First crack in the high end?

[Bugs]

It’s been kind of interesting to watch the trends in sentiment. Back in 2002 when I was watching the market pass the point of parity with the 1990 peak nobody contemplated the idea that we could go through another downturn. That’s when the “new paradigm” came out.

As 2003 progressed and prices really started passing all relationship to regional wage trends the lone voices were joined by the occasional skeptic. 2004 rolled around and that’s when Rich’s blog started – he had been watching this mess for a while and got to the point where he had to vent somewhere.

Rich’s blog gained steam in 2005 but sentiment was still divided. By the time 2006 rolled around the bears outnumbered the bulls, and by early 2007 most of the bulls left town.

Now it looks to be reversing. Those who came late and/or were conflicted seem to be getting ready to leave early. Those who started out back in 2004 with the anticipation that pricing would return to or overcorrect past the long term trendline seem to be holding their ground.

———–

Regardless of where you’re coming from, there’s no point in speculating where it should be. By definition, what should be….isn’t. The only thing that really matters is “what is”. And right now, “what is” consists of an oversupply of inventory with lots more “must-sell” sellers on the way, a weakening macro-economic base for the region and rapidly decreasing price strucures – starting from the outside and working its way in.

The high end is still subject to price compression. That won’t really start to happen in earnest until the second wave of ARM resets comes to town, which is still more than a year away.

Bottom line – watch the ratio of standing inventory vs. rate of sales for your target market and ignore the anecdotes about one or two transactions generating multiple offers. That, and recognize that the best deals probably won’t involve your dream house. That’s because the sucker who bought it at the peak is too emotionally involved to let it go at a loss of any type.

[sdrealtor]

Great advice Bugs,
High end wont feel pain in earnest until 2009 and 2010 when 5/1 ARM’s start resetting. Where rates are at the time will determine how many are spared.

When the best deals are out there, expect huge competition for the dream houses as there arent alot of truly great homes in any given area. The few that will be on the market at any given time will be pursued by the handful of folks that sat out the madness like the piggies and the folks with lots of cash (trust funds, business owners, rock stars, doctors and drug dealers).

[sdrealtor]

Great advice Bugs,
High end wont feel pain in earnest until 2009 and 2010 when 5/1 ARM’s start resetting. Where rates are at the time will determine how many are spared.

When the best deals are out there, expect huge competition for the dream houses as there arent alot of truly great homes in any given area. The few that will be on the market at any given time will be pursued by the handful of folks that sat out the madness like the piggies and the folks with lots of cash (trust funds, business owners, rock stars, doctors and drug dealers).

[sdrealtor]

Great advice Bugs,
High end wont feel pain in earnest until 2009 and 2010 when 5/1 ARM’s start resetting. Where rates are at the time will determine how many are spared.

When the best deals are out there, expect huge competition for the dream houses as there arent alot of truly great homes in any given area. The few that will be on the market at any given time will be pursued by the handful of folks that sat out the madness like the piggies and the folks with lots of cash (trust funds, business owners, rock stars, doctors and drug dealers).

[sdrealtor]

Great advice Bugs,
High end wont feel pain in earnest until 2009 and 2010 when 5/1 ARM’s start resetting. Where rates are at the time will determine how many are spared.

When the best deals are out there, expect huge competition for the dream houses as there arent alot of truly great homes in any given area. The few that will be on the market at any given time will be pursued by the handful of folks that sat out the madness like the piggies and the folks with lots of cash (trust funds, business owners, rock stars, doctors and drug dealers).

[sdrealtor]

Great advice Bugs,
High end wont feel pain in earnest until 2009 and 2010 when 5/1 ARM’s start resetting. Where rates are at the time will determine how many are spared.

When the best deals are out there, expect huge competition for the dream houses as there arent alot of truly great homes in any given area. The few that will be on the market at any given time will be pursued by the handful of folks that sat out the madness like the piggies and the folks with lots of cash (trust funds, business owners, rock stars, doctors and drug dealers).

[Omega Point]

I find it interesting that houses in “high end” areas are getting multiple offers in a few days because they have dropped in price two-three hundred thousand dollars. They’re still $1mm and just tract homes.

I have a house in Austin, TX that is about 4,000 sq. ft and in a nice area of town where the median income is just slightly below the median income for Carmel Valley. I have it for sale at $399K and have dropped the price nearly $40K since I listed it in December. I’ve had no serious offers and my house list price is well below competitor for sale homes. What’s more, Austin’s population is quickly growing and has a diverse job base including many high-tech companies.

The point of all this, is people who think they are getting a good deal in these “high-end” areas of San Diego are fooling themselves. This is just the first drop, next year those same houses will be another two-three thousand dollars below what they are selling for today.

[Omega Point]

I find it interesting that houses in “high end” areas are getting multiple offers in a few days because they have dropped in price two-three hundred thousand dollars. They’re still $1mm and just tract homes.

I have a house in Austin, TX that is about 4,000 sq. ft and in a nice area of town where the median income is just slightly below the median income for Carmel Valley. I have it for sale at $399K and have dropped the price nearly $40K since I listed it in December. I’ve had no serious offers and my house list price is well below competitor for sale homes. What’s more, Austin’s population is quickly growing and has a diverse job base including many high-tech companies.

The point of all this, is people who think they are getting a good deal in these “high-end” areas of San Diego are fooling themselves. This is just the first drop, next year those same houses will be another two-three thousand dollars below what they are selling for today.

[Omega Point]

I find it interesting that houses in “high end” areas are getting multiple offers in a few days because they have dropped in price two-three hundred thousand dollars. They’re still $1mm and just tract homes.

I have a house in Austin, TX that is about 4,000 sq. ft and in a nice area of town where the median income is just slightly below the median income for Carmel Valley. I have it for sale at $399K and have dropped the price nearly $40K since I listed it in December. I’ve had no serious offers and my house list price is well below competitor for sale homes. What’s more, Austin’s population is quickly growing and has a diverse job base including many high-tech companies.

The point of all this, is people who think they are getting a good deal in these “high-end” areas of San Diego are fooling themselves. This is just the first drop, next year those same houses will be another two-three thousand dollars below what they are selling for today.

[Omega Point]

I find it interesting that houses in “high end” areas are getting multiple offers in a few days because they have dropped in price two-three hundred thousand dollars. They’re still $1mm and just tract homes.

I have a house in Austin, TX that is about 4,000 sq. ft and in a nice area of town where the median income is just slightly below the median income for Carmel Valley. I have it for sale at $399K and have dropped the price nearly $40K since I listed it in December. I’ve had no serious offers and my house list price is well below competitor for sale homes. What’s more, Austin’s population is quickly growing and has a diverse job base including many high-tech companies.

The point of all this, is people who think they are getting a good deal in these “high-end” areas of San Diego are fooling themselves. This is just the first drop, next year those same houses will be another two-three thousand dollars below what they are selling for today.

[Omega Point]

I find it interesting that houses in “high end” areas are getting multiple offers in a few days because they have dropped in price two-three hundred thousand dollars. They’re still $1mm and just tract homes.

I have a house in Austin, TX that is about 4,000 sq. ft and in a nice area of town where the median income is just slightly below the median income for Carmel Valley. I have it for sale at $399K and have dropped the price nearly $40K since I listed it in December. I’ve had no serious offers and my house list price is well below competitor for sale homes. What’s more, Austin’s population is quickly growing and has a diverse job base including many high-tech companies.

The point of all this, is people who think they are getting a good deal in these “high-end” areas of San Diego are fooling themselves. This is just the first drop, next year those same houses will be another two-three thousand dollars below what they are selling for today.

[NotCranky]

Right or wrong it seems there just are a hell of a lot of people that are not concerned about a systemic meltdown. As has been pointed out many have strong positions to handle the risk. Buyers of cheap condos and beat up stuff can be at parity with rent or better. I think for some of us those factors are as important as when we realized something was weird with housing prices. Also in play, our various historical experiences with our own real estate endeavors and that of our friends and associates and also what risk buying poses for our current interests and for some of us, those of our clients and prospective clients.

Different strokes for different folks. It is a little frustrating to see people categorically align any optimism with “bullishness” or some kind of malevolent prodding. Of course any realtor is also self interested but that in itself doesn’t merit an indictment. Trolling through here selling an overpriced house with bullshit is.

The market and its nuances, including opportunities for gain or just a desired life-style choice with a lot less downside risk are are getting broader everyday. I think for the most part those of us talking about upside are also openly discussing the situation that appear to be more risky. Nobody wants to see someone get hurt. I don’t think we will be the ones that are in denial going forward. Someone who thinks there are ZERO good or reasonable deals in San Diego regardless of the buyers situation is or at least has a good chance of being wrong. Will they be hurt if they wait? No. Nobody here is challenging that.

[NotCranky]

Right or wrong it seems there just are a hell of a lot of people that are not concerned about a systemic meltdown. As has been pointed out many have strong positions to handle the risk. Buyers of cheap condos and beat up stuff can be at parity with rent or better. I think for some of us those factors are as important as when we realized something was weird with housing prices. Also in play, our various historical experiences with our own real estate endeavors and that of our friends and associates and also what risk buying poses for our current interests and for some of us, those of our clients and prospective clients.

Different strokes for different folks. It is a little frustrating to see people categorically align any optimism with “bullishness” or some kind of malevolent prodding. Of course any realtor is also self interested but that in itself doesn’t merit an indictment. Trolling through here selling an overpriced house with bullshit is.

The market and its nuances, including opportunities for gain or just a desired life-style choice with a lot less downside risk are are getting broader everyday. I think for the most part those of us talking about upside are also openly discussing the situation that appear to be more risky. Nobody wants to see someone get hurt. I don’t think we will be the ones that are in denial going forward. Someone who thinks there are ZERO good or reasonable deals in San Diego regardless of the buyers situation is or at least has a good chance of being wrong. Will they be hurt if they wait? No. Nobody here is challenging that.

[NotCranky]

Right or wrong it seems there just are a hell of a lot of people that are not concerned about a systemic meltdown. As has been pointed out many have strong positions to handle the risk. Buyers of cheap condos and beat up stuff can be at parity with rent or better. I think for some of us those factors are as important as when we realized something was weird with housing prices. Also in play, our various historical experiences with our own real estate endeavors and that of our friends and associates and also what risk buying poses for our current interests and for some of us, those of our clients and prospective clients.

Different strokes for different folks. It is a little frustrating to see people categorically align any optimism with “bullishness” or some kind of malevolent prodding. Of course any realtor is also self interested but that in itself doesn’t merit an indictment. Trolling through here selling an overpriced house with bullshit is.

The market and its nuances, including opportunities for gain or just a desired life-style choice with a lot less downside risk are are getting broader everyday. I think for the most part those of us talking about upside are also openly discussing the situation that appear to be more risky. Nobody wants to see someone get hurt. I don’t think we will be the ones that are in denial going forward. Someone who thinks there are ZERO good or reasonable deals in San Diego regardless of the buyers situation is or at least has a good chance of being wrong. Will they be hurt if they wait? No. Nobody here is challenging that.

[NotCranky]

Right or wrong it seems there just are a hell of a lot of people that are not concerned about a systemic meltdown. As has been pointed out many have strong positions to handle the risk. Buyers of cheap condos and beat up stuff can be at parity with rent or better. I think for some of us those factors are as important as when we realized something was weird with housing prices. Also in play, our various historical experiences with our own real estate endeavors and that of our friends and associates and also what risk buying poses for our current interests and for some of us, those of our clients and prospective clients.

Different strokes for different folks. It is a little frustrating to see people categorically align any optimism with “bullishness” or some kind of malevolent prodding. Of course any realtor is also self interested but that in itself doesn’t merit an indictment. Trolling through here selling an overpriced house with bullshit is.

The market and its nuances, including opportunities for gain or just a desired life-style choice with a lot less downside risk are are getting broader everyday. I think for the most part those of us talking about upside are also openly discussing the situation that appear to be more risky. Nobody wants to see someone get hurt. I don’t think we will be the ones that are in denial going forward. Someone who thinks there are ZERO good or reasonable deals in San Diego regardless of the buyers situation is or at least has a good chance of being wrong. Will they be hurt if they wait? No. Nobody here is challenging that.

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