North County Coastal monitor

[sdrealtor]

[quote=yipla]Yes, that’s right I can’t take cap gains on Clairemont. What’s are good reasons for holding long term? Long term is not work-free… Rents commanded are not a ton more than my mortgage and maintenance costs. In fact, I don’t think I’ve yet broken even with the maintenance I had to do in the years I’ve rented it out. Perhaps those deferred maintenance issues are done now, and I won’t have as many large expenses anymore. If I sell, even without cap gains exclusion benefits, I would still cash out a decent chunk and could just dump it into the stock market. Maybe I’ll wait and see if Build Back Better actually passes and kills step-up in basis at death. Or maybe I just hold until these times of massive appreciation stop/slow.

I agree on UC. Plus our neighbor there is a real thorn.[/quote]

You are missing three things in CM.

1 You are paying down principal
2 It is appreciating
3 Rents are rising but your mortage and taxes are basically fixed

As for UC the opportunity to walk with a few hundred K tax free is potentially life changing as you can pay off/down your current debts, improve current home, fund retirement or college for kids so that would be mighty tempting for me. One thing I agree with is that bad neighbors evenutally move. After 17 years I got rid of a lousy one last Summer. Now I have new neighbors I love who have very young children. They will likely stay as long as Im above ground. This place Im planning to leave as a generational asset

[yipla]

gzz, I don’t need cash, but I’m often dinged on tax benefits for having too much income. As a landlord, I can’t take losses against my other income. So, if step-up-in basis is killed even in part, I bet it will get me.

My approach to mortgage’s has been leverage to the max at lowest 30yr rates possible and keep excess money in the stock market.

sdrealtor, the cap gains exclusion only saves like 20% on gains, right? Assuming my gains on either place are about the same, I’m not sure it really changes the overall calculus much between UC and Clairemont? It would be a good chunk of change either way.

I think I need to do a bunch of math to decide whether hold or sell is better, and this is all better to be done after we see what the new tax laws end up as.

But outside of financials, stress is high and managing rentals is like, this background worry that something could pop up at a bad time. And a bad neighbor is part of that. I will probably feel less stressed and more appreciative of cash flow if I early retire in a couple years…

[sdrealtor]

Absolutely the answer is to do the math. 10 years ago I bought a condo in North Park and sold it five years later for 3x what I paid. At the time it was worth paying long term capital gains as it allowed me to wipe out all my debt except my 1st mortgage on my primary. For me that was life changing. Had I held it now it is about 4.5x what I originally paid. It would also be generating almost $20k actual income which would be more than a 20% income stream return. Would I like to have that today and on into retirement? Sure but looking back it was and still is the right decision to have made. I paid off a large HELOC I still have with a zero balance that I’ve used a few times to capitalize on great investments that have returned even more. I’ll likely use it next to build an ADU for myself that will allow me to convert my primary into a massive cash flow generator. Do the math, apply it to your own circumstances and make the best decision you can for yourself and your family

[sdrealtor]

Last one of the year as of Tuesday

New listings 2 – mostly tenant occupied or prior rental

New Pendings of 5 –

Thats -3

Closed sales at 6 –

Price reductions at 0 –

Total houses for sale 18 with median of $2.9M.

We end the year with the shelves empty. Everything on the market is well over $3M or if less than that horribly overpriced. Even so I just rechecked and we are down to 14 with median of $3.25M. Looking forward to a fresh start to see what next year brings but dont expect much relief. By mid Jan we should start seeing things trickling on

[sdrealtor]

Preseason begins

New listings 6 – half we listed last year and taken off before holidays

New Pendings of 12 –

Thats -6

Closed sales at 18 –

Price reductions at 0 –

Total houses for sale 18 with median of $2.77M.

Still early but Im looking to see how much higher sellers are willing to test the market. TBD

[sdrealtor]

First week of the season. Im gonna make one slight change going forward. Next to the listings and pendings each week I will include the figure from last year. That will start now for this thread.

New listings 6 (18) – oh boy not a good start and 2 new lsitings were 2BR detached zero lot line condos not really true SFR’s

New Pendings of 5 (15) – cant sell what isnt there

Thats +1

Closed sales at 13 –

Price reductions at 0 –

Total houses for sale 21 with median of $2.575M.

This is not a good start. Really need to get this market going. It would be nice to see 15-20 new listings per week if not more

[sdrealtor]

New listings 17 (14) – encouraging start to see new listings back up

New Pendings of 13 (22) – not much to buy and will take a little more time to catch up with last year

Thats +4

Closed sales at 10 –

Price reductions at 0 –

Total houses for sale 29 with median of $2.2M.

In some ways its encouraging to see more new listings but most are high end, very small or pushing price. Just looked for 4/3 2400 sq ft + up to 1.75M in all 4 Carlsbad zips or 92078. Based upon running similar a couple days back knew I could count em on 1 hand. I still have all my fingers. Nothing

Need the tide to come in

[sdrealtor]

No one wants to move away from here either

New listings 10 (14) – back down we go

New Pendings of 23 (23) – double digit offers and prices 10% or more above asking are the general rule

Thats -13

Closed sales at 10 –

Price reductions at 0 –

Total houses for sale 21 with median of $2.7M.

Same time last year we had 50 sfr’s. Inventory is down 60% Y-O-Y. We thought it was incredibly low last year.

Tide is going out not coming in for now

[sdrealtor]

Out here looking for homes for a few clients and one thing struck me. Looking at inventory volume only tells half the story up here. I’ve been watching this micro market and tracking it very closely for 25 years now. In the past nearly all the listings were typical middle of the road homes for the area. Very rarely did one see prime coastal properties hit the market to any degree. Was always one here, one there. Now when I watch the flow it seems like half the new listings and often more are what I’d consider in the top 1/3. That does two things. It means it’s even tougher for the entry and average buyer around here. It also means the median up here is being driven to a bigger extent by the mix of the inventory. Looking just at how many homes are on the market does not show how thin it is. As an example my neighborhood of over 1,000 traditionally had 10-20 homes on the market at all times until the last few years. It’s been 3 months since one hit the market. I know there have gotta be some coming but this is a destination neighborhood that buyers watch and wait to get into. Those first listings are gonna get overwhelmed with interest. Will report once it happens

[sdrealtor]

More of the same if not worse relative to last year

New listings 12 (21) – should be trending up but isnt

New Pendings of 16 (33) – could sell 5X easily if we had it

Thats -4

Closed sales at 13 –

Price reductions at 0 –

Total houses for sale 24 with median of $2.585M.

Inventory half what it was last year. This was the week one year ago it started getting better but not this year. Maybe next week

In my hood first house to be listed in 3 months is coming soon. Last sale of this model was 10 months ago. It was listed for $1.4 and sold for 1.6M. This one will be listed for $2.1M. Its not impossible that we’ll see it sell 50% higher than the one a year ago. One to watch

[sdrealtor]

Heading into the weekend. We have 5 new listings for resale SFR’s. Hopefully a surge coming soon. This is a trainwreck

[DaCounselor]

The last 3 sales in the fall in LCV at around the $2 mil mark were all like 3400 or 3500 sq. ft.? Now we have a guy coming in with a $2.1 ask for 2700 sq. ft.? What do you think sdr – it closes at around $2.25 mil? What does that mean for the 3500 sq. ft. big boys on that street this spring – $2.5 mil? When and how does this rocket ride end, we are pulling major G’s.

[an]

[quote=DaCounselor]When and how does this rocket ride end, we are pulling major G’s.[/quote]
My crystal ball is broken, but I hope it’ll end the way it ended in the early 80s. I wouldn’t mind 5-10x increase in valuation over 10-15 years.

[sdrealtor]

[quote=DaCounselor]The last 3 sales in the fall in LCV at around the $2 mil mark were all like 3400 or 3500 sq. ft.? Now we have a guy coming in with a $2.1 ask for 2700 sq. ft.? What do you think sdr – it closes at around $2.25 mil? What does that mean for the 3500 sq. ft. big boys on that street this spring – $2.5 mil? When and how does this rocket ride end, we are pulling major G’s.[/quote]

There’s a big premium for a one story house especially a newer turnkey one with pool and 3 car garage. It’s an easy yes for a silly valley refugee retiree. I say 2.375

[svelte]

OK. I no longer understand this world.

Maybe its time for me to retire and spend all of my remaining days stoned and drunk in the forest or beach of my choice.

[Author]

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