Our old friend in La Costa Oaks keeps evolving. Out of the 20 homes on the street, four have been foreclosed, and two sold short (one of those is still pending). But on November 9th there was a sale of a 3,345sf house on the culdesac that was head-scratcher:
At least the house looks very nice on the outside. Hopefully it’s just as nice on the inside. But pay close to a million for it? Forget it!
Someone’s wife must really love that house. 🙂
A question. How are California drivers in the rain? Can they handle it? Can their bald tires handle it?
Isn’t the average income 55K in San Diego? How can anyone afford these prices? I guess the property tax in CA is less but that seems to be offset by higher mortgages. I suppose its easier to adjust taxes than mortgages. Painted in a corner….
anon, keep in mind that the typical household income in North County is higher than the county/city average. For example, in January 2009 the median household income in Carlsbad was $101,000, with 8% of households earning more than $200,000 (3350 households). I’m not saying that these prices are reasonable, by the way, just pointing out the differences in demographics.
The house that sold for $980k was staged very nicely. I hope the new owners plan to live there for a long time, because I really don’t think they will see similar prices in that neighborhood for a while.
I know two families that live on that street. Both are in the process of trying to get home loan mods, and I just don’t see either of them getting the mods. So I predict at least two more foreclosures on that street within the next 4-3 months.
A $980K home works out to be about a $6000 monthly payment plus or minus depending on the different variables. A household with the median income of $101K (as stated above) would be bringing in a little over $8400 per month. The home payment would take up over 70% of their income. The incomes would probably need to be closer to $175-$200K or more. Either way, I hope the employment situation doesn’t continue to slide. I am still seeing a LOT of empty commercial space for lease around town.
My gf and I combined make $175-$200K and are in no way even considering a $900K+ house. I think the payment is closer to $4500 with 20% down (I’m doing the math in my head, I could be wrong), but that’s still a ton of money every month. You could rent a house on the beach for that.
That figure for Cbad median household income is way higher than what I expected; the median hh income in Del Mar back in 05 was $108k…
Cool that $300/sqft is considered expensive now.
$980K??? That is almost $300K more than the lowest comp on the street and almost $200K more than the highest comp. I don’t get it. I’m curious to know how much was put down; anything less than about 25% means the lender is arguably 100% ltv or thereabouts. I have seen a few deals that looked like this in ’08, where the buyer paid an inflated purchase price as a means to essentially obtain 100% financing, then received a kick-back from the seller in the amount of the overpayment. I’m not saying that happened here, but wow that is a huuuuge premium over the comps.
Not all buyers are smart / rational
Those short sales and foreclosures on Corte Romero are some of the worst locations not only on the street but La Costa Oaks in general. They back up to not one but two major roads. One across the street on 3466 Corte Fresa closed for 610k. Rancho Santa Fe Road pretty much destroyed these sections of La Costa Oaks. Plus you throw in the power line and the main feeder street Camino Junipero as added amenities. BUT if you need big and new and want that school district then there is nothing else that touches those deals so I could see them working for some people.
More short sale shady business practices:
http://www.cnbc.com/id/34877347/
It’s funny that they’re complaining about this kind of short sale fraud. Much bigger amounts are being fraudulently stolen from banks when people have back-door deals on short sales (like when they’re contingent even before listing at well below market prices, possible selling to themselves through a third party). Why isn’t anyone complaining about that?
What about the seller “concessions” (up to 6% legally!?!? and more that is being done behind the scenes, IMHO) that are recorded in the sales prices, but are really being kicked back to the buyer — artificially inflating prices all over the place?
Bottom line: there is so much fraud in real estate, and there has been for most of this past decade. Everything the govt is doing is encouraging the fraud. Either we accept it, or eliminate all the govt support/programs that are encouraging the fraud.
We need full transparency and accountability in all transactions. Without this, capitalism cannot exist.
It comes out to about $5600/month with 20% down. The $980K home on Corte Romero is 4/3.5 and 3345sf. Here’s a list of some 5 bed homes currently for rent on Craigslist:http://sandiego.craigslist.org/search/apa/nsd?query=carlsbad&catAbbreviation=apa&minAsk=min&maxAsk=max&bedrooms=5
Nearly all of them are well below $5600/month.
Hey Jim, you might be doing a Bubbleinfo ‘stormchasers’ episode this week if you’re out driving the rest of the week! for the non-locals, we’re having some intense weather activity here:
link
This smells like classic Jenae-like activity.
Perhaps the unusualness of the house had something to do with it. You don’t see many of that style in SoCal, and I didn’t see any others like that on the street. Growing up in the Midwest, that one spoke to me much more as a “house” than the fauxciendas you usually see around here. Maybe someone just fell in love with it.
Yeah I could have sworn you were going to say the $980K was Super Jenae.
It looks legit – they put down 30%, and list price was lowered to $999,000 after trying $1,090,000 for three months. Old what’s her name would increase the list price by $100,000 and figured no one would notice.
Here’s how it looked in photos:
http://www.sdlookup.com/MLS-090030236-3504_Corte_Romero_Carlsbad_CA_92009
Can’t say how frustrated I get when I see folks offering just a little more to get the deal done. Clearly, seen unwarranted price escalation over the last 4 months due in large part to buyers becoming frustrated and giving in to seller demands. This appears mostly due to a sheer lack of inventory. If seller’s list their homes high, but in the ballpark, they get a lot of attention because there are so many other sellers smoking 2005 and 2006 vintage weed.
Really interested in seeing the impact of another Republican in the Senate will have. I would assume any talk of cramdowns in Congress is dead and we can now focus on clearing out the deadbeat homeowners and forcing short sales, deeds in lieu or courthouse steps.
A million dollars in that location? I would have tried Olivenhain or somewhere more south and west towards Solana Beach. But then again, maybe their commute is towards Carlsbad, Escondido or San Marcos? That said, I’m still not sure why some think people do not have money. I would easily forgo lease payments to gain an extra $1000+ per month in disposable income. And in some cases a single car lease can be over $1000 a month – imagine two car lease payment above, at or even near 1K/mo each?
Nearly all of them are well below $5600/month.
Here’s the thing, at the higher end there’s never been a 1 to 1 ratio of rent to house payments. People with that kind of money seem to value being a homeowner over a renter enough to pay more money for it. My guess is that status symbol of being an owner instead of a renter drives this dynamic.
I think it’s insane, but then again it’s why I think the fundamentals at the high end rarely seem to make sense. At some point the extra $1000 a month just doesn’t matter.
I agree that those who earn more will see such a savings from renting vs. owning as being less than advantageous compared those who don’t earn as much. However, saving even $1000 per month would mean a savings of 6% for one of the 8% of households in North County that are earning $200K or more per year. Saving six percent of one’s earnings is not insignificant. This additional amount could be allocated towards a number of other investments that provide a higher ROI. Status might play well for a time if one works it properly, but it isn’t a sound way to pay the bills and be profitable in the long run, IMHO.