Bob2007 and Josh, thank you for the well thought out and articulate responses. I could not agree more!
From my research and hard facts, I have access to MLS and title reports and have pulled all existing sales in the these various developments. The majority (in excess of 75%) of the buyers in the SD luxury tract developments (Stonebridge, IvyGate, Derby Hill, SantaLuz, and others) are highly leveraged with very little down and mortgages exceeding $1M. If the tract is older and homes were purchased at prices below $1M, some of have since taken out HELOCs and now owe more than $1M. All of these properties also have a tax assessment of at least 1.25% to 1.5%. The monthly HOA also ranges from $100-$450. So the monthly expense (mortgage + taxes + HOA) for these homes ranges from $5,000 to $8,000 plus depending upon the rates.
Even with a household income of $240K, I find it hard to believe that most of these households will be able to sustain a hefty payment each month as well as leases on two (I am certain) luxury vehicles at $500/month for each. Not to mention child care, utilities ($300+/month), landscaping, etc.
I am certain that most have gotten in over the heads and live lavishly but paycheck to paycheck and with very little if anything going into savings. As the Professor has pointed out previously, should they ever be laid off, they are one or two paychecks away from foreclosure or bankruptcy. As rates have adjusted on the ARMs, they are starting to pop up for sale unless they were able to refi and buy themselves sometime. You will start to see more and more NODs of these homes and consequently going into foreclosure.
The point of this site to share information with one another for our mutual education and benefit. There is nothing wrong with healthy debate and discussion, but it is counter productive and meaningless to insult others. Just my two cents.
