The biggest fear for the North San Diego County coastal region is a meltdown in Bay Area prices.
It’s been estimated that 50% or more of the buyers who were bidding up homes here during the frenzy are from the Bay Area, and Silicon Valley in particular. If prices were to drop 23% to 30% there, it would impact how much they would be willing to spend on replacement homes here.
This is only one example but we can say that this sold at the peak of the market, or close.
This was my uncle’s girlfriend’s house, and when I was there in November to pay my last respects, I told them that my guess at the current value was high-$2,000,000s.
They hired a good agent who spruced it up and staged it, and they listed for $3,195,000 on March 2nd.
A month later, it closed for $3,710,000 for 1,763sf.
How does it look today?
Today’s zestimate is within 1% of the sales price in April, which had been bid up $515,000 over the list price at the time. What are the comps that Zillow says they used to determine the value?
Four recent closings:
It is only one example, and certainly, not everyone from Los Altos is moving here. But just looking at those four recent sales, it seems like that area is holding up pretty good.
https://www.zillow.com/homedetails/1200-Brucito-Ave-Los-Altos-CA-94024/19620416_zpid/
The $/ square foot declined each month, based on the comps. Do you think this will continue?
Maybe.
But a better judge of where values are going would be to look at the quality of the improvements to see how picky buyers are being and the LP to SP discounts being demanded. In this case, most of the photos have been removed from the comps so it’s hard to say.
Remote work is here to stay, especially for the tech sector. The bay area is getting more and more crowded, which is less desirable for many. Expect more bay area transplants to North San Diego County coastal region over the foreseeable future; this process has only just begun. So glad I got ahead of the crowd back in 2016. Just wish I could’ve convinced more of the family to move before the run up in prices, can’t say I didn’t try.
The last year a lot of homes changed hands in my Carlsbad zip 92011. $2M+ homes closing within a couple weeks (cash) and then boom…a Tesla or 2 in the driveway with license plate frames or a former private school sticker on the back window from Northern CA locations.
I lived just across the border from Los Altos for many years. Despite the various real estate sites that show estimated monthly mortgage payments, most of these homes tend to sell for cash and their prices don’t change a whole lot as the economy rises and falls. The buyers are mostly affluent people who have recently become more affluent and are selling their homes in Sunnyvale so they can put down cash to buy in Los Altos and the sellers are mostly even more affluent people who have recently become filthy rich enough to sell their homes and put down cash to buy in Portola Valley or Atherton.
News reports about mortgage rates are pretty much irrelevant to all of these people, and their moves down south probably don’t have a lot to do with remote work either, because you can clip coupons and trade stock from anywhere. My guess is that most of them just want to live someplace where it’s warm and they can have big houses without having to drive an hour or more to get to a beach.