Saturday, May 27, 2006

It's Starting to Get Interesting

I have about ten more specific examples of downtown condos that are listed at less than the owner paid for the property.

I also have some new resources that show foreclosure activity in San Diego. The 92101 zip shows a number of condos that are in or going into foreclosure. The details show several units that are behind in payments where based on the current market the owner can't simply sell to get current and walk away with any equity. What this means to me is that these units will become Real Estate Owned (REO) by the various financial institutions and will be listed for sale at prices that further drive comparable prices down.


ACR said...

Great job, keep tracking, will help us understabd whats happenning on the real ground and cut through the crap

Bob said...

At least for the properties that were vacant for the holding period, it seems obvious to also add in the holding costs (say, an average of 90% LTV at an average of 6%, since most "investors" probably bought using multiple "creative" loans) and inflation effects (say, at 4%/year). So, in a sample house that lost 10% of its value just in terms of the buy vs. selling prices over the past year, that loss would more than double when the holding and inflation costs are figured in as well. And on a cash-on-cash basis, it could be astronomical: a $550k house that was purchased for 10% ($50k) down and sold a year later for $500k would actually lose the speculator a combined total of $500k (selling price) - $40k (realtor fees and other closing costs of the sale) - $30k (one year's interest) - $20k (inflation effects) - $10k (one year's real estate taxes) - $550k (cost basis) - $10k (unrecoverable closing costs of the buy) = $160k. So our hypothetical speculator lost over 3x his/her original cash investment. In short, the magical leverage that magnifies gains also magnifies losses.

Anonymous said...

Thank you for putting together the great blog. Keep up the good work. If anyone is interested in looking at the actual listings for the real estate that's for sale, they can go to, then click on "Search the MLS" on the left, and enter the MLS number at the bottom of the screen. There are usually pictures, etc.

Anonymous said...

Great blog. Here is my monitoring project:,+San+Diego,+CA+92109

Click on the satellite view and you will see this is a great location. Condo conversion done a few years ago. Built in 1973.

The large building closest to the street has 76 units. Range from $280k Studio / $375k 1br 1bth / $575k 2br 2 bth / to just North of a $million for a unit that combines a 1 br and a 2 br.

April 1st twenty units for sale =26% (counting lock boxes).

Yesterday 28 units for sale = 37%.

Buildings closest to the Mission Bay. North and South
of the pool. 40 units $575k 2br 2 bth.

April 1st one for sale = 4%

Yesterday 5 for sale = 12.5%.