Halley S., Home Buyer in New York, NY

There is a lot of talk of a softening real estate market. How would you describe the real estate market in Solana Beach?

Asked by Halley S., New York, NY Mon Apr 23, 2007

How long do homes typically sit on the market in this city?

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Conrad Hodgson’s answer
Hi Halley,

Solana beach is one of the best performing markets in San Diego. The prices have held firm and there has been very little foreclosure activity. At least for the time being. Seth does have a point about ARMs that have still to reset and we may see some foreclosure activity in the area. I would say that it is a good time to sell if you are on the fence. Houses tend to move quickly if priced right.

All told, I do not see a remarkable softening of the market in Solana Beach. I live in SB so I may be a tad. biast.
0 votes Thank Flag Link Fri Sep 4, 2009
0 votes Thank Flag Link Wed Oct 8, 2014
As a broker I agree with Mr. Shafron on all of his points, but see one major difference (and to be fair to Mr. Shafron, it is now seven months after his post was logged and much has changed since then). I think North County has held firm and stayed steady... so far.

But the bulk of the ARM loans have not re-set yet. They will. A substantial percentage of North County homeowners have ARM loans. It is true that the upper scale neighborhoods (i.e. $750k - $1.9m) are inhabited by folks who are a little more insulated than other neighborhoods... but only while their insulation lasts. I mean mortgages as an investment vehicle were safe… until they weren’t, right? Fannie/Freddie were AA rated… until they weren’t right?

Some marginal folks in the areas that haven't gotten hit yet will need to sell. And when they do, we will see the beginning of the same downward moving spiral we just saw play out in sub-prime. It is not a social-demographic thing, but rather a math thing. I see a big pricing correction coming our way.

I am not attached to being right about this. In fact, I hope I am wrong. But I was not wrong about the first wave of re-sets. And anyone now claiming how obvious this "sub-prime debacle" was should also see this next wave coming in neon lights. From a 10 year outlook perspective, I bet my career we'll see higher prices than peak. In the next 2-3 years... we're going to get hammered.

My take: if you own and can hold out, then do so. If you are not sure about your staying power, sell now. If you are looking for a place to shelter or reallocate paper based assets… then consider the smart money quietly flowing into lower-end rental properties.
0 votes Thank Flag Link Sat Nov 15, 2008
I am sorry, but the last poster is at best mistaken.

Look at a simple Rent vs Buy comparison:

1005 Santa Queta, Solana Beach, CA 92075
Price: $1,097,000
20% down, at 7% fixed
Monthly payment is 7000$ (P&I, Tax, Insur). No upkeep, expenses included.

Comparable: http://sandiego.craigslist.org/nsd/apa/735170369.html
Rent 3500$

Insurance rates are going to rise very shortly.
The SD/South OC markets are still largely inflated. The tax benefit for buying does not come close the additional 40,000$ anually you need to pay in home payments. At best you would get a 10K tax benefit, which in itself is an extremely liberal estimate.

Additionally, with rising rates, you are taking substantial risk in the loss of the 220,000$ of equity which you used as a down payment.

My advice, rent minimum 24 months. Bottom is still 24 months away, with a recovery 48 months if the economy stabilizes.
0 votes Thank Flag Link Sun Jun 29, 2008
The real estate in the market is holding firm and staying steady. It does not appear to either be rising or falling. The misconception of falling prices is a result of many sellers overpricing their homes and then adjusting to real market prices over time. Homes are on the market between 90 and 180 days
0 votes Thank Flag Link Mon Apr 23, 2007
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