San Diego Housing Bubble News and Analysis

It's both amusing and frustrating for me when I see salespeople at new developments behave like this. I don't know if they are instructed to do so, or they just do it out of their own resentment of the party being over. But the few sales people I have interacted with recently have this defensive attitude and big goofy grin on their face, and try their best to ignore the elephant in the room...that the bubble is over and a buyer with good credit and a large down $ holds all the cards now. Throw them an offer 20+% below the sheet price and see what happens.

I wouldn't expect these guys to budge any on price now that the conforming loan limits are set to increase. You may have to wait until the end of the year to get a decent deal.

Alternatively, maybe there will be tons of qualified buyers under the new conforming guidelines and they'll sell off those 14 homes in no time. Your tax dollars at work against you.

"Throw them an offer 20+% below the sheet price and see what happens." --- the original poster is not talking about Temecula, Murrieta, Chula Vista ...i m sure you get it

4spotentialbuyer,
You sound pretty desperate to buy a house in 4S. Perhaps the salesperson senses that, in that case they hold all the cards. I recently toured 4s, I was not impressed. Plus you are in high wildfire risk area., there were vast burn areas in surrounding areas. Why on earth anyone in their right mind choose to live near there? I personally have redlined areas of San Diego county due to wildfire risk.

Yes, unfortunately it might be that they smell a sure-thing when you walk in the door. These are sales people.

Maybe you should put your pen and checkbook away, lose the pad of paper, muss your hair and dress down like you just don't care. Also don't show up in a moving truck.

IMO - If builders don't want to deal, check SDLookup.com

There are many defaults and hurting people in 4Closure Ranch. Shop around. All these places are fairly new. Does it need to be brand-spanking new from the builder? There are a lot of foreclosures and desperate people out there in 4$. You can pick up something less. I just posted a place for $499k. You can low-ball some flippers who flopped. Make it a fun thing. If the builders don't want to play, their loss. Move on. Lots of other fish in the sea of houses out there.

I swear, sometimes I consider getting a place there, and then I do the math and I just can't swallow a minimum of $800 a month in taxes and Mello Roos and HOAs. That is a sh*t load of money every month to live there. I can't bring myself to do it. You're not even near the beach. You're not near downtown. I just can't do it.

But I guess if you have kids, the schools are supposed to be the best. Sacrifices.

4spotentialbuyer,

I have to agree with NewtoSanDiego. The sales people in 4S can see how desperate you are (or at least it seemed that way to them). Next time, when you talk to them, put on your "poker face" :-)

We have friends who bought in 4S last year, (not Pienza) and actually seemed to get a better deal than builders are offering now. Not really sure what's going on with pricing at the moment, but I still wouldn't hesitate to make an offer to the builder if you are serious. Get the name of the VP of Sales, or higher up, (that's what our friends did) and present the offer directly to them, and see if you can make the deal you want.

As far as the fire concerns go, we own a home in Rancho Santa Fe, and we have fire concerns, too. Even some friends in Del Mar, Santaluz and the Crosby were evacuated during the past fires. If you can stand the traffic/long drive times and airport noise, you'd probably be better off buying in Carlsbad or Oceanside, if this concerns you. Personally, I'd never live north of Via de la Valle, or south of 56.

Useful advice---thanks for the useful advice...we may do that if we do not see a price reduction. I don't think the salespeople think we are desperate to buy as last time the salesperson tried to talk us into a house that fell out of escrow and we told him straight out that we are not interested in that floorplan, the price was too high, and when he stated that they had no problems selling 3-4 homes per month, we told him straight to his face that he was not selling 3-4 homes/month net when they have 1-2 people dropping out from escrow and that the previous salesperson had made us a better offer. Maybe they resent us speaking the truth...

We are starting to look around at resells as we want to get a better deal--we can't say we want the "best" deal as we are not sure when the bottom of the market will hit with the way the federal government insists on a bail out.

"Personally, I'd never live north of Via de la Valle, or south of 56."

You should be grateful to live anywhere in this Great Country.

4spotentialbuyer, I went to 4S several weeks back and find these two builders John Laing and Buie Communities very helpful and willing to listen to potential offers. The sales lady from Buie willing to deal if you purchase one of their existing specs. I didn't bother to "ink" the contract once I find out the Mello Roos and HOA fee. Too much for cookie cutter homes. If you have chance, go to Buie on top of the hill and look down to a valley, you will see all the homes are bunched up very close. Also pay attention on mid way to the top of the hill and you will see a burn line where the wildfire ends.

Thanks for the feedback...we looked at John Laing and Buie awhile ago, and had some reservations about how tight the homes were next to each other....however if the price is right, it would be worth a second look.

I would say this is true for other builders as well. We went to check out places in Oceanside (Montemar and Parkside), thinking they would have screaming deals considering they are in a bad-rep area with high mello-roos. We're not buying anytime soon and by no means were we giving off any desparation waves, we were just in the neighborhood and like looking at model homes. The salespeople there were exactly how you described the 4S people - condascending, rude, with the "oh, we've sold most of this phase already" - attitude. I just didn't get it. Though, we were looking like scrubs, touting our two kids and me being 8-mos pregnant - I guess they didn't figure we were bringing in 6-figure salaries. And, homes were still going for $650K+ - unbelievable!! Who would spend that much in Oceanside - even for a brand-new house??!!

"homes were still going for $650K+ - unbelievable!! Who would spend that much in Oceanside"

That is mind-blowing! Especially nowadays.

"homes were still going for $650K+ - unbelievable!! Who would spend that much in Oceanside"

That is mind-blowing! Especially nowadays.

I always find it amazing that people call salespeople rude when they do not find that they are going to give things away.

As you state you are not buying at the moment therefore you are not a sales prospect. They should not waste too much time on you.

Secondly you said you went in thinking you were going to get a screaming deal. Maybe the builder has a different strategy to wait things out. May or may not prove to be more profitable then giving away home or taking a loss.

The bottom line is that regardless of how you look or are dressed if you want to see what a salesperson can do put down a pre approved letter form the bank and that will warrant their time.

Otherwise if you are a looky lou than just be content to look. Nothing wrong with that.

Aside from coastal areas of SD. 4S Ranch is probably one of the safest places in San Diego county when it comes to fire danger. Not a single home in 4S burned in the last fire. Moreover, every home has an extensive sprinkler system which has already successfully doused housefires started by dense homeowners. If you are worried about avoiding "fire danger" then 4S Ranch should be at the top of your list.

See this extensive thread on the topic.

http://piggington.com/4_closure_ranch_er...

_____________________________

Great PDF Brochure by Rancho Santa Fe Fire Dept. on "Shelter in Place" concept of fire resistant construction found in newer communities within the Rancho Santa Fe Fire Dist. which include

The Bridges
4S Ranch
Cielo
The Crosby Estates
Santa Fe Valley

http://www.rsf-fire.org/assets/documents...
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New York Times message to world . . . if your going to move to San Diego . . . 4S Ranch is one of 5 communities with "safe homes" from fire which did not burn. Good press for 4S.

http://www.nytimes.com/2007/10/28/weekin...

________________________________

Exclusive homes emerge unscathed as fire-protection concept is tested

http://www.signonsandiego.com/uniontrib/...

_________________________________

Sprinkler System in 4S Ranch "saves dumb homeowners from themselves.:

http://www.rsf-fire.org/assets/documents...

"The Fire District encourages the use of sprinklers and other preparedness measures as a means of promoting fire-safe communities." (Their words not mine)

Another fine example of the fire resistant technology built into 4S Ranch homes and how it gives added protection from fire compared to other homes and other communities in San Diego (even if you have a hair brained home owner throwing burning cigarrete butts onto flammable material in his garage). 4S homes are all separately plumbed with their own fire sprinkler system which is pressurized and distinct from the normal plumbing (I'm sure this cost me a small fortune). The water supply to the sprinkler systems is prioritized at the same level as the fire hydrants on the street. There are dozens of fire sprinklers on the cieling throughout my house including 4 sprinklers in the attic suspended just below the roof and a sprinkler outside of the front door (presumably to give a sprinkler protected escape route through the front door).

“The sprinkler definitely saved this home, and possibly the lives of those in the home,” said Captain Fred Cox, who responded to the call. “If there had not been a working sprinkler system in place, the fire would have spread very rapidly before anyone inside noticed. By that time, it would have been difficult to save the home and those inside could have been severely injured.”

. . .

"This is the fourth time in the last two years that sprinklers have extinguished a structure fire within the RSFFPD. In each scenario, the heat from the fire activated the nearest sprinkler head, immediately dousing the flames with water, minimizing property loss and injuries."

Read . . . normal home burns to ground with potential loss of life. Same situation 4S Ranch home = $500 damage to the junk in your garage and a singed hand. Thats the difference between 4S Ranch and other homes not built with the same technology.

grateful owner . . . .

I was responding to this post by 4spotentialbuyer,

"I have to agree with NewtoSanDiego. The sales people in 4S can see how desperate you are (or at least it seemed that way to them). Next time, when you talk to them, put on your "poker face" :-)"

We were not desparate buyers and while yes, we were just looking, we may have been a potential sale considering our lease is up in May and had they offered some incentives or at least not given the air of "we don't need your business" we may have been interested. I would just think the sales office would try a little harder considering the housing situation. Could they afford to be so standoffish and not give a potential customer more attention? I don't expect them to be kissing my ass, but come on, I'd expect a little more love :)

In response to:

Submitted by Raybyrnes on February 19, 2008 - 10:28am.
I always find it amazing that people call salespeople rude when they do not find that they are going to give things away.

-We are prequalified and will down more than 20% plus have the income required to qualify for the homes in 4S Ranch at these outrageous prices. We just don't feel that market justifies paying 750K plus for these homes. There are not many qualified noncontigent buyers left and the point is that the salespeople need to realize that this is not a seller's market.

I too find that salespeople are not interested in spending much time with you if you're just looking around. I guess they've encountered too many of these folks. It does not matter that you are pre-qualified and have 20% plus down. They are not interested in qualified buyers. They are interested in serious, qualified buyers. By serious, I mean you need to put the $10,000 deposit and make an offer. Then, they will talk numbers (price, incentives, ...) and invite you to sit in their office and give you something to drink.

We have asked multiple builders and they have said they are not taking offers. Again, there are many serious buyers sitting on the sidelines waiting to buy however if the attitude from the builders is that they control the prices, then the buyers will remain on the sidelines until a sense of reality kicks in.

If you are only putting down 20% you will need to get a loan. Therefore, your purchase is CONTINGENT on getting financing.

As Raybyrnes stated, come in with a pre-approved letter. Otherwise, you are a looky-lou.

The Public builders have already written down the value of the standing inventory. They don't have the axe over their head as much as you think.

The smaller, private builders can't drop prices willy-nilly. They have lenders and partners to answer to. I am not saying that they might not drop prices later in the year but they will need approval from their lenders and partners. At some point, the builder doesn't have any skin in the game anymore and their equity is gone. They have no incentive to drop the price (unless they have personal guarantees to the lender).

San Diego doesn't have the huge oversupply of new detached homes that they have in the Inland Empire. You can probably negotiate harder out there.

Downtown condos are obvioulsy overbuilt. I don't know how they will unwind those.

I think it may have been somewhere on this board that I read people don't HAVE to buy, but sometimes people HAVE to sell, something like that
If it's becomes a stand off, who can last the longest?

I agree with jpinpb. At this point it is a stand off. As for all the other suggestions about how qualified we are, etc...we are already preapproved with their lender...have more than enough in cash, assets, income, etc to qualify for a loan, the point is that SELLERS, whether it is a builder or a resell, have not reached the same conclusion that may on this board have....that real estate in San Diego is only declining in value....We have already decided that we WILL not buy unless we see more price drops.

Not prodding you to buy but no reason for a builder to sell either. At leaset not to a retail person.

Who are public builders selling too. Smart ones are selling an interest to investment banks and carrying the loss back against their taxable gains over the last 5 years. They can structure the deals so that they still control the property and now have regained some margin in future sales.

If you ahve the cash and want a good price on a house start finding REO's in the area, forget about the custom BS and make an offer at the price you think it is worth. Would be far more successful and productive wiht this approach as opposed to complaining about builders salespeople not kissing your ass when you clearly state that you are not going to buy their product at that price.

Don't go to a Porche dealership and expect them to sell you a Porche at a Honda price simply because they are not selling a lot of cars.

Don't go to a Porche dealership and expect them to sell you a Porche at a Honda price simply because they are not selling a lot of cars.

That Porsche analogy only apply if we want RSF homes for Mira Mesa price. We're just trying to get an Accord for a Camry's price and that's pretty doable.

For some reason I thought builders take out construction loans over a certain period of time that eventually needs to get paid. Over however many developments and units, I would think that would start adding up and bills piling up. Some units end up BOM. With increasing inventory and competing w/resale, you would think they would be eager to sell. Eventually they will have to pay the piper. Look at DR Horton liquidating in the Temecula/Riverside/San Bernardino area. Is San Diego next? Will other developers follow suit?

Exactly! And I would say the builders in Oceanside are trying to sell a Hyundai for a Honda price!

Seems that it's not doable because you feel the builder is way off on his price. The builder does not see it as doable either becaeu his employees have made it know what price they are looking to sell at.

Maybe to better qualify the conversation, the pricing points for each party are not where they need to be today.

asianautica

What happened to all those low ball offers. I swear you were going to throw pie in my face about how effective they were for you.