Forum Replies Created
-
AuthorPosts
-
March 27, 2007 at 6:33 PM in reply to: millionaires moving in keeping prices flat in high-end markets? #48575
gn
ParticipantMr. Calbreath failed to mention that, for every millionaire household moving into SD, there will be 5 households:
– Barred from entry into the market b/c of the sub-prime meltdown.
– Or, lose their primary residences to foreclosure b/c of ballooning mortgage payment.
– Or, lose their investments properties b/c of ballooning mortgage payment.ParticipantSD Realtor said:
>> I was also curious as this spring it has been really tough negotiating with
>> the builders. Last summer it seemed like they were much more
>> negotiableI think the builders in 4S have been aggressively lowering prices in the last 12 months. And to be fair, 18% in 12 months is aggressive! They probably think that they’ve done enough to bring in buyers. From the builders’ point of view, keep lowering prices will send the “wrong message”. So, they want to be “firm on prices” and hope that the coming “spring bounce” will help.
Since the lenders are tightening credit standards, sales for this Spring & Summer will probably be weak.
I suspect that the next round of price reductions will come during late summer/early fall. Because, builders won’t want to wait another 6 months until Spring 2008.
ParticipantOne of the most well-kept secrets in real estate is: it’s possible for builders to make money, even in a downturn.
When prices go down, builders pressure the subcontractors to reduce construction costs. The subcontractors really have no choice but to comply, b/c all builders are doing this.
The prices of building materials also go down. The crucial thing is land cost. I think the land in 4S was purchased in 2001 or even earlier, so the cost is not so high.
>> If they are at a far along stage, they are not going to stop
I agree with surveyor on this.>> the floor plan we are looking at sold last year for $880K and is now at $720K
That’s a 18% reduction. What is the size (sq. ft.) of this floor plan ?ParticipantThanks to SD Realtor & MANmon for the reply.
The thing that surprised me is that PUSD is assigned to Stonebridge even though it is in Scripps Ranch.
– Is it because the current SD Unified schools in that area are overcrowded ?
– Or is it the result of the builders/developers “lobbying efforts” ?
– I understand that any neighborhood’s school can change. But, in this case, it seems very likely ? Am I wrong ?ParticipantCT,
Exotic mortgages owned by people with good credit fall into the “Alt-A” category. This category is also at risk. It’s just that the risk is relatively lower. Right now, the sub-prime implosion is so spectacular, it attracts all of the attention.
IMO, defaults in the “Alt-A” category will be the “next wave” after the current wave of sub-prime defaults. Stay tuned, there will be more bad news for this category in the months ahead. Here is one article:
http://www.reuters.com/articlePrint?articleId=USN0222181120070302
ParticipantSD Realtor,
When a buyer “reserve a home” with some good faith money & prices go up, the buyer benefits from the appreciation.
If prices go down, why would a builder allow the buyer to walk away (getting the good faith money back) ? It just seems like a lose/lose proposition for the builder.
ParticipantChewie83,
Thanks for the info.
No, I’m not filthy rich. I am waiting for the prices at Crosby to go down to my price range 🙂
ParticipantSDCellar,
Thanks for your answer.
The reason that I’m asking is I may buy in Crosby (maybe in 2 years). I work in Rancho Bernardo. What is the best way to get to RB (besides using Del Dios to get to Fwy 15) ?
ParticipantLooking at the map, Bing Crosby Blvd can be easily “connected” to Artesian Rd.
>> I don’t believe you’ll ever be able to go from Crosby to 4S Ranch
Is this intentional to preserve the values of the homes in Crosby Estates ?
ParticipantHe’s trying to preserve his legacy.
Greenspan is no fool. He knows that there will be “collateral damages” to the economy from the housing downturn. A few years ago, Greenspan was on the record cheering the housing bubble. If the economy is hit hard, he’ll be blamed.
He’s trying to associate any possible recession with the “end of the business cycle”. Now, to be fair, the business cycle does play a factor. IMO, it’s a small factor. The bursting of the credit bubble (that manifests itself as a housing bubble) is the big factor.
February 26, 2007 at 10:31 AM in reply to: Is it just me or has the troll quotient ratcheted up recently? #46246ParticipantActually, I think there are 3 stages in a correction:
1. Disbelief – Impossible. Everyone needs a roof over his head. Real estate is different from stocks. One can live in a house. One cannot live in a stock.
2. Acceptance – Yeah, prices have been down. But, we are near the bottom.
3. Despair – House are terrible investments …
In San Diego, I think most people are in stage 2. There are a few in stage 1 (these people haven’t pull their heads out of the sands).
ParticipantI agree with SD Realtor about the developers’ ability to survive. Builders like Pardee have been around for many decades. They have been through a few real estate cycles.
In a downturn, the prices of building materials go down. Same for labor costs & land prices. It’s still possible to make money.
ParticipantIf the house is such a bargain (relative to the current market price) that it screams: BUY ME, should you buy it ?
There is a phrase for this: “catch the falling knife”.
The problem with the current San Diego market is this: Even if you buy a house at 10% under the current market price, that “10% cushion” will disappear by the end of 2007. And prices will go down further in 2008.
One other thing. In general, it’s a bad idea to buy a house whose value is at/near the top of a neighborhood. For example, buying a $800k house in a neighborhood whose value range is $500k – $850k.
It’s better to buy a $800k house in a $750k – $1Mil neighborhood.
ParticipantGiven the following:
1. It is difficult to sell in Temecula
2. The owner’s asking price is unrealistic
3. He is probably underwater
4. He is probably having an exotic mortgage that is resetting (payment amount going up).There is a decent chance that the owner will default. In some of these situations, the owner continues to collect the rent from the tenant (even though he stops making payment to the lender).
When the lender forecloses on the house, the tenant will be given a notice to move. I am not saying that this will happen. But you need to be aware of that possibity.
-
AuthorPosts