Here’s a tour of Derby Hill, the Pardee tract of big bombers south of the 56 freeway. In the MLS remarks of the only model listed, it said that the furniture did not convey. The house across the street (towards the end of video) that’s mentioned as pending, listed for $1,449,000, had multiple offers and just closed escrow a couple of days ago – full price:
The recent Mustang Ridge resales on video:
A. The $1,337,500 was 2% under price the seller had paid, but buyers’ were represented by father who may have kicked in commission.
B. The $1,335,000 was $100,000 over what seller paid in March, 2007.
C. The $1,449,000 was $6,000 under what seller paid in March, 2007.
Yes, they had paid for improvements during their stay, plus closing costs.
I concede: the bubble is back.
Is this not enough to convince Zimbabwe Ben to pull out?
Wow
The data does not lie. I am amazed. I guess the question is how big can the differential between CV and Penesquitos grow before prices decline in CV?
I say the $1.44 one that just closed on Mustang Ridge probably had $250k in improvements (counting the pool).
Jim, what’s your thought about the latest scheme by the builders featured on the Union Tribune today: “Developers consider private transfer fees.” essentially taking 1% of all future transactions on the property for the next 99 years.
could potentially be a good substitute for the mello roos scheme. although knowing the builders they’ll want both in place.
I didn’t see the interior because the house sold so quick (first day or two on market), but wouldn’t everything but the pool be included in the original sales price?
http://www.sdlookup.com/Pictures-100003249
Private transfer fees? In the article they use the same justification that was used for Mello-Roos:
“By creating future revenue streams – which builders can “monetize” up-front by selling to investors for cash – the plan allows developers to sell houses for lower prices than they otherwise could, Campbell said.”
But they don’t sell them for lower prices. Have you ever seen a new house with Mello-Roos offered for a lower-than-market price?
I haven’t. They’ll make ‘private transfer fees’ just small enough that you might shrug your shoulders……just like Mello-Roos.
I agree Jim that a house built right above you, lower the value because of loss of privacy. You stated $50,000. But my question to you would be even if there is not a house or one to be built looking into your backyard.. You still have no privacy in a back yard built with a two story house next door.
“I didn’t see the interior because the house sold so quick (first day or two on market), but wouldn’t everything but the pool be included in the original sales price?”
Pool, yes, but also all the exterior hardscape including that nice entry staircase, exterior lighting, etc. Also all landscaping which looks to have included mature tropical plants. Also painting of the entire interior along with the very few window coverings I can see. I’m not sure it would be over $250K, but $150K for sure.
Okay, so am I understanding this correctly that the buyers here have been on the waiting list for a couple years? If so, then people committed to these homes in ’07/’08 when the bubble mentality was still going strong, and the resales will tell the true story.
$1.6 for a tract house sounds insane to me no matter what it backs to. Just because you can afford it, doesn’t make it a good idea.
This is insane. And who needs 5000sf? I think the neighborhood is ugly. I’d rather pay 1.5 for 2 acres in Olivenhain.
Derby Hill and Saratoga will be very interesting in the coming months as PAS has been requesting lots of BPOs for both developments, most likely folks who have missed one or two payments but not enough yet to make the NOD list. Peak pricing with peak financing, I suspect very few foreclosures but lots of new short sales on the horizon for these 2.
You guys just may not be the target market here. As someone who was on the Derby Hill list from the start, the appeal of these is not necessarily for ourselves, but our children. We decided not to buy and remained in our half-the-size house just down the street, but the reasons for popularity of these homes are many:
– Routinely brought up is the school system. Tops in San Diego.
– Some of the best beaches in SD. Family-friendly Torrey Pines beach is 8 minutes from my driveway.
– A huge amount of the best natural open space in SD is a walk or short drive away. No better places to get your kids out on a hike than Torrey Pines Reserve, Carmel Mountain Preserve, Peñasquitos Canyon Preserve, Del Mar Mesa Preserve, Black Mountain, etc. Mountain biking paradise as well. Yes, these places are more than just a view out the back on a canyon rim lot. As much as I love Solana Beach, Encinitas, Leucadia, Olivenhain, Carlsbad etc., those cities have allowed the majority of their desireable open spaces to be bulldozed. Well, you can always go for a hike in your big back yard.
– The neighborhood. While I personally would love to live on 2 acres, that would mean my kids probably wouldn’t have a cul-de-sac to run out to and find five or eight other kids playing. The demographics of the houses on the huge lots in the middle of nowhere tend to skew to the older empty nest set, or those with much older kids, so the streets seem lonely and evacuated. Here, the houses may be packed tightly and far too close to the street, but it also means there’s probably going to be a bunch of kids my kids can play with on our street or the next one. And I don’t have to hop in my car to take kids on play dates.
– Plethora of parks. There are four parks within walking distance. This is where they play and where their sports games are going to be for years.
– Major high-tech employment centers are literally just down the street. More time with the kids if you aren’t driving 20 or 30 miles both ways in traffic every day.
– Middle of everything. I worked on advertising campaigns for The Baldwin Company back in the early 90s, and they knew they didn’t even need to advertise the homes in this area because the location was ideal. In nearly 20 years, this has only become more true. Downtown, UTC mall, Miramar businesses, inland shopping areas, etc. North of the merge is terrible traffic. Heading south on the 5 or 805 is terrible from Mira Mesa.
– Safest area in SD, as highlighted in UT article I sent in to Jim in last thread. Yes, that matters for the kids.
– Floor plans with more space for the kids. That 3rd story in the Derby Hill Plan 3 sure was a lure for a kids play room that they’d probably enjoy even more in their teens.
If I didn’t have kids and didn’t do business in the area, maybe these things wouldn’t be as important and I might be considering 2 acres somewhere far out instead. It crosses my mind occasionally, but for now, the kids come first.
Robo,
Let me ask you this: Do you want to live there after your kids our out of high school? I personally would not.
And, what makes a good school system after all? Do all the kids that go to Ocean Aire become Doctors and Lawyers? Do all the kids that go to San Ysidro High become losers? The answer is no. There are great kids come out of all schools. Too much greatschools.com information.
I personally love University City. The location is tops.
I bet these houses lose at least 10% as soon as you drive them off the lot. Example:
http://www.redfin.com/CA/San-Diego/5291-Birch-Hill-Pt-92130/home/17205617
Here’s a Derby Hill OPT staring at a 15% hit, assuming it ever closes. Makes the recent closings even more head-scratching.
I don’t doubt at all these houses will go for 10 or 15% below original price. When the market was dropping all around them, the prices for these did not budge. In fact, that’s a big reason I decided not to buy one. I know the family that were #1 on the list, and they also decided not to buy. But I have several friends who did – simply because their view is the long term.
As to Mindy’s question: I’d say once my kids are out of college and not likely to need to come back, the house would indeed be too big for us. Unless of course the in-laws then need to move in! But that’s about 20 years away. By the way, these range from 3,505 to 4,621 sq. ft. Plan 3 has about the best use of space I’d seen in a plan that size – except for no coats closet!!
And University City is great from what I can tell. However, being an older community, you will generally find a much wider variation in the ages of the residents and their kids, if they have any. One nice thing about new communities is that you tend to get a lot of people at a similar stage, child-wise in their life. Hence my point about this being a decision based more for the children’s benefit. One of my kid’s friends just moved here from UC a year ago, and one major complaint was the near total lack of children living around them.
As for the schools, I’ve never even looked at greatschools.com. I’ve lived in this area for 16 years, far before I had kids, but stayed knowing it would be valuable for them one day. I went to school in the Poway school district which was and is very good. And I think it’s human nature to want to provide an equal or better experience for your children in life. I don’t think it provides them any guarantees, but it certainly doesn’t hurt!
That last Derby Hill in the video “that guy’s on the F list” belongs to a realtor actually.
Mindy, there will always be exceptions, so yes, not all kids in Ocean Air want to become doctors or lawyers and not all kids who go to San Ysidro are going to be losers. And i dont believe Robo ever alluded to such.
Let me ask you this, how many 4th graders in San Ysidro talk about the colleges they want to attend? My kid goes to Ocean Air and imagine my surprise when i overheard her and her friends already talking about specific universities they want to attend. Rice, Notre Dame, etc were mentioned — they may not end up at the universities of their choice but the fact that they are talking about it amongst themselves implies that there is considerable interest in higher education, even at their young age.
By the way, University City and San Ysidro are fine too, as are lots of other communities. I much prefer CV however and i am willing to pay the CV premium. But that should be okay, right? No need to pit one community against another. As they say, different strokes for different folks; as Robo said, you are not the target market for CV.
And Robo, as far as that being safest area, check the registered sex offender map.
I still believe CV is in for a rude awakening sometime in the future. With the Democrats shoving healthcare to us and California state cutbacks – I think it’s too risky.
“but wouldn’t everything but the pool be included in the original sales price?”
Jim, the original price was likely without upgrades as the oversized lot carried a premium. These homes are on 5-6000 sqft buildable pads, which would not be able to fit a pool. plus we are also looking at pool/landscape cost at the peak vs the bottom. I think $250k is about right, maybe if they were really savvy they could have done everything for $200k. but I doubt these guys are that savvy.
Robo, the problem is there’s a lot of neighborhoods in north county that fits that description if you are just willing to add 15 minutes to that “drive to the beach.”
schools are not the reason why CV is so expensive, because Poway schools are actually better by a hair.
the bottom line is the parents’ face and the value placed on competition between Asian families.
ocrenter wrote:
“schools are not the reason why CV is so expensive, because Poway schools are actually better by a hair”
ocrenter, what data are you using to justify this statement?
Elementary schol:
CV’s DMUSD: Average API = 956
Poway USD : Average API = 917
http://www.greatschools.org/cgi-bin/cs_compare/ca/?level=e&area=d&district=699&sortby=name&tab=over&x=37&y=4
http://www.greatschools.org/cgi-bin/cs_compare/ca/?level=e&area=d&district=682&sortby=name&tab=over&x=42&y=16
ocrenter, schools in Poway are not better than CV schools.
Average elementary API in CV (DMUSD) : 956
Average elementary API in Poway Unified: 917
Schools contribute quite a bit to CV’s appeal.
Don’t think so about the school argument, most CV schools rank about 25-50 points higher in API results than Poway schools. Still great schools just setting the record straight.
sorry, I’m a little dated, Westview was above Torrey Pines a couple of years ago.
btw, comparison of Poway vs San Dieguito doesn’t really fit. Poway is a much bigger district, plus we weren’t really comparing older areas of Poway that drags down the total PUSD API numbers. Rather, I was looking at specifically the newer areas of PUSD which has essentially comparable numbers.
and seriously, if you really think 40 points on the API justify $400k more for the same house, I really don’t know what to say.
“And Robo, as far as that being safest area, check the registered sex offender map.”
I’m familiar with it, and check it often. I’m not sure what your exact point is, but the area from Del Mar through Carmel Valley and east to Peñasquitos has about the lowest density of registered sex offenders in the entire county.
The data I am referring to is highlighting the safest area in the City of San Diego, which contains Derby Hill. See it here:
http://www.walletpop.com/insurance/article/the-safest-neighborhoods-in-americas-50/903758
I’m just giving you some reasons for the demand here, not justifying specific prices here or there or saying other neighborhoods aren’t great. I am also saying there are many more reasons than school scores and drive time to the beach that make this area desireable – to attempt to break it down to one thing or the other is simply closing your eyes to the reality.
Robo — for some reason, a lot of folks on this forum seem to be hung up on CV — nitpicking on everything and trying to find all kinds of reasons as to why CV owners should not have bought in CV. I’m not sure you could say anything to make them understand, let alone change their minds.
It seems like whenever CV comes up, I sense a bit of jealousy from people that can’t afford to live there.
CV bears reminds me of the Irvine bears on another forum I used to visit. They just keep waiting and waiting, thinking the prices will drop for years but it never comes and they yet again miss the chance to own there. The Asians and FCB who desire top school districts for their kids will keep the house prices in those areas from dropping drastically.
As somebody who made the move from Torrey Hills to Olivenhain 1 year ago, I will say that it was the best decision we have ever made. We have a young family and were concerned about not having a lot of kids around, but also realize that you don’t just let your kids go play out in the street anymore. Also, our home in Torrey Hills was burglarized about 8 months before we moved. There were 2 more burglaries on our street by the time we moved. The police officer said that the reason that burglaries were common in this neighborhood was because of the relative affluence and easy access to multiple freeways. The neighborhood was completely anonymous and was tough to get a return wave or smile when walking down the street. We now have a 2+ acre lot with lots of room for kids to play and our dog to run. We absolutely love where we live now.
One other comparison is the quality of home construction. Our home in CV was already in need of new windows (moisture between the panes) and was only 7 years old. Not to mention some major plumbing and roof leak issues. The builder cut a lot of corners on these tract homes to save a little bit on cost. The average consumer in CV just looks at the high end appliances and assumes that the construction is good. I will take a custom built home over a tract home any day.
“I sense a bit of jealousy from people that can’t afford to live there.”
it isn’t really jealousy.
how can I put it. I know the driving force behind it. It is that ugly combination of conformity and competition amongst Asians. non-Asians may not know it well, but you know it well and so do I. It is what lead to the same Toyota Sienna/Honda Odessy in every Asian driveway and how somehow all of the neighborhood Korean girls end up getting the same lid surgery from the same surgeon at age 17. it is completely out of touch with reality, that is why I’m so up in arm about it.
you’re from Irvine, so seriously, is Uni High really that much better than Laguna Hills High? Is it really worth pay that Irvine premium just so you don’t lose to your fellow Chinese/Taiwanese/Korean friends? seriously.
Let’s not overthink it. While schools, etc. are very important, for CV its all about jobs, jobs, and jobs that pay well over $100k.
Sure there are good jobs on the 15, in Univ City, downtown, etc. However, I cannot imagine another single place in the county with both the density and the quantity of these high paying jobs. Wireless, healthcare, biotech, finance, legal, etc.
Driving and extra “15 minutes” to 4s or elsewhere is really a 30-45 min commute door to door at rush hour depending on traffic accidents, etc.
I live in 92009 and it takes me 30-45 to get to my Del Mar Heights office in the am and headed home.
Thus, instead of paying $400k extra for a house we are moving our company to Carlsbad and are lucky to be in a business that is national and flexible in its location. Others are not flexible and $100k+ jobs are few and far between today, and likely tomorrow, and for the foreseeable future.
Thank you T-Dub. YOU GET IT!
Having lived in Carmel Valley for two years, these are my observations
1) Most people I’ve encountered as neighbors and in the shopping areas are relatively cold and unneighborly.
2) Materialism is rampant
3) Good schools or not, CV is not a fun area to live. So I left
4) I think the Asian card is overplayed. In my experience 30% at most are Asian
Each new street lane in CV (and those streets are WIDE) means one less lane for N. County.
“Developers consider private transfer fees.”
Rent-seeking is a big trend in long-term business strategy. Everyone who is anyone is piling into anything that provides a consistent revenue stream. You’ll be renting your software in the not-too-distant future.
Expect to see lots more of this.
Well Robo, there is a convicted rapist living less than 1/2 a mile from OCean Air school. or does that not bother you?
All this talk about Asians. I’d love to find out the stats about Asians with NOD’s. It seems like Asians have a near zero percent NOD rate – thus having a high Asian demographic would lead to stable values vs. other demographics. Combined with the fact that the other cultural groups in CV also value honor and conservative values, you end up with a different real estate market vs the rest of the county.
Yes, it’s a sensitive topic, but the truth is in the pudding… so to say.
Well Robo, there is a convicted rapist living less than 1/2 a mile from OCean Air school. or does that not bother you?
Look the fact is you can’t get completely away from it. However, living in a place with a very low density of crime and sex offenders makes it less likely you’ll be a victim of either. If you asked the question if Robo would rather have one rapist living near the school or five, he’d choose the one every time.
CV is not a guarantee that your kid will go to college, succeed or you won’t be a victim of a crime. However, it will give you a better chance than living in other areas.
Just curious what the specific jobs are close to CV that pay well above $100k. Research firms or something? QCom has a lot of people in the lower 100’s (way upper management makes considerably more), and I guess if you paired two of them up and tossed in some bubble equity they could afford a home in the low $1M range. Maybe I should marry a coworker.
So much talk about Asians recently I almost thought I was on IHB.
Clearfund – Up until a month ago (job change) we did the exact opposite commute. It’s easier going from DMH to Cbad in the morning I believe, the drive usually took me from 25-30.
“Driving and extra “15 minutes” to 4s or elsewhere is really a 30-45 min commute door to door at rush hour depending on traffic accidents, etc.”
It’s about a 10-15 minute drive from 4S to the main part of Carmel Valley in the mornings going back roads. Once there, everyone who needs to get on the freeway jam up together.
I understand the desire for CV, I lived there for many years.
For a couple hundred thousand dollars less, you can have the same community of kids/etc and nearly identical school districts 10-15 minutes away. That said, it’s clear many people are willing to pay that premium – and for some financially those 30 mins a day extra aren’t worth it (big $$ ballers). I get it, and it’s pretty amazing how many people CV strikes a cord with.
“So much talk about Asians recently I almost thought I was on IHB.”
Asians are infamous for spiking a specific target area to unreasonable heights when it come to real estate. See Cupertino, San Marino, Arcadia, Diamond Bar, Irvine, and now Carmel Valley.
someone said earlier it is overblown, that there’s only 30%. Trust me, at this rate, CV will become majority Asian within the next couple of decades.
“someone said earlier it is overblown, that there’s only 30%. Trust me, at this rate, CV will become majority Asian within the next couple of decades.”
It won’t even be a couple of decades. I think within this decade it will be.
In a way you are on IHB because all these CV perma bears are exactly like the Irvine ones.
I was a perma bear on IHB but then had enough of waiting for the “suppose” price to drop and found an even higher paying job in CV and decided to move and buy in CV. Didn’t want to wait forever like we did in Irvine for something that didn’t eventuate.
Carmel Valley is “CHEAP” when compared with “Cupertino, San Marino, Arcadia, Diamond Bar, Irvine..”. For those families I know in CV are relocated from outside of San Diego. For those families who sold their properties from the above areas for $500/sf to $700/sf before 2007 and decided to lease in CV until now to weather the bubble, the current price in CV is still a big discount.
ocrenter, do you have the email address ocrenter at gmail dot com?
CVAsian,
I am still a perma-bear, and I still bought this year after a 7 year wait. But my purchase was at a 2001 price, and that was fair enough to me. I’m still bearish on CV, but I also have to realized that the formulas, stats and ratios of 2001 is not the same as 2010.
Comparing CV to 4S may have held weight back in 2001 when the 56 wasn’t built and your commute to work in RB/Poway was 45 minutes, but now it’s a 10 minute jaunt across the 56. Other factors have changed the game. So if CV was a 5% premium back in non-bubble 2001, then it may permanently have a 20% premium in 2010.
There are few properties in CV that I would drop 7 figures for, and the view from those properties better not be of the morning 56 rush hour traffic!
Jeeman
yes, still at the same e-mail.
I know CV appears cheap to the newcomers. Carlsbad appeared to be a steal when we first crossed over into Baja Orange County. But once you get to know the dynamics of the local market it didn’t seem that way any more. That is why it is always important to rent first when you first move to a new area.
“someone said earlier it is overblown, that there’s only 30%. Trust me, at this rate, CV will become majority Asian within the next couple of decades.”
—————-
We know a few families who’ve bought in the CV area in the past 1-2 years. Every family was Asian, all were highly qualified financially, all were highly educated, and all were absolutely buying into the school system AND the “Asian” group mentality (that they care more about education, and they want their kids to be around kids/families who have the same beliefs and values — and yes, they are all quite competitive). Many of these families move in with parents/kids, so they are pooling resources as well. In some cases, the parents/grandparents are long-term owners in higher-end areas, and have “cashed-out” equity or sold some investment RE in order to give their kids money (sometimes, pretty significant amounts) for a down payment.
As far as I’m concerned, these people are a very low risk for foreclosure. That doesn’t mean prices won’t go down, but there is much less distress than in other expensive areas, IMHO.
Well said, thank you.
Interesting discussion. Let me know where all these Asian buyers are moving from. I’ll look to buy there. Should be some good deals, no?
duncbdunc,
Just from my anecdotal observations:
-some are first-time buyers (these are the ones with mom & dad’s money and/or they are buying with their parents who came over from China and brought some money with them) — the parents are older and will soon be in need of more care, so they are looking to the future, and making the decision to live together so they can take care of their parents in their home.
-we also know a few families who were bubble-sitters (a much larger pool of people than most people realize, IMHO), and they were sitting on pretty significant gains from previous sales. They got tired of waiting, and saw that prices weren’t really going down (they actually believe prices are going up from here — maybe they’ll be right), and they bought. They really have faith that the Asian community will keep the prices high, so they are buying with the mindset that they are getting in before prices take off. Who knows? So far, they seem to be right.
-others have sold and lost just a small amount (not “peak” buyers, necessarily), and are “moving up.”
Okay, that’s just what I’m seeing in my little part of the world.
CA Renter. Thanks for the response. I guess the rental market should loosen up some more then. On the price side, I guess the Asian community can do a better job holding up price when volumes are low. We’ll see if this support is enough when volumes normalize. Prices are set by the marginal buyer and these homes all look the same so all it takes is a few bad comps to break the confidence. Me, I prefer other neighborhoods for non-monetary reasons so not personally looking to buy here even though I can afford it (still wouldn’t buy even if I liked it due to relative value). Jim’s done a pretty good job documenting CV’s resilience so I’ll concede the point in the short-term. This will be an interesting one to watch though.
Absolutely agree regarding the prices and low volume. As you probably know, we are also waiting because we feel this situation is not over by a long shot.
Still, the CV area is as immune as a place can get, IMHO.
Can’t argue with you on that point. Will be interesting to see how this story unfolds.