Whats so special about Del Mar?

DEL MAR DREAMIN’

Is it a racetrack Thats open 8 weeks a year?

Is it that beautiful Ocean and Beach?

Is it the great schools,Great weather or that Southern California beach town experience?

NOPE - ITS THE “IMMUNE HOUSING ” THAT HAS HAD ALMOST NO EFFECT FROM THE GREAT REAL ESTATE BUBBLE!

Lets take a example here:
http://www.redfin.com/CA/Del-Mar/2593-Via-Pisa-92014/home/4435479

Decent 2500 sq ft del mar house with some views and also some street noise. modestly renovated to a contemporary style.

what due you think is the true value of this home?

owner has it listed for a bubbly 1.175 m

it sold for 800k end of 2002
it sold for 535k end of 1998.

here is the value – lets take average crazy appreciation during this time between sales in 98 and 2002 – lets round it to a approx value of 650k on 01/01/2000. Lets figure 100k in renovations (take a third of that, because that is the most any renovation is worth and that is being generous, All homes need renovation every 10 years or so anyway- it is part of being a homeowner)

The California Dreamin’ value indicator:

Value formula is approximate pricing on 01/01/2000 plus 1/3 of all renovations since 01/2000

current value is :
650k on 01/01/2000
+ 33k(100K) for renovations

value is 683k . that is what this home is worth -700k tops.

And it may take 3-7 years for this to play out . but it will. It always has. It is The golden rule of bubbles-just like the laws of Physics.

to quote Mike from the movie Rounders:
” Listen, here’s the thing. If you can’t spot the sucker in your first half hour at the table, then you ARE the sucker “