[KingKong]

One more thing,

12465 was recorded on 9/22/06 but nobody moved in until end of November.
12469 was recorded on 11/1/06 but people did not move until 2/07.
12453 was recorded on 2/1/07 but people did not move in until 5/07.

[KingKong]

PS,

What’s your web site address? I would be very interested in reading them 🙂

[KingKong]

The Ghost Town: Verona Development in Carmel Valley

Hi heavyd,

My friend went there last night to do some trick’treat and got a real surprise: none of the eight houses were occupied despite all the “sold” signs on the lawn for over three months.

Yes, it got a great location. But the biggiest problem with development is that it is surrounded by the Pines development which are either zero-lot or twin homes with no more than 1800 square feet.

The price has come down as you noticed. But it has to go even lower to attract serious buyers. If you read my posts on this board, you will know that I am not predicting a bust. I see another 10 to 20 percent down.

[KingKong]

Rental Math:

From the landlord perspective, a vacant place means losing money. For instance, if rental is $1000 a month, that’s $12,000 a year in rent. If the place sits empty for a month, he can only get $11000 for the year. In order to get the same amount of money, he needs to hike the rent to $12000/11=$1,100.

[KingKong]

My thoughts on the divergence:

Smaller houses are relatively old. Nowadays the land is so expensive in CV, greedy builders tries to put as much house as possible on a given land. People who like spaces would rather buy a smaller old house vs a mini-mansion that you can shake hands with your neighbour on the second floor.

The other day I went to a new fill-in development Verona. It sits in the Pines neighbourhood where zero-lot houses are around 1800sf on over 5000sf lots and sells for 670K right now. The new houses in Verona sits on less land, around 4000sf and much bigger, around 2500sf and sells for over 900K. This is an extremely example even in Carmel Valley. No wonder nobody moved in yet. Do not believe the sold signs. Go over there at night and knock at your potential new neighbour’s door to find the real scoop.

[KingKong]

When and where is the meetup?

Hi Powayseller, I missed last one. I will be interested in attending this one if possible. My son has soccer matches on Saturday so the timing might be important.

[KingKong]

Hi Powayseller,

Thanks for the nice post. I just saw it today.

I am still around but did not get much time to contribute.

I surely flattered by your appreciation.

Back to the jungles 🙂

[KingKong]

Hi gs,

I totally agree with you. 10 years ago, San Diego was a vacation destination with no traffic and smog. Now San Diego is a high tech hub with defense, wireless and pharmaceutical research and drug development. Daily commute is a struggle for everyone and you do not need to go to LA to see smogs.

IMHO, the price will drop (we already see a 10% drop) a little further. But I just can’t see a drop more than 30%. I also do not think it will be a quick recovery. I see at least 5 years to get back to the peak in dollar amount.

Just my 2 cents.

Back to my jungles 🙂

[KingKong]

Hi Powayseller,

Thanks for replying 🙂

I have not been there since my Feb visit. I loosely followed their online information at http://pardeehomes.com/index.php?startat=%2Fcalifornia.php%3F. At first, Pardee will list all the available homes and their prices. Later on, they stop posting that information and introduced “Featured Home” to list a single house. This trick has been discuss in another thread on Torrey Hills communities by Pardee.

You might notice the specials in the middle:
“Specials

SPECIAL FINANCING and PRICE REDUCTIONS on select lots!”

So I think there is more inventory than Feb.

Here’s another question for you. What would you do if we are the seller trying to sell in this buyer’s market?

[KingKong]

Gosh, so many post in a day. I am swampped just to read all the postings.

This technician (assumes making 60K) purchased a house for less than 700K and within 4 years, it is appreciated to 1.1M. He paid (assume a 4% interest rate) 28K*4=112K in four years and if he sells now, he will get back over 300K tax-free. What’s his rate of return? 300K/112K, that is close to 300% within 4 years.

My point is that just like the tech boom in 1999, if you buy and sell right away, you are making big money. If you do not cash out, you will be in trouble. That’s also called the bigger fool theory. I respect the “fool” who bought and sold at the right time and laugh at the bigger fool who bought and hold although the difference between them may be just purely luck.

If I remember correctly, PS was calling for a 40% decline. For his 1.1M mansion, 700K is where it should be. So as long as he can afford the payment, everything is great.

Yes, only if he can afford the payment 🙂 As they said, devid is in the details.

[KingKong]

This is very rare.

Tricks for developer is incentive, incentive and incentive. They will do everything to protect the sale price. Because a low sale price will lower the value of the rest of his inventory. The sale price is public but the incentive is behind the table.

Last time I visited Portico, also in Pacific highland ranch, in Feb, they were offering 30K on a finished house of 799K. If you want to buy now, remember to ask for 10 to 20% of sale price in incentives.

Good luck!

[KingKong]

I think the title is very misleading. This technician lives in a house worth 1.1M but only pays interests on less than 700K. He is enjoying a profit over 300K. This is a great investment!

If he sells even below the market, he can reapp a big fat profit that is not to be laughed at. He made a smart financial decision four/five years ago. I want to applause his financial smarts.

Now the issue is if he could not afford his new payment in 2007, the best choice for him is to sell, even below the market. This will allow him to take the profit and run. In a declining market, preserve your gain/capital is the #1 priority.

[KingKong]

I think the new 20ers are mostly well educated like you and holds more professional jobs than previous generations. Look at yourself, with just four, five years out of college, you are making more money than most of the people in San Diego. I am not sure of the percentage but you are at least in the top 5% of all SanDiegans. With you are so young and early in your career, you have better days ahead of you. I think this new generation are more confident with themselves and will have a bright future.

[KingKong]

Do you know how they calculated this:

“The average 401K has $50K in it and about 33% of them have less than $35K.”

Did they consider the situations that people change their jobs and leave the 401K account behind with their previous employer? I have four accounts with my previous employers and the total is about $100K. If they did not do it correctly, the average will be $25K and 100% of them have less than $35K.

[KingKong]

Fresh off the press:

“Take advantage of special financing and price reductions at Portico,
for one day only! You have been chosen to receive this private
invitation, in advance of the public release…and now is your
chance to purchase a home in Carmel Valley!

You are invited to a Private Sale
Saturday, May 20, 2006 – 9:00 am
At Portico in Pacific Highlands Ranch
“

[Author]

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