San Diego luxury segment

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Submitted by Stripes on March 10, 2017 - 1:30pm

I was wondering if anybody had opinions or research on whether the San Diego luxury real estate market may soften, and when, as they have in NY and SF due to more supply coming online. Also, what price point does the luxury market in San Diego start at? Thanks.

Submitted by spdrun on March 10, 2017 - 1:35pm.

The apartments in NYC that have softened are the ones that don't make sense at 50% of the peak price. Condos with crushing taxes, HOA fees, and massively overpriced -- one could buy an entire building for that kind of dough.

Submitted by flu on March 10, 2017 - 6:23pm.

Define what luxury means :)

Submitted by harvey on March 10, 2017 - 7:31pm.

It's anything you can't afford.

Submitted by flyer on March 10, 2017 - 7:45pm.

As in other areas of the country, there has been some softening in the luxury market in San Diego, and what we're seeing wrt luxury properties that are selling near properties we own, seems to be a mixed bag.

Essentially, the closer you get to the coast, the less softening (increases are far more iikely and sustainable) and the faster homes sell.

Below, are a couple of slightly outdated links/stats (by about a year) that might be of help, and, I'm sure some of the great realtors on this forum will also respond to your questions.

http://www.sandiegouniontribune.com/busi...

92024 Encinitas: $1,020,000. ...
92130 Carmel Valley: $1,227,500. ...
92075 Solana Beach: $1,290,000. ...
92014 Del Mar: $1,465,000. ...
92037 La Jolla: $1,675,000.
92118 Coronado: $1,865,000. ...
92091 Rancho Santa Fe: $1,990,000.
92067 Rancho Santa Fe: $2,737,500.

You can search for current homes for sale in these zip codes at sdlookup.com to get a better idea of current pricing.

Submitted by gzz on March 11, 2017 - 8:12pm.

In 92107, the 1.2 million and up segment was much slower than the rest of the market for years. Not doing badly, but those houses would take 4-6 months to sell while the rest of the market took 0-1.5 months. The past year and a half, they are both equally hot and tend to sell in under 1.5 months.

Of course both of our flyer posters would consider a 2400sf 1.3 million ranch in sunset cliffs unacceptablely cramped rather than a luxury!

Submitted by gzz on March 11, 2017 - 8:18pm.

I do wonder how such a large share of new construction can be $2700/mo 2 bedroom apartments and $1900 one bedrooms without saturating that market segment. They seem like poor values to me, but they all get snapped up. Maybe they are new residents whose frame of reference is NYC and SF, so they look like deals.

Submitted by Stripes on April 17, 2017 - 2:29pm.

Related to this topic, here is a link that talks about the rent declines that Manhattan has experienced in the last year, as high end, new construction rentals come online. The same thing is happening in SF.

Even though the new supply is high end, it is giving renters of every apartment size negotiating power, as detailed in the article.

In terms of home purchases in these two cities, it seems like prices are falling at the high end while the low end is still seeing increases. No word yet on how the low end home price growth will react to the rent declines.

Reports say that financial services and tech wages in these cities are stagnating, which could be a good explanation for the softness at the top.

Wonder if San Diego will follow suit with rent decreases, more home price softening at the high end, and continued home price growth at the low end.

https://www.bloomberg.com/news/articles/...

Submitted by spdrun on April 17, 2017 - 2:57pm.

Here's to it being the beginning of a rent-driven bubble going "phut" in all coastal cities nationwide.

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