Hi all, being in the boat of actually having lived in San Diego (La Jolla and Olivenhain) and having fled to the midwest for a few years with the kids to see if Armageddon was on the horizon, I can bring a different perspective to the situation on the middle to high end homes….
When the financial crisis set in, anyone who had money in the bank or investments went to immediate protect the capital mode. While previous to 2007 would induce people to buy expensive homes right up to the limit of their credit (even if they made 300K to 1M / year, for 1.5M to 3-5M properties), post financial and more importantly housing crisis and housing crisis perspectives, made everyone run for cover.
But you have to live somewhere, and just like me, lots of people in their prime spending years have kids and want to give them the live in a great home experience, but you don’t want to risk your economic future to do it.
People affording the high end of homes today, have money in the bank, have made sure that they are liquid and have whats left (hopefully mostly) of their capital protected and are not worried about the future (or not very) price increases or decreases. They are not buying because they are afraid prices are going up, they know that there are a lot more properties out there which will come available and more and more deals will still exist. More people with money expect a future which is financially more desperate for the general populace, and a lower stock market and world economy, so they are not afraid of losing out on an area do to higher prices.
Most folks believe that while the future will be poorer for the economy, it will make the money that they have more valuable as they are not job dependent and have the basic needs covered, nor are leveraged with credit card bills and the like. You are seeing some sales of higher end homes because the weathering of the first crisis has led to asset preservation and risk avoidance. I would suspect that the people buying these homes are not leveraging themselves to do it, nor are they that price sensitive to begin with.
I myself bought a lot in Coronado with a house on it, will be remodeling (tearing down most of it and rebuilding a new house / garage & carriage house), and while I expect prices in general to fall long term, it doesn’t bother me too much, after all you have to live somewhere and then you die!
One note on a previous post, I was in heavy competition with another individual on this house, ended up paying the full counteroffer 15 min before they did and so got the house. I also got a pleading letter from the other party begging me to resell them the house! I competed with 4 other parties on a condo in Coronado, and lost offering 20% above the banks asking price (the bank knew their price wasn’t reality anyway – just a teaser).
The price I paid was an average price in Coronado, not any super deal based on the economy, but that area doesn’t have the inventory of the right properties, and the properties that are for sale are still in my opinion 20-30% higher than they should be.
