San Diego Housing Bubble News and Analysis

I think this may be attractive to a foreigner with strong currency. Multimillion $ properties don't have to follow normal RE market, especially if they are bought for cash with a currency that may make $2.5M appear like $1.2M, after translation. That may also explain why the agent didn't take you seriously. { I am assuming you are not a foreigner with $2.5M cash }

She sounds typical of the selling agents I have run into in RSF. I have heard that exact thing more than a few times.

From watching the La Jolla market, I can tell you that there is plenty of craziness and only a couple of people pricing their houses realistically. And btw, that house on lamplight you refer to was on the market for months before they bought it at $1.8m. With a bunch of open houses and lots of marketing, so I can guarantee you they didn't get it at "below market". More likely the seller popped a champagne bottle when it finally sold.

Here's another house that is similar. Bought in 2005 for 1,950,000 and now wants to sell for $2.3m to $2.6m. (Hah! Lots of luck!)

http://www.sdlookup.com/MLS-076081009-55...

Maybe these guys should talk to the owner of this property:

http://www.sdlookup.com/MLS-076045532-53...

They bought for $2.9m in 2006 and have been trying to sell at $2.65m (a $250k loss not counting fees and costs) with no takers for months. So, I don't think you can say the La Jolla market is going up.

I heard that foreigners don't like to buy houses in America because of the property taxes plus we are too isolated from most every place in the world. Dubai and China don't have property taxes. Plus getting a visa to America and getting finger-printed at the airport every time is a big hassle.

This house, 809 Lamplight in La Jolla, sold for $730,000 in 2002. I remember the house from then. It was one of the creepiest in all of La Jolla, decorated like a low-rent, musty version of the Playboy mansion. Made you feel like a sex offender had been holed up in it.

I did think at the time that it was a good opportunity to be remodeled at a profit, but it would have been a big project and even in 2002 prices seemed high. The house has some unchangeable drawbacks: little useable yard (they have improved this), on a noisy main street, and too low down on La Jolla Mesa to have a view.

It has been completely rebuilt, and nicely. I don't know how much was done before and after the November 2006 sale at $1,800,000.

If I were a rich foreigner looking for a place to retire, La Jolla would not be near the top of my list.

In Brazil, that kind of money buys you a 10,000 sq ft beachfront mansion, or a huge ranch with orange and banana plantations, and you'll save enough cash to hire a bunch of servants for life to take care of your property. (Their minimum wage is $200 a month and many people don't make even that)

Visa problem is an even bigger one. You can't just buy a house and move here. The whole immigration system is set up to make sure people DON'T do that. With the exception of Canadians, almost any foreigner who intends to stay in the country for more than 90 days needs to get a visa. There are two kinds of visas - immigration and non-immigration. To get an immigration visa, you need to have relatives here, find a good job in the States (H1B process), marry a U.S. citizen, or invest $1,000,000 into the U.S. economy. (Buying a house does not qualify.) Non-immigration visas are given to tourists and U.S. embassy is free to deny a tourist visa to anyone. In fact, owning a house in the States is an indication of immigration intentions and that alone is grounds for automatic denial of a tourist visa.

Would you want to spend 2+ million dollars on a house if you knew that you had no legal right to stay in the country and its government could prevent you from coming back if you left?

For a super rich Brazilian businessman, La Jolla can be a nice summer home when it is winter in the south (and a good winter home for holidays when it is hot and humid in the south). Plus, you don't have to go around with a phalanx of bodyguards to prevent getting shot down or kidnapped for which Brazil is well known.

Visa restrictions are only to keep poor people out. For a million $, you can buy a green card (officially called 'Investor Visa') directly from US government. Another way would be the lottery system ("Diversity Visa"). I have never heard of a millionaire being refused a visa (unless he is some sort of political troublemaker or criminal).

Now realistically, how many Brazilian businessmen can afford to give a million bucks to the U.S. government for the right to buy a $2m house in La Jolla? And wouldn't those businessmen prefer a Mediterranean country? I'm not sure about immigration restrictions, but Italian or Portuguese real estate can't be more expensive than La Jolla.

PK it is simply a commentary of out of touch sellers. It also is likely that they are having thier stubborn position cemented by the listing agent. It would not surprise me if they had several agents tell them the same thing. This is what it is and while it is unfortunate, it will not be remedied until sellers get through the denial phase which they are certainly sitting in now. Don't sweat it... you have time on your side and eventually the home will sell or it will not and they will reprice.

SD Realtor

esmith: they don't have to pay money to US government. They have to just structure the transaction such that it looks like an investment in US. There are companies that specialize in that. Like for e.g. set up a REIT that buys the house etc.. La Jolla is also nearer to South America than Mediterranean. Many South Americans own property in Miami. San Diego is well suited to become a western equivalent.

Thanks.....I was close to putting an offer in on the place in 2006, but the new remodel is just plain aweful with hideous bright red and light blue wallpaper..And the furniture looks like a bordello right out of New Orleans..(not that i would know personally...)
The story is someone bought the place then had to relocate, but it has the "staged" feel of a spec home with a near- sighted interior decorator..I would have to rip everything down to just feel comfortable....

I will just follow the price and see what happens...

Well, the house is still listed. Now down to $1,980,000. I actually like the decor, but there's no way I'd pay over $1.2 for that size house.

Well, it's priced close to 2006 price and in several months dropped half a mil. That's not bad. Chasing down the market. Probably would've sold for 1.9 back in October.

I'll post the same chart that I posted on the other LJ thread.

LJ Sales chart

Speaking of Brazilian banana plantations, look what you can get in American retiree-friendly Panama for $2.5 million - it's a mile from the ocean, but nearly 11,000 sf on almost 30 acres:

http://www.movetopanama.com/re_costaesme...