Upper MId to Lower High End Market in NCC

[Anonymous]

In 2000 interest rates were more like 6%. Also, there is a huge risk in price depreciation buying today at 800K.

Other than those nitpicks this is a good example of a house (I assume it is not a dump) that is easily affordable for upper/middle class. Unfortunately there are few if any example like this in SD (not NC) coastal.

[CA renter]

[quote=ocrenter]2519 Levante in Carlsbad is 4110 sqft and just closed for $800,000. Assuming 20% down of $160k, the mortgage on the $640k at the current 4.5% would be $3200/month.

Back in 2000, its neighbor on 2343 Levante at 4400 sqft sold for $495,000. assuming 20% down, the mortgage would have been $396,000 at 8%, or $2900/month.

Now what about the opportunity cost of the respective down payments? Currently, the CD Index rate is 0.28%, by dropping $160k as the downpayment, the buyer is forgoing $448 in lost interest rate.

In 2000, the CD Index rate was 5.5%, so by dropping that $99k for the downpayment, the buyer was giving up $450 in interest payment per month.

essentially, the cost of buying now and back in 2000 are the same. and this is not even adjusting for inflation.[/quote]

OCR,

The house at 2343 (w/2345) is a duplex with two 3/2 units on either side. The house at 2519 Levante was effectively a 3/2 (downstairs) with a *very nice* loft upstairs, but it is a 3/2 SFH (we had made an offer on it). The duplex would have been the better deal, and I believe the buyer of 2519 overpaid and will lose money if they need to sell it within the next ten years (obviously, they outbid us by a large margin).

The bolded part of your post is very important here, IMHO. This is exactly what I was referring to in my response to sdr — when interest rates are this low for this long, savers/cash holders will be MUCH more willing to part with their money than in a higher rate environment. Everyone who is throwing money around today is making a bet that interest rates will stay low for the duration, and/or are betting on inflation. I honestly see both sides of the inflation/deflation debate, and have always been conflicted about it. Right now, our position is entirely unhedged in favor of deflation (all cash), but I’d be lying if I said it doesn’t worry me.

[CA renter]

[quote=ocrenter]2519 Levante in Carlsbad is 4110 sqft and just closed for $800,000. Assuming 20% down of $160k, the mortgage on the $640k at the current 4.5% would be $3200/month.

Back in 2000, its neighbor on 2343 Levante at 4400 sqft sold for $495,000. assuming 20% down, the mortgage would have been $396,000 at 8%, or $2900/month.

Now what about the opportunity cost of the respective down payments? Currently, the CD Index rate is 0.28%, by dropping $160k as the downpayment, the buyer is forgoing $448 in lost interest rate.

In 2000, the CD Index rate was 5.5%, so by dropping that $99k for the downpayment, the buyer was giving up $450 in interest payment per month.

essentially, the cost of buying now and back in 2000 are the same. and this is not even adjusting for inflation.[/quote]

OCR,

The house at 2343 (w/2345) is a duplex with two 3/2 units on either side. The house at 2519 Levante was effectively a 3/2 (downstairs) with a *very nice* loft upstairs, but it is a 3/2 SFH (we had made an offer on it). The duplex would have been the better deal, and I believe the buyer of 2519 overpaid and will lose money if they need to sell it within the next ten years (obviously, they outbid us by a large margin).

The bolded part of your post is very important here, IMHO. This is exactly what I was referring to in my response to sdr — when interest rates are this low for this long, savers/cash holders will be MUCH more willing to part with their money than in a higher rate environment. Everyone who is throwing money around today is making a bet that interest rates will stay low for the duration, and/or are betting on inflation. I honestly see both sides of the inflation/deflation debate, and have always been conflicted about it. Right now, our position is entirely unhedged in favor of deflation (all cash), but I’d be lying if I said it doesn’t worry me.

[CA renter]

[quote=ocrenter]2519 Levante in Carlsbad is 4110 sqft and just closed for $800,000. Assuming 20% down of $160k, the mortgage on the $640k at the current 4.5% would be $3200/month.

Back in 2000, its neighbor on 2343 Levante at 4400 sqft sold for $495,000. assuming 20% down, the mortgage would have been $396,000 at 8%, or $2900/month.

Now what about the opportunity cost of the respective down payments? Currently, the CD Index rate is 0.28%, by dropping $160k as the downpayment, the buyer is forgoing $448 in lost interest rate.

In 2000, the CD Index rate was 5.5%, so by dropping that $99k for the downpayment, the buyer was giving up $450 in interest payment per month.

essentially, the cost of buying now and back in 2000 are the same. and this is not even adjusting for inflation.[/quote]

OCR,

The house at 2343 (w/2345) is a duplex with two 3/2 units on either side. The house at 2519 Levante was effectively a 3/2 (downstairs) with a *very nice* loft upstairs, but it is a 3/2 SFH (we had made an offer on it). The duplex would have been the better deal, and I believe the buyer of 2519 overpaid and will lose money if they need to sell it within the next ten years (obviously, they outbid us by a large margin).

The bolded part of your post is very important here, IMHO. This is exactly what I was referring to in my response to sdr — when interest rates are this low for this long, savers/cash holders will be MUCH more willing to part with their money than in a higher rate environment. Everyone who is throwing money around today is making a bet that interest rates will stay low for the duration, and/or are betting on inflation. I honestly see both sides of the inflation/deflation debate, and have always been conflicted about it. Right now, our position is entirely unhedged in favor of deflation (all cash), but I’d be lying if I said it doesn’t worry me.

[CA renter]

[quote=ocrenter]2519 Levante in Carlsbad is 4110 sqft and just closed for $800,000. Assuming 20% down of $160k, the mortgage on the $640k at the current 4.5% would be $3200/month.

Back in 2000, its neighbor on 2343 Levante at 4400 sqft sold for $495,000. assuming 20% down, the mortgage would have been $396,000 at 8%, or $2900/month.

Now what about the opportunity cost of the respective down payments? Currently, the CD Index rate is 0.28%, by dropping $160k as the downpayment, the buyer is forgoing $448 in lost interest rate.

In 2000, the CD Index rate was 5.5%, so by dropping that $99k for the downpayment, the buyer was giving up $450 in interest payment per month.

essentially, the cost of buying now and back in 2000 are the same. and this is not even adjusting for inflation.[/quote]

OCR,

The house at 2343 (w/2345) is a duplex with two 3/2 units on either side. The house at 2519 Levante was effectively a 3/2 (downstairs) with a *very nice* loft upstairs, but it is a 3/2 SFH (we had made an offer on it). The duplex would have been the better deal, and I believe the buyer of 2519 overpaid and will lose money if they need to sell it within the next ten years (obviously, they outbid us by a large margin).

The bolded part of your post is very important here, IMHO. This is exactly what I was referring to in my response to sdr — when interest rates are this low for this long, savers/cash holders will be MUCH more willing to part with their money than in a higher rate environment. Everyone who is throwing money around today is making a bet that interest rates will stay low for the duration, and/or are betting on inflation. I honestly see both sides of the inflation/deflation debate, and have always been conflicted about it. Right now, our position is entirely unhedged in favor of deflation (all cash), but I’d be lying if I said it doesn’t worry me.

[CA renter]

[quote=ocrenter]2519 Levante in Carlsbad is 4110 sqft and just closed for $800,000. Assuming 20% down of $160k, the mortgage on the $640k at the current 4.5% would be $3200/month.

Back in 2000, its neighbor on 2343 Levante at 4400 sqft sold for $495,000. assuming 20% down, the mortgage would have been $396,000 at 8%, or $2900/month.

Now what about the opportunity cost of the respective down payments? Currently, the CD Index rate is 0.28%, by dropping $160k as the downpayment, the buyer is forgoing $448 in lost interest rate.

In 2000, the CD Index rate was 5.5%, so by dropping that $99k for the downpayment, the buyer was giving up $450 in interest payment per month.

essentially, the cost of buying now and back in 2000 are the same. and this is not even adjusting for inflation.[/quote]

OCR,

The house at 2343 (w/2345) is a duplex with two 3/2 units on either side. The house at 2519 Levante was effectively a 3/2 (downstairs) with a *very nice* loft upstairs, but it is a 3/2 SFH (we had made an offer on it). The duplex would have been the better deal, and I believe the buyer of 2519 overpaid and will lose money if they need to sell it within the next ten years (obviously, they outbid us by a large margin).

The bolded part of your post is very important here, IMHO. This is exactly what I was referring to in my response to sdr — when interest rates are this low for this long, savers/cash holders will be MUCH more willing to part with their money than in a higher rate environment. Everyone who is throwing money around today is making a bet that interest rates will stay low for the duration, and/or are betting on inflation. I honestly see both sides of the inflation/deflation debate, and have always been conflicted about it. Right now, our position is entirely unhedged in favor of deflation (all cash), but I’d be lying if I said it doesn’t worry me.

[CA renter]

[quote=deadzone]CAR, don’t try to argue economics with sdr as he has clearly been touched by greatness. Just keep in mind he grew up in a neighborhood where 1 out of 8 students went to Ivy league schools! Nearly everyone of his neighbors are doctors, CEOs and nobel prize winners. How could he possibly understand that not all SD residents are wealthy and successful because in his world everybody is.

That clearly explains why high end properties haven’t corrected and never will, there is an endless supply of new wealth. The secret is out now. Unlike 10 or 20 years ago, when San Diego was a sleepy military town with bad weather and polluted ocean water, everything is differnt now. Today, thanks to the improvements to the weather, beaches, expanded downtown bar scene and endless supply of new cookie cutter tract homes, EVERYBODY wants to live here.

Why didn’t I see this before? The secret is out![/quote]

deadzone,

You must have missed the memo: It’s *different* here! 😉

[CA renter]

[quote=deadzone]CAR, don’t try to argue economics with sdr as he has clearly been touched by greatness. Just keep in mind he grew up in a neighborhood where 1 out of 8 students went to Ivy league schools! Nearly everyone of his neighbors are doctors, CEOs and nobel prize winners. How could he possibly understand that not all SD residents are wealthy and successful because in his world everybody is.

That clearly explains why high end properties haven’t corrected and never will, there is an endless supply of new wealth. The secret is out now. Unlike 10 or 20 years ago, when San Diego was a sleepy military town with bad weather and polluted ocean water, everything is differnt now. Today, thanks to the improvements to the weather, beaches, expanded downtown bar scene and endless supply of new cookie cutter tract homes, EVERYBODY wants to live here.

Why didn’t I see this before? The secret is out![/quote]

deadzone,

You must have missed the memo: It’s *different* here! 😉

[CA renter]

[quote=deadzone]CAR, don’t try to argue economics with sdr as he has clearly been touched by greatness. Just keep in mind he grew up in a neighborhood where 1 out of 8 students went to Ivy league schools! Nearly everyone of his neighbors are doctors, CEOs and nobel prize winners. How could he possibly understand that not all SD residents are wealthy and successful because in his world everybody is.

That clearly explains why high end properties haven’t corrected and never will, there is an endless supply of new wealth. The secret is out now. Unlike 10 or 20 years ago, when San Diego was a sleepy military town with bad weather and polluted ocean water, everything is differnt now. Today, thanks to the improvements to the weather, beaches, expanded downtown bar scene and endless supply of new cookie cutter tract homes, EVERYBODY wants to live here.

Why didn’t I see this before? The secret is out![/quote]

deadzone,

You must have missed the memo: It’s *different* here! 😉

[CA renter]

[quote=deadzone]CAR, don’t try to argue economics with sdr as he has clearly been touched by greatness. Just keep in mind he grew up in a neighborhood where 1 out of 8 students went to Ivy league schools! Nearly everyone of his neighbors are doctors, CEOs and nobel prize winners. How could he possibly understand that not all SD residents are wealthy and successful because in his world everybody is.

That clearly explains why high end properties haven’t corrected and never will, there is an endless supply of new wealth. The secret is out now. Unlike 10 or 20 years ago, when San Diego was a sleepy military town with bad weather and polluted ocean water, everything is differnt now. Today, thanks to the improvements to the weather, beaches, expanded downtown bar scene and endless supply of new cookie cutter tract homes, EVERYBODY wants to live here.

Why didn’t I see this before? The secret is out![/quote]

deadzone,

You must have missed the memo: It’s *different* here! 😉

[CA renter]

[quote=deadzone]CAR, don’t try to argue economics with sdr as he has clearly been touched by greatness. Just keep in mind he grew up in a neighborhood where 1 out of 8 students went to Ivy league schools! Nearly everyone of his neighbors are doctors, CEOs and nobel prize winners. How could he possibly understand that not all SD residents are wealthy and successful because in his world everybody is.

That clearly explains why high end properties haven’t corrected and never will, there is an endless supply of new wealth. The secret is out now. Unlike 10 or 20 years ago, when San Diego was a sleepy military town with bad weather and polluted ocean water, everything is differnt now. Today, thanks to the improvements to the weather, beaches, expanded downtown bar scene and endless supply of new cookie cutter tract homes, EVERYBODY wants to live here.

Why didn’t I see this before? The secret is out![/quote]

deadzone,

You must have missed the memo: It’s *different* here! 😉

[CA renter]

[quote=sdrealtor] Be a part of it or be left behind.[/quote]

Buy now, or be priced out…FOREVER!!!!!

(Sorry, sdr, I couldn’t help myself on that one.) 😉

PM for drink time. It’s on us, but you’ll have to pay when we win in 2012. 🙂

[CA renter]

[quote=sdrealtor] Be a part of it or be left behind.[/quote]

Buy now, or be priced out…FOREVER!!!!!

(Sorry, sdr, I couldn’t help myself on that one.) 😉

PM for drink time. It’s on us, but you’ll have to pay when we win in 2012. 🙂

[CA renter]

[quote=sdrealtor] Be a part of it or be left behind.[/quote]

Buy now, or be priced out…FOREVER!!!!!

(Sorry, sdr, I couldn’t help myself on that one.) 😉

PM for drink time. It’s on us, but you’ll have to pay when we win in 2012. 🙂

[CA renter]

[quote=sdrealtor] Be a part of it or be left behind.[/quote]

Buy now, or be priced out…FOREVER!!!!!

(Sorry, sdr, I couldn’t help myself on that one.) 😉

PM for drink time. It’s on us, but you’ll have to pay when we win in 2012. 🙂

[Author]

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