Tuesday, August 28, 2007

Real Estate Fantasyland Questions

There are standard eight-inch white ceramic tiles on the floors of the bathrooms, the kitchen and the foyer of our townhouse. A little basic math easily demonstrates that a set of four of those tiles is a bit larger than one square foot, but it's just about the right size for the average person to stand on comfortably. Would you be willing to pay more than $12,760.00 for a space the size of those four tiles? How about if you had a fabulous, unobstructed view of the ocean? Any takers?

The LA Times "Home of the Week" this past Sunday featured a house in South Laguna with a 270-degree "breath-stealing" ocean view and an asking price of $31.9 million. The house has 2,500 square feet of living space with the bare minimum of amenities one might reasonably expect in a home even in a much lower price range: "cathedral-vaulted ceilings, hardwood and marble floors, skylights, a bay window and a double-door entry. There are hand-painted tiles in the kitchen and a hand-painted mural on a wall in a private courtyard . . . a wet bar, air conditioning and two-car garage."

But there's that view. A spectacular experience, undoubtedly. And yet, is it worth $12,760.00 per square foot? The listing agent suggests that "it obviously makes most sense as a turnkey, fully furnished vacation home for two or three, if you prefer."

So at that price it's not even expected to sell as a primary residence? It's just a little "get-away" spot at the beach?

Is anyone else noticing a dramatic disparity between this listing and all the latest news about the rapidly-increasing number of foreclosures homeowners are currently facing? How many of those homeowners simply took on mortgages that they couldn't afford in order to maximize the size, or perhaps the location, of the home they purchased? I suspect that they thought they were maximizing their "lifestyles" as well. Instead, they made bad financial decisions in order to get "more" and now many of them are going to end up not with "less," but with nothing.

I also suspect that what those homeowners really wanted was more quality in their lives, not in their lifestyles. With a little thought, they might have figured out that in order to achieve the quality they were seeking, they didn't need a fancier house, or better views, or marble countertops and restaurant-quality appliances in the kitchen; what they needed was more time, more enjoyment, more peace of mind.

Maybe the buyers of this pricey beach home will end up with more of what they want. But I wonder . . . .

© 2007 Cynthia Friedlob


BigNerd said...

Yep. I agree. Nice post. There is definitely a disparity arising.
Keep it simple. Live within your means. Unclutter your life. Give thanks for what you have.

Blog on!

Cynthia Friedlob said...

Thanks, BigNerd! I appreciate your support. Your four "rules" make perfect sense to me.