Quote from NYSEscalpa:
It is insane what places are going for in Southern California. I am thinking of buying a house in the San Diego area and have full realtor access to the MLS through a friend. I can check past sales with sales price, old list prices, new list, pending sales, etc. The point is, I have seen condos- 2BR, 1100 Sq. ft going for around $400K in the greater San Diego area- move close to the coast- La Jolla, PB, MB and that same condo is now $500-$550K. For that same amount of money, 6-8 months ago, you could have moved to North County, got @2000 sq. ft house for around 490-515. Now that same house is @575K (asking price) and it is turning into a sellers market as more people go north to find better value for their money- would you rather have a house with a yard and view (and a 30 min commute to work) or a shitty condo close to work and the hot spots? So, it seems like there is a ripple effect going on in San Diego as more people are pushing out from the citys center trying to buy a better place than the $400K fixer upper with no parking. These people are driving up home values in the outlying areas and as others noted, clearly demand far exceeds supply, fueled by low mortgage rates. The real conundrum with the San Diego area is if you are thinking of buying a home, when is the right time to do it? I am seriously thinking about buying in the next month and if rates start to rise, I can sell and either get some equity out or at the worst break even. I can finance it interest only with no prepayment penalty, so if rates do start to rise, I can switch it over to a longer term ARM like a 5 or a 7 year, as they carry lower rates and this would be a starter home. Conversely, I have also thought that home prices are so inflated here, what is the real upside potential, especially in an environment where everyone expects interest rates to rise inside of 2 years? WHEN rates rise, people with ARMs that have become variable are screwed and I think we could see more selling of properties as these people realize that they are in way too big of a house for their budget, now that the mortgage pymt has jumped way up. This would shift the balance as more homes came on the mkt and property values would drop maybe 10-15%. The reason is demand will have dropped off with a corresponding rise in rates on mortgages. So, If I waited maybe a year, I could pick up a house at a discount. Then again, San Diego shows no signs of slowing down as far as growth, so it is a tough question as to what to do in the San Diego area??
wait to buy real estate or buy real estate and wait?????????
