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Monday, Feb. 25, 2008 | If Goldilocks had two kids and worked a biotech job in UTC, she might house-hunt in Carmel Valley, ZIP code 92130. For many in Goldilocks’ position, the neighborhood is not too urban, not too funky; it’s just right.

The community east of Torrey Pines, south of Del Mar, north of La Jolla, and west of Mira Mesa exploded with new homes in the last two decades. And to the kind of buyer magnetized by this neighborhood, Carmel Valley is a La Jolla with newer streets. It’s a slice of Orange County-style suburban living in the northern edge of San Diego city. It’s home to good schools, including three well-regarded high schools on one street, and shiny cars that zip onto and off of nearby freeways.

It’s a planned community, a labyrinth of generic streets and homes and mansions and shopping centers and schools and churches rimming canyons. When they look out their windows, homeowners see more homes.

Many Carmel Valley-ans see their community as an anomaly, a safe pocket protected from the housing distress plaguing many areas of the county. Foreclosure activity is creeping in, some real estate pros warn, but so far the creep has been slow.

“Schools is the No. 1 answer and there’s no close second,” said North County real estate broker Jim Klinge on the allure of the community. “And there’s the presumed security and safety of buying in an area that has been so strong.”

When examined on a county level, a housing market is nearly impossible to diagnose with much precision. Schools and noise and even what type of tree is planted in the median of a thoroughfare can attract or repel buyers, many of whom care only about the price performance of one house: the one they’re buying. Carmel Valley is one of the most sought-after neighborhoods among rent-and-see San Diegans posting to the region’s online real estate forums. And a look at how this neighborhood is doing, in the overlap of North City and North County, yields a look at the performance of a neighborhood some boosters thought to be untouchable when prices were soaring.

On a recent afternoon drive through the community, Klinge pointed out the way the subdivisions settled in one after another as developers followed Pardee’s initial development of the Del Mar Highlands subdivision in the 1980s.

In several of the developments, the houses are large in proportion to the lots they sit on, which are decorated with manicured lawns and trees. One model house has a trampoline embedded in the grass in the backyard.

An SUV wheeled into a driveway soon after school let out; two kids hopped out and helped unload bags. Klinge gestured out the window at the homes stacked as far as he could see. That’s not how it used to be, he said.

“The big question was how the city (of San Diego) was going to get services up here,” he said. “This was the boondocks. The only thing out here were rattlesnakes and coyotes.”

A slight bump in foreclosure activity carries uncertainty into the market in Carmel Valley. In January, the community had 15 notices of default and nine trustees’ sale notices recorded, according to DataQuick Information Systems. That was up from seven notices of default and just two trustees’ sales in the same month a year earlier.

“Our notice of default list is actually much higher than people realize,” said Anne-marie Boyer, a Carmel Valley real estate broker. About 65 homes are in one of those first two stages of foreclosure, she said.

“I think we’ll probably see more, because [loans with spiking payments] are coming due, and people haven’t been making their payments,” Boyer said.

It’s not the only spot where brand-new homes bounded on the market as real estate sizzled a few years ago, where people who’d taken out large loans now find themselves underwater. In other places in the county, rampant foreclosure has caused some new homes to plunge in value, but the same trouble hasn’t yet nested here. Some buyers wonder if they should hop down from the fence or if waiting — like many already have, for years — might prove worth it later.

“The people who are waiting are reading the newspapers, seeing that prices are coming down,” Klinge said. “But, just in this neighborhood, are prices really coming down? Prices are dropping slower. … Some people say that it’s just a matter of time.”

Per square foot, buyers paid a median price of $338 in January on the 28 standalone resale homes sold. That was a 2.1 percent decline from the price in January 2007, an 8.6 percent drop from the January before that. The peak price paid per square foot came in October 2005 at $411 — 17.8 percent higher than last month’s price, according to DataQuick.

The same price paid per square foot measure for all of San Diego County shows a year-over-year decline of 17.2 percent to $270, compared with Carmel Valley’s 2.1 percent. From the peak, prices had fallen 22.9 percent — a larger fall than Carmel Valley’s 17.8 percent decline, according to DataQuick.

Builders still have new homes to sell, and more than 200 people were reportedly on the list waiting for a Pardee’s release Saturday of eight homes for sale at its Derby Hill development. The homes ranged from $1.1 million to more than $1.7 million. Buying a house in this community is buying the security of a suburb, the prestige of North County, the esteem of high-performing schools.

“I really feel like we have got one of the most desirable areas in the U.S. for the family with two kids,” said Richard Stone, a real estate broker specializing in Carmel Valley.

And some people are willing to pay top dollar to live here. Late last year, a foreclosed house on Moonflower Meadows Trail in Pardee’s Arabella development sold in November for $859,900. The previous owner bought it from the builder in October 2005 for more than $938,000.

The 8.4 percent decline in price parallels the way the market’s changed in Carmel Valley between the two sale dates — it’s “close to retail,” Klinge said. But where a lot of people associate foreclosures with bargains, this sale doesn’t show that kind of dramatic reduction. That’s not going to stop a buyer from boasting at dinner parties over finagling a bank deal in Carmel Valley.

“There is built into society a thought that a bank deal equals a good value,” he said. “And it doesn’t.”

For many Carmel Valley homeowners, the neighborhood is just right.

Randy Rechs and his wife moved to Carmel Valley in October 2003, soon after they had their first of three children, who are now 5, 3, and 17 months old.

“We owned a condo in Pacific Beach, and this was a better atmosphere for the kids,” he said. “I think it all depends on what stage in your life you’re in.”

Rechs said he knows about the trouble some homeowners are in, but he doesn’t worry about his house.

“We didn’t buy at the top of that market,” he said. “We didn’t buy at the bottom either, but

I think it’s a little bit different in Carmel Valley. I think it’s a bit of a pocket. We do know some neighbors who’ve moved out of state because of how the market is — we’ve heard of one or two people in that situation.

“People don’t like to talk about it a whole lot,” he said.

Another homeowner, Steve Jess, said he wouldn’t be surprised if values slipped further in Carmel Valley, but doesn’t worry about his home since he bought in 1998, before the most recent housing boom.

“Definitely homes are staying on the market quite a bit longer,” he said. “One would assume that if there’s drops across the county and across the country, there’s a general trend.”

Boyer said she helps her buyers to find the neighborhoods where there have been foreclosures.

“If you haven’t seen any drop at all, then I would probably wait,” she said. “If you’ve had somebody tank the area already with a foreclosure, then I think it’s going to be fine.”

Please contact Kelly Bennett directly with your thoughts, ideas, personal stories or tips. Or send a letter to the editor.

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