At the time of this auction in 2010, it seemed unbelievable that anyone would pay $4 million (plus 10% fee) for any lot – and these auctioneers couldn’t convince anyone else to get close.
But in the end, Mr. Palmer got the last laugh when his 10-year odyssey ended last month with the sale of the 6,580sf home he built here for $18,000,000 cash:
https://www.realtor.com/realestateandhomes-detail/2160-Balboa-Ave_Del-Mar_CA_92014_M19991-23463
I like the use of the word Odyssey to describe Carson Palmer’s Del Mar home sale. I am not sure that he ever really lived in the home because it was put up for sale shortly after construction around 2015 for $25 million. I would estimate that the house cost around $11 million to build – $4.4 million for the land and $6.5 million for total construction costs ($1K/sq ft). I would estimate the yearly carrying cost at around 7% (5% lost income on principal, 1% property tax, 1% maintenance costs) or about $800K per year. Over 5 years, that’s around $4 million. So, Palmer’s total investment was around $15 million. He may have net around $3 million (maybe less). Not a great investment, IMHO.
I think the primary mistake was the initial asking price. Palmer should have asked for Jim’s advice on pricing back in 2015. If he had sold the house for $18 million in 2015, he would have returned a healthy profit of about $7 million.
Most sellers have gotten bailed out by the length of this bull market. How many do you see that are priced higher today than they were 1-2 years ago? I’d say it’s 20%.
Ego is not your amigo.
Here’s a good example.
The list price was $1,200,000 a year ago.
It sold today for $1,550,000 – check the property history:
https://www.realtor.com/realestateandhomes-detail/1651-Caudor-St_Encinitas_CA_92024_M21067-23080