Million-dollar homes

California million-dollar home sales in 2005 surged to a new peak for the fourth year in a row, as appreciation pushed a higher portion of overall sales into the seven-figure category, a real estate information service reported.
A total of 48,666 Golden State homes sold for a million dollars or more last year, up 47 percent from 33,107 in 2004. The total was 19,080 in 2003 and 13,871 in 2002, according to DataQuick Information Systems.
One in 13 homes sold for more than a million dollars last year, up from one in 20 the year before.

"In reality, the prestige market remained pretty stable from 2004 to 2005. But because of the increase in home values across the board, more sales prices crossed the million-dollar threshold. In other words, homes that would have sold for $900,000 in 2004, sold for more than a million last year," said Marshall Prentice, DataQuick president.
Statewide, there were 310 sales for more than $5 million last year; 327 sales were in the $4-$5 million range; 990 in the $3 million range; 3,937 sales in the $2 million range; and the rest between $1 million and $2 million.
The most expensive confirmed purchase was a 13,636-square-foot, 6-bedroom, 12-bathroom La Jolla house on six acres, which sold for $23.5 million in September. The largest was a 7-bedroom, 8-bathroom, 18,369-square-foot house on 2.2 acres in Solana Beach in San Diego County, which sold for $6.2 million in August.
Ross in Marin County and Rancho Santa Fe in San Diego County were communities where virtually all home sales were in the million-dollar category.
Several new million-dollar home markets emerged last year, mostly because of sales of newly built large homes on big lots. The areas include Corona and Norco in Southern California, and Union City in the San Francisco Bay Area.
Newly built homes accounted for 9,043 of last year's sales, up 73.6 percent from 5,210 for 2004. San Diego and Orange counties were the most active markets for newly built million-dollar homes, DataQuick reported.
There were 2,902 condo sales in the million-dollar category, up 73 percent from 1,677 a year ago. Most were sold in West Los Angeles, San Diego and San Francisco.
The median-sized million-dollar home was 2,480 square feet with 4 bedrooms and 3 bathrooms. The median price per square foot for all million-dollar homes was $516, up 5.6 percent from $489 a year ago, DataQuick reported.
Around 10 percent of the buyers paid cash, down from 15 percent in 2004. Of those who financed their purchase, the median down payment was 28 percent of the purchase price. Lending institutions most willing to provide mortgage financing were Countrywide, Washington Mutual and Wells Fargo, according to DataQuick.

No low incomes in Placer County

The U.S. Census Bureau reported that prosperous Placer County has the lowest poverty rate of any other California County. That’s good news for all the folks who live and work in Placer County but as expected not everyone is happy about the news.
Advocates for the poor say low-income people can’t afford to live in high priced Placer County. Herb Whitaker, managing attorney for the Mother Lode regional office of Legal Services of Northern California, said “Depending on whom you ask, a low poverty rate can mean one of two things: Either you’re helping people in your county get out of poverty, or you’re helping people in poverty get out of your county.” Whitaker thinks there should be more poor living in the county and has a proven track record of litigation against counties and cities to enforce his beliefs.
According to the data from the Census Bureau only 5.9 percent of Placer County residents have an income below $18,400. Typically 13.8 percent of California residents have incomes below $20,000 considered by many a poverty level. Housing advocates believe that Placer needs more poverty level people living in the county. I am not sure I follow their reasoning.
There are a lot of places where I can’t afford to live. A few are even in Placer County. No one is purposely locking out low-income wage earners from living in Placer. Most find more affordable housing on the other side of the 80 highway in Sacramento so what’s wrong with that? Do affordable housing advocates believe that Placer County should import low-income families to bring up their percentages of working poor?
Robert Mogull, a professor of business statistics at Sac State said the county’s “extraordinary high white population, its small black and Latino population, and its relatively small family size, and its small population of people who speak a language other than English all correlates heavily with a low poverty rate.
Economic factors not social drive all purchases including housing. Placer County is among the top 5 in the state for highest average family income. Advocates for subsidized housing won’t be satisfied until a larger percentage of low-income families live in the county; providing a larger constituency for them to represent.

Prices and inflation

The Labor Department reported that consumer inflation increased to a five year high of 3.4 percent for 2005. Interest rates jumped a little on the news. The yearly inflation rate of 3.4 is very reasonable from a historical standard but I question its accuracy.
I know of few things that have only increased 3.4 percent this year, so where does the government find them? I wish the government would publish a list showing products and services that have only increased their pricing by 3.4 percent.
Take insurance for instance. I pay for health, auto, homeowners, life and professional liability insurance. All my insurance policies have increased by 10 percent or more. Each year I drive about 35,000 miles and each year I buy a set of new tires and get a new set of breaks for my well traveled Honda Accord. This year the cost of both has increased 12 percent. All transportation costs have increased over 3.4 percent. Did the 3.4 percent include the cost of gas?
My dentist wants $600 for a new crown. His price was $400 for the last one I had installed. Have you ordered lunch recently? Remember that $5.00 soup/sandwich special? Now it’s priced at $8.00 and that doesn’t include the $1.50 for coffee or ice tea. The only place to find a reasonably priced lunch is the dollar menu at Mc Donald’s.
We don’t go to movies very often. Vicki likes chick-flicks and I like action-hero or political intrigue. Part of the reason we don’t is time and distance. The nearest theater is 30 minutes away from our place and we both work more than full time. Another reason is that Hollywood isn’t producing too many enjoyable feel good productions. I don’t like feeling embarrassed or humiliated when seeing a move. I like a movie to have a good story-line, the good guys to win and everyone to live happily ever after. There is not many of those movies anymore. Neither are their any $5.00 matinees. If fewer people are going to the theater wouldn’t you think the ticket price would come down?
The cost to sleep someplace is higher than last year. Vicki and I plan on taking a weekend trip and need a hotel for two nights. In addition to the room rate which has increased $15 bucks from last year the hotel now charges an energy tax of $3 and a room cleaning charge of $5. Don’t they know that inflation is only 3.4 percent?
Whoever is responsible for determining the yearly inflation factor doesn’t buy groceries. We used to enjoy a nice steak once a week. Now, steak is for company or other special occasions. Did you ever think you would pay nearly a buck a pound of apples or oranges?
Contractors and builders tell me that the cost to build a house has increased 15 percent just this year. County building permits are responsible for much of the increase but so is the high demand for lumber. The average home was 18 percent more expensive in 2005 than in 2004.
There may be a few products and services that have only increased by the official 3.4 average but I don’t think I use any. If anyone has I would appreciate you forwarding me a list.