I agree with CAR’s explanation of the mid and upper tiers but that does nothing to make a connection between lower end markets and high end markets. Again it is easy to sit in cyberspace and dream up theories which make perfect sense but nothing I have seen indicates that down payments are the issue. Under the old superconforming limit one needed $170,000 to buy an $850,000 home. Today you need $300,000 if you want a super conforming loan. For a jumbo loan most would need $212,500 and qualify under much stricter standards particularly applicable to the self employed. The rate is also a fair amount higher. This has shrunk the pool of buyers as those are material differences. It also changes the financial numbers raising the cost of ownership. All these things impact peoples decisions. It is not a black and white but rather a nuanced thing that defintely has an impact. Its not the only factor but rather what I see as the biggest factor in the latest $50K drop I have seen the last couple months.
AS for SW Esco or other areas, the CAR family could also be living in a larger custom home on 1/2 acre plus lot not a tract home. I would also question whether the price differential included at least 6 months of rent you paid while doing a major remodel. Additionally the cost of a major remodel and expansion of the house. Not that you wouldnt have done alot to any property but my guess is the construction bill and rent went well into 6 figures. For an apples to apples comparison you gotta look at the complete picture.
Lastly the fact you couldnt find what you wanted in SW Esco makes perfect sense in one way. It couldnt have the most important thng you want. It wasnt here which is my point. In the end you really wanted to stay here.
[quote=svelte]Agree CAR but wonder if there is one more factor you overlooked – that high end homeowners often have funds stashed in various places that they can use to feed their home loan during the down economy (a luxury that low end homebuyers didn’t have as they were barely making it to begin with, so any hiccup in their income stream forced them to miss payments).
One theory is that those stashed funds are now becoming very depleted or the high end homeowners have grown tired of watching their life savings go up in smoke so they have decided to start bailing.
I think it is very plausible, especially on the high end homes originally bought with exotic loans.[/quote]
Yes, absolutely. This is very compatible with my theory, too. The high-mid and higher-end households and neighborhoods are impacted in multiple ways. Sdr’s point is also very valid. IMHO, it’s a combination of many different things, but the lack of a large pool of buyers with downpayments from the sales of “starter” and first-tier move-up homes has the largest impact, IMHO. But that’s just a theory.
[quote=sdrealtor] … AS for SW Esco or other areas, the CAR family could also be living in a larger custom home on 1/2 acre plus lot not a tract home. I would also question whether the price differential included at least 6 months of rent you paid while doing a major remodel. Additionally the cost of a major remodel and expansion of the house. Not that you wouldnt have done alot to any property but my guess is the construction bill and rent went well into 6 figures … [/quote]
I agree with this statement but not sure it applies to CAR. The custom property they could have had in SW Esco for same or similar price as the (tract home?) they bought in LC would have likely had more privacy, very mature trees and GREAT bones to work with, thus negating the need for an increased footprint. It very well could have been dated inside (cosmetic fixer) but would have been far less work and expense to make it liveable.
However, is does NOT lie in NCC (“nirvana”) but is a relatively short drive away.
I myself would prefer the more private custom cosmetic fixer on 1/2 + AC over a tract home in nirvana. But that’s just me.
I heard something interesting this morning, KLOS had a commercial on advertising for Software and embedded software engineers for a company in Corona (Riverside). First time I heard them advertising for Engineers since 1999.
