Big reduction in Carmel Valley

[Daniel]

Yeah, kind of the same here. I signed a 2-year lease last year (to forestall rent increases), so I have plenty of time to look until Fall 2007. Even then it will probably be too early. I thought about renting in Pacific Highlands Ranch, though, to get a feel for those houses. But only Santa Barbara had a couple of rentals when I checked them out last year, and those were too large for me.

[PerryChase]

Like you guys, I’m also looking but not buying. I know San Diego neighborhoods pretty well now. The nice thing is I can do it all from home, on my wireless laptop, while watching TV or in the backyard with my dog — all without a realtor breathing down my neck. 🙂 Well, I drive around also to look at new development or when it’s convenient and on my way somewhere.

I find it funny when I see “prices won’t last, great opportunity for investor, prices will only go up, why rent when you can buy, look no further, affordable, resort-like, below market, motivated seller, owner wants it sold, priced to sell, seller will entertain offers…, reduced to sell fast (100 DOM), don’t miss out.” The hyperbole is a bit much in this market.

[Anonymous]

Carmel Valley was supposed to be recession-proof because of the good location (beach and commute) and good schools. This may prove that this bubble-popping is so big that no one will be inmune.

[no_such_reality]

Nothing is immune. It’s a real simple math formula in most communities. If the home is $620K, it’s a $500,000 loan at 6.5% interest and rising with a $120,000 down.

That’s a monthly PITA of ~$3800 not including mello roos/association. To get that down in the 40% of gross range, you need $120,000 a year income. The 30% range and it’s $150,000 in income.

Now, how many families make $120,000 a year or more and have $120,000 lying around?

It gets worse as the price goes up.

[JES]

I met this guy once who works for a builder and they get these marketing reports weekly, or maybe monthly, that show data for all the new home communities in detail in the counties of their choosing. These things are thick and show data like traffic through model homes per week, sales per model per week for each community, sale prices and even incentives I believe. One look at it and you can see everything you need to know about every new home community in the area.

[rhinopham]

false advertising at Derby Hills;
As you guys know, it seemed like the Derby Hills development by Pardee homes in Carmel Valley seemed “invincible” for a while with a waiting list >400 strong and stable prices. Since early August, there have been chinks in the armor. Now 5 homes (3 plan twos and 2 plan 3’s) have become “available” due to continent buyer not being able to sell their previous stucco boxes.
I was interested in a 3B and they called and said one became available. I saw their posted price for that 3B (their only one) initially at 1.399 drift down to 1.327 down to 1.307 by August 14th. When I walked into the office with the print out of the 1.307 number, they stated that the house actually is available for 1.347 and that the lower number must not be accurate. Anyone know if they have violated any false advertisement laws or if they are held to the lower price as advertised? Whole thing left me with a very bad taste in my mouth and further disdain for large homebuilders…
rhino

[JES]

Are there any upgrades included?

I would tell them that you want to buy it at the lower price and nothing more. Walk away if you have to and leave your contact information.

[rhinopham]

Man are there upgrades: travertine floors, granite countertops, window casings, iron staircase, plush carpeting, crown mouldings, pre-wiring, all in all over 100k in upgrades. Thing is ready to occupy minus landscaping. They even offered to cover my closing costs and any penalties my landlord would impose for early termination of lease agreement. I said I’d take it for the advertised price but they wouldn’t budge from the 1.347 so I tore up the deposit check and left my business card. Some other sucker can take the lifetime of debt on a depreciating “asset”. I’ll come back to the table when these houses flood back onto the list of “available homes” for 20-40% off peak 2005 prices. I figure if they can’t move the increasing inventory of built/upgraded/ready to occupy homes from previous phases, how will they move the newer, more expensive skeleton homes in new releases? Any other thoughts you guys might have on Derby Hills? I say we all walk in at different times and put up low-ball offers to wake them up to the new realism of the deflating market…
rhino

[Anonymous]

the new phrase for the Fall season that should be used on RE bulls, “sell now or be priced in forever”…its starting to get legs!!

[zk]

“Any other thoughts you guys might have on Derby Hills?”

3 quick ones:

I went in there on Tuesday the 22nd to defer. There were 6 houses available as of then.

I heard the salesman talking to a potential buyer on the phone. I think they were discussing the upcoming phase release. All I heard of the conversation was the salesman saying, “no, they’ll still be around 1.3, they won’t be any lower than that.” His tone of voice indicated that maybe they’re getting a lot of people asking about possible lower prices.

As far as the prices on the web page, they’ve never been accurate for Derby Hill, Carriage Run, Saratoga, Arabella, Santa Rosa or any other Pardee development in CV. I’ve asked them a few times about it, but I never get a straight answer. Something about the website being run by HQ or by somebody else having nothing to do with the sales office. As if that answered my questions.

[zk]

Derby Hill had a release today. There were 7 homes in the release, and they sold 3. At prior releases, they’d sold most or all of the homes. The 6 that were on the market as of last week were mostly or all ones that came back on the market as the “buyers” couldn’t sell their homes. Now, they’re not even selling well at the releases. And I thought it was kinda funny that, when I asked the guy how many they sold today he said, “we sold three. Well, we took checks on three, anyway.”

So, they’ve got 10 for sale now, and who knows if more will come back on the market as “buyers” have more trouble selling their homes.

[barnaby33]

It seems there is an un-natural amount of interest in Carmel Valley on this board. By un-natural I mean more than in any other area, by volume of discussion. Could the folks who are really interested please give me reasons why this is so as opposed to say Del Mar, or PQ which border it on either side?

Josh

[Daniel]

Josh,

It seems to me that a lot of people on this board happen to work in the Torrey Pines and Sorrento Valley areas. Those areas have lots of companies and high-paying jobs (engineering, computers, biotech, etc). For those of us working there, CV is a natural choice. It’s very close to work, it has good schools, and it is substantially cheaper (in the past, present, and, no doubt, future) than either La Jolla or Del Mar.

I have friends who live in Rancho Penasquitos, Poway, Encinitas, etc. All of them went there because they couldn’t (at the time) afford CV. So it’s nothing necessarily special about CV, other that it’s really, really close to a lot of good jobs.

Daniel

[powayseller]

I brought up Carmel Valley only because docteur, a 40-year veteran of real estate in San Diego, said it would keep rising in value. He emphasizes that he is so much more knowledgeable than me, so much more savvy and clever about real estate issues. So I set to find out if he could be right…

Could coastal properties keep rising in value through this downturn? The answer: definitely not! Not only is his neighborhood “nothing special” (sorry, no offense, just repeating what a realtor told me), but in the past downturn every neighborhood dropped, including a RSF Covenant REO that lost 30%.

Also, CV is dropping already.

Personally, I would never buy a builder tract home, where every home looks the same. None of my 3 homes were tract homes. Unfortunately, I let my husband decide on each of our 3 homes and I ended up in locations I hated, out in the boondocks. The rentals we’ve had have been just my style! Our previous house, while beautiful, was on a crappy road in the wilderness, definitely rural. You realize we live in a desert when you are surrounded by brown shrubs. I digress…. So I have zero interest in Carmel Valley or any other clone neighborhoods. This post and my other CV posts were merely a research project.

[an]

powayseller, you don’t like track home, but you also don’t like living out in the boondocks. Unless you’re ready to buy multi-million dollar custom home, I don’t see how you have much choices in custom homes and in middle of it all.

As for me, Carmel Valley is just one of the easiest area to follow since it has new houses. That’s not where I intend to buy though. For me, Sorrento Valley is much more desirable to me as well as north Mira Mesa, and that where I’ll buy.

[Author]

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