San Diego Housing Bubble News and Analysis

Commuting into CV from either area is going to be a nightmare, but since you probably own a Bentley then the drive should be comfy.

It seems that you have millions to drop on a house so here is my advice. Look at Del Mar Mesa. These homes rival those you will find in RSF and Santa Luz. The commute would be a no brainer and the views are fantastic.

Welcome in advance to San Diego. How terrific that you have so many beautiful and luxurious areas to choose from. A friend recently spoke to a woman who sold her home in the Covenant and moved further up the North County coast. She loved the RSF environment but complained that it takes too long to do anything there; e.g. 20 minutes just to get to a gas station.

Somebody complained on here (or another blog -- I don't remember) that in order to do anything to your home in the Covenant, you have to go before the very strict Art Committee. That comment was countered by someone who said the rules are just as strict in the communities adjacent to the Covenant, such as Santaluz.

Personally I would take FB Ranch, (north side) if you can afford it... It is very well established and more lush compared to the other selections you mentioned. You are correct about Cielo, it will give you the best views. I have been up there a few times lately but it is out pretty far out there and not being able to cut through the Crosby sucks. Interesting that you feel RSF is best for your family. I take it that is because you feel the school districts are preferable? Just my guess but given the Torrey Pines schools, Del Mar and La Jolla schools, or even the plethora of quality private schools in those locales, it would seem to me that you have the benefit of selection, (assuming you could afford them)... My point being that as the other poster pointed out, driving to CV from the locations you mentioned is a pain, especially as you head out more East and North.

By far the most established (and I would guess but cannot confirm) would be Fairbanks Ranch. As far as foreclosures, my "opinion" is that even very high end areas will suffer foreclosures but the more recently built high end areas will suffer more foreclosures then the more established high end areas. I believe that for a variety of reasons such as demographic, equity stake that the homeowners have, and spending patterns/risk aversion of those with old money as opposed to new money.

Crosby, Bridges and Cielo will have a similar microclimate which will be warmer then FB due to the fact that they are east of FB and built on the western slopes of the hills.
If you are really into golf then yeah the Bridges and Crosby are your best bet and that cannot be argued.

Anyways I could go on and on but I think alot of people on the board will give you valuable feedback as well. My recommendation (and it is biased) would be North Side of Fairbanks Ranch...You could rub elbows with Trevor Hoffman seeing as the Padres will most likely choke their way out of the playoff race.

SD Realtor

Thanks for your comments. Unfortunately, I don't have unlimited funds. Although I can spend up to $4.5 million, I prefer to spend $3.5 million or less and pay a fair amount below asking in this market. That does not get you all that much in the nice parts of the Bay Area, not much at all. It gets you about 1/2 of what you can get in RSF.

For the record, while I recently owned an Aston Martin, I don't own a Benteley, although I reserve the right to buy one if it fits in RSF. ;)

Del Mar Mesa? I think the Del Mar Medows/Grand Del Mar house we toured was in Del Mar Mesa? I thought it was overpriced for what you got compared to other houses I saw down there and the houses too close to eachother. The lot was about the right size though. Our minimum preference is 1 acre.

Traffic is one concern, particularly from Cielo. All one lane roades I noticed in RSF. I commute in off hours, so my bigger concern is for my wife when she is taking the kids places in RSF, going shopping, to the mall etc. We nixed La Jolla primarily due to traffic getting in and out. We nixed Del Mar because you get so much less sf/lot for the $$, although in some cases, the view/beach proximity had us really thinking. We need a large house on a large lot as we are a large family.

Speaking of which, where do people buy their groceries or go to the mall if they live in FBR, Cielo, Santaluz etc?

You can also consider Olivenhain (I can never remember how to pronounce) which is part of Encinitas. I think you can find two acre lots, with large square footage, but slightly more convenient access to shopping and errands.

As far as malls, you have UTC down in UTC or where I live my wife will typically go up to Carlsbad Outlets, or the Carlsbad/Oceanside mall along 78 and El Camino Real.

From RSF there might be a mall in RB that is closer than Carlsbad.

Thank you for your comment on FBR. Interesting that you prefer North Gate. We toured houses in both. Seems to me NG is slightly older. I found the homes in South Gate more striking and we are preferring it over North Gate, although that is really splitting hairs. NG has the equestrian center, large lake, and club we noticed. Both are amazing. There is nothing remotely as nice as FBR in the Bay Area IMHO.

I don't play golf, but we would want to join a club for the non-golfing things. I always hear, however, that homes along the fairway etc are worth more and appreciate more. We toured one next to the Del Mar golf course (which, was not in Del Mar?).

The commute sounds not so good. When we have been there on the weekend, traffic has been light compared to bay area mountain weekend traffic. I will be there Friday and maybe we should drive those commutes during rush hour to see.

We think it is best for our family because we can buy much larger homes in RSF and the lots are big. We have a large extended family that will be visiting often and we plan on 6 children of our own (3 so far). That is the criteria. We liked the privacy/seclusion of RSF, country type setting, while still being only a few miles from the beach. While we thought Del Mar was gorgeous, particularly west of Camino Del Mar, it was too dense for our needs and the homes smaller than we prefer. When we looked at schools, CV schools actually seemed a little better than RSF schools, but both were pretty comprable to the schools our kids are in up here. There is always private school.

I have to echo the Fairbanks North side sentiment. Friends of ours own the largest property there and I have spent alot of time there. It is beautiful and exclusive but still feels like a family neighborhood. For shopping you can shoot out the back through Santaluz to all the new shopping off 56 with little traffic. You also have also have a couple small shopping centers nearby and in the Village of RSF. Getting into CV shouldnt be impossible either. In your price range you should be able to find something nce but you may need to do some updating.

Raptorduck,
I would avoid Cielo altogether. This community has faired the worst out of the newer RSF area developments (Bridges, Cielo, Crosby, Santaluz). I love Santaluz, but the disadvantage is no access to Carmel Valley Schools (Torrey Pines High, Canyon Crest Academy, CV Middle, etc.). Santaluz goes to Black Mountain Middle & Mt. Carmel High in Rancho Penasquitos (Poway district).

I would advise RSF Farms, Fairbanks, Del Mar Country Club, Rancho Pacifica, or Del Mar Mesa. As SD Realtor said, Fairbanks is well-established plus has great facilities (lake, horse stables, hiking, Tennis, etc.). RSF Farms if quite convenient to get into Carmel Valley via RSF Farms Rd. and has great security (if that is important to you). Rancho Pacifica average lot size (1/2 acre) might be too small for you, but the homes are nice and it's close to Carmel Valley.

For my tastes, the inconvenience of living in the Convenant outweighs it's supposed prestige. Covenent, Bridges, Cielo, Crosby would all be a royal pain in the @ss for commuting anywhere. Traffic has only worsened in recent years around those developments.

BTW, to see Del Mar Mesa, make the 1st left you come to when exiting south at Carmel Country Rd. from I-56. Meadows Del Mar is the 2nd Left.

where do people buy their groceries

Considering the narrow roads, if I lived there, I would buy my groceries online from Safeway/Vons (unless I wanted to just go out for a drive). In recent years, I have become a good online shopper but poor in-store shopper. (When I go to a store, I don't remember where all the stuff is and have to run around searching. Too embarassing to ask where potato chips are!)

Thanks. I will ask my agent about those. I think we saw a house in Del Mar Country Club. Is it near RSF Farms? It was gated, but w/o a guard. I did notice this week that Santaluz is Poway school district, but those seem pretty good as well.

One thing my agent told me about Santaluz is that they prefer drought resistant landscaping. Looking at pictures it looks kind of like a dessert. The houses look great, but we prefer lush tropical landscaping and not dessert terrain. Are there CC&R's in Santaluz that would prevent us from planting palm trees and putting in more grass?

FBR is our preference, but finding the right house in our price range is another story. It is the views that have us still thinking about Cielo. Prices are lower too. We are not looking to spend as much as we can afford just because we can. We are looking for the best house for our family in those areas at the right price for that particular house.

Maybe it's just because I was used to driving in LA traffic, but "Nightmare" traffic seems a bit extreme. I lived in Encinitas for 5 years (moved a few months ago) and commuted into Sorrento Valley daily. I typically left my house at 8:30 and arrived just after 9 (35 minutes), and I left at 7 and got home in just over 20 minutes. Driving home at that time was a bit easier because traffic north on the 5 at the merge (Racetrack) was lighter. Driving into work I tried multiple different routes and the one I enjoyed the most was taking side-streets through Rancho Santa Fe all the way to Via De La Valle (the racetrack). The 5 is rarely slow after Via De La Valle down into Sorrento Valley. The reason I liked going through RSF, is because there was NEVER any traffic...you drive slower, and have stop signs on occasion, or get behind someone that is checking out the scenery, but it's still a much more enjoyable commute...even if it takes a few extra minutes.

Honestly, I now live much farther north in San Elijo Hills and I still prefer the drive through RSF...it takes me about 10-15 longer than it used to, depending on what time I leave, but there's just something about the rural roads through beautiful countryside that makes commuting more enjoyable.

On a side note, is it too much of a hassle to rent in RSF? You could rent for a year and then really get a feel for the area. Not to mention the fact that just about every person on this site will suggest that holding out is a safe bet.

Good luck and welcome to Heaven on Earth (leave your rain-gear up north, you won't need it).

Good post New_Renter...

To the original poster you absolutely should go ahead and check out the commute on a weekday. This is absolutely a non trivial issue. Either way, commuting via the 56 corridor or the 5 corridor is something you should prepare for so definitely I would advise you to come down during a weekday to experience the commute in both directions.

I like Del Mar Mesa as well. I will say I already have seen some pretty substantial depreciation there and I expect it to continue on par or possibly even exceeding the Covenant. There is a nice foreclosure on Mesa Norte. It sold originally for 2.275M in 2005 and is now owned by the Bank of New York but they have not put it back on the market yet that I know of. Commute wise Del Mar Mesa will blow away anything in FB, the Covenent, etc...

Also regarding North vs South FB, I have no real basis for my preference nor do I have hard stats showing exceptional value/appreciation of either side over the other. My basis was only on some of the friends I have that live there that they prefer north to south. So take it with a small grain of salt.

SD Realtor

Sure we could rent, but we don't like to pack and move so only want to do it once. We can stay where we are and hold out for at least another 12 months if needed. Since we are not desperate, we will only buy when we find the perfect house at a price that will provide some protection against further declines.

My current commute is 24 miles and 1-1.5 hrs in Bay Area gridlock! That is what I am trying to improve upon. Seems I am looking at under 1/2 hr from RSF to CV through some very pretty roads. Anything is better than 5 lanes of herds of metal.

Moving from the Bay area, you will be pleased with the relatively cheap housing and relative lack of traffic in the areas you are looking. (Same goes for those wanting to move from many parts of LA)

I live in Fairbanks.

You won't find any good deal in the more expensive areas for at least another two to three years. The downturn has yet to affect those areas.

You'll regret buying anything in the next 12 months, especially if your funds are not unlimited and you care about appreciation/depreciation. If you don't care, then buy.

My recommendation is to rent a house in the covenant of Rancho Santa Fe and watch the market depreciate. They are older but very nice houses. That will give you a feel of the overall area then you can explore the neighborhoods that are best for you. Some people prefer new/newer houses.

As far as foreclosures, my "opinion" is that even very high end areas will suffer foreclosures but the more recently built high end areas will suffer more foreclosures than the more established high end areas.

SD, Can you please explain that analysis? I thought most of the very high end transactions are cash and hence immune to foreclosures. In fact, if $ depreciates low enough, a lot of foreign buyers may find estate grade property (multi million kind) in places like RSF irresistible. That should keep the prices from plunging.  

My recommendation is to rent a house in the covenant of Rancho Santa Fe and watch the market depreciate

That may not be the smartest move if you are sitting on $3.5M - 4.5M. Your risk of loss on $ plunge are far higher than price drops in RSF at that price level. I think anyone with more than $1M cash has serious value erosion risk sitting on US $ compared to good RSF grade real estate.

In terms of Fairbanks, we have seen a number of very nice houses in our price range, albeit on the higher side of it. There are some smaller/more dated ones we also saw that we could update or expand (assuming it is permitted)that were around $3 mil or less.

Comps for the past 6 months show pretty steady drops in FBR and sales prices about 90%+ of asking. While we prefer to buy at least a 10 yr house and preferbly a 20 yr house, you never know what life brings so we always want to maximize appreciation where possible. But this is not a flip situation and we are not looking for a "transition" home either.

I suppose if a year from now we have still not bought anything, we could consider renting until we do. But until then, we don't need to move, just to rent, although your idea of renting and getting a feel for the area is a very good one.

I should note that I have lived in SD before for short periods (1 year each time). Once in the military on base and also in Del Mar (10th street) and Carmel Valley so I have a good feel for those areas. My last stint there was 10 yrs ago and my frame of mind so different back then (i.e. single bachelor life) that my prior experience in SD is utterly useless to me as a family man now. I am not lookig for cool, active, busy places to party any more and be seen, but rather quiet places to peacfully raise a family and grow old gracefully. That is probably why I never noticed RSF really when I lived there before.

While I often drove through RSF on weekends on my motorcycle back then, I never did so on weekdays and never really went into neighborhoods or knew much about the area. I had never been to FBR or even knew where it was, although now I realize I often drove near it. What has impressed me the most about FBR is not just the very nice homes, but how consistantly well manicured they all are. We do also like guarded gated communities for the added actual/or artificial security.

raptorduck,

I second the renting idea. Rent where you are most likely to want to live. Get the wife and the kids familiar with the area. After a year the whole family can make the decision together as to where is the best spot for that permanent family home. (it doesn't hurt that prices would be quite a bit lower in a year compared to now either).

when we first moved from OC to SD, everything looked great, the idea that a 3700 sqft golf course home can be had for $650,000 was unreal (was in Valley Center). good thing we rented because we can't imagine being trapped in Valley Center for the next 15 years. A bit different than your situation, but similar idea.

I would also recommend renting if you can. That way you will not only enjoy the benefit of what will most likely be continued depreciation, but you will be able to really scope out your ideal property without any rush.

SD Realtor

RSF Farms might be your best deal. It has much easier access. I'd skip the Crosby and Cielo altogether. Driving around in Cielo is a real nuisance - it can take you 10 minutes to get back home even after you enter the gate.

If you have $3.5mil to spend it would pay to shop around a bit. The number of new homes on good sized lots out in that area vastly outstrip the number of sales, and there should even be a few never-lived-in foreclosures. A lot of the spec builders are going to lose their shirts out there, and their loss is your gain.

As far as prestige, there's the Covenant areas and then there's everything else. The Bridges is nice too but it's still closer to FR than the Covenant in terms of prestige.

Truly, if you look around you should be able to rent. Renting will be but a fraction of what a mortgage payment would be. In a few years you'll probably be able to get a lot more house for your money.

Testing the commute to Cielo and Del Mar Meadows this weekend. I will drive from CV to Cielo in the middle of rush hour, which should be the worst commute of all our options. What has us still looking at Cielo is the views and the low prices for what you can get. One house we are looking at we should be able to get $1 million below what it was listed for last year!

We are now looking at a house at Del Mar Meadows, which I now understand is right next to the place we looked at before, Meadows Del Mar (how confusing!). I know that commute is a snap, but commute is not the #1 priority as the worst commute (Cielo) is still 3 times shorter than my current one.

Anyone have an answer for my Santaluz landscaping restriction question from earlier?

You might consider googling the "nifty 50" drought tolerant plants. They are available all over the county at many, many nurseries.

San Diego is actually a desert, and I'm not sure if you're aware, but we're in stage one of a drought here. The nifty 50 are all the plants that do beautifully well in local conditions (read dry) and do not require a lot of water. And no, they are not cacti. They are flowering, soft-leaved, beautiful plants, and look perfect in the RSF area. You can have a very lush look, without tropical plants.

There are many local landscapers who will landscape using these plants. Please email me at lindismith at hotmail if you want me to put you in touch with some.

I suppose I should not move to a dessert if I like palm trees so much.

Theory on why SD prices have dropped so much. No lock boxes in RSF. Now up here, I looked for a while in places like Los Altos Hills and Atherton, which are more expensive than RSF. I looked in the same price range and even let my broker show me a $15 million home I would never or could never buy. In all cases they were on lock boxes and she could show them to me any time.

In RSF everything is by appointment. If the listing agent is out of town, (as is the case for two homes we wanted to tour) you don't get to look at the house. For out of town buyers that may mean you never considered tht house. How does that help the seller? If folks are having trouble finding buyers in RSF and houses are staying on the market 100+ days, seems to me you would want to maximize the chances of potential buyers actually seeing your property. Just my two cent.

Avoid Del Dios Highway in the morning at all costs.....One area of RSF to consider is the area in and around the Rancho Santa fe farms golf club....It connects to Carmel Valley via Rancho Santa Farms Rd. to Carmel Valley road to the 56 and avoids the northern Del Dios Highway which is one lane and gets bogged down in the morning and afternoon...

Its nice that you have 3.5 million to spend!!! Good luck......Need to adopt another son?????????????

Thanks to everyone for their very insightful comments. They were very helpful.

An interesting note. We decided to look a second time at one of the houses in FBR that has been on the market for a very long time (140+ days) and had only had one offer prior to us reviewing it. When we contacted seller's agent, she indicated that there were two offers that had just come in that day, but would show it to us anwyay. Amazing coincedence.

I immediately told my agent to pull that house from our list and indicate to seller's agent we were not interested in it any more and move on. If what seller's agent said is true, which is somewhat suspect, there is no need for us to get into a bidding war in this market anyway. Interesting coincidence though.

raptorduck: The possibility of two offers coming in at the same time that you showed interest in a home that has been on the market for 140 days is just about zero. The market is just headed in the wrong direction for this to happen on an expensive home at this time. Many agents are desperate right now because they are so used to doing "little to nothing" for making an above average income................now that they are having to actually work, they will resort to stupid sales tactics that are transparent to anyone with half a brain. I'm glad you told them that you weren't interested anymore......that's what I would have done.
You're looking in some great areas and many of the people who posted in response to your query in this thread are pretty knowledgeable about these areas. You can't go wrong with any of these locations. I am a huge bear at this time and right or wrong, I think that the bottom won't come until mid 2011 or 2012 and then it will sit on the bottom for a good while. My point is that there is no rush to buy and there is likely to be a good supply of luxury homes for rent as the housing market continues marching downward.
Good luck to you and your family whatever you may choose to do.

What about Santee?

Raptorduck: Can you tell why you preferred to move to San Diego for such a big purchase? I thought, if you want to buy a multi-million $ property, New England has some fine high class properties (miniature "Hearst Castles"). I think the South also has some fine estate property (if you hate cold). When I drove through RSF, it felt more upper middle class than "Hearst Castle" like. If one were to buy something for multi-millions, I think a fair degree of privacy, like you get with a a couple of hundred acres of grounds, is reasonable to expect. paying so much for a one acre lot seems excessive.