CA Housing Forecast: A Realtor's Analysis of the San Diego Housing Market

Updated 10:00 am

Most people think buying a house brings financial savings, due to the tax deductions.  We are all aware of the tax breaks that come from writing off mortgage interest and sometimes Mello-Roos fees.

Here's the truth:  the tax deduction is eaten up by maintenance costs.  Remember that annual big property tax and homeowners insurance bill.   And if you don't do regular updates, your home will look like one of those guys wearing plaid suits from the '60s:  stale!  Some fun photos of outdated homes are below.

As a general rule, set aside 1% of your property price for maintenance and repairs

Homes, like cars, need constant attention to remain in good condition.   Landscaping, replacing run-down fencing, painting, replacing a water heater or appliances, are just some of the examples that come to mind.  In an older home, replumbing and rewiring could be needed.  Decks have to be resurfaced every few years.   Replacing a leaking roof can run $10K - $30K easily.

A second cost is updating.  I have seen many homes that were properly maintained, cleaned, well cared-for, but that were not updated.  Updating is both expensive and optional, so most homeowners don't want to spend the money.   In Carmel Valley, $1.2 mil homes rarely have solid-surface kitchen counters;  instead, they still sport the 1980's white tiles. 

In the photos below of 1970's townhomes in Rancho Bernardo, you do feel like you are stepping back in time.   Let's just focus on the kitchen.   The kitchen has those fluorescent box lights (second kitchen was updated with can lights), old appliances, tile countertops, outdated floor tiles, and those dark wood cabinets which are worse than the 1980's oak cabinets.   This first kitchen even has wallpaper!

Now, let's move over to Carmel Valley kitchens.  Is it much better?  No!  None of these kitchens have been updated with appliances or countertops.  Carmel Valley homes were built in the 1980's so the kitchens are not as ancient as the 1970's kitchens, but the homeowners failed to invest in their homes.

This 1985 townhome looks like ones above.

 Now, a look at detached homes.  This home on Ashley Falls in the popular Palisades neighborhood as, believe it or not, concrete floors in most of the downstairs.  The flooring is concrete tile, but it looks and feels like patio concrete.  The same concrete tile covers the barbeque area in the backyard.  That is just weird!!  But notice also the white tile countertop.

You will find tile kitchen counters even in new homes, since the solid surface is an upgrade.  Some builders have specials, where granite is standard.  This $1.049 mil home, built in 1999, looks outdated too!

This home sold for $ 949K.  The kitchen sucks.  They thought they could make a nice kitchen by slapping a granite counter on it.  But you still have a cheap old kitchen.  Look at the cabinets, appliances, and original windows.   Notice the cheap job on the backsplash (portion of wall rising from the counter level) .  A backsplash should be small tiles, and not the same material as the countertop.  So they bought the cheapest granite (which is ok) and then made the cheapest backsplash.  I can't respect that kitchen, sorry!

This neighbor of the home above remodeled his home with this dream kitchen.  This is how a home should look when you spend a million bucks.  This is the only time I have ever seen a dream kitchen in a Carmel Valley home, and I have seen almost every home under $1.3 mil this year.  (That's why Carmel Valley homeowners are not in financial distress - they did not do cash-out refis!  They lived in their means, so they did not remodel their homes.)  The backside of the island is bookshelves, really cool!