Overpriced: October 2009 Archives

A little Victorian cottage at 1209 Eagle Ave just came on the market with the following specs:

2 bedrooms, 1 bathroom, 1,161 sqft, 4,125-sqft lot, MLS(r) #40434764, $499,000 ($430 / sqft)

Queen Anne high basement cottage by Marcuse and Remmel built in 1891. Traditional charm w/ loads of permitted upgrades, and a kitchen for today! Period full bath. Plus room for office? [...] Tankless water heater, newer furnace. Nice yard!


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It looks empty with nice period details and hideous modern kitchen updates apparently made on the cheap (or with no taste). The property is listed for just a hair more than its last sale price in 2003. It'll probably sell quickly in spite of its sub-prime location.

Property History for 1209 EAGLE Ave

Date Event Price
Oct 20, 2009 Listed $499,000
Dec 30, 2003 Sold $465,000





3260 Briggs Avenue recently came on the market with the following specs:

3 bedrooms, 1 bathroom, 1,221 sqft, 10,150-sqft lot(!), MLS(r) #40434872, $725,000 ($594 / sqft)

Incredible opportunity property. Three bedroom, 1 bath crafstman [...] Needs work, but great location and huge yard. Contact the city to get details on subdividing the lot to build another residential building on it.


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The extra-large lot is obviously the justification for the excessive, almost $600-per-sqft asking price. The last recorded sale was over 30 years ago, so one would hope this house is paid off and the sellers can drop their price closer to where it belongs.

Last sale and tax info

Sold 12/01/1976: $57,000
2009 Property Tax: $2,072

Update 10/25/09: The MLS(r) photos suggest this place needs not just "work" but a complete redo inside.

Update 12/6/09: Dropped to $649,000 in mid November.

Update 3/2/10: Sold for $595,000 on 12/28, an 18% drop from the original asking price.

You'd think agents selling houses in Alameda would know the difference between the many architectural styles that grace our little town. Heck, in any town I'd expect a Real Estate Professional (tm), someone who makes a living helping people buy and sell houses, to have a modicum of sensitivity to building styles, or at least some knowledge of chronology. But that's not the way Marcus and Millichap rolls, evidently.

Today's property at 1012 Walnut Street has the following specs:

5 bedrooms, 4 bathrooms (4 units), 5,001 sqft, 3,132-sqft lot, built in 1896, MLS(r) #40434353, $849,000

Detailed & well-maintained Craftsman with significant renovation-new roof, siding, paint, electrical, plumbing. [...] Large renovated Owner's Unit w/ 2 car garage & storage. All units sep metered/sep hot water heaters. Coin-op W/ D owned by landlord. [...] Perfect for Owner-occupant. Large backyard. [...]


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First off, as far as I can tell, the agent screwed up the details in the MLS(r) listing; the lot is ~5,000 sqft and the house is 3,132 sqft, not the other way around, at least according to Zillow and Trulia. This ain't Bayport, thank you very much. Second, if we are to believe the agent, this property is a rare example of a 1896 Craftsman, complete with bay windows and a second story like so many Craftsman houses of the era.

The one part of the listing I can't argue with, though, is the "perfect for owner-occupant" bit. That's because the only owner for whom this property makes sense is the owner who lives on the premises and doesn't mind paying twice the market rate for the privilege of enjoying one fourth of their house and sharing the yard with a handful of strangers; because this house sure doesn't make any sense as an investment property. Take a look at these numbers, provided by the owner:

Unit 1: 1+1, $1,495 / mo
Unit 2: 1+1, $1,050 / mo
Unit 3: 1+1, $1,000 / mo
Unit 4: 2+1, $1,200 / mo

Gross rent income: ~$56,000
Expenses (repairs, taxes, vacancy, etc): ~$22,000
Net income: ~$34,000
A 6% fixed mortgage on a $849,000 property with 20% down comes out to about $49,000 / year. So you're $15,000 in the red every year from the get-go.

"But what if you're living in the property?" you ask. Let's see.

Assuming the 2-bedroom unit is the "owner's unit", the numbers come out to ~$42,000 gross / $20,000 net income (remember you lost $1,200 a month by kicking one tenant out). This means you're paying $2,400 / month ($49,000 mortgage - $20,000 net income, divided by 12) to live in a 2-bedroom unit in a shared house (with shared yard) that normally rents for $1,200 / month.

What an incredible deal!

"But rents aren't always going to be this low!" you retort.

Maybe not, but they're not exactly going up either.

"But real estate doubles in value every 10 years!" you persist.

I suppose it all depends which 10 years you're looking at:

ZESTIMATE®: $873,50

  • Value Range: $515,365 - $952,115
  • 30-day change: -$2,000
  • Zestimate updated: 10/16/2009

Last sale and tax info

Sold 06/17/2005: $856,000
2009 Property Tax: $11,866
If this property is supposed to double in value by 2015, it might want to get started soon.

After a lull in new listings, the end of this week reverses the trend with a number of interesting new listings. First up is 1206 Buena Vista, a tiny house with a cheerful paint job and the following specs:

2 bedrooms, 1 bathroom, 886 sqft, MLS(r) #362505, $459,900

Stunning 1910 home, well maintain and beautiful landscaped. [...] update kitchen. Located close to shopping, schools, and easy freeway acess. This one will not last long. .. Hurry!

1206-buena-vista-street-view.jpgOf course this listing is only new if your memory is short. After paying $630,000 ($711 / sqft) in 2005, the "owners" tried to unload their "stunning" house almost 2 years ago for $679,000. Judging by the San Francisco MLS(r) number and the funny-looking, non-round asking price, it seems that didn't work out very well.
This is the third time I've sat down to write a post about tiny 318 Pacific Avenue: I find the neighborhood so depressing it's difficult to muster the energy to research even just a few facts. But in the interest of comprehensiveness, here goes 318 Pacific Avenue, a "wonderful Victorian Farmhouse" which is neither wonderful nor Victorian (nor a farmhouse, really) and has the following specs:

2 bedrooms, 1 bathroom, 878 sqft, 4,410-sqft lot, MLS(r) #40432050, $525,000 ($568 / sqft)

This wonderful Victorian Farmhouse features a full basement/workshop area [...] large park like back yard, a deck off the kitchen overlooking the garden [...] formal dining area with box beam ceilings and an enclosed front porch!

318-pacific-street-view.jpgThe only reason the 1/10 acre lot qualifies as "park like" (and it's hardly a park, based on the MLS(r) photos, but let's give the agent the benefit of poetic license) is because the house is so damn small, has no side yard, and is set all the way up against the sidewalk.

318-pacific-lot.jpgOf course it is massively, massively overpriced, given the large number of comparable midgets priced much lower that are not exactly flying off the shelves. But of course this property is a living, breathing example of the utter insanity that gripped the real estate market from 2000 to 2007. Take a look at those yearly appreciation rates:

Property History for 318 PACIFIC Ave

Date Event Price Appreciation
Oct 01, 2009 Listed $499,000 --
Jun 03, 2004 Sold $525,000 22.7%/yr
Feb 14, 2002 Sold $328,000 26.5%/yr
Oct 17, 2000 Sold $240,000 --

Anyone paying more than $275,000 for this property given its tiny size and pathetic location just a few blocks from the barren desolation of the old Naval Air Station is an idiot who deserves to be separated from her money.

Charming--1528 Broadway, Alameda, CA

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As it turns out, it's not just modern McMansions like the Bayport development that put houses on handkerchief lots. Today's Craftsman at 1528 Broadway is 93 years old and sits on a lot barely twice the interior footprint. The specs:

2 bedrooms, 1 bathroom, 1,353 sqft, 3,204-sqft lot, MLS(r) #40432306, $525,000 ($388 / sqft)

Charming craftsman home with two spacious bedrooms, fireplace, hardwood floors. [...] Bonus room in basement, perfect for relaxation, office or storage. [...]

1528-broadway-tiny-lot.jpgThere isn't much room to exercise in the yard, but with a couple of tennis courts a couple hundred feet away, who needs a yard?

The property sold for $590,000 in 2006, and again for $370,000 in August, 2009, the latter transaction being a trustee sale. This suggests whoever owns this property has some latitude to drop the price to a more reasonable level, because $388 / sqft for a yardless house on a busy street in October 2009 isn't going to cut it.

Property History for 1528 BROADWAY

Date Event Price
Oct 03, 2009 Listed $525,000
Aug 14, 2009 Sold $370,000
Nov 01, 2006 Sold $590,000
Jun 07, 1993 Sold $160,181