Pure real estate genius.

[GDaddy]

It's tough to use gross sales prices without relating to property characteristics because a 6000sf home isn't an apple for the 9000sf home that sold a year later. But without regard for property attributes, here's the breakdown in SD County among the top 100 sale prices sold through the listing service between 2005-2011

2005 - 22
2006 - 30
2007 - 26
2008 - 14
2009 - 15
2010 - 10
2011 - 8

As can be expected, sales activity drops off as the trends for increase reach their peak as fewer and fewer buyers think it makes sense to pay more.

On a price/sf basis, 13 of the top 20 occurred after 01/2008. That's not a great measure but it does show that the high dollar market didn't peak at the same time as the lower end.


I did the same thing with the pricing in LA County as reported in the CLAW MLS system - that system is used more by the brokers who cover the puxury markets through Beverly Hills, Bel-Aire, the west side and such. It's incomplete for the County but probably a better indicator than the other system.

Of the top-10 sales on a gross price basis from 2005-2012, 9 of them occurred after 01/2008 and 8 of them occurred after 01/2010. Same for price/sf, 9/10 after 01/2008 and 8/10 after 01/2010.

The point is that even though SD and LA are close geographically, their respective luxury home markets didn't peak at the same time as each other, or at the same time as their respective lower end market segments. So basing our opinions on what we saw on the lower end would only apply to the lower end, and would be local in any case.

 

[studog]

If any of you were familiar with the luxury real estate business in the US you'd understand that price increase over that period of time isn't particularly unusual among those properties.

L.A. County alone has generated at least 20 sales transactions in excess of $50m over the last 5 years, and that doesn't count the transactions for which the details are obscured so they don't show up that way in public records. And the east coast luxury markets have always grossly outpriced every other market in the nation. Including HI.

You are wrong about that. Particularly in the luxury real estate market in South Florida during the relevant time. Do some research and report back your findings. What's happened in LA over the past 5 years could not possibly be further removed from what was going on in South Florida (and the rest of the nation) between 2004 and 2008.

Price increases starting around 2015 have a lot due to China "unpegging" it's currency. Money fleeing from the country into a safer investment such as property in the US.

 

[sizzld1]

The question is what was happening to the market price of high-end homes from 2004 (when Trump bought) to 2008 (when Trump sold). Sales after 2008 don't help your case. Did the market price for equivalent homes double over that time frame? Maybe they did. It certainly doesn't square with my memory of that time period though. Here's an interesting graph of home prices in South Florida (and the rest of the nation) over those years, it does not seem to support your claims. In fact, it seems to indicate 2004 was the peak of the market and 2008 the bottom with a precipitous drop in housing prices between the two dates (and Florida suffering worse than most):

https://www.washingtonpost.com/news/wonk/wp/2015/08/18/florida-could-be-headed-for-another-housing-slide/?utm_term=.b91702fdaa96 [A larger version of the image is available here]

 

[GDaddy]

You're not comparing the properties in question to each other. I just showed you that the higher end pricing was working off a very different timeline than the lower end, so why do you keep transposing pricing for ALL properties onto this niche? It's completely irrelevent to the $20m buyer in 90210 what the $200k home prices were doing in Riverside. And vice versa.

I was working with the raw data in real time during the time frames in question. Now if it's a fair point that I shouldn't assume that the FL market in this price range was doing the same thing at the same time as its corresponding markets in SD and LA - and that is a fair point - then that goes double for trying to assume that the national averages for all homes can be used as any indication to what these high dollar buyers were doing.


As I say, I don't know what is and isn't with this transaction. My original point was that it wasn't particularly unusual for prices to double in just 3-4 years, and this occurred in several markets nationwide, not just here in SoCal.

 

[StuAzole]

It's tough to use gross sales prices without relating to property characteristics because a 6000sf home isn't an apple for the 9000sf home that sold a year later. But without regard for property attributes, here's the breakdown in SD County among the top 100 sale prices sold through the listing service between 2005-2011

2005 - 22
2006 - 30
2007 - 26
2008 - 14
2009 - 15
2010 - 10
2011 - 8

As can be expected, sales activity drops off as the trends for increase reach their peak as fewer and fewer buyers think it makes sense to pay more.

On a price/sf basis, 13 of the top 20 occurred after 01/2008. That's not a great measure but it does show that the high dollar market didn't peak at the same time as the lower end.


I did the same thing with the pricing in LA County as reported in the CLAW MLS system - that system is used more by the brokers who cover the puxury markets through Beverly Hills, Bel-Aire, the west side and such. It's incomplete for the County but probably a better indicator than the other system.

Of the top-10 sales on a gross price basis from 2005-2012, 9 of them occurred after 01/2008 and 8 of them occurred after 01/2010. Same for price/sf, 9/10 after 01/2008 and 8/10 after 01/2010.

The point is that even though SD and LA are close geographically, their respective luxury home markets didn't peak at the same time as each other, or at the same time as their respective lower end market segments. So basing our opinions on what we saw on the lower end would only apply to the lower end, and would be local in any case.

That's got nothing to do with peak market values. The value of any home in 2005 in SD, whether it was worth $100,000 or $100M, was higher than it was in 2008 or 2010. Showing rich people paid cash for what they thought were bargains in 2007, 2008 and 2009 doesn't give any indication as to where those properties sold relative to their 2004/05 values.

 

[StuAzole]

You're not comparing the properties in question to each other. I just showed you that the higher end pricing was working off a very different timeline than the lower end, so why do you keep transposing pricing for ALL properties onto this niche? It's completely irrelevent to the $20m buyer in 90210 what the $200k home prices were doing in Riverside. And vice versa.

I was working with the raw data in real time during the time frames in question. Now if it's a fair point that I shouldn't assume that the FL market in this price range was doing the same thing at the same time as its corresponding markets in SD and LA - and that is a fair point - then that goes double for the use of national averages for all homes.

No you didn't. You showed that some of the most expensive homes sold over a period were sold later in the downturn. But you didn't show that those homes sold for the price they would have 2 years prior. That high-end homes sold in 2010 is immaterial.

Make things easy on yourself - go to zillow, pick out a home in Palm Beach and then go look at the 10-year estimates and pricing trends in the zip code. Now I recognize that zillow's just an imperfect guide, but if you can find a home that was worth 2x higher in 2008 than 2004, other than Trump's, show us.

 

[sizzld1]

You numbers don't actually show that prices were increasing over the 2004 to 2008 time period. In fact, they don't say anything at all about price trends. To the extent your numbers are relevant at all, they show a massive decline in demand for high value homes from 2004 to 2008 (1/3 less demand for top 100 homes).

 

[GDaddy]

It's tough to use gross sales prices without relating to property characteristics because a 6000sf home isn't an apple for the 9000sf home that sold a year later. But without regard for property attributes, here's the breakdown in SD County among the top 100 sale prices sold through the listing service between 2005-2011

2005 - 22
2006 - 30
2007 - 26
2008 - 14
2009 - 15
2010 - 10
2011 - 8

As can be expected, sales activity drops off as the trends for increase reach their peak as fewer and fewer buyers think it makes sense to pay more.

On a price/sf basis, 13 of the top 20 occurred after 01/2008. That's not a great measure but it does show that the high dollar market didn't peak at the same time as the lower end.


I did the same thing with the pricing in LA County as reported in the CLAW MLS system - that system is used more by the brokers who cover the puxury markets through Beverly Hills, Bel-Aire, the west side and such. It's incomplete for the County but probably a better indicator than the other system.

Of the top-10 sales on a gross price basis from 2005-2012, 9 of them occurred after 01/2008 and 8 of them occurred after 01/2010. Same for price/sf, 9/10 after 01/2008 and 8/10 after 01/2010.

The point is that even though SD and LA are close geographically, their respective luxury home markets didn't peak at the same time as each other, or at the same time as their respective lower end market segments. So basing our opinions on what we saw on the lower end would only apply to the lower end, and would be local in any case.

That's got nothing to do with peak market values. The value of any home in 2005 in SD, whether it was worth $100,000 or $100M, was higher than it was in 2008 or 2010. Showing rich people paid cash for what they thought were bargains in 2007, 2008 and 2009 doesn't give any indication as to where those properties sold relative to their 2004/05 values.

Focus, the same question about whether the 2008 sale price was reasonable also applies to the 2004 acquisition price. Right? When none of the top sales reported in LA occurred before 2006 what does that say about the later prices vs the prior prices? It says they were higher.

Most of these high-dollar properties were not new construction, so they have their own respective sales histories. I would imagine there are probably several 2008 sales that had prior sales from 2004 and 2006. Flipping was common back then, same as now.

 

[GDaddy]

You numbers don't actually show that prices were increasing over the 2004 to 2008 time period. In fact, they don't say anything at all about price trends. To the extent your numbers are relevant at all, they show a massive decline in demand for high value homes from 2004 to 2008 (1/3 less demand for top 100 homes).

I already provided the explanation for that. We have a small dataset to begin with - there are only so many of these properties out there. You can watch any market segment and see exactly the same pattern with volume vs pricing - as the pricing continues to increase the volume drops off as fewer buyers are sufficiently motivated to pay that much more. Until finally there are no buyers, at which point the only sellers are those who reduce their asking prices. Then as it becomes a buyers market its the sellers who are competing with each other to get that sale.

 

[sizzld1]

It's tough to use gross sales prices without relating to property characteristics because a 6000sf home isn't an apple for the 9000sf home that sold a year later. But without regard for property attributes, here's the breakdown in SD County among the top 100 sale prices sold through the listing service between 2005-2011

2005 - 22
2006 - 30
2007 - 26
2008 - 14
2009 - 15
2010 - 10
2011 - 8

As can be expected, sales activity drops off as the trends for increase reach their peak as fewer and fewer buyers think it makes sense to pay more.

On a price/sf basis, 13 of the top 20 occurred after 01/2008. That's not a great measure but it does show that the high dollar market didn't peak at the same time as the lower end.


I did the same thing with the pricing in LA County as reported in the CLAW MLS system - that system is used more by the brokers who cover the puxury markets through Beverly Hills, Bel-Aire, the west side and such. It's incomplete for the County but probably a better indicator than the other system.

Of the top-10 sales on a gross price basis from 2005-2012, 9 of them occurred after 01/2008 and 8 of them occurred after 01/2010. Same for price/sf, 9/10 after 01/2008 and 8/10 after 01/2010.

The point is that even though SD and LA are close geographically, their respective luxury home markets didn't peak at the same time as each other, or at the same time as their respective lower end market segments. So basing our opinions on what we saw on the lower end would only apply to the lower end, and would be local in any case.

That's got nothing to do with peak market values. The value of any home in 2005 in SD, whether it was worth $100,000 or $100M, was higher than it was in 2008 or 2010. Showing rich people paid cash for what they thought were bargains in 2007, 2008 and 2009 doesn't give any indication as to where those properties sold relative to their 2004/05 values.

Focus, the same question about whether the 2008 sale price was reasonable also applies to the 2004 acquisition price. Right? When none of the top sales reported in LA occurred before 2006 what does that say about the later prices vs the prior prices? It says they were higher.

Most of these high-dollar properties were not new construction, so they have their own respective sales histories. I would imagine there are probably several 2008 sales that had prior sales from 2004 and 2006. Flipping was common back then, same as now.

The question is really, really simple. It certainly is not whether it is uncommon for home prices to double in the span of 3 to 4 years. The actual 3 to 4 years we are considering matter. A lot. 2004 appears to have been the peak of the housing bubble. 2008 was the bottom. Are you really going to argue the luxury market was going in the exact opposite direction during that time frame? If so, you should have some actual examples and statistics to back it up, because it doesn't square with basic logic. While the two markets don't necessarily chage at the exact same times, they definitely are not as mutually exclusive as you seem to be arguing.

 

[GDaddy]

I just showed you the pricing trends for SD and LA county during that time frame that showed more high dollar sales being booked after 2007 than before it.

The only other thing I can do is seek out specific examples of homes that sold in 2004 and resold in 2008 to see what changes - if any - occurred during the interim. It's doable, but time consuming. I tried using price/sf as a proxy but you're not buying that explanation - you still seem think the same thing that happened to subdivision homes in Pacoima were happening at exactly the same time to the homes in Holmby Hills.

 

[Surfdog]

RE market in So Cal peaked in 2007, with a slow decline thru early 2008. But by mid-late 2008, prices started to crash.

If Trump sold in early 2008, it was still just off the peak in 2007.

I know personally, as I soid my little tiny bachelor pad condo in late 2007 at near max values. Tried to do a 1031 exchange within 6 months to roll-over gains (rental), but the deal we had worked on had a sketchy assoc. reserves issue and we backed out, and it was near our max budget anyway. So glad it didn't work out in hind-sight.

Lost my cap gains exemption and had to pay full taxes on the bach pad gains. OUCH!! Later bought my current place in late 2008, after some initial drop in prices, only to watch the market and banking disaster unfold while in Princeville staying in our place the very first time in late Sept 2008. Initially thought "what the hell did we just do?" RE market tanked further from there well into 2009, bottoming out in 2010-2011.

But, as we all know, RE will always have value for the long term investor, and now here we are from those 2009-2011 depths.

 

[sizzld1]

I just showed you the pricing trends for SD and LA county during that time frame that showed more high dollar sales being booked after 2007 than before it.

The only other thing I can do is seek out specific examples of homes that sold in 2004 and resold in 2008 to see what changes - if any - occurred during the interim. It's doable, but time consuming. I tried using price/sf as a proxy but you're not buying that explanation - you still seem think the same thing that happened to subdivision homes in Pacoima were happening at exactly the same time to the homes in Holmby Hills.

That's not what I'm saying. But I provided an actual source that shows housing prices dropping rapidly over the relevant time frame. You are trying to argue the exact opposite occurred in the luxury home market, but you've yet to provide any evidence. After/before 2007 is not what matters. 2004 matters. What happened to prices in 2005-2007 matters. And, ultimately, what matters most is what was happening in July 2008 when Trump sold the property. What happened in 2009, 2010, and on is completely irrelevant. You numbers show a massive decline in sales of "top 100" properties from 2004 (22 sold) to 2008 (only 14). That does not help your case, no matter how you try to rationalize it.

I'm not saying I'm absolutely right here, I'm just saying you haven't shown anything that would indicate prices were doubling in that market at the same exact time the rest of the real estate market was going to sh!t.

 

[StuAzole]

RE market in So Cal peaked in 2007, with a slow decline thru early 2008. But by mid-late 2008, prices started to crash.

If Trump sold in early 2008, it was still just off the peak in 2007.

I know personally, as I soid my little tiny bachelor pad condo in late 2007 at near max values. Tried to do a 1031 exchange within 6 months to roll-over gains (rental), but the deal we had worked on had a sketchy assoc. reserves issue and we backed out, and it was near our max budget anyway. So glad it didn't work out in hind-sight.

Lost my cap gains exemption and had to pay full taxes on the bach pad gains. OUCH!! Later bought my current place in late 2008, after some initial drop in prices, only to watch the market and banking disaster unfold while in Princeville staying in our place the very first time in late Sept 2008. Initially thought "what the hell did we just do?" RE market tanked further from there well into 2009, bottoming out in 2010-2011.

But, as we all know, RE will always have value for the long term investor, and now here we are from those 2009-2011 depths.

You're generally a year off on your timing. Homebuilders were slashing prices (10-15%) in coastal SD by late 2005 to get rid of high-end inventory. They didn't slash fast enough. It's why builders like John Laing went BK.

 

[GDaddy]

OMG

I just showed you *that* pricing tier continued to increase past 2008. That was the primary purpose of including the later years, to show the market DID NOT REVERSE in those price ranges until after 2011. I presented SD County first because on a nationwide basis that region was first-in/first-out during the real estate cycle. LA came on later and so did virtually every other bubble market, probably including FL.

Some housing markets in the nation never did get into the explosive price growths, and yet they're included in the national averages you're trying to associate with the luxury price market.

 

[sizzld1]

OMG

I just showed you *that* pricing tier continued to increase past 2008. That was the primary purpose of including the later years, to show the market DID NOT REVERSE in those price ranges until after 2011. I presented SD County first because on a nationwide basis that region was first-in/first-out during the real estate cycle. LA came on later and so did virtually every other bubble market, probably including FL.

Some housing markets in the nation never did get into the explosive price growths, and yet they're included in the national averages you're trying to associate with the luxury price market.

The graph I presented shows changes in housing prices - in the relevant market - during the relevant timeframe. Your data points - again - are completely meaningless when it comes to changes in prices from 2004 to 2008. To the extent they have any meaning at all, they show a serious decline in demand for "top 100" houses from 2004 (22) to 2008 (14).

 

[kidfury]

1. Acquire most of the capital, (Step 1 completed)
2. Erode faith in the government, (Step 2 in process)
3. Break down and remove government institutions/departments,
4. Invalidate government regulations,
5. Diminish government taxes,
6. Acquire all of the capital.
7. Dissolve the government

 

[Surfdog]

All I know, is prices were topping out in 2007.

You could look at Zillow for price histories, but it only goes back 10 years to date (Feb 2008).

Most homes in So Cal are at, near or slightly above their 2007 peaks today, at least in my neck of the woods. Depends how "hot" your specific neighborhood has been the last 5 years. Some have gained back and more than 2007 peaks, some just under.

This SF chart pretty much backs my claims....

 

[Mr Doof]

Not that I agree with what Zillow has to say, but the current price for this place put the Russian guy in the black by a few million.

Check it and see.

Hey that isn't too far from where I slept on some famous rock star's couch back in the late 90s.

 

[Billy Ocean]

2007/8 was peak in NYC area (its higher now)

Palm Beach I would guess is highly correlated to NYC

Spring of 2007 was pretty much the last hurrah for NYC if I recall, mainly because the Wall Street folks had huge bonuses from 2006 to spend.

Yes

But I had friends that made very bad purchases in 2008 too because they were conditioned to bubble prices

2010 was bottom