Older homes in Carmel Valley

[arny]

What is your opinion of buying older homes in Carmel
Valley ( i.e built in the 1980’s) and how do you think they will hold their values after 5 years.

For example I am looking at ~ 1800 sq foot homes in the high 600 to low 700k range. Specifically I found the following home sold last year.

12174 CARMEL PARK DR 3/2 1,736 1987 08/02/06 0.16 $700,000 $403

The homes don’t have HOA or Mello Roos and are cheaper – however they are older than most houses in CV. What are the other pros and cons of buying in this area ( as opposed to the newer houses say in the Torrey Hills/Trilogy ? )

Thanks

Arny

[SD Realtor]

Hi Arny –

My wife and I are also considering old CV if we can afford it. I like it MUCH more then new CV. I like the homes off of El Camino, north of Del Mar Heights. They are a bit pricey though. I did a search on the MLS for the Carmel Park home you referred to but could not find it. One thing I have found though are even some of the older CV homes that don’t have MR or HOA are still cookie cutter and are boxed in pretty tight. Personally that is not for us. As to whether they will hold up better then the new CV is speculative. Certainly no MR or HOA will save you a few thousand a year so that is good. Pros of this area include a much easier commute, (unless you work out east) closer to the beach, no MR/HOA or at least lower HOA, and again if you get into certain subdivisions a larger lot and yard. Still the pricing is high for those better subdivision.

SD Realtor

[arny]

Hi SD Realtor,
Thanks for your reply. The homes I am looking at are certainly cookie cutter homes – lot size is ~ 4500 sqft and home size is ~ 1800 sq ft – so certainly no yard here – just a big sized patio. These were built in the mid-80s. I like the commute ( work in Sorrento Valley area), good neighborhood and schools. Also kid friendly. But the houses are old – so not as appealing to wife as the newer homes.
Similar sized homes on similar sized lots in the Torrey Hills area go for an additional 150k. They have HOA+Mello roos of more than $300 per month.
Question is if I am forced to sell after 5 years which one do you think will hold its value better ? I am not looking for a profit here – trying to minimize my loss.
One argument I can make for older homes keeping their value better is that fewer people are as heavily mortgaged as in the newer homes. Much less likely to have taken exotic loans to finance their homes. They can always rent and still make a profit. However the same argument also goes against – because of the equity they have they can perhaps lower prices much more than those in newer homes.
The argument for newer homes is certainly the “desirablility factor”. Also people here perhaps have a higher income to start with.
Are there any statistics on how older vs newer homes in the same neighborhood fared during the previous downturn ?
Also how can I find any information on the construction quality of these older homes.

Thanks

Arny

[sdrealtor]

Arny
Closer to the coast with better freeway access will help the older homes not to mention lower prices and fees. Think of it this way, there are alot more pretty new homes in Torrey Hills than older CV in the area you are referring to. If you are highly concerned about holding value, you will likely do better in an area where supply is relatively low.
SDR

[SD Realtor]

Hi Arny –

I work in Sorrento Valley also. Why Hwy 56 was made a crappy 2 laner from the start is beyond my comprehension because it is pretty brutal in the morning and at night so I agree with you about the commute. It is not like going to Carlsbad but it is not fun… I absolutely agree with sdr about holding values. It all depends on inventory. Combing through the data to see which homes hold value better can be done but it is burdensome. I can give you a for instance though… In Scripps old Scripps homes are holding value substantially better then new Scripps. Even the highest ends home in Bridgestone are falling hard compared to old Scripps. Again, it is simple inventory… In 92131 the inventory on the MLS is dominated by newer homes compared to older homes.

As pointed out by yourself and sdr, the newer homes have more amenities and have lots of eye candy. In terms of the construction quality of the older verses newer, I am sure there are resources out there but personally I do not know where they would be.

Anyone have any advice for Arny on that?

SD Realtor

[JJGittes]

Regarding older homes in CV, be sure to ask about PB (polybutelene (sp?)) piping. I know it was used in some developments there, and it has ofetn caused horrendous flooding where it has failed. Plumbing companies all around SD county are making a mint off copper re-piping right now.

[arny]

Thanks for all your replies.

So what do you think would be a fair price to pay for an older home in average condition ?

Most of the listings are in the mid-750K range ? Is high 600K a good price to lowball ?

Also what are the cons of not going thru a buyer’s agent ? Since I know the area and the listings are publicly available can I make an offer without an agent and ask for a 3% discount ?

If I decide to purchase, my understanding is that I will need –
A) Make an offer – are there templates available for this ?
B) Qualify for financing and get a loan. I have pristine credit – and am looking for 30 year fixed-rate loans. Are the websites on http://www.bankrate.com or lendingtree.com real ? Or can a buyer’s agent give me a better contact ?
C) Get an inspection done
D) Open escrow account
E) Verify title thru title verification company
F) Get attorney do the paper work
G) Do the closing

Are there agencies/individuals who can help me do this for a flat fee ? Are there DIY kits/paid services available ?

Thanks in advance for your responses,

[SD Realtor]

I will try to answer your questions. I am sure I will get lots of heat for shilling for your business.

“So what do you think would be a fair price to pay for an older home in average condition ?”

This is a tough one to answer. Fair price right now varies in the eyes of sellers and buyers. Many people here, myself included have submitted what we feel are fair prices for homes but they are not getting accepted yet. Sellers in more desireable areas are holding out… It all depends on the distress/motivation level of the seller.

“Most of the listings are in the mid-750K range ? Is high 600K a good price to lowball ?”

There is no harm in trying. I doubt you will get any response from sellers in CV right now for that price.

“Also what are the cons of not going thru a buyer’s agent ? Since I know the area and the listings are publicly available can I make an offer without an agent and ask for a 3% discount ? ”

By not using a buyers agent you do not have an advocate who is looking out for your personal interests, or has a fiduciary obligation to you. This is my shortest answer but there are other factors as well such as helping you understand the docs, pointing out your rights, assessing reports/inspections, and other items. Yes you can submit an offer to purchase and waive your right to representation. There is a CAR form for that and you can let the listing agent know that you would like to be unrepresented and build in the co-op discount into a price reduction.

“If I decide to purchase, my understanding is that I will need –
A) Make an offer – are there templates available for this ?
B) Qualify for financing and get a loan. I have pristine credit – and am looking for 30 year fixed-rate loans. Are the websites on http://www.bankrate.com or lendingtree.com real ? Or can a buyer’s agent give me a better contact ?
C) Get an inspection done
D) Open escrow account
E) Verify title thru title verification company
F) Get attorney do the paper work
G) Do the closing”

I will not go into specifics but you have the general idea. I don’t really know if you need an attorney or not. It is up to you to gauge your level of proficiency as well as how much work you can get the listing agent to do for you. It is not rocket science and most everyone here underestimates the value of a good buyers agent. A good agent will have contacts for financing, inspections, a great escrow/title company, transaction coordinator, etc… that doesn’t even start to go into making sure the contracts are all correct and all documentation conforms to DRE law.

“Are there agencies/individuals who can help me do this for a flat fee ? Are there DIY kits/paid services available ?”

Yes there are flat fee offerings out there. You can get a real estate attorney to represent you. You can use Zip and get a rebate, Redfin and get a rebate, small independents like myself also give rebates. Even larger brokerages in some cases MAY offer a rebate. DIY kits, I am sure exist but I don’t know how or where. sdr (sdrealtor) posts here and I am sure he does a good job and he works for one of the larger firms. Jim Klinge also does a good job and posts here now and then and he can help you.

The bottom line is there are ways for you to get good representation or do it yourself.

SD Realtor

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