Is half of RSF for sale?

[Gata]

I have been following the local real estate market on Trulia for some time, and as of late I see a flood of listings in RSF/ Fairbanks / Santaluz ranging from $21 MM to the low $2 MM. Am I missing anything? What is making all these people move: water restrictions, high taxation, or both? I can’t imagine that they would be leaving willingly all at once. We have started investing out of State (Austin area), and two of our former neighbors in one of the aforementioned high-cost areas are leaving for Austin, too – one due to the recent Qualcomm layoffs (and he is a senior VP), and the other one due to cost of living (and he’s affluent, he could afford to stay if he wanted to). Your thoughts?

[Escoguy]

Gata

At the RSF level, homes are only a minor part of the overall portfolio. Usually several homes in a variety of markets along with significant financial assets.
Homes make up a much smaller portion of the wealth for those with 5M+ assets.

Basically everything in RSF is over 1M with much in the 3-5M range. Ownership, taxation and residence are entirely different things. There may be a few who don’t have their affairs in order and pay full California taxes but by and large these are sophisticated people who get good advice. T Boone Pickens is an example, Bill Gates, Janet Jackson etc.

The water issue is real for some and the resale stats are soft, but if you’re looking at a property in Santa Luz which doubled in value over 10 years, then a 10-15% drop isn’t so dramatic as often it takes months to sell such a property.

I’d be surprised if even a dozen Qualcomm execs leave RSF.

That being said, an agent I worked with a few years ago did mention spots of weakness in RSF but it appeared to me it is usually for personal reasons that a person would want to leave with the occasional strategic default, but on balance that’s rare.

[flyer]

Have lived in RSF for years, and, yes, there are a lot of homes for sale right now. As mentioned, many things could be going on, but, most people we know who have been here as long as we have or longer are fine, and never plan to move, but the nouveau riche do tend to come and go in cycles.

It does seem that many are unprepared to stay in San Diego through retirement, so it’s not too surprising to see this happening. We have investment properties here and elsewhere, and have noticed there does seem to be a growing demand in less expensive areas around the country.

[poorgradstudent]

[quote=flyer]Have lived in RSF for years, and, yes, there are a lot of homes for sale right now. As mentioned, many things could be going on, but, most people we know who have been here as long as we have or longer are fine, and never plan to move, but the nouveau riche do tend to come and go in cycles.

It does seem that many are unprepared to stay in San Diego through retirement, so it’s not too surprising to see this happening. We have investment properties here and elsewhere, and have noticed there does seem to be a growing demand in less expensive areas around the country.[/quote]

Considering how high home prices are right now, it wouldn’t shock me if some of the Smart Money is looking to cash out.

[flyer]

Don’t know exactly what is motivating quite a few people to sell now, but I do know that most people, like our family, who bought many years ago, know we could never replace what we have for the relatively small price we
paid–anywhere. Plus, there is nowhere else we’d rather live, so I hope those who are selling are going somewhere they really want to be.

[CA renter]

[quote=poorgradstudent][quote=flyer]Have lived in RSF for years, and, yes, there are a lot of homes for sale right now. As mentioned, many things could be going on, but, most people we know who have been here as long as we have or longer are fine, and never plan to move, but the nouveau riche do tend to come and go in cycles.

It does seem that many are unprepared to stay in San Diego through retirement, so it’s not too surprising to see this happening. We have investment properties here and elsewhere, and have noticed there does seem to be a growing demand in less expensive areas around the country.[/quote]

Considering how high home prices are right now, it wouldn’t shock me if some of the Smart Money is looking to cash out.[/quote]

Yes, that was my thought as well. The current RE bubble (probably near peak) and the water issue would certainly push some people off the fence.

[joec]

The problem I see with that thought for high end areas is that the rental numbers never made sense so the majority of these homes in coastal or many parts of CA are for people living there. That being the case, are there really that many rentals in those areas to begin with? Limited supply like now is hard to see price drop since people with low mortgages aren’t in any rush to move assuming they can still pay their mortgages (we’re in 1.5-2 months supply now vs. 6 in a normal market?). I also just saw on the news that home prices are up yet again…

Unless your kids are grown, you lose your job and can’t find another, another job comes and you had to move, there is no “rush” to sell since unlike stocks, everyone HAS to live somewhere.

The early 2000s – 2007 had way too home flippers compared to now.

[FlyerInHi]

Joec, I think that in a low interest rate environment, it’s better to park your money in tangible assets. If I remember well, during the housing bubble, you could get 5% in savings.

For high end homes, it could be that the smart money is testing the market simply because it takes longer to get out.

At the middle and lower end, as you said, there’s low inventory, so I wouldn’t sell yet.

I don’t follow trophy properties in alpha cities because I can’t afford them. but it seems they still sell like hotcakes.

[The-Shoveler]

Seems like half of Irvine is on sale.

[CA renter]

[quote=The-Shoveler]Seems like half of Irvine is on sale.[/quote]

Good news. Hopefully, this is signaling the beginning of the “normalization” of housing prices.

[Author]

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