Big Loss for Agent in San Marcos

[sdrealtor]

PS,
No that is not where docteur lives nor is it as nice in my opinion. I nearly sold a house up the street from him last month (I know you will ask so here’s why: buyer changed mind and now wants something more expensive in Del Mar W of 5 which will take some time to find the right house) and if he is in one of the locations I believe his is in he has nothing to worry about. There are some spectacular lots/locations where he lives and I suspect he has one of them.

I believe the reason for the drop is exactly what I predicted and have been expecting all along. While the fundamentals may have been weak behind the price increases from 2001 to 2003, there were ABSOLUTELY NONE behind the rise that occurred from Later 2003 through 2004. There was nothing, absolutely nothing to support these values and I expected tehm to evaporate almost overnight which they have. From here on out I don’t expect the decline to come so easy as there were some fundamentals behind these increases and we’ve already got 4 years of inflation to help prop them up further.

[JJGittes]

sdr, good examples. However, I have many friends who don’t live and breathe this stuff and who also don’t think prices have backed off. The best I can figure is that folks simply look at the ads in the sunday paper and see house after house above $800k, or 900, or even 1 mill, that are basically just tract houses in decent neighborhoods, and feel discouraged that they are nowhere near being able to afford them, even though these poeple went to school and have done all the right things in their lives. In other words, when you have perpetual sticker shock, a drop of 5 or 10% is not noticed because it is inconsequential….couldn’t afford it before, can’t afford it now.

[sdrealtor]

JJ,
Don’t dismay, very few people have the ability, interest and access to the information necessary to prove what I know to be true. The decline is between 10 to 20% from the peak in most areas and I believe there is another 10 to 20% coming though it will take longer to transgress. SD will always be expensive and this is the way I thought about it several years ago and what I recommend to my clients. It is how I ended up living my dream.

It will probably take you at least 3 purchases to get the house you really want. The key to getting there is buying at the right time AND buying the right houses along the way. The right houses will appreciate more relative to the market allowing you to make bigger jumps and will be more enjoyable places to live on stops along the road to the home they really dream of.

[sdcellar]

sdrealtor– Since you offered, can you provide some examples for 92127? (and if you really want to, for Santaluz?)

[sdrealtor]

sure, give me a day or so. Santaluz will be tricky because most homes were purchased from the builders which means they were likely under contract 1 year before they actually closed when new and thus have an extra year of hidden appreciation. We need to find homes that were sold by the 2nd owner to a 3rd owner to eliminate the impact of all the post builder upgrades and landscaping. Here is one to get you started.

82XX Santaluz Village Green N

7/02 $732K (new from builder)
3/04 $1.1M
11/06 $1.03M

Tough to argue this one isnt back to early or pre-2004 pricing!!!

[PerryChase]

sdrealtor, I agree that it takes 3 house purchases before you can find the best one for you.

I remember a poster here who said that the didn’t care what the statistics show. He looks at the market “with his feet” and researches the neighborhoods that he likes. He compares price history and rents then decides when it’s the right time to buy. I too believe that’s the best approach. Who cares what Greenspan or Bernanke say? All real-estate is local.

I’ve been looking at different neighborhoods that I like. The nice thing about the Internet it that it takes you from one property to the next and the next. I now have a pretty good idea of where prices are headed. We’ve only started on the downward slide so I’m pretty sure that another 20% drop is coming.

[Steve Beebo]

sdrealtor –

As I said, condo conversions and some newer tracts are doing the worst, due to current competition from other condo conversions / other new tracts. You posted mostly newer tract homes.

What you’re missing is the other 90% of the market – normal resale homes. Maybe you only work in newer areas, and do not have much experience in the broader market.

These are all resales in established areas:

4976 Marin Drive 92056
9-04 $550,000
9-06 $600,000

4955 Marin Drive 92056
6-04 $569,000
5-06 $632,000

13754 Bassmore Dr. 92129
1-06 $540,000
6-06 $592,000

3930 Via Palo Verde Lago 91901
4-05 $830,000
5-06 $879,000

617 Alameda Blvd. 92118
3-03 $1,010,000
5-06 $1,702,000

5780 El Camino Del Norte 92067
8-04 $2,650,000
10-06 $2,850,000

729 F Ave. 92118
10-03 $577,000
5-06 $815,000

1150 J St. #314 92101
9-05 $367,000
5-06 $392,000

429 9th Ave. #708
7-05 $284,000
8-06 $370,000

1250 Florida St. 91932
6-04 $520,000
9-06 $575,000

10448 Russell Rd. 91941
5-04 $925,000
11-06 $1,000,000

2701 State St. 92103
10-03 $600,000
10-04 $738,000
8-06 $1,000,000

1414 Torrance 92103
3-03 $630,000
8-06 $990,000

3433 Albert St. 92103
9-04 $602,000
9-06 $869,000

240 A Ave. 92118
4-03 $950,000
9-06 $1,350,000

525 6th St. 92118
7-04 $1,050,000
9-06 $1,170,000

10 Admiralty Cross 92118
7-05 $1,799,000
9-06 $1,950,000

13929 Frame Rd. 92064
10-03 $366,000
10-06 $465,000

13229 Tining 92064
8-03 $510,000
8-06 $680,000

16503 Ave. Florencia 92064
8-03 $686,000
11-06 $766,000

4515 Rhode Island 92116
2-04 $685,000
8-06 $847,000

4173 Hilldale 92116
4-03 $730,000
11-06 $989,000

I’m not trying to convince anyone that the market doesn’t suck right now, and that it won’t get at least a little worse, with an increasing number of foreclosures. But with inventory now at well below 20,000 in SD County, it’s not as bad as some portray. To say that prices are “most definitely and even a little below 2004 prices” is just plain idiotic.

[lendingbubblecontinues]

“But with inventory now at well below 20,000 in SD County, it’s not as bad as some portray.”

C’mon Steve…you are just kidding yourself if you think there aren’t a HUGE number of homes that will be re-listed come January/Spring PLUS several thousand more who have finally been convinced that it is NOW OR NEVER to get out…in my neighborhood of 200 homes alone, there are six current listings with another 7 that were pulled just before the holidays…these will go back on very soon.

I envision 30,000+ resales on the market by June. This doesn’t include new construction either. This market is D-E-A-D!!

[Steve Beebo]

lendingbubbleco:

You’re right that the inventory level will jump between now until March, but the market isn’t completely dead.

According to Sandicor (MLS), there are 18,922 SFRs and condos on the market right now. Inventory typically does dip going toward the end of the year, but there were predictions on this board of 30,000 listings this fall – it didn’t happen.

There have been about 15,000 sales of SFRs and condos in the past 6 months, and there are 4600 in escrow right now – somebody’s buying.

If you want to see a dead market, check out the Phoenix area – with a similar population as San Diego County, they have an inventory iof 53,000 homes on the market.

[sdrealtor]

Beebo you are just silly. Instead of questioning my examples and debunking them with others you chose to pull ridiculous examples that are generally exceptions to the rule. You question me using some newer homes yet your first two examples are newer homes. You use predominantly single level homes with views which are rare and coveted. You use high end single level view homes in RSF and Coronado. View homes on top of Mt helix. You use homes that were bought and underwent dramatic remodeling. But the SINGLE BIGGEST FLAW is that you use nearly no sales that have closed in November. Who cares about homes that sold 6 months ago, you might have well use homes from another planet.

The truth is my examples speak to the overall market while yours speak to exceptions. Silly Boy!

[lendingbubblecontinues]

I am certainly glad people are buying….we need people to help set lower and lower comps.

With tongue in cheek I say this: “Good thing nobody from San Diego County thought it would be a good idea to liberate home equity here, to go to Arizona and buy houses for speculation purposes.”

[SD Realtor]

I think it is relatively easy to find sales above and below 2004 prices. As always it will vary with the area and housing type. As the fall has progressed I feel that the decline will be a bit more long and drawn out then I originally had hoped for unless we get a catalyst. The catalyst I was hoping for which was substantial foreclosure activity will happen but it will not be the earth shaker we are all hoping for. It looks like rates will stay low, and to compound things, I think lenders will get more creative and enable distressed sellers to hang around. I also have found that homeowners with equity are not giving in. They are simply pulling off and not selling and sitting tight. Don’t get me wrong, I think the decline will continue but I think it will be a more agonizing slower pace decline. Think about it, if the the other two cycles took 6 years, and we are only in year 2, then we still have a long ways to go right?

This spring will be ESPECIALLY important. I haven’t actually looked at numbers, but I believe the number of cancelled/expireds/withdrawns outweighs the number of sales this year.

The reduction of inventory since the peak is no surprise to any of us as that is seasonal. However Steve was correct that there is activity, the market is not as as any of us would have hoped. I REALLY HOPE we do see 30k in inventory this year because if we did, maybe that would change some of the sellers attitudes…

SD Realtor

[sdrealtor]

From the listing of your Hilldale example:

“All the charm of a classic Kensington home with 21st century luxury and amenities. NOTHING WAS LEFT OUT when this SPACIOUS CANYON HOME ON A LARGE PARCEL was COMPLETELY GUTTED AND REMODELLED from the plumbing and electrical to the top-of-the-line finishes throughout.”

Additionally the prior sale you used was a none MLS sale and was likely a below market sale of total fixer property. If I had time I’d check the comps but that is likely the case.

This is typical of the ridiculous examples provided by the court jester!

[Steve Beebo]

Nationally, the real estate market must be close to bottoming out – Warren Buffet has bought 6.5 million shares of Lowe’s stock in the past three months, and he’s smarter than all of us put together.

Also, keep in mind two things:

1. They’re not making any more land, and

2. The weather is really good here in San Diego. 10 or 20 years ago, the weather here was not that much better than other areas, but now it’s quite pleasant almost every day.

[Anonymous]

Nah, Warren Buffet has made lots of mistakes: shorting the dollar too soon, having to unwind a bunch of ugly reinsurance positions when he bought Gen Re, attempting to use money — instead of patient counsel, help, and example — to induce his son to lose weight, becoming a DemoRat when his father was a Republican Congressman, living in sin with a mistress for 30 odd years, etc. The mistakes just weren’t fatal.

If he’s been buying Lowe’s, now — at a P/E of 15, it’s no steal — this will be another mistake.

Wishful thinking, SB.

[Author]

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