A few more bank-owneds in Del Mar, Solana Beach, and Encinitas in this youtube video:
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But I thought the higher end was immune?
Overshoot on the upper end. The mid & upper tier market is now where the low end was early this year.
Mozart can you elaborate on your comment?
I’ll start by saying the first comment is tongue and cheek.
Sounds like Wells made the right move on this one. Rinse and repeat for a couple of years, problem solved. Millions of new homeowners willing and able to pay, especially the ones who skipped over the bubble.
3clicks – you’re right. I was being snarky.
But there are a lot of people who seem to argue that the high end is immune.
CalculatedRisk just posted about Option ARMS imploding. Fitch just released a report that says in 94% of securitized option ARMS the borrower is only making the interest payments. And 40% of option ARMS are delinquent.
http://www.calculatedriskblog.com/2009/09/fitch-on-option-arm-recasts.html
Since a lot of people used option ARMS to get into more expensive houses – this could be the pain train that some have been waiting for.
SDScientist’s blog shows that house prices in the lower and middle tiers are about 1.4 to 1.55 times their value in Jan of 2000. The high tier, by contrast, is still 1.8 times its value back then. I don’t see any reason why the high tier should have appreciated significantly more than the lower and mid tiers. That would suggest the high tier is likely to come down about 15-20%.
“The high tier, by contrast, is still 1.8 times its value back then”
That stat is obsolete or just plain incorrect.
Here are some quick counter-examples:
1.) http://www.sdlookup.com/MLS-090003958-1361_Shorebird_Carlsbad_CA_92011
Price paid in 12/99 = $750,806
Approved short sale at 1M (just went pending).
In this case, price paid is 1.33 times its value in 2000.
2.) http://www.sdlookup.com/MLS-090042014-1612_Aryana_Dr_Encinitas_CA_92024
Price paid in 4/00 = $1,076,490
Still listed between 1.5M-1.7M
Let’s say it sells at 1.5M then the price would be 1.39 times its value in 2000.
3.) http://www.sdlookup.com/MLS-090030918-1335_Ravean_Ct_Encinitas_CA_92024
This house closed recently for 1.22M
Price paid in 6/00 = $906,250
This is 1.35 times is value in 2000.
However, this is misleading because all of these houses were bought new and had big $$$ dumped into landscaping. So the margins are even lower that what I calculated.
I think this is what Mozart was referring to when he said that the high end is starting to overshoot to the downside. I have been noticing this as well recently. The market is changing so fast it is hard to keep up. Not sure where we go from here but it doesn’t look good for sellers over 1M.
Labeling these properties “high end” is quite a huge leap and stretch…in the remaining 98% of the country,they would be categorized in the pretentious stucco ghetto category, ranging in the 250 to 400K range.
I love the Del Mar and Solana videos, keep doing them! 😀 I wonder if any of the houses I see up here with for sale signs will ever make it to the MLS. That house on Boquita may be a reasonable deal for a couple hundred thousand less.
Wait till interest rates start to tick back up, then you’ll hear people squeeling in agony when you drive by…
I’m sorry, why was that first house ever worth over 1.2? Or still worth between .8-1 now? It looks like a single story track house in Westwood. Does it have a view of the water, or does it come with a Faberge egg or something?
The first house is west of the 5 in a really nice area, with a great school district, and only about half of a mile from the water. I don’t believe you can see the water from Boquita, but I could be wrong. The area is still littered with bubble pricing, but I see so many houses for sale there it’s bound to change. Seems like every 2 story house is asking $1.5-$2.0M, then along comes a new 5k sqft house priced at $1.8k on 1/3 of an acre… Squishdown?
“does it come with a Faberge egg or something?”
lol
*sound of brakes locking up*
Del Mar is hearing proposals for closing/reconfiguring schools. Imagine buying into an area and having to spend more time in traffic ‘busing’ your children to a different school due to declining enrollment and increased budget cuts. The North Coast News reports 5 of 8 schools are operating at half or two thirds capacity. So this begs the questions: Did DM build out the schools too fast? Has there been a large number of recent dis enrollments or has the attendance always been this way? Did DM build for the future knowing most of the schools will have low attendance?
@UCGal
Another home on Camino De Orchida is on the way to REOdom being 13K in arrears. I would consider this high end (though not super high end). This collection of approx 36 homes, many with ocean views hit the market at 1.5M – 2.5M in or around 2006. Talk about buyers being late to the game. I’m guessing there are at least four homes in some for of foreclosure at the moment. I would venture to say at least 33% of the homes in this track would have been either SS or REO before next Fall.