[quote=temeculaguy]…The trick are all the other variables when trying to determine the value of a single house and it’s current fair value and estimated future value. Sizes of houses have changed, some areas that were once far flung suburbs have grown up and have gained autonomy (ie. carlsbad/encinitas) so it get really hard to compare median priced 1970’s home purchase in encinitas, factor inflation since then and come to an estimated value for today. The water gets muddy, because the houses are bigger now, much bigger, and encinitas isn’t the same as it was 40 years ago…[/quote]
Good observation, TG. You mentioned “built-out” areas such as Manhattan in your post as being immune to how “mainstream” property values across the nation behave (correct me if I have this wrong.) I want to add other areas of the US to Manhattan and SF (and other very congested cities with much opportunity). They are some areas =< 5 miles from the CA coast and the (Pacific and Atlantic) coasts of other states and US resort areas such as isolated ski areas, etc. An area can be "built out" even if the average lot in it is 15K sf and it is zoned 3 units per AC max and apartment/condo units are no longer permitted on all affected parcel maps (ex: Bonita, CA). For instance, the average lot size in OB is about 6500 sf but it, along with many other coastal communities in SD County, is "built out." Mission Hills and Pt Loma are NOT coastal, but they are "built out," as are virtually ALL "metro" SD communities. The only way there would be land available for residential building in these communities would be to buy a lot where a previous owner has demolished a previous bldg or buy a "knockdown" bldg and demolish it yourself. If a desirable and convenient area is “built-out,” it is a finite commodity. Of course, “desirability” varies widely among the “built-out” communities within 5 miles of the bay or ocean in SD County but for the most part, I don’t see these areas being decimated, price wise. The amount of inventory in these areas which could be available and currently on the market has long been established. There is nothing location-wise to compete with these properties and never will be, except their neighboring available properties.
In the interior US, this isn’t so. Subdivisions the same age might be equal in value to a subdivision 60 miles away (ex. Houston, TX) if neither has access to neighborhood lakes or their own parkland, and each is equidistant to job centers. Here, there is no ocean, island, historical property, different topography or sufficiently “built-out” areas to suggest the values should be higher than other areas. The weather is basically the same for hundreds of miles around a subdivision there. In these interior areas, values hold steady and are more susceptible to the financial wherewithal of potential buyers. A typical buyer is not usually a relo, transplant or foreigner, as are many SD buyers, but a locally born individual/family from that county or an adjacent one. These areas’ value fluctuations, if any, are much easier to predict far into the future.
Not so in coastal CA. It is a different animal entirely. The properties are very diverse, the topography is diverse, the buyers are very diverse, the home styles and ages are diverse and the weather can be significantly different just 5 miles away. In trying to determine the “worth” of properties in this “coastal niche,” these properties shouldn’t compared to or confused with areas further inland which have multiple near-identical tracts, possible vacant land still available and many residents who may be entirely freeway-dependent. Scarcity of land/lots and convenience will always have a higher value, even if it is a vacant lot. Size of dwelling is secondary.
