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
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3 comments:
I gotta believe that all of these downtown condo prices start really tumbling pretty soon. To use the example of this unit, even if this owner took on a really funkified option ARM when rates were really low, s/he's gotta be paying out north of $3K/month on this thing. And there's almost no way s/he's getting more than $2,500/month in rent. And I'm being really generous. S/he might be underwater by more than $1K/month or more. So it's one thing to carry the note to the tune of $500/month when prices are going up, but it's another thing entirely to carry it when prices are declining. I think a lot of these folks are assuming that the price declines will flatten and they'll get out bruised but not beaten. But once the funky mortgages start resetting on these things and the current buildings under construction are completed next year that's going to put a hammer on the ability to carry the mortgage while inventory continues to rise. I think a lot of these folks wake up in 6-9 months and realize that prices aren't stabilizing, their carrying costs are increasing and they've gotta get out at whatever the market-clearing price is. It's probably not a controversial view but I have to believe that the downtown condo market moves down faster and deeper than the other markets in San Diego County.
mike,
I couldn't agree more, I do not see how the prices downtown can do anything except go down.
All this negative cash flow is sucking money out of the owner's accounts. This reminds me of all the tech stocks long in margin accounts, it's only a matter of time before a lot of investors are going to get stopped out.
Mr. Brightside, I don't think you've covered this one, but take a look at The Mills on Cortez Hill #524 (1642 7th Avenue). Per craigslist, this guy bought the property for $563,000, put $17,000 into it, and has lowered the price from $625,000 to $499,000. He's now doing a FSBO.
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