La Jolla Real Estate: La Jolla Luxury Homes

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If you stay abreast on the La Jolla communitites real estate news even in the least, you've undoubtedly heard doom-and-gloom stories about the La Jolla real estate market. And while there is certainly a softening La Jolla Real Estate market for some, these reports do not tell the whole story. Specifically, there are indications that the upper-tier of the La Jolla real estate market remains strong.

According to the 2007 Coldwell Banker Previews International ® Luxury Survey, luxury homeowners-defined as homeowners whose primary residence is valued at over $2 million in California ($1 million nationwide) and who have investable assets of more than $1 million-are so positive about the real estate market that 40 percent of respondents are considering purchasing a home in the next year as a secondary residence for family use, with 38 percent interested in purchasing as an investment and 22 percent purchasing a retirement property.

Many local real estate agents and brokers confirm that houses in the upper tier-from $2 million to tens of millions of dollars-are indeed still hot properties. And within this grouping, the coastal areas have the strongest foothold on the market.

"We have a very sound, stabilized market," says Greg Noonan, an agent and broker who specializes in San Diego County's coastal zones and is located in La Jolla's Prudential office. "When it comes to high-end real estate, it is not yet a buyer's market."

He attributes this stabilization primarily to the fact that prime real estate, especially on the coast, is a limited commodity. Using La Jolla as an example, he says, "We're out of land." Noonan adds that there are only so many high-end homes that are ready for move-in. He further explains that there are very few empty sites available that could be built from the ground up. Of course, there is always the option to renovate an existing home or raze a building and start from scratch. "[But] it takes about a year to get the permits and a year and a half to build it," says Noonan. "And the cost of construction is at an all-time high."

"What causes prices to drop is oversupply," Noonan says. "[But] that is not what is happening here."

Shawn Hethcock, an agent in the Del Mar office of Willis Allen Real Estate, has also found that the high-end market remains strong. "It's true that across the board we have seen a slowing, but it does not affect the high-end markets the same way it does the lower-end markets," she says. She notes that one reason the higher-end market is more stable is that this market has avoided some of the troubles of lower-tiered markets-specifically with sub-prime lending issues, which have affected people who had difficulties qualifying for loans. "In our areas, that is not even relevant," she says.