Massive 26% Markdown on Carmel Valley McMansion

[raptorduck]

I can only look at myself to evaluate this emotion vs. logic argument.

As a likely 2008 buyer I came to this site last year because I finally found folks not brainwashed by the real estate industry who show me the other side of the home ownership equation.

I like that this site focuses more on the logic than the emotion. I have pleanty of the emotion. My wife, she is all emotion when it comes to buying a home. “The hell with logic” she says, “I wan’t my damn house, of the size and style I want, and I want to do what I want with it without having to ask a landlord and I don’t want to worry about the owner selling and making me give up the home I worked hard to create” yada yada.

My emotion is simple, I am looking for a home, not an investment. But the logical side of me says don’t overpay because you just never know what life brings. The logical side says, be patient. This site has helped me remain patient.

To me, buying a home is very emotional. I can crunch numbers until I turn blue, but in the end emotion is at least half the equation. The trick is to ensure it is 49% and no more so logic will prevail. That is all I need. Emotion is ok. I want to walk into a home and say “wow, this is my dream home, I wan’t to grow old here and raise children here.” I want to see my wife tear up. Once I see that then I can let the logic in me drive the deal and have enough input to walk away if the price is too high and hope for another emotional reaction to a possible abode.

Buyers can be unpredictable with their emotions, with one house in SD, I was. But I think sellers are even more unpredictable. Their emotional attachments to their homes and their value are making for some long long days on market while they wait for that buyer that never comes.

There is a home up here I have discussed before. 4,600 sf listing for $4.4M, the same price it first listed for 1 yr ago. Larger homes on the same street are selling for $500k-$1M less. You see, that seller bought it at the peak of the market for $3.4M and then put $1M into it. So in their eyes, they are being very reasonable considering the market and just trying to break even (which we all know is already not the case at that price, it is still a loss). They will absolutely refuse to lower it one penny despite its actual value being about $3.5-$3.6M now. They are emotionally tied into it and that emotion is controlling any logic. The consequence is >1yr on the market and 2 offers in all of that time, both of which came in the first month of listing and were around $4M or slighly less. I think if they drop the price under $4M it might sell, but they won’t.

To me, it is sellers that are the most emotional right now and their emotions are rulling the day. And to me, that is what one should expect in a “buyers” market. Buyers can afford to be logical in this market. When I bought my current house during a market peak in 2000, it was buyers who were more emotional and their emotions were running the day. I am to be included among them. I overpaid by $100k for my house back then. Sellers were the logical ones, the patient ones.

The odd thing is that buyers were just crazed to buy anything at any cost in that “sellers” market. So you would expect that sellers are crazed to sell at any price in a “buyers” market. But what I see is that they refuse to sell at “any” price. So sticky prices on the way down. This suggests to me that downturns run longer life cycles than housing booms. Curious.

BTW, I think that CV house is priced about right based on what I know about CV in this market. I suspect it will sell, even without the landscaping. CV is still in demand by families and that is a good size house for that price compared to what you can normally get in CV, which is less house for not that much less money than this one.

Just my 2 cent

Future resident of RSF, dunno which part yet.

[SD Realtor]

DWCAP good posts. By the way I agree that CV will continue to depreciate. No argument there at all. How much? I am not sure, maybe down to 2001 pricing. Will a home like this go for 750k? Not in my opinion. The 25k number I used was from a post Bugs made for the totals. As for the timing, spring always has the larger number of closing as it is always a seasonal high point for activity. We will see where 2008 heads out to. I expect the volume in 08 to be below 07 by perhaps as much as 10-15% but I could be wrong. The option arm wave to me, will not start to swamp the market until 2009 and beyond by the looks of the chart. 2008 will continue to cope with the subprimers going down. The option arm wave worries me alot on two fronts. Yes it can really hurt the market much more then the subprime but it is also filled with more qualified homeowners who have the ability to float with the tide if some entity provided relief in the form of a 5 year freeze on the rates.

Again, I have no clue about if/when buyers will ever dry up at all. Maybe this year, maybe next year, maybe never. Demand has ABSOLUTELY gone way down which is great but even 25k sales in 07 still surprises me.

Just on this board, to say I am astounded by how many people post that they want to live in Temecula or Murrieta is a huge eye opener to me. I am not an elitist or anything of the sort but I had no idea of the demand for that area.
Similarly if banks continue to carve pricings out there at the present rate, those homes will pencil out sooner, much sooner then 2010-2012 and they will get purchased by savvy investors.

I think that masses are somewhat driven by the talking heads but not as many as we think. This is the point where in my opinion, income level starts to take effect. Those making more money tend to listen to the heads less then those making less. That sounds snobbish but I find it to be true.

Personally I find the assessment you make to be pretty much correct. I tend to think 09 will be worse then 08 but I am certainly not saying 08 will not be worse then 07. I guess we will see. I still think for the home type I want it will be a longer haul into 2010-2012 for a bottom.

SD Realtor

[SD Realtor]

DWCAP good posts. By the way I agree that CV will continue to depreciate. No argument there at all. How much? I am not sure, maybe down to 2001 pricing. Will a home like this go for 750k? Not in my opinion. The 25k number I used was from a post Bugs made for the totals. As for the timing, spring always has the larger number of closing as it is always a seasonal high point for activity. We will see where 2008 heads out to. I expect the volume in 08 to be below 07 by perhaps as much as 10-15% but I could be wrong. The option arm wave to me, will not start to swamp the market until 2009 and beyond by the looks of the chart. 2008 will continue to cope with the subprimers going down. The option arm wave worries me alot on two fronts. Yes it can really hurt the market much more then the subprime but it is also filled with more qualified homeowners who have the ability to float with the tide if some entity provided relief in the form of a 5 year freeze on the rates.

Again, I have no clue about if/when buyers will ever dry up at all. Maybe this year, maybe next year, maybe never. Demand has ABSOLUTELY gone way down which is great but even 25k sales in 07 still surprises me.

Just on this board, to say I am astounded by how many people post that they want to live in Temecula or Murrieta is a huge eye opener to me. I am not an elitist or anything of the sort but I had no idea of the demand for that area.
Similarly if banks continue to carve pricings out there at the present rate, those homes will pencil out sooner, much sooner then 2010-2012 and they will get purchased by savvy investors.

I think that masses are somewhat driven by the talking heads but not as many as we think. This is the point where in my opinion, income level starts to take effect. Those making more money tend to listen to the heads less then those making less. That sounds snobbish but I find it to be true.

Personally I find the assessment you make to be pretty much correct. I tend to think 09 will be worse then 08 but I am certainly not saying 08 will not be worse then 07. I guess we will see. I still think for the home type I want it will be a longer haul into 2010-2012 for a bottom.

SD Realtor

[SD Realtor]

DWCAP good posts. By the way I agree that CV will continue to depreciate. No argument there at all. How much? I am not sure, maybe down to 2001 pricing. Will a home like this go for 750k? Not in my opinion. The 25k number I used was from a post Bugs made for the totals. As for the timing, spring always has the larger number of closing as it is always a seasonal high point for activity. We will see where 2008 heads out to. I expect the volume in 08 to be below 07 by perhaps as much as 10-15% but I could be wrong. The option arm wave to me, will not start to swamp the market until 2009 and beyond by the looks of the chart. 2008 will continue to cope with the subprimers going down. The option arm wave worries me alot on two fronts. Yes it can really hurt the market much more then the subprime but it is also filled with more qualified homeowners who have the ability to float with the tide if some entity provided relief in the form of a 5 year freeze on the rates.

Again, I have no clue about if/when buyers will ever dry up at all. Maybe this year, maybe next year, maybe never. Demand has ABSOLUTELY gone way down which is great but even 25k sales in 07 still surprises me.

Just on this board, to say I am astounded by how many people post that they want to live in Temecula or Murrieta is a huge eye opener to me. I am not an elitist or anything of the sort but I had no idea of the demand for that area.
Similarly if banks continue to carve pricings out there at the present rate, those homes will pencil out sooner, much sooner then 2010-2012 and they will get purchased by savvy investors.

I think that masses are somewhat driven by the talking heads but not as many as we think. This is the point where in my opinion, income level starts to take effect. Those making more money tend to listen to the heads less then those making less. That sounds snobbish but I find it to be true.

Personally I find the assessment you make to be pretty much correct. I tend to think 09 will be worse then 08 but I am certainly not saying 08 will not be worse then 07. I guess we will see. I still think for the home type I want it will be a longer haul into 2010-2012 for a bottom.

SD Realtor

[SD Realtor]

DWCAP good posts. By the way I agree that CV will continue to depreciate. No argument there at all. How much? I am not sure, maybe down to 2001 pricing. Will a home like this go for 750k? Not in my opinion. The 25k number I used was from a post Bugs made for the totals. As for the timing, spring always has the larger number of closing as it is always a seasonal high point for activity. We will see where 2008 heads out to. I expect the volume in 08 to be below 07 by perhaps as much as 10-15% but I could be wrong. The option arm wave to me, will not start to swamp the market until 2009 and beyond by the looks of the chart. 2008 will continue to cope with the subprimers going down. The option arm wave worries me alot on two fronts. Yes it can really hurt the market much more then the subprime but it is also filled with more qualified homeowners who have the ability to float with the tide if some entity provided relief in the form of a 5 year freeze on the rates.

Again, I have no clue about if/when buyers will ever dry up at all. Maybe this year, maybe next year, maybe never. Demand has ABSOLUTELY gone way down which is great but even 25k sales in 07 still surprises me.

Just on this board, to say I am astounded by how many people post that they want to live in Temecula or Murrieta is a huge eye opener to me. I am not an elitist or anything of the sort but I had no idea of the demand for that area.
Similarly if banks continue to carve pricings out there at the present rate, those homes will pencil out sooner, much sooner then 2010-2012 and they will get purchased by savvy investors.

I think that masses are somewhat driven by the talking heads but not as many as we think. This is the point where in my opinion, income level starts to take effect. Those making more money tend to listen to the heads less then those making less. That sounds snobbish but I find it to be true.

Personally I find the assessment you make to be pretty much correct. I tend to think 09 will be worse then 08 but I am certainly not saying 08 will not be worse then 07. I guess we will see. I still think for the home type I want it will be a longer haul into 2010-2012 for a bottom.

SD Realtor

[SD Realtor]

DWCAP good posts. By the way I agree that CV will continue to depreciate. No argument there at all. How much? I am not sure, maybe down to 2001 pricing. Will a home like this go for 750k? Not in my opinion. The 25k number I used was from a post Bugs made for the totals. As for the timing, spring always has the larger number of closing as it is always a seasonal high point for activity. We will see where 2008 heads out to. I expect the volume in 08 to be below 07 by perhaps as much as 10-15% but I could be wrong. The option arm wave to me, will not start to swamp the market until 2009 and beyond by the looks of the chart. 2008 will continue to cope with the subprimers going down. The option arm wave worries me alot on two fronts. Yes it can really hurt the market much more then the subprime but it is also filled with more qualified homeowners who have the ability to float with the tide if some entity provided relief in the form of a 5 year freeze on the rates.

Again, I have no clue about if/when buyers will ever dry up at all. Maybe this year, maybe next year, maybe never. Demand has ABSOLUTELY gone way down which is great but even 25k sales in 07 still surprises me.

Just on this board, to say I am astounded by how many people post that they want to live in Temecula or Murrieta is a huge eye opener to me. I am not an elitist or anything of the sort but I had no idea of the demand for that area.
Similarly if banks continue to carve pricings out there at the present rate, those homes will pencil out sooner, much sooner then 2010-2012 and they will get purchased by savvy investors.

I think that masses are somewhat driven by the talking heads but not as many as we think. This is the point where in my opinion, income level starts to take effect. Those making more money tend to listen to the heads less then those making less. That sounds snobbish but I find it to be true.

Personally I find the assessment you make to be pretty much correct. I tend to think 09 will be worse then 08 but I am certainly not saying 08 will not be worse then 07. I guess we will see. I still think for the home type I want it will be a longer haul into 2010-2012 for a bottom.

SD Realtor

[Coronita]

If a home like this can go for $750k, in inflationary weak dollar we are heading towards, this would be a steal for just about every other foreigner. At that price, even my sis-in-law from PRC would consider buying that, especially once the Yuan floats. I would buy that property without hesitation, my parents would buy that property without hesitation, and about 10 other people I know looking to move up would buy that place without hesitation.

As much as I'd like to dream about something like this in the $800k terms, I can't see it happening in the forseeable future. It will be interesting to see what a continued weakening dollar will do to home prices.

Anyone thinking about a worst case scenario in which to americans, american homes are unattainable but to foreigners it's dirt cheap? Just food for thought.

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

If a home like this can go for $750k, in inflationary weak dollar we are heading towards, this would be a steal for just about every other foreigner. At that price, even my sis-in-law from PRC would consider buying that, especially once the Yuan floats. I would buy that property without hesitation, my parents would buy that property without hesitation, and about 10 other people I know looking to move up would buy that place without hesitation.

As much as I'd like to dream about something like this in the $800k terms, I can't see it happening in the forseeable future. It will be interesting to see what a continued weakening dollar will do to home prices.

Anyone thinking about a worst case scenario in which to americans, american homes are unattainable but to foreigners it's dirt cheap? Just food for thought.

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

If a home like this can go for $750k, in inflationary weak dollar we are heading towards, this would be a steal for just about every other foreigner. At that price, even my sis-in-law from PRC would consider buying that, especially once the Yuan floats. I would buy that property without hesitation, my parents would buy that property without hesitation, and about 10 other people I know looking to move up would buy that place without hesitation.

As much as I'd like to dream about something like this in the $800k terms, I can't see it happening in the forseeable future. It will be interesting to see what a continued weakening dollar will do to home prices.

Anyone thinking about a worst case scenario in which to americans, american homes are unattainable but to foreigners it's dirt cheap? Just food for thought.

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

If a home like this can go for $750k, in inflationary weak dollar we are heading towards, this would be a steal for just about every other foreigner. At that price, even my sis-in-law from PRC would consider buying that, especially once the Yuan floats. I would buy that property without hesitation, my parents would buy that property without hesitation, and about 10 other people I know looking to move up would buy that place without hesitation.

As much as I'd like to dream about something like this in the $800k terms, I can't see it happening in the forseeable future. It will be interesting to see what a continued weakening dollar will do to home prices.

Anyone thinking about a worst case scenario in which to americans, american homes are unattainable but to foreigners it's dirt cheap? Just food for thought.

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

If a home like this can go for $750k, in inflationary weak dollar we are heading towards, this would be a steal for just about every other foreigner. At that price, even my sis-in-law from PRC would consider buying that, especially once the Yuan floats. I would buy that property without hesitation, my parents would buy that property without hesitation, and about 10 other people I know looking to move up would buy that place without hesitation.

As much as I'd like to dream about something like this in the $800k terms, I can't see it happening in the forseeable future. It will be interesting to see what a continued weakening dollar will do to home prices.

Anyone thinking about a worst case scenario in which to americans, american homes are unattainable but to foreigners it's dirt cheap? Just food for thought.

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[mrwrong]

I won’t look at it until it returns to price below $750s range.

You want to start a bidding war now, masayako? 🙂 Barring any kind of disasters, natural or manmade, I doubt price will ever drop to that low. That kindof percentage decline is unlikely to happen in CV imho. Tract homes or not, I think CV has established itself as one of the best areas in San Diego over the years mainly due to its location and schools.

With that said, I do think prices in CV will eventually decline. However, the decline will be relatively small and perhaps with most of the decline happening towards the end of the cycle. So the real decision for people waiting to buy CV is: is this worth the wait?

Also keep in mind that price may not decline much in nominal terms due to inflation. Most people on this board think home prices in 1998 are reasonable. Prices in CV have probably doubled since then. If you also happen to believe 2012 will be the bottom and assuming prices stay flat until that time, then prices have only doubled in 14 years, which comes to an annualized appreciation of just under 5.1%, quite reasonable given the current inflation numbers, don’t you think?

Mr. Wrong

[mrwrong]

I won’t look at it until it returns to price below $750s range.

You want to start a bidding war now, masayako? 🙂 Barring any kind of disasters, natural or manmade, I doubt price will ever drop to that low. That kindof percentage decline is unlikely to happen in CV imho. Tract homes or not, I think CV has established itself as one of the best areas in San Diego over the years mainly due to its location and schools.

With that said, I do think prices in CV will eventually decline. However, the decline will be relatively small and perhaps with most of the decline happening towards the end of the cycle. So the real decision for people waiting to buy CV is: is this worth the wait?

Also keep in mind that price may not decline much in nominal terms due to inflation. Most people on this board think home prices in 1998 are reasonable. Prices in CV have probably doubled since then. If you also happen to believe 2012 will be the bottom and assuming prices stay flat until that time, then prices have only doubled in 14 years, which comes to an annualized appreciation of just under 5.1%, quite reasonable given the current inflation numbers, don’t you think?

Mr. Wrong

[mrwrong]

I won’t look at it until it returns to price below $750s range.

You want to start a bidding war now, masayako? 🙂 Barring any kind of disasters, natural or manmade, I doubt price will ever drop to that low. That kindof percentage decline is unlikely to happen in CV imho. Tract homes or not, I think CV has established itself as one of the best areas in San Diego over the years mainly due to its location and schools.

With that said, I do think prices in CV will eventually decline. However, the decline will be relatively small and perhaps with most of the decline happening towards the end of the cycle. So the real decision for people waiting to buy CV is: is this worth the wait?

Also keep in mind that price may not decline much in nominal terms due to inflation. Most people on this board think home prices in 1998 are reasonable. Prices in CV have probably doubled since then. If you also happen to believe 2012 will be the bottom and assuming prices stay flat until that time, then prices have only doubled in 14 years, which comes to an annualized appreciation of just under 5.1%, quite reasonable given the current inflation numbers, don’t you think?

Mr. Wrong

[mrwrong]

I won’t look at it until it returns to price below $750s range.

You want to start a bidding war now, masayako? 🙂 Barring any kind of disasters, natural or manmade, I doubt price will ever drop to that low. That kindof percentage decline is unlikely to happen in CV imho. Tract homes or not, I think CV has established itself as one of the best areas in San Diego over the years mainly due to its location and schools.

With that said, I do think prices in CV will eventually decline. However, the decline will be relatively small and perhaps with most of the decline happening towards the end of the cycle. So the real decision for people waiting to buy CV is: is this worth the wait?

Also keep in mind that price may not decline much in nominal terms due to inflation. Most people on this board think home prices in 1998 are reasonable. Prices in CV have probably doubled since then. If you also happen to believe 2012 will be the bottom and assuming prices stay flat until that time, then prices have only doubled in 14 years, which comes to an annualized appreciation of just under 5.1%, quite reasonable given the current inflation numbers, don’t you think?

Mr. Wrong

[Author]

Posts