San Diego Housing Bubble News and Analysis

The question to be asked is, WTF did this guy buy it for $1,179,000?

10209 Paseo De Linda (6/5, 4150 sf) was sold on the same day for 999k. 10225 Paseo De Linda (6/5, 3823 sf) was sold two months later for 939k.

It's not a real 40% drop from the peak if the original buyer overpaid at least 20% over fair market value when he bought it.

Yeah, looks like a cash back.

Either that or maybe there were a lot of "options and upgrades". Most of these builders really raped their buyers for these options by grossly inflating their costs. I mean, really abusive markups.

The irony is that in 3 or 4 years after the initial purchase these upgrades all-but disappear in the resale transactions.

This is just the beginning. I think the really big declines for 4S are at least a year away at this point.

I would like to see all of 4s drop to 200 per sq ft or less.

That's only 10% more off this list price. Sub $200/SF pricing is in the bag. I'm thinking it'll settle out closer to $150/SF than $200/SF.

I really hope you're right Bugs. @ $150/sq-ft, you're looking at $450k for a 3000 sq-ft house. Seems very reasonable to me, even if interest rates goes up a couple of percent.

Man how sweet would that be - 3K sq ft for 450K. I can deal with a crappy rate at that price point..

For the price to reach $450K there should be no buyers in $500-550K price range. I think there are a couple of dozen such buyers on this board alone.

Not saying $450K is not going to happen, just don't think it will happen soon.

I saw the inside of this house and got some info. There is already an offer over $800K, probably around $850K. Thing is, it is trashed! All the appliances are ripped out. Holes in the ceilings where speakers used to be. Wires hanging out of walls. Landscaping all dead.

For the price to reach $450K there should be no buyers in $500-550K price range. I think there are a couple of dozen such buyers on this board alone.

I originally said "closer to $150 than $200", so once it gets to $174 I'm golden.

A year ago we weren't talking about the collapse of the secondary market for mortgage paper or 30% price decreases in this county or $5/gallon gasoline, but it all happened anyway. We might be in the 5th inning of this game, but it's a double header and we have a long ways to go yet.

Besides, I don't think the regional pricing structure will decline to that point without mortgage interest rates going up. That means that people who are $600k buyers now may only be able to swing $400k purchases then. A $360,000 loan at 9% is almost $2,900/month, and that's without taxes, insurance, maintenance, etc. Even now those homes aren't renting for $3,000/month.

It can happen.

Check around the SFH developments in 4S, Chanteclair just sold out he Phase 3A release, Pienza only has 4 homes left, Silouette only has 1 left in Phase 5 release. The Maybeck may have more before it doesn't have backyard. So I would say the support for $220/sft in 4S is strong till the end of the 2008 because it looks there won't have to many new home inventories to drag the price.

Builders are not the only one that's serious in this market. I think banks are actually even more serious than the builders if you don't count in incentives. Here are 3 places that's listing under $200/sq-ft:
Linky 1
Linky 2
Linky 3

There are also 7 houses in 4S Ranch that's priced between $200-220/sq-ft.

In the past 12 months, the main reason why 4S dropped much more than other communities in PUSD is just because of the overbuilt. As soon as we see relatively stable in new home market, the downward trend should be slowed down. Another thought is if the Carmel Vally doesn't go down much, then the 4S will have support because more and more people will choose 4S instead of CV considering the huge price gap (50%) for the 3000+ sqf home now.

I just visited a few 4S communities this Sat, 7/5. Remaining in Phase 4 in Maybeck, Plan 2 is going from $659k - $684k. Plan 4 at 3481 ft. baselines from $678k - $696k with upgrades. Plan 3 is still holding steady at $731k from April of '07 when I last visited, but it now comes with the guest house, representing about a $40k drop.

What is disgusting is Chanteclair. They showed me a price sheet of their Phase 3A that's sold out. Nothing less than $678k, but we're talking about 3000 sq. ft. here, much smaller than Maybeck. I couldn't believe it. The sheet shows a plan 1 at 2901 sq. ft., selling for $710K!! Compare that to Plan 4 of the Maybeck, I couldn't believe it.

Anyhow, price gouging is still alive and well at 4S if places like Chanteclair is still fetching those prices. We still have a ways to go...

Personally I know a lot of people interested in Chanteclair more than other 4S developments. Nice floorplan and decent lot size ~6000 sqf.

From my opinion, the main drawbacks of other developments are:
1) Piennza: urgly floorplan and poor standard configurations;
2) Maybeck: don't have backyard;
3) Silhoutte: the lot size is too small for 3000 sqf house, 4000+ sqf for current phase;

I doubt there is any selling going with these prices. Sometimes they hold the rates but no one prepare to buy. As I heard there is steep price decline in new properties who ready to short sale. I believe we don't have to look into these newconstruction on predict this area. Already the rumour is SD area many REOs and ready to foreclosures ones accepting for shortsale of around 200k price drop and even further.

It's not the developers who will cut the pricing. It's the lenders who will cut and run when they take back the homes that were purchased with Neg-Am loans back in 2005-2006.

The same thing will happen in Carmel Valley and E. Carlsbad and Encinitas and Del Mar. There are no fortresses in this region, there are only different timelines.

Guaranteed.