Sub-2001 sold price in Del Mar

[barnaby33]

Im calling BS on that Cow_tipping. Lots of stuff has gone up since 01.

Lets see here, starting with food: I spend about 20% more on food than I did just 3 years ago. Eating out has gone up conservatively 30% in the last 3 years. My cell phone bill has gone up. Wine, a big category for me has gone up ALOT, though that is just as much currency related as anything else. Inflation is not zero. Even using a non-Austrian approach to inflation, I’d say its running at 6-7 percent. Oh yeah my rent has gone up as well, though not by huge amounts.

Then there is the killer, gasoline, ouch thats inflationary. Its just about doubled in the last 5 years. I know you excluded it in your post, but how can you? It is something we all need alot of.

Josh

[Cow_tipping]

Food and energy (gas included) does not figure in inflation.
Sorry that is just the fact, I didnt exclude it, the government does.
No_such_reality – ~2% Maybe I’d say mostly under 2% but you in SD probably have 2%.
If inflation is 6-7% interest rates on long term loans will be 10-12% and interests paid on savings accounts will be 3-5%.
Eating out and rent and whatever in your area might have the classic wealth effect inflation. It bears very little resemblence to reality much like the housing prices in your area.
National level inflation does not count food and energy and it may have been 2% across the last 6 years. I anticipate much of that to get wiped out when the crash fully mobilises, cos it will create a lack of wealth effect deflation which it already has.
Cool.
Cow_tipping.

[John F]

Are you sure that the price of wine has gone up? I don’t know for sure but a bottle of Charles Shaw was $1.99 a few years ago and I think it’s still $1.99. Admittedly I haven’t checked for awhile.

I can tell you that a 40 oz. Old English has gone up in the past few years; you used to be able to get one on occasion for 99 cents but now you’re looking at $1.69 minimum and that’s if you look.

In any event, inflation is real and it’s more than 2%.

[(former)FormerSanDiegan]

Not to tip a sleeping cow, but …

1. Food and energy does factor into inflation. The government reports both top line CPI and Core CPI (excluding food and energy) because those components are volatile, not because they don’t count.

2. A conclusion you made is the opposite of what one would infer from the data you posted …

Inflation may have been a factor 01-02-03 but after that its not only down, its pretty much wiped out the gains from 01-02. Look at rents and look and costs of essentials and always they exclude energy because that is influenced by too many externals.

But the data you posted later on says the opposite. Core inflation actually declined from 01-03 and picked up again after that.

I took the liberty of plotting the data you provided.
A clear decline from 01-03 and a pick-up from 03 on. Exactly the opposite of what you said.

[img_assist|nid=3235|title=Core Inflation (excl. food & energy)|desc=|link=node|align=left|width=466|height=349]

I also took the core inflation numbers and computed the cumulative impact of CORE inflation from 2000 to 2007. Guess what ? Excluding food and energy, things have gone up by a cumulative 16% since 2000. 16 > 0. People tend to underestimate the erosion effect of even mild (< 2%) inflation on the costs of things. [img_assist|nid=3236|title=Cumulative effect of inflation 2000-2007|desc=|link=node|align=left|width=466|height=349] This thread has taken a diversion from the original point. All I was trying to do was to point out a pile of BS that was not backed by data. When the data is provided, it contradicts the BS.

[forsale_2007]

One thing I also found interesting. Occasionally, a few sales occurs due to unusual circumstances. One of my neighbors in Torrey Hills bought their home at the peek close to $1.2m, put in about $150k upgrades. Then, they put it back on the market, 3 months later. It finally closed escrow recently about $1.1m. At first, I thought this was a flipper. But it turns out that the couple bought the house because they were trying to rebuild a family. Things turned even more sour, and they ended up separating. Hence their “motivation” for sales at the huge loss. It’s sort of sad, but reality is that a lot of times, these things happen to people that don’t necessarily have “credit issues” or “finance” issues.

Moral of the story
1) never make big financial decisions if you’re having family problems.
2) sometimes market annomalities can be found by sellers of unusual circumstances.

…About the home. Nice home….But imho bad feng-shui. The previous owner was also a couple that got divorced. For the sake of the current owner, I hope it was just a coincident.

About nice areas falling in price….imho…It really depends on on how long the housing correction lasts. It always starts in the less desirable area. But once those areas come down in price, and become property that have more bang for the buck, it will start impacting nicer areas.

i think the reason why homes in nicer areas haven’t quite fallen as much, is simply because home prices in less nicer areas haven’t drastically detorriated yet. Once it does, then all homes will be impacted, except possibly the multi-mullion (+$3million homes)- people who buy those homes usually don’t do any financing and are immune to any market correction. There hasn’t been enough price differentiation yet. For example, it ridiculous that anyone would pay for $700k for a home in chula vista, when you could get something slightly smaller in say Rancho Pensequito, or even Carmel Vally for $720k (much smaller), regardless of the how big the home is in Chula Vista is. Why? Because regardless of whether it’s new or bigger, it’s still in Chula Vista- bad neighborhood, with bad schools, and bad environment. It doesn’t make sense. If you make that much money to afford something $700k, you don’t want to live in area where the majority folks around you don’t…Frankly, I wouldn’t even pay $500k for a home in Chula Vista, because before I’d buy there, I’d buy in Mira Mesa. Other areas like Chula Vista need to significantly correct, and there needs to be enough price difference between different locations before we see “nicer areas” take any signficant hit in a meaningful way.

[PerryChase]

I never knew Chula Vista until I drove through to go to the Otay Ranch Town Center a couple of months ago. To be fair to Chula Vista (the eastern part near Eastlake and Otay Ranch), the development is exactly the same as Carmel Valley, in my view. I don’t see any physical difference. Granted, the school district and ethnic makeup might be different.

Not counting whites, are Chinese/Asians and Indians from India neighbors better or worse than Hispanic neighbors? Are the whites in Chula Vista any different than the whites in Carmel Valley? Assuming the houses are priced about the same, wouldn’t they belong to about the same social class? Or perhaps the upbringing they come from is different?

[forsale_2007]

I never knew Chula Vista until I drove through to go to the Otay Ranch Town Center a couple of months ago. To be fair to Chula Vista (the eastern part near Eastlake and Otay Ranch), the development is exactly the same as Carmel Valley, in my view. I don't see any physical difference. Granted, the school district and ethnic makeup might be different. Not counting whites, are Chinese/Asians and Indians from India neighbors better or worse than Hispanic neighbors?

Race has nothing to do with it imho.

Financial background/value system/social background/surrounding environment has everything to do with it. First, I'm not saying Carmel Valley is the end all/be all place. It's inflated just like everywhere else.But, I'm merely pointing out a $700k home in Chula Vista imho is ridiculous, considering it's not close to the coast, there's no decent school system , it borders the old chula vista parts which is crime infested, and it's not close to where most of the high paying jobs are.

What other advantages does living in Chula Vista have that you couldn't find in Poway, Rancho Penesquito, Carmel Valley if you were willing to compromise on the square footage? A 700k price tag seems steep for the sacrifice you'd make in quality of everything else. It just doesn't make sense imho.

I sure as hell wouldn't want to live there, no matter how nice the home looks or the immediate neighborhood is…It's really the entire package. For the sake of my family, I'd rather live in something smaller in a neighborhood where school good and crime is low. I don't want to send my kids to any high school that has an auto-shop class. And I would say people from a white-collar background probably would feel more or less the same. But that's just my opinion.

As far as Carmel Valley is concerned, I believe things are going to get hit too. How hard depends on how long the housing slump sustains. I would say though that Condos in Carmel Valley will get hit the hardest versus SFH. $600+k for a 3 bedroom TOWNHOME with $200-300 HOA on top of that is ridiculous. And most of the time, people who purchased these where first time buyers that way over-extended. A lot where purchased by flippers/”investors”… Plus, there were plenty of condo units newly constructed and apartment converts….If we can get a 3 br townhome with attached garage for $400k, we’ll probably get back in. I’ve seen some of the units come down in price, but not significantly.

[Cow_tipping]

16% over 7 years (its actually 8) is under 2% annually.
Inflation is always an annual figure. I would like to see the region wise numbers and I can find it, I am not asking you to, and the margin of error even in a national number is how much. I know they claim its accurate, but 2% even if it is that, is very low inflation. Extremely low. That explains the 6% long term interest rates a bit though. I’d think 6% interest means under 1% cos I think they like to pad it 5 point atleast, but maybe the bond market had become less risk averse from 00-07.
The discussion is waaaay of course though, I was trying to just point out that 6% ineterst implies 1% or less or I did say nearly 0 cos for a while interests were flirting with 5.5% on a 30yr fixed.
That was all.
Cool.
Cow_tipping.

[barnaby33]

Poway high had an excellent auto shop class, when I gradumacated. I’d never live in Chula Vista either.

Josh

[(former)FormerSanDiegan]

cow_tipping –

I agree that 1.5-2.5% is very low inflation. But even under those circumstances from 2000 to 2007 the end result was 16%. (That’s not accounting for food and energy… how much was gas in 2000 ?).

Your rule of thumb for long interest rates of 5% plus inflation is probably pretty close to reality for moderate ranges of interest rates (e.g. 6-10%). But I don’t believe the market is reflecting what inflation is currently. It reflects anticipated inflation over the course of the term of the bond looking forward, not current or past inflation.

My real point regarding inflation is that I think people forget that even a little inflation does a lot of damage. That’s why I have not bought in to the belief of a 40-50% decline in nomimal house prices. 40% in real terms, sure, but not nominal. If this occurs over 8 years of relatively low inflation that’s 20-30% in nominal prices and 20% due to inflation. If inflation is higher maybe its 25% due to inflation and 20% due to nominal price declines.

Inflation happens.

{Clarification: I started at 2000 with an amount of 100, so I only accounted for 7 years of inflation in my example: 2001-2007. If I start at 1999 and take year 2000 inflation of 2.7% into account I get 19% cumulative over 8 years. IN either case a bit over 2% on average over that period}

[surveyor]

chula vista

awhile back when we were searching for a house to buy, we considered chula vista. chula vista at the time offered new houses, a decent yard, and more square footage than comparable homes in north county/mira mesa area.

of course, that is no longer the case, but that was the reason to get a house there at the time. we ended up not getting a house there because of the traffic and distance however.

[sdrealtor]

Just closed for $1.35M which is $51K above the asking price. Multiple offers no doubt. As it was a bank owned property I cant imagine there was any monkey business (i.e. cash back to buyer).

Looks like Del Mar is still alive and rockin!

[Anonymous]

I live in Del Mar and have for over 6 years. I actually called the listing agent and was shown this house. It was listed at $999K. By the time I shown the house it was on the market for 30 days. I know this because I take my son to school in the neighborhood and passed the sign daily. I was told by the Realtor that the bank would take $950K for it. I was also told he had five offers and I needed to see the house quickly and make a quick offer. I hesitated and called him back in about a week to find all the offers were “rejected” by the bank. I looked at the house but there was too much street noise and told him I had no interest. I did not see a “sold” sign for another month.

I find it had to believe it sold for over $1 Million.

[sdrealtor]

Wrong house. You are probably thinking of 13796 Durango which had a backyard overlooking DM Heights Rd. This one was at 13881 Durango (a block North of DM Heights) overlooking Crest Canyon.

P.S. If you have a nice ocean view and want to sell your house, let me know. I have a ready, able and willing buyer up to about $2M.

[(former)FormerSanDiegan]

Based on the current available information, the title of this thread should be changed to

“2001 prices plus 25% – sold in Del Mar”

Yawn …

That’s about 4% per year.

[Author]

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