[bearishgurl]

[quote=Ren] . . . Like many others, I’m willing to pay a lot more to live in south Carlsbad than Vista. A LOT more. Those areas will always command a premium, and may even be close to their bottom – but what you can’t argue is that those areas aren’t affected by price drops in less desirable areas. Of course it depends on how much people (like me) are willing and able to pay for a nice area (that’s why they command a premium in the first place), but ultimately the sale price also depends on the appraisal and comps (and therefore indirectly, government intervention). No, a big drop in a less desireable area is not going to pound the prices in a nice area, because nicer areas fluctuate less, and rise and fall at different rates. But it does make some impact. That’s all I’m sayin’.

It’s okay to admit that – it doesn’t change the fact that Del Mar is still waaaaay better than Escondido and may be close to being priced right.

Yes, I’m becoming more bullish in my old age.[/quote]

Ren, I understand what you’re saying here. I’m not even particularly “bullish.” But the property you are planning to buy in South Carlsbad in the future will be on tract, no? I don’t believe the way you’re describing it here is the way appraisals are done in the real world. First of all, there could be geographical barriers to using a sold comp from =>6 blocks away (ie freeways, canyons, zip codes, etc). I don’t see sold comps from a different tract used for appraisal purposes to value a property on a certain tract unless there are no recent comparable sales on the SUBJECT’s tract for them to use for a comparable sale.

I’m simply stating that “custom” properties in highly sought-after coastal/urban enclaves and also situated on acreages will not be affected much, if at all, by the lowering of the GSE’s guarantee. For example, it is more difficult for an appraiser to find sold comps for a “custom” property which may have sit-down views at a rare angle, lots of built in mahogany in excellent condition, a particular lot configuation (in an urban area) allowing for concealed boat parking, a Mills Act contract in place, a specially-ordered $50K roof, a garage with a 12′ high garage door to park “toys” in, and the list goes on. The appraiser here will have to make a lot of adjustments to arrive at a value. For this reason, custom properties’ values are “subjective.” In the eyes of the right buyer, they are worth more. There are thousands of these properties in SD County. Their appraisals do not have anything to do with what happens on a tract – even a tract six blocks away.

The buyers who buy the customs in coveted areas and the buyers who buy in a tract even just 6 blocks away are two completely different animals.

[bearishgurl]

[quote=Ren] . . . Like many others, I’m willing to pay a lot more to live in south Carlsbad than Vista. A LOT more. Those areas will always command a premium, and may even be close to their bottom – but what you can’t argue is that those areas aren’t affected by price drops in less desirable areas. Of course it depends on how much people (like me) are willing and able to pay for a nice area (that’s why they command a premium in the first place), but ultimately the sale price also depends on the appraisal and comps (and therefore indirectly, government intervention). No, a big drop in a less desireable area is not going to pound the prices in a nice area, because nicer areas fluctuate less, and rise and fall at different rates. But it does make some impact. That’s all I’m sayin’.

It’s okay to admit that – it doesn’t change the fact that Del Mar is still waaaaay better than Escondido and may be close to being priced right.

Yes, I’m becoming more bullish in my old age.[/quote]

Ren, I understand what you’re saying here. I’m not even particularly “bullish.” But the property you are planning to buy in South Carlsbad in the future will be on tract, no? I don’t believe the way you’re describing it here is the way appraisals are done in the real world. First of all, there could be geographical barriers to using a sold comp from =>6 blocks away (ie freeways, canyons, zip codes, etc). I don’t see sold comps from a different tract used for appraisal purposes to value a property on a certain tract unless there are no recent comparable sales on the SUBJECT’s tract for them to use for a comparable sale.

I’m simply stating that “custom” properties in highly sought-after coastal/urban enclaves and also situated on acreages will not be affected much, if at all, by the lowering of the GSE’s guarantee. For example, it is more difficult for an appraiser to find sold comps for a “custom” property which may have sit-down views at a rare angle, lots of built in mahogany in excellent condition, a particular lot configuation (in an urban area) allowing for concealed boat parking, a Mills Act contract in place, a specially-ordered $50K roof, a garage with a 12′ high garage door to park “toys” in, and the list goes on. The appraiser here will have to make a lot of adjustments to arrive at a value. For this reason, custom properties’ values are “subjective.” In the eyes of the right buyer, they are worth more. There are thousands of these properties in SD County. Their appraisals do not have anything to do with what happens on a tract – even a tract six blocks away.

The buyers who buy the customs in coveted areas and the buyers who buy in a tract even just 6 blocks away are two completely different animals.

[bearishgurl]

[quote=Ren] . . . Like many others, I’m willing to pay a lot more to live in south Carlsbad than Vista. A LOT more. Those areas will always command a premium, and may even be close to their bottom – but what you can’t argue is that those areas aren’t affected by price drops in less desirable areas. Of course it depends on how much people (like me) are willing and able to pay for a nice area (that’s why they command a premium in the first place), but ultimately the sale price also depends on the appraisal and comps (and therefore indirectly, government intervention). No, a big drop in a less desireable area is not going to pound the prices in a nice area, because nicer areas fluctuate less, and rise and fall at different rates. But it does make some impact. That’s all I’m sayin’.

It’s okay to admit that – it doesn’t change the fact that Del Mar is still waaaaay better than Escondido and may be close to being priced right.

Yes, I’m becoming more bullish in my old age.[/quote]

Ren, I understand what you’re saying here. I’m not even particularly “bullish.” But the property you are planning to buy in South Carlsbad in the future will be on tract, no? I don’t believe the way you’re describing it here is the way appraisals are done in the real world. First of all, there could be geographical barriers to using a sold comp from =>6 blocks away (ie freeways, canyons, zip codes, etc). I don’t see sold comps from a different tract used for appraisal purposes to value a property on a certain tract unless there are no recent comparable sales on the SUBJECT’s tract for them to use for a comparable sale.

I’m simply stating that “custom” properties in highly sought-after coastal/urban enclaves and also situated on acreages will not be affected much, if at all, by the lowering of the GSE’s guarantee. For example, it is more difficult for an appraiser to find sold comps for a “custom” property which may have sit-down views at a rare angle, lots of built in mahogany in excellent condition, a particular lot configuation (in an urban area) allowing for concealed boat parking, a Mills Act contract in place, a specially-ordered $50K roof, a garage with a 12′ high garage door to park “toys” in, and the list goes on. The appraiser here will have to make a lot of adjustments to arrive at a value. For this reason, custom properties’ values are “subjective.” In the eyes of the right buyer, they are worth more. There are thousands of these properties in SD County. Their appraisals do not have anything to do with what happens on a tract – even a tract six blocks away.

The buyers who buy the customs in coveted areas and the buyers who buy in a tract even just 6 blocks away are two completely different animals.

[bearishgurl]

[quote=briansd1]…One question is if the lower GSE limits won’t affect anything much, then why are the Realtors fighting them? Do they know something we don’t know?[/quote]

brian, the amount the GSE’s will lower their guarantee (from the current approx $729K) will differ region to region. Nationwide, it used to be $417K. It is not predicted to go below that. $417K is 80% of $521,250. In areas where Fannie/Freddie lower their guarantees back to this amount, it will cover properties in that area priced up to $521,250 if a standard 20% is put down by the buyer. The buyer always has the option to put down more to get a conforming loan. In TX and GA, for instance, $521,250 will buy a VERY large “McMansion” type home on a 1/2 AC+ lot in a prime area. In San Mateo County, CA, it will buy a 1000 sf postwar box situated under the SFO landing path. Of course, the GSE guarantee will not be lowered to mortgages =<$417K in San Mateo County, CA. It will likely be in the 600K range there. The lowering of the GSE's guarantee will not affect cheaper housing states like TX and GA very much, if at all. It will not affect premium "niche coastal markets" on either coast where a typical buyer has many resources to employ in the purchase of RE and commonly does. In SD County, I predict it will adversely affect the value of tracts in INLAND areas adjacent to prime coastal areas where prices ARE AS MUCH AS OR CLOSE TO coastal prices but the house itself (not necessarily the lot) is much bigger and newer. That is, the =>$680K properties in the 56 corridor, inland Chula Vista annexations, Poway and surrounds, Scripps Ranch, North County Inland and other areas where younger people commonly buy into who need mortgages. I can’t say how much these areas will devalue, though. Perhaps the private mortgage lenders will step up to the plate and make their application processes more streamlined, as it was in the past and thus appeal to moderate, middle income and upper-middle income buyers. When the “portfolio” mortgage is being utilized again, it will be a viable choice to a F/F backed mtg. We shall see.

We will not know how much the RE in a given area or state will devalue due to the lowering of the guarantee on conforming loans until the new guarantee amount is set in each housing area in every state.

[bearishgurl]

[quote=briansd1]…One question is if the lower GSE limits won’t affect anything much, then why are the Realtors fighting them? Do they know something we don’t know?[/quote]

brian, the amount the GSE’s will lower their guarantee (from the current approx $729K) will differ region to region. Nationwide, it used to be $417K. It is not predicted to go below that. $417K is 80% of $521,250. In areas where Fannie/Freddie lower their guarantees back to this amount, it will cover properties in that area priced up to $521,250 if a standard 20% is put down by the buyer. The buyer always has the option to put down more to get a conforming loan. In TX and GA, for instance, $521,250 will buy a VERY large “McMansion” type home on a 1/2 AC+ lot in a prime area. In San Mateo County, CA, it will buy a 1000 sf postwar box situated under the SFO landing path. Of course, the GSE guarantee will not be lowered to mortgages =<$417K in San Mateo County, CA. It will likely be in the 600K range there. The lowering of the GSE's guarantee will not affect cheaper housing states like TX and GA very much, if at all. It will not affect premium "niche coastal markets" on either coast where a typical buyer has many resources to employ in the purchase of RE and commonly does. In SD County, I predict it will adversely affect the value of tracts in INLAND areas adjacent to prime coastal areas where prices ARE AS MUCH AS OR CLOSE TO coastal prices but the house itself (not necessarily the lot) is much bigger and newer. That is, the =>$680K properties in the 56 corridor, inland Chula Vista annexations, Poway and surrounds, Scripps Ranch, North County Inland and other areas where younger people commonly buy into who need mortgages. I can’t say how much these areas will devalue, though. Perhaps the private mortgage lenders will step up to the plate and make their application processes more streamlined, as it was in the past and thus appeal to moderate, middle income and upper-middle income buyers. When the “portfolio” mortgage is being utilized again, it will be a viable choice to a F/F backed mtg. We shall see.

We will not know how much the RE in a given area or state will devalue due to the lowering of the guarantee on conforming loans until the new guarantee amount is set in each housing area in every state.

[bearishgurl]

[quote=briansd1]…One question is if the lower GSE limits won’t affect anything much, then why are the Realtors fighting them? Do they know something we don’t know?[/quote]

brian, the amount the GSE’s will lower their guarantee (from the current approx $729K) will differ region to region. Nationwide, it used to be $417K. It is not predicted to go below that. $417K is 80% of $521,250. In areas where Fannie/Freddie lower their guarantees back to this amount, it will cover properties in that area priced up to $521,250 if a standard 20% is put down by the buyer. The buyer always has the option to put down more to get a conforming loan. In TX and GA, for instance, $521,250 will buy a VERY large “McMansion” type home on a 1/2 AC+ lot in a prime area. In San Mateo County, CA, it will buy a 1000 sf postwar box situated under the SFO landing path. Of course, the GSE guarantee will not be lowered to mortgages =<$417K in San Mateo County, CA. It will likely be in the 600K range there. The lowering of the GSE's guarantee will not affect cheaper housing states like TX and GA very much, if at all. It will not affect premium "niche coastal markets" on either coast where a typical buyer has many resources to employ in the purchase of RE and commonly does. In SD County, I predict it will adversely affect the value of tracts in INLAND areas adjacent to prime coastal areas where prices ARE AS MUCH AS OR CLOSE TO coastal prices but the house itself (not necessarily the lot) is much bigger and newer. That is, the =>$680K properties in the 56 corridor, inland Chula Vista annexations, Poway and surrounds, Scripps Ranch, North County Inland and other areas where younger people commonly buy into who need mortgages. I can’t say how much these areas will devalue, though. Perhaps the private mortgage lenders will step up to the plate and make their application processes more streamlined, as it was in the past and thus appeal to moderate, middle income and upper-middle income buyers. When the “portfolio” mortgage is being utilized again, it will be a viable choice to a F/F backed mtg. We shall see.

We will not know how much the RE in a given area or state will devalue due to the lowering of the guarantee on conforming loans until the new guarantee amount is set in each housing area in every state.

[bearishgurl]

[quote=briansd1]…One question is if the lower GSE limits won’t affect anything much, then why are the Realtors fighting them? Do they know something we don’t know?[/quote]

brian, the amount the GSE’s will lower their guarantee (from the current approx $729K) will differ region to region. Nationwide, it used to be $417K. It is not predicted to go below that. $417K is 80% of $521,250. In areas where Fannie/Freddie lower their guarantees back to this amount, it will cover properties in that area priced up to $521,250 if a standard 20% is put down by the buyer. The buyer always has the option to put down more to get a conforming loan. In TX and GA, for instance, $521,250 will buy a VERY large “McMansion” type home on a 1/2 AC+ lot in a prime area. In San Mateo County, CA, it will buy a 1000 sf postwar box situated under the SFO landing path. Of course, the GSE guarantee will not be lowered to mortgages =<$417K in San Mateo County, CA. It will likely be in the 600K range there. The lowering of the GSE's guarantee will not affect cheaper housing states like TX and GA very much, if at all. It will not affect premium "niche coastal markets" on either coast where a typical buyer has many resources to employ in the purchase of RE and commonly does. In SD County, I predict it will adversely affect the value of tracts in INLAND areas adjacent to prime coastal areas where prices ARE AS MUCH AS OR CLOSE TO coastal prices but the house itself (not necessarily the lot) is much bigger and newer. That is, the =>$680K properties in the 56 corridor, inland Chula Vista annexations, Poway and surrounds, Scripps Ranch, North County Inland and other areas where younger people commonly buy into who need mortgages. I can’t say how much these areas will devalue, though. Perhaps the private mortgage lenders will step up to the plate and make their application processes more streamlined, as it was in the past and thus appeal to moderate, middle income and upper-middle income buyers. When the “portfolio” mortgage is being utilized again, it will be a viable choice to a F/F backed mtg. We shall see.

We will not know how much the RE in a given area or state will devalue due to the lowering of the guarantee on conforming loans until the new guarantee amount is set in each housing area in every state.

[bearishgurl]

[quote=briansd1]…One question is if the lower GSE limits won’t affect anything much, then why are the Realtors fighting them? Do they know something we don’t know?[/quote]

brian, the amount the GSE’s will lower their guarantee (from the current approx $729K) will differ region to region. Nationwide, it used to be $417K. It is not predicted to go below that. $417K is 80% of $521,250. In areas where Fannie/Freddie lower their guarantees back to this amount, it will cover properties in that area priced up to $521,250 if a standard 20% is put down by the buyer. The buyer always has the option to put down more to get a conforming loan. In TX and GA, for instance, $521,250 will buy a VERY large “McMansion” type home on a 1/2 AC+ lot in a prime area. In San Mateo County, CA, it will buy a 1000 sf postwar box situated under the SFO landing path. Of course, the GSE guarantee will not be lowered to mortgages =<$417K in San Mateo County, CA. It will likely be in the 600K range there. The lowering of the GSE's guarantee will not affect cheaper housing states like TX and GA very much, if at all. It will not affect premium "niche coastal markets" on either coast where a typical buyer has many resources to employ in the purchase of RE and commonly does. In SD County, I predict it will adversely affect the value of tracts in INLAND areas adjacent to prime coastal areas where prices ARE AS MUCH AS OR CLOSE TO coastal prices but the house itself (not necessarily the lot) is much bigger and newer. That is, the =>$680K properties in the 56 corridor, inland Chula Vista annexations, Poway and surrounds, Scripps Ranch, North County Inland and other areas where younger people commonly buy into who need mortgages. I can’t say how much these areas will devalue, though. Perhaps the private mortgage lenders will step up to the plate and make their application processes more streamlined, as it was in the past and thus appeal to moderate, middle income and upper-middle income buyers. When the “portfolio” mortgage is being utilized again, it will be a viable choice to a F/F backed mtg. We shall see.

We will not know how much the RE in a given area or state will devalue due to the lowering of the guarantee on conforming loans until the new guarantee amount is set in each housing area in every state.

[bearishgurl]

[quote=Eugene]Hey, I can argue that it’s a positive.

Right now we have one continuous market up to about $900k.

When the hammer falls, we’ll have two markets. One up to $700k where anyone can buy with 20% down and borrow the rest at 4.5%; and the other above $700k, where you have to put 30% down and borrow at 5.5%.

This is bad for the second market (but it is not a big deal, because people selling houses above $700k have a lot of wherewithal), but it increases activity across the market for the rest of us.[/quote]

In SD County, the new conforming limit will be $546,250. This is 80% of $682,821. This will be the *new* maximum sales price for a buyer utilizing a conforming loan and putting 20% down.

[bearishgurl]

[quote=Eugene]Hey, I can argue that it’s a positive.

Right now we have one continuous market up to about $900k.

When the hammer falls, we’ll have two markets. One up to $700k where anyone can buy with 20% down and borrow the rest at 4.5%; and the other above $700k, where you have to put 30% down and borrow at 5.5%.

This is bad for the second market (but it is not a big deal, because people selling houses above $700k have a lot of wherewithal), but it increases activity across the market for the rest of us.[/quote]

In SD County, the new conforming limit will be $546,250. This is 80% of $682,821. This will be the *new* maximum sales price for a buyer utilizing a conforming loan and putting 20% down.

[bearishgurl]

[quote=Eugene]Hey, I can argue that it’s a positive.

Right now we have one continuous market up to about $900k.

When the hammer falls, we’ll have two markets. One up to $700k where anyone can buy with 20% down and borrow the rest at 4.5%; and the other above $700k, where you have to put 30% down and borrow at 5.5%.

This is bad for the second market (but it is not a big deal, because people selling houses above $700k have a lot of wherewithal), but it increases activity across the market for the rest of us.[/quote]

In SD County, the new conforming limit will be $546,250. This is 80% of $682,821. This will be the *new* maximum sales price for a buyer utilizing a conforming loan and putting 20% down.

[bearishgurl]

[quote=Eugene]Hey, I can argue that it’s a positive.

Right now we have one continuous market up to about $900k.

When the hammer falls, we’ll have two markets. One up to $700k where anyone can buy with 20% down and borrow the rest at 4.5%; and the other above $700k, where you have to put 30% down and borrow at 5.5%.

This is bad for the second market (but it is not a big deal, because people selling houses above $700k have a lot of wherewithal), but it increases activity across the market for the rest of us.[/quote]

In SD County, the new conforming limit will be $546,250. This is 80% of $682,821. This will be the *new* maximum sales price for a buyer utilizing a conforming loan and putting 20% down.

[bearishgurl]

[quote=Eugene]Hey, I can argue that it’s a positive.

Right now we have one continuous market up to about $900k.

When the hammer falls, we’ll have two markets. One up to $700k where anyone can buy with 20% down and borrow the rest at 4.5%; and the other above $700k, where you have to put 30% down and borrow at 5.5%.

This is bad for the second market (but it is not a big deal, because people selling houses above $700k have a lot of wherewithal), but it increases activity across the market for the rest of us.[/quote]

In SD County, the new conforming limit will be $546,250. This is 80% of $682,821. This will be the *new* maximum sales price for a buyer utilizing a conforming loan and putting 20% down.

[bearishgurl]

[quote=earlyretirement]…And I do agree with you BG that the coastal areas will be less affected by the loan reduction limits but I do think nonetheless it will make a difference.

I think that San Diego will always be a more desirable market and will attract a wealthier crowd in the nicer neighborhoods.

While there are a lot of wealthy folks in that area, there are still plenty of people that lived beyond their means. Lots of folks even with good income streams were taking equity out of their homes, etc.

Just a look at the scary high number of Americans that have NEGATIVE equity on their homes speaks volumes and isn’t something you can argue with. By the end of this year, the percentage of Americans with negative equity could be upwards of 35% depending how much properties fall. That’s a staggering #.

So yeah there are a lot of wealthy people that didn’t over extend themselves but there are lots that did.[/quote]

ER, I don’t see how there could be a “trickle down” effect of lowered values to La Playa San Diego (92106) or Del Mar Village because a homeowner in SantaLuz (92127) or Scripps Ranch San Diego (92131) lost their (valued at over $680K) property to foreclosure.

SantaLuz IS a custom area but situated in a less-desirable inland area and also heavily encumbered by CFD(s). Scripps Ranch is predominantly on tract (except for some fire rebuilds). No matter what improvements were made to a property there, when all is said and done, it IS a tract home situated in a tract area. That fact in itself sets a “ceiling” on values. Very few buyers will pay a premium for over-improvements on a tract.

Since you are living out of the area, why don’t you try this exercise before you visit? Take an urban zip code such as 92103 or 92106 and compare the current distress in it with a suburban or exurban zip code (such as the two above or their surrounds). Study ONLY SFR’s (condos have a much higher rate of underwater owners and walkaways).

I think you are mistaken on your assertion that most of the valuable coastal property is owned by “highly educated” people or even career people. Perhaps 50% of it is and even a higher percentage in sdr’s outlying NCC. But in the urban core, the valuable RE is mostly owned by the over-55 set. This demographic may or may not have a college education or even a complete HS education. They may be widows/widowers (remarried or not) and other heirs. Due to the familial pass-thru provisions of Prop 13, an heir often bought out other heirs so they could live in a low-tax property for life. If the last parent died 15+ years ago, it may have not cost them that much to buy their siblings out. If you were a 62 year-old female who inherited your parent’s 70+ year-old well-appointed, well-located valuable home in Mission Hills (92103) and also their tax base, would you mortgage it and screw up your entire future just because it is now 2004 and an easy-lending bubble floated thru the statosphere? I think not. Many of these people are on fixed incomes. Whatever their house is worth is on paper only to them, until they decide to sell or die, whichever occurs first.

These are often the unusual custom properties we see marketed with a “wishful” price. If the marketing “experiment” doesn’t work, the listing is withdrawn. It’s not about seller-delusion because there is no distress here. No one wanted that particular property at that price at that time (with all the distressed properties around to choose from) and that’s okay for now. It’s a free country.

Custom properties vs. tracts are apples and oranges. Older and newer areas are apples and oranges. The buyers and owners in these respective areas are also apples and oranges as is their levels of “distress.”

In short, CA RE values and levels of distress vary widely from micromarket to micromarket. This will never change.

[bearishgurl]

[quote=earlyretirement]…And I do agree with you BG that the coastal areas will be less affected by the loan reduction limits but I do think nonetheless it will make a difference.

I think that San Diego will always be a more desirable market and will attract a wealthier crowd in the nicer neighborhoods.

While there are a lot of wealthy folks in that area, there are still plenty of people that lived beyond their means. Lots of folks even with good income streams were taking equity out of their homes, etc.

Just a look at the scary high number of Americans that have NEGATIVE equity on their homes speaks volumes and isn’t something you can argue with. By the end of this year, the percentage of Americans with negative equity could be upwards of 35% depending how much properties fall. That’s a staggering #.

So yeah there are a lot of wealthy people that didn’t over extend themselves but there are lots that did.[/quote]

ER, I don’t see how there could be a “trickle down” effect of lowered values to La Playa San Diego (92106) or Del Mar Village because a homeowner in SantaLuz (92127) or Scripps Ranch San Diego (92131) lost their (valued at over $680K) property to foreclosure.

SantaLuz IS a custom area but situated in a less-desirable inland area and also heavily encumbered by CFD(s). Scripps Ranch is predominantly on tract (except for some fire rebuilds). No matter what improvements were made to a property there, when all is said and done, it IS a tract home situated in a tract area. That fact in itself sets a “ceiling” on values. Very few buyers will pay a premium for over-improvements on a tract.

Since you are living out of the area, why don’t you try this exercise before you visit? Take an urban zip code such as 92103 or 92106 and compare the current distress in it with a suburban or exurban zip code (such as the two above or their surrounds). Study ONLY SFR’s (condos have a much higher rate of underwater owners and walkaways).

I think you are mistaken on your assertion that most of the valuable coastal property is owned by “highly educated” people or even career people. Perhaps 50% of it is and even a higher percentage in sdr’s outlying NCC. But in the urban core, the valuable RE is mostly owned by the over-55 set. This demographic may or may not have a college education or even a complete HS education. They may be widows/widowers (remarried or not) and other heirs. Due to the familial pass-thru provisions of Prop 13, an heir often bought out other heirs so they could live in a low-tax property for life. If the last parent died 15+ years ago, it may have not cost them that much to buy their siblings out. If you were a 62 year-old female who inherited your parent’s 70+ year-old well-appointed, well-located valuable home in Mission Hills (92103) and also their tax base, would you mortgage it and screw up your entire future just because it is now 2004 and an easy-lending bubble floated thru the statosphere? I think not. Many of these people are on fixed incomes. Whatever their house is worth is on paper only to them, until they decide to sell or die, whichever occurs first.

These are often the unusual custom properties we see marketed with a “wishful” price. If the marketing “experiment” doesn’t work, the listing is withdrawn. It’s not about seller-delusion because there is no distress here. No one wanted that particular property at that price at that time (with all the distressed properties around to choose from) and that’s okay for now. It’s a free country.

Custom properties vs. tracts are apples and oranges. Older and newer areas are apples and oranges. The buyers and owners in these respective areas are also apples and oranges as is their levels of “distress.”

In short, CA RE values and levels of distress vary widely from micromarket to micromarket. This will never change.

[Author]

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