New Tract in Mira Mesa

[an]

[quote=flu][quote=AN]I understand that this will be newer than most SFR in MM, but will this drive down the houses in MM that were built in the 90s without those new home features, like great rooms, home networks, etc. If you have a houses that’s built in the 80s-90s that has been remodeled with these features, would buyers view it in the same light when both are resale?

Wouldn’t taste change 10-20 years from now and some of these features will be outdated, just like some of the features that were the in thing in the 80s-90s?[/quote]I think quite the opposite possibly. If the ultimate result attracts new buyers who presumably have a higher economic background (being that these homes are in the 600’s and that the days of crazy financing have gone), I think the only thing that would happen is the neighborhood gets better, not worse. Folks with higher income levels will raise the levels in spending in local areas, school scores, etc. And this will feed on itself.[/quote]
I understand the effect of getting new more expensive housing stock built in an area. I agree with all the advantages you listed. My post was in response to sdr’s statement that there’s a cachet with new homes. So, I asked if the cachet will fetch $200k premium. If it does, then what would it do to those homes that currently enjoy the cachet of being the newest homes in the area. If anything, I was hoping it would drive down those houses so I can pick one up for myself :-D. I hate these new houses with narrow and TINY lots. I thought my lot is already is small at 5200 sq-ft. For $650k, I rather pick up something like this one: http://www.sdlookup.com/MLS-110041512-6181_Sunset_Crest_Way_San_Diego_CA_92121. It currently enjoy the “newest house/development” cachet. If that cachet is gone, I was hoping I can pick it up for high 500s :-D.

[an]

[quote=flu]MM schools aren’t THAT bad, come on…And frankly CV schools are overrated. Only a small percentage of people *that* snooty when it comes to schools.

Highland Village i think is selling considerably above attached townhomes on the other side of CV (near Ralphs).
So yes, I think there is a premium that people are paying for new homes. Same could be said for Carriage Run, which I use to laugh at all the time. I’m not laughing anymore. People have paid around mid $800k for those too, and those are pretty much sold out.

This MM community I think has the convenience factor, so I think it will be a winner. It will bring up MM and the surrounding and schools.[/quote]
You and I can agree that MM schools aren’t “THAT” bad, but your average buyer doesn’t know that. Even long time San Diegan like UCGal was surprised. It will take many many years to change an image of an area (WRT to school quality). I know those who grew up here and are doing quite well think it’s subpar (even when they themselves are doing well in life while being part of the “subpar” schools). So, stigma is hard to shake off.

No, doubt that there is a premium for new vs old. I’m only questioning whether the premium is $200k or $25-50k. Maybe putting it in % might make my point a little more clear. I can see 10-20% premium for new, but $200k is equivalent to ~45% premium. I personally think 45% premium is way too high, that’s why I’m asking you guys to see what you guys think.

I don’t think this area will add enough home to make a difference to MM schools. This is not considering that some of those parents might send their kids to private school. I know that there are a few 92121 parents sending their kids to my kids’ school. So, those kids are not helping bringing up MM schools.

[Coronita]

[quote=sreeb]

Qualcomm engineers are the last ones who should be buying in Mira Mesa or Carmal Valley. The big Q looks good now but if they start to cut back, there is nobody else to employ these guys in SD. You could lose your job and have your house crater on the same day. Those Qualcomm engineers who want to live close should rent.[/quote]

I’m not sure I follow. a fast stock price decline is inherently more likely than a fast home price decline. . For folks who have seen their equity stake rise to all time highs, who haven’t bought a home yet… it probably would be prudent to taking money out of QC (or tech stocks in SD) right now and using proceeds to purchase a home… It’s probably much less likely we’ll see a 20% correction on home prices that happens fast anytime soon, versus it is entirely possible to see a 20% correction in stock prices really quick.

Furthermore, even if a a company’s stock corrects significantly, it doesn’t necessarily translate into layoffs, unless the company is performing poorly (QC is not, neither is the smartphone market, at least not right now).

Also, now’s probably a good time to take advantage of the still low taxes on long term capital gains…who knows what that’s going to look like next year.

[an]

Another question for you guys regarding what’s considered “new” to get the “new” premium. I’m sure I’m totally off base here, but wouldn’t a completely remodeled home with all the modern conveniences be just as good as new?

[Coronita]

[quote=AN]Another question for you guys regarding what’s considered “new” to get the “new” premium. I’m sure I’m totally off base here, but wouldn’t a completely remodeled home with all the modern conveniences be just as good as new?[/quote]

If by remodeling you mean just the inside, no I don’t think it would be the same, because some people probably would still view the outside as looking old.

If you are talking about a complete teardown to make it look more modern, then probably some would then say the neighborhood still looks old,

People that are drawn to a new home, are probably looking at the entire appearance of the neighborhood.

Vanity 101 i guess.

At one point, I had considered Pardee’s then new Saratoga home, because it was in a newer neighborhood, even the actual sqft was the same as my existing home. I eventually chickend out because I was too cheap and didn’t want to pay for the premium. but plenty of people did. Evan as resales now, Saratoga homes still have a premium over comparables i think.

[sreeb]

[quote=AN]so, you advise people to rent based on that statement? Qcom have been around for almost 30 years. San Diego want to make Sorrento Valley and UTC to be one of their main employment area. Even if qcom doesn’t last forever, Sorrento Valley and UTC will be employment center for many years to come.[/quote]

I am acutely aware of the job market for the types of people Qcom employs.

Can you name the 2nd, 3rd, 4th, and 5th employers of telcom engineers in the Sorrento Valley area? How many do they collectively employ compared to Qcom? How much of their business is dependant on Qcom?

Drive around Sorrento Valley. Most of the buildings have a sign saying “Qualcomm”. Most of the rest have a sign saying “Available”.

Once upon a time there was a large population of Linkabit spin offs, startups, and companies opening design centers. That is all history now.

I only suggest that there is merit in a little diversification no matter how stable your employer looks today. Buying a house is a long term commitment. Longer than anyones Qcom forecast.

[sdrealtor]

AN
You are such the enginerd. Its impossible to put an exact value on new particularly over time. Suffice to say, the strongest buyers for an area look at the best properties. The best properties are generally the newer ones. This would be particularly true for MM because it is up and coming. When most of MM was built there was no QCOM and no tech center. The level of buyer that would consider MM has and will rise ona relative level.

A remodelled home will be worth more but is always limited by what surrounds it. In MM that means lots of older houses not as nice. By definitiona home in a new tract will be surrounded by similar homes. Does that make sense?

[an]

[quote=sreeb]I am acutely aware of the job market for the types of people Qcom employs.

Can you name the 2nd, 3rd, 4th, and 5th employers of telcom engineers in the Sorrento Valley area? How many do they collectively employ compared to Qcom? How much of their business is dependant on Qcom?

Drive around Sorrento Valley. Most of the buildings have a sign saying “Qualcomm”. Most of the rest have a sign saying “Available”.

Once upon a time there was a large population of Linkabit spin offs, startups, and companies opening design centers. That is all history now.

I only suggest that there is merit in a little diversification no matter how stable your employer looks today. Buying a house is a long term commitment. Longer than anyones Qcom forecast.[/quote]
Again, why does it matter if QCOM is the biggest player in Sorrento Valley? It’s not surprising and they’re only going to get bigger as the smartphone market get bigger. Now that ARM is moving into tablets and Windows 8 supporting ARM, that’s a who new untapped market for QCOM. They’ve been around for 30 years. I can easily see them being around for at least another 10 if not 20 years.

A job center is a job center. If QCOM goes away, do you think all these office building will sit empty? If it does go away, it will go away slowly. In that transitioning time, there will be some other company that will replace it. As an engineer, you’ll adapt to whatever industry that’s thriving right now. 5-6 years ago, there’s no such thing as iOS development or Android development. I’m sure 10 years from now, it’ll be something else all together. But one thing is for sure, San Diego have zoned Sorrento Valley and UTC for offices and business building. It will only get more dense as San Diego grow and more jobs move into town.

Yes, buying is a long term commitment. But I don’t see how prognosticating that QCOM will go away some day will mean you should rent vs buy. I’ve worked at 5 different companies so far and they all are in Sorrento Valley, Carmel Valley, and Scripps Ranch. So even without QCOM, there will be others to take its place.

[an]

[quote=flu]If by remodeling you mean just the inside, no I don’t think it would be the same, because some people probably would still view the outside as looking old.

If you are talking about a complete teardown to make it look more modern, then probably some would then say the neighborhood still looks old,

People that are drawn to a new home, are probably looking at the entire appearance of the neighborhood.

Vanity 101 i guess.

At one point, I had considered Pardee’s then new Saratoga home, because it was in a newer neighborhood, even the actual sqft was the same as my existing home. I eventually chickend out because I was too cheap and didn’t want to pay for the premium. but plenty of people did. Evan as resales now, Saratoga homes still have a premium over comparables i think.[/quote]
When I say remodeling, I was referring to inside and out. I haven’t seen this new development and how it feel, but areas along Sorrento Valley Blvd and Calle Cristobal with HOA still look pretty new.

The only thing about looking more modern is that, you can’t always look more modern. Example would be, houses in the 80s look more modern in the 80s while houses in the 70s look dated. But now, 20-30 years later, they both look old and dated.

I basically have 2 questions. One is, is new really worth $200k (45%) premium right now. Two is, would that premium sustainable after 20+ years. Keep in mind that these lots are nothing special. If anything, it’s worse than your typical lot in MM since it’s smaller. 20 years from now, would it matter if the house is 20 years old or 30 years old? At that point, wouldn’t they all be old? Taste and style change all the time, so I’m almost certain that what’s desirable today is not desirable 20+ years from now. If you don’t think the premium will be sustainable after 20+ years, do you see a new house development like this pulling up the houses around it over time, or do you see these new houses appreciate at a slower pace comparing to older houses in the area?

Like you, I did consider newer too. However, like you, I was too cheap and didn’t want to pay for the premium. Maybe this is why it’s so hard for me to wrap my head around why someone would pay $200k (45%) premium for these houses.

[an]

[quote=sdrealtor]AN
You are such the enginerd. [/quote]
Thanks, I take that as a compliment :-D. I agree with the rest of your post.

[sdrealtor]

I think the cachet of new is worth more when they are actually new. People will pay more to sit on an untainted potty, cook in a new oven and everything else that has never been used. Over time that premium generally will shrink but for properties like these in this location they will always hold a very nice premium over the older homes. What that will be is impossible to determine. They should also pull up the area a little.

[sreeb]

[quote=AN]
Again, why does it matter if QCOM is the biggest player in Sorrento Valley? It’s not surprising and they’re only going to get bigger as the smartphone market get bigger. Now that ARM is moving into tablets and Windows 8 supporting ARM, that’s a who new untapped market for QCOM. They’ve been around for 30 years. I can easily see them being around for at least another 10 if not 20 years.
[/quote]

So can I. But I can also seeing them not doing so well or just having a significant cut back on their way to a bright future.

[quote=AN]
A job center is a job center. If QCOM goes away, do you think all these office building will sit empty? [/quote]

There is plenty of empty buildings today. There are lots more buildings with nearly empty parking lots. I’m not witnessing a stampede of companies moving in.

[quote=AN]
If it does go away, it will go away slowly. In that transitioning time, there will be some other company that will replace it.
[/quote]

Perhaps or perhaps not. How did you expect Nokia was going to take?

[quote=AN]
As an engineer, you’ll adapt to whatever industry that’s thriving right now. 5-6 years ago, there’s no such thing as iOS development or Android development. I’m sure 10 years from now, it’ll be something else all together. But one thing is for sure, San Diego have zoned Sorrento Valley and UTC for offices and business building. It will only get more dense as San Diego grow and more jobs move into town.
[/quote]

I don’t see new businesses popping up like mushrooms these days. I remember when they did. Hopefully they will again.

While I expect good engineers will always be in demand, it may be optimistic to expect that demand to always show up at your doorstep.

[quote=AN]
Yes, buying is a long term commitment. But I don’t see how prognosticating that QCOM will go away some day will mean you should rent vs buy. I’ve worked at 5 different companies so far and they all are in Sorrento Valley, Carmel Valley, and Scripps Ranch. So even without QCOM, there will be others to take its place.[/quote]

If you think it is a good idea to get a job at Qualcomm, buy their stock, hold onto all your stock options, and buy real estate whose value is mostly dependent on demand from other Qualcomm employees, go for it. It will probably work out fine. But if it goes bad, it will be very very bad.

[an]

[quote=sreeb]So can I. But I can also seeing them not doing so well or just having a significant cut back on their way to a bright future.[/quote]
Sure, but when and by how much? If you can’t answer that, then why even make it a variable in determining whether it’s good to buy or rent?
[quote=sreeb]There is plenty of empty buildings today. There are lots more buildings with nearly empty parking lots. I’m not witnessing a stampede of companies moving in.[/quote]
We did experiencing a “great recession”. What did you expect? I don’t know where the start ups are in SD, but I know the city planners (if they get their way), will make Sorrento Valley/UTC area. Especially as SD get more dense, they have to have more defined areas. They’re expecting 1M+ people to move to SD over the next 30 years. They don’t want to sprawl like LA. So, in the short term, QCOM will carry SV and the many banks/financial and biotech will carry UTC. Even if QCOM goes away and SD will no longer have tech jobs, do you think all jobs will be gone from SD?
[quote=sreeb]I don’t see new businesses popping up like mushrooms these days. I remember when they did. Hopefully they will again.[/quote]
Again, we just experience a pretty pad recession. I hope you were not expecting SD to be immune.

[quote=sreeb]While I expect good engineers will always be in demand, it may be optimistic to expect that demand to always show up at your doorstep.[/quote]Like I said above, engineering are not the only job in SD. So, even taking worse case scenario about QCOM and it going away, unless you expect SD job market to become like Detroit where that 10k+ people will stay unemployed for a very long time, I don’t see how QCOM’s success or failure will affect RE price over the long term.
[quote=sreeb]If you think it is a good idea to get a job at Qualcomm, buy their stock, hold onto all your stock options, and buy real estate whose value is mostly dependent on demand from other Qualcomm employees, go for it. It will probably work out fine. But if it goes bad, it will be very very bad.[/quote]
RE value mostly dependent on demand from QCOM employees? Do you have proof of that? Again, do you expect SD’s job market to be desolate if QCOM goes away? Are you saying the city’s planners who expect 1M+ people to move here over the next 30 years and have them all be unemployed?

I never suggest you hold all of your eggs in one basket (RE is not one of those egg). If you have all of your retirement and investments in QCOM, all I can say is you might want to diversify. That’s a whole different topic all together though. However, if you make buy/rent argument based on one company’s success is pretty ludicrous to me too. Before QCOM, there were other employers, and after QCOM, there will be other employers. Unless you’re betting against SD’s job market as a whole, I don’t see how one company’s future will affect housing price of a whole region. Also keep in mind that it’s currently cheaper (monthly payment) to buy than to rent in Mira Mesa. I can’t speak for Carmel Valley, but they have other factors that give them the premium (they always did, even before QCOM). So, unless you can say QCOM’s demise will be sharp and imminent, I don’t see how you can use QCOM’s future as a variable to determine buy vs rent.

[Author]

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