The Plan Three in Arista, a neighborhood of 43 homes being built in the gated golf course community of The Crosby. All three models have the option of having the master suite on the ground floor, as well as additional flexibility – the Plan Three can be 5 br/5 ba plus bonus room:
I’m still trying to figure out how many of these super rich folks are out there.
Certainly there are plenty of upper income professionals that should be able to handle a million dollar price tag on homes. But another $1000 per month on fees is something else entirely. These would have to be either business types or duel income physicians, income would have to be around $500k.
Aw Jim, you’ve officially gone to the dogs with these last few videos. Nice work.
Those Davidsons were beautiful, and more what I’d be looking for in a new home – rid of the useless formal rooms, in favor of one grand living space. The only negative is the overall square footage, more than I’d want to care for. The economic downturn killed this small business owner, that makes these beyond the scope.
Based on Davidson’s recent remarks, I’ll have to settle for our current digs, or look else where for a downsized dream.
Arista has been opened for three weeks, and sold 10 of 13 – with the leftovers being the most inferior locations.
My guess? One-third will be second-home (or third-home, etc.) buyers.
Makes sense. Big shot from LA adding a vacation home in SD for the weekend golfing escape.
I have wondered for a long time now how deep the buyer pool is/was for the high end properties and clearly it looks deep. I suspect the down payments are very large (>30%??) which would offset the high HOAs and MRs.
For those that are buying these as their 2nd or 3rd homes, then it is safe to assume that the first house is probably paid off.
I think it would be safe to say we are looking at the ultra high end, instead of high end. In that scenario, you include the LA/OC pool of that group and suddenly the pool of buyers get a lot bigger. And judging by LA/OC standards, 3000 sqft home in most exclusive neighborhood of a vacation destination like SD for less than a million is a bargain.
I’m curious about your numbers. For a million dollar home, you say the typical buyers should have an income of around $500K.
Let’s say someone puts down 20%, the loan would be $800K. At around 5% interest, that’s a $4K monthly payment. Seems to me that annual income of 250K would be adequate. $300K would definitely be enough, right?
I know a fair number of dual income families making 250-300K.
250k to 300k would be fine for homes in the $1 million range.
It is the high fees that separate this group from the next leg up, the half million annual income club.
Marginal tax rate above the 250k level is at 43-45%. Lets say someone pulls in 350k, that extra 100k ends up being just 55k after tax. Would someone in that position really be willing to give up 20% of that post tax dollar to 12k of fees that contribute absolutely nothing to tax deduction?
People in this group would rather get a higher priced home, aka 1.25 million, since the extra $1000 in mortgage at least can go toward tax deduction, which is vital when the marginal rate at this level is so high.
So you have to go higher on the income group. You have to get to a point where spending $1000 per month of non-deductible post tax dollar really doesn’t matter that much. And that is the level around the half million income group.
Put it to you this way, the $1k MR/HOA is the elite’s way of keeping these $250-300k dual income riffraffs out. 🙂
OK, I think you are saying that some people in the 250-300K income group would not want to spend $1K monthly on MR/HOA.
But people in that group could afford the $1K monthly fees. I know of several people in that income group that live in Santaluz, Crosby, and the Lakes.
I’m looking at combination of $1 million and $1k monthly. Which is a stretch for this 250-300k group. People in this group do live in Santaluz, Crosby, and the Lakes. I know them personally as well. And they are stretched thin. One guy I know is always doing extra work to keep up with the bills. Except because of the marginal rate at this level, they end up having to do a lot more extra work to earn the same post tax return.
At this income category, you would think some of these guys would know better.
Damnit! Now you’ve let the secret out!