Market Stabilization Brings Renewed Interest in High-End Homes

By Emmet Pierce
FREELANCE WRITER, Business Journal.
February 8, 2010

REAL ESTATE: Building Plans for Upscale Properties Begin to Gain Momentum
The market for high-end homes costing more than $800,000 has slipped since the end of the housing boom, but builders say there are increasing signs of a turnaround.

"The market in my mind has stabilized," said longtime San Diego builder Bill Davidson, president of Davidson Communities. "It is not falling like it was last year, and that is very important. No one wants to buy a house when they think the market is falling."

With prices stabilizing, Davidson has begun to prepare for a real estate rebound.

"We are actively trying to buy more land now because we can price our homes profitably," he said.

His company has upscale production homes under construction in La Costa and Del Sur in North County. They range in price from the $700,000s to more than $1 million. Tight credit has made it more difficult for upper-end buyers to secure loans, however. Conditions were much different just a few years ago, when loan underwriting standards were looser and customers bought big homes "with all of the gadgets and luxuries that we could pile on," Davidson said. Since the recession hit, high-end buyers have been seeking smaller, simpler dwellings.

At McCullough-Ames Development Inc., Principal Monty McCullough typically builds custom $1 million, estate-style homes on 1-acre lots. Most of the firm's recent projects are in North County, near the coast and along the state Route 56 corridor, between the Del Mar area and Poway. Even these buyers are looking for ways to stretch a dollar. McCullough presses his subcontractors for the best prices and passes the savings along to customers.

"Everybody has been hit by the recession," he said. "... I felt my business starting to tail off by the summer and fall of 2004. Since the spring of 2009 we have built 15 homes, under contract or just finished."

"The average home is right at or under 5,000 square feet," he said. Not long ago, 6,000-square-foot to 9,000-square-foot homes were common in the custom market.

Custom builder Terry Wardell of Wardell Builders Inc. estimates that the size of the upper-end market had declined by about 50 percent from its peak. Wardell builds most of his homes in La Jolla, Del Mar, Rancho Santa Fe, Point Loma and Mission Hills.

"I think 2010 will be stronger than 2009, but it is still going to stay pretty flat," he said. "Construction prices probably are 25 percent off their peak."

Analyst Russ Valone, president and CEO of the MarketPointe Realty Advisors research firm, has been tracking $800,000-plus home sales. In 2005, such homes made up 49 percent of the detached housing market here. In 2006, the percentage was 44 percent. Last year, the share was down to just 20 percent.

Recent upscale buyers have taken advantage of reduced prices, Valone said. Some of them "were able to acquire homes that were designed to sell for hundreds of thousands of dollars more." Those buyers likely will realize large gains in home value as the recession ends.

Optimism Returns
Lora Heramb, vice president of sales and marketing for Brookfield Homes, noted that her company now is selling high-end production homes at the Serenity community east of Scripps Ranch. Prices range from just under $900,000 to just under $1 million.

There is a perception among many buyers that prices have stabilized, Heramb said. "Some of our buyers have been waiting for the right community and the right time."

Borre Winckel, president and CEO of the Building Industry Association of San Diego, said sales of upper-end homes will grow as the economy improves.

"People have faith again," he said. "People believe that the worst is behind us."

Home sales and prices rise in July
Building permits down across U.S., reports say

By Roger Showley
STAFF WRITER, San Diego Union Tribune
August 19, 2009

Southern California housing prices and sales continued to rise in July, even as new construction and building permits fell across the country, new reports showed yesterday.

MDA DataQuick reported the six-county regional median sales price at $268,000, up $3,000 from June, in the third consecutive month-to-month gain. It was still 23 percent below the year-ago level of $348,000 and 46.9 percent below the peak of $505,000 set in mid-2007.

There were 24,104 sales, up from 23,262 in June and 18.6 percent higher than in July 2008. The sales pace was roughly halfway between the low of 16,225 in July 1995 and peak of 38,996 in 2003 over the 21 years the firm has kept track.

As reported Monday, San Diego County's median in July stood at $320,000, up from $316,250 in June, but still below July 2008's $364,000. There were 3,809 transactions, 11 percent ahead of the year-ago pace.

"Even if we are near bottom," DataQuick President John Walsh said, "history suggests we could bounce along that bottom for quite a while."

Meanwhile, the Commerce Department reported that building permits dropped 1.8 percent from June to 560,000 units on a seasonally adjusted annual basis, largely due to a drop in multifamily development. They were down 39.4 percent year-over-year. However, permits were up on single-family homes for the fifth straight month.

In Western states, permits rose 7 percent from June but were also down year-over-year. The news was enough to cheer some analysts.

"Housing is no longer a drag," said Mark Vitner, a senior economist with Wells Fargo. "That's a good thing." Said Patrick Newport, U.S. economist for IHS Global Insight, "Moving further ahead, single-family starts will continue to improve, but the recovery will be a slow one, lasting two or three years."

The National Association of Home Builders said its latest survey of members showed growing confidence that conditions will improve in the next six months.

The group's Housing Market Index stood at 18 on a scale of 100, with 50 and above being a sign of good sales conditions. It was the highest level since June last year. Western builders ranked conditions at 17, up three points from July.

In DataQuick's report, the San Diego firm said 20.1 percent of single-family resale houses that changed hands in Southern California sold for more than $500,000 represented, compared with a low this year of 15 percent. San Diego's percentage was 27.9 percent.

Resales in July that had gone through foreclosure in the previous 12 months represented 43.4 percent of all Southern California resale transactions. For San Diego, the foreclosure count represented 37.4 percent.

DataQuick said investors and absentee buyers bought 19.4 percent of homes last month, up from 15.5 percent a year ago and above the average this decade of about 15 percent. San Diego investor and absentee purchases represented 21.2 percent of the county total.

DataQuick analyst Andrew LePage said anecdotal evidence suggests that many of these buyers are new to real estate investing, having lost faith in stocks and bonds, and may underestimate the carrying costs of owning a rental house when the property is vacant and no rent is coming in.

Reprinted from the San Diego Union Tribune

Higher-End Housing Moves Buyers in SoCal

By Austin Kilgore
July 17, 2009 7:49 am CST

Improvements in mortgage availability and the belief that prices have hit rock bottom have buyers moving in the Southern California and the San Diego Bay area, according to La Jolla-based data analyzer MDA DataQuick.

In So Cal, buyers are responding to price cuts on mid- to high-end homes and the availability of credit for pricier homes. There were a 23,262 total new and existing homes and condo sales completed in San Diego, Orange, Los Angeles, Ventura, Riverside and San Bernardino counties in June, up 12% from May.

While foreclosures are still having an impact on the SoCal market, the effect is weakening. Foreclosure sales made up 45.3% of resales in June, down from 49.7% in May and the February peak of 56.7%.

Fewer foreclosure sales meant resale of homes priced $500,000 and above rose to represent nearly 20% of all sales in the SoCal region. It's the first time that segment of the market made up more than 19% of all sales since October 2008, and comes after that figure had dipped to a low of 13.4% in January.

The increase in pricier home sales helped increase the median sales price for the second consecutive month to $265,000, up 6.4% from $249,000 in May.

DataQuick president John Walsh said the numbers should be viewed with cautious optimism.

"The rising median should still be viewed mainly as a sign the market's moving back toward a more normal distribution of sales across the home price spectrum," he said in a press release. "Sales in many higher-cost neighborhoods couldn't have gotten much lower, so this recent uptick in activity should come as no surprise." Walsh added: "The recession and problem mortgages are fueling more high-end distress, hence more high-end 'bargains.' What's missing, still, is a wide-open financing spigot for the would-be buyers of these more expensive homes."

In the nine-county San Diego Bay area, sales were up 16.1% from 7,447 in May to 8,644 in June. The median price paid for those homes and condos was $352,000 last month, up 3.1 percent from $341,500 in May, the highest since the median was $375,000 in October 2008.

The percentage of foreclosure sales dropped to 37.3% in June, down from 40.5% in May, and is at its lowest point since August 2008 when foreclosure sales made up 36% of all transactions.

Playground work is moving ahead

By Dave Schwab
La Jolla Light
December 3, 2008

Replacing the playground equipment at La Jolla Shores Kellogg Park could start as early as March, said Mary Coakley, who is heading up the effort.

"We are working with the city on the permit that gives our contractors the ability to go into the playground and install the equipment," she said last week.

The project will be done in two phases, starting with installation of the upgraded equipment and $20,000 worth of higher-grade sand.

The second will be creation of a bronze bust of J.J., the gray whale saved by the staff at Sea World who nursed the mammal back to health and returned it to the wild.

Jim Heaton, La Jolla Shores Association chair, said famed wildlife artist and sculptor Robert Wyland has agreed to donate his services to create J.J.

Move over dolphins
"The city has given us notice that the two dolphins in Kellogg Park are going to be removed because they are deteriorating from the inside out and can no longer be repaired," Heaton said. "J.J. is going to be moved onto the site to replace the two dolphins where they are."

The life-size sculpture is going to be huge and heavy. It's also going to run about $80,000 in foundry costs to create, Heaton said.

Much of that money is included in what has been raised so far, but another $25,000 to $30,000 is still needed to cover all of it.

"We're very proud of what we're doing for the people of San Diego and La Jolla," he said. "I hope we can get this done before next summer."

Special fund
Heaton added that more than 99 percent of private funding donated by community members to the playground project has already been collected and deposited in a nonprofit fund held by La Jolla Town Council earmarked for Kellogg Playground. "There is no commingling of funds between The Map and the playground equipment," he added.

Playground equipment was removed from the popular park last May because it was in a state of disrepair and the city didn't have the money to replace it.

Saluting donors
The community advisory group, which has been working on getting the new equipment and working with the city so they can retain control over design and installation, recently named the key donors: Rise Johnson, Patrick and Virginia Daniels, Jeff and Deni Jacobs, and Jim and Jennifer Kelly.

Patrick Daniels noted in a recent e-mail, "Lots of people in La Jolla want to help take care of our city and make it more beautiful, but it takes a leader like Mary Coakley to get us organized and focus our efforts. None of this would have gotten done without her."

Holiday Listings: Happy holiday, happy holiday

By Nicole Reino
La Jolla Light
December 1, 2008

Hold onto your candy cane - it's officially the hap, hap, happiest time of the year. They'll be halls to deck, menorahs to light and plenty of festive events to fill up your holiday season. Here are some that will surely make you feel all merry inside:

FESTIVALS/PARADES
Balboa Park December Nights Food from around the world, sparkling lights, free admission to participating museums, an ice skating rink and live entertainment from San Diego Junior Theatre, San Diego Civic Youth Ballet and many others - it all makes up the largest free holiday community festival in San Diego County. 5 to 10 p.m. Dec. 5; 12 to 10 p.m. Dec. 6. Museum admission will be free of charge from 5 to 9 p.m. both days. Balboa Park, 1549 El Prado. (619) 239-0512, www.balboapark.org.

Hanukkah Happening San Diego's largest Hanukkah event for families celebrates 25 years. Food, games, crafts, appearances by Batman and Cinderella, and more will be featured. 11 a.m. Dec. 14. Lawrence Family Jewish Community Center, 4126 Executive Drive, La Jolla. $2. (858) 457-3030, www.lfjcc.org.

Holiday Block Party Legoland decks its bricks with boughs of holly. A 30-foot holiday tree adorned with more than 240 Lego ornaments towers over the park. And, the "Holidays Around the World" Lego mosaic returns. Dec. 20-31. Legoland, One Legoland Drive, Carlsbad. $52-$62. (760) 918-LEGO, www.legoland.com.

Holiday Wonderland The Del Mar Village Association presents this street festival, which features food from Del Mar restaurants, children's arts and crafts activities, a holiday gift bazaar, horse and carriage rides, live music, a visit from Santa and the lighting of a 35-foot tree. 1 p.m. Dec. 7. Camino Del Mar from 15th to 11th streets, Del Mar. Free admission; $20-$25 for food/activity tickets. (858) 755-1179, www.delmarmainstreet.com.

Kwanzaa Celebration The WorldBeat Cultural Center presents this celebration of the second principle of Kwanzaa - Kujichagulia (self-determination). 6 p.m. Dec. 27. WorldBeat Cultural Center, 2100 Park Blvd. Free. (619) 230-1190, www.worldbeatcenter.org.

La Jolla Christmas Parade Floats, bands, equestrians, vintage vehicles and Santa will be in the 51st annual parade, which ends with a tree lighting. 2 p.m. Dec. 7. Girard Avenue to Prospect Street to Draper Avenue, La Jolla. Free. www.ljparade.com.

LIGHTS
Del Mar Highlands Tree Lighting The second annual "Lights Across the World" tree lighting ceremony will make the holiday season just a little bit brighter. 5:30 p.m. Dec. 4. Del Mar Highlands, Del Mar Heights Road and El Camino Real, Del Mar. Free. (858) 793-5757, www.delmarhighlandstowncenter.com.

Festival of Lights The Wild Animal Park's Festival of Lights celebrates its 20th anniversary and final year in its current location. Next year, the event will move to the Zoo under the new name Jungle Bells. Dec. 13-23, 26-30; Jan. 2-3. San Diego Zoo's Wild Animal Park, 15500 San Pasqual Valley Road, Escondido. $24-$34. (760) 796-5615, www.sandiegozoo.org.

Holiday of Lights Drive through more than 400 sparkling light displays that line the racetrack. 5:30 p.m. daily through Jan. 4. Del Mar Fairgrounds, 2260 Jimmy Durante Blvd., Del Mar. $14-$19. (858) 793-5555, www.holidayoflights.com.

San Diego Bay Parade of Lights The boats get dressed up in their best holiday lights and sail their stuff around the San Diego Bay for the 37th year. This year's theme is "Rock and Roll Around the Bay." 5:30 p.m. Dec. 14 and 21. Parade route: Shelter Island, Harbor Island, The Embarcadero, Seaport Village and the Ferry Landing in Coronado. Free. (619) 224-2240, www.sdparadeoflights.org.

Solana Beach Holiday Tree Lighting The tree lighting also features carols, cookies and a visit from Santa Claus. 6 p.m. Dec. 7. Fletcher Cove Park, Solana Beach. Free. (858) 720-2453, www.ci.solana-beach.ca.us.

MUSIC/PERFORMANCES
Aimee Mann's Christmas Show Aimee Mann and guests - Patton Oswalt, Nellie McKay, Grant Lee Phillips and Morgan Murphy - put on a Christmas variety show. 8 p.m. Dec. 5. Belly Up Tavern, 143 S. Cedros Ave., Solana Beach. $28-$30. (858) 481-8140, www.bellyup.com.

Canyon Crest Academy's Winter Concert The performance will feature music from the school's choral and band programs. 7 p.m. Dec. 8. Canyon Crest Academy, 5951 Village Center Loop Road. (858) 350-0253, www2.sduhsd.net/cc.

"A Christmas Carol" North Coast Repertory Theatre presents an adaptation of Charles Dickens' classic. Dec. 12-30. North Coast Repertory Theatre, 987 Lomas Santa Fe Drive, Suite D, Solana Beach. www.northcoastrep.org.

Christmas Messiah-Sing The La Jolla Symphony & Chorus holds its annual sing-along of the Christmas portion of the "Messiah." 4 p.m. Dec. 14. St. Elizabeth Seton Catholic Church, 6628 Santa Isabel St., Carlsbad. (858) 534-4637, www.lajollasymphony.com.

"Dr. Seuss' How the Grinch Stole Christmas!" The Grinch returns to the Globe for the 11th year. Runs through Dec. 28. The Old Globe, 1363 Old Globe Way. $19-$79. (619) 234-5623, www.theoldglobe.org.

Holiday Pops! The San Diego Symphony, conducted by Matthew Garbutt, is joined by the San Diego Master Chorale, California Ballet and San Diego Children's Choir for the ultimate holiday concert. 7:30 p.m. Dec. 17 and 18; 2 p.m. Dec. 20; and 2 and 5 p.m. Dec. 21. Copley Symphony Hall, 750 B St. $10-$85. (619) 235-0804, www.sandiegosymphony.com.

Ocean Air School's Holiday Music Program The elementary school presents its holiday music show. 6:30 p.m. Dec. 16. Ocean Air School, 11444 Canter Heights Road. (858) 481-4040, www.dmusd.org/oceanair.

Salute to Vienna Fall in love with Vienna's "Waltz King," Johann Strauss Jr., in a performance of music, song and dance featuring The Strauss Symphony of America, L'via Galambos (soprano, Budapest) and Valeriy Serkin (tenor, Vienna) with dancers from Vienna City Ballet. 2:30 p.m. Jan. 1. Copley Symphony Hall, 750 B St. $39 and up. (619) 235-0804, www.salutetovienna.com.

San Diego Ballet's "The Nutcracker" This local dance company performs the classic holiday ballet. Dec. 18-21. Mandeville Center at UCSD, 9500 Gilman Drive, La Jolla. $20-$50. (619) 294-7311, www.sandiegoballet.org.

"Tis the Season" The Village Church's Village Players perform in this production, which is based on the "living nativity" with a few scenes that go a bit awry. Dec. 5-7. The Village Church, 6225 Paseo Delicias, Rancho Santa Fe. (858) 756-2441, www.villagechurch.org.

THIS & THAT
Family Holiday Workshop Make hand-crafted holiday gifts. 9 and 11 a.m. Dec. 6. Rancho Santa Fe Community Center, 5970 La Sendita, Rancho Santa Fe. (858) 756-2461, www.rsfcc.org.

Holiday Storytelling Warwick's will have a holiday storytelling event with milk and cookies for the children. 6 p.m. Dec. 16. Warwick's, 7812 Girard Ave., La Jolla. Free. (858) 454-0347, www.warwicks.com.

Make Your Own Holiday Greeting Cards Every Tuesday in December will be "make your own greeting cards" day. Bring your old greeting cards, magazines or paper and get creative. When you're done, you will have your own greeting cards to share with family and friends. Tuesdays in December. The Riford Center, 6811 La Jolla Blvd., La Jolla. $5-$10. (858) 459-0831, www.rifordcenter.org.

TOY DRIVES
Captain Mike's Memorial Toy Drive Help make children's dreams come true. This toy drive was started 35 years ago by the late 10News weatherman, "Captain" Mike Ambrose. All toys donated go to the Salvation Army for deserving families. Drop off donations at the 10News studios (4600 Air Way) Monday through Friday between 9 a.m. and 5 p.m. through Dec. 16. There will also be two special donation events on Dec. 5 and 17. Visit the Web site for more information: www.10news.com.

Toys For Tots Help the U.S. Marine Corps Reserve give gifts to needy children. For more information about special donation events and a complete list of drop off locations, visit www.toydrive.com.