The previous owner of this house had received several notices of default before finally selling, and it was scheduled for auction I believe some time in mid-September before being sold. It was listed for quite a while with a gradually decreasing listing price, finally ending up at something like $1.3xM as the lower end of the list price range.

I actually looked at this house and it was quite nice in some respects – large kitchen, fairly large lot, and (obviously) large square footage. However, it had some significant deficiencies as well – faced a wall and parking lot across the street; interior somewhat dark (in terms of ambient daylight and decor, e.g., black porcelain fixtures in a downstairs bathroom); staircase leading directly to the front door (which is bad feng shui for Chinese buyers). My *opinion* is that these deficiencies were not the primary factors responsible for the final selling price; instead, I assume the seller had to sell, and got what the current market will bear.

Another large house in Carmel Valley, 4454 sf on Brittany Forrest Ln (Lexington development by Pardee), sold for $1.25M in Jan 2006, which works out to $280/sf in what was then a better (for sellers) market. This house backs onto the end of Carmel Mountain Rd, as do about half the other houses on that street, but otherwise was quite nice.

So I think that in some instances lower transaction prices in Carmel Valley are being realized, but these are still mixed in with sales prices that are often considerably higher on a per sf basis and even accounting (subjectively) for differences in quality of the property. I think this is not surprising given the current stage of the market – in my opinion still in the early stages of dropping, with not everyone realizing what is going on.