January 2009 Archives

The famous Webster House, reportedly the oldest building in Alameda, has been on and off the market for several years, and it's now on the MLS(r). It's currently listed at $1,795,000 ($598 / sqft) and my guess is that it probably won't sell this time around either.

The specs:

6 bedrooms, 6 bathrooms, 3,000 sqft, ~7,000-sqft lot, MLS(r) #351782, $1,795,000

Architecturally & historically significant WEBSTER HOUSE Bed & Breakfast Inn is offered for sale!!!!!!! This 1854 Gothic Revival house was designed by Andrew Jackson Downing, built in New York, shipped around Cape Horn and assembled in Alameda. [...] Six bedrooms, six baths, seven fireplaces, hundred-year-old trees on the property and great karma [...]

It's not exactly my cuppa architecturally speaking, and the commercial kitchen that's been advertised in various Craigslist posts would be overkill even for the occasional soufflé, but if you're into that sort of thing, it's certainly an interesting building.

The owners have been trying to get rid of it for years, and I've counted no fewer than seven asking prices, without an obvious downward pattern--the price seems to go up and down randomly:

$2,750,000 google cache link (no date)

Watch for a wave of relists now that the holidays are over. I think Superbowl Sunday is coming up, too, and as we all know demand and prices skyrocket after the Superbowl.

Another relist this week is 1811 Sherman Street, a foreclosed Mediterranean duplex in a non-prime part of town we discussed last summer. It's now MLS(r) #40391865, listed at $484,900, down from $524,900 last time ($209 / sqft). The MLS sites have photos this time around (Redfin doesn't yet but I suspect they will soon) and it looks rather, um, undistinguished on the inside. Maybe that's why it still hasn't sold, although I wouldn't be surprised if bank inertia may have something to do with it as well.

I deliberately omitted the brown shingle house at 1532 Benton when it first came on the market, mostly because Kirk Knight's saccharine listings annoy the living daylights out of me. But now that it's back at a lower price, there's no harm in documenting its descent towards a non-stupid list price, which--believe you me--probably doesn't start with the number 8.

Here are the specs of this large-ish, very brown home:

3 bedrooms, 2 bathrooms, 1,968 sqft, 4,551-sqft lot, MLS(r) #40391439, $825,000

What's not to love about this home?
Open Saturday & Sunday 1:30-4:00PM.
1532 Benton Street

• Excellent Schools
• Original Craftsman character
• 3+ bedrooms, 1,969 sq ft
• Park-like setting of trees and garden
• Huge 2 car garage entered from side street
• First time on market in 35 years
• Excellent condition, move-in ready

Can you imagine living among the trees and gardens in a quiet retreat?

This 3++ BR, 2 BR Cedar shingled home is set on a quiet street, and backs onto a cul de sac setting of trees and garden.

Traditionally in Franklin Elementary School (903 API), the home also has a huge 2 car garage with space for a shop or playroom with entry from the rear cul de sac.

Remember when 2005 2006 2007 2008 was a great time to buy? I'm sure whoever bought this new property on Tucker is really happy they heeded their agent's advice a couple of years ago. 390 Tucker has the following specs:

3 bedrooms, 2.5 bathrooms, 2,035 sqft, 3,024-sqft lot (!), MLS(r) #40390663, $695,000

Classic Colonial in Bayport [...] Custom Shutters, Tile entry way,French doors [...] Office/Dining rm. Designer lights [...] Fireplace in Family Rm. with Additional llghting. Finshed patio [...] Upgrades & beautiful landscape yard & lots more. Great value!

(not sure this is the exact address; development is a little too new for Google's Street View to be 100% accurate)

Note the tiny postage stamp lot for this big house, as seems to be the case almost everywhere in that area.

The neighbors who bought their homes at the peak must be overjoyed to have a new comp listed for $150,000 or more below what they likely paid themselves:

Last sale and tax info

Sold 10/02/2006: $830,500

2008 Property Tax: $11,290

I'm wondering if this string of below-cost listings is going to cause a jingle-mail tsunami around the Bayport development.

 

Sometimes a cluster of homes within spitting distance of each other seem to come on the market at the same time. Last spring, a string of Gold Coast properties got listed and sold shortly thereafter. This January appears to be the West End's turn, with at least three properties in the 400-500 block range coming on the market at once, adding to an already sizable inventory.

Today's Vic is a sad, naked duplex that most likely wasn't born that way.

2x2 bedrooms + "bonus rooms", 1,597 sqft, ~6,000-sqft lot, MLS(r) #40389963, $479,900

Duplex [...] Each unit has 2 BD+ Bonus room. Lots of old details, E. G. antique fixtures, claw foot tub. Large yard for children to play. [...] Room in front yard for small garden. 

A friendly reader pointed out that 1350 Broadway was back on the market at a slightly lower price. I toured that dump property when it was on the market a year or two ago (unsuccessfully, and for good reason, for it reeked of age, neglect and cooking oil) and was thoroughly unimpressed. Agent Kirk Knight picked it up, repriced it, and thankfully published no photos of the inside on any MLS sites (as of today, anyway). My gut tells me he's going to wait as long as Griselda Bissett did the first time around.

On to the specs.

2 units, 3 bedrooms, 2 bathrooms, 1,381 sqft, ~7,000-sqft lot, MLS(r) #40390078, $600,000

Classic Americana [...] Farmhouse. Legal duplex - convert back to single family? Excellent Otis Elementary (880 API) [...] Huge lot, park-like back yard, [...] sep office bldg + detached garage. [...] Neighboring 1885 fixer now transformed for inspiration.

(here's the "Neighboring 1885 fixer").

You can see this property's slow price descent here:

I dug up my notes from my 2007 tour of the place. I haven't seen it since, so for all I know it's fabulous and all new inside now, but this is where it started from:

• Some hardwood floors, in bad shape
  
• Horrible old stinky carpet elsewhere
  
• Floors have noticeable tilt
  
• Downstairs bath: no sink, only a tub
• Upstairs kitchen looks like converted sun porch
• Tiny bedrooms
• Pronounced traffic noise in front living room
  
• Foundation is old, brick-cement mix
• Legal little building in yard has 2 big rooms, but no bathroom or kitchen
• Huge detached garage for 2 normal cars (probably)
• Listed at $699,500 as of 12/16/2007.

The yard is indeed very large, but there's nothing "park-like" about it. And as our friendly reader points out, an 880 API score is nothing to write home about.

The sale history certainly doesn't show anything that justifies a price above $250,000, which is about as much I'd be willing to pay:

Sale History
06/12/1998:	$102,000 *
No other sale data is available
* Transaction not included in Zestimate. More info

$600,000 is obscene.

Another day, another pretty, old West end 2-story house going back to the bank. 452 Santa Clara joins 450 Taylor in our rogues' gallery of failed real estate experiments. Here are the specs:

4 units (3x1BR 1BA, 1x2BR 1BA), 2,836 sqft, 7,810-sqft lot, MLS(r) #351187, $699,900

Large 4 plex in the heart of Alameda. Victorian Home built in 1900 converted to 4 units. Garage parking in the rear. Separate Meters. Short Sale! Grab this great deal! 

The property has a long history of multiple sales in the past 20 years, courtesy of Redfin for a change:

Property History for 452 SANTA CLARA Ave

Date	Event	Price	Appreciation	Source
Jan 15, 2009	Listed	$699,900	--	San Francisco MLS #351187
Jan 15, 2009	Listed	$699,900	--	MLSListings #80902277
Sep 09, 2004	Sold	$738,454	11.1%/yr	Public Records
Dec 30, 1999	Sold	$450,000	51.5%/yr	Public Records
Sep 15, 1994	Sold	$50,000	-36.7%/yr	Public Records
Oct 26, 1993	Sold	$75,000	-24.2%/yr	Public Records
Dec 18, 1992	Sold	$95,000	-30.5%/yr	Public Records
Jan 31, 1989	Sold	$390,000	--	Public Records

Whoever bought it last for $738,454 didn't appear to mind the 11% annual appreciation since the previous sale or the fact that the rental income doesn't come close to covering the costs:

Financial Information

• Tax Amount: $11,074.70
• Gross Rent Multiplier: 26.51
• Rental Income: $26,400
• Net Income: $6,381
• Gross Scheduled Income: $26,400
• Gross Annual Income: $26,400

(for reference, a 6.5%-interest, 80%-LTV loan for a $740,000 house comes out to about $3,700 a month exclusive of property tax).

Oh and by the way, $699,900 is still nowhere near cash-flow positive, either, so anyone buying at today's price is just as much of an idiot as the current owner. But I suppose they may have felt they were getting a great deal then too, since it was apparently listed at $895,000. Interestingly the agent's trophy page for the last sale mentions greater square footage, an owner's unit, and a sale price of $820,500.

This one made me do a double-take.1808 Everett Street (map) recently came on the market, with the following specs:

2 bedrooms, 1 bathroom, 1,236 sqft, 6,000-sqft lot, MLS(r) #40388929 , $649,950

[...] this awesome updated alameda home will be at the top of your list. [...] oversized 6000sqft lot, (almost twice the size of most alameda homes), vinyl siding, [...] double car garage and shop and updated interior, all offered at a competitive price.

1808 Everett is already hardly a prime location, way up there near Clement, but this house also happens to be directly across the street from what looks like a school, which is perfect if you don't care for peace and quiet.

Have I mentioned this nondescript 1,236-sqft bungalow is priced well above $500 / sqft ($526, to be precise), and dares to present itself as priced competitively? It also essentially makes the claim that most Alameda homes are either 3,000 sqft themselves, or (if you interpret the ambiguous grammar the way it's probably meant to be read), located on 3,000-sqft lots, both of which are provably false, and might even constitute false advertising, unless you interpret "almost" very liberally.

It gets better: someone (the owner or agent) actually listed this property on Zillow for...


That's right. Not a Make Me Move(tm) million dollars like, say, that pretty Gold Coast Victorian that's over twice as big, on a bigger lot, in a prime Gold Coast location with lagoon access. Not that kind of million dollars--an actual for-sale million dollars.

Don't believe me? Check out the property's virtual tour:

Today's new listing is a pretty Victorian on the lagoon on the 1900 block of Clinton. Handy if you need to run to the hospital. The specs:

4 bedrooms, 3 bathrooms, 2,563 sqft, 7,420-sqft lot, triplex, MLS(r) #40389387, $949,000

Gorgeous "turn of the century" victorian on lagoon on gold coast [...] Owners unit is 2 bedr/1 bath w/formal dr, sunporch,etc. All units have access to backyard, deck and lagoon. Updated triplex with original charm. [...] One of a kind! Must see

Today's post about 601 Fortress Isle made me look up a few statistics to try to figure out how many real estate agents Alameda can reasonably sustain. The assumptions simplify things a bit: I'll assume Alameda agents only sell homes in Alameda, and no outside agents participate in Alameda transactions. I know both of these not to be true, but because they tug the numbers in opposite directions, I feel fairly confident they only moderately distort the numbers. I'm also not including FSBOs, which as far as I can tell are pretty infrequent here.

On to the data.

The pretty graph on AOL's real estate page for Alameda shows 460 sales in 2008 (I extrapolated December as a % of November's number based on 2007, i.e. 25 estimated sales for December).

The same graph shows an average sale price of $629,647 (estimating December to be the average of the previous 11 months). Trulia's market overview for Alameda says $590,000. I'll split the difference and call it $610,000.

This means approximately $290M changed hands between buyers and sellers in 2008.

Because I'm a nice person, I'll give agents the benefit of the doubt and assume they were able to keep all 6% of their commissions in most cases. This means a gross commission pool of about $17M.

What this all means is that the average transaction brings in a $37,778 commission, split between two agents and a broker. On the sale side, assuming the broker takes 30% and the agent takes 70%, we have the following gross income per transaction:

Buyer's agent	$18,889
Seller's agent	$13,222
Broker	$5,666
Total	$37,778

Now, how many real estate agents do we have in our fair city?

Take a wild guess. Heck, check Gallagher and Lindsey, Harbor Bay Realty, Kane and Associates, and even Alameda Realty's rosters and do a little math if you'd like. I'll wait.

Turns out the big three don't tell the whole story. A quick scan of the Alameda Association of Realtors(tm)'s site indicates we had 282 agents as of May, 2008. Here's the full list with phone numbers (PDF) if you'd like to say hi. Note this is a lower bound on the number of agents in Alameda, since not all of them are registered with the association (perhaps?). 

For convenience, assuming an agent has an equal chance of being a seller's agent and a buyer's agent (i.e. $16,000 average commission), gross incomes come out to:

  $16,000 commission
x 460 transactions
/ 282 agents
x 2 agents per transaction
------------------------------------
$52,000 gross income (before taxes, NAR dues, lock-box fees, marketing costs, lease on your Lexus SUV and three-digit cell phone bill).

I don't know about you, but I'm not terribly impressed. I sure hope they squirreled away all their boom money, because they're going to need it.

Add into the mix overachievers like Pacita Dimacali and Keiko McDonah who seem to sell every other property on the island and you're left with a bunch of underemployed agents who make very little. In fact it doesn't take very many Pacitas and Keikos to cause a non-negligible number of real estate agents to be involved in exactly zero transactions in the whole year.

Of course my assumptions simplify the picture a bit, and lifer Realtors(tm) will tell you they're in it because they're people-persons (people-people?), or because they like architecture, or because they enjoy making their clients happy, or whatever--not for the money.

On the other hand, you might say that making $52,000 for selling 2 houses a year amounts to a pretty impressive hourly fee, and I can't say I disagree.

That said, I don't think anybody would complain if we lost as many as half of the agents on the island to retirement, career change, or other forms of attrition.

You may remember 601 Fortress Isle, a lagoon-side rancher that was in deep trouble last Spring. To refresh your memory:

3 bedrooms, 2 bathrooms, 1,940 sqft, 7,452-sqft lot

Photo from Zillow, resized down, fair use; not EBRD-copyrighted as far as I know

It was purchased for $925,000 in April, 2006, and went back to the bank last year:

Sale History
10/14/2008:	$652,500 *
04/06/2006:	$925,000

Well, it's back, and not yet on the MLS. Better act fast, says the agent:

$680000 / 3br - NOT YET ON MLS BANK OWNED WATERFRONT PROPERTY (alameda)

*Not yet on MLS* Alameda Foreclosed Dream Home Available

Location: South Shore

GET IT BEFORE A REALTOR DOES, STAY AHEAD OF THE GAME WITH THIS BANK OWNED PROPERTY near the water!Ready to move in with waterside access. Great for summer entertaining as well as winter fireside relaxation! A real steal and if you can get the financing then I highly recommend this property!

*Due to this bank owned property being so new, please call for most updated details as the pictures and information below may be out of date*

My favorite part is "if you can get the financing then I highly recommend this property!" It makes me wonder if the agent is consciously trying a new approach, the friendly-advice sales tactic (as opposed to the "buy now or be priced out forever" mouth-breather hard sell), or if he's just new.

I wouldn't mind if a Realtor(tm) did get this property. Chances are they would probably lose it pretty quick, since $680,000 isn't a walk-in-the-park mortgage payment and Realtor(tm) incomes haven't exactly been going up, That would in turn provide me with more material for the next couple of years. Everybody wins.
 
Update 1/13/09: There's a feeding frenzy of classless agents around this property.

You can't pass this house up, It is located on a corner lot in a court. The back yard has a patio and access to the water. Close to shopping and close to Alameda Beach. Your welcome to make an offer, You know what it's worth.
pictures are dated back 11/23/2005

I wonder what the house really looks like now--it was nice enough in the 2005 pictures, but foreclosures have a way of going to pot.

Update 1/17/09: I don't know what's going on with this house--here's a third agent with his name on it.

Update 1/19/09: Yet another agent, and a different price ($745,000) and amusingly worded false advertising--"overlooking with the ocean!!!!!". Agents, do everyone a favor and check your facts, ok?

The postman always rings twice. Opportunity is more old school, and it knocks. Twice.

3221 Encinal is back on the market as an REO, known as MLS(r) #40388418, and listed at $429,500. The last time it was on the market a few months ago, it was listed at $650,000 and looked like hell from the outside (it probably still does). If it was...

[...] a great opportunity for first time home buyers and investors

at $650,000, then it truly is an...

[o]pportunity in coveted Alameda!!! Single family home with nearly full legal height basement [...] Needs work [...]

... at $429,500.

I often wonder about how folks who came close to buying but decided against it must feel when they see the property they almost bought come back for over $200,000 less than they may have paid just a few months ago, had common sense not gotten the better of them. Survivor's guilt, maybe?

Agent Pacita Dimacali always amazes me with her seemingly endless ability to be positive and upbeat about the properties she represents, even the barkingest of the dogs. Today's bungalow on Paru is one of those. First, the specs:

2 bedrooms, 1 bathroom, 966 sqft + bonus room, 3,838-sqft lot, MLS(r) #40388323, $499,000

Let me quote the juicier bits in case you can't decipher the scaled-down print in the photo:

Hard to believe....but this delightful Spanish bungalow offers something unique: [...]

[...] overlooking the backyard which is like one, big patio that requires minimal upkeep

[...]  at the fringe of the famed Gold Coast.

The Gold Coast must have a really wide fringe:

But my favorite, by far, is the "one, big patio that requires minimal upkeep" euphemism for "small paved-over backyard":

One of my favorite failed sales from a year or two ago is about to come back on the market--you read it here first, folks (well, if you don't read anything else, really, since it's on the front page of the local rag's real estate section this week). 450 Taylor is a magnificent 2-story Italianate Victorian in a crummy part of town (for Victorians, that is).

3 bedrooms, 2 bathrooms, 1,798 sqft, 7,000-sqft lot, MLS(r) #TBD, $749,000

Description TBD as well--the MLS(r) sites or craigslist don't have it yet.

I'll drive by later and take a better picture because it's worth seeing.

The interesting story here is that this property was on the market in 2007 or early 2008, if I remember correctly, for $839,000 ($466 / sqft) and failed to sell. It had sold not once but twice in the previous two years, once in December 2005, another in September, 2006 (Zillow page):

Sale History
08/21/2006:	$839,000
12/21/2005:	$675,000
No other sale data is available

The newspaper description suggests someone went wild with "modern comforts" (granite everywhere, Terminator appliances, etc), which might account for the crazy $164,000 gain between those two sales.

A third sale was attempted at some point in the past couple of years, perhaps as a short sale (my memory for details is fuzzy on this one), but I wasn't able to find any trace of that sale completing. I did find an old listing price ($849,000) and MLS(r) number (40281736) on an agent's site, but there's no date there other than the "Copyright 2007, Lucian Trif" at the bottom of the page.

It's going to be listed at $749,000, which is still way too much considering how close it is to some high school and miscellaneous ugly houses, but an interesting trajectory:

early 2006: $675,000
late 2006: $839,000
2007/2008: $879,000 (no sale)
early 2009: $749,000

Buy now or be priced out forever, because real estate is a great investment that always goes up.

On the way back from the grocery store, I started to wonder about one long-term consequence of the foreclosure crisis that I haven't seen discussed explicitly in any of the various economics and real estate blogs and media sources I read.

The issue I have in mind is the protracted shortage of qualified buyers we're likely to have for several years in the future as a result of the foreclosure mess.

Let me explain.

We've all seen the mortgage reset graphs from the IMF and Credit Suisse, which indicate we're in for several years of distress. Here's one from Calculated Risk:

And one from the Irvine Housing Blog:

The graphs are normally discussed from two angles:

• The impact of defaults on the financial system (bank collapses, worthless mortgage-backed securities, etc)
• The impact of defaults on housing inventory (lots of foreclosures = lots of homes on the market = downward pressure on prices = more upside-down mortgages = fewer refinancings, wash, rinse, repeat)
  

But another consequence of these huge numbers of foreclosures is that millions of people's credit scores will be significantly damaged, and so unable to secure a home loan for several years (assuming the banking and financial sectors have learned their lesson). I therefore predict the pool of eligible home buyers will be diminished for many years after the incoming glut of foreclosure filings has been completed.

You might argue a lot of those people probably shouldn't and wouldn't be in the buyer pool in the first place, ever; the fact they entered it is only an artifact of the mortgage market's insanity in the first few years of this decade. But one might counter that some of them would eventually have become eligible after a few years of employment and credit history, except they bought houses in 2002-2007 and screwed themselves up for five to ten years.

You might also point out the buyer pool shrinkage is independent of whether today's distressed owners stay in their homes or not, as they wouldn't buy a new house for the next 5 to 10 years anyway: either because their FICO score is shot, or because, well, they already own a house. That's fair enough, but again I don't recall seeing a discussion of the inevitability of a buyer pool shrinkage as a result of the high levels of home ownership we saw in the past few years.

I'm going to try to get in touch with various RE economy bloggers to see if they can help me quantify this.

Of course, this specific point might have been discussed all over the place and I might just be uninformed. If anyone has any articles you know about, I'd love to see them.

I deliberately ignored this property when it first came on the market because, frankly, 94502 condos interest me about as much as pork futures, but in the interest of comprehensiveness, here is 22 Rutland Court, a "sparkling" condo on Bayfarm, with the following specs:

2 bedrooms, 2 1/2 bathrooms, 1,519 sqft, 2,688-sqft lot, 2 stories, 2-car garage, MLS(r) #40350870

Sparkling 2 bedroom, 2.5 bath Bay Colony duet [...] near the Sshoreline, Ferry and recreation. [...] vaulted ceilings and lots of light [...] wood burning fireplace and babmboo floors make this a warm and inviting setting. The eat-in kitchen has access to the garden and rear deck ideal for entertaining. Upstairs has two master suites with tile baths and lots of closet and storeage space. [...] HOA fees are $342 mo.
[...]
bamboo floors
cheery kitchen
[...]
Serene cul-de-sac.

The MLS(r) listings is only slightly different, but obviously composed by the same person:

New Price! Easy to show--bring an offer. [...] bamboo floors, cheery eat-in kitchen, deck and garden area ideal for entertaining. Master suite [...] tiled baths. Garage & washer/dryer. Cul-de-sac near ferry & shoreline

Now, I don't know about you, but the most I'd ever pay for a good-sized 2-story townhome on Bayfarm is probably about $350,000. If that. Especially with the $342 monthly HOA dues. But the sellers are asking a trifle more--$664,700 at last reckoning. It's less than they used to want, back when it was known as MLS(r) #343705 and listed at $679,000 (that's a whopping 2.1% price drop, in case you were wondering).

I was a bit curious about the weirdly shaped new price, so I did some math and found that it's tailored almost exactly so the owners will make back their exact purchase price if the agents split a 5% commission. Imagine that. 

Last sale and tax info

Sold 10/28/2005: $630,000

2008 Property Tax: $9,915

At least the listing suggests the owners had the decency not to pimp out remodel a perfectly fine looking 16-year-old condo with a big HELOC and granite everywhere.

Sparkling or not, though, given the state of the condo market and the massive, massive premium the owners overpaid in 2005, I just don't see them getting out of this with money in the bank.

Update 4/2/09: Whopping $5,700 price drop. Yes, five thousand seven hundred, not fifty seven thousand. This one's so toast I can smell the butter melting.