At first this video seemed like it would be a quick 3-4 minute jaunt, but it turned into a full-length feature film instead – sorry.
Here’s the condensed version:
At the beginning of the year many of us thought that Carmel Valley would be finally taking a hit on price, and the 2,700sf models in Soleil/Bordeaux would end up well into the $700,000s by now. In 2008 they had sold from $800,000 to $925,000, and it sure seemed like the trend was southbound. Instead, they are selling like gangbusters:
| Street Name | List Price | Sales Price | COE |
| Briarcrest | $775-$825K | $880,000 | 4/14/09 |
| Flintwood | $775-$825K | $835,000 | 5/21/09 |
| Mill Creek | $895,000 | $840,000 | 6/16/09 |
| Sonoma | $859,000 | $855,000 | 6/17/09 |
| Briarcrest | $792,000 | $782,000 | 7/17/09 (backed to freeway) |
| Rabbit | $885,000 | $880,000 | 6/18/09 |
| Gamay | $859,000 | $850,000 | 7/28/09 |
| Porter Crk | $895,000 | $892,000 | 7/31/09 |
Also included in the video is another look at the short-sale that listed on Sonoma for $765,000 in April by the realtor from Chula Vista. It was foreclosed in June, but this week the same agent re-inputs it on the MLS as a pending listing, priced $830,000 to $850,000! All I can figure is that he worked something out with the bank?
The enthusiasm is bubbling over too – there are now three houses listed well into the $900,000s: $924,900, $949,900, and the range $949,000 to $999,000!
There are a lot more houses NOT selling in 92130, than are selling, especially higher up price-wise. But these exemplify some of the exuberance this year around CV – will it last? Can it last?
$700,000s is just a matter of time. Next year interest rates in the 6% range. Prices will drop below $700,000.
Maybe, but I’m not so sure. I think supply & demand will rule out. The demand is there, yet the supply of quality homes is dismal. This has been my experience. I’m a buyer actively looking everyday. Some neighborhoods have virtually nothing for sale. It seems some owner occupants would rather go into foreclosure than sell their house.
Regarding supply I know several people living off the free rent. It’s time to kick out the deadbeats and up the supply. If banks weren’t given all our tax dollars via tarp this would never be happening.
As a buyer the possibility of a large number of foreclosures coming on the market is just one more reason to be nervous about buying.
To be honest, if the value of my house was far below the price I paid for it, I’d take advantage of the “free rent program” too. Why should I be stuck with a huge bill? Offload the house to the bank and let them deal with the headaches.
I must admit that’s an easy statement for me to make considering I sold my condo just before the market tanked. Bought it in 1999 at $125K, sold it in 2007 at $275K.
Today, I still wouldn’t buy anything just yet unless I had no other choice. The market conditions still scare me a bit.
Interesting how many of these were short sales. Are there any people in these neighborhoods with “equity”? I wonder how many of the buyers are future short sales? I think when you see how many of these are short sales there is no question why the more expensive stuff in CV is not selling at all.
If I were a CV homeowner and not underwater, I’d sell ASAP and rent somewhere nearby. We’re up to 72 U.S. bank failures this year and almost 10% U3 unemployment. Take the money and run.
This seems to me to be a seasonal aberration, and I think this Barnumesque enthusiasm won’t have legs.
It really is a lot of money to live in these. $1,000 in taxes and mello roos, And interest on a $700K mortgage (assuming 20% down) is $3,500/month. If you add in HOA, electricity, and maintenance it is close to $5,500/month. That is take home pay on $125K/ of income. How about cars and food (or mortgage principle)? I think you need $200K/year just to live in this neighborhood and not save. San Diego income statistics do not support this as sustainable.
I’m thinking you are coreect Jim that this was the summer push but the key factor will be in the winter as well as the slew of coming defaults across the road in Pacific Highlands ranch. Once default hell kicks in over there then the Bordeaux and Briarcrest homes will tank.
For $800k I would like a little more distance between me and my neighbors. But there are plenty of places like this. Irvine in Orange County is another place where people are perfectly willing to pay a million bucks for lot sizes of three or four thousand square feet.
“the possibility of a large number of foreclosures coming on the market is just one more reason to be nervous about buying.”
I couldn’t agree more; it’s essentially placing your 20% down payment down on the table and rolling the dice.
Pacific Highlands Ranch IMHO is a ticking time bomb, and they aren’t done building. It’s only one builder, which does provide some price stability but not much.
As LV Renter points out – these are some serious coin each month.
That was me above; forgot my nerd tag.
So I’m watching this video with my wife when Jim gets into, “I guarantee you somebody’s spouse said ‘I’m tired of waiting – you pay whatever it takes to buy this house today.'”
While I’m laughing hysterically, I look over at my wife and she is not amused!
Prices going up? Maybe for a few comps in the short-term, but if you look at the bigger picture, I see the $700k’s coming up. How many of these in the video would have sold in the $8’s just one year ago? As a potential buyer, it’s good to see so much volume in this price range. I agree with Jim – it’s gonna be a long, cold winter! Small lots, no privacy, high fees will catch up sooner or later.
800K to open a window and say hello to your neighbor is typical. Not sure why this is acceptable, perhaps because people are followers and it is cool to be in the ‘in’ crowd.
What’s the secret? Same thing as before…same thing as brought pain to Ireland and Spain… low interest rates.
Bubble much?
I currently live in Carmel Valley and don’t understand the hype at all. The one thing I do love is I seem to miss all the traffic north and south. Easy access to the freeway, etc. On the other hand, there is nothing around (shopping, dining) but suburbia and a couple of strip malls. I’m not much of a kid lover and there are kids everywhere in this area. They invade our private community pool waking me up at 7am, they are rude at the movie theatre and they all seem like a bunch of spoiled brats. Just drive over to the little strip mall with the Ralphs and that will be enough to prove my point. Since when do teenagers get BMWs and drink Starbucks? They loiter, I’ve seen fights and then they leave their trash behind. I feel like I’m living a MTV reality show.
Enough of my bitching…here is some relevant info. I’m renting a condo that the owner had to sell since she was under water. She purchased in 2006 for $480k and sold it on the first day to a young asian couple for $480k. So she lost maybe 15k after all was said and done. This condo is next to the skate park and low income housing, is 1251sqft and 2bd/2bth. Explain to me how this is worth half a mil. People must be delusional or sheep. Probably both.
Since this place is sold, I just rented a detached townhouse in UTC. I’ll continue to pay off my student loans, save, and hopefully buy in 2010 when the next waive of resets arrives.
DJIA today 9370 cf March 2009, 6440 up 50%
Nasdaq – today 2000.25 cf March 1265.62 up more than 50%
and you wonder why people suddenly have money to over pay for houses again??
Poorhouse – I agree there are a lot of bratty kids today…many more than when I was a kid in the 60s/70s. I couldn’t imagine anyone addressing an adult by their first name then.
Does that mean they’re all that way? No. Unfortunately for those that are, it is the fault of the parents. Low expectations and entitlement mentality yields brats. When the Mommy & Daddy gravy train finally dries up, there will be a rude awakening for them. And again, this will be another result of their parents doing them no favors by indulging them as children.
Not exactly a housing topic…but perhaps there is a link. When these kids are of house buying age, they’ll likely have little savings and poor self-discipline. Given fewer children in the post Baby-Boom generations, that too might be a long term macro-economic factor that will hold down prices.
“DJIA today 9370 cf March 2009, 6440 up 50%
Nasdaq – today 2000.25 cf March 1265.62 up more than 50%
and you wonder why people suddenly have money to over pay for houses again??”
True, but you have to remember most people rode the DOW down from 14,000. I’d say it’s more accurate to say people are down 35%, not up 50%. I don’t think the last 5 months have made people forget we’re in an economic crisis. On the other hand, it doesn’t take much for people to generate reasons to overspend.
Baa Baa Baaa. P.T. Barnum was Right and Jim just proved it in this latest great video.
You are looking at the next wave of destitution.
Read post #6. ‘Tired of Waiting let’s buy Today’
Honey lol.
Jim, please don’t revert to realwhore type of a cookie baker skirted imbescile. These buyers will be broke in 12-18 months, max.
When they end ou in the BK penalty box, Have NO Mercy… http://www.youtube.com/watch?v=tN7GI0lkWPo
Thanks for the Great Information.
I’d say CV stands for “Crazy Valley”, but for now it appears to be “Cash Valley”.
Jim, do you ask your current & prospective buyers what their motivation is for buying now?
a) Their dream house — gotta have it!
b) They believe the market is close enough to a bottom to not warrant waiting.
c) They have more cash than patience (IOW, don’t want to wait and can weather more drops).
d) ???
d) They agree that if they could find the right house at 10%-20% off, they’d be comfortable. It’s my job to produce it, and they’re counting on me!
I love you posters who always say things were better in my day. You sound like a bunch of old farts. The only “thing” better back then was ESPN. At least they weren’t whores and actually showed sports highlights.
Exactly. On the whole things are much better today, people just have very selective memories.
This is the same set of responses for past 3 years… “CV is going to crash…” “suckers…”
Well, it still hasn’t happened – maybe the crash is just around the corner, but this conversation is getting really old about how everyone is sure CV will crash.
I don’t think anyone said “things were better in my day”. I think they were referring to societal decorum. Economically, things are far better today than they were in the past. However, if anyone thinks that we have a more polite society than in the past, they must thoroughly enjoy the Jerry Springer show, and I’d comfortably rest my case.
P.S. I also don’t recall any all encompassing slurs like “old farts”. Remember, if you’re really lucky, you’ll be one some day.
Oh by the way, before you call me grandpa, I have kids in elementary school. I guess I was just taught manners.
I just cannot shake the feeling that these are only selling for the mid 8s because they have sold in the mid 6s. Sure there’s value innate in a good neighborhood and schools and square feet and appointments but is it $850k? It is now but tastes can change. The other concern is future tax treatment. Taxes doubling on these houses isn’t the same as on more modest homes.
CB Mark, you said that kids are more bratty than in the 60’s, which should put you over 40, making you an “old fart.” I say that light heartedly.
I’m sure if you really think hard and reflect back on the era you grew up in, you’ll be able to discern all the big changes that have happened over the years. I’ll state a few to help you out: population boom, less gay bashing, better healthcare drugs, less discrimination, better equal rights, yet crappier espn. This is just off the top of my head.
To support of what Poorhouse said, it really is shocking the complete lack of suburban pillars in and around Carmel Valley. The day I moved in, I couldn’t believe the nearest Home Depot or Lowes is 20 freakin’ minutes away (Leucadia or Mira Mesa at the 15). Holy cow, most anywhere that’s half-way civilized I know of, there are probably 10 HD’s or L’s within that distance. Everytime you need a tool or something, it’s an hour round trip. Of course since everyone in CV is a millionaire, I suppose they can just send their butler. And then when you want to run over to Target or Walmart, also a good 20-30 minute drive each way depending on traffic and stop lights. If you want to relax to a nice, family-friendly sit down restaurant, get ready to shell out $15 for a regular burger at Red Robin, since that’s about your only choice. Of course you can decide to stay home and order pizza, but your only choice is garbage dominoe’s or overpriced Oggi’s since there’s not even a friggin’ PIZZA HUT! Really, what suburban American can’t even order from Pizza Hut? And finally the biggest pillar of suburban American life, the wholesale club. Too bad we don’t have a Sam’s or BJ’s, and the closest Costco is all the way up in Carlsbad or down off Balboa (obviously you have to plan your trips around rush hour either way, and once you pick out your ice cream you have to hit the road quickly since it’ll be at least a half hour trek home). If you don’t have a job to commute to, you’re really better off out in Temecula if you like to be conveniently located to the aforementioned establishments. I don’t think prospective CV residents realize this until they actually move in, I know I never thought about it.
Just a point. ESPN is better now than it was in the 60’s… but that’s a technicality – it didn’t come into existance till 1979.
(Another ‘old fart’ in my 40’s with elementary school age kids and attempting to teach my kids manners and respect.)
Another way to look at it is the cost to NOT sit in traffic or drive 9 hours per week. To some it could be $25K/year +/-.
I’m 1 – 3 miles from every of those stores you mentioned with the exception of Costco, but that doesn’t pose a problem because I am not a member.
LV renter wonders how the supply will continue when $5500 a month doesn’t match up to the San Diego statistics for income. I asked this same question a few years ago.
I joined a 25 person Carmel Valley mom’s group of toddlers and found some answers on how they do it. For reasons above I took it off my list.
Group 1: Doctor/ Lawyer. One spouse is a doctor and the other a lawyer. They have a nanny for the children. There were several of these. One family lives in Derby Hill. The husband’s income pays for the 1 million dollar mortgage. The other income is for regular expenses.
Group 2: Moved from L.A., San Fransisco, New York, and Carmel Valley is a deal compared to there.
Group 3: Family live in San Diego and gives children money for the down payment. I know several families in Carmel Valley that want their kids and grand kids around so they help their kids stay here. They have the San Diego statistical wages but got help on getting in.
Group 4: They bought their first home in another cheaper area of San Diego and then cashed out the $300,000 profit and moved into CV. I know this one doesn’t exist anymore.
Group 5: There are a group of just really rich people.
I personally didn’t meet any of the fake rich people who were pretending.(I know they are out there) I was surprised how many of them could actually afford it and found a way to do it.
Thank you propertysearch. I think reason 2 – 4 are going to become smaller going forward. Perhaps the slow down in high end SD is related to the slow down in NY and LA. There is less ability for grand parents to cash out refi for children There is also fewer people making money on a flip in SD. What does this mean going forward?
KBoy, you’re absolutely right about the lack of commerce in CV. It’s nothing but cramped rooftops for miles. (By the way, you should try Rancho Bernardo for Home Depot, Costco, and other such places. You should also check out Mario’s Pizza off Camino Del Sur:) – unless of course you’re willing to drive to Bongiorno’s in Solana Beach.) Now if anyone knows a driving range that’s not located right next to the track, I’d like to know!
My wife and I actually find the teenagers to be relatively polite here in CV. They hold doors open for others, they’re respectful at the gym and other public places. Sure, on the whole teenagers are obnoxious – that’s what they do. They loiter, are loud, and are completely unaware of their surroundings. But just because their parents buy them Beemers, doesn’t make them jerks. Sorry, but saying anything to the effect of, “things were better back in my day,” makes you an old fart. We were all kids once.
My wife’s reading the CV paper this morning about Mello-roos schools in Del Mar that are closing or not even being built. Apparently there’s no legal recourse for homeowners. If I wasn’t sure before, you can certainly count me out now on anything with mello-roos. I feel bad for 4s and Del Sur owners.
Propertysearch,
Those are the five groups I see too.
Using the average or median incomes is too broad.
All that matters:
Sellers’ Staying Power vs. RWA Buyers
of each local market.
Are there enough ready, willing, and able buyers for each sellers who can’t hold out? The balance of those will determine pricing.
It comes down to net worth and some are able to sustain a high consumption lifestyle for now. Pay nor or pay later – unless you are part of the super rich. I believe there are still many people who are not hurting in this economy.
A friend of mine bought in CV 15 years ago and when he me the directions i had to laugh, it was like Carmel Valley rd to Carmel Creek to Carmel Cape to Carmel street or something like that.
It was lame back then! Now the 56 goes through…i guess its better now?
Kboy, location among other things, was why picked CV.
You seem to pick on our restaurant choices. Sure, we wish we have more options but we much prefer our Pat/Oscar’s to your Pizza Hut. I like Ruth’s and Arterra’s too. They’re only 4 minutes from my house. Fastfood (La Salsa, Rubio’s, El Pollo Loco, McD, PickUp Stix, Taco Bell) are all within 4-8 minutes. UTC and Delmar restaurants are 15 minutes away.
You’re right about the distance to club stores and Home Depot. But then again, isnt the point of the club stores to buy in bulk so you dont have to go there frequently? We go there once every two or three months. For our groceries and other supplies, we like our Vons and Ralphs fine. I also like our neighborhood Ace Hardware but i’ve been known to drive to Home Depot once or twice a year.
We’re close to the beach, employment centers, and interstates too.
Obviously, our criteria is different than yours. I’m sorry you found out about CV only after you moved in. Just curious, at which pizzahut+Costo-community are your looking to move to soon?
Drive time is relative and we all have are preferences. One one hand, I just got back from Target, drove past Home Depot and hit every stop light in sight and it took me 4 minutes to get home. A door-to-door round trip to Trader Joe’s is less than 15 min (personal best is 12 min) assuming I pick up a few items and because it is all right turns for me. Fastfood (Chipotle, Rubio’s, El Pollo Loco, McD, PickUp Stix, Taco Bell among others) are all within 2-4 minutes. Pat and Oscars is about 7 miles away, however Bongiornos Pizzaria in SB is 5 miles and that is where I go. On the other hand, CV is closer to Sorrento Valley and SD from a work POV by seven miles and some prefer a shorter work commute.
That being said, I also drove by what used to be Circuit City, Linen’s and Things, Home Expo, Pro Golf Discount, and Hollywood Video. But this is a cycle and a Mexican Restaurant with 24×7 drive through just opened up where La Salsa used to be on ECR. Some keep waiting for market normality to return. But what is normal? Personally, I would like to see the banks foreclose as soon as possible and sell those homes sold on the market as quickly as possible – but we know that is not going to happen. A little OT here, what is with the big giant white Union Bank sign in DT Encinitas? I could see that sign from the panoramic coast view of the Encinitas Library and it sticks out like a sore thumb.
I have always been amazed at how much cash/credit there really is in the US. . .I said in 2005 that Tiffany’s was doing a pubic service by relieving the public of excess cash. . .now there is simply less money, but 90% of the people are still working, and many at high paying jobs here in SD at Scripps, Qualcom, Biotech companies Leap, etc. Downsizing means going from a 4 car garage (with 5 cars – one in the drive) to a 3 car garage. . .As Paul Volker once said, “never underestimate the American consumer.”. . .I think we are at the bottom of the housing cycle, and most people must feel that too. . .why else would they be buying?
I believe there are still many people who are not hurting in this economy.
There are plenty that it’ll generally help, not hurt. They’ll keep their jobs and income while most everything they buy gets cheaper.
A buddy of mine last month said, ‘the dollar ain’t going to get any cheaper’ as he left my house. He came back with a brand new Ford extra cab truck with camper shell and accessories. Price and wage compression is alive and kicking. And if the world goes MadMax he can use it more ways than one.
On the whole things are much better today, people just have very selective memories.
Absolutely.
“Children today are tyrants. They contradict their parents, gobble their food, and tyrannize their teachers.”
Stated by Socrates 2,000 years ago.
You can buy 4 of these chicken wire and foam stucco boxes in Mesa/Chandler AZ for 900K. The property taxes on all 4 would be about 1OK total per year, with lower insurance and utility rates also.
3 clicks,
4 minutes to get from Target to home in Carmel Valley? Pray tell which Target, your route home, and mode of travel please, because my wife would love to hear how she can go 12 miles in 4 minutes as well.
As long as Qualcomm isn’t laying off workers, Carmel Valley will be fine.