It is not a McMansion either. McMansions are defined as >3000 sqft and/or oversized for the neighborhood. This place looks exactly like a standard CV house. I would love to live in this area. Great Schools, convenient for my job and newer houses.

Taxes are likely to be $1100/mo.
HOA at least $100/mo
Insurance/Mello Roos ???

Even if it rents for $4000/mo, net will be under $2800/mo. That’s ~3% return. Stinks for property, even in current environment.

Taxes are about 1.1-1.2% of value at sale, and can increase at 2% per annum to account for increased valuation.

1.2% tax per annum on $1,092,000 is almost $1100/mo ($1092). $42 for HOA. $50 for insurance. Call it $1200 total.

$4000/mo – $1200 = $2800/mo or $33,600/yr.

$33,600 is about 3% of the purchase price of $1,092,000. Not a great rental return for a property, especially since other expenses are neglected in this calculation.

[quote=spdrun]Taxes are about 1.1-1.2% of value at sale, and can increase at 2% per annum to account for increased valuation.

1.2% tax per annum on $1,092,000 is almost $1100/mo ($1092). $42 for HOA. $50 for insurance. Call it $1200 total.

$4000/mo – $1200 = $2800/mo or $33,600/yr.

$33,600 is about 3% of the purchase price of $1,092,000. Not a great rental return for a property, especially since other expenses are neglected in this calculation.[/quote]

spdrun, I have taxes at $1065 mo (1.17%); Mello Roos at $104 mo (listing states $1244 yr), HOA dues of $42 mo and $225 mo for insurance (replacement value policy). This totals $1436 mo which almost totals my entire PITI! And we haven’t even discussed what the P&I payment is yet! There is no way this property would be cash flow positive …. not now and not ever …. UNLESS the buyer/owner has a VERY small mortgage or no mortgage at all (not typical for this age of home).

I don’t really know what misayako meant by his statement, “Welcome to SoCal” in the OP. The link he provided showing an “Econobox” isn’t typical of 85-90% of SoCal housing and is in no way representative of how the masses live in SoCal (or anywhere else in the state, for that matter). It is only typical of newer neighborhoods where the developers were permitted to build largish boxy homes on smallish lots. His comment makes it seem as if that is all buyers have to choose from out there. But we all know that is a crock of BS.

Yes, I find it hard to envision that this “Econobox” with a hole in the wall for a FP, the liberal use of carpeting throughout and situated on a barely standard lot will actually sell for anywhere north of $1M. I just find it amazing that there are buyers out there who are truly that stupid.

as they say a sucker is born every minute. .
I see a hot housing market

[quote=flu]Well, 1.1-1.3 is around 12% of one’s net worth if one’s net worth is 8 figures at least. So I don’t see relatively speaking why this would be such a big issue, considering many others, that would be roughly 25-30% of one’s net worth and for them they still consider that affordable. Just saying 🙂

Also, I believe the person did not try to rent this home out at $3000/month but considerably more…. This home was also the model home for Bridge Ridge I think, so that probably also explains the markup back then.[/quote]

flu, do you know if there is a high percentage of homeowners worth 8 figures ($10M or more) residing in tract subdivisions in Carmel Valley? If you know any, do you know why they chose Carmel Valley (when they could obviously afford to buy in CA’s finest well-established communities)?

And what would you approximate to be the percentage of homebuyers in Carmel Valley who pay ALL CASH for their purchases in tract subdivisions there?

Because Carmel Valley is the closest community to most of the well-paying tech jobs in SD, I was under the impression that the “worker-bee” homeowner is the prevalent type there (Carmel Valley subdivisions attract primarily the “worker bee” buyer.) Because of this, I never really considered it as a “high-equity” area (area with a high % of paid-off homes), but assumed the majority of homeowners there are saddled with huge mortgages.

I mean, how many “worker bees” 20 – 45 years old have the funds to pay all-cash for an $850K ++ property? Especially those with families to support. Most of the demographic which typically DOES have the cash (boomers and older) are “retired” or about to retire and thus don’t have to commute anymore so they can live anywhere they damn well please (with no regard to commute times). If the older set sells their longtime homes elsewhere in SD County and CA, a newish econobox on a 6K sf lot in a very dense area is probably the last thing this group would want to drop a cool $1M on, IMO.

I realize that there are many very wealthy Gen X and Y “worker bees” in Silicon Valley who might pay all cash for a “million-dollar home” on the peninsula. But a million-plus won’t buy much more than a 1200 – 1600 sf, 60 – 85 year-old ranch home there … a far cry from a SD econobox pretending to be “pretentious,” lol.

Even though Gen X and Y tech workers in SD don’t make as much money (on avg) as SV workers do, their housing expectations are through the roof (after approaching or exceeding $100K annual salaries)!

SV workers are “trained” to accept what housing is available there for the price it is commanding or commute such long distances to work and back that their lives very quickly become intolerable. They have no other choice.