Recently in Price drops Category

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.

On yet another one of those misspelled street names in 94502 lies today's short-sale duet, which sports not one but two master bedrooms suites.

2 bedrooms, 2 bathrooms, 1,519 sqft, 2,560-sqft lot, MLS(r) #40385586, $499,000

Two master suites grace this bright and sunny Bay Colony duet [...] Very short distance to the ferry, schools, shopping, [...] walking paths along San Francisco Bay. 

The MLS(r) listing is amusingly worded:

Sunny duet [...] Two master suites and additional ½ bath. [...] This propety has a "long driveway". Vaulted ceilings & lots of windows. Roof two years old. [...]

The "propety" has a "long driveway". Not a long driveway, mind you--a "long driveway". I'm not sure why that would be a selling point, with or without the scare quotes. And even if there were a pool of buyers out there with a "long driveway" fetish, $328 / sqft is on the high side for a duet on such a teeny tiny lot.

Maybe the owners are tired of serving two master bedrooms (although I'm not clear on how both bedrooms in a 2-BR unit can be the master), considering:

Last sale and tax info

Sold 03/25/2005: $650,000

2008 Property Tax: $10,280

Assuming the property does sell for $499,000, and subtracting 6% for agent commissions and the price of a new roof (rounding down to net proceeds of $450,000), we're looking at $200,000 up in smoke in less than 4 years. That's just under what most people take home in solidly middle-class 94502. Well done.

The property at 709 Haight has been on the market for about three weeks now, but I'm glad I waited for its latest craigslist incarnation to blog about it.

2 bedrooms, 2 1/2 baths, 1,460 sqft, 1,950-sqft lot, MLS(r) #40380271 , $614,900

The public records have it as built in 2003, which I suspect is really 1903. It even has a white picket fence around its handkerchief lot!

My favorite part about this listing, though, is yesterday's craigslist post:

$614900 REO BANK OWNED PROPERTY! HUGE PRICE REDUCTION! ALAMEDA HOME! (alameda)

---

Reply to: reobayareaproperty@yahoo.com ^[?]
Date: 2008-11-25, 6:01PM PST


$614,900 709 Haight Avenue Alameda
(Was $624,900) FOR PICTURES AND MORE BANK OWNED PROPERTIES
Leslie Drury
Windermere Welcome Home
510-755-2666

Advertised With Permission By:
Seville Real Estate
Maya Clark

HUGE PRICE REDUCTION! And right below, it reads "$614,900 [...] (Was $624,900)"

Seriously, folks, is that the best you can do?

The sale history is sad:

Sales History

Sale History & Tax Info

Sale History
10/22/2008:	$451,800 *
09/30/1986:	$109,000 *
No other sale data is available
*This transaction was not used in computing the Zestimate for this house due to anomalies we detected with this transaction. These anomalies can include unusual document or transaction types, sales between possibly related parties, unusually high or low transaction prices, or other data irregularities that might indicate the transaction is not a full-value, arms-length transaction.

How exactly do you lose a house to foreclosure in this situation?

Now it's back on the market at the worst possible time of year, idiotically priced ($421 / sqft) for this time of year / location / lot size / home size / REO loan balance (per last transaction), and it's just going to sit there for months on end. Way to go, Maya Clark.

Update 12/04/08: Another "huge" price reduction, to $609,900. W-O-W.

This cute blue property at 2017 Lincoln has been on the market for ages, but I missed its débutante ball in mid-May and didn't write about it then. Poking around on Zip Realty, its scarlet "Short Sale" badge drew me in, so here goes.

3 bedrooms, 1 1/2 bathrooms, 1,443 sqft, 5,320-sqft lot, MLS(r) #40344005, $560,000

Come see this home. Fully loaded with [...] located within a stroll's distance to park street alameda theatre!!!

(Never mind that some people can't stroll.)

Here's a family portrait of our fully-loaded property standing next to its older sibling:

It's reasonably sized and at $388 / sqft not grotesquely overpriced compared to other listings on the market (note that I didn't say it was reasonably priced). Its price was dropped to $560,000 from $649,000 back in early August, and it's still sitting around waiting for a buyer. I don't know when it became an official short sale, but $560,000 is 11% more than the previous sale price, which suggests the loan balance has grown either due to a gnarly negative-amortization mortgage with very low pick-a-payments and/or a HELOC gone wild.

Last sale and tax info

Sold 10/29/2004: $509,000

2008 Property Tax: $6,77

The property appears to be very close to its neighbors, in spite of a large-ish lot, and right across the street from something that looks like a high school, so the location is less than ideal if you value peace and quiet, but then again if that's the case you're probably not shopping on Lincoln anyway. The location + short sale + left on the shelf + economy + holiday season combo puts the odds of a quick sale pretty close to nil.

This week's Victorian made me laugh.

4 bedrooms, 3 bathrooms, 2,494 sqft, ~6,000-sqft lot, 3 units (2x 1BR, 1x2BR), MLS(r) #40380511

Darling Victorian Triplex [...] Magical garden w/ space galore! [...] units all with large kitchens and lots of original details. A must see!

It certainly doesn't look like a house that started out as a triplex--more like a high-basement cottage whose lower half was put to use. I'm happy to be corrected if that is indeed one big Victorian with 2,494 sqft of above-ground living space (thanks to reader T. Fergusen for the tip; I might verify it if the agent holds an open house).

What made me laugh, exactly?

They're asking $1,150,000 ($461 / sqft). Assuming 6.5% interest and 10% down, we're looking at a $6,500 mortgage, with another $1,000 for property tax. How exactly do you expect to cover that with 2 1-bedroom and 1 2-bedroom units' rents?

What is it about big lots and "magical gardens" in the west end that causes owners to lose their minds over the value of their properties? What is it about the current market that leads people to believe they'll be able to unload their houses at these delusional prices, especially considering many of the comps haven't exactly set the market on fire?

This property has no business being priced in the seven digits.

Update 12/28/08: Price dropped to a still-too-high $1,095,000 two weeks ago.

Not much grows on the ugly west side of this lovely island, probably due to its recent past as a contaminated military base. Other than McMansions, that is. Today's huge property has the following specs:

4 bedrooms, 3 bathrooms, 3,179 sqft, 4,160-sqft lot, MLS(r) #40380296, $929,000
(public records say 3 bedrooms, 2 1/2 bathrooms)

[...] highly sought after Plan 9 [...] features a dramatic entry w/vaulted ceilings and exterior balcony. [...] beautifully upgraded w/ granite counters, maple cabinetry, upgraded flooring, [...] Developer has SOLD OUT of this model!

There isn't much land around this thing, and it makes you wonder how exactly the 3,179 sqft is used--is every bedroom a 25x25 ballroom?

Look on the bright side of life, though--this is a sought-after, sold-out model! I wonder if they'll throw in the de rigueur SUV (or truck) parked in front.

The sale history suggests the seller is expecting to get out from under this anvil with some money left in the bank, maybe so they can make the payments on that shiny black Armada with alloy wheels:

Last sale and tax info

Sold 04/07/2005: $856,500

2008 Property Tax: $11,892

But who knows, maybe that price doesn't include the "upgrades" and they're already upside down after agent commission.

There's a special place in hell for folks who build, buy and sell these monstrosities. They're going to be in good company.

Update 12/28/08: Price dropped to $909,000 a week before Christmas.

You know the old saw--you're better off with a modest house on a great block than the best house on a sketchy block. Today's repossessed Victorian fixer doesn't have any qualms about admitting it's squarely in the former category:

3 bedrooms, 2 bathrooms, 1,249 sqft, 3,000-sqft lot, MLS(r) #40378425, $394,900

REO bargain priced below comps. [...] fixer needs work but priced to sell! [...] full basement [...] Ideal neighborhood of much more expensive houses makes this a worthwhile investement.

You may remember this property from when it was known as MLS(r) #40287584 and trying to sell itself honorably in the mid $500s (here's the current Trulia page with a wonky prior transaction price of $6,130,182 back in April, 2007):

If you've been to that part of town, you know the only reason the other houses on the block are more expensive is because this one is cheaper, which is not completely tautological--it's like saying the clearance aisle at the Dollar Store is in an ideal store of much more expensive items, as opposed to, say, strolling through Saks and finding an ever-so-slightly scuffed pair of Dior pumps with a 10% off tag.

The sale history is a bit odd:

Sales History

Sale History & Tax Info

Sale History
09/23/2008:	$427,979 *
04/16/2007:	$61,301 *
05/14/1999:	$275,500
No other sale data is available
* This transaction was not used in computing the Zestimate for this house due to anomalies we detected with this transaction. These anomalies can include unusual document or transaction types, sales between possibly related parties, unusually high or low transaction prices, or other data irregularities that might indicate the transaction is not a full-value, arms-length transaction.

Whatever actually happened in 2007, it's certainly remarkable to have added $150,000 to the loan balance in just 9 years and still have a "fixer" that "needs work." Sure, foundations don't come cheap, and the previous listing claimed the property's was just ten years old new, but there's no way this little house got a $150K foundation job, especially considering it had sold for $275K in 1999--I don't know about you, but in 1999 I wasn't about to pay that much for a house I knew needed 10 Honda Civics' worth of foundation work. But then again, maybe the buyer overpaid for a dilapidated hovel and then proceeded to overpay for a new foundation.

The previous listing also noted a remodeled kitchen with new tile floor and cabinets; just how much more work is needed in this house? And if it needed everything redone, why pay that much in 1999?

A closer look at one of the pictures reveals an interesting taste in door and window designs (note there's no date available, so for all I know the picture is old and the house looks much better now; but if that's the case, why use it in the current listing? I drove by on 10/30/08 and the house is indeed boarded up (i.e. the photo below is current as of late October, 2008). It's also around the corner from a nail salon:


The little house four blocks away we looked at a few weeks ago now has a friend in misery. Expect more as the winter frost starts biting.
 

Fernside strikes again with another obscenely overpriced property, represented by an agent who really should know better. 3231 Fernside Blvd just appeared (MLS(r) #40378008) with the grotesquely inflated list price of $939,000:

(listing) 3 bedrooms, 2 bathrooms, approx. 5,200-sqft lot, $939,000
(public records) 2 bedrooms, 2 bathrooms, 1,472 sqft, 5,376-sqft lot

40' Deep Water Dock. [...] 3 plus bedroom home with water view and access [...] Lots of charm with up-dated kitchen, baths, newer windows and newer roof. [...]

Today's craigslist post touts its long driveway, perhaps for lack of anything else to tout:

$460000 2 Bed 1 Bath Aprox. 1392 SqFt / Large Lot Aprox. 6000 SqFt (alameda) (map)

---

Reply to: susan@staggrealty.com ^[?]
Date: 2008-10-25, 9:15PM PDT


Open House Sunday 2-4PM. Original Charm! The large lot gives a long driveway, with possible class C RV access behind gate. The enclosed front porch waits for those relaxing afternoons. The living room and dining room have hardwood floors, built-in cabinets and seating. Through out the home is original architectural detail. Information deemed reliable, but not guaranteed. It is the responsibility of those who are interested to verify all information. Home being offered by Stagg Realty (510) 773-6160 Susan Stagg/Broker

1185 Broadway at San Jose

I find it interesting the agent devoted so much of the listing to the disclaimer--is there something more to this property than its "Original Charm"? Is that code for "Not updated since before the world knew Nixon was a crook"? It's also unclear why the RV appeal has such a prominent spot in the listing; what percentage of the buyer pool is RV access a selling point for?

The house itself is somewhat decently sized, at 1,392 sqft on a 6,000-sqft lot, but it only has 2 bedrooms and 1 bathrooms. I suppose overnight guests can always sleep in the driveway and shower somewhere private on the 6,000 sqft at their disposal.

There's no sale history on Zillow, which likely accounts for the low list price ($460,000, or $330 / sqft). That said, the price wasn't always this low:

The property has been on the market as MLS(r) #40367294 since the first week of September and already dropped its price twice. RV owners must be a tough crowd.

The third of today's rash of relists is our sweet old friend on Bungalow Boulevard, 3240 Sterling Avenue. The last time we met, last July, it was waiting for a buyer at $525,000, after over 6 months on the market. That buyer evidently never came, and 3240 Sterling is back as MLS(r) #40376648, with a lower list price of $514,900. Having last been purchased for $557,000, it's been in loss leader territory since its second price drop back in February, and this new list price sure isn't helping the seller recoup their money.

Any non-round list price makes me suspicious there might be some foreclosure action going on, so I went over to Zillow to check things out, and sure enough...

Last sale and tax info

Sold 09/17/2008: $483,230 *

2008 Property Tax: $7,078

Transaction Not Included in Zestimate

This transaction was not used in computing the Zestimate for this house due to anomalies we detected with this transaction. These anomalies can include unusual document or transaction types, sales between possibly related parties, unusually high or low transaction prices, or other data irregularities that might indicate the transaction is not a full-value, arms-length transaction.

* Transaction not included in Zestimate. 

I'm beginning to feel a bit like Oscar the nursing home cat.

Update 12/04/08: Dropped to $463,900 this week. Below the foreclosed amount, even.

Old is the new new, it seems. Out of four new listings on the MLS today, three are relists that were covered on this blog the last time they were active. The largest of all three is a newer home on the west end at 2418 Coral Sea Street. It was previously listed at $849,000, which was already a money-losing proposition from the previous sale price of $877,500, so it's not that surprising that it's been relisted for almost the same price, $829,000 (MLS(r) #40376560). Of course it's not going to sell at that price either, but that doesn't matter.

Good luck, or not.

You may remember 609 Fortress Isle, a lagoon rancher that languished on the market for a while last summer at a grotesquely high $1,199,000. In case you forgot, here's what Craigslist had to say about it:

Description
$290,000 WORTH OF IMPROVEMENTS/UPGRADES/RENOVATIONS!!! Georgeous 3 Bedrooms, 2 Baths Custom Estate on very large Cul-de-sac Lot on the Lagoon will leave you breathless.  Entrance has room for artifacts. Grand room w/ majestic stone, wood burning fireplace. A solid wall of Panoramic windows overlooking large deck & length of lagoon. Upgraded galley kitchen and large BR's. This home is a true showplace. Private Boat Dock, stunning large deck for entertaining with stair lighting ambience. Incredible dining room with panoramic windows, A/C, central heating, track lighting, and skylight. Remodeled kitchen with pergo floors, Andersen Bay Window. Upgraded bathroom with pergo floor, light fixtures, and mirrors. Relaxed Living on the Water! Convenient to Alameda Towne, schools, and transportation. Close to the Beach. Quiet South Shore neighborhood.

Well, it's back (MLS(r) #40376581), and you can have it for...

$850,000.

That's right. A $349,000 haircut all at once. That's 29% off. And yes, it's the same house:

One of the largest lagoon homes on the South Shore, [...] water views from many windows, its own private boat dock and a large sunny wraparound deck, grassy play/garden area. [...] stone fireplace, updated kitchen, bonus sunporch. Many upgrades.

I can only imagine what it must feel like if you were a buyer who lowballed at, say, $1,099,000 and got rejected.

Notably, this is one of three relists in today's batch of four "new" MLS(r) listings (although one of those has apparently been foreclosed on since I wrote about it, so it's technically not a relist, I suppose).

Today's craigslist post describes the property at 1828 9th Street as "A real find," perhaps due to its somewhat hard-to-get-to location. It doesn't describe it as an "overpriced find," lest it scare potential buyers away, but it might as well. Here are the specs:

3 bedrooms (public records) or 2 bedrooms (listings), 1 bathroom, 1,011 sqft, 4,445-sqft lot, MLS(r) #40376427, $519,000

$519000 First Open House Sunday Oct. 19. (alameda) (map)

---

Reply to: hous-884791028@craigslist.org ^[?]
Date: 2008-10-18, 10:18PM PDT

This home hit the market Saturday. A real find. Excellent 2 bedroom bungalow on a quiet street in Alameda. Lots of upgrades and care make this home shine. Just over 1,000 sq. ft. of living space. Hardwood flooring in bedrooms and living room and dining room. Fireplace in living room.
You'll love the gardens on the side and rear. Redwood tree in a quiet setting off the 2-car garage. Lots of parking. Laundry porch over a very useful basement which has a separate room suitable for work and recreation.
Good condition indicated by "termite report" and "home inspection report" available at the property.
Very nice neighborhood.
Check that price! Call for a convenient visit by appointment. 510-508-1215.

Sure, $519,000 is lower than most recently-listed homes on the market, but it only has 1 bathroom, and it's very small; $513 / sqft is much too high.

The sellers might be able to drop the price, assuming they're not too stubbornly set on the magical $500,000 threshold, given:

Last sale and tax info

Sold 04/16/2002: $386,000

2007 Property Tax: $5,458

But then again, they might not have to, considering the Alameda market's remarkable willingness to overpay.

Update 12/04/08: And drop they did,this week, below the magical $500,000, to $499,000.

An adorable Victorian at 1514 Minturn showed up in my email box today courtesy of Trulia. It's a pretty "duplex", which really means "high-basement conversion" based on the square footage and the high-basement look of it (photo below) with the following specs:

4 bedrooms, 2 bathrooms, 1,300 sqft, MLS(r) #, $599,000

Victorian Duplex Pride of Ownership , 2 floors, harwood floors

The location is great if you like peace and quiet--it's at the end of a cul-de-sac--but less so if you like large lots. I couldn't find the lot's square footage anywhere, but judging by the Google map's aerial view, it doesn't look too big. The property (or part thereof) appears to have been used as the headquarters for a painting business named Grand Finishes.

Listed at $599,000 ($461 / sqft), it's probably going to sell reasonably quickly, although the current credit contraction + holiday season combo is not exactly playing in its favor. It's also not clear how it would be cash-flow-positive as an investment property, given that a 6.5%-interest mortgage assuming 20% down is at least $3,000 / month, not counting maintenance or property tax, and I have a hard time imagining either unit in this house renting for much more than $1,500 $750 a month (turns out each unit is about 650 sqft).

It certainly hasn't been a terribly cash-flow-positive investment for the current owners:

Last sale and tax info

Sold 09/30/2005: $720,000

2007 Property Tax: $9,404

Who exactly thought this little house justified paying almost three quarters of a million?

Update 11/3/08: Here's a bank that doesn't mess around. Priced at $420,000 today.

Update 11/20/08: A reader reported this property sold for $476,000, a 34% drop in value from its previous transaction just three years ago. Yay (and thanks for the tip)!

Update 11/25/08: Back/still on the market?

Update 1/2/09: Still on the market.

This quaint, ancient little Gothic-y house on Chestnut was on the market last spring. I didn't write about it then, but I just found out it recently sold, so I thought it would be interesting to take a look at the listing's life over the past few months. First the specs, with picture courtesy of Google Street View:

2 bedrooms, 1 bathroom, 1,250 sqft, 3,150-sqft lot, built in 1875 (!)

It was once known as MLS(r) #40346003 and described as...

Charming, historical Gothic Carriage House with front and rear yards, historic "tack/bunkhouse." Wood flooring in LR, unique windows, said to be from Old City Hall (per owner; not verified). Home is an "H" designation on Alameda Historical List.

There's no sale history on Zillow, other than this last transaction at $459,000 recorded on 9/18/08. What's interesting, however, is that you can easily find evidence of its descent towards its final price, starting from its June open house when it was listed at $539,000 (emphasis mine):

Open Homes

Written by Alameda Sun    Published: Friday, 13 June 2008

[...] Open Homes for June 14–15 Alameda 15 Parfait Lane $529,000 Sunday 2-4 1546 Broadway $530,000 Saturday 3-5 1316 Chestnut St. $539,000 Sunday 2-4 3110 El Paseo $539,000 Sat. and Sun. 1:30-5 305 Lagunaria Lane $540,000 Saturday 1-3

with an intermediate stop at $499,000:

What's most interesting, however, is that several sites (like the Harbor Bay Realty site in the screenshot above, or Barb K's site, which is otherwise a good resource for up-to-date sales data) show the property as having sold for its list price, with no mention of the 15% discount off its original list price that was required to close the sale. Strictly speaking, this is true--the house was listed for $459K at the time of its sale, and it sold for exactly that amount.

But if it's "nothing but the truth," it's not "the whole truth," and the casual would-be buyer gets suckered into drinking from the poisoned well guarded by the local experts and making inflated offers that are too close to the obscene asking prices we're still seeing all over town. "You need to offer their asking price or your offer will be turned down--you see, homes in this area are selling very close or over their asking price!" This vile, dishonest, false sense of urgency is motivated by exactly one thing in a commission-based transaction, and that ain't the buyer's best interest.

This is going to be a sad holiday season for the real estate market.

You may remember a hapless Victorian on a busy block of Park street nestled amidst such lovely amenities as a party store, a tire store, and a laundromat. It was on the market last spring, for no less than $925,000, and the owner was making a big deal of having spent over $120,000 on renovations. Well, what do you know, it's back as MLS(r) #40376306 for considerably less, $708,500, which is still obscenely high for that poor old wreck in that wretched location.

As much as I love Victorians and want to see them preserved, I'm afraid there isn't much to save here, even though the building itself has appealing specs (except for the tiny lot):

4 bedrooms, 2 1/2 bathrooms, 2,672 sqft, 3,744-sqft lot

[...] As is sale. Upper level,, with hardwood floors [...] Lower level under construction, designed and approved for another 3 bedrooms.1 bath

The sale history is edifying: not a single arms-length transaction in the bunch.

Sale History
06/03/2008:	$644,100 *
12/07/2005:	$163,000 *
04/18/2003:	$112,000 *
No other sale data is available

Pacita Dimacali is one of Alameda's most active agents. She posts on craigslist, Trulia, and this little blog. We've had our disagreements about marketing fluff, but we have a very cordial relationship. Today I want to recognize Ms. Dimacali's talent for embellishing the unembellishable, pitching the unpitchable, and listing the unsellable, by reproducing her latest Craigslist post in its resigned, shoulder-shrugging entirety. Brace yourselves, because it's a doozie.

1715 Schiller
Help beautify Alameda --- fix up this home!

2BR/1BA Single Family House
       
Year Built     1925
Sq Footage     856
Bedrooms     2
Bathrooms     1 full, 0 partial
Floors     1
Parking     Unspecified
Lot Size     2,520 sqft

DESCRIPTION
Help make Alameda look beautiful and fix up this house!

Not the worst of the worst, but close to it. This is a home a contractor would love. Spanish bungalow needs a total makeover. (Yes, it’s a fixer.)

The dining room was turned into a bedroom 30 years ago, without permits.

The roof leaks. There are holes in the ceiling, the walls, and the floor. Wood floors need refinishing. Paint is peeling inside and out. The bathroom and the kitchen are not pretty. The appliances stay, if you want them. Rickety back stairs. There is no heat, no cooling.

It is chockfull of stuff, including an abandoned Silverado truck in the driveway, a VW Convertible in the garage, and a jet-ski in the backyard.

Its real value lies in the fact that it is a detached single family home on a small lot, albeit a fixer, in the beautiful city of Alameda.

After I was done laughing, I asked myself the following questions:

1. what would possess any sane agent to take on this listing?
2. how does being a tiny fixer on a tiny lot in a crappy part of town constitute "real value"?
3. why on earth is all that junk still on the premises?
4. if the dining room is a bedroom, where does one eat?
5. when was the last time anybody lived in that hovel (anybody human, that is)?
6. what the hell is wrong with whoever priced that monstrosity at (drum roll) $350,000?
   

You read right: three hundred fifty thousand dollars. For a leaky, unpermitted, junk-filled, 856-sqft dump on a cocktail-napkin lot on the north end of civilization. $409 per miserable, rotten square foot. This monstrosity was last sold almost 40 years ago for 2 grand, and sadly it really isn't worth much more than that now. Heck, I'd be half tempted to ask for a property tax refund. Like hazard pay.

Last sale and tax info

Sold 11/10/1969: $2,000

2007 Property Tax: $1,265

Ms. Dimacali: Are you bored? Desperate for a challenge? Doing a friend a favor? What is going on here? 

A "new" listing caught my eye this week, both because of its "low" price ($460,000) and its familiar address (1312 Mound Street).

2 bedrooms, 1 bathroom, 1,103 sqft, 2,800-sqft lot, MLS(r) #40374881, $460,000

Great east end location. [...] Large living room with hardwood floor. Formal dining room. [...] Detached garage. Common driveway.

There's no photo yet, but based on the area and description, I suspect this is one of those bungalowy cottages (or maybe a cottagey bungalow). At $417 / sqft, it's less obscenely moronic than other recent listings but still too high for a small house on a postage-stamp lot.

Interestingly, though, this is the second incarnation of our bungalottage (or cottalow). It was recently on the market  as MLS(r) #40352822 and priced at $550,500. There's still plenty of evidence of the old price, including this very blog (scroll down about half-way).

It was also sold not that long ago for $385,000 and another two times between 1999 and 2002:

Sales History

Date Price Appreciation Aug 26, 1999 $210,000 -- Apr 12, 2002 $332,500 19.1%/yr Oct 20, 2006 $385,000 3.3%/yr

I'd bet it would probably fetch its 1999 price again if it came on the market after Xmas 2009, given the way things are going. As it is, though, it will probably break even after commission and such. Good luck. Or not.

Update: I ran into a rental property report site named krunching that shows very interesting numbers. If this property were purchased as a rental, krunching calculates its breakeven sale price should be--guess what--its 1999 price + 10%:

Investment Summary

This investment summary assumes a 30-year fixed loan, 20% down, 7% APR. It uses operating assumptions of 10% management fees, 9% vacancy allotment, 3% repairs. This investment summary assumes that rents increase each year by 5%. This property would need to be purchased for $233,640 in order to generate a break-even cashflow based on prevaliing market rents.

The art of flipping is still alive and well, in spite of the market's current malaise. Today's flip is a large Victorian in an area noted for its small lots and tiny homes, the 400-500 blocks of Santa Clara. First, the specs:

4 bedrooms, 2 bathrooms, 2,366 sqft, 7,120-sqft lot, 1x2BR, 1x3BR units, MLS(r) #40374744, $819,000

Gorgeous Victorian on a huge lot. Totally remodeled from top to bottom with permits. New appliances, flooring, granite counter tops, cabinets, fresh paint in and out, etc. [...] Long driveway parks many cars.

I don't know about gorgeous, but there's photographic evidence it was being worked on not terribly long ago, thanks to Google's ruthless street view camera:

I can't vouch for this, but this property doesn't look like it was born a multi-family residence. I'd bet it was raised and chopped up into two units at some point in its long history, and as a result it looks just wrong, especially when you compare it to real two-story Victorians on the island.

The sale history reveals truly inspired financial reasoning on the owner's part:

Last sale and tax info

Sold 11/15/2006: $560,000

2007 Property Tax: $2,023

I suspect it went something like this: "Let's buy this place, spend a hundred K fixing it up, and flip it! We're gonna be RICH! MUAHAHAHAHAHHAAHAHAAAA!"

Except there are a lot of other pretty Victorian MFHs, some with 4 units (and therefore much better rental upside potential; at least you're not losing 50% of your revenue when one tenant moves out), many in better areas, most about the same size, that just aren't selling, even when listed for a lot less than this property's delusional $819,000 asking price.

Did anyone do a cash flow analysis of this beast? A quick back-of-the-envelope calculation puts the mortgage alone at $4,700 / month (assuming 10% down and 6.5% loan); add $700 for property tax and $500 for maintenance (a low estimate to reflect the fact the house was just renovated) and you need $5,900 / month in rent just to break even. I don't know about you, but I ain't paying $3,000 a month to live in a Vic basement in that part of town, even if I can use the long driveway to practice my bowling skills all day. And if all you want is a big house to live in for yourself, you can rent one just 5 sqft smaller for $3,500 a month. That's close to $30,000 savings every year, or tuition and board at any good 4-year public college in California.

Restoring old homes is a wonderful, laudable enterprise. Expecting to flip them for a massive profit is not. I just hope this doesn't cost these idiots' kids a chance to get the good education their parents obviously didn't get. Or maybe they skipped the intro math classes.

Update 10/31/08: It didn't take long for the first price drop. We're down to a still excessive $780,000. I'm almost ready to bet there's going to be another one before the end of November.

It's not April 1st (I checked), so I can't find any explanation for the pricing strategy on today's itty bitty property. 423 Santa Clara Avenue bills itself as a "sweet little 1 bedroom cottage". I don't know about sweet, but it's certainly little:

1 bedroom, 1 bathroom, 623 sqft, approx. 1,740-sqft lot, MLS(r) #40375010, $425,000

Sweet little 1 bedroom cottage [...] new Roof, new Brazillian Cherry flooring and tile in kitchen & Bath. Granite Counter, new stove, new kitchen cherrywood cabinets. [...] 20 minutes to SF [...]

The price isn't a typo. $425,000, or $682 / sqft. And if they really mean "20 minutes to SF" they must have forgotten to mention the helipad on top of the house.

For the life of me I can't figure out what could justify this demented asking price. Location? Nope. New interior? Maybe a $30K premium, if that. Lot size? Nope. Architecture? Nope.

There's no sale history on Zillow, so one presumes the owners should be able to drop the price to where it belongs, say, $175,000 (not drop it by $175K--drop it to $175K). It's not as if it's difficult to find comparably-sized properties for pricing ideas.

Idiots.

Update 10/27/08: Price dropped to $399,000 and a "MOTIVATED SELLER BRING OFFERS" note. The floors are gorgeous.