There’s a $40-million mansion for sale in Rancho Santa Fe . The main house has eight bedrooms, and the 40-acre spread also comes with two guest cottages that add 10 more rooms where your friends can sleep it off after the housewarming blowout.
Whether your dream home is high-rise condo downtown, an upscale tree house in Mission Hills or a land-locked Encinitas residence shaped like a pair of boats, experts say the San Diego real estate market is reentering prime time.
The number of home sales and the average selling price of homes are up countywide. The most accurate way to measure the upswing is by price-per-square-foot, says Alan Nevin, a principal at The London Group, a downtown San Diego-based real estate advisory firm. He says the price-per-square-foot for homes and condos in San Diego was up 9.4 percent in 2012.
The increase has been more evident among $350,000 homes in Chula Vista than in multi-million-dollar homes in La Jolla and other communities, says Nevin. To his point, San Diego Association of Realtors president Linda Lee reports there were 200 homes sold in the South Bay region in December 2012.
“If you’re looking for homes under $400,000, with quality construction and affordability, that’s the place to go,” Lee says.
Nevin notes that the South Bay has lower- than-usual for-sale inventory right now - a trend that’s mirrored around the county.
Other observations by Nevin:
East County. “East of the College Area - El Cajon, Santee, Lakeside - is always slower to recover. Prices there didn’t go up a lot, even in 2005, when things were wild.”
North County Coastal. “Home prices here didn’t go down all that much. Carmel Valley and Torrey Pines, for example, are pretty much back to 2005 prices.”
North County Inland. “Home values are very affected by SAT scores in the school districts. The Poway area prices are coming back; unfortunately that’s not the case in Escondido.”
The recession caused six million people across the country to “double-up,” Nevin says, meaning they moved in with other people or moved back home with their parents to save money. He estimates there are 15,000 double-ups in San Diego.
With prices climbing and mortgage rates still historically low, it may be time to move out of Mom and Dad’s basement. Potential first-time homebuyers should bone up on the benefits of home ownership in realtor Tony Napoli’s “Home $weet Home” story.
If you are in the market to buy, check out the real estate update we’ve compiled and glimpse some of the eclectic homes we’ve scouted around the county.
Your dream house is out there, and it’s probably listed at less than $40 million.
Fantasy is reality at Ilan-Lael, the Santa Ysabel (near Julian) home/studio of acclaimed local artist and architect James Hubbell. The natural compound is comprised of eight structures - made with clay, glass and mosaic tile, and stained glass - that would make any Hobbit or Gnome feel right at home.
*Note: The printed version of this issue incorrectly insinuates that the great Mr.Hubbell has passed. James Hubbell currently works and lives in this beautiful home pictured here, and is hosting a panel discussion on the relevancy of sculpture at the Oceanside Museum of Art on March 23. We apologize for any confusion.
San Diego residential real estate overview
- Average listing price: $589,670
- Median sale price: $367,500
- Homes for sale: 2,953
- Homes in foreclosure: 3,845
- Average home price- per-square-foot in San Diego County: $280
San Diego’s most expensive residential listing is a Rancho Santa Fe estate with eight bedrooms and eight-and-a-half baths. It also has two guesthouses, a resort-style clubhouse and a free-standing gym, all surrounded by lush gardens. If its 16,000-square-feet of living space were spread out flat, it could cover the entire width of a football field from one end zone to about the 33-yardline. Assuming there were such thing as an interest-free mortgage, payments for this $40 million bad boy would be $111,111.11 per month for 30 years. The yard guy would be extra.
On A Roll
There’s a mobile home in El Cajon that’s yours for just $5,000. The 660-square-foot trailer is part of an age-55-plus community, and offers use of a clubhouse and pool. It’s an active community - if bingo, Bible study and pool exercise classes get you fired up.
Here We Grow
San Diego County’s top 10 zip codes for detached home price-per-square-foot increase (October 2011 to October 2012)
Oceanside (92057): 27.2%
Central San Diego (92123): 25.1%
El Cajon (92020): 25.1 %
Santee (92071): 25%
Oceanside (92056): 22%
El Cajon (92012): 18.7%
Chula Vista (91910): 18.3%
Mission Hills (92103): 18%
San Marcos (92078): 16.6%
Rancho Bernardo (92127): 15.8%
Source: San Diego Association of Realtors
Miles Kellogg was a sailor at heart, although he never actually hit the high seas, says Downtown Encinitas Mainstreet Association (DEMA) executive director Dody Crawford. But the landlocked, side-by-side homes he built are indeed shaped like boats. DEMA rents out the two-deck, two-bed, two-bath structures. Built in the 1920s, they’re called the SS Encinitas and the SS Moonlight, and like the Leaning Tower of Pisa, they list a little.
Source: San Diego Association of Realtors
On The Edge
The campus of University of California, San Diego is home to “Fallen Star,” a 70,000-pound, 15- by-18-foot structure that was placed askance off the side of Jacobs Hall. A three-quarter-sized version of a Rhode Island-style home, it’s fully furnished but uninhabitable. “There’s running water outside, but no bathroom, and the couch is too small to sleep on,” says spokesperson Mary Beebe.
Median detached home price in May 2006
Median detached home price in March 2009
Rental occupancy rate, countywide
Source: The London Group
Talk About Short Sales
Urban legend has it that a bunch of munchkins who acted in The Wizard of Oz moved from Hollywood to San Diego and took up residence in tiny houses built to their scale. Some point to a property on Mt. Soledad in La Jolla. Myth busted. This house on Hillside Drive, built by Cliff May in 1935, was never home to any members of the Lollipop Guild.
Home $weet Home
Why to say “bye” to renting and buy a place of your own
By Anthony Napoli
The first of the month is approaching, and once again you’ll write a rent check to your landlord. Why? Because you don’t want to be burdened with a mortgage payment and all of the responsibility that goes with it?
Wake up and smell your rent money being flushed down the toilet. If there were ever a time to purchase a personal residence for yourself, it’s now. In California, for the first time - maybe ever - it’s now cheaper to own a residence than to pay rent.
That’s because of a couple of interesting and monumental factors. First, interest rates are at an all- time low - lower than when they started keeping track in the 1950s (before there was email).
Second, home prices have plummeted over the last five years, with some properties losing 50 percent of their value. Pity the people who bought at the peak, thinking prices would continue upward. But they bought for the wrong reason.
Add to this scenario the fact that demand for rental properties has skyrocketed, because not a lot of folks were buying homes over the last few years. This has caused rents to increase upwards of five percent per year in some parts of San Diego.
So, rising rents, lower purchase prices for property and historically low interest rates have created a wonderful buying opportunity for first-time homebuyers.
We’ve already seen real estate values start to increase four to six percent per year, showing we have hit the price bottom and are starting to come back. Waiting for prices to drop again is now not a good strategy.
There are some other reasons for owning instead of renting. One is that your mortgage payment plus real estate taxes may only be slightly more (or sometimes less) than your current rent payment. When you pay a mortgage, you are entitled to many tax advantages that don’t come with paying rent.
Your landlord takes those advantages now. Call an accountant to confirm the benefits of owning instead of renting.
On The House
How to earn income without going to work
Between 2001 and 2005, the main reason people purchased real estate was to make money when they sold it. It got out of hand because of the availability of easy loans. Today, buyers want to own their homes to give themselves a feeling of stability and security, to be in control of their own destinies. No one is going to call and raise the rent or not renew your lease when you own your own property.
And, hopefully, after seven to 10 years, you will have a little nest egg of equity in your home, giving you some financial security. Building home equity is like having a part- time job that you don’t have to show up to in order to make money. - AN
Anthony Napoli has been a realtor in San Diego County since 2001. His specialty has been the downtown condo market. anthonynapoli.com