Monday, December 11, 2006

Housing market's reality check

Very timely article in today's Union Tribune about short sales. Readers of this blog will not be surprised at the specific examples discussed in the article. I think it's very important to note that these properties will be sold at a loss to the banks and mortgage lenders.

At some points in this debate and analysis over real estate prices in San Diego some observers and pundits noted that "people don't sell in down markets" - it's clear that people will and are selling at lower prices

5 comments:

Anonymous said...

You can see the prices going down, in the next few months, around the condos in the area of the ball park. Like ICON & simlar properties, where the buyer was sqreezed to put a low down-payment. When they see the value going down 10-20%, than the short sales begin.

Anonymous said...

I really don't know what to think of all the news about the housing market. Everybody seems to have some sort of "scientific" evidence backing their views. I often question, "who can afford those expensive houses?" People who purchase those median priced home (500K, I think) must be making around 170K per year. If the buyers have equity from their previous houses, that is a different story. Are there that many people making that much money?

I read the article today and thought to myself, "duh!" I don't follow the housing market in the subburb so don't know much about it. I am more interested in the downtown market. I read and heard that the downtown market has lots of units in the pipeline. Those units are to be readied in 2008. Nevertheless, the latest development from Bosa (Bayside)price is still pretty high. I think the lowest priced unit is around 750K.

Does any of this blog readers have any thought about the downtown market in general, and Bosa's Bayside development specifically?

downtown sideliner said...

Bosa's Bayside is very impressive to me, and I like all their other developments. I also think Columbia and Little Italy are the best places to be in the next ten years downtown. This makes Bayside one of the most desirable buildings in SD.

Is it overpriced? That's a matter of your opinion. I think a $5000 Louis Vuitton purse is overpriced, but people buy them. Look at the alternatives around Bayside - you can get a unit in the Grande for ~$500 per square foot. This is much lower than they are selling Bayside, so my opinion is that Bayside is priced too high. But, if you think Bayside is like a Louis Vuitton purse, maybe you are willing to pay more than the alternative.

My advice is to wait, I think it will come down a bit or they will offer you more incentives.

Mr. Brightside said...

anon 11:24,

I expect the downtown market to continue to go down in value over the course of 2007. There are thousands of new units coming online and prices are still very high relative to renting.

It should be a very interesting year.

Anonymous said...

Downtown sideliner,
Thanks for your inputs. Yes, it is all about "perceived value." like you said. However, there must be a bit rationality somewhere.

Everyone has been saying that there will be 1000s of units coming on the market in 2007. Which building specifically? Also, But those units are already taken/purchased, aren't they? So in theory, that should not influence the market much unless those were purchased by investors.