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Home › Forums › Closed Forums › Properties or Areas › Massive 26% Markdown on Carmel Valley McMansion › MrWrong, While I appreciate

January 3, 2008 at 12:15 PM #128726
New_Renter
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MrWrong,
While I appreciate your opinion, and in fact did start this thread to get everyone’s thoughts on whether a 26% discount on a CV McMansion signified the start of a more serious downturn there, I personally disagree with your assessment of how things will play out in CV. First, you seem to imply (actually stated in an early post) that CV prices were flat and would likely remain flat until the end of the downturn. It’s quite clear from the (unemotional) data that prices aren’t flat in CV. Just compare November’s CV Median of $875K to the 2005 Nov. Median. It’s down about 10%. Aug/Sept/Oct medians also down compared to a year earlier. The Case Shiller index for the top 1/3 tier shows a 8.72% decline through October and will likely go over 10% in the November report. I could also point out many CV sales in this past year that sold at a loss to 2005 comps, with Caminito Stella being one of the most dramatic. Yes I know, it hasn’t sold yet and could go at a price higher than $1.499, but even if it ends up selling for $1.6 to $1.7, it is still a dramatic loss. Another example is a Belmont recently closing for $276/sq. ft. There are many others.

What I am trying to say is that it is wrong to give the impression that CV is flat and thus implying it hasn’t been affected much by the downturn. You also state that you think it will only decline by a small amount (your 20% isn’t small, btw) and only at the very end of the cycle. From what I see, CV is declining just like everywhere else, albeit at a slower rate because of it’s high desireability. Nevertheless, it is declining, and will more likely continue to decline consistently throughout this downturn rather than at the very end. It’s clear that CV is already down 8-10%, and if it continues through 2010-2012 (as SD Realtor and many others think) then I can easily see CV going down at least another 20-25% from here (30%-35% from peak to trough). On the other extreme, I agree with you and others that Masakayo is way off. I don’t think the 75% decline he implies is in the cards.