Today’s home buyers want bang-for-the-buck, and don’t want to compromise.
This new-home tract in Carlsbad is feeling it – three houses sold over $1 million this past weekend, while six others are sitting unsold from $769,000 to the low-$800,000s:
(This was taped last Sunday)
I too noticed that the furniture was way too small in model homes. My wife might fit in that bed, but I’d hang over all sides. No fun. A real man-sized bed swallows those rooms quickly.
Chuck
Expected build out of 800 lots, 80 at a time..2015? Long term contest?
I bought in early phases of Aviara and Rancho Carillo…it is a couple of years process of:
Year 1 landscaping and builder warranty headaches and battles
Year 2 driving by unfinished homes/lots/lack of landscaping and streets unfinished with top coat and city of Carlsbad ripping out perfect sidewalks and curbs just because they want to torture builders and developers with the process.
This tract will be at least 1/2 decade of the above if not more.
Who has the money to pony up 1 million these days?Are these people getting those funny money FHA loans?I guess times arent that tough after all.I am trying to figure out who is actually struggleing?Is this another ploy to get the govt to hand out free money to help people?Who is getting the help?Sure in the hell isn’t mainstreet.wall street is getting rich off of you again.When are people going to see that wall street is basically a ponzi scheme?
Who has the money to pony up 1 million these days?Are these people getting those funny money FHA loans?
Jim has touched on this before, lots of people buying these houses are doing so with large down payments. Most have 20% down or more, since jumbo loans require it. They got their money either from the bubble years, saving, inheritance etc. The FHA loan limits don’t allow you to purchase a $1M loan, and the income qualifications required for FHA loans would require a fairly high income anyways.
Yes it’s an economic downturn but that doesn’t mean that everybody in the country all of the sudden is making $50K a year or less.
Jordan,
If you put down 27%, you could qualify for an FHA loan for a $1M house. I think you just proved “hug a realtor”‘s point.
Chuck
If you put down 27%, you could qualify for an FHA loan for a $1M house. I think you just proved “hug a realtor”’s point.
The point is do you need a FHA loan to put 27% down, or could you get a jumbo loan? I don’t think that FHA is the one supplying loans at the upper end. The second point is how much risk is there in a loan with a 73% LTV? How many people are going to walk away from a $200,000+ cash commitment on a house?
Hug a realtor’s point was that the only way people could buy these houses was with funny money loans. 27% down payments aren’t funny money loans.
Is that children’s clothes in the master closet to make it look bigger, or just petite women’s ? struck me as weird.
Another great video. I would still be tempted to show clients distressed SEH propeties as an alternative to these new homes. Even with the inferior highschools SEH has to be competition for these.
I love the plan 2 house with the folding doors. If I could pick that up for just under the FHA a limit with 3.5 % down and stop paying the mortgage on day one, live rent free for ~24 months, and wait for my cash for keys, this pencils out well with a rent equivlent around 1K/month.
Did you guys know goldman sachs had a record year for profits?They are trying to figure out how to give their employees bonuses without pissing off the public.So where did all this money come from?You guessed it you and me via 401k’s and all the other so called investments.These guys are totally fleecing america as you just sit and give them more money every year.The market is controlled by insiders folks.If you think you have a fair opportunity in the market you are in a real fantasy land.
Jordan,
Go out and try to get a 700K loan for rates anywhere near what FHA is charging. Then you’ll see the clear advantage.
Once you pass the threshhold of “conventional” financing, it gets dicey. Above the “Jumbo Conforming” limit, it’s the wild west. FHA fits a specific niche for $1M home purchases right now.
Chuck Ponzi
Why arent we dropping these power lines below ground? Im sure there are a lot of reasons (cost to lay the lines, drill into the earth, maintenance etc) but they are such an eyesore. I know the EMF doesnt matter – above or below.
At least if you buy near one, you can offset the testicular or leukemia with free electricity since it will light up all bulbs in your home for free. Running around unscrewing bulbs is a bit of a pain but hey free juice!
Go out and try to get a 700K loan for rates anywhere near what FHA is charging. Then you’ll see the clear advantage.
I just don’t agree that a 73% LTV loan is a funny money loan, even at those dollar amounts. Even if they go FHA, they still have to pay upfront PMI and PMI for 5 years. Is it still worth the lower interest rate at that point? It seems like with these loans the FHA is more likely to make money then lose it to defaults.
The house with the folding doors looked very nice indeed. Especially with a big backyard overlooking a canyon. Very nice.
Something tells me it wouldn’t be as good on the ‘normal’ lots if you can high five your neighbor while doing the dishes.
Perfect example of if you build it, they will come – just like the Pontiac Aztec. Why even bother with windows? It is a 20 minute drive to I5 and you are hoping on before the bottleneck if you are going south and we aren’t talking rush hour traffic yet. Love the folding doors though.
$20,000 for a folding door ?! Does that include the floor/deco outdoor ? I can not believe that door costs more than a car !
Jim–I’ve got to hand it to them!!! We went through those models about a month ago–I immediately got on the horn to source those folding doors to install in our house–I was blown away–it is a great way to customize a tract home–They are from La Cantina. I got a quote for $10K for those exact doors no install.
The interiors are beautiful–they are smart to push the envelope!
Wow, you don’t get much for “one million dollars” any more. I’m shocked. Those look like glorified town houses. They seem cramped, like the builder packed in too many features, so that you wouldn’t notice how unspecial the house is. The cielings seem low. There can’t be much more than 4 feet between the island and the stove. The bedrooms seem small.
Would these have been going for 1.5 million in 2005. Where’s the bargain here. And Uncle Sam is on the hook for these loans? Can you say suburban nightmare?
Local Boy–I agree 100%
“it is a great way to customize a tract home”
Upon exiting the home I went straight to Google and found out about La Cantina as well. Those doors are sweet!
JE–I also agree 100% with the SEH comment. I can’t justify spending an extra $200,000-$300,000 for a slightly higher API score and to save 5 minutes on the drive to the I-5?
If you think those sliding doors are amazing, you should see the set that are curved! I went to the Builders Show last year and saw things that made me drool – visibly – right on the convention center floor. If you are close enough for a day trip to Vegas, next year’s show is January 19-22.
Is SEH still a pain to get in and out of? That would make me thing twice about it, even with sub $200/sqft pricing. One of my friends is dead set on buying in San Marcos, although I’m trying to talk him out of it.
It is not a pain at all to get out of SEH Genius. Just drive through SEH Road. I can make the drive in 13 minutes from my house to I 5 w/o speeding at all.
Jim, realistically, how do the prices of these new homes affect the prices of homes in SEH. I would think that SEH would be an alternative to these really expensive homes. Do you agree? Try to be objective. We all know how you hate SEH.
Thanks for the input.
There are 5 Kindergarten classes at SEH’s elementary school this year, with 33 kids in each class! The school is already overburdened, and I think it’s just 2 years old?! It is absolutely not about 5 API points.
26 minutes round trip just for the pre-freeway part of your commute is nothing to sneeze at.
Jim, how are these $1m houses appraising with seemingly little ease, but it’s impossible to get appraisals in line for existing homes in the $1m range? The lack of appraisals for existing home jumbos is choking the market at that end.
ah Russel, you have surfaced. You’re the whiner who made a mountain out of a molehill about my last SEH video, right? The one who misrepresented everything I said, and went around blasting me, just to look like a hero? If not, keep an eye out for who did, I’d like to have a word with them.
If I hated SEH, I’d go photograph the 388 properties in 92078 that are in foreclosure.
Nope, not that Russel. I was signed in as Adam before.
Did you have an answer to my question about how these new homes affect SEH prices? I’ll just use the name Adam from now on so you don’t confuse us. And dude, you have to know that hosting a blog is gonna bring some criticism. Just keep doing what you are doing. Even though I don’t always agree with you, I like reading your website and appreciate what you are doing.
Adam
So you’re just a troll looking for reaction when you say:
Try to be objective. We all know how you hate SEH.
Because I don’t think I’ve ever said much of anything about SEH, especially lately.
Actually no. Just trying to be a bit funny. Guess it didn’t work. I really just respect your opinion on this topic and I don’t know how new expensive housing in the general area affects my home price. No worries.
Well I’m still on the lookout for the wuss who tried to be a hero at my expense. Let me know if you come across him, OK?
Wasn’t me. I’d tell you. I did comment, though, right after Russel on your SEH video segment. Said about the same thing as this time. Don’t know any Russel who lives in SEH.
Guess I won’t get an answer from you though.
I think Jim tries to be objective in all of his posts-that is one reason that so many people continue to follow the blog. SEH is a nice new community, but it is isolated and has high MR. The market is the market–supply and demand. SEH is less expensive than some surrounding areas, more expensive than others.
I visited the models recently, and I have issues with the following:
LOCATION: entrance off RSF Rd feels like San Marcos
CONTENT: stop focusing on the furnishings an notice how cheap the cabinets, plumbing/light fixtures, baseboards, etc., even the upgraded items seen in plans 2 & 3 are hideous – cabinets look like they are covered in contact paper … Don’t get me started on the kitchen pantries and guest bedrooms!
EMPTY LOTS: there are tons of graded lots that have not been sold to anyone that are right next to the ColRich homes. Directly next to the $1MM+ ones
LOT SIZES: the lot sizes on the expensive lots were around 6500 – 7500 sf. For that money you could buy in La Costa Ridge with 10 – 12k sf lots.
STARTING PRICE: with prices starting in the 700’s, you’re bound to get some lower-class social-climbers from Oside, Vista, San Marcos, etc.
POWER LINES: have you every heard those things up close?
HIGH HOA: you do get the benefits of the La Costa Oaks rec ctr, but it’s a haul to get there!
I’ve ragged on long enough, for now ….
Bam
Oh the schools…..
I agree that it has a lot of kids. I was at the La Costa Valley pool yesterday and my cousin said they have over 900 kids at their school too. They are Encinitas School District. So there are a lot of kids????
My son’s class has 24 kids in the first grade. Everyone is so concerned that we have 3 parents signed up to volunteer each day of the week. My point is the whole school thing is SOOOOO blown out of proportion. I was worried moving from La Jolla. The fact is my kid is reading at a fourth grade level and his writing is phenomenal. They are doing a fine job.
The 26 minute round trip addition onto your commute is a valid one. I agree that it’s annoying. The question we ask ourselves…”Would I rather have an extra $1500 a month or drive 26 minutes?” Is 26 minutes of my time worth $1500? The answer is different for everyone. For us, we would rather travel, give private lessons to our kids, and save our money. I respect and understand other people’s decisions.
Oh and Troll person…can you chill for a minute.
I am actually considering buying in SEH and before we spend half a million dollars I would appreciate JTR’s analysis of the community. It is what it is. And if you are trying to pretend any different you must not really live here or have never talked to your neighbors.
If everyone really hates tracts as much as they write, then there is a great future for North East Vista and Northern San Marcos estate style living! Its what everyone wants, but are afraid to look at. Do you think Cal La Vie and Golden Door spas were placed there by accident and can charge 5-10k per week per person?
It’s Adam not Troll person. Although that is pretty funny. I do live here in SEH and like it a lot but it is definitely just for families. Could you explain your last two sentences?
Great to see the bubble mentality is alive and kicking in California !
Nice fire canyon, good thing there’s a firehouse so close.
The first group selling well…the buzz must have been good 😉
Hasn’t there been a plastic/aluminum version of those doors for about 30 years in banks and malls? $10,000? Sheesh.
It is what it is means…
Good community, good schools, people care about their community, small town feel, tract homes very close together, ok access to I-15 and I-5. Reasonable priced housing, varying fee rates. From $300 a month to $700 a month for MR + HOA.
I live here too. The majority of the community was financed with option arms and neg am loans. There is a govt map that outlines this fact. As I have gotten to know my neighbors and community, the prevailing story is one of distress. The community will be feeling this distress for the next few years.
Bottom line…people bought homes they couldn’t afford. I know news flash! There is just a higher concentration of them in our community.
@ Russel,
13 minutes is too long, that’s 26 minutes round trip!
A 13 minute commute is considered long?
So where does that put my 10 minute walk to work? 🙂
I love your blog…great insight. I worry however that you’re going to crash your car while filming and driving!
13 minutes one way is just to get to the freeway.
I think it is funny when people ask who can afford a million dollar house. There are lots of high paying jobs around here to fill those homes. My problem is less who can afford it but who really thinks they have an ocean view from La Costa Oaks. That is rediculous but I know people who think that way. Ocean view is when you can see the waves breaking and white water.