[quote=Ren][quote=bearishgurl]ER, I don’t see how there could be a “trickle down” effect of lowered values to La Playa San Diego (92106) or Del Mar Village because a homeowner in SantaLuz (92127) or Scripps Ranch San Diego (92131) lost their (valued at over $680K) property to foreclosure.[/quote]
I know this isn’t exactly on topic but… what some of the more bullish among you are forgetting is that there is no wall around the nicer areas. The change from less desirable to better neighborhoods can be very gradual, and the sale of a nice 4/3 in a slightly less desirable neighborhood is a comp for a similar 4/3 a half mile away in a slightly nicer neighborhood. That house is a comp for a 4/3 in an even nicer neighborhood another half mile away. Repeat a dozen times until you’re smack in the middle of one of our magical coastal communities, and the same size 4/3 is worth twice what the first house is – but it was affected by that first sale, period. There is no appraisal force field around La Jolla.
Like many others, I’m willing to pay a lot more to live in south Carlsbad than Vista. A LOT more. Those areas will always command a premium, and may even be close to their bottom – but what you can’t argue is that those areas aren’t affected by price drops in less desirable areas. Of course it depends on how much people (like me) are willing and able to pay for a nice area (that’s why they command a premium in the first place), but ultimately the sale price also depends on the appraisal and comps (and therefore indirectly, government intervention). No, a big drop in a less desireable area is not going to pound the prices in a nice area, because nicer areas fluctuate less, and rise and fall at different rates. But it does make some impact. That’s all I’m sayin’.
It’s okay to admit that – it doesn’t change the fact that Del Mar is still waaaaay better than Escondido and may be close to being priced right.
Yes, I’m becoming more bullish in my old age.[/quote]
Exactly.
Like you, we’re willing to pay more to live in certain areas, but we’re not willing to pay twice as much for an inferior house/lot/neighborhood (there are better neighborhoods in some parts of Escondido than Encinitas, for instance, even if it’s further away from the ocean). We are most certainly weighing every aspect of the house/lot/location against the price. Not everyone is willing to significantly overpay just because a house is closer to the ocean.
