2010 Predictions for High-End Housing Market

[george]

Anyone have predictions for the North County $2M+ market?

[UCGal]

I suspect there will be some distressed sales/foreclosures – but not in the quantity in other market segments. For two reasons: most who bought/qualified for those big houses had substantial resources so they’re hoping to ride it through. Those that stretched beyond their means will still face some pain – but the number of cases will be small enough there won’t be as much price pressure on the overall segment.

The market segment I expect to feel more pain is the 900k-1.5k group. It seems like a lot of folks bought in that price point that really couldn’t afford it. (Based on anectdotal evidence of water cooler talk at work.)

[UCGal]

I suspect there will be some distressed sales/foreclosures – but not in the quantity in other market segments. For two reasons: most who bought/qualified for those big houses had substantial resources so they’re hoping to ride it through. Those that stretched beyond their means will still face some pain – but the number of cases will be small enough there won’t be as much price pressure on the overall segment.

The market segment I expect to feel more pain is the 900k-1.5k group. It seems like a lot of folks bought in that price point that really couldn’t afford it. (Based on anectdotal evidence of water cooler talk at work.)

[UCGal]

I suspect there will be some distressed sales/foreclosures – but not in the quantity in other market segments. For two reasons: most who bought/qualified for those big houses had substantial resources so they’re hoping to ride it through. Those that stretched beyond their means will still face some pain – but the number of cases will be small enough there won’t be as much price pressure on the overall segment.

The market segment I expect to feel more pain is the 900k-1.5k group. It seems like a lot of folks bought in that price point that really couldn’t afford it. (Based on anectdotal evidence of water cooler talk at work.)

[UCGal]

I suspect there will be some distressed sales/foreclosures – but not in the quantity in other market segments. For two reasons: most who bought/qualified for those big houses had substantial resources so they’re hoping to ride it through. Those that stretched beyond their means will still face some pain – but the number of cases will be small enough there won’t be as much price pressure on the overall segment.

The market segment I expect to feel more pain is the 900k-1.5k group. It seems like a lot of folks bought in that price point that really couldn’t afford it. (Based on anectdotal evidence of water cooler talk at work.)

[UCGal]

I suspect there will be some distressed sales/foreclosures – but not in the quantity in other market segments. For two reasons: most who bought/qualified for those big houses had substantial resources so they’re hoping to ride it through. Those that stretched beyond their means will still face some pain – but the number of cases will be small enough there won’t be as much price pressure on the overall segment.

The market segment I expect to feel more pain is the 900k-1.5k group. It seems like a lot of folks bought in that price point that really couldn’t afford it. (Based on anectdotal evidence of water cooler talk at work.)

[clearfund]

We developed luxury homes during the boom in country clubs, coast, etc in the $3mm-$6mm range.

One of the differences with they type of pain/foreclosure for this is the type of loans used to buy the homes. Because of the size of the individual loans they were not part of the fannie/freddie/gov cabal and are typically left on the books of the lender or whoever bought them.

Additionally, most 1st TD’s were apx $1mm to enjoy the tax write off then they would supplement the 1st with 2nds and leverage their stock portfolio to make up the balance. Thus, the first is not automatically underwater but the balance of the debt is. Additonally, a high portion of these loans are done by local banks, not the big banks, thus watch the local lenders sink under the wieght but that won’t make the headlines.

Foreclosures will happen, however, the are often done quietly and under wraps as a deed in lieu etc to avoid the ‘shame’. its an insiders market/sneaky shadow market.

[clearfund]

We developed luxury homes during the boom in country clubs, coast, etc in the $3mm-$6mm range.

One of the differences with they type of pain/foreclosure for this is the type of loans used to buy the homes. Because of the size of the individual loans they were not part of the fannie/freddie/gov cabal and are typically left on the books of the lender or whoever bought them.

Additionally, most 1st TD’s were apx $1mm to enjoy the tax write off then they would supplement the 1st with 2nds and leverage their stock portfolio to make up the balance. Thus, the first is not automatically underwater but the balance of the debt is. Additonally, a high portion of these loans are done by local banks, not the big banks, thus watch the local lenders sink under the wieght but that won’t make the headlines.

Foreclosures will happen, however, the are often done quietly and under wraps as a deed in lieu etc to avoid the ‘shame’. its an insiders market/sneaky shadow market.

[clearfund]

We developed luxury homes during the boom in country clubs, coast, etc in the $3mm-$6mm range.

One of the differences with they type of pain/foreclosure for this is the type of loans used to buy the homes. Because of the size of the individual loans they were not part of the fannie/freddie/gov cabal and are typically left on the books of the lender or whoever bought them.

Additionally, most 1st TD’s were apx $1mm to enjoy the tax write off then they would supplement the 1st with 2nds and leverage their stock portfolio to make up the balance. Thus, the first is not automatically underwater but the balance of the debt is. Additonally, a high portion of these loans are done by local banks, not the big banks, thus watch the local lenders sink under the wieght but that won’t make the headlines.

Foreclosures will happen, however, the are often done quietly and under wraps as a deed in lieu etc to avoid the ‘shame’. its an insiders market/sneaky shadow market.

[clearfund]

We developed luxury homes during the boom in country clubs, coast, etc in the $3mm-$6mm range.

One of the differences with they type of pain/foreclosure for this is the type of loans used to buy the homes. Because of the size of the individual loans they were not part of the fannie/freddie/gov cabal and are typically left on the books of the lender or whoever bought them.

Additionally, most 1st TD’s were apx $1mm to enjoy the tax write off then they would supplement the 1st with 2nds and leverage their stock portfolio to make up the balance. Thus, the first is not automatically underwater but the balance of the debt is. Additonally, a high portion of these loans are done by local banks, not the big banks, thus watch the local lenders sink under the wieght but that won’t make the headlines.

Foreclosures will happen, however, the are often done quietly and under wraps as a deed in lieu etc to avoid the ‘shame’. its an insiders market/sneaky shadow market.

[clearfund]

We developed luxury homes during the boom in country clubs, coast, etc in the $3mm-$6mm range.

One of the differences with they type of pain/foreclosure for this is the type of loans used to buy the homes. Because of the size of the individual loans they were not part of the fannie/freddie/gov cabal and are typically left on the books of the lender or whoever bought them.

Additionally, most 1st TD’s were apx $1mm to enjoy the tax write off then they would supplement the 1st with 2nds and leverage their stock portfolio to make up the balance. Thus, the first is not automatically underwater but the balance of the debt is. Additonally, a high portion of these loans are done by local banks, not the big banks, thus watch the local lenders sink under the wieght but that won’t make the headlines.

Foreclosures will happen, however, the are often done quietly and under wraps as a deed in lieu etc to avoid the ‘shame’. its an insiders market/sneaky shadow market.

[clearfund]

ps: I am seeing some luxury homes coming in at 50% of their peak when bought in a new community with very little collective equity ($7mm home in the low $4mm – mid $3mm range).

These homes are racing towards the replacement cost of the structure which is typically $300/sf +/-depending on how ‘tricked out’ they got with their finishes and personalization.

[clearfund]

ps: I am seeing some luxury homes coming in at 50% of their peak when bought in a new community with very little collective equity ($7mm home in the low $4mm – mid $3mm range).

These homes are racing towards the replacement cost of the structure which is typically $300/sf +/-depending on how ‘tricked out’ they got with their finishes and personalization.

[clearfund]

ps: I am seeing some luxury homes coming in at 50% of their peak when bought in a new community with very little collective equity ($7mm home in the low $4mm – mid $3mm range).

These homes are racing towards the replacement cost of the structure which is typically $300/sf +/-depending on how ‘tricked out’ they got with their finishes and personalization.

[clearfund]

ps: I am seeing some luxury homes coming in at 50% of their peak when bought in a new community with very little collective equity ($7mm home in the low $4mm – mid $3mm range).

These homes are racing towards the replacement cost of the structure which is typically $300/sf +/-depending on how ‘tricked out’ they got with their finishes and personalization.

[Author]

Posts