The signs of a dramatic economic downturn are everywhere on the wealthy side of San Diego.
SAN DIEGO — The License to Chill glides by a wonderful sight in San Diego harbor. Hundreds of sea lions, basking at leisure, occupy their own private resort, a long dock that is anchored out in the harbor. Respectful pelicans, cormorants and gulls mingle carefully, searching for inconspicuous resting spots.
Looking toward the city we can see the skyscrapers of San Diego, the constant arrivals and departures from the airport, and the amazing bulk of the aircraft carrier Nimitz, now being restored. This is a beautiful bustling harbor.
Less than a month ago, my wife and I were sailing that boat, a Hunter 33 from the Harbor Island Yacht Club. It’s a club for sailors who don’t own boats. Instead, you can rent anything from a 22-foot Catalina to a 39-foot Beneteau by the afternoon, day or week.
The weekend we arrived, Merrill Lynch had been sold to Bank of America. Lehman had filed for bankruptcy. And AIG had become an $80 billion government investment. But stock markets around the planet had yet to tank.
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Life seemed almost suspiciously normal. That Sunday afternoon, we still had to wait to get a table on the ocean terrace at George’s at the Cove in La Jolla. The valet parkers outside were still shuffling Bentleys, Porsches, Mercedes and Beemers. The bar at La Valencia was packed. And lots of people were carrying shopping bags.
So you wonder, how will all this unwind? How will this glossy society adjust? It won’t be easy. Here’s a quick tour of some coming “adjustments.”
• Status cars. Often leased, offers of leases are disappearing. Loans to buy cars are requiring actual down payments and higher interest rates. Whether it’s fancy or muscle that moves you, the out-of-pocket cash and monthly payments are going up. Cash buyers are going to find great bargains.
• The customers’ yachts. In the marina, I encounter a gathering of abandoned boats. Clustered together and ranging from 24 to 60 feet in length, nine boats have been impounded for nonpayment of slip fees. With monthly slip fees running about $500 a month, you have to wonder how many more boats will be impounded when owners start to look for ways to cut spending.
• Shelter. The Real Estate Book, a home-listings publication, now shows “bank owned” and “short sale” properties, as well as houses with major price reductions. So far, the reductions only take prices down from insane to ridiculous. San Diego homes, like houses in much of California, are still priced way over paychecks.