Tuesday, February 5th, 2008 at 3:20 PM
Searching for Market Value
Ocrenter asked about 92127, which is mostly Santaluz and 4S Ranch – and it looks like the poster child for the meltdown on the higher-end.
Currently there are 134 houses listed for sale over $900,000, 19 are pending, and 6 have closed since 1/1/08 – and that’s just in this zip code. There are another 863 houses for sale over $900,000 between Carlsbad and La Jolla – so the selection is plentiful for buyers.
Of the 19 pendings, 9 are new homes, 3 are short sales, and one is a bank-owned – so only 6 of the 19 pendings are regular sellers, struggling to beat out the builders and banks for the precious few buyers.
Sellers have been lowering their prices and still can’t find a buyer – the competition is brutal. If you are trying to sell a McMansion over 3,800 sf, there are currently 60 for sale from $869,900 to $2 million.
Here are a few examples – I’m not looking to exploit people’s misfortunes, they are all openly advertising their situation:
15266 Winesprings
4 br/4 ba 4,136 sf
SP = $1,150,000 2/06
LP = $899,900 REO
34 days on mkt
***********************************************************
15984 Cayenne Ridge
5 br/5.5 ba 4,288 sf
SP = $847,000 7/04
LP = $899 – $999,900
short sale
listed since July
***********************************************************
7972 Purple Sage
5 br/4.5 ba 4,453 sf
SP = $1,060,000 7/04
LP = $1.195 million
short sale listed in Aug
loans = $1.755 million
*************************************************************
7448 La Mantanza
5 br/4.5 ba 4,519 sf
SP = $900,000 12/03
LP = $1.1 to $1.2 m
short sale listed since Oct
loans = $1.381 million
Notice of TS filed 10/07
***********************************************************
16050 Palomino Valley
5 br/4.5 ba 4,570 sf
SP = $1,275,000 2/07
LP = $950 to $1.15 m
100% fin in Feb, shortsale
NOD filed in December
These are among the better-priced listings, yet they haven’t sold, and list prices are getting into the low-$200 per sf range.
Where are the market values on these? And if you’re selling, how much lower than these do you have to go to beat them?
Posted on Tuesday, February 5th, 2008 at 3:20 PM in Thinking of Buying?, Thinking of Selling? | 29 Comments » | 
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Yeah, I’ve been watching these with drool draining from my mouth but still always come to the same realization…
Maybe the price is good today, but next year maybe it will be $120 a square? And, I shy away from them like the plaque.
That’s why I ponder the question. In the long range 20 year timeframe – where is the best place for the best return? It doesn’t seem like inland will keep up with the coast – that is unless the global warming sucks up miles of real estate. Unlikely. Did you see the headlines today? China having the Snowstorm of the Century.
I’m sticking with the "fair price" coast now vs. the bloodbath steals inland.
Todd | February 5th, 2008 at 7:16 pmOne more thing -
The Mello Roos at 4S Ranch and Santaluz ARE EXTREMELY SCARY!!!!!!!!!!!!!!!!!!!!!!!
Todd | February 5th, 2008 at 7:17 pmI don’t know about everyone else, but at $900k and up, none of these houses are in my "market," and never would have been even at the height of the easy mortgage money boom.
GeneK | February 5th, 2008 at 7:39 pmThat Cayenne Ridge house is beautiful, but I think it’s eventual buyer will get it at less than it cost from the builder. If I had double my down payment I would make an offer at $800k just to see if by some miracle it worked – and even if it did I would still end up catching a knife IMO. Like one of the other readers posted above, I can see $/sqft falling under $150.
Winesprings is pretty as well.
A couple of these homes seem much nicer, imho, than many of the ones you have previously profiled, and they are selling at larger discounts. Coupled with the fact that we recently had a peak forclosure month, that really swings the momentum in favor of the buyers.
Genius | February 5th, 2008 at 8:10 pmThe owners of Purple Sage took out $700,000 in "equity" in 3 years? Where did that money go? I don’t consider that "misfortune".
just me | February 5th, 2008 at 8:49 pmWe are looking in this price range (and a bit higher); these houses are lovely, but we are simply refusing to take on the nearly $1K Mello Roos and HOA costs that come along with a house in Santaluz simply to have someone tell us what color outdoor lights we must have. Gene, believe it or not, there are more than a few of us who have the down payment and income to buy these houses easily.
I’m perplexed by the Purple Sage situation as well.
Hibiscus | February 5th, 2008 at 9:36 pmOh, I’m sure there are. We might even be among them if we were willing to take on the full amount our lender qualified us for last year. I just don’t see anything about any of those houses that would prompt me to lay down $900k-1.1 mil for them. For this kind of money I could be in Carlsbad or Encinitas looking at the ocean.
GeneK | February 5th, 2008 at 10:25 pmGene, trust me, you can’t look at the ocean for $900K.
Hibiscus | February 5th, 2008 at 10:29 pmHave you checked the listings lately? We probably couldn’t because of our need for a one story home, but for someone who doesn’t mind stairs it appears that you can, though not in a McMansion the size of these.
GeneK | February 5th, 2008 at 10:39 pmBullshit you can’t look at the ocean for $900k. You may not be standing next to it, but it will be very visible. The ocean is rather large, in case you hadn’t noticed.
Hibiscus, I’m proud of you for being rich. I really am.
Genius | February 5th, 2008 at 11:37 pmGene, where are you finding homes with Ocean View for under $1m? (Not trying to be a smart a** – genuinely curious.) I’ve had a hard time finding homes with views for under this much, but my search doesn’t expand much beyond Cardiff, Encinitas, Del Mar, Carmel Valley, and Carlsbad 92009. I’d assume you’d have to get a fixer for ocean view.
Also, is anyone else tired of homes listed as "ocean view" with maybe a sliver of ocean available from the front porch or an upstairs balcony? It’s funny to see some of the MLS listings with "STUNNING VIEWS!" One such listing is in Santa Fe Trails of a $1M+ home next to an old cow pasture. People used to go cow-tipping there when I was growing up, but I don’t think anyone went to appreciate the scenery. But hey, if it’s on the MLS, it’s gotta be true!
The Blur | February 6th, 2008 at 12:45 amWhat are we defining as "ocean view?" There are homes in the hills of san marcos for $600k that you have a good view of the ocean from. If you’re talking about an ocean view from a block or so away then yeah, you won’t find those for close to under $1mil. I won’t bother posting a bunch of links, just do a search on redfin or ziprealty with ocean view checked and you should find plenty of results for under $1mil. I’ll go check again just to make sure I haven’t recently suffered an aneurysm.
Genius | February 6th, 2008 at 12:58 amBlur: I didn’t expend a great deal of effort on an online search just to reply to a post here, so it’s possible that a lot of what turned up is "peek," upstairs or fixers, and of course nothing west of I5; certainly I wouldn’t expect to turn up a 4000 sq ft mansion that fronts on PCH in that range. But as Genius said, the ocean is rather large, and if I was buying in the 900k and up range, I’d rather have a peek at the ocean from five miles away than a panoramic view of a cow pasture.
GeneK | February 6th, 2008 at 1:02 amI just looked again. Good views of the ocean in solana beach for under $1mil. Still a rip-off, but time is on the buyer’s side.
Genius | February 6th, 2008 at 1:13 amSan Diego was listed as a Cat-4(5 being the worst) by CFC, they expect prices to drop another 20-30% depending on location. I have researched all of SOCAL coastal communities, you can get some nice deals( I would not call it a deal) for 1mill with full ocean view in San Pedro and Palos Verdes.(OLD homes around 1200 t0 1800 sq ft) 1.5 mill gets you 2500-3500 sq ft…for now)
pv ocean views | February 6th, 2008 at 3:14 amLooking at hundreds of homes tax rolls, I would say at least 65% have loans over 800k, with 20% having option arms, do not buy into the notion that coastal properties never drop,
tons of divorces, business failures, real estate guru’s. etc are currently on the brink up here in Newport Beach.
BE PATIENT…….the high priced coastal properties are coming, the question should be how may people have the 500k DP and 500k salary(not one hit wonders) to support the price levels the banks/sellers will be asking?
Here’s one in CV for $899K with a full ocean view, 2900 SF, and a pool. Also has power lines behind it, but you weren’t specific.
TB | February 6th, 2008 at 3:53 amhttp://www.sdlookup.com/MLS-071073082-10575_Corte_Jardin_Del_Mar_San_Diego_CA_92130
Hehe, I know that one… Those power lines are freakish. I never thought power lines were such a big deal until I saw these ones. There is also a giant power pole behind the house, the biggest I’ve seen in my life. Kinda gives me a creepy "shock and awe" feeling every time I drive by there…
Daniel | February 6th, 2008 at 5:28 amHere’s a cute house in La Jolla with an ocean view for $1.1 million. 3/3, 2,033 sf.
http://www.realtor.com/search/listingdetail.aspx?ctid=10991&ml=3&typ=1&sid=9b7e3b540f9a424fae1d228c8cc0596f&pg=2&lid=1090673452&lsn=12&srcnt=170#Detail
If we wanted to spend around $1MM, we’d buy something like this, in an area like this (nice, custom-built, older, established house & neighborhood).
CA renter | February 6th, 2008 at 7:48 amCa Renter,
This home was purchased in 1994 for only 245K, in 87 it was purchased for $189k. So it increased 29-30% during the last cycle. Now we fast forward 13 years and the property gians 448% appreciation,an average of 34% a year!!!!!!!!!!!
They have done what looks like maybe 30-40k in upgrades. I would rather have a "mini-ranch" in Poway for this price, hell with the ocean view, at a cost of aprox 328$ a night I could stay in a timeshare for a couple of weeks to get my "ocean view fix"…….
And people in SD dont think values can drop in La Jolla …..after a 4x increase in basically 6-7 years……
ocean seeker | February 6th, 2008 at 9:27 amOther than the fact that there is no longer a garage and that we’d want to change the paint colors and update the cabinetry again, if we could afford the price of this house it would be better suited to our preferences than a larger home located somewhere that to me is visually and environmentally indistinguishable from Escondido.
This is apart from any consideration of what will happen to the prices of either in the future. It’s not as if the Poway mini-ranch is going to go up while the La Jolla ocean view house goes down; they’re ALL going to go down. If my house is going to lose money, I want to think of that money as what I paid to get what I really wanted.
GeneK | February 6th, 2008 at 3:44 pmI looked at the CV Power Line house when it was offered for sale NEW. Really nice house.
But, when I went to the backyard, it was misting outside, and the powerlines were SIZZLING and my fillings were tingling in my mouth. Very weird, for such an experience in your own backyard.
It CANNOT be good for your body to live so darn close to those lines. They should never be allowed to build residential so close to those lines.
BAD – BAD – INVESTMENT.
Todd | February 6th, 2008 at 4:36 pmCA renter,
That house is cute. But it is also on a very, very busy street. I went to see it at an open house and cars were whizzing by at about 50 mph the whole time I was there.
just me | February 6th, 2008 at 6:20 pmThat sort of thing goes with the territory; the closer you get to the ocean the busier things get because everybody wants to be there, even if they’re just driving down for the day to get their "ocean fix." Our home up north was in a coastal town, during the summer there was often so much traffic on the main road through town we couldn’t even get down to the grocery store.
GeneK | February 6th, 2008 at 8:07 pmAgree with above posters. Just wanted to point out an alternative to the tract McMansions in Cbd or Enc, etc. I know some people prefer newer & larger, but for those who don’t, there are plenty of nice homes near the ocean for a price that are similar to (often less than) the newer/bigger tract homes.
You can get an ocean view, in a NICE area for around a million dollars.
Also agree that almost all areas will experience price depreciation. We were looking at foreclosures in Malibu during the last housing bust, and they were down just as much as the inland areas. It’s all relative & we’ve discussed the substitution effect here before — at some point, it becomes very tempting to buy a nice, large, custom home (or compound) on a couple of acres in Escondido instead of a very average house, on a small lot, in a tract in Carlsbad at the same price, IMHO.
CA renter | February 6th, 2008 at 9:55 pmIt used to be repeated over and over that the three most important things to consider when choosing a home were "location, location and location."
But it seems to me it’s been a really long time since I heard anyone in the real estate business say that.
GeneK | February 6th, 2008 at 10:24 pmGeneK’
ocean seeker | February 7th, 2008 at 2:20 amyour points are well taken about the advantages and disadvantages of living near the ocean.
At some point econ 101 "theory of subsitution" takes over regardless of ocean view location. As OC renter mentions some of us will "subsitute" location of the ocean for our little slice of the pie, including privacy, lack of crowding, lack of riff raff, etc, but I do agree most towns have become homogenious(look alike…in case I mis-spelled), and Escondido looks like every other inland city.
In another year of so, you will be able to purchase a "mini- ranch" for about 550k, but a nice home in La Jolla going for about 3 mill, will drop to maybe 2 mill, thats a lot of debt service and carry costs to view the ocean for 10 minutes a day. IMHO
pardon me I met "Ca renter", been reading too many blogs……
oceanseeker | February 7th, 2008 at 2:22 amThis points to the relationship between personal preference and "market value." The price of property is lower inland because more people prefer to be closer to the ocean, and regardless of how the market goes, ocean view property will always be more expensive than inland property. If you’re willing to give up the ocean view, or if you’re really lucky and happen to prefer it inland, you will get more house for the same money, regardless of which way the market is headed. Just don’t have visions of your big mini-ranch someday soaring to a higher resale than the smaller ocean view property without some giant earthquake or global warming suddenly putting the latter under the tideline.
GeneK | February 7th, 2008 at 3:07 pmGreetings people. I’m new here and it looks interesting.
llamafruit | May 19th, 2008 at 5:14 pm