price may stay flat for much longer

[hpi]

I followed RB area (also including scripps ranch, RP, Mira Mesa …, since I am sort of a 1st time buyer, coastal area is too expensive). Especially I am concerned about the new homes, because the resale market is really not friendly. I found some unpleasant factors that indicate the price will not reduce as expected:

1. most of the resale homes bought before 2001 already got at least 250k-350k equity and low mortgage by refinancing during 2003-2005, the owner has all the reason to hold or rent it out (with a positive cash flow)…, so there is no “hope” to expect a big price reduction from them.

2. most of the resale home bought during 2001-2003 is the only hope for buyers to get a “fair” price, because its purchase price is still reasonable, a faction of owner is under pressure to reset ARM … but in general, my observation is that those homes should have no problem to be sold in 1 month in current market if the seller isn’t too greedy (a profit of 50k-150k should be rather easy)

3. For those home purchased during 2004-2006, I always see sellers suffer a loss of 30k-60k loss, but even with this loss, it is still a rather mild correction from the peak. The total amount of homes in this category is not very large though.

4. I noticed that the supply of new homes in RB has been shrinking, e.g. detached homes of less than 2300 sf at 4s ranch are sold out completely. In last 4-5 years, 4s ranch built 600-700 detached homes with 1300-2300 sf, which is equal to a net supply of ~150-200 homes/year in this area. But this trend finally stopped in the first half of 2007.

5. Only bigger new homes are on sale at 4s with the price range of 700k-800k. If the price can be reduced to 600k-700k, maybe I can be a potential buyer next year (by saving more money at the same time), but this is really unpredictable. What I saw is the homes are selling after price reduction in early 2007. The builder obviously want to keep current price level as long as it takes. The disappearance of >2300 sf homes (as explained in 4) will drive some buyer to this category next year … so I will be very surprised if the price can be really reduced much in next 12 months or even longer.

6. I think the home price might be surprisingly strong due to this very unusual market … Del Sur might need to price their homes next year, but this is totally driven by the supply and demand, instead of true property value. On the contrary to the market trend, the price of homes of 1700-2200 sf at Del Sur hasn’t show a sign of weakness since last September when I first visited there.

My impression is that Builders at SD are smarter than we think, because they control the inventory and phase of release very well. Most of resale homes are for big profit at little holding cost, they can be sitting on the MLS for years, but they don’t care, which can’t be treated as true inventory as new home sale or foreclosure sales.

I blame Feds for creating a big house bubble and made the market financially divided into two groups: existing home owners that take a big free profit from last bubble, and future home owners who will suffer from the bubble in the next 5-10 years.

[The-Shoveler]

Nor_LA-Temcu-SD-Guy

Maybe,

I think it all has to do with (if and or how bad) we get a recession,

A hard recession would go a long way toward clearing out the excesses of this latest bubble.

But the Builders have to eat, to eat they must move inventory (So there is yet another wild card out there).

[The-Shoveler]

Nor_LA-Temcu-SD-Guy

Maybe,

I think it all has to do with (if and or how bad) we get a recession,

A hard recession would go a long way toward clearing out the excesses of this latest bubble.

But the Builders have to eat, to eat they must move inventory (So there is yet another wild card out there).

[PD]

There seem to be a lot of new posters who have not read Rich’s articles. Perhaps some of the bad news is getting out and more people are aware that there might be a problem and are looking for info on the internet. However, these new posters seem to be confused and still suffering under the effects of the koolaid.
It’s different here, 4S (CV, Del Mar, La Jolla, Coronado etc) is special, no more land, too much equity, yada, yada, yada.
Real estate is set at the margins, people!

[PD]

There seem to be a lot of new posters who have not read Rich’s articles. Perhaps some of the bad news is getting out and more people are aware that there might be a problem and are looking for info on the internet. However, these new posters seem to be confused and still suffering under the effects of the koolaid.
It’s different here, 4S (CV, Del Mar, La Jolla, Coronado etc) is special, no more land, too much equity, yada, yada, yada.
Real estate is set at the margins, people!

[Nancy_s soothsayer]

The impression of “FUTURE home owners who will suffer from the bubble IN THE NEXT 5-10 years.” —ROTFLMAO!!!

Nominate for the “Last Comic Standing.”

[Nancy_s soothsayer]

The impression of “FUTURE home owners who will suffer from the bubble IN THE NEXT 5-10 years.” —ROTFLMAO!!!

Nominate for the “Last Comic Standing.”

[sdcellar]

hpi– The price for all homes in Del Sur is lower than it was in September, so don’t know what you’re talking about there.

[sdcellar]

hpi– The price for all homes in Del Sur is lower than it was in September, so don’t know what you’re talking about there.

[hpi]

The price of several low-end neighdour at Del Sur increases by 5k-10k from last Dec. to May this year. e.g. Cassero was sold 605k last Dec with 15k incentive and 10k+ upgrading included (floor, countertop), BTW that was year-end quick colsing deal. Bridgewalk was sold 580k with 10k incentive in early 2007, now it is 600k (with 25k incentive?). I didn’t check the latest prices, so I really don’t know what’s going on there.

I felt the price for new home of less 650k didn’t change much for last 6 months (their price might be reduced earlier though). The price drop in last 6 months mainly occured for those high-end homes I guess.

[hpi]

The price of several low-end neighdour at Del Sur increases by 5k-10k from last Dec. to May this year. e.g. Cassero was sold 605k last Dec with 15k incentive and 10k+ upgrading included (floor, countertop), BTW that was year-end quick colsing deal. Bridgewalk was sold 580k with 10k incentive in early 2007, now it is 600k (with 25k incentive?). I didn’t check the latest prices, so I really don’t know what’s going on there.

I felt the price for new home of less 650k didn’t change much for last 6 months (their price might be reduced earlier though). The price drop in last 6 months mainly occured for those high-end homes I guess.

[sdcellar]

Yes, SFRs are going for high sixes, low sevens, so good luck to Standard Pacific on the duplexes (Cassero) and detached condos (Bridgewalk).

They’ve got like 5 of the Bridgewalks with upgrades on the MLS right now. Casseros are still below six. I’m sure if you checked model for model, upgrade for upgrade, incentive for incentive, you’d find they’re cheaper now (but why waste your time?)

[sdcellar]

Yes, SFRs are going for high sixes, low sevens, so good luck to Standard Pacific on the duplexes (Cassero) and detached condos (Bridgewalk).

They’ve got like 5 of the Bridgewalks with upgrades on the MLS right now. Casseros are still below six. I’m sure if you checked model for model, upgrade for upgrade, incentive for incentive, you’d find they’re cheaper now (but why waste your time?)

[PD]

Does anybody have time to research some numbers? I would really like to know how many closed sales there were in 92118 (Coronado) for April and May. Is there any way to break down the numbers in price groups (under 1.25m, 1.25 – 1.7 and over 1.7)? Thanks in advance. I’m trying to figure out how many months of inventory there is available. Further, it seems that properties under 2M are moving downward in price. I haven’t been paying attention to higher priced properties here. I talked to a realtor recently (who I do not trust AT ALL) who claimed the upper tier houses were still appreciating.

[PD]

Does anybody have time to research some numbers? I would really like to know how many closed sales there were in 92118 (Coronado) for April and May. Is there any way to break down the numbers in price groups (under 1.25m, 1.25 – 1.7 and over 1.7)? Thanks in advance. I’m trying to figure out how many months of inventory there is available. Further, it seems that properties under 2M are moving downward in price. I haven’t been paying attention to higher priced properties here. I talked to a realtor recently (who I do not trust AT ALL) who claimed the upper tier houses were still appreciating.

[Author]

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