Big Loss on Downtown Condo at Treo #318

Treo is a high rise building in downtown's Columbia neighborhood. This is very close to the highly debated Broadway development that has been in the news lately.

This unit was purchased one year ago and has caused a serious loss to occur. At $70,000+ the cost of living in this small non-view one bedroom condo approaches $8,000 per month!

Type: Listed on MLS(#066083604)

Resale Price: $359,990
Cost: $410,000

Loss@6% Sales Expenses: $71,609
Loss%: 17.47%

Purchase Date: 09/30/2005
Holding Period: 12 months and counting...

Bedrooms: 1
Bathrooms: 1
Square Feet: 687

Purchase Details: view

Another High-End Downtown Condo Lists for a Loss - Cityfront Terrace #1601

Cityfront Terrace is a mid-rise development in the Marina District.

In a bit of irony it was developed as condos during the previous real estate boom and bust cycle and couldn't be sold as condominiums so it was reverted to a rental property for a number of years. The units were then sold off as condominiums again when the now busting boom cycle was underway.

Type: Listed on MLS(#066082869)

Resale Price: $839,000
Cost: $880,000

Loss@6% Sales Expenses: $91,340
Loss%: 10.38%

Purchase Date: 12/08/2005
Holding Period: 9 months and counting...

Bedrooms: 2
Bathrooms: 2
Square Feet: 1492


Purchase Details: view

Yet another Downtown Condo at Acqua Vista #105

Here's another unit at Acqua Vista that's listed for a loss. This is a new listing so again it's interesting that people are coming out with their first price that's less than they paid. This is the only practical approach if you need to sell.

For new readers of this blog Acqua Vista is a newer building in downtown's Little Italy neighborhood. It was developed as a rental property and was converted into condos before the building was completed.

Type: Listed on MLS(#066082919 )

Resale Price: $555,777
(Range priced $530,777 to $580,777)
Cost: $594,000

Loss@6% Sales Expenses: $71,570
Loss%: 12.05%

Purchase Date: 10/14/2005
Holding Period: 11 months and counting...

Purchase Details: view

Luxury Downtown Condo at Park Place Sells for $98,000 Loss - #506

Park Place is a high rise Bosa building in downtown's Marina District.

This is the third showing on the list for Park Place.

Park Place is one of downtown's premier buildings in one of the best neighborhoods so this should give you a pretty good indication of the price peformance of higher end units since 2004.

Type: Closed Sale

Resale Price: $800,000
Cost: $850,000

Loss@6% Sales Expenses: $98,000
Loss%: 11.53%

Resale Date: 08/11/2006
Purchase Date: 10/28/2004
Holding Period: 22 months

Bedrooms: 2
Bathrooms: 2
Square Feet: 1227

Purchase Details: view

Resale Details: view

Condo conversion craze grinds to halt

The Union Tribune weighs in with this timely article on the end of the condo conversion craze.

I think that the likely thousands of apartments that are empty are a strong factor in the boost in the strength of the rental market.

Luxury Downtown Condo at Horizons Listed Below 2004 Cost - #905

Horizons is a Bosa development in the Marina District.

This luxury unit has been on the market for almost three months.

Price cut history of this unit:
Price Reduced: 08/03/06 -- $829,900 to $819,900
Price Reduced: 09/07/06 -- $819,900 to $799,900

Type: Listed on MLS(#068054852)

Resale Price: $799,900
Cost: $810,000

Loss@6% Sales Expenses: $58,094
Loss%: 7.17%

Purchase Date: 09/10/2004
Holding Period: 24 months and counting...

Bedrooms: 2
Bathrooms: 2
Square Feet: 1245

Purchase Details: view

Downtown Condo at Acqua Vista #433

Here's another unit at Acqua Vista that's listed below the price the current owners paid the developer.

Also interesting is that they listed this unit for a loss without putting the unit at a higher price, not getting any offers (or likely no walkthroughs) and then cutting the price. Perhaps we are at a point where almost everyone including real estate agents recognize the market for having made a clear move down.

Going back to my point about listing below developer price, there were a fair number of flipped units in this building so the losses must be mounting.

Type: Listed on MLS(#066081157)

Resale Price: $384,900
Cost: $391,000

Loss@6% Sales Expenses: $29,194
Loss%: 7.47%

Purchase Date: 04/01/2005
Holding Period: 17 months and counting...

Bedrooms: 2

Bathrooms: 1

Square Feet: 877


Purchase Details: view

More Unhappy Condo Owners - www.elcortez.info

Just up Cortez Hill from the under-development SmartCorner that was featured in the previous post, some of the owners and neighbors of the historic El Cortez are organizing to stop the proposed 777 Beech development which is proposed for the same block as the El Cortez.

I have no idea if all of the accusations on the elcortez.info website are true but they are very much worth a read. I did not know that the highly touted Mills Act property tax discount is being debated. I am also suspect of the sales practices of condo developments so I'm not surprised about some of the accusations.

I do think some more retail, which 777 Beech is proposing, would be very beneficial to Cortez Hill.

http://www.elcortez.info/

smartcornersucks.com

More controversy on a downtown high-rise project that is under development. The developer seems to have found a way to raise prices which is leaving contracted customers unhappy. Ironcically prices are going down, the developer may have been better off just leaving the prices where they were.

SMARTCORNERSUCKS.COM

Downtown Real Estate Sales People Starting to Feel the Pinch

A two bedroom unit located at Crown Bay in the Gaslamp District has slipped into foreclosure proceedings. Purchased for $750,000 in October 2004 it is not currently listed for sale, however I highly doubt it is worth that much in the current market.

Foreclosure.com shows a default of $26,884. While all this is becoming pretty standard the interesting detail is the owner of this unit is a real estate agent, in fact I believe the realty office is located in the Crown Bay building.

In the interest of privacy I won't copy the name, note the information is public and can be found by logging on to foreclosure.com. County records also indicate the same person owns 2621 Covington Road in North Park which is currently listed on the MLS (066032831). This indication of cash flow problems is yet another data point that the market has changed. I do believe we are just getting started as the market has a quite a lot of correcting to do before prices and fundamental valuations converge.

350 K Street #405 purchase details: view

The Upride Ends: Now It Gets Interesting

Don Bauder from the Reader ask a very appropriate question about what happens next now that the price boom is clearly over.

My own view is that we are just getting started and we won't know until this time next year how big the selloff is going to be.

The Upride Ends: Now It Gets Interesting

Yet another "Short Sale" listing - Downtown Condo at ParkLoft #218

This entry validates a what is becoming a clear trend, once again the MLS listing markets this property as a "Short Sale", this means the owner of the property is selling at a loss. That's obvious when you review the numbers below.

To be down $138,000 in just less than a year is quite interesting.

Type: Listed on MLS(#066078740)

Resale Price: $560,000
(Range priced $540,000 to $580,000)
Cost: $665,000

Loss@6% Sales Expenses: $138,600
Loss%: 20.84%

Purchase Date: 09/26/2005
Holding Period: 12 months and counting...

Bedrooms: Loft
Bathrooms: 1
Square Feet: 1281

Purchase Details: view

883 Antilla Way, San Marcos, CA 92078

We're heading up to San Marcos for this post as we focus on a home that was purchased in early 2005 that's been listed and relisted a few times.

Also noteable as that the houses on each side of this property are also for sale.

Type: Listed on MLS(#066078490)

Resale Price: $887,500
(Range priced $925,000 to $850,000)
Cost: $931,887

Loss@6% Sales Expenses: $97,637
Loss%: 10.48%

Purchase Date: 03/03/2005
Holding Period: 18 months and counting...

Bedrooms: 5
Bathrooms: 4.5
Square Feet: 3,607

Purchase Details: view

Flippers Flee, Long-Term Investors Hold On

I love the "Where are they now" type of article, Kelley Bennett from the Voice of San Diego follows up on some of the investors in that now classic Money Magazine article on San Diego real estate from a little over a year ago.

voiceofsandiego.org: Flippers Flee, Long-Term Investors Hold On

Union Tribune: Housing still cooling

The updated aggegrate numbers are out and prices are down. Personally I don't think these numbers are especially useful as they don't tell the story as well as looking at specific properties or doing a comparables analysis.

There is no question in my mind that if you want to get a generic property sold you need to offer a compelling price.

SignOnSanDiego.com -- Housing still cooling

Huge Loss on Foreclosed Condo in Pacific Beach - Crown Point Villas #7

Listed on Foreclosure.com as fully foreclosed and bank owned this Pacific Beach condominium carries a massive loss of $129,000 and that's not including the $5,000 carpet and paint credit offered at closing.

You can discern from the price cut history that the lender that owns the unit wants it off of its books:

Price Reduced: 07/01/06 -- $515,000 to $505,000
Price Reduced: 07/17/06 -- $505,000 to $495,000
Price Reduced: 08/25/06 -- $495,000 to $485,000

I'm very curious what the rules are, accounting, regulatory or otherwise, that the banks are financial institutions are under when holding foreclosed properties. These institutions would seem to be highly motivated to cut the price in order to get a buyer into the unit. Of course this has downward price pressure ramifications for the rest of the market.

Type: Listed on MLS(#061047870)

Resale Price: $485,000
Cost: $585,000

Loss@6% Sales Expenses: $129,100
Loss%: 22.07%

Purchase Date: 01/31/2005
Holding Period: 20 months and counting...

Bedrooms: 2
Bathrooms: 2
Square Feet: 913

Purchase Details: view

Thanks to Gary for finding this property!

Downtown Condo at City Walk #124

This is the second City Walk unit to hit the list in less than a week.

Again City Walk is a nice low rise condominium project located in downtown's Marina District. There are no view restricting projects or other neighborhood changes so the decline in property values are completely market oriented.

Type: Listed on MLS(#066055267)

Resale Price: $620,000
Cost: $650,000

Loss@6% Sales Expenses: $67,200
Loss%: 10.34%

Purchase Date: 10/15/2004
Holding Period: 23 months and counting...

Bedrooms: 2
Bathrooms: 2
Square Feet: 1225

Purchase Details: view

Interesting "Price Cut" Activity at Metrome

Metrome is a low rise condominium in the Ballpark District. Three specific properties have come up on this blog:

Metrome #608
Metrome #504
Metrome #813

Now the new interesting part, Metrome is still not sold out, the first wave of closings occurred starting in August 2005. Based on normal procedures this would have been the units that were reserved during the construction of the development.

Unit 606, a 994 square foot one bedroom one bath unit closed September 23, 2005 for $550,700 purchase details

Unit 706, also a 994 square foot, one bedroom, one bath unit closes almost a year later on August 17, 2006 for $495,000. Since there were no prior closings on this unit we can assume that this was an unsold unit that the developer has been holding for a year and has cut the price. purchase details

Since condo developments are pretty cookie cutter in the sense that a particular "stack" in the building will be identical with perhaps large patios on the ground floor units and vaulted or higher ceilings for the top floor it's pretty easy to do a comp analysis. These two units are on top of each other so they're virtually identical, in fact the cheaper unit is one floor higher and perhaps even has a better view. Note that Metrome is an eight story building and the two units are on the 6th and 7th floor so there isn't a penthouse premium that skews the analysis.

Assuming unit 606 is worth what the unit above closed for and the usual 6% sales expenses this property is underwater $85,400!

This example clearly shows the risk embedded in purchasing a generic condominium in an unsold out building. As we have seen with the posts on Cortez Blu and The Lodge at Bankers Hill, developers can and will cut the prices to move unsold property.

With so many new buildings completing downtown in the next year or two, many that aren't fully reserved at this point, it will be very interesting to watch how the market digests all these properties.

Downtown Condo Acqua Vista #1004

Readers of this site will be familiar with the Acqua Vista story; designed and built as rental grade housing, converted at the near top of the boom, units selling for less than orginal price.

The MLS listing describes this condo as having $40,000 in upgrades. The pictures verify this as the usually drab Acqua Vista kitchen has been upgraded and the unit has wood floors. The loss below does not include any upgrades, just dollars in dollars out assuming 6% sales expenses.

Type: Listed on MLS(#066057486)

Resale Price: $507,938
(Range priced $485,000 to $530,876)
Cost: $570,000

Loss@6% Sales Expenses: $92,538
Loss%: 16.23%

Purchase Date: 01/27/2005
Holding Period: 20 months and counting...

Bedrooms: 2
Bathrooms: 2
Square Feet: 938

Purchase Details: view

voiceofsandiego.org: News... If They Build It, Will Buyers Come?

Local homebuilders are cutting back, all the way down to the coffee in the breakroom.

voiceofsandiego.org: News... If They Build It, Will Buyers Come?

Downtown Condo at City Walk #423

The MLS listing markets this listing as a "Short sale!" which in the real estate business means the property is selling for less than is owed on it.

It's interesting to note that the property was originally purchased from the developer from $415,456 in February 2003.

City Walk is located in the Marina District downtown and is a low rise building, it's only a few years old.

Type: Listed on MLS(#066076942)

Resale Price: $612,500
(Range priced $575,000 to $650,000)
Cost: $650,000

Loss@6% Sales Expenses: $74,250
Loss%: 11.42%

Purchase Date: 06/13/2005
Holding Period: 15 months and counting...

Bedrooms: 1
Bathrooms: 1
Square Feet: 1330

Purchase Details: view

San Diego Real Estate Agent Meltsdown, Attacks Reporter

Frankly this is pretty unbelievable. Between the identity theft, mortgage fraud and assault and battery caught on video this agent is pretty much done.

Since this guy owns a number of properties and is in serious criminal and civil trouble these properties have a good chance of going into foreclosure.

Downtown Condo at Discovery #503

Discovery is a 199 unit high rise condominium in the Cortez Hill neighborhood downtown.

On the one hand this entry is "only" a $40,000 loss however this unit happens to be a very good comparable to the Cortez Blu unit featured in this entry.

Both units have only one parking spot, don't have a view (if anything the Cortez Blu unit has a slight view). Discovery does have nice amenities so let's be fair and give it a 10% price advantage.

As noted in the prior entry the Cortez Blu unit was offered at $350 a square foot. At $385 per square foot this Discovery unit is worth $473,500! Clearly a substantial discount to the unit's current list price.

Type: Listed on MLS(#066061752)

Resale Price: $595,000
Cost: $600,000

Loss@6% Sales Expenses: $40,700
Loss%: 6.78%

Purchase Date: 08/30/2004
Holding Period: 25 months and counting...

Bedrooms: 2
Bathrooms: 2
Square Feet: 1230

Purchase Details:view

The Last Stand of the 6-Percenters? - New York Times

I normally post local stories or of course examples of specific properties in San Diego, however I think this New York Times piece on the national real estate industry is a must read.


Please note that nytimes.com requires a login.

Downtown Condo at Park View #216

This small two bedroom is located in one of downtown's older buildings on Cortez Hill. Since it's rental value is probably no more than $1,200 a month you would really wonder why someone would pay twice that amount to own a marginal unit like this one.

Type: Listed on MLS(#068075764)

Resale Price: $380,000 (Range priced $360,000 to $400,000)
Cost: $405,000

Loss@6% Sales Expenses: $47,800
Loss%: 11.80%

Purchase Date: 10/01/2004
Holding Period: 23 months and counting...

Bedrooms: 2
Bathrooms: 2
Square Feet: 919

Purchase Details: view

"Everybody wants to live in San Diego" Downtown Condo at Acqua Vista #959

This is a very interesting property as I believe this is the Acqua Vista unit discussed in this Union Tribune article from April of 2005.

This is more evidence of speculators taking losses on downtown properties. How many of the thousands of condos to be delivered downtown are under contract with speculators? Keep in mind that the buildings that are underway all started sales during a very pro-downtown "can't lose" environment.

Additionally interesting is that the Park Boulevard West unit discussed in this article generated approximately $75,000 in profit. The simplified loss on this unit is $46,060 however I doubt it sells for this price and as noted in the UT article it was a negative cash flow rental. County records show property tax of $5,986. Since this unit has only one parking spot and it's in a marginal building that was initially developed as a rental project it's unlikely it'll sell at this price point. At this point this investor experience downtown between the two properties is breakeven at best.

Type:Listed on MLS(#066037976)

Resale Price: $489,000
Cost: $505,720

Loss@6% Sales Expenses: $46,060
Loss%: 9.11%

Purchase Date: 08/02/2004
Holding Period: 25 months and counting...

Bedrooms: 2
Bathrooms: 2
Square Feet: 987

Purchase Details: view

Another Downtown Condo at Gaslamp City Square #703

Here's another unit at Gaslamp City Square that's sold for less than it last changed hands for in late 2004.

Type: Closed Sale

Resale Price: $618,000
Cost: $631,881

Loss@6% Sales Expenses: $50,961
Loss%: 8.06%

Resale Date: 05/16/2006
Purchase Date: 12/10/2004
Holding Period: 17 months

Bedrooms: 2
Bathrooms: 2
Square Feet: 1016

Purchase Details: view

Resale Details: view