Investing in San Diego Area?

[Gary Young]

My wife & I are looking to purchase a house in the San Diego area to possibly move into within the next 5 years or so. I am hoping there are appraiser's reading this that know this area pretty well and are willing to give us some advise. Preferably I would like to find and area that may be under valued right now, be able to purchase an SFR detached within walking distance of the ocean. I would probably use it as a rental until we are ready to move and would need to do my own rent survey in the area also. What areas/neighborhoods would you invest in? Why?

 

[Lloyd Bonafide]

If I were you, I would wait a year or two. Or three.

In a lot of the better areas and coastal areas, that had been close to holding their values, the market has gotten noticeably worse in the last 3 months, and with the number of adjustable loans resetting between 2009-2011, (especially the pay-option or neg. am. variety, which were really popular here), things are definitely going to get worse.

A lot of homeowners are doing short sales and bailing out now, before their loans even reset - wait until their payments double in the next couple of years and see what happens.

In the low-end / sub-prime areas here, (not anywhere near the beach), things may be getting closer to bottoming out. But that's after prices have dropped 50% or so.

 

[Randolph Kinney]

I agree with Lloyd.

Encinitas along the coast, Moonlight beach, specifically along Neptune Street but that is pricey. If you can afford it, that is where I would buy. Some properties offered have been reduced. Who knows what the future is?

 

[Terrel L. Shields]

The investor advisors that i watch are pretty much in unison...you have time to wait and see. Once prices hit bottom in RE, it is unlikely they will simply explode to the top side...and picking bottom isn't practical. You are not going to see 10% annual price inflation for some time to come. Wait it out, if you buy now and the market drops another 30%...you may have to wait a very long time to recoup the investment on paper. Once you see a 6 mo. or year's trend to the positive side, then you haven't missed bottom by more than 3 - 5% likely.

 

[George Hatch]

The coastal areas to which you refer will be among the very last to bottom out, and the prices still won't pencil out as rentals.

I surf, and I'd still hate to live within walking distance to the beach. Those neighborhoods are always busy and loud, and the idiot factor is way too high for my tastes.

 

[Randolph Kinney]

Those neighborhoods are always busy and loud, and the idiot factor is way too high for my tastes.

Not so much in the winter, George.

Summer is the big pain but it is a pain all over too. However, with high gas prices and a slowing economy, that has kept the crowd level down from what it is typically in good times.

Did you notice the flip at 1487 Neptune Avenue? Sold 03/04/08 for $900,000 and then again 07/08/08 for $1,200,000? It does not sit on the ocean side of the street and it does not have the best view but for someone who wants to rent it out while holding, it might get $2k to $3k a week in the summer.

 

[George Hatch]

My favorite time of year is Fall, after the tourists leave and the water cools off. Spring and Summer suck, summer being the absolute worst.

Weekly rentals are a business, and there's lots of overhead and management involved besides just the mortgage. I wouldn't say that its a viable plan for an out-of-town buyer. But, different strokes.

 

[Gary Young]

I thank all of you very much! This is just what I was looking for!