[quote=Ren][quote=bearishgurl]If “Dr. Feelgood” thinks a $1.5M property is now only worth $1.4M, it is because that’s all Ms. Starlet, Mr. CEO (ret), and Mr. Nobel Prize were recently willing to pay in that area. These values have little to NOTHING to do with local worker-bee wages and current mortgage interest rates.[/quote]
But they do, at least indirectly. When millions of worker bees pay 40% less (or whatever) for housing farther inland (due to years of mass unemployment, foreclsoures, etc), those price drops put some downward pressure on coastal properties. That’s what I meant by outside influence. I’m sure it’s countered somewhat by the local salary increases sdr mentioned, but how much is anyone’s guess.[/quote]
Ren, I see the “coastal market”, the “covenant market” and the “exclusive resort market” (ex: certain areas around Lake Tahoe) as completely different markets than the rest of the SFR housing market. When I speak of these markets, I am NOT referring to tracts, only custom properties. These markets have a separate set of buyers than the “mainstream housing (SFR) market.” This “separate set” is relatively “unaffected” by worker-bee salaries and mortgage interest rates. They are looking at exactly what they want where they want it . . . because they CAN! I’m not saying this set of folks is particularly willing to overpay. But if it’s exactly what they’re looking for, they’ll find a way to get it. As you know, recent sales comps exist, even at the high end. But I don’t think this “buyer set” overanalyzes the purchase like a typical Pigg would. If it fits in with the location they’re seeking and their needs, they BUY IT. At all times, they are utterly cognizant that there is only ONE Laguna Beach, Doheny or Del Mar.
