The journey of one Carlsbad home
July 18th, 2008 Categories: Carlsbad Business Community, Carlsbad City, Carlsbad Community Events, Carlsbad Real Estate
CARLSBAD– This is the story of one home, one buyer and graphic illustration of the current Carlsbad housing market.
This 3 bedroom 1563 square foot Chestnut Street home was last sold in December 2003 for $500,000 with the buyer financing $450,000. If the story ended here, everything would be great. It doesn’t and I believe this is why this home and many others have ended up in the bank’s hands.
The buyer, within 60 days took out what was most likely a HELOC or home equity line of credit of $270,000. That $500,000 home just became a 
$720,000 liability. It does look as though there were some improvements done on the home and on August 9th of 2005 the home was listed in the MLS. After 93 days with a listing price of $749,000 to $849,000 the first listing period expired. It immediately went back on the market at same price for an additional 114 days.
In this two year timeframe, this area of the Carlsbad housing market saw an increase in values of approximately 20%. The average selling price in 2003 
was $546,573 and in 2005 was $656,000. Unfortunately the homeowner was looking for almost a 70% premium at the high end of their range.
In January of 2008, the home came back on the market as a short sale. It was listed at $549,000 to $649,000. After 178 on the market, the bank has auctioned the property. I will up date this article as soon as I know the price.
What this illustrates to me and should to you, is the fact that many homebuyers looked to their homes as more than homes. In general we have only each other to look at for the current state of the real estate market. When one wakes with a hangover, you generally don’t blame the bar. Instead you question why you drank so much. It was the over exuberance of this false wealth that fueled lifestyles and our economy. The banks only filled glass. 
Had this particular owner not squandered what equates to over 50% of the market value of the home, they would still own their own 3 bedroom with a view slice of paradise less than mile from the beach with approximately a 17% appreciation to date.
Only 20 years ago, the U.S.’s total outstanding mortgage debt made up roughly 30% of our GDP. Homeowners held large stakes in their houses – close to 70% of the equity on average. Today, mortgage debt equals nearly 80% of GDP. The average homeowner owns less than half the equity in his home. This seismic change in the nature of home ownership and debt financing occurred nearly overnight – in less than one generation.– Seeking Alpha, 7/18/2008
Real estate as it pertains to this home was taken from SANDICOR and REALIST.
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