[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.
