Median Price Down in North County

[Bugs]

It’s funny you should mention Hollowbrook Ct. I just did a review on an appraisal on one of those homes and it’s not looking good. As of last week, Pulte had sold 85 out of 105 units and they are now getting into the price-inclusive strategy where the base price includes many of the typical “extras” that they used to charge $30k for in their prior phases. So while the base price hasn’t changed the sale prices are effectively going down when comparing homes with similar finishes.

All of SEH is looking a little weak right now, pretty similar to the lower and middle ends over at Bressi Ranch.

I think SEH should be judged for what it is, not for what it isn’t. It is a planned community with it’s own schools and it’s own supermarket anchored retail center (when it’s finished). There will be more direct access both to Rancho Santa Fe Road and CSU San Marcos by the time they get done. It would be nice if they’d stop marketing it as “almost Carlsbad” because there’s nothing wrong with being San Marcos. Considering the $200k differential between SEH and that Carlsbad neighborhood east of RSF Road/La Costa Blvd, I think SEH is a no-brainer. After the regional prices decline, of course.

[powayseller]

Ok, Jim the realtor removed the article I linked. Oh well…

[Jim Brubaker]

I think that you have to realize that persons that buy into a bubble are not really playing with a full deck.

I don’t think that you will see a panic, rather just a bunch of REO will appear on the market. These should drop the property values dramatically. From that point you will see a bunch of pissed off home owners that can’t move or change jobs because they can’t sell their house.

The big question that has to be asked: When this stuff gets liquidated, who has to eat it? Your retirement plan or mine?

[powayseller]

Not mine, since I sold my FNM, and am moving my cash from my prime money market into CDs. By the way, most MBS is owned by foreigners. When the value goes down, how will they react? Maybe they’ll buy Tnotes instead of MBS.

I hope everyone reading this realizes that the mortgage debt is purchased by money markets. Anyone with money markets not federally insured can lose value if MBS lose value, or Fannie Mae files bankruptcy. But I’m sure the government will bail out Fannie Mae. That will require more dollar printing, and higher inflation.

You can get the same yield of a MM by buying CDs. The rates are around 5% for a 4-month CD. So there’s no need to take the risk in a money market in a brokerage account. Vanguard has tons of CDs. Money market in banks are FDIC insured, I think.

[balasr]

A little off-topic. But regarding the Bressi-Ranch homes (also in North county), there is an ad in todays tribune. The Wisteria houses are advertised from the high 600s. That doesn’t square with the verbal offer someone got for 620 and with 20-30K off for something or the other. Any ideas why they aren’t advertising the lower price? Or are they offering 620 verbally to people and will suddenly raise it to high 600s at sign on time by putting in some “options” which are unavoidable?

[SDbear]

Powayseller,
Vanguard’s CA tax exempt Money Market does not contain any MBSs or Agency securities (Freddie Mac, Fannie Mae et.al). I checked with Vanguard on their exposure to real estate. They mentioned that 17.36% of their funds are invested in private ..(something).. bonds (bonds issued by CA govt to build private assets like stadiums). But they are still debt instruments that the CA govt is liable for. So I think they have the same risk exposure as the T-bills from treasury direct.

[lendingbubblecontinues]

Turn to page 7 in today’s North Inland section and you’ll see that they still have Wisteria Place “from the low $600,000s”

Conflicting information with the color ad on page 5…let there be no confusion, however, that these homes, er ALL homes, are worth SIGNIFICANTLY less than they are being sold for today.

[powayseller]

When I called Vanguard, they told me that the Prime Money Market holds a variety of debt instruments, including Fannie Mae bonds. The GSE bonds are not listed in the prospectus.

I did not inquire about CA Tax Exempt, since I only have a couple bucks in that one.

So perhaps the CA Tax Exempt is safe. Regardless, if Fannie Mae goes bankrupt, the government will likely bail them out. They bailed out a hedge fund, with much less exposure to global markets than Fannie Mae has. So I wouldn’t really worry too much about the money market deal. It’s just if they do bail out Fannie Mae, they’ll not raise our taxes but print more money, really raising inflation.

I have a funny story. I took my youngster to the bank to make a withdrawal today, and he said, “Mom, where do they keep the money?” I blurted out,”They don’t keep money here, it’s all paper entries. If everyone withdrew their deposits, there isn’t enough here to handle it. See those folks sitting there, signing their loan documents? They have your money. The money is wired to everyone anyway, so we don’t need real money anymore. We pay with debit cards and checks. So son, there is probably a few thousand bucks in this bank, and that’s all they need”. He was amazed at all this information.

But the system works, so that’s good enough for me.

[sdrealtor]

Dont pay too much attention to newspaper advertising. Deadlines are frequently weeks in advance and what you see re: real estate is old news. Walk-in and you find the “Special of the day” on a blackboard. And yes the salad bar is $4 extra 😉

[BostonAndOC_RE_perspective]

Powayseller,
Cut up those debit cards! They pose a HUGE risk for identity theft, and since they are linked to your actual funds you do not have the $50 fraud loss guarantee offered by credit cards.

[powayseller]

How can someone use my debit card without knowing my PIN? If you make 3 false entries, the card stops working. If you make unusual purchases, the bank stops the card from working and calls me. This is actually a big hassle, as I once went to buy gas, and my card wasn’t accepted. It turned out the bank had temporarily shut off my card because I’d made a purchase in another state (internet purchase) earlier that day. So while I want to be careful of identity theft, I’m not sure I want to get rid of my debit card. I am a big believer in paying cash, whether by debit or check.

[ocrenter]

More example of price cutting…

xx5 CAMINO HERMOSO, San Marcos, CA 92078
Bedrooms: 3
Baths: 2.5
Sq ft: 2,172
Listing Date: 04/21/06
List Price: $549,000 – $569,000

here’s two comps in the same development:

xx3 Camino Hermoso, San Marcos, CA 92078
Bedrooms: 3
Baths: 2.5
Sq ft: 2,172
08/20/2004: $589,500

xx4 Via Del Caballo, San Marcos, CA 92078
Bedrooms: 3
Baths: 2.5
Sq ft: 2,172
12/22/2005: $571,000
(btw, this was purchased by an investor who was trying to rent it out for $2200/month, after 4 months of sitting empty, he lowered it to $2000/month and found a renter. Assuming 20% down at 6%, he’s losing about $1300/month on a property that just lost $22,000 in 4 months.)

[ocrenter]

well, looks like things are a lot worse than I realized.

xx7 VIA DEL CABALLO, San Marcos, CA 92078
Bedrooms: 4
Baths: 3
Sq ft: 2,358
Listing Price: $550,000 – $599,876
Last Purchased: Dec 03 $460,000

Check out this loser that bought the same exact model in March 2006. Looks like he just lost $75,000 in 1 month. keep in mind the lots are of similar size.

xx5 Via Del Caballo
Bedrooms: 4
Baths: 3
Sq ft: 2,358
Mar 06 $625,000

[sdrealtor]

Once again the danger of not understanding the data. The $625,000 was for the Former Model with tons of upgrades, a prime location and a much larger than average yard. Better properties always sell for premium prices. Not sure about the others but it looks like “this loser” actually paid a more than fair price even in light of the other cheaper priced model matches.

Prices are softening but the real estate market is a pretty darn efficient market. It’s because of the information systems created by Realtors. Homes typically sell for what they should while homes priced incorrectly rot on the shelves. If there were no Realtors and no Multiple Listing Service which is not a public utility but rather a system paid for and supported by Realtors homes would be very difficult to sell at any price.

[sdrealtor]

[Author]

Posts