Reader AI wondered what happened to the homes for the middle class. The Seaport is a good example. In 1977, these 1,512sf to 1,946sf homes across the street from the La Costa Resort were priced reasonably:
Today?
A remodeled house with an extra 500sf addition just sold for $1,035,000!
Here are photos of it:
Link to Photos
Jim Klinge
Klinge Realty Group
Are you looking for an experienced agent to help you buy or sell a home?
Contact Jim the Realtor!
CA DRE #01527365, CA DRE #00873197
Verified Donna and Jim provided exceptional support and professionalism throughout the entire process. We couldn't have been happier with their efforts. They made our house shine, and thanks to their expertise, it sold above the listing price in the very first weekend! Truly a fantastic experience from start to finish.Verified This year has been difficult on our family, mainly due to having to sell our home. Thankfully we knew God had a plan for us and working with the Klinge team was a key part of it. It was an obvious decision to work with them again after such an amazing experience when purchasing the same home we needed to sell. The challenge was, how will we do this in so little time with so much going on? Jim and Donna held our hand every step of the way. Whenever an unexpected issue arose they found and provided a solution. Never once did we feel pressured to make a decision and the Klinges were always reassuring after providing the information that the decision was ours to make. Despite the curve balls, they never panicked and exemplified the “can do” attitude, making us feel optimistic and taken care of. Their expertise and professionalism was superb. But of all the reasons to work with the Klinges, the most impactful and valuable is their compassion and genuine care for their clients. We pray that we can one day purchase our forever home and you better believe that Jim and Donna will be representing us - as long as they will have us of course. Thank you again Klinge team! Your execution, experience, and care are unmatched.Verified Jim and Donna were fantastic! Jim understanding my needs, recommending potential places, pointing out the pros and cons of each property was invaluable. Then when the offer was accepted Donna’s organized guidance through the inspections, paperwork etc made the whole process seem effortless. So grateful that I had them on my side!Verified I appreciate Jim & Donna's great teamwork, sound advice, and guidance that eased the stress of selling our Carlsbad home. Their professional input and assistance throughout the process was very helpful. Highly recommended!Verified The Good The Klinge Realty Group operates like a finely tuned machine, with a very personal touch. We contacted them on a Sunday and they were talking to us about our family and our needs on our living room couch the following day. They carefully listened to us and worked with us to identify the best and quickest path to listing within 2 weeks to take advantage of the low inventory conditions in our South Carlsbad neighborhood. They knew our tract specifically and had many previous sales there over the years - they came prepared with a thorough analysis of comparative sales and recommended a pricing strategy that they felt confident would yield offers the first weekend on the market. The Great Over the next two weeks Donna coordinated a range of vendors who she knew from experience could get the preparation to list work we needed done on time and with high quality. Our light tune-up involved excellent experiences with their stagers, landscapers, contractors, electricians, and plumbers. Throughout this period Donna's daily communication was clear, concise, and responsive. Any time we had questions Donna picked up the phone or texted immediately - but almost always, she answered our questions before we even knew we had them. The Outstanding We had a tricky situation with a shared fence that could have delayed our escrow. Donna used superb mediation skills to negotiate the terms of replacement and was personally on site with the fence contractor to make sure everything went smoothly. The fence looks great and escrow closed on time. The Truly Exceptional Our house came on the market on a Wednesday and between then and Monday morning Jim was personally at all three open houses. He was in constant communication explaining potential buyer reaction and strength. As he predicted offers began to come in on Saturday and each one was incrementally higher than the last. At the end we had 5 offers, 4 of which were over list, and the final accepted offer was $100,000 over list. In addition to being over list it included rent back terms that met our needs. The Recommendation For all of these reasons we would strongly recommend The Klinge Team to anyone wanting to sell in North County Coastal San Diego. I had been reading Jim's blog for 15 years and knew when the time came to sell that he would be our first call. Jim Klinge is not your standard realtor. He is keenly aware of market conditions and sales strategies. And, works his tail off - though not as hard as Donna . At this point he's gone from realtor to friend and I plan to have him over to grill and chill at our new place to talk real estate, but also just about life and raising kids in San Diego. He's more interested in relationships than his sales numbers - and that's why his sales numbers are so high. We have already recommended the Klinge's to some close friends and another successful sale is on deck right around the corner...Verified We recently had the pleasure of working with Jim and Donna from Klinge Realty Group to sell our house, and we couldn't be more satisfied with the experience. From the initial meeting, they listened attentively to our needs and provided invaluable guidance on specific improvements to get our home market ready. Their responsiveness throughout the entire process was truly impressive. Anytime we had questions or concerns, they were quick to address them, ensuring we felt comfortable and informed every step of the way. What stood out the most was their team and extensive network of tradespeople, which made addressing any necessary repairs or updates seamless and stress-free. Thanks to their expertise and dedication, our house sold quickly and at a great price. We highly recommend Jim and Donna to anyone looking to buy or sell a home. They are a fantastic team who truly care about their clients and deliver exceptional results.Verified We had a wonderful experience buying our home with Donna and Jim! In particular I was very impressed with their efficiency and support through the purchase process. As we were doing the walk through, Donna started contacting roofers, plumbers, aircon, electricians, etc for all the areas we needed potential repairs - by the time we were done with the walk through appointments were already set up to get estimates for all the major services. When we had to change an appointment, or couldn't make one, Donna was there to arrange things to fit our schedule. Even after we closed on our home, Donna helped set up the repairs we needed before move in day. They truly went above and beyond to deliver exceptional service. I'll be calling them for our next home!Verified The sale of our home exceeded our expectations - Jim and Donna Klinge are the best! We’ve followed Jim’s Bubbleinfo blog since the 2006 housing bubble. After he helped us buy in 2017 we stayed in touch and Team Klinge were the obvious choice when it came time to move. They guided us through the preparation of the house, including a kitchen refresh - Donna and Lisa skillfully managed the various contractors for us after we had moved out of state. Donna’s excellent attention to detail and regular communication made the whole process run smoothly from a distance. Jim’s market knowledge, expert negotiating skills and candid opinions, together with Donna’s responsive communications and problem solving, set them in a league of their own. Highly recommended!Verified Jim and Donna have exceeded my expectations with sale of my house. It was best experience with house sale. Professional, responsive, superior negotiating skills. I would recommend them with 5 star (I would give them even more than max) rating. Sale of my house was closed for really good price in 10 days. Jim and Donna perfectly handled house preparation for sale. Thanks a lot!!!Verified Jim and Donna have exceeded my expectations and made my most recent move back to California go so much more smoothly than I expected. Jim’s Bubbleinfo blog was full of useful information about the current market conditions. His experience helped us make a successful offer for the home we wanted in a desirable neighborhood. After the purchase Donna organized the work we needed done in the house without us having to make an additional trip. We were pretty worried when we started searching for real estate that not being in the area was going to makes things really difficult but Jim and Donna made the process so much easier. I enthusiastically recommend them.Load moreVerified by TrustindexTrustindex verified badge is the Universal Symbol of Trust. Only the greatest companies can get the verified badge who has a review score above 4.5, based on customer reviews over the past 12 months. Read more
I had to run the inflation calculator… $69,900 in 1977 money was equivalent to $254,803 in today’s money. If they’re selling for a cool million that’s a 6.88% compounded return over 40 years.
69k invested in the DJI in 1977 with dividends reinvested would be around $4,000,000 today. 20% downpayment ($13,800) invested then in DJI would be worth $810,500 today.
Median household income in U.S. 1977 was ~13k, house price to income 4.3X
Median household income in Carlsbad in 2010 was $105,000, house price to income 10X
Hong Kong has the most unaffordable housing prices at 20x, but also the lowest tax rates in the world.
Will the price to income ratio can expand much more, considering taxes, pension deficits, and Gen y/x incomes and relative to debt? What about when rates hit 5% on the 30 year?
Mortgage rate in 1977 was around 8.5%
Interesting times indeed.
https://westegg.com/inflation/infl.cgi
https://www2.census.gov/prod2/popscan/p60-117.pdf
https://dqydj.com/sp-500-dividend-reinvestment-and-periodic-investment-calculator/
Good points Brian.
Back in the 80s to 90s I remember looking at a home that was $150,000 (not California). We just could not justify that amount of money. Our home at that time was worth $50,000.
Ten years later we ended up buying a similar home and it was then $275,000 and our home $100,000. I was upset with our “bad choice” until a friend showed us numbers like yours and that we had actually made more money in investments during that time. whew. (Still should have bought in Carlsbad then!!!)
Amazing how times have changed since 1977!
Checking an online inflation calculator, $56,990 for the Portsmouth plan in 1977 would be $241,398.67 in 2018 dollars (Annual inflation over this period was about 3.58%) and this is for a NEW house!
Where is that extra $700,000+ in value coming from for a 41 year old house!? Could this just be an anomaly caused by historically low interest rates?
30 year FRM in November 1977 was about 8.92%
Assuming 20% down, PITI would be about $421 a month on that house in 1977 dollars. And $421 per month in 1977 is worth $1,783.27 per month in 2018!
With the median income in San Diego county being just $63,996, I can’t see how million dollar houses are sustainable over the long term.
Sure, let’s assume that there’s no limit to the number of rich people available to purchase million dollar, 41 year old houses.
These rich people will still want services while living here. Things like trash pickup, good roads, baristas, hairstylists, dog groomers, manicurists, etc. These service people have to live somewhere too!
“These rich people will still want services while living here. Things like trash pickup, good roads, baristas, hairstylists, dog groomers, manicurists, etc. These service people have to live somewhere too!”
That’s where the trusty bullet train from Lancaster comes into play.
High speed hovercraft connecting the service people barges a mile off Mission Bay to the mainland will take up any slack.
Look at me I’m kidding, of course. Ha ha.
eddie89 we are on the same wave-length. I am looking at a playing card from a deck of 52.. What is it? If correct, we need to report to Pechanga immediately!
Brian – Yeah, I saw your post after I uploaded mine and had to do a double take! LOL!
What’s that saying? Great minds think alike!? 🙂
Now if only I could pick those “winning” Powerball numbers!