Alex_angel…. I not sure that your reality fits where the market is going.
We bought a house in Carmel Valley in 2001 for 810K. Sold it in 2004 for 1.4M. My neighbors paid 300K in 1992. My broker told me to get a 1.16% mortgage floating with the LIBOR. I got a 10 year arm at about 5% instead. When I bought my last house got a 1.5M mortgage at 5.5% for 10 years (interest only). Now a 30 year is 7.5% or more (if you can qualify and get it).
Pardee does own all that land (for 20 years or more). They might sit on it. But all those lovely CV houses at 1.5M need to be financed somehow. And a lot of those people worked as Realtors, Mortgage brokers, etc. There was NO reason for the prices to go up like they did. There are lots of lots still for sale, lots being sat on, Pardee only has 1 derby hill home for sale (that I could see)… They will wait till someone buys it and then put up the next one. This could happen all while prices fall and fall and fall.
Wait till all the people in CV start losing all their equity. Wonder what will happen?!!! Every single neighbor in our street in CV redid their entire home with new kitchens, pools, baths, extensions, landscaping. They didn’t save up for it, they refinanced. They also bought a crapload of vacation homes, 3rd cars, timeshares, vacations, boats, and toys. They didn’t intend to sell, they have watched their equity go up, so did their mortgages. As the equity shrinks, the spending will go down, as the houses on the market get hammered, the sentiment will change.
Oh the arrogance to think that prices can only go up! How much are these houses worth jammed 6 feet away from each other, crappy pipes, crap construction, 6000-9000 foot lots, when interest rates are 8%…
