Thursday, June 19th, 2008 at 2:46 AM
San Diego = Bargain
San Diego is listed as one of six bargains in America, according to Fortune Magazine:
"The housing downturn’s upside? You don’t have to go overseas anymore for your dream retirement home. We found the six best markets for deals."
http://money.cnn.com/galleries/2008/fortune/0806/gallery.Fortune40_real_estate.fortune/4.html
The others listed? Miami, Las Vegas, Phoenix, Tampa, and Denver.
Posted on Thursday, June 19th, 2008 at 2:46 AM in Uncategorized | 20 Comments » | 
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From the fortune article…
Which means exactly what? Just say it.
No really. I keep saying this and have yet to see a refutation, is there any property for sale today that could arguably be purchased for (at least) 20% less in the next 24 months?
How does that dovetail with that whole "bargain" description?
And from the Tampa section…
And will be worth $500k next year.
From the Vegas section…
And who wins in Vegas most of the time?
I don’t get this whole article. It doesn’t seem like something a truly smart financial publication would publish. I mean, it’s great to see positive press about San Diego (and the other cities I suppose) but what relationship to reality does this article contain? Or was it just some puff piece supported by half dozen Chamber of Commerce and regional Realtor associations?
ice weasel | June 19th, 2008 at 3:42 amLazy, bad journalism. Fixer uppers in Oceannside and Chula Vista are not bargains at current prices, just reality. A 10 or 15 percent decline from peak in Downtown is certainly no bargain either.
Jasper Lamar Crabb | June 19th, 2008 at 3:46 amThe article is a joke, but if another hundred of those get published, it’ll have an effect on people’s perception.
People in general, and those targeted in that article – the retirees – want to believe it’s safe to go back in the water.
If you’re retired, time is running out on your dream of living in SD. If you heard that prices were cheaper, rates were low, and it’s still 75 degrees and sunny in the winter, you’d be tempted to get on with it. You’re not getting any younger!
Jim the Realtor | June 19th, 2008 at 4:11 amYou’re not getting any younger! You’re not getting any richer either. Even retirees have to fill up their tanks, between rounds of golf and posing for advertisements photos for seizure world!
Barnaby33 | June 19th, 2008 at 4:41 amOfcourse four years ago an article like that saud San diego was a bargain cause only prices go up.
LV Renter | June 19th, 2008 at 5:06 amIf you’ve set aside some specific amount to buy your "dream retirement home," you’re probably thinking more along the lines of getting exactly what you want and won’t have to spend the next five years remodeling for that amount than about resale values or whether the home’s equity will support borrowing against it the way someone younger might. And since most homes on the market in SD county right now seem to have been popped out of the same pseudo-Spanish-Tuscan McMansion cookie cutter, it could easily take 24 months or more for someone with a high end budget and a desire for something different to find something they’d want to spend the rest of their lives in.
GeneK | June 19th, 2008 at 5:22 amI have a 1992 GMC Jimmy with a little rust for sale. It was listed at 15k but I’m giving it a 40% haircut to 9k!!!!!(are those enough exclamation points, I’m not a Realtor) HURRY, this deal won’t last. With a full price offer, I’ll throw in a paint and carpet allowance
Pseudo | June 19th, 2008 at 5:53 amSubstitute "Ferrari Testarossa" for "GMC Jimmy" and multiply the prices by 10; you’ll get offers even in this economy. To get similar results for real estate, the property will have to have similar provenance.
GeneK | June 19th, 2008 at 6:20 amI think ice weasel’s comment about it being a puff piece from the CofC and/or local RE assoc rang pretty true for me. It sounded more like a veiled, "Please come buy my properties before it gets really bad and I won’t be able to sell them at all!" Perhaps the author was a former flipper….
shoppingaround | June 19th, 2008 at 1:06 pmMagazines like Fortune and Worth are basically financial porn. They’re written as if their readership are all wealthy people who have the disposable cash to buy anything they want without having to worry about its future, but the majority of their readers are really just people who like to fantasize about having that kind of wealth.
GeneK | June 19th, 2008 at 2:23 pmPlease Jim. I’m on vacation. Now there’s oatmeal all over the laptop and Mrs Dawg thinks I’m having a heart attack. This was like reading the Bawlguy’s evil twin. if your motto for homeowners is ‘sell now or be priced in indefinitely’ his advice for SD RE investors is ‘get outta Dodge now.’ The two of you make the MSM and SDCIA look foolish. Keep up the good work. And if you wonder why the Seattle isn’t in as bad shape, late to the decline and unlikely to decline as much you need only realize they are spending more on roads than all of SoCal combined. They have us an a counterexample.
Rob Dawg | June 19th, 2008 at 2:44 pmI currely have a subscription to Fortune (it was free), I’m going to call them and tell them to stuff it. If they ask why I will cite this idiot article.
MattK | June 19th, 2008 at 4:00 pmFortune magazine, Money magazine, etc. are all predigested fluff for the masses. Time and Newsweek are a step up but not much better.
If you really want to read some good reporting, go read The Economist.
greenlander | June 19th, 2008 at 4:01 pmI picked up a copy of the Economist to read on the flight back from Europe last month. It was pretty darn good – I agree with you Greenlander.
jb | June 19th, 2008 at 5:43 pmThey must be smoking crack. I’ll call it a bargain when I buy my pad in Del Mar. Be ready for me, Jim.
Tyrone | June 19th, 2008 at 7:23 pmTo me, that article was intentionally disingenuous. The reason the "market has been heating up" (if you can call it that) is because the very bottom end has had price cuts of 40% — just see Jim’s examples. Wealthy retirees aren’t going to want to live in those kind of properties.
"…it’s the high end where you might find the best bargains, because much of the renewed activity has been for entry-level homes, while luxury properties have been slower to move."
Yes, the high ends have been slow to move because they haven’t dropped their prices to reflect economic reality. That’s why they’re not selling, and that’s exactly why they aren’t a bargain either.
By deliberately conflating the 40% drop in prices and consequently increased sales interest in bottom end homes with the unrealistically frozen (but thawing?) prices for high end homes, this article is either ignorant or deliberately misleading.
Dwip | June 19th, 2008 at 8:04 pmWell, one would hope that those rich buyers, if they come look, will realize the prices are not bargains yet. By the way, the UT had a good article on that on Tuesday. Here’s a quote:
“What you see right now is the deals that everybody wants are on bad property in a poor location or in poor condition,” said Phil Morris Jr., an agent with Prudential in San Diego. “For good property in a good location and in good condition, you’re still paying a good price."
(Personally, I would not have used the word "good", more like "ridiculous" for price, but at least the guy knows what’s going on.)
Simone | June 19th, 2008 at 10:04 pmRich people probably get that way by thinking ahead better than the rest of us do. Maybe a rich person’s interpretation of "San Diego is a bargain now" means "start watching the high-end neighborhoods now so you’ll have your dream home picked out by the time things really go to hell there in a year or two."
GeneK | June 19th, 2008 at 11:08 pmWell to be fair lots of articles get written every year promising great value and appreciation in housing. The difference is now the articles consistently acknowledge that prices have in fact plummeted – there was a time not long ago when this was a hotly disputed fact. So an article like this can be considered a pig with a new color of lipstick.
I think the dot com bubble taught a lot of people not to throw everything into tech stocks expecting double digit gains..in fact, I think it had a lot to do with people switching to investing in houses. Greedy people lost interest in tech when everyone realized it was not infallabe. The same’s going to happen with housing..there’s going to be more bubbles but people are going to move on somewhere else. Some people say speculators have moved on to oil already. And after that, they’ll find something else.
As long as you can move from bubble to bubble before each one pops, you can make tons of money. For all the people that lost their life savings in the tech bubble and housing bubble, I know of plenty who knew when to get out by a few years.
I never had enough for a 20% down payment, so all I could do about the bubble was not buy. =(
BDiego | June 20th, 2008 at 12:17 amI haven’t moved from bubble to bubble, but have mostly ridden the roller coaster up and down through the years, starting in the early 80′s. It’s definitely been a "chutes and ladders" kind of experience, and my guess is that allowing for inflation after four booms and four busts my equity is not terribly different from what I would have if I could have just put my original $120k purchase price into average investments for the past 30 years. Except for the fact that I didn’t originally have $120k to invest.
GeneK | June 20th, 2008 at 1:43 am