Doom & Gloom…All the Way to the Bank
Doom & Gloom…All the Way to the Bank
Wow. The April issue of DREAM HOMES SAN DIEGO was barely off the press today when we started hearing the buzz from San Diego County real estate circles about this article that is in the issue:
The article makes these key points:
- All real estate is local…and not just by city but by neighborhood.
- Buying real estate in an upscale community is still your best investment.
But please read the entire article. It’s short but chockfull of interesting quotes and statistics and our opinions, some of which you may find controversial. Then post your comments about the piece in this blog. We are also interested in hearing stories about your personal real estate experiences in this market no matter what you do for a living. Thanks.
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We list luxury homes for sale in many of California and the world’s most prestigious communities. These locales are highly sought for the quality of living they offer. From waterfront condo homes to multi-million-dollar estates, our real estate agents can help you find just the right luxury property. Our Dream Agents are the best in the business, many of whom specialize in multi-million-dollar homes and they provide the level of professional advice luxury home buyers need.
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Nice article Dream Homes! I am so sick of hearing about how real estate prices are plummeting. I have lived in La Jolla for years and i see this blowing over just like all the past recessions. The house values are steady from what i have seen in the community. A few cities like Stockton and Detroit seem to give a “doom and gloom” feeling to the rest of the nation. It is refreshing to see a publication finally stand up and tell it how it is. Take care.
I agree with the last post. The media has blow this out of proportion. This article does a good job of showing the return on investmest that real estate has yielded over the years. I own a few homes in the area and I see now as a great time to purchase a few more. While the rest of the country is in a panic now is a time to take full advantage and purchase some under-valued properties. I also agree with the comment about comparing the growth in the stock market to the growth in value of homes in La Jolla or other high-end communities. It is not even close.
I just attended the LuxuryRealEstate.com conference this year in San Diego and the keynote speaker Ben Stein summed it up very well. You buys things when they are “on sale”. Right now properties are “on sale”. Would you rather pay for properties at a high price or when they are “on sale”. All the buyers they are waiting for the bottom will never realize when this happens and will end up paying a lot more for properties than the smart buyers who are buying now at huge discounts. I preach this often on my San Clemente Real Estate Blog at http://www.bclh.com/blog. Let’s go buy some real estate!
Your article caught my eye – but maybe not for the right reasons. When calculating percentage increases, it’s important to do the calculation accurately, and unfortunately, the author of this article needs some help. If the average home price went up from $763,500 in 1997 to $2,408,900 in 2007 – that’s a 12% average increase per year. Not bad, but certainly, not a 315% increase. (Even if it was just a one-year increase – it still isn’t a 315% increase!)Rates of return should be given on an annual basis – or ou are misleading the customer.
There are two sides to this story, however. In places like La Jolla and Pacific Heights of San Francisco, you’re dealing with niche homes where land actually is in short supply. Places like Seattle and Silicon Valley actually are seeing declines in home prices where the fundamentals had been disconnected from 2005 on. La Jolla is in its own right, as it appeals only to .00001% of the population. Condo prices in San Francisco are dropping, home prices in The Bay Area, San Diego, and LA are dropping, and the only places that aren’t are places that are only inhabited by executives who are price inelastic.