[quote=Jazzman]BG, if we take ‘over-rated’ to mean ‘perceived poor value for money’, then I think it is not only SD that is over-rated. If you can buy a similar home for half the price elsewhere, the implication is there must be twice as much on offer; better schools, better homes, better jobs, better weather, better cultural facilities etc. Those are all difficult things to quantify, but most will have an inbuilt value-o-meter.
My view is that RE has been highjacked in many places and these places share things in common. They tend to be English or Asian speaking, major metropolitan conurbations, with an industry that drives it and a government that accommodates it. In other words, a culture has been built up around it. We know when it started, when it got out of hand, the consequences, and the continued disregard for it. I find it useful to view current trends through that prism. Others clearly find it irrelevant arguing that homes now represent good value ie, they are affordable as measured by income and rents. But why then do they continue to debate it unless they are a little insecure in their beliefs. If one thing has defined RE over the last decade or two, it is insecurity. The problem faced by many is they don’t have a choice. Complacency and ignorance feeds the beast. Homes remain over-valued.
The OP’s choice of home is a prime example of the home-fest culture. It clearly is not a mansion, and the +$1m price tag is incredible. It is a tract home with no individuality, no personality, packed with ‘pseudo-designer” finishes, surrounded by featureless, arid land. If you paid the asking price for that home you are fool by my accounts. Corporations are telling us how to live, what colors we should like, and even what views we should enjoy. If you are smart enough to make enough money to afford that price tag, you should be smart enough to know that it is not worth it. I feel sorry for anyone who can’t see that. Strike that …I don’t feel sorry for them at all.[/quote]
Jazzman, the OP later posted here that they feel as you do, that the price was too high for the home in the link they posted and essentially that any buyer would be “stupid” to pay anywhere near the asking price for it.
In CA coastal counties, I believe that it IS true that a certain demographic (i.e. young families, Asians, etc) ARE running up prices in their desired locations by attempting to overbid one another for almost any listing in that area which pops up on the market. Case in point: Carmel Valley (SD), as we have been discussing here. But there are other areas of the county as well which are rising rapidly in “value” due to this phenomenon. ALL of these so affected areas have exploded in population due to new construction built since 2000.
However, it is NOT true of the East LA County corridor cities (mostly situated in the San Gabriel Valley). Except for just a handful of fairly expensive cities, a very decent 3-4 bdrm/2 bath SFR with a double-car garage and central air (needed in most areas around there) has an asking price of as low as $350K (usually a short sale) to $600K, with average $450-$475K. The lot sizes there range from (a few) 6500 sf to 20,000 sf with the “average” lot size of 8000 st. There are MANY listings in this price range with 9500+ sf lots! At least a dozen of these cities’ population consists of >80% “Asian” residents (incl Chinese, Taiwanese and Vietnamese). Two cities have mostly (55-70%) Filipino residents. This region has the largest Asian population in the country (even larger than the state of Hawaii)!
The typical house there is 55+ years old. And as far as I could tell, there were very, very few houses built after 1980 (possible total remodels resulting from full or partial teardowns and spec tracts consisting of 6 or less homes). So the Asian buyer in East LA County (and Northern CA Bay Area counties as well) ACTUALLY WILL accept an older, smaller home on larger lot when nothing else is available in their chosen location. (This is excepting eastern Alameda and southern Santa Clara Counties where newer development is available for purchase.)
In SD County and Southern OC, newer residential construction abounds, so that is where the younger demographic and Asian buyers seem to flock to.
I disagree that this phenomenon is “out of hand.” It is only “out of hand” for those who are desirous of and able to but unwilling to compete in the bidding process for a home in those subdivisions which have been run-up in price over the past decade-plus (primarily due to bidding wars).
For those for whom buying tight, boxy, nondescript quarters for $850K+ to live in is a turnoff, such as myself, the situation is NOT “out of hand” because it doesn’t affect anything in my sphere.
Different strokes for different folks.
And today’s buyers DO have many choices in SD County! That was the jist of my posts here. They don’t HAVE to engage in bidding wars with several other buyers over a single listing every time something pops up on the market in ONE zip code. They can take their business to an area where where a fair offer will be considered carefully by the sellers.
As far as a buyer considering “a better home for half the price elsewhere,” one truly DOES pay for what they get in CA coastal counties, except in areas which are currently suffering from “sales frenzy,” such as CV. In the frenzy areas, price paid does not necessarily equate with “value,” IMO. The price paid there only equates to one premise … that the buyer was the “winning bidder” for the property (of several bids).
In CA coastal counties, I believe the “traditional” hallmarks of home (SFR) value, in order, are:
location
possible view
quality of construction
condition of dwelling
lot size
lot configuration
sf of dwelling
accessible to sewer
lack of or minimization of easements
“Location” includes consideration of “economic obsolescence” factors such as: busy street in front or directly behind property; unrelenting freeway noise; high power lines overhead or nearby; situated in fire or flood zone; and affected by mixed-use zoning.
I’m not sure the younger buyer cohort of today considers (or even notices) many of the above factors when shopping for a residence they may live in for a decade or more. They’re too wrapped up in kitchen and bathroom countertop finishes to be looking at that boring, “big picture” I just listed. Thus, they manage to get “roped into” $1000+ month in tax + MR + HOA dues (in addition to their mo P&I payment). I’m not saying here that they’re all “stupid” (like the OP did) but they are certainly complacent (and may not have any knowledgeable family support in place to keep them from making a homebuying mistake). And we all know that their agent just wants to make a commission as quickly and easily as possible.
