San Diego Housing Bubble News and Analysis

OCR featured this property in 4S that I brought to his attention.

17426 Alva, San Diego, CA 92127
--4 beds, 4 baths, 3,608 sqft
--listed for $946,518 in 2008 for over 4 months
--12/24/2008: sold for $777,000 ($215/sqft)

That is a 18% price drop from the builder.

Fieldstone was getting foreclosed by San Diego National Bank on its $6.5 million loan.

I think there will be further declines in 4$.

Please don't post links to invitation-only web sites. Most visitors can't read them.

Nice deal. I bet he got a 5% interest rate as well. There should be a few more of those before this is all over.

Need a little more info. What did you pay? What did people pay two years ago?

Hate to say it but for the umpteenth time, escrow is not the time to ask advice, it's almost too late. Most of the opinions will be that you caught a falling knife and that will only make you nervous.

More importantly, did you make a downpayment and take out a fixed rate loan that you can easily afford on just your income when your babymaking begins and your wife stops working. If that part is o.k., no sense in crying over spilled money, just enjoy it.

It is free. All you need to do is email OCR and most likely he will allow access.

In any case, I posted the information for the property transaction along w/the link.

I was there last weekend; I laughed at the updated sale price sheet. Still way over priced for what you get IMHO.

Now if you bought a REO there, then you might be in better shape.

Details; need them.

It is private, fewer than ten people in the world have access (the OP is probably not one of them), and the thread with blog owner's contact information is gone from the list of active forum topics.

4s was built in the last 5 years and it hasnt dropped like other areas with the same level of HOA/ MR built in the same time period.

It will drop more, as low comps are dropping the neighborhood levels down.

As long as you wont move for 10 years, you should be fine.

Congratulations on your new home! I believe that as long as you don't see your home as an investment for the short-term (i.e. time frame <10 years) you should be fine. The values will likely drop further, but it's almost impossible to buy at the bottom. You bought your house as a home for you and your family. I have been to 4S ranch many times and think that it is a nice area to raise a family. Once the housing market recovers (and it will!) the value of your home will go up. Nobody knows when the housing market will bottom but it looks like it will take another year or 2 before this happens here in SD.

lifeisgood,
Compare your purchase price with "Recent closing" homes on SDLookup.com
http://www.sdlookup.com/Closings-92127-R...

Temeculaguy hit the nail on the head. I've seen too many of my friends (late 20's) get starry eyed and buy a $500k home with their combined $125k income, then freak out when they realize that raising kids requires either a) one of them staying home or b) forking out $1,000-1,500/mo for full time day care (neither of which did they calculate in their debt/income ratio).

Thankfully, I'm starting to see a trend away from keeping up with the Jones's. Good riddance.

Would you mind sharing the current price list and availability at Chanteclair? Are these builders willing to take counter offers on the list price? Last time I checked, they were down right arrogant about their prices and did not want to entertain any counter offers at all, especially Silhouette - John Laing Homes

I have found a similar response with clients who I represented with these same builders that you had DA. Seems they were very resilient. The fact of the matter is that they have reduced the phases so substantially that they have created demand through reduction of inventory.

Contrary to what many piggs want or think, there is more buyer activity out in the market now then I have seen for a long time. Yes the buyers are more educated and looking for deals, but those who think there are no buyers are sorely mistaken. Thus it is easier now then it was 2 years ago for the sales offices to hold the line on pricing.

I agree SDNERD that it is still way overpriced up there. IMO not just the new homes but the resales, shorts and REOs.

My feeling on 4S is that it will decline in value and bottom out in the next 2-3 years. The depth will depend 100% on the employment picture and of course interest rates.

I agree with you but what do you think is a reasonable price per sqft in 4S Ranch under current market conditions? Also, if there is so much activity, doesn't it mean that the sellers can ask what they are getting right now?

200 per sq ft which means all those homes on fieldthorn would need to dump to 300 plus, the homes selling in the low 500s now in garden gate and garden path would need to drop to the low 400s (like this one http://www.sdlookup.com/MLS-080075819-17...)

This one on Albert is close - http://www.sdlookup.com/MLS-080074848-17...

So if you look at the builders:

Chanteclair should be 530K - 650K

Maybeck should be Mid 500s to High 600s

Maybeck has its biggest model starting at about 200 per sq ft.

I would assume there are some big incentives too (upgrades). I would ask them to pay the MR - cant hurt.

Agreed! Given the small lots of most of these homes the fair value is around $200 per sqft. before upgrades.

There are already a few that are below $200/sq-ft. Such as:
Linky 1
Linky 2
Linky 3
Linky 4

There's no such thing as an abstract "reasonable price per sf". 4500 sf houses will always be cheaper per sf than 2500 sf houses.

I agree - someone around these parts made that statement previously.

Most of the smaller "homes" in 4s are actually condo's due to the shared driveways so realistically, those "homes" should price just above the townhomes in the area (Bridgeport, Gianni etc)and bridgeport has broken the 300 barrier with the 2 & 2 units selling in the 290s.

Im a local btw.

Thanks for everyones knowledge. First of all my wife and realize that falling prices from todays price point are a possibility. We are cool either way as we will not be moving any time soon. ie 15+ years. We sincerely wanted to know how big of a hit 4S has yet to take from the loss that this area has already suffered? I know that none of you can predict the future, but it does seem like a lot of you have a genuine grasp on what the market has the potential to do. Now for the good stuff. We didn't steal the house but feel as though we bought low enough to be able to see a return on our home within 15+ years. The story: We have been on the Dave Ramsey path for two and a half years. As bad as it sounds, we moved in with my wifes parents and payed off ALL of our debt. From that point we saved 6 months of emergency fund. After that we saved up our down payment which was only about 10%. I used my VA benefit and got approved for the loan with a fixed 5% interest rate. NO mortgage insurance thanks to VA. Yeh! We did have to pay a funding fee of about 8500 which we tacked on to the closing. Just had to save a little more. The house was listed at 668300. Like I said we put 10% down plus used the 20000 dollar incentive against the price of the house as well. Not only did they give the 20000 dollar incentive, but they also threw in stainless steal appliances, granite, upgraded stairs(all stained), windows in the garage doors, tiled all wet areas, and turned the 5th bedroom into a loft for us. It came out to like 205 a square foot. We aren't millionares, but we are tight with our money. We would rather have paid off cars and a mortgage than the other way around. We don't care about a benz or beamer. Thanks again for all of your market predictions!!!

By the way this model sold for around 838000 one and a half years ago. That has to be a large pill to swallow.

"I agree with you but what do you think is a reasonable price per sqft in 4S Ranch under current market conditions? Also, if there is so much activity, doesn't it mean that the sellers can ask what they are getting right now?"

Sunny I thinkt he question is to abstract. Look, invariably every buyer I work with asks me, do I think the price they are paying for the home is "reasonable". That is a very poor question isn't it? It may be "reasonable" now but will more then likely be unreasonable in the future due to depreciation. Simplistic thought IMO 4S is overpriced right now.

To me, the price of a home will always be dictated by the market. If the developer has found the market price such that he can slow roll homes out to keep his costs low, yet sell phases at a pace that matches that roll out then he is good. Whether that price is "reasonable" to you or I is quote moot.

nevermind

Congrats to the OP and they'll be excited to know that 4S is practically immune from wildfires.

I wonder how people know they'll be here 15 years. I thought for sure I'd be here a long time and now it seems our company wants to move some people out of here.

Look at the previous prices!

I actually have the sheets for all the divisions there. Maybe I'll type them all up tomorrow and post them.

Here's what is on the sheet from last weekend for Chanteclair:

Plan 1 - The Gauguin

2 out of 3 sold; 1 avail at $713,300 (2901 sq ft)

Plan 2 - The Lautrec

3 out of 4 sold, 1 avail at $711,605 (3025 sq ft)

Plan 3 - The Monet

5 out of 5 sold, high 600's to $702k

I'm not sure how many are really available/etc, I didn't ask or look... just strolled through the models.

Decent enough area, but by the time you add in the HOA and MR to those inflated prices. Ouch! I don't see the appeal to 4S at those prices...

If lifeisgood will really end up living in 4S for 15+ years, he needs not to worry about the price he's paying now. However in this difficult time, large-sized houses with strict HOA and high MR will always be at greater risk. I noticed greater % of homes on the market are either <2,000SF condos or >2,800SF houses.

Smaller condos represent investment properties to be abandoned and larger houses represent shattered dreams. The mid-sized homes (2,000SF - 2,800SF) may just be the sweet spot that more families are able to hold on to, despite the difficult time.

Thus I think the situation at 4S will be more at the 2 extremes, while the average-sized homes should fare better.

First of all thanks for the congrats. Secondly, I smell some sarcasm in the 4S is practically immune from wildfires comment. We both know that there is no community in SD that is immune to wildfires. You just have to get good insurance and pray. We can't predict the future about how long we will stay in this home, but we can plan. After looking deeply at our situation, there shouldn't be any reason we should ever have to move. Anything can happen though. Thanks

You mind telling us what your home insurance costs are?