Future of Santa Luz – 92127?

[EconProf]

ocrenter and clearfund raise some interesting points about the Santaluz golf club membership that prompt ruminations about how things have changed so radically in the past decade. Golf/membership clubs are reportedly in trouble nationwide, as baby-boomers age and golf less, expensive sports are shunned with our nation’s newfound austerity, and land and water rates rise.
Consider also the particular economics of a golf course: heavy up-front fixed costs, low marginal or variable costs (the cost of each additional user). This means the enterprise cannot thrive without volume, and in fact may have a breakeven point of perhaps 70% or 80% of capacity. Usage of both clubs is way below their potential, as we have observed.
Since Santaluz was conceived and planned in the heady post-stock market peak of 1999, and executed in the real estate bubble of 2000-2005, they assumed their expensive memberships would always have high and increasing demand, thus their lofty initial asking price. Now the gloom of our post-bubble economy is becoming permanent, some 10% + building pads of Santaluz sit vacant (and are selling for less than their initial 2003 or so price), and the membership prices have been cut, much to the chagrin, I suppose, of the original buyers. I imagine a lot of internal debate and gnashing of teeth preceeded this decision.
I suggest this is the new normal and a slew of other enterprises must rethink their business model in view of a permanent slow growth economy.

[clearfund]

EconProf – You are correct except for one distinction. The developer who planned/executed between 199-2005 sold 100% of their real estate product at/above their expectations and made a killing. They are out, have their cash, and don’t give a whit about what has happened since.

All the unbuilt lots are owned by individuals who purchased them from the developer (or 2nd/3rd generation resales). Developer got out before the crash. Beautifully executed real estate play on their part. come to CA, sell, get out. Stick a big mello-roos on the property which reduced their capital risk. Home run for them.

Yes, they still own many golf memberships, but their basis is essentially zero since they got a massive portion of their money out of the club/course property already.

Lastly, in a private club scenario you don’t need marginal users as your monthly membership fees should cover expenses. Usage fees & food/bev profits are likely minor relative to the $1,100/mo base golf dues whether you show up and play or not.

[clearfund]

EconProf – You are correct except for one distinction. The developer who planned/executed between 199-2005 sold 100% of their real estate product at/above their expectations and made a killing. They are out, have their cash, and don’t give a whit about what has happened since.

All the unbuilt lots are owned by individuals who purchased them from the developer (or 2nd/3rd generation resales). Developer got out before the crash. Beautifully executed real estate play on their part. come to CA, sell, get out. Stick a big mello-roos on the property which reduced their capital risk. Home run for them.

Yes, they still own many golf memberships, but their basis is essentially zero since they got a massive portion of their money out of the club/course property already.

Lastly, in a private club scenario you don’t need marginal users as your monthly membership fees should cover expenses. Usage fees & food/bev profits are likely minor relative to the $1,100/mo base golf dues whether you show up and play or not.

[clearfund]

EconProf – You are correct except for one distinction. The developer who planned/executed between 199-2005 sold 100% of their real estate product at/above their expectations and made a killing. They are out, have their cash, and don’t give a whit about what has happened since.

All the unbuilt lots are owned by individuals who purchased them from the developer (or 2nd/3rd generation resales). Developer got out before the crash. Beautifully executed real estate play on their part. come to CA, sell, get out. Stick a big mello-roos on the property which reduced their capital risk. Home run for them.

Yes, they still own many golf memberships, but their basis is essentially zero since they got a massive portion of their money out of the club/course property already.

Lastly, in a private club scenario you don’t need marginal users as your monthly membership fees should cover expenses. Usage fees & food/bev profits are likely minor relative to the $1,100/mo base golf dues whether you show up and play or not.

[clearfund]

EconProf – You are correct except for one distinction. The developer who planned/executed between 199-2005 sold 100% of their real estate product at/above their expectations and made a killing. They are out, have their cash, and don’t give a whit about what has happened since.

All the unbuilt lots are owned by individuals who purchased them from the developer (or 2nd/3rd generation resales). Developer got out before the crash. Beautifully executed real estate play on their part. come to CA, sell, get out. Stick a big mello-roos on the property which reduced their capital risk. Home run for them.

Yes, they still own many golf memberships, but their basis is essentially zero since they got a massive portion of their money out of the club/course property already.

Lastly, in a private club scenario you don’t need marginal users as your monthly membership fees should cover expenses. Usage fees & food/bev profits are likely minor relative to the $1,100/mo base golf dues whether you show up and play or not.

[clearfund]

EconProf – You are correct except for one distinction. The developer who planned/executed between 199-2005 sold 100% of their real estate product at/above their expectations and made a killing. They are out, have their cash, and don’t give a whit about what has happened since.

All the unbuilt lots are owned by individuals who purchased them from the developer (or 2nd/3rd generation resales). Developer got out before the crash. Beautifully executed real estate play on their part. come to CA, sell, get out. Stick a big mello-roos on the property which reduced their capital risk. Home run for them.

Yes, they still own many golf memberships, but their basis is essentially zero since they got a massive portion of their money out of the club/course property already.

Lastly, in a private club scenario you don’t need marginal users as your monthly membership fees should cover expenses. Usage fees & food/bev profits are likely minor relative to the $1,100/mo base golf dues whether you show up and play or not.

[earlyretirement]

Thanks guys. All GREAT points. Another point that I discovered today is that when buying there is a 1/4 of a point fee that I’m told is split 50% between the buyer and seller. It’s called the “Santaluz Enhancement Fee”. Not a big fee but still those doing due diligence should keep this in mind.

Also, I was told the city of San Diego has a “Supplemental Tax- one time assessment”. I forgot to ask my realtor today when I was out and about. But is this tax just based on what the closing price is compared to the latest appraisal price the property tax is currently based on?

I spent all day looking at houses in Carmel Valley today and driving around the area more. Some of the areas are nice. I thought the area in Pacific Highland Ranch had some attractive homes. The biggest problem to me is the density. The houses all sit on top of one another for the most part.

We saw a house on Aster Meadows Place and really there isn’t any privacy as you have houses on both sides looking into your house and 3 houses on the backyard that all can see into your house and to the back yard. There is a jacuzzi/hot tub in the backyard but not sure I’d want to spend time in it with the wife with all my neighbors watching. So much for walking around naked in the house as well.! Ha, ha. The Mello Roos was low and the HOA was really cheap but really who wants to spend $1 million + with all your neighbors looking into your house??

We also looked at a house listed at around $1,250,000 in the gated community of Collins Ranch in Carmel Valley. They had some beautiful homes there but even there on a big home of almost 4,900 sq. feet… your neighbor can look onto you easily. But the biggest rub was that we heard more street noise from Highway 56 than ANY of the homes we toured and walked around even directly facing Camino del Sur in Santaluz. By a long shot! And consider this was a non-peak traffic time on the weekend.

I was really surprised about that as on a map, Highway 56 isn’t really that close to Collins Ranch but the sound is such that it echos so you have traffic noise which I would have never imagined just looking on a map.

We love the location of Carmel Valley and it’s proximity to the city and the ocean… but the density is just about a killer for us. But I think some people exaggerate a bit when they say all the homes are cookie cutter homes there in Carmel Valley. There are some beautiful homes but the density there compared to other areas is a big negative with the houses so close together but especially the many apartment and townhouse complexes in the area.

So that is my 2 cents. I still think Santaluz is a unique and beautiful development. But definitely you have the downside with the HOA and especially the Mello Roos fees and the uncertainty if they will go up. After reading that URL I wrongly assumed MR fees were fairly fixed but looks like I might have assumed wrong.

Thanks everyone for your great and helpful comments.

[earlyretirement]

Thanks guys. All GREAT points. Another point that I discovered today is that when buying there is a 1/4 of a point fee that I’m told is split 50% between the buyer and seller. It’s called the “Santaluz Enhancement Fee”. Not a big fee but still those doing due diligence should keep this in mind.

Also, I was told the city of San Diego has a “Supplemental Tax- one time assessment”. I forgot to ask my realtor today when I was out and about. But is this tax just based on what the closing price is compared to the latest appraisal price the property tax is currently based on?

I spent all day looking at houses in Carmel Valley today and driving around the area more. Some of the areas are nice. I thought the area in Pacific Highland Ranch had some attractive homes. The biggest problem to me is the density. The houses all sit on top of one another for the most part.

We saw a house on Aster Meadows Place and really there isn’t any privacy as you have houses on both sides looking into your house and 3 houses on the backyard that all can see into your house and to the back yard. There is a jacuzzi/hot tub in the backyard but not sure I’d want to spend time in it with the wife with all my neighbors watching. So much for walking around naked in the house as well.! Ha, ha. The Mello Roos was low and the HOA was really cheap but really who wants to spend $1 million + with all your neighbors looking into your house??

We also looked at a house listed at around $1,250,000 in the gated community of Collins Ranch in Carmel Valley. They had some beautiful homes there but even there on a big home of almost 4,900 sq. feet… your neighbor can look onto you easily. But the biggest rub was that we heard more street noise from Highway 56 than ANY of the homes we toured and walked around even directly facing Camino del Sur in Santaluz. By a long shot! And consider this was a non-peak traffic time on the weekend.

I was really surprised about that as on a map, Highway 56 isn’t really that close to Collins Ranch but the sound is such that it echos so you have traffic noise which I would have never imagined just looking on a map.

We love the location of Carmel Valley and it’s proximity to the city and the ocean… but the density is just about a killer for us. But I think some people exaggerate a bit when they say all the homes are cookie cutter homes there in Carmel Valley. There are some beautiful homes but the density there compared to other areas is a big negative with the houses so close together but especially the many apartment and townhouse complexes in the area.

So that is my 2 cents. I still think Santaluz is a unique and beautiful development. But definitely you have the downside with the HOA and especially the Mello Roos fees and the uncertainty if they will go up. After reading that URL I wrongly assumed MR fees were fairly fixed but looks like I might have assumed wrong.

Thanks everyone for your great and helpful comments.

[earlyretirement]

Thanks guys. All GREAT points. Another point that I discovered today is that when buying there is a 1/4 of a point fee that I’m told is split 50% between the buyer and seller. It’s called the “Santaluz Enhancement Fee”. Not a big fee but still those doing due diligence should keep this in mind.

Also, I was told the city of San Diego has a “Supplemental Tax- one time assessment”. I forgot to ask my realtor today when I was out and about. But is this tax just based on what the closing price is compared to the latest appraisal price the property tax is currently based on?

I spent all day looking at houses in Carmel Valley today and driving around the area more. Some of the areas are nice. I thought the area in Pacific Highland Ranch had some attractive homes. The biggest problem to me is the density. The houses all sit on top of one another for the most part.

We saw a house on Aster Meadows Place and really there isn’t any privacy as you have houses on both sides looking into your house and 3 houses on the backyard that all can see into your house and to the back yard. There is a jacuzzi/hot tub in the backyard but not sure I’d want to spend time in it with the wife with all my neighbors watching. So much for walking around naked in the house as well.! Ha, ha. The Mello Roos was low and the HOA was really cheap but really who wants to spend $1 million + with all your neighbors looking into your house??

We also looked at a house listed at around $1,250,000 in the gated community of Collins Ranch in Carmel Valley. They had some beautiful homes there but even there on a big home of almost 4,900 sq. feet… your neighbor can look onto you easily. But the biggest rub was that we heard more street noise from Highway 56 than ANY of the homes we toured and walked around even directly facing Camino del Sur in Santaluz. By a long shot! And consider this was a non-peak traffic time on the weekend.

I was really surprised about that as on a map, Highway 56 isn’t really that close to Collins Ranch but the sound is such that it echos so you have traffic noise which I would have never imagined just looking on a map.

We love the location of Carmel Valley and it’s proximity to the city and the ocean… but the density is just about a killer for us. But I think some people exaggerate a bit when they say all the homes are cookie cutter homes there in Carmel Valley. There are some beautiful homes but the density there compared to other areas is a big negative with the houses so close together but especially the many apartment and townhouse complexes in the area.

So that is my 2 cents. I still think Santaluz is a unique and beautiful development. But definitely you have the downside with the HOA and especially the Mello Roos fees and the uncertainty if they will go up. After reading that URL I wrongly assumed MR fees were fairly fixed but looks like I might have assumed wrong.

Thanks everyone for your great and helpful comments.

[earlyretirement]

Thanks guys. All GREAT points. Another point that I discovered today is that when buying there is a 1/4 of a point fee that I’m told is split 50% between the buyer and seller. It’s called the “Santaluz Enhancement Fee”. Not a big fee but still those doing due diligence should keep this in mind.

Also, I was told the city of San Diego has a “Supplemental Tax- one time assessment”. I forgot to ask my realtor today when I was out and about. But is this tax just based on what the closing price is compared to the latest appraisal price the property tax is currently based on?

I spent all day looking at houses in Carmel Valley today and driving around the area more. Some of the areas are nice. I thought the area in Pacific Highland Ranch had some attractive homes. The biggest problem to me is the density. The houses all sit on top of one another for the most part.

We saw a house on Aster Meadows Place and really there isn’t any privacy as you have houses on both sides looking into your house and 3 houses on the backyard that all can see into your house and to the back yard. There is a jacuzzi/hot tub in the backyard but not sure I’d want to spend time in it with the wife with all my neighbors watching. So much for walking around naked in the house as well.! Ha, ha. The Mello Roos was low and the HOA was really cheap but really who wants to spend $1 million + with all your neighbors looking into your house??

We also looked at a house listed at around $1,250,000 in the gated community of Collins Ranch in Carmel Valley. They had some beautiful homes there but even there on a big home of almost 4,900 sq. feet… your neighbor can look onto you easily. But the biggest rub was that we heard more street noise from Highway 56 than ANY of the homes we toured and walked around even directly facing Camino del Sur in Santaluz. By a long shot! And consider this was a non-peak traffic time on the weekend.

I was really surprised about that as on a map, Highway 56 isn’t really that close to Collins Ranch but the sound is such that it echos so you have traffic noise which I would have never imagined just looking on a map.

We love the location of Carmel Valley and it’s proximity to the city and the ocean… but the density is just about a killer for us. But I think some people exaggerate a bit when they say all the homes are cookie cutter homes there in Carmel Valley. There are some beautiful homes but the density there compared to other areas is a big negative with the houses so close together but especially the many apartment and townhouse complexes in the area.

So that is my 2 cents. I still think Santaluz is a unique and beautiful development. But definitely you have the downside with the HOA and especially the Mello Roos fees and the uncertainty if they will go up. After reading that URL I wrongly assumed MR fees were fairly fixed but looks like I might have assumed wrong.

Thanks everyone for your great and helpful comments.

[earlyretirement]

Thanks guys. All GREAT points. Another point that I discovered today is that when buying there is a 1/4 of a point fee that I’m told is split 50% between the buyer and seller. It’s called the “Santaluz Enhancement Fee”. Not a big fee but still those doing due diligence should keep this in mind.

Also, I was told the city of San Diego has a “Supplemental Tax- one time assessment”. I forgot to ask my realtor today when I was out and about. But is this tax just based on what the closing price is compared to the latest appraisal price the property tax is currently based on?

I spent all day looking at houses in Carmel Valley today and driving around the area more. Some of the areas are nice. I thought the area in Pacific Highland Ranch had some attractive homes. The biggest problem to me is the density. The houses all sit on top of one another for the most part.

We saw a house on Aster Meadows Place and really there isn’t any privacy as you have houses on both sides looking into your house and 3 houses on the backyard that all can see into your house and to the back yard. There is a jacuzzi/hot tub in the backyard but not sure I’d want to spend time in it with the wife with all my neighbors watching. So much for walking around naked in the house as well.! Ha, ha. The Mello Roos was low and the HOA was really cheap but really who wants to spend $1 million + with all your neighbors looking into your house??

We also looked at a house listed at around $1,250,000 in the gated community of Collins Ranch in Carmel Valley. They had some beautiful homes there but even there on a big home of almost 4,900 sq. feet… your neighbor can look onto you easily. But the biggest rub was that we heard more street noise from Highway 56 than ANY of the homes we toured and walked around even directly facing Camino del Sur in Santaluz. By a long shot! And consider this was a non-peak traffic time on the weekend.

I was really surprised about that as on a map, Highway 56 isn’t really that close to Collins Ranch but the sound is such that it echos so you have traffic noise which I would have never imagined just looking on a map.

We love the location of Carmel Valley and it’s proximity to the city and the ocean… but the density is just about a killer for us. But I think some people exaggerate a bit when they say all the homes are cookie cutter homes there in Carmel Valley. There are some beautiful homes but the density there compared to other areas is a big negative with the houses so close together but especially the many apartment and townhouse complexes in the area.

So that is my 2 cents. I still think Santaluz is a unique and beautiful development. But definitely you have the downside with the HOA and especially the Mello Roos fees and the uncertainty if they will go up. After reading that URL I wrongly assumed MR fees were fairly fixed but looks like I might have assumed wrong.

Thanks everyone for your great and helpful comments.

[earlyretirement]

A big thanks to EconProf that took the time to confirm to me that Cable and Internet via Time Warner are included in the HOA fees each month. Surprisingly the listing agent for all of the houses we saw there didn’t know much about that.

I assume you can upgrade packages and just pay the difference. What speeds are you guys getting with the included free internet?

Getting those things included in the HOA helps take the sting out and not as bad as I thought.

[earlyretirement]

A big thanks to EconProf that took the time to confirm to me that Cable and Internet via Time Warner are included in the HOA fees each month. Surprisingly the listing agent for all of the houses we saw there didn’t know much about that.

I assume you can upgrade packages and just pay the difference. What speeds are you guys getting with the included free internet?

Getting those things included in the HOA helps take the sting out and not as bad as I thought.

[earlyretirement]

A big thanks to EconProf that took the time to confirm to me that Cable and Internet via Time Warner are included in the HOA fees each month. Surprisingly the listing agent for all of the houses we saw there didn’t know much about that.

I assume you can upgrade packages and just pay the difference. What speeds are you guys getting with the included free internet?

Getting those things included in the HOA helps take the sting out and not as bad as I thought.

[earlyretirement]

A big thanks to EconProf that took the time to confirm to me that Cable and Internet via Time Warner are included in the HOA fees each month. Surprisingly the listing agent for all of the houses we saw there didn’t know much about that.

I assume you can upgrade packages and just pay the difference. What speeds are you guys getting with the included free internet?

Getting those things included in the HOA helps take the sting out and not as bad as I thought.

[Author]

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