You know, everyone wants to live in Olde Carlsbad. They love the feel, the walk-ability. The prices may not be at the bottom yet, but you won't know that until they start coming back up. If you see the right house...buy it!
Good luck,

Joan Wilson (Realtor, SRES, Ecobroker)


California Cool 4 Sale
Prudential California Realty
Direct Phone: 760-757-3468
Fax: 760-946-7894
JoanWilson@prusd.com
License # 01341483

It is my Goal to Increase the Success and Profitability of Those I Serve

To date, home prices in coastal North County (i.e. Carlsbad, Encinitas, Cardiff, Solana Beach, and Del Mar) have held firm and stayed steady. To many, we do not appear to either be rising or falling. And I agree… so far.

But the bulk of the ARM loans have not re-set yet. They will. A substantial percentage of North County homeowners have ARM loans. It is true that the upper scale neighborhoods (i.e. $750k - $1.9m) are inhabited by folks who are a little more insulated than other neighborhoods... but only while their insulation lasts. I mean mortgages as an investment vehicle were safe… until they weren’t, right? Fannie/Freddie were AA rated… until they weren’t right?

Some marginal folks in the areas that haven't gotten hit yet will need to sell. And when they do, we will see the beginning of the same downward moving spiral we just saw play out in sub-prime. It is not a socio-demographic thing, but rather a math thing. I see a big pricing correction coming our way.

I am not attached to being right about this... and rather really hope I am wrong. But I was not wrong about the first wave of re-sets. And anyone now claiming how obvious this "sub-prime debacle" was should also see this next wave coming in neon lights. From a 10 year outlook perspective, I bet my career we'll see higher prices than peak. In the next 2-3 years... we're going to get hammered.

Meantime, if you really want to determine the bottom of a micro-market, or better yet, a specific listing within a micro-market, you may be interested in reviewing my "Market Bottom Triangulation" test (see link below).

There are "deals" out there, though I hate the word for the misconceptions it inspires. I see smart money flowing to select REO’s (as vehicles to tie cash to hard assets) in select markets, which are trading at or below the fundamental market cycle bottom, and at or below its intrinsic value, while earning a solid ROI of 7%... and I see other investors buying up similar properties to further validate this sea change.

Here's a graph showing prices for the past 5 years for an average 1900sf detached home in olde Carlsbad. You'll see prices recenty picked up!

http://FileLibrary.MYAASite.Com/Content/12/12509/28525786.jpg

Whenever you consider prices, unless you are a cash buyer, you should also watch interest rates. They affect your cost of ownership just as much.

Just like the stock market, a top or a bottom is only visibile in hindsight.

Tony

Hi John,

Whether to wait 6 to 9 months to buy a property is a tough question to answer. Like the stock market the real estate market is tough to predict. However I have a few buyers looking in this zip code and we are still seeing some foreclosed and Short sales. We are not seeing has many has Oceanside and Vista are seeing, however. This being said, there are some great deals in the 92008 we might continue to see small decline for the remaining of the year, but for sure we won't see any increases for a little bit. If you are thinking of buying a home and selling with in the year I wouldn't recommend buying a home in the San Diego area it will take longer than that to recover from this market.

Dee is 100%, we are stamped with the "Declining Market" by lenders.

Hi John,

The mortgage industry has declared San Diego County a "declining market" which means tougher mortage underwriting restrictions including the possibility of an additional 5% required down payment.
As for olde Carlsbad 92008, it has declined some since 2005; however, Carlsbad has a strong economy, community commitment and outstanding city government that makes it a desireable place to live. Of course, any coastal communities will retain value long after the other parts of San Diego decline. As for buying now, the answer depends on your long term real estate goals.

Your question is a difficult one to answer. Values in coastal San Diego have declined since 2005. It sounds like you may be asking, "Will 92008 decline further?" That's a bit of a crystal ball question, but here's the best that I can answer. The least likelihood of further decline is near the water. As you move away from the ocean, towards Vista and San Marcos, the likelihood of additional loss of value increases. The likelihood that we will see some further decline this year is fairly high simply because we are now past the primary season, and the number of buyers tends to fall off after mid August. There is one big factor that we predict will affect coastal California (the marine and coastal zones) in a positive way, and that's global warming. That's because the inland southwest is going to get increasingly hot while the coastal zone will remain relatively unaffected. But that is a long-term trend and likely not to play much of a role in the short term, which will primarily be determined by availability of mortgages, foreclosure rates, and the economy.