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ParticipantThe residential areas of Bressi Ranch are situated on a “mesa” created by a canyon that runs north-south down Alicante Road to the west, and another canyon that runs east-west along Poinsettia to the south. There is a natural drainage course or creek that parallels the west side of Alicante and wraps east to parallel the south side of Poinsettia. Because of the topography and the city’s desire to maintain the drainage course/creek, the Alicante portion of the creek will be a public park and Poinsettia portion will be a 200 yard wide open space easement.
What is not addressed by “view amenity” permiums being paid by those buyers is that the area west of the Alicante canyon and east of El Camino Real is being developed with 300,000 SqFt of office and industrial buildings; and the downslope area on the south side of the mesa but north of Poinsettia is already being graded for another residential subdivision featuring smaller homes.
The views from inside the homes on the west side of Bressi Ranch will be limited to industrial buildings along El Camino Real because of the setbacks of the structures from the edge of the terraced lots; and the views on the south side of the project will be limited to the narrow open space easement on the south side of Poinsettia. Everything else east of Alicante and north of Poinsettia will be built out with homes. There are a few homes along Keeneland that will have a diagonal view from almost 1/4 mile of the northern tip of the La Costa golf course, but on the bottom floor of the house you have to be standing and looking through the slats in the metal fencing to see it, and you wouldn’t recognize it if you weren’t looking for it – it ain’t much.
I don’t think it’s an accident that the development of the industrial lots didn’t start until after almost all of the Alicante canyon view homesites had already been sold. Or that the upper mesa homes were built out prior to the lower slopes. This would be a little different if the project only included residential projects and the industrial projects were offsite on an adjacent parcel – then the developers could claim they didn’t know and had no control on what was happening on the other parcels. This development was planned this way from the start and the master developer has control over both parts. In my personal opinion the developers have clearly manipulated the development to max the pricing on the homes knowing that they wouldn’t have gotten that pricing if the industrial buildings had been built first.
I truly wonder how many of those buyers realized what they were getting for their money.
All this really calls into question the resale value of these view amenities a couple years down the line. $150,000 is a lot of money for the folks on the west side of Alverton to have paid to look at industrial buildings. As an example, I know of examples of older homes in other areas of Carlsbad with comparable price ranges where such limited “open” views might be worth around $20,000.
ParticipantQuick anecdote No. 1. One of my younger son’s long time time friends have a brother who is a mortgage broker. He’s was making pretty good money at it, had bought the big car and some toys and such. Just a couple months ago he was talking about the new house they were buying.
But now the bottom’s fallen out for them. They’re not only NOT following through with the purchase of the house, but they’re moving in this week with the brother because they’re broke. It seems their credit cards are too maxed to even stay in their rental.
Quick anecdote No. 2. A couple months ago I was reviewing an appraisal for one of my clients on a single family res in E. Vista. The appraisal was pretty bad and I ended up disagreeing with the value conclusion by over $100,000, which basically means rejecting it. That property is now currently listed as a bank-owned foreclosure. Had we not caught the funky appraisal that borrower might have bought themselves a little time at my client’s expense.
Quick anecdote No. 3. That same client, one of a nation’s largest banks, maintains a do-not-accept list of appraisers their QC department has identified as untrustworthy. That list is growing quickly as more and more appraisers attempt to maintain their volumes in the face of a declining market.
These are all the same indicators I saw the last time we went through this. Maybe it’s just my own biases, but it seems like the main difference is how quickly it’s progressing this time.
ParticipantToo little, too late.
This one’s probably going back to the bank. This seller is being stubborn. As far as I can see they would need to drop at least another $25k to get any serious interest. Lots more if they actually do need to do it in the next 30 days. Having a hole in the backyard is going to be a problem, not an amenity, for most buyers right now.
ParticipantWe could be staring down the Japan slope, aka “the long slow slide”. 20 years from trough to trough. Sellers not giving in unless/until forced to do so.
I don’t think it’ll happen but it is one of the possibilities.
ParticipantUnfortunately, there are some people in different areas here who are now chasing their 2004 and 2005 purchase prices and coming up a little short. If you’ve come up short you’re hardly the first, and you surely won’t be the last.
I realize taking even a small loss is painful but look at the bright side – your timing was good enough to get off with only a minor loss. If the current trend continues a lot of people are going to lose a lot more than you.
ParticipantIt’s like everything else. We all want the benefits of big government but we don’t want to pay for them. We choose to spend our money supporting professional sports organizations. We choose to redevelop our downtown for the sole benefit of the developers, leaving our schools and libraries to scramble for light bulbs. We spend almost as much money on the lowest performing 10% of our kids as we do on the other 90% even though most of those underachievers will never appreciably improve. We want the European-style social systems but we don’t want the 55% tax brackets it takes to pay for them.
Collectively, our electorate has the mentality of a teenager – that’s why the political machines operate on such an adolescent level. As far as I’m concerned, we completely deserve the government we get.
ParticipantI reckon this forum probably wouldn’t be a good site to sell anything.
ParticipantThis goes back some years (somewhere around 1980 or so), but there were originally 2 more north-south freeways proposed by the predecessors to SANDAG. One through inland Poway connecting to Hwy-52 and another between I-5 and and I-15 from Hwy-78 to (I think) Hwy 56. Local politics got in the way, particularly from the folks in Poway. So now they have to drive 15 minutes just to get to a jammed I-15.
ParticipantYeah, he did make his profits on resale. He bought while the market was still on its way up and he could see there was room for growth – that’s what justified the slightly higher income multipliers. The better locations contributed to his decision only to the extent that it meant there was more room for growth. When the sales volumes dropped off he started selling. That’s what a smart investor does – they buy while its on its way up and they sell as close to the peak as they can.
In a rapidly increasing market, some investors will even accept a negative cash flow for a short period of time because they know they’ll make up for it when they sell. Once that situation changes, so also changes the price an investor will pay.
ParticipantBasic Baked SPAM
1 can SPAM 2 teaspoons yellow mustard
Whole cloves 2 teaspoons water
2/3 cup brown sugar 1 teaspoon Worchestershire sauce
1 teaspoon vinegarPreheat oven to 375 degrees. Score SPAM in diamond pattern and dot with cloves. Mix sugar, vinegar, mustard, water and Worchestershire. Brush on SPAM. Bake 25 to 30 minutes, basting three or four times. Note: This is a generous amount of topping, enough for two cans of SPAM at once, if you want to serve more.
ParticipantWhat WOULD have made this area a better place to live would have been if the other two north-south freeways that were proposed had been built. Then we wouldn’t by trying to funnel all that north county traffic down 2 freeways.
Of course, it’s too late for that now.
ParticipantIf those construction jobs are paying anywhere close to $20/hour you better believe that English would be the dominant language on the jobsite. Actual hourly wages being paid are closer to $9 or $10, not $20. Cruise by one of these subdivisions going up and you’ll see a lot of beater cars you wouldn’t put your 16-year old into. These guys work hard for what they get paid.
ParticipantI agree with FormerSanDiegan – the monthly statistics are the trees, not the forest. I don’t invest too much meaning in any indicator until they start stacking up. It’s like worrying about the effects of the one foreclosure on the entire neighborhood. By itself, the one low sale is just noise.
ParticipantI agree with 4plexowner – the savvy investors know that, depending on financing costs, an annual multiplier in the 8-10 range will usually throw off a little cash as long as the property doesn’t need a lot of maintenance and they don’t get the tenant from hell. Since they don’t live in these properties, an investor doesn’t (legitimately) qualify for the lending programs with the 95% financing terms so they have to put in more cash. Property taxes and long term maintenance costs have to come out of the rental payments, too.
A $500,000 purchase price results in $450+ per month in property taxes – that’s a lot of money to pay out of a $1,700 monthly rental rate.
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