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gn
Participanthammer,
I can’t help but thinking that you are exhausted from waiting for the last 5 years. And now, there is this seemingly “incredible” opportunity that knocks. So, it’s understandable that you want to make a leap.
In today’s market, where real estate is a depreciating asset & lenders are tightening credit standards, cash is KING. There are many desirable areas in SD county with ocean views, I wouldn’t worry about the lack of buying opportunities 15 months from now. If anything, there will be more opportunities/bargains next year.
May 4, 2007 at 11:52 AM in reply to: Outstanding housing market analysis at National City bank #51859Participant“then you have nice little spots like Temecula…that are basically outcroppings of the SD market and OC market… 90% of it is upscale, cleancut, etc.”
The problem with Temecula is it’s infested with speculations/fraud. While the houses in Temecula may look nice on the outside, it is the financings of the houses that are crummy. In the next few years, foreclosures will mushroom in Temecula.
I suspect that the main reason Temecula looks good now b/c most of it is relatively new. Overtime, new houses will become old. This is why, in real estate, it’s all about the location. And Temecula is “location challenged”.
Temecula is an “outcropping” of SD & OC. Riverside is also an “outcropping” of OC & LA. Riverside used to be new & looked good too.
May 3, 2007 at 4:01 PM in reply to: question about building new – is there also a land bubble? #51664Participant“… the value of the dirt under the shack will be far more valuable than the corresponding bare lot dirt because of the entitlement value of a house vs dirt.”
El Jefe, what is “the entitlement value of a house” ?
Participant“These spec builders have built a lot more McMansions than our market can support, and more are in process as we speak”
Currently, where are they building in 92067 ?
Participant“Stick around – I’ll bet at some point you’ll be able to buy a shell with no flooring, fixtures or appliances and design your custom interior yourself. The only question for the builder will be how to avoid disclosing that sale price in the public records so as to not piss off their other buyers.”
Is this b/c in a downturn it’s easier to sell a “shell” ?
Did the same thing ocured during the last downturn ?ParticipantSD Realtor,
Thank you very much for the information.
The information you came up explains why 7819 Camino De La Dora is not selling.
Is Cielo the least expensive part of RSF b/c it’s on the eastern most part of RSF ?
I looked up 7992 Camino De La Dora on Zillow. Zillow showed the house being situated behind another house (7976). From the front door of 7992, you look directly into the back yard of 7976. Isn’t that odd ? Why would anyone want to buy a luxury house that is situated behind another house ?
ParticipantOzzie,
Do you know the traffic pattern on Del Dios ? As in, which direction (east or west) is the traffic heavy in the morning & afternoon on a weekday ?
ParticipantSD Realtor & sdrealtor,
I was wondering if you can provide your opinion on the following property:
http://www.sdlookup.com/MLS-061058403-7819_Camino_De_La_Dora_Rancho_Santa_Fe_CA_92067
It’s been on the market for a long time. In January, it was reduced to $1.8M. What would be a fair price for it ?
May 2, 2007 at 11:45 AM in reply to: question about building new – is there also a land bubble? #51618Participant“otherwords, can I expect the price of building a new custom house to decline as the overall housing market does, or is that not borne out over history?”
Yes. When home prices are high, everyone is building. The demand for contractors & construction labor is high.
You want to build your house when prices hit “the bottom”. At that time, contractors will be begging for your business & go out of their way to do a good job with minimal delays.
Also, the prices of construction materials & labor will be lower.
April 30, 2007 at 11:37 AM in reply to: Price drop will be to pre bubble DOLLARS or adjusted for inflation??? #51456ParticipantThere are 2 reasons that can make a house valuable (i.e. worth keeping):
1. It’s a shelter.
2. It’s a “profitable” investment.Shelter: Currently, there’s a large surplus of homes. So, there’s more than enough “shelter” for everybody. Of course, over time, the population increases. But it will take a long time for the population count to catch up.
Keep in mind that builders are currently still building, adding more to the existing surplus. While the population count is “catching up to the supply”, prices will keep going down.
Investment: At current prices, it’s impossible to generate REAL positive cash flow. That is, without using an exotic mortgage to artificially lower the payment. As long as it’s unattractive to buy, investors will stay away.
A “bottom” will be found when prices are low enough that it’s profitable for investors to buy properties & rent them out.
It will be the investors who will save the market. Note that I said “investors” not “speculators”.
Unlike speculators, investors make their buying decisions based on fundamentals. They will buy ONLY when prices are low enough that it’s profitable to buy properties & rent them out.
Most speculators don’t understand the RE market. They are driven by market psychology, emotions … So, the role of speculators in “firming up prices” will be small. If anything, speculators will panic & drive prices down further.
It probably seems counter-intuitive that price can fall to levels where it’s less expensive to buy than rent. But, it can, here’s why:
If you don’t have a place to live, then a “roof over your head” has a lot of value. Now, once you already has a place to live, an extra house only has value if it’s “profitable” to keep it.
When that “extra property” has excessive negative cashflow and/or is a depreciating asset, there’s a very strong motivation to get rid of it.
A valid/fair question would be: If it’s less expensive to buy, why don’t all of the renters buy ?
Answer: it’s only less expensive to buy IF one has:
1. The down payment
2. A good credit history to obtain a loan
3. The income that qualify for the loan.Not all renters have all of the above.
This is why there is an old saying: “Excessive things correct themselves excessively”. That is, not only will the correction bring prices back to where they are in-line with incomes, the correction will “overshoot”.
ParticipantSD Realtor,
If you have a client who wants to buy a resale house (whose owner is NOT in any financial trouble). Your client wants to make an all cash offer. What sort of premium is that all-cash offer worth ?
April 28, 2007 at 4:17 PM in reply to: 4S Ranch – (3000+sq/ft update) Pienza / Evergreen / Maybeck #51380Participanttemeculaguy,
Thanks for telling us what’s going on in Temecula.
“… she confirmed, not one sale and that phase is being framed and may have passed some room option cutoffs”
What do you mean by “being framed” ?
And “may have passed some room option cutoffs” ?ParticipantSD Realtor,
“Yes a cash deal is always faster because there is no financing involved”
In a typical (i.e. non-short sale) situation, when a buyer makes an all cash offer, what kind of discount (i.e. under the market value) can he expect (since an all-cash offer is a very strong offer) ?
Participant“Apparently he said it wasn’t that hard to negotiate with these folks in 4closure ranch”
This is because, in a short sale situation, the seller just want to walk away from the property. Effectively, it’s the lender that’s deciding whether to accept the offer.
Currently, most sellers in 4S (who are not in financial trouble) are still in denial about the value of their properties. This is not surprising. The builders know this and are using this fact to undercut the resellers by offering lower prices.
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