Having lived in CV for 5 years (up to 3 years ago) there is something to be said for both opinions (in my opinion!). Carmel Valley is very overpriced – this is a fundamental flaw in the logic that it will hold it’s pricing relative to other areas. I’m not sure that the amount it is overpriced is realistic as other properties go down. CV was a roller coaster over the last 10+ years going straight up. My neighbor still has his house on the market for 1.8M. I think it should be 1.3M, but only if housing prices stay stable. Reality? 800K (eventually)
There has been lots of movement of people in and out of these areas. This is a neighborhood started in 1992, that’s only 15 years ago. The typical owner is a small business owner, executive, doctor, lawyer, investments, banking, etc. If the economy holds up, the prices should stay stable and downward. If the economy does NOT hold up, I still maintain that a lot of these folks are living at a very high level even with very high incomes. They are not banking their income. This isn’t Rancho Santa Fe, it’s not Del Mar at the beach. They have held up because the economy has held up. We are in the first level of crisis in the financial markets. Next year should be awful. The business that these people employ should start layoffs and downsizing to correspond with the economy. This should devastate CV.
Another factor… These houses suck. They are stucco and wire crappy houses 6 feet from their neighbors. Any oversized lots are oversized because half the lot is a hill-side. There is a huge amount of new construction which has yet to be leveraged into the market. It’s an illiquid market, and will not show destabilization until time itself makes the correction.
Bottom line – CV will fall as fast or faster because it has grown faster and higher than it’s more stable long term areas. If the economy chugs along – it won’t fall quickly. If there is a recession – it is a gonner!
