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Benny Landman

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Is your home in a rising market?

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Just a few of my recently sold properties...

Another fabulous dinner party on Saturday night thrown by my amazingly talented wife. Our guests included local friends as well as friends from Canada and Scottsdale, Arizona: great conversation, food & wine!

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Del Mar Home Tour

Benny will be a proud sponsor of the first annual Del Mar Schools Home Tour this May 6th, 2012, all proceeds go directly to the school and students of Del Mar.

Almost Rich
The Western world has become economically complicated: a recession that doesn’t want to go away; governments that are broke; and Europe, in a debt crisis. In general life in San Diego does not appear so grim, but a close examination of the true cost of living makes us understand why rich is never rich enough.
The threshold for the top one per cent of income earners is $250,000. In an increasingly pricy area like Southern California we seem to pay a premium for everything from gas to grocery’s, for some $250,000 can seem positively middle-class, especially after taxes.
For many San Diegans, that amount disappears fast. For those with young kids, daycare and preschools can cost upwards of $1,500 a month, not to mention if you have college aged students, a private or out of state university can cost over $50,000 per year. And of course there are the car payments and retirement accounts, wardrobe, utility bills and something to set aside should anything go wrong, plus the cost of food and basic entertainment. Living the “good life” is very difficult.
During my childhood, spent in a middle class neighborhood of Detroit, my parents were not worrying about replacing their laminate kitchen counters with granite or marble. You could host a casual weekend party without spending a fortune. Clearly living the “good Life” wasn’t the full time pursuit.
San Diego’s most sought after neighborhoods: La Jolla, Solana Beach, Rancho Santa Fe, and Del Mar, to name a few, are the ones where the average household debt levels are often among the highest. The result of this unreasonable amount of debt is that even those who earn $250,000 hope that next week’s payday will cover this week’s overspending.
When my wife and I bought into Del Mar in 1993 our neighbors were retired university professors, and other middle class income earners. In the decades since, old owners were replaced, by successful 30-40 something white-collar professionals. Chevys and Toyotas have given way to BMWs and Mercedes.
Who is wealthy enough to become my neighbor? It’s not as grim as it appears because today we are experiencing a market unlike before….never in my 40 year Real Estate career has the mortgage interest rates and the price of real estate moved in the same direction. Not only are interest rates the lowest since the 1950’s, but the housing prices have tumbled throughout the county. 4% interest rates for 30 year conforming loans and under 3% for 5 year mortgages are what my parents had in the 1950’s when they bought their new home for $25,000.
All areas of San Diego housing have lost value but in prime areas the values have stabilized. Now my problem with presenting offers is not the bank’s ability to lend or not lend, but sellers receiving multiple bids on the same property. People are buying and the supply of good homes is low: too many buyers are chasing too few homes. It’s only a matter of time before the housing prices begin to rise, and I predict by the beginning of summer the media will be talking about this trend. San Diego may be an expensive place to live but right now housing is one of the only great bargains left for the “almost rich” middle class.
PS have you checked the cost of a gallon of gas? In the 1950’s it cost about $0.20 a gallon and 3% mortgage rates were common, today we can still get a 3% mortgage, but a gallon of gas….
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