Expensive McMansion for sale

[CA renter]

Funny, I remember the RE agents claiming that foreign buyers were behind the run-up in the prior housing bubble. IMO, it’s not that the world is smaller (agents come up with the nuttiest stuff), but that it really hurts to hold cash right now, and most other asset classes are at/near highs, too. As they said during the last bubble, at least you can live in a house (unlike stocks, bonds, etc.).

One thing that tends to happen when the housing market is about to turn is that spreads between the high-end and low-end tend to compress near market bottoms and expand near market tops. That’s because the people who sold starter homes have more money to put down on move-up homes, whereas buyers at the bottom don’t have huge sums to put down. That’s why the top usually continues to go up for a while longer after the bottom has stalled, and it’s why the top of the market usually doesn’t crash quite as hard as the bottom — there is more equity at the top, along with other types of wealth that can help these owners make it through the hard times.

[Coronita]

While foreign purchases do make up some part of the high end purchases, I don’t think it’s the majority. The bulk of the purchases still appear to be domestic.

Maybe it’s just the economy is doing better for some. With the exception of enginerd salaried employees, maybe small biz, doctors, lawyers, and other professions have been seeing better times. Maybe people’s investments have been going through the roof, and maybe those same people psychologically feel more comfortable buying now. Maybe folks are trading up because their current property has gone up, rates are low, and for them, there source(s) of income are more or less stable…

I think during the past few years, there’s been so much pessimism about the economy, but there appears to be folks that emerged from all this stronger. These tiny condos I bought are all cute and such. But hardly something that really is exploding the bank. My problem was I played it way too safe. And I’m sure there are plenty of people that did well just by being less fearful.

[njtosd]

[quote=spdrun]Agreed, it’s a matter of opinion. But I maintain that for that price (or anything over $1 million), I better be able to walk and take a swim and be on the “proper” side of I-5 :)[/quote]

Ha! If you want to live in a closet ….

[The-Shoveler]

IMO I think there will be a big push to get the more lower end moving as well but seeing the same type of thing happening up where I am (the more ghetto north county “just kidding”). There is an Eclectic mix of older smaller custom homes (even some mobile homes) and really big (talking 10-12 thousand sqf custom mansions with landscaping to match).

Seems these days they are starting a new custom mansion about once a week (these are on lots with several acre minimums). (You know they somehow screwed up and let you into the wrong area when you start seeing homes with their own helipad).

But IMO I see a push coming to the lower end (good or bad I am not sure).

[Coronita]

[quote=The-Shoveler]IMO I think there will be a big push to get the more lower end moving as well but seeing the same type of thing happening up where I am (the more ghetto north county “just kidding”). There is an Eclectic mix of older smaller custom homes (even some mobile homes) and really big (talking 10-12 thousand sqf custom mansions with landscaping to match).

Seems these days they are starting a new custom mansion about once a week (these are on lots with several acre minimums). (You know they somehow screwed up and let you into the wrong area when you start seeing homes with their own helipad).

But IMO I see a push coming to the lower end (good or bad I am not sure).[/quote]

I’m not so sure. I think until we see less stringent loan requirements I dont think the lower end will move as fast up and as far up. I’d be curious to see on the high end his many homes had mortgages that people really needed to get.

[spdrun]

Ha! If you want to live in a closet ….

Some damn nice closets out there for $1 to $2 million within pissing distance of the beach.

http://www.zillow.com/homes/for_sale/house,condo_type/2103185321_zpid/1000000-2000000_price/3679-7358_mp/days_sort/33.168019,-117.150478,33.017588,-117.41209_rect/11_zm/0_mmm/?view=map

[spdrun]

I think until we see less stringent loan requirements I dont think the lower end will move as fast up and as far up.

Speaking to San Diego, I think the lower end HAS already moved up much further than the higher end. No need to give loans to idiots who can’t handle them.

[Coronita]

[quote=spdrun]

I think until we see less stringent loan requirements I dont think the lower end will move as fast up and as far up.

Speaking to San Diego, I think the lower end HAS already moved up much further than the higher end. No need to give loans to idiots who can’t handle them.[/quote]

The lower end also fell much lower than the higher end.

[spdrun]

As it should have. Peak-bubble pricing didn’t make sense. No reason to bail out mugs who overpaid at the expense of new buyers.

[spdrun]

As it should have. Peak-bubble pricing didn’t make sense. No reason to bail out mugs who overpaid at the expense of new buyers.

[bearishgurl]

[quote=flu]FWIW: I really haven’t been checking out Carmel Valley stats recently, simply because prices 2 years ago reached a point above which I personally could feel comfortable affording, so I stopped looking and keeping in touch (the same philosophy why i don’t go to auto-shows. Why bother looking at things that you cannot obtain)….

Anyway, this thread made me interested on looking at what’s going on again in this area…. I found this stat interesting posted by Redfin.

Past 90 days
Median List Price: $1.25M
Median List $/Sqft: $428
Median Sale Price: $950k
Median Sale $/Sqft: $406k
Median Sale/List: 98%
Average # of Offers: 2.4
Average Down Payment: 32.1%
Number of Homes Sold: 187

I don’t think people are struggling or necessarily stretching that much.[/quote]

Acc to Redfin’s Carmel Valley stats:

The median sold price is $950K

The average downpayment is 32.1%.

.321 x $950K = $304,950 downpayment.

$950K – $304,950 = $645,050 mortgage amt.

$562,350 is the current conforming limit in SD County (up from $546,250 last year). A $645,050 mortgage would have jumbo loan rates, which are higher and harder to get than a conforming loan. Homebuyers don’t take out expensive jumbo loans unless they are unable to put enough down to avoid it.

I honestly don’t see where the typical tract homebuyer in CV is (or was) dripping with cash. And it is obvious that the average homebuyer there is NOT part of the “8 figure” group because if they were, they wouldn’t be bothering with a ~70% purchase money mortgage …. or any mortgage at all, for that matter.

And flu, your $4.5M and up listings were outliers.

Even Alta Del Mar’s brochure showed artist’s renderings of “estate homes” and the developer offered to “build to suit.” They also offered available 1/2 AC and up lots for $1-2M. Those aren’t typical tract homes on typical CV lots nor are they even remotely typical of the vast majority of homes built in CV subdivisions.

The current 30-year fixed jumbo rate in SD County is 4.13 with 0 pts (requires a 740 FICO score) with a monthly P&I payment of $3,124. When you add in taxes, insurance, MR and HOA dues totaling $1102 mo, the monthly PITI + HOA comes to $4226 mo!

That is a LOT of money every month for a $950K econobox situated on a 4500 – 5500 sf lot. And this is assuming that SFRs can still be purchased in CV today for $950K (1900 – 2200 sf?).

For comparison purposes to a $950K median sold price, the asking price on the OP’s link is $1,375K for a 2691 sf house situated on a ~6400 sf lot:

[quote=flu]…At $1.375, might be tougher to sell, but I think it would move easily around 1.2-1.25 maybe higher…[/quote]

Today’s homebuyer can do so much better than this outside of Carmel Valley …. Yes, even in some of SD County’s best areas!

[Coronita]

You win BG. I give up. You are always correct. Since $1million seems unobtainable, they must be unobtainable for everyone.
And every one of the ones that spend $1million+ in Carmel V have made terrible financial decisions throughout their life, and a reason why everyone in Carmel V must depend on welfare and foodstamps….Time for me to go to the local Jimbos and use my EBT check that I just got.

[spdrun]

No one is saying that it’s a terrible decision (so long as costs can be supported), but that there are much better option from an investment standpoint.

Rental income of under 3%, imputed (calculated as if you were renting from yourself) or otherwise is pretty stinky even for the San Diego area. Especially if you don’t have the benefit of being able to walk to the beach and a downtown area.

To each their own, I guess.

[Coronita]

[quote=spdrun]No one is saying that it’s a terrible decision (so long as costs can be supported), but that there are much better option from an investment standpoint.[/quote]

#1. Many people don’t evaluate their primary home the same way that one evaluates a cash flow+ rental. I don’t see why people don’t get this

#2. I don’t understand why BG is so fixated on 8 digit net worth people and tract homes. She keeps wondering why an 8digit net worth people would be even looking at a tract home, and trying to argue as if I stated everyone in Carmel V has an 8 digit net worth and everyone looking for a tract home up here has an 8 digit net worth, despite I repeatedly saying that wasn’t the case. I have no idea, except for maybe a few friends that I suspect are 8 digit net worth.

Do you people like to argue for just arguing sake?

I’m guessing some people with 8 digit net worth would be looking tract home, because it appears that way. And there’s probably some that don’t. Don’t ask me why because I’m not in that category. BG, if you really are curious, why don’t you ask someone in that category. Maybe the OP? . I’m simply putting what folks says on different threads… and was curious why?

Let me put a poll for people ok? There.

http://piggington.com/if_you_have_8_digit_net_worth_have_you_considered_buying_tract

Can we now delete the previous 30+ posts on this thread?

[spdrun]

Not evaluating a primary home as compared to market conditions (i.e. rents for a similar home) is making a bad investment. Why not buy a few better investments, then rent the same home with the income?

And if you’re doing to buy, why not buy closer to the beach for the same price, which is a more attractive area?

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