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Discounts In the California Real Estate Market Or Just the Waydown?

2012 December 29
tags:
by sv
california-debt

The ultra rich are finding discounts in the California real estate market.  Jeff Paster, a luxury home developer out of California’s Marin County, failed to find a buyer for a brand-new waterfront mansion that he listed for  $45 million. Instead, Paster will wait until an auction this weekend, where the starting big is set at $25 million. This has been the trend for California luxury homes, and very little is pointing towards a recovery in the sector for California, especially in light the CABs. The aforementioned Marin County houses on of the districts that took out the CABs.

In 2012, the San Francisco Bay area luxury properties have sold for discounted prices to the listed prices, as many homes are sitting unsold for years before finding buyers. Many are celebrating the social media market as a way of pulling the Bay Area housing market out of its doldrums, but the performance of most of these companies demonstrates that they cannot be depended upon to close any shortfalls in other parts of the economy.

Earlier this month, Jay Paul the San Francisco-based developer of 6 million square feet of Silicon offices, including Google Inc.’s four-building complex in Sunnyvale, purchased for $28.25 million. The deal was a 48 percent discount off the asking price in 2007, around the northern California’s peak. The seller had recently sought $34 million.

Luxury discounts are in part thanks to sellers motivated by higher capital gains taxes in 2013.  Lower end luxury homes are discounted, too. A Twitter co-founder recently paid $9.9 million in February for a two-bedroom house in Sea Cliff that had been previously listed for $12.5 million.

The late summer 2012 saw detailed reports of social medial websites going public that should not have. Overvalued and shorted by keystone Wall Street insiders, one company after another saw failed public offerings.

A recent report from the Mercury News  showed that both national and California real estate trends are shifting in favor of more practical designs catering to baby boomers wishing to downsize, first time homeowners without much in savings and, a more recent trend for the US, multigenerational families in need of flexible living environments.

According to the Mercury News report, many homes are today being built with multiple generations in mind, and including separate quarters, cottages or detached units for aging parents or adult children without sufficient work to live on their own.

 

 

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from → Financial Anarchy

  • Darryl

    Interesting, I’m a great gold and silver advocate . But I do find this mindset about property hard to understand . Sure prices are declining. But surely if they continue printing money to infinity ( which is well underway) then ALL boats MUST rise, just some will rise a lot faster than others. Can anyone please name a situation where house prices continued to fall during major inflation or hyper inflation. I’m not saying property is a good investment at all. But what I’m thinking is as they do begin to rise is if you don’t understand that it’s not keeping pace with inflation and you think these guys are wrong you will jump in and get hurt. The DOW has risen over the last 10 years , but has it really been a good investment. Of course not, as it hasn’t kept pace with inflation and I think the same situation will occur with property compared to good investments. I would appreciate people’s thoughts

    • http://www.facebook.com/harry.bath.5 Harry Bath

      Darryl

      No all boats do not rise during periods of monetary instability. During a hyperinflation many assets become worthless as others become incredibly expensive. If you own a house in the city in the middle of Los Angela’s and riots are breaking out everyday or in the middle of a war zone the assets become worthless. You can read stories about prior hyperinflations where people traded their grand pianos for food. The hyperinflation has already occurred in realestate now that bubble is collapsing whilst another one is forming. Another example is between the period of 2000 and 2008 the Nasdaq didn’t rise on the tide of all of the money printing in the real estate loans sector. The fed has been “printing money” for 100 years and it has been clear that not all boats are rising at the same time. Marc fabers book tomorrow’s gold explains this all in great detail.