I sold out of Southern California last year and am purchasing in Phoenix and Tucson. As is the case in most locations, deals are not easy to come by. There are more distressed sellers here due to the rental market conditions.
I am in the San Diego area and prices here are nuts here to. (as much as 90k+ for 1bds in C- neighborhoods). I still find things it is just hard (I guess it must be like that everywhere though). I just would really like to get income when I buy these darn things. You know they are called income property. Anyway I am sniffing around the phoenix, tucson area also the inland empire. Any thoughts on those areas.
Curt, I too am in San Diego. Currently we are working on condo conversions because you are right, the prices are through the roof. $125K a door in City Heights! I bought on 44th Street 5 years ago for $30K a door! Nuts is right. The only thing these investors are banking on is appreciation, because cash flow ain’t gonna happen. Pull the demographics in East San Diego, you can’t charge $1000 bucks for a 2/1 they can’t afford it. Plus, when the market does correct itself, the service industry (which those tenants are in) suffer first. As far as Arizona goes…honestly, we had a 40 unit building at $39K a unit, with a TRUE yearly vacancy of…get this…25%! For the past 2 years, Brokers have been telling us that AZ is turing around, I don’t buy it. Inland Empire is even $100K in Riverside! Investors need to wake up and realize that when (not if…WHEN) the market does correct, these people are upside down and the reo market picks up. If I still owned property in San Diego…I’d sell for a ridiculous price, take the 15% tax hit, and sit on the sidelines and cherry pick in a year or two and buy back my property for less than i sold it for! Some decent wisdom.