In July, 2007, I sold the house at 10503 Abalone Landing Terrace in 92130 for $1,199,000, which was the full list price at the time.
Zillow has a follow-up program for properties logged under your name, and they send regular updates.
Yesterday they noted that their zestimate of value was $1,093,500, an increase of 1% over last month. The overall decline since it sold was a relatively strong -8.8%, which seemed about right to me. Carmel Valley has only seen about a 10% dip in values, at least so far. (click on image for better clarity):
For those buyers who are waiting for the big collapse, know that there are other buyers out there who are willing to pay more – it’s the sellers who are holding out. I talk to other CV listing agents just about every day, and the stories are amazing. I called on one that’s listed in the $1,300,000s, thinking that the max value was around $1,100,000, and had proof. But the agent told me that they had two offers this month in the 1,200,000s, and the sellers turned them down!
These days buying home is similiar as buying stock. Buying has nothing to do with fundamentals like (how long do you live in house, job security, health status, martial status, schooling, neighborhood, crime rate etc..).
Buying home these days is more of an betting on interest rates,future house values, low supply,green shoots,President recommendations 🙂 , Ben & Geithner assurances, 3% downpayment loans, and finally builders upgrades without price reductions.
So who wins : Both longs n shorts win, pigs get slaughtered.
Jim, Is it your experience in the high end (over 1m) that it is the sellers refusing to lower their price, or more the listing agents encouraging the sellers to hold out? Just curious.
Buying in an excellent school district is always a good bet.
Buying west of Interstate 5 is always a good bet too, if not better.
Over the long weekend I had various discussions with 4 friends of mine. Each one is now out seriously shopping to buy a home (to my surprise). I’ve been advising them for years now to hold off, but had not spoken to them about RE in a while.
The reasons they are buying now (according to them):
– Tired of waiting
– Prices have come down some
– Their down payment funds have kept going up
– Interest rates are low
– Prices have not gone up
– Leases are expiring
– They think prices are bottoming
None of them were aware of the foreclosure pipeline being put on hold. Each said they didn’t care if prices fell another 10%. (I suspect they would)
My personal impression is they all wanted to buy years go but were priced out. Homes are now affordable, and they are tired of waiting/not interested in waiting for the elusive bottom.
Now I know a sampling size of 4 of my friends is quite irrelevant in the grand scheme of things. But in my world the people around me are getting off the fence. Increase in demand… now how about that supply..?
That said, it bolsters my current feeling that unless CV (or equivalent) encounters a LARGE increase in inventory – the reasonably priced houses are going to get sucked up as soon as they hit the market.
I personally plan on looking later this year. Still think it’s a bit too early.
Demand may be increasing, but who really thinks a 15 year old home in Carmel valley is worth a mil? I know many people looking for work- including specialized high income. THose homes seem like H2 hummers.
When the dam breaks I’m afraid many won’t be on an ark.
I’m perfectly happy to wait for the big collapse. Impatience has always cost me money. 🙂
I have to agree with sdnerd and TJ — We were in the market last month, but decided to step back into the shadows again when it became ridiculous. Why were we so eager to buy? Tired of waiting was the top reason. We didn’t buy during the bubble years because we could see a crash on the horizon. We waited this long, what’s another 6-12 months? We rent in comfortable home in a great school district. It would be nice to paint the walls and get rid of some landscaping nightmares in the back yard, but not worth spending top dollar in a bidding war for a tiny little house that is only going to depreciate in the next 1-2 years.
Jim,
I notice that there are about 300 distressed properties in this zip according to foreclosureradar.com. What percentage will make it to market? Could make a difference in the Fall.
We’re also in the “tired of waiting” camp, but have decided to get back on the fence after seeing that flippers are back in the game, BIG TIME.
All of these speculative investments are “pent up” supply, either as rentals or future sales.
Like sdnerd said (and I totally agree), people who were priced out can now afford a home, especially because of the low rates and various govt incentives.
We’re resigned to waiting until this wave passes, maybe even longer.
There is a sucker born every minute. Those ‘buy’ signals got me back in ’06 against my better judgement.
“…but not worth spending top dollar in a bidding war for a tiny little house that is only going to depreciate in the next 1-2 years.”
Really? Your investment timeline is 1-2 years? You are looking for absolute market bottom? Good luck. This mindset make suckers out of people every day. If you want for a HOME and plan to stay in it for 10, 15, 20 years, who cares what happens in the next 1-2.
I bought a house in 1989, watched prices come down for a few years and then flatten, If I had sold in 1995 I would have been a loser. When I sold in 2007, I did fine.
If you buy a home in a good area, good schools etc., nothing too weird (power lines, roads, etc.) and plan to live it in long term, you will never remember that you paid 10 percent too much for it.
“you will never remember that you paid 10 percent too much for it.”
I understand the point being made here and agree with the general concept. However, there’s no way I’d forget paying too much. It would really start to sting in a couple years when I’d realize I could have purchased a significantly nicer house than the one I owned if I had just been more patient. There’s no way to recover that, and it would be a lesson that stayed with me forever. But, as JLC indicates, it’s tough to hit or wait for the absolute bottom.
Interesting note about the flippers, CA Renter. That’s just a sign of dangerous times ahead IMO.
On a similar note, I noticed 1455 Heritage in Encinitas Ranch is back on the MLS. Jim, didn’t you do a feature on this house a while ago? Wasn’t it a flip? I wonder what the story is there.
“….It would really start to sting in a couple years when I’d realize I could have purchased a significantly nicer house than the one I owned if I had just been more patient…”
That statement cannot be more correct.
The great location void of powerlines, top rated schools and no powerlines makes my purchase more palatable. In otherwords, buy the most house you can afford in the best area.
Condos are a whole different story in CV. Mass foreclosures over the last year in complexes such as Pell Place and The Heights. Last sale in the Heights for 2br was $329K, off from over $480K two years ago. The two units for sale are approaching 3 and 4 months DOM. Pell Place had harder price drops.
They should just split the zip code in two and be done with it. =)
I don’t think not wanting to over-pay for less of a home makes me a sucker. It does tend to tick off Real Estate agents trying to get us to pay listing prices. I’m not looking for the absolute bottom either. I just don’t think it’s worth paying over half million for a tiny 3/2 1400 sq home with a tiny yard right now, when that same home sold for $230K in 2001. Just looking for value for my hard earned dollars and a nice place to raise a couple of kids.
“you will never remember that you paid 10 percent too much for it.”
Arguably that depends greatly on how quickly that 10% decline came about, purchase price, and just how much your down payment means to you.
Personally, every single dollar in my down payment fund is a dollar I’ve worked my rear end off for. It’s a compilation of thousands of small sacrifices here and there, second jobs, overtime, aggressive savings, etc. We’re talking many years of hard work, patience, luck, wife that wants to own a home, etc.
Now, if I’m going to buy a $700,000 home. That’s a $140,000 20% DP.
If I buy said home today, and in 6-12 months from now it’s fallen 10% – yes, I am going to remember that because it will seriously hurt. I personally see that as a very likely possibility.
If I felt that over the next 2-5 years prices will bounce around a 10% decline before they flat lined or increased it’s a different scenario. I’d buy today. I’m hoping we are closer to this scenario at the end of this year.
The MLS is full of homes we’d love to own. And most of them are $100-200,000 over their 2004+ purchase price. Their DOM is going towards infinity.
From my viewpoint, the cliff is still deep.
This whole supposed recovery is just another suckers’ rally. I am expecting that this current “recovery” will peak out somewhere around 2016-2018. I am planning on waiting for the ensuing crash and swoop in at the bottom in 2020-2025. I hope Jim is still in the business then.
“I don’t think not wanting to over-pay for less of a home makes me a sucker. It does tend to tick off Real Estate agents trying to get us to pay listing prices. I’m not looking for the absolute bottom either. I just don’t think it’s worth paying over half million for a tiny 3/2 1400 sq home with a tiny yard right now, when that same home sold for $230K in 2001. Just looking for value for my hard earned dollars and a nice place to raise a couple of kids.”
Do not worry you will definately be able to get that same 1400 sq ft home for very close to 2001 Prices – I will Guarantee it
Again, if you are thinking long term, the 10 percent won’t matter. Its not about paying “list”– It’s about sitting in a rental home while you anxiously await CV and Encinitas having a 50 percent off sale.
What does matter—ask Jim–is that there will always be competition for choice spots (coastal, schools, etc., etc.) so if you’re waiting for that bargain dream think about how many others are waiting too.