Well I would not include Condos in anything. Also I think the meaning of the word PRIME is not being understood. All of San Diego is not PRIME. If you want to talk condos, a condo on the beach would be considered PRIME.
A condo in [enter average neighborhood here] in SD is usually not prime. It might be part of a general housing demand, but that in itself does not make it prime. It would simply make it “desirable”, which can mean anything from people have to live there to people want to live there.
The 200k to the 400k reference, while apples to oranges, is a good point on why you want to buy on the low end of an area. Less fall, greater upside.
I think RE is safe from bubble busting for some time. First of all, people need someplace to put their money. Stocks are just not it right now. General public perception on stocks is down. I don’t see this changing drastically for a few years at a minimum. While diversification is a must, I see most people going RE heavy on their financial portfolio.
so a downtown San Diego condo with gorgeous views that sells for $1200/sq ft is a safe investment?? even if you’re 1400/mo rent only
covers 40% of the mortgage??
if a condo a few miles away in a ‘less than prime but desirable neighborhood’ starts selling for $200/sq ft, do you think people will pay an extra $1000/sq ft just to live in downtown???
the answer is no, they’ll rent it from the morons who’re willing to subsidize their rents!
I guess as a rookie I would worry about that on the other hand at the point you cash flow enough off of all your other investments I would personally buy that and use the negative cash flow as a write off as long as the property was going to continue going up! and if it was not I would not buy it what would you have a property that is worse the worthless! On the other hand I do agree with you 100% if you can not afford being upside down DON’T BUY IT! Unless you can flip it quick and or get 40-50k back at closing!
If you are a landlord (since you mentioned renting) then why would you buy any property that would not cash flow?
I am not sure why you are stuck on SD, but Prime is not always downtown and usually if there is a prime spot downtown, it is in a small radius. Also while this area you speak of might be “prime” for SD, it might not be prime for SoCal or California or the West Coast or the USA. Just because an area is prime in its space does not mean it is solid. It needs more than simply local appeal. It needs appeal on a countrywide or worldwide level.
Kind of like this one high rise here in Vegas. They are sure doing a nice marketing job to make people think it is the cat’s pajamas. This is what I call Faux Prime.
Not everyone in this world is looking for a “family” home. Not everyone is on the poor end of the financial spectrum. Many regard location as top priority. It is sort of a personal status symbol. Echo boomers are looking to live downtown in the hub of activity where driving around is not needed.
But, none of this matters. If someone wants a SAFE investment, they should go bury their money and draw a really good treasure map to it.
As to SQ FT costs. I could live about 2 miles from where I do now and pay about 1/2 the sq ft cost. Why don’t I? Because I like the immediate area where I live and this is how I want to live. It is not just about getting the lowest sq ft price. It is almost always about environment. In that small 2 mile distance, the entire vibe changes.
Just wanted to add that many people need to believe there is a bubble and it will pop tomorrow. I am watching friends do some very stupid moves because they are caught up in all the hype.
Thinking things through just is not a factor. As was said many times before, if you can’t afford it, don’t do it. Don’t count on anything happening. If you can’t hold the property for a good while on your own with no help, move along.
i’m stuck on san diego, becuase thats where i live. i constantly hear realtors pitching about how SD is always a good investment. it’ll never go down in value. this time is different, there’s more job diversity, etc.
no one ever says how only 9% of the county can afford to buy here.
these are bad investments for a majority of the people who buy at this time. i just sold my condo. the buyer is putting 10% down but getting a 3/1 IO loan. he’s also letting me rent back for less than the mortgage.
thats not PITI, just the interest on the loan.
I agree. Check the numbers, but in the end you have to be able to excute a Plan"b" (i.e. hold); too many people think they can buy today and sell tomorrow some regular piece of crap for 50K more than they paid. Feels like '99 in the tech market all over again. With that said, I think we will see a soft landing in some areas (SoCal near the water) and a hard market in more voliate markets
i’m stuck on san diego, becuase thats where i live. i constantly hear realtors pitching about how SD is always a good investment. it’ll never go down in value. this time is different, there’s more job diversity, etc.
no one ever says how only 9% of the county can afford to buy here.
i think what you mean about the 9% of the county can afford to buy here is that only approx. 9% of current homeowners in the county could afford to repurchase their existing homes at their homes current value.
same thing is going on in orange county which is the county north of san diego. it’s an affordability issue.
However you slice it, it is still pretty sad that only 9% can afford the home.
That is the end result of the USA become a customer service nation. All the “good” jobs, and I use that term loosely, were sent overseas to places like China, who is becoming the next great nation while we start sinking to Canada status.
People who only make $15 or less an hour working these jobs can only afford so much, and not much at that. People are being forced to shack up or get married to boost income in hopes of sustaining life.
To further matters, our government keeps raising taxes rather than cleaning house and spending wisely. They spend our money like no tomorrow rather than getting the most for it, which is why taxes will continue to rise. The sad part is we have enough money now and could even reduce taxes.
Whoops, going off the subject.
The next time you see a Walmart opening and think it is a good thing, look at the big picture of what they do to business and the community over the long term. Look past the surface.
Is there a bubble? There are millions of them and they are called Americans. Each day our country worsens and more bubbles pop and have to cope with a new sad reality.
evergreen,
i will agree with in theory. economies run in cycles. we’ve had a phenomenal post-world war 2 cycle.[even though we’ve had some minor recessions since then]
i think we might be poised for a major reversal of fortune[although
i hope not]. But thats why people like Kiyosaki are now bullish on commodities like gold and oil.
i definitely think countries like India and China and some sleepers like New Zealand might have more robust economies than the US over the next 5-10 years.
i agree with your thoughts on Walmart. they never create new jobs.
they just cannibalize local mom & pop stores.
