You are spot on with the buyer frenzy. I’ve noticed myself that getting a reasonable priced (<$350,000) home in North Park, Normal Heights, and even City Heights has been really tough. Most properties on the market have loads of offers.

From my experience in this market the buyers seem to be evenly split between Cash/Investor Offers, Conventional Financing, and FHA financing. The current market environment with low rates, high usage of FHA programs, and the uncertain macro-economic future of the USA, as well as the lowered purchase prices on the market are driving the buyers to buy.

Plus in the future FHA may have to make some major changes to the way they do business, and that’s going to mean a more expensive FHA Loan.

See: http://www.bloomberg.com/apps/news?pid=20601087&sid=aOmu318hOZr4

There is no way that lending rates can remain at this level forever, but the economic recovery has to happen before the Fed can raise the rates. If rates go up too soon many more people will be forced into foreclosure. (Lots of Macro-economic reasons for keeping rates low right now actually)

There are still so many people upside down on their properties meaning that the short sales and foreclosures are still happening, and going to trickle into the market a little at a time. I think there is going to be a slow/depressed market for years to come as people realize that the credit hit may be worth getting out of their overpriced homes.

I think that it is always a good time to buy, if you are looking for your own home. Don’t panic when you see pricing rising, there is no way I can see this taking off like another bubble. I think this is just a pricing correction because prices went too far down. Don’t be in a hurry, as it seems like timing is just as important as purchase price.

San Diego will always have a higher demand for housing simply because it’s a great place to live, perfect weather, diverse job opportunities, etc.

Just my 2 cents.

ROTFL, Genius! OT ~ Is there anyone who hasn’t seen Meg Ryan in the famous restaurant scene with Billy Crystal in “When Harry Met Sally”?
http://www.youtube.com/watch?v=F-bsf2x-aeE

First, I’ve finally gotten some more sleep and am on my 2nd glass of OJ (my coffee) this morning. Thankfully, I’m much more sane today. I have learned an important lesson: I’m no longer college-age and easily able to go without sleep. Back then, I could stay up for 42 hours. Today? Nooo… But being a single parent (by widowhood), I find there just aren’t enough hours in a 24-hour period to get everything accomplished. Add a real estate search into the equation and forget about it.

Facts about the Meg Ryan movie scene:
(1) The lady at the end of that 2:52 minute scene is actually Rob Reiner’s mom. Rob was the director of the movie and said directing this scene was very uncomfortable for him (Captain Obvious why).
(2) In an Oprah interview about 10 years after the movie’s release, Billy Crystal talked about this scene and how much fun he had. Meg Ryan was present (by remote). He told her what he had never admitted to her or anyone else before: “I intentionally flubbed my lines over and over just to watch you have to re-do this scene over and over.”(Meg cracked up.)

Now on to real estate–so JtR doesn’t hit the delete button. Here’s my confession: IF I can find my last home, if I can find 30-year financing (I have no debt, stellar FICO and long credit history, and my 20% down payment in hand), and sign the closing papers and then be standing at my new home with keys in hand, I could utter Meg’s famous words from the “When Harry Met Sally” restaurant scene: “Yes! YES! YEEESSS!”.

There I said it! Not just because this scene is my #1 favorite of any movie I’ve ever seen, but because those three words would portray my exact feelings at that very moment.

The fact is I couldn’t care less if my next home turns out to be a great investment or not when it’s resold, or if the do-nothing Congress extends the $8,000 tax credit.

Yep, there’s sure to be the usual homeowner headaches for me. And being a homeowner as a widow without the “best finish carpenter on the planet” along for the adventure will present personal challenges, but I’m ready. But there will also be the ecstatic feeling of knowing I’m finally “home” and am exactly where I’m suppose to be to move forward in my life. Simply priceless, I’d say!

ETA: (You can delete my next question after you read it, Jim.) *Susie Pondering* Jim, would my re-enactment of Meg from this scene at the front door of my new home really be considered a “verbal real estate orgasm”? *Chuckle* Not that there’s anything wrong with that…

Exactly! But I was sooo wondering if you would delete my “crazy” post, Jim. On further reflection, this should be mentioned in ALL your videos: “JtR’s videos: MUST-SEE TV!” Really, my check’s in the mail, right?

Please don’t take my post above (or this one) personally, like I said I am not the most eloquent blog poster. I’m just trying to tell you what I see, and how that conflicts with what once attracted me to your site.

To me, your early description in the next days video are a perfect example of how the focus around here has shifted from home buying to short term finance finance. What you described is the very essence of a bubble. No rationale for pricing, buyer frenzy, and the unspoken urgency for people to get in now. I’m sure at one point the tulip brokers were having a hard time finding merchandise for their buyers, too.

In my opinion, in the past you offered more commentary on the intangibles, on neighborhoods, peculiarities of a particular house, and longer time horizon factors that as a newcomer to SD, I found refreshing and useful. The oceanside condo auction/head shop tour is a perfect example.

What seemed to me to distinguish you from other realtors was that you kept the excitatory rhetoric relatively low, you didn’t openly fan the flames and play on emotions like the realtors who took me around NoCo in late 2007. They were crassly after a commission, and didn’t seem to care a whit how that affected my family or future prospects. [You may be too, but at least you try to hide it ]

How about some information for “the rest of us,” the ones who still don’t have 20% down and are unwilling to rush into this crazy market? What SHOULD we be looking for? I’m not talking about buying price alone, but also the more intangible and durable components of home buying. Neighborhood, noise, future development, commute times, boring details like that that make a place a dream or a nightmare.

You’ve been through a SD RE bubble before. Where did people get burned, what mistakes were made, what things have proven over time to have been good moves?

Thanks.

Maybe you’ll do a showing in the future and meet the buyer of your dreams… Careful Jimmy.

But those using the big down payments are flying in the face of that argument, and makes you wonder if Haves could prevail?”

Nice post JTR, it is hard to make the case all the cash buyers out there are dumb because they did get their cash in the first place. Of course, they could have sold at the peak but the point was they had the savvy to do so.

And yes it is a HOT market. I lost out on many before that and it got to the point where I was monitoring the web several times a day and when I saw something I liked I’d call my realtor and look at it within a few hours. Mine had just fallen out of escrow that day when I made an offer.