Loss leaders: February 2009 Archives
I didn't write about an ugly, overpriced 1960s 2-level rancher on the lagoon at 604 Westline Drive (the $848,000 "jewel at Crown Beach" 4+3) when it came on the market a few months ago because, frankly, I much prefer to look at pretty Victorians. Its yard sign claimed the property was pending for a while, but it was listed for sale on Zillow 7 days ago, so it might still be available. Shortly after 604 was listed, a big new-ish home at 514 Westline came on the market, and now a third listing has arrived in the past few days, so this brewing epidemic should probably be documented.
616 Westline is an ugly rancher with the following specs:
616 Westline is an ugly rancher with the following specs:
5 bedrooms, 3 bathrooms, 2 floors, 2,260 sqft, 3,650-sqft lot, MLS(r) #40396342, $779,000It's plenty ugly, although the inside redeems the exterior a bit:$779000 / 5br - Five Bedroom Lagoon Home (alameda) (map)
Reply to: quinn@bayside-realestate.com
Date: 2009-02-27, 9:56PM PST
Open Sunday, 2pm - 4pm
Year Built 1965 Sq Footage 2,260 Bedrooms 5 Bathrooms 3 full, 0 partial Floors 2 Parking 2 Car garage Lot Size 3,650 sqft HOA/Maint $475 per year
DESCRIPTION
Enjoy your own private dock on the lagoon. Relax in the spacious master suite or read a book on its lagoon-view balcony. The bright living/dining room has a gas fireplace and double sliding glass doors opening on to a balcony overlooking Crown State Park. Sunsets are spectacular!
A large interior laundry room with sink makes laundry a snap. The versatile bonus room offers many possibilities. Convenient attached 2 car garage with interior access.
Across the street from Crown State Park and Beach, close to Webster Street and Towne Center shopping.
604 Westline (now pending) has the following specs:
604 has one fewer bedroom than 616, yet it was priced $69,000 higher; the lot is larger, but not $69,000 larger.
Interestingly, 604 has probably been owned for a long time (I couldn't find its sale history), but 616 is a much more recent transaction:
4 bedrooms, 3 bathrooms, 2,300 sqft, 6,270-sqft lot, MLS(r) #40373937, $848,000It is just as ugly, with that loathsome, hideous, despicable stone-chunk chimney typical of that tasteless era:
Grab your flip-flops and beach towel and head straight to this 4 bedroom, 3 bath home [...] just steps from the beach. A wall of windows offers views of Crown Beach and beyond. From the master suite, savor the views of the lagoon and boat dock.Built in 1965, this desirable home sits on an approximate 6,270 square foot lot [...] large bonus room with wet bar, built in vacuum system and dumb waiter. Yes, the kitchen is on the second floor [...] The beautifully landscaped gardens offer a quiet retreat. [...]
604 has one fewer bedroom than 616, yet it was priced $69,000 higher; the lot is larger, but not $69,000 larger. Interestingly, 604 has probably been owned for a long time (I couldn't find its sale history), but 616 is a much more recent transaction:
Assuming it sells at its excessive list price of $779,000 ($344 / sqft), and 6% commission for the agents, we're looking at $108,000 down the lagoon in just 3 1/2 years, which works out to about $80 per spectacular sunset. From that perspective, the longer it stays on the market, the cheaper the sunset (assuming a constant list price).Sales History
Sale History & Tax Info Sale History 07/29/2005: $840,000 04/07/2000: $381,500 No other sale data is available
Right next door to a duplex covered twice on this blog stands the sad Victorian at 1813 Sherman, which just came on the market as MLS(r) #40397301, although you'll have to hand over your registration information to an MLS site, or just pay attention (check out Redfin's URL) if you want to know where exactly it is. The specs:
low traffic, very little noise, and a lovely view to the owner and tenants:
Never mind that $599,000 for a small house that was never really intended to be a duplex might not be cash-flow positive for, what, 15 years, if that: the location alone should be enough to deter all but the dumbest savviest investor from purchasing this poor old thing.
It certainly was a great investment for the current owner:
duplex, 3 bedrooms, 2 bathrooms, 1,784 sqft, 3,125-sqft lot, MLS(r) #, $599,000 ($336 / sqft)The lot is tiny, and as you can see in the photo it seems to be all length. The Avocato trees must be hiding from the former fruit processing plant right across the street, which guarantees
Super clean, no defered maintenence. [...] top unit has access to finished attic. newer concrete foundation. [...] individually metered, and have washer and dryers in unit. [...] low maintanance building. Large back yard with mature Avocato trees.
Never mind that $599,000 for a small house that was never really intended to be a duplex might not be cash-flow positive for, what, 15 years, if that: the location alone should be enough to deter all but the It certainly was a great investment for the current owner:
I shudder at the thought they may have finished the attic to squeeze more rental income from their miniature Avocato plantation.Sales History
Sale History & Tax Info Sale History 09/22/2006: $570,000 10/20/1987: $66,000 * No other sale data is available * Transaction not included in Zestimate.
A gorgeous 1880 Victorian at 2323 Buena Vista came on the market a little while ago, and I'd been waiting to take my own pictures so I could write a post worthy of the structure and its current condition. A reader (who shall remain anonymous; no, it wasn't I who took the pictures) was gracious enough to send me their own photos, used here by permission, so there's no reason to wait.
Today's glorious wreck has the following specs:
I couldn't find the lot size anywhere, but its neighbor to the east at 2327 Buena Vista is listed as sitting on 6,800 sqft (green border), and this property's lot (orange border) looks about one third larger (from Zillow):
Whoever is representing this property is likely from out of town, as it is not an "East End" Victorian--it's to the west of Park Street. The agent also conveniently omitted the large Chevron gas station at the very busy intersection two doors down (clearly visible in the Zillow map above).
It was once a fantastic, well-preserved, enormous house:
But somebody ran out of money, apparently, and left before completing renovation work in the back:
... or on the side:
The foundation work appears to be done:
But the lower level has no walls. And it's been raining. A lot.
The running-out-of-money hypothesis appears to be supported by the sale history:
Today's glorious wreck has the following specs:
multi-family (beds, baths unknown), 3,514 sqft, built in 1880, MLS(r) #40394635(Description excerpted from listing on Trulia).
Contractor needed to start and complete lower units of East End Victorian. Much potential. Plans and permit history unknown. No inspections or reports. Bank/ Seller will consider all offers.
I couldn't find the lot size anywhere, but its neighbor to the east at 2327 Buena Vista is listed as sitting on 6,800 sqft (green border), and this property's lot (orange border) looks about one third larger (from Zillow):
Whoever is representing this property is likely from out of town, as it is not an "East End" Victorian--it's to the west of Park Street. The agent also conveniently omitted the large Chevron gas station at the very busy intersection two doors down (clearly visible in the Zillow map above).It was once a fantastic, well-preserved, enormous house:
But somebody ran out of money, apparently, and left before completing renovation work in the back:... or on the side:The foundation work appears to be done:
But the lower level has no walls. And it's been raining. A lot. The running-out-of-money hypothesis appears to be supported by the sale history:
Sale History 10/29/2008: $466,200 * 06/17/2004: $745,000 * No other sale data is available * Transaction not included in Zestimate. More info
I really hope the bank does "consider all offers" and sells this beautiful building for well under $500,000 to someone who will give it the care it deserves, rather than wait until they get their insultingly obscene asking price of $694,900, which is about $350,000 too much.
Note to bank: walls are pretty important.
Update 3/11/09: Price dropped 28% to $499,900. Still too high. Note to bank: WALLS ARE PRETTY IMPORTANT.
Note to bank: walls are pretty important.
Update 3/11/09: Price dropped 28% to $499,900. Still too high. Note to bank: WALLS ARE PRETTY IMPORTANT.
Here's a blast from the past. 2438 Coral Sea Street is back as MLS(r) #40396836, at the same price it failed to sell a year ago ($799,000).
To minimize redundancy, please consult the original post for the skinny.
Update 8/30/09: Apparently sold for $750,000.
Update 1/10/10: Actually sold for $700,000.
To minimize redundancy, please consult the original post for the skinny.
Update 8/30/09: Apparently sold for $750,000.
Update 1/10/10: Actually sold for $700,000.
It is well established that NAR and the MLS(r) are not the most fair-playing, transparent or sharing of organizations, especially when it comes to relevant information regarding properties for sale. A number of independent sites have emerged to try to blow away the Balkanized, obfuscated, opaque system of rules and restrictions set up by NAR to maximally impede the free flow of information and keep home buyers from making informed decisions--after all, those might lead to lower sales prices or no sales at all if everything were disclosed and available to everyone, rather than artificially space-constrained and restricted in their distribution. It also allows for a cottage industry of compliance officers and lawyers to flourish, all of whom (or whose employers) probably pay NAR dues. The Realtor(tm) must be the final arbiter of what the consumer knows, for an informed customer is a harder patsy to hoodwink.
Today's listing is a particularly egregious example of the kind of downright consumer-hostile practices NAR and the MLS(r) revel in.
8 Dolphin Court came back on the market today. It is a mostly new McMansiony house on a business-card-sized lot:
know, nor do I much care, which one of these it is (it's the blue one on the right). It probably doesn't matter, because they're so close to each other you're practically living with your neighbor anyway:
It is also not far from many other monstrosities covered on this blog, which have fared remarkably well not done so great since their construction and initial sale:
One might think $599,000 for a somewhat large house is a decent deal, especially if one believes, as the MLS(r) probably hopes, that this is a new listing, priced to sell, with no issues whatever.
Because the address sounded familiar, I went to Redfin to refresh my memory, where I was greeted by the friendly admonishment below:
So in I sign, and for my trouble I am given the strategically redacted information below (emphasis added):
I don't blame Redfin; they're a broker and they can't not abide by MLS(r) rules if they want to stay in business. At this point I was becoming somewhat irritated, so I turned to an independent site with no vested interest in hiding information, namely Google, and I found this:
Luke Trif's site appeared to be malfunctioning at the time of this writing, but Google had a cached version showing the following data:
I can't ascertain the date, but the Google cached version says (emphasis added):
There'll be a party at the Opine compound once that antiquated, anti-free-market conglomerate finally disappears in a cloud of vampire dust.
Oh, and that property on Dolphin Court, yes, it's overpriced. Thanks for asking.
(bonus points if you can figure out the title of this post)
Update 9/28/09: Sold for $628,000. All hail Spring fever bidding wars in the worst economy, job market and real estate market in 80 years.
Today's listing is a particularly egregious example of the kind of downright consumer-hostile practices NAR and the MLS(r) revel in.
8 Dolphin Court came back on the market today. It is a mostly new McMansiony house on a business-card-sized lot:
3 bedrooms, 2 1/2 bathrooms, 2,035 sqft, 3,494-sqft lot, MLS(r) #40396446, $599,000I don'tWell Maintained Warmington Home [...] Great Corner Lot with beautiful flag stone back yard [...] Versatile Floor Plan. .. Stainless Steele Appliances. .. .SHOW and SALE
It is also not far from many other monstrosities covered on this blog, which have One might think $599,000 for a somewhat large house is a decent deal, especially if one believes, as the MLS(r) probably hopes, that this is a new listing, priced to sell, with no issues whatever.
Because the address sounded familiar, I went to Redfin to refresh my memory, where I was greeted by the friendly admonishment below:
So in I sign, and for my trouble I am given the strategically redacted information below (emphasis added):I don't blame Redfin; they're a broker and they can't not abide by MLS(r) rules if they want to stay in business. At this point I was becoming somewhat irritated, so I turned to an independent site with no vested interest in hiding information, namely Google, and I found this:Luke Trif's site appeared to be malfunctioning at the time of this writing, but Google had a cached version showing the following data:I can't ascertain the date, but the Google cached version says (emphasis added):This is Google's cache of http://www.luketrif.com/process_paragon.php?ct%5B%5D=ALAMEDA&mnbath=2&mxprice=900000. It is a snapshot of the page as it appeared on Jan 19, 2009 17:57:38 GMT. The current page could have changed in the meantime.In summary, at various points in time, 8 Dolphin Court was...
- Listed as MLS(r) #40258170 and priced at $860,000
- Listed as MLS(r) #40356830 and priced at $729,900
- Dropped to $699,900
- Listed as MLS(r) #40396446 and priced at $599,000 (today's listing)
- how this listing has fared since it was first listed,
- whether the current owners (be they human or bank-shaped) might be easy or hard to deal with,
- whether trying to buy this property is worth the time (banks are notoriously slow and impenetrable, and some folks are giving up or not interested in wasting their time trying to buy REOs and foreclosures)
- the listing's prior price and sale history,
There'll be a party at the Opine compound once that antiquated, anti-free-market conglomerate finally disappears in a cloud of vampire dust.
Oh, and that property on Dolphin Court, yes, it's overpriced. Thanks for asking.
(bonus points if you can figure out the title of this post)
Update 9/28/09: Sold for $628,000. All hail Spring fever bidding wars in the worst economy, job market and real estate market in 80 years.
Two Marina Village condos, both on Redondo Court, came on the market a couple of days ago. They're both "yawl" models, and have identical specs:
As is appropriate for townhomes near the Marina, at least one of them (14 Redondo Ct) appears to be seriously underwater:
It's also interesting to note how prices changed between 1988 and 1999: a whopping $772, or 0.21%, nominal value increase per year. Not 21%. Not 2.1%. 0.21%. Point-two-one percent. In real dollars, assuming 4.5% yearly inflation, that's about a $215,000 shortfall over 11 years. But we all know that home values (or prices; the myth has been repeated so many times in NAR's giant game of telephone it's hard to keep track) double every 10 years.
When the market is down, real estate agents always tell you "you can't generalize--my market in Pikerville, Maryland is doing great and prices are holding up". When you provide example after example that shoot holes the size of the Titanic into NAR's propaganda, they'll tell you "the house-value-doubling-every-10-years thing is a general trend, your isolated local examples don't disprove it."
Realtors(tm): Having their cake and eating yours too since 1908.
Update 9/5/09: 14 Redondo old for $510,000 in June, $110,000 off from its previous price less than 2 years ago. Nice.
2 bedrooms, 3 1/2 bathrooms, 1,631 sqft MLS(r) #40395927 (14 Redondo Ct) or #40396026 (25 Redondo Ct)The strident agent for both is, as you might expect, Wendy Sanda, who should probably change her first name to Marina.
14 Redondo Ct:
[...] LARGE [...] TOWNHOME STYLE YAWL PLAN IS 2+ BEDROOMS/3.5 BATH. HUGE EXTRA ROOM WITH IT'S OWN BATHROOM IS ON THE GROUND LEVEL. [...] EXTRA LARGE GARAGE LENDS ITSELF TO A WORK ROOM OR LOTS OF STORAGE SPACE.
25 Redondo Ct:
FINALLY ONE OF THE COVETED "YAWL" CONDOS OVERLOOKING THE MARINA! [...] BONUS ROOM WITH IT'S OWN BATHROOM ON THE GROUND LEVEL AND A PATIO. [...] GAS COOKTOP, CORIAN COUNTERTOPS, GAS FIREPLACE, SOUND/INTERCOM SYSTEM THROUGHOUT. ..
As is appropriate for townhomes near the Marina, at least one of them (14 Redondo Ct) appears to be seriously underwater:
Property History for 14 REDONDO Ct
Date Event Price Feb 18, 2009 Listed $575,000 Oct 19, 2007 Sold $620,000 Sep 01, 1999 Sold $364,500
What I don't understand is why Ms. Sanda took two near-identical listings priced $75,000 apart, since the cheaper one is almost guaranteed to eclipse or at least cannibalize sales prospects for the other.Property History for 25 REDONDO Ct
Date Event Price Feb 19, 2009 Listed $650,000 Nov 18, 1991 Sold $371,000 Dec 23, 1988 Sold $356,000
It's also interesting to note how prices changed between 1988 and 1999: a whopping $772, or 0.21%, nominal value increase per year. Not 21%. Not 2.1%. 0.21%. Point-two-one percent. In real dollars, assuming 4.5% yearly inflation, that's about a $215,000 shortfall over 11 years. But we all know that home values (or prices; the myth has been repeated so many times in NAR's giant game of telephone it's hard to keep track) double every 10 years.
When the market is down, real estate agents always tell you "you can't generalize--my market in Pikerville, Maryland is doing great and prices are holding up". When you provide example after example that shoot holes the size of the Titanic into NAR's propaganda, they'll tell you "the house-value-doubling-every-10-years thing is a general trend, your isolated local examples don't disprove it."
Realtors(tm): Having their cake and eating yours too since 1908.
Update 9/5/09: 14 Redondo old for $510,000 in June, $110,000 off from its previous price less than 2 years ago. Nice.
Every once in a while a house is actually priced realistically. Not affordably, mind you--that's for 2010 and 2011. But today's listing at 1429 Gibbons doesn't monkey around.
Of course the cherry on top is the sale history showing not one but two prior sales at a higher price:
3 bedrooms, 3 1/2 bathrooms, 2,980 sqft, 6,231-sqft lot, MLS(r) #352702, $799,000This house is so pretty and the price is so uncharacteristically reasonable ($268/sqft) I will forgive the agent's horrifying capitalization. Just this once.
Beautiful Original Woodwork, Ballroom Size Living Room [...] Remodeled Kitchen, [...] Good Layout for Live-in Au-Pair, Abundant Attic and Basement Storage. Wrap-Around Garden and Play Areas.
Of course the cherry on top is the sale history showing not one but two prior sales at a higher price:
Sale History:Just two years ago this property would easily have been listed at $1.2M and probably sold. But times have changed (they're only just getting started). I'll be very surprised if it's not sold by week's end above list price (buyers still go ape over big East End properties) assuming there's no structural skeleton lurking in the closet, or in the attic.
10/29/2004: $965,000
07/12/2002: $810,000
I'll let the numbers speak for themselves today. 1713-1715 9th street just came on the market:
Prior sale? Of course.
I can think of a lot of better uses for $5,700 a month.
Update 2/22/09: the property photos on the MLS(r) suggest the building is completely empty. What a wonderful purchase at full price when you have to find tenants right off the bat.
5 bedrooms, 2 bathrooms (2 units), 2,346 sqft, MLS(r) #352847, $675,000 ($288 / sqft)Before you run out and buy it as an "investment", be sure to borrow your 6th grader's calculator.
Nice duplex-two houses on one lot. Large front home is a 3 bedroom, 1 bath. [...] Rear residence is a charming 1 bedroom, 1 bath cottage. [...] beautiful neighborhood of Alameda and close to public transportation, fwy access, and shopping.
Prior sale? Of course.
Assuming a full-price sale at $675,000, that comes out to about $5,700 up in smoke every month since the owners took possession.Last sale and tax info
- Sold 09/27/2006: $840,000
- 2008 Property Tax: $10,470
I can think of a lot of better uses for $5,700 a month.
Update 2/22/09: the property photos on the MLS(r) suggest the building is completely empty. What a wonderful purchase at full price when you have to find tenants right off the bat.
It's not often that a building from 1940 makes me smile, but I have to say I was very impressed with the spectacular meltdown of 537 Central, which just came on the market. The specs:
It doesn't look like much from the street view, and the agent herself says it needs work (which usually means it needs a lot of work), but I'm not actually certain that's the right property, so I'll probably post one of my own pictures soon (that is the right house). At any rate, $211 / sqft is getting pretty close to a sensible price, assuming the house is actually livable and liberating its "potential" doesn't require another $200,000.
The sale history from Redfin, Zillow and Trulia suggests this property was a cross between a hot potato and a holiday fruitcake during the real estate boom (the September 2008 sale looks a lot like a foreclosure sale):
The funny thing is that even at the current list price, the property is still not cashflow-positive, even with generous assumptions (21% down to get to a conforming 5.5% fixed-rate loan). Including property tax and 1% in maintenance per year (just in case), we're looking at $3,200 a month or so in fixed costs; and there's no way anyone should pay more than $800 a month for a 1+1 rental in that house in that location.
So in the absolute best-case scenario, with zero vacancy and a move-in condition property, this building barely breaks even. Add in taxes on the rental income and you get a property that's still overpriced, even after a 34% drop since the last sale. Add in the cost of whatever work needs to be done to rehab the house, and you're better off burning dollar bills to heat your apartment (it's COLD out there this week) than buying this place.
Every once in a while, readers of this blog ask me what price per square foot Alameda properties should be. I'm not a financial planner or advisor, so you have to do your homework, but as far as I'm concerned, if you can't break even renting a property at $211 / sqft, then a reasonable, sustainable price per sqft for someone looking to buy has to be... less than $211.
It's really not that complicated.
And it's true whether the market is going down, up, or sideways: you never know when you might need to move (layoff, illness, transfer, retirement, new baby, divorce, sick relative) and rent out your house for a while (you may not be able or willing to sell for whatever reason). Moving in difficult circumstances is hard enough without bleeding money on a house you're no longer living in because your rental income doesn't cover your mortgage.
And to the mathematically inept who claim that we're just never going to see $175 / sqft in Alameda: this property has potentially dropped 34% in 2 1/2 years, still doesn't pencil out as an investment, and only the lunatic fringe at NAR still claims the market will bottom out real soon, any day now, really, so we're probably in for another year or two of real price declines. It was $127 / sqft twenty years ago, presumably in better shape than it is now, and (surprise!) at a time when prices were also too high and headed for a crash:
Adjust $127 / sqft down for 1988 bubbliness, add a couple decades' worth of inflation, subtract 20 years' worth ofneglect deferred maintenance, throw in some price pressure from actual investors who won't buy unless there's an actual return on their investment, and $175 / sqft suddenly doesn't sound so kooky anymore.
Watch for more of those brilliant "Alameda investment opportunit[ies]" go back on the market as the economy continues its epic performance of the past few months. In fact, it might be entertaining to make it a game--look for some egregious transaction prices in the past 5 years of old issues of SFGate's Alameda home sales and predict when they'll come back on the market. Whoever guesses the next sale price gets a cupcake.
Postlude: After writing this post and reflecting on earlier writeups on other "investment properties", it struck me once again how absurd it is that a blogger with absolutely zero interest in any of these transactions would spend more time doing basic arithmetic than the irresponsible, innumerate, improvidentidiots investors who put themselves on the hook for $45K a year in mortgage payments on properties that bring in $2,500 a month in gross rental income. Sigh.
4 units (1+1 each), 2,487 sqft, MLS(r) #40395338, $525,000
Potential says it all! Needs work - take advantage of this Alameda investment opportunity. [...] Unit 1 & 2 have been converted to large unit - easily converted back. [...] Come see!
It doesn't look like much from the street view, and the agent herself says it needs work (which usually means it needs a lot of work)The sale history from Redfin, Zillow and Trulia suggests this property was a cross between a hot potato and a holiday fruitcake during the real estate boom (the September 2008 sale looks a lot like a foreclosure sale):
Property History for 537 CENTRAL Ave
Redfin doesn't compute the potential appreciation rate for currently for-sale listings for obvious reasons (we don't know what the final sale price will be); but assuming a full-price transaction, we're looking at a 34% drop in "value" in just 2 1/2 years.
Date Event Price Appreciation Source Feb 13, 2009 Listed $525,000 -- Sep 23, 2008 Sold $702,473 -5.8%/yr Public Records Jul 25, 2006 Sold $800,000 1.8%/yr Public Records Mar 01, 2005 Sold $780,000 5.4%/yr Public Records Jan 27, 1988 Sold $317,000 -- Public Records
The funny thing is that even at the current list price, the property is still not cashflow-positive, even with generous assumptions (21% down to get to a conforming 5.5% fixed-rate loan). Including property tax and 1% in maintenance per year (just in case), we're looking at $3,200 a month or so in fixed costs; and there's no way anyone should pay more than $800 a month for a 1+1 rental in that house in that location.
So in the absolute best-case scenario, with zero vacancy and a move-in condition property, this building barely breaks even. Add in taxes on the rental income and you get a property that's still overpriced, even after a 34% drop since the last sale. Add in the cost of whatever work needs to be done to rehab the house, and you're better off burning dollar bills to heat your apartment (it's COLD out there this week) than buying this place.
Every once in a while, readers of this blog ask me what price per square foot Alameda properties should be. I'm not a financial planner or advisor, so you have to do your homework, but as far as I'm concerned, if you can't break even renting a property at $211 / sqft, then a reasonable, sustainable price per sqft for someone looking to buy has to be... less than $211.
It's really not that complicated.
And it's true whether the market is going down, up, or sideways: you never know when you might need to move (layoff, illness, transfer, retirement, new baby, divorce, sick relative) and rent out your house for a while (you may not be able or willing to sell for whatever reason). Moving in difficult circumstances is hard enough without bleeding money on a house you're no longer living in because your rental income doesn't cover your mortgage.
And to the mathematically inept who claim that we're just never going to see $175 / sqft in Alameda: this property has potentially dropped 34% in 2 1/2 years, still doesn't pencil out as an investment, and only the lunatic fringe at NAR still claims the market will bottom out real soon, any day now, really, so we're probably in for another year or two of real price declines. It was $127 / sqft twenty years ago, presumably in better shape than it is now, and (surprise!) at a time when prices were also too high and headed for a crash:
(source)
Adjust $127 / sqft down for 1988 bubbliness, add a couple decades' worth of inflation, subtract 20 years' worth of
Watch for more of those brilliant "Alameda investment opportunit[ies]" go back on the market as the economy continues its epic performance of the past few months. In fact, it might be entertaining to make it a game--look for some egregious transaction prices in the past 5 years of old issues of SFGate's Alameda home sales and predict when they'll come back on the market. Whoever guesses the next sale price gets a cupcake.
Postlude: After writing this post and reflecting on earlier writeups on other "investment properties", it struck me once again how absurd it is that a blogger with absolutely zero interest in any of these transactions would spend more time doing basic arithmetic than the irresponsible, innumerate, improvident
Speaking of remembering last year's listings, you might recall one of my more impassioned pleas for typographical restraint. It appears agent Andrea Gordon either went to the same writing school as the boor who wrote that monstrosity last year, as evidenced by today's copywriting disaster describing the cat-puke-colored McMansion at 514 Westline Drive:
And about that property? Oh, right--well, what do you expect for a 2006 McMansion. Of course it's listed at a loss. Do I even need to post the sale history? Ok, I suppose I probably should.
long, painful sale quick escrow and full-price, all-cash sale, let's say, by Friday of this week. Or maybe even Thursday, what with the idiotic tax cuts that just passed the senate and will simply fix all ills overnight.
Update 4/25/09: Price dropped to $1,299,000.
Update 10/2/09: Dropped to $959,000 after a handful of other drops. Newish agent, too (Mark Playsted replacing Andrea Gordon).
We're now more than half a million dollars off the previous sale price 3 1/2 years ago. Not bad.
Update 10/25/09: Now down to $918,000. We're now $570,000 off the initial sale price (38%).
Update 1/10/10: New agent, new price ($909,900). Mike Silva is urging everyone to "hurry." Which begs the question: or what? Are you going to raise the price? Take it off the market to spite us all? This ochre elephant has been on the market for a year, and I have a hard time believing this latest $8,100 drop is what a thousand buyers had been waiting for.
4 bedrooms, 4 1/2 bathrooms, 3,741 sqft, 5,280-sqft lot, MLS(r) #40394468, $1,399,000In 10 years as a "real estate professional" you'd think Andrea might have picked up how to spell "amenities." I say, STOP THE INSANITY! Learn how to compose and properly capitalize promotional copy, or stay home. Although I guess that choice is probably soon going to be made for the agent, considering how great the real estate market is doing these days. Maybe she could use her free time to enroll into a writing class at Alameda College. Anything. Please.
[...] superb finishes and ammenties throughout. Close to Beach, Transportation, Shops, Restaurants, the Best ofAlameda!Hand hewn hardwood floors, Formal Dining Room, terrific Living Room, excellent Family rumpus room off Chef's Kitchen, beatiful Baths, great Master!
And about that property? Oh, right--well, what do you expect for a 2006 McMansion. Of course it's listed at a loss. Do I even need to post the sale history? Ok, I suppose I probably should.
Given how successful big, huge, expensive, giant McMansions have been at selling around $1M lately, this one is a shoo-in for aLast sale and tax info
- Sold 04/06/2006: $1,488,000
- 2008 Property Tax: $17,712
Update 4/25/09: Price dropped to $1,299,000.
Update 10/2/09: Dropped to $959,000 after a handful of other drops. Newish agent, too (Mark Playsted replacing Andrea Gordon).
We're now more than half a million dollars off the previous sale price 3 1/2 years ago. Not bad.
Update 10/25/09: Now down to $918,000. We're now $570,000 off the initial sale price (38%).
Update 1/10/10: New agent, new price ($909,900). Mike Silva is urging everyone to "hurry." Which begs the question: or what? Are you going to raise the price? Take it off the market to spite us all? This ochre elephant has been on the market for a year, and I have a hard time believing this latest $8,100 drop is what a thousand buyers had been waiting for.
Update 3/4/2010: Down to $889,000.
Remember last year when it seemed as if all of "Bungalow Boulevard" (Sterling Ave) was for sale and/or being foreclosed on? It's not quite done yet! A new short sale at 3230 Sterling Ave just showed up. The specs:
HELOC gone bad mystery.
For posterity's sake, here's a list of the fallen:
3240 Sterling Ave, the harbinger
3259 Sterling Ave, the one that got away
3247 Sterling Ave, the bigger loss leader
Note if this sells at $525,000, the morons who bought 3259 Sterling for $570,000 last year will be very pleased to have a new comp to help with their investment; this one is 150 sqft larger and has one more bedroom.
Update 3/11/09: Forget about selling at $525,000. The price dropped to $459,000 earlier this month. Another nail in the coffin of 3259 Sterling's equity.
3 bedrooms, 1 bathroom, 1,221 sqft, 3,422-sqft lot, MLS(r) #40394300, $525,000I couldn't find a sale history on Zillow, so why this is a short sale (i.e. the owners owe more than $525,000 on it) is a
Charming [...] many architectural details [...] built-ins and gum wood trim.
For posterity's sake, here's a list of the fallen:
3240 Sterling Ave, the harbinger
3259 Sterling Ave, the one that got away
3247 Sterling Ave, the bigger loss leader
Note if this sells at $525,000, the morons who bought 3259 Sterling for $570,000 last year will be very pleased to have a new comp to help with their investment; this one is 150 sqft larger and has one more bedroom.
Update 3/11/09: Forget about selling at $525,000. The price dropped to $459,000 earlier this month. Another nail in the coffin of 3259 Sterling's equity.
Some listings make me scratch my head. Today's foreclosure waaaay north on Chestnut has the following specs:
Which begs the question: how on earth do you foreclose on a property that, by all right, you should probably own free and clear by now? Might that possibly have to do with the "granite coutertops"?
Oh, and whoever is trying to sell this miniature house on a postage stamp lot in a questionable part of town for $450 / sqft is, what's the word again, oh, right, a MORON.
Update 3/2/09: Still on the market. More photos from the Craigslist post:
Update 3/11/09: Price dropped to $437,000 last week.
Update 4/25/09: Price dropped to $394,700. New MLS(r) #40406548 to pretend it's a new listing, and "special buyer incentives":
Update 9/28/09: Sold for $342,000.
3 bedrooms, 2 bathrooms, 1,022 sqft, 2,485-sqft lot, MLS(r) #40394074, $459,900There's no sale history on Zillow or Redfin other than what looks like a foreclosure transaction back in December, 2008:
[...] sold AS-IS. Hardwood floors. Granite coutertops.
The property tax amount and the absence of sale history suggest that the last transaction on this property must have occurred a long, long time ago, in a galaxy far, far away.Last sale and tax info
- Sold 12/16/2008: $357,668 *
- 2008 Property Tax: $1,400
Which begs the question: how on earth do you foreclose on a property that, by all right, you should probably own free and clear by now? Might that possibly have to do with the "granite coutertops"?
Oh, and whoever is trying to sell this miniature house on a postage stamp lot in a questionable part of town for $450 / sqft is, what's the word again, oh, right, a MORON.
Update 3/2/09: Still on the market. More photos from the Craigslist post:
Update 3/11/09: Price dropped to $437,000 last week.
Update 4/25/09: Price dropped to $394,700. New MLS(r) #40406548 to pretend it's a new listing, and "special buyer incentives":
Charming bungalow with gorgeous hardwood flooring, granite counters & updated baths. Full of light and ready for you to move in. Special buyer incentives (contact listing agent) - make this your new home!!
Update 9/28/09: Sold for $342,000.
Earlier today I threatened to post more about recent condo listings, and here's one that has me wondering what is going to happen to a bunch of condos (not just in Alameda, everywhere, really) as the economy continues its unraveling and the real estate market reaches for ever deeper depths.
The unit at hand has the following specs:
The unit at hand has the following specs:
2 bedrooms, 1 bathroom, 864 sqft, MLS(r) #40392938, $284,900 ($336 / sqft)
Bank owned 2 bedroom 1 bath. Condo.
The kind of units I'm wondering about are the small, sub-1,000-sqft (or even sub-900-sqft), 1- or 2-bedroom condos that sold for grotesquely inflated prices between 2004 and 2008 and are (unsurprisingly) going back to the bank or being listed at a loss. I've written about several such examples on this blog.
Assuming a 10% down payment (although perhaps a widowed senior downsizing might have the 20% saved up), an average mortgage on this particular unit would cost you about $1,500 a month, plus probably $100-$250 in HOA dues, plus $200 in property tax (at least), plus insurance, etc. Let's round it up to $2,000 a month to live in that little cubby (a conservative estimate).
For perspective, my rent is considerably less than that, for a much larger unit in a lovely area within easy walking distance of the bay, with much more character and offering amenities of a much higher caliber than this property. And contrary to what real estate agents might tell you, the foreclosure glut is not actually causing rents to rise: the opposite is true. So the more time passes, the less buying a property like this for $275,000-$300,000 makes sense. As it stands, this property would have to sell for no more than $125,000-$150,000 to pencil out and compete with comparable rentals.
If you're an architecture buff or someone with special needs like a ceramic kiln or a giant carrot garden or what have you, I understand the pride-of-ownership, my-house-is-my-home thing has its own appeal beyond strictly financial considerations. But does that really apply to tiny cookie-cutter 1960s condos (which may even have been apartments in a former life) on a high-traffic thoroughfare?
And there's the rub: today's asking price of $284,900 is already 29% less than its previous sale price less than two years ago, and it's even less than the transaction before that (in real dollars):
A lot of sellers are already screaming blue murder when you make an offer at or 10% below their list price; what do you think they'd do if you offered 25% of their asking price? More importantly, (how) can the financial system handle losses of that magnitude?
Update 3/10/09: Down to $269,900.
Assuming a 10% down payment (although perhaps a widowed senior downsizing might have the 20% saved up), an average mortgage on this particular unit would cost you about $1,500 a month, plus probably $100-$250 in HOA dues, plus $200 in property tax (at least), plus insurance, etc. Let's round it up to $2,000 a month to live in that little cubby (a conservative estimate).
For perspective, my rent is considerably less than that, for a much larger unit in a lovely area within easy walking distance of the bay, with much more character and offering amenities of a much higher caliber than this property. And contrary to what real estate agents might tell you, the foreclosure glut is not actually causing rents to rise: the opposite is true. So the more time passes, the less buying a property like this for $275,000-$300,000 makes sense. As it stands, this property would have to sell for no more than $125,000-$150,000 to pencil out and compete with comparable rentals.
If you're an architecture buff or someone with special needs like a ceramic kiln or a giant carrot garden or what have you, I understand the pride-of-ownership, my-house-is-my-home thing has its own appeal beyond strictly financial considerations. But does that really apply to tiny cookie-cutter 1960s condos (which may even have been apartments in a former life) on a high-traffic thoroughfare?
And there's the rub: today's asking price of $284,900 is already 29% less than its previous sale price less than two years ago, and it's even less than the transaction before that (in real dollars):
Yet I submit it stilll needs a further 55% price cut before it makes sense for anybody to buy this property. That would amount to a 70-75% price cut from 2006-2007 prices, which in many cases means a 70-75% loss for the lender.Sales History
Sale History 10/31/2008: $227,435 * 05/22/2007: $399,000 05/09/2003: $265,000
A lot of sellers are already screaming blue murder when you make an offer at or 10% below their list price; what do you think they'd do if you offered 25% of their asking price? More importantly, (how) can the financial system handle losses of that magnitude?
Update 3/10/09: Down to $269,900.
As the new year slowly rolls in, and with the Superbowl is behind us, we're seeing a metric boatload of new listings cropping up left and right. Of course, a lot of those "new" listings are actually relists, but that's par for the course for our lovely used home salespeople ethical real estate professionals, and certainly not a specialty of Alameda Realtors(r)--everybody's been doing it for years.
Amidst the glut, we discern a large number of condominiums, some of which are relists while others are newly minted MLS(r) numbers, such as today's Shorepoint Court unit. The specs:
So you won't be surprised by the property's sale history:
Multiply this situation by several tens of thousands over the whole US and you realize how astonishing the amount of funny money creation and destruction that has happened over the past 5 years or so is.
Watch for more posts about newly-listed condos in the next few days.
Amidst the glut, we discern a large number of condominiums, some of which are relists while others are newly minted MLS(r) numbers, such as today's Shorepoint Court unit. The specs:
2 bedrooms, 2 bathrooms, 1,092 sqft, MLS(r) #40392878, $335,000Nothing particularly remarkable about this unit, and a few other condos in the area have been listed in recent memory, which is not surprising considering the size of the complexes there. A lot of them have been in various states of financial distress, which again is not surprising given how overpriced they were during the boom while remaining within reach of buyers willing to commit 50-70% of their income to a mortgage (as opposed to, say, 120% once their neg-am ARM recasts).
Very good condition.Recently painted interior. Quiet end unit on first floor. Wet bar. [...] One of the best well-kept complexes in alameda.
So you won't be surprised by the property's sale history:
Or by the fact Zip Realty identifies it as a short sale.Last sale and tax info
- Sold 10/01/2004: $405,000
- 2008 Property Tax: $5,428
Multiply this situation by several tens of thousands over the whole US and you realize how astonishing the amount of funny money creation and destruction that has happened over the past 5 years or so is.
Watch for more posts about newly-listed condos in the next few days.
Miscellaneous