Monday, November 06, 2006

Downtown Condo at Victorian House #7

The Victorian House is a small seven unit complex in Little Italy.

This unit is listed below the original developer price/value from early 2004. The price cut history below shows a long process of price cutting. In adddition to the general market slowdown, the fact that this is a very large condo with only one parking spot in a non-amenity building is likely huring the resale efforts of this unit.

Price Reduced: 06/13/06 -- $650,000 to $599,000
Price Reduced: 08/09/06 -- $599,000 to $589,000
Price Reduced: 08/31/06 -- $589,000 to $579,000
Price Reduced: 10/06/06 -- $579,000 to $574,000

Type: Listed on MLS(#061013465)

Resale Price: $574,000
Cost: $617,400

Loss@6% Sales Expenses: $77,840
Loss%: 12.61%

Purchase Date: 02/27/2004
Holding Period: 33 months and counting...

Bedrooms: 2
Bathrooms: 2.5
Square Feet: 1492

Purchase Details: view

7 comments:

Mark in San Diego said...

Thanks Mr. Brightside for finding the information on this property. It is a block from me, and I have watched the reductions since June. Actually, it would be a nice place for the right person, who doesn't need a pool/gym, etc. I am, however, very cautious about small condo developments (7 units). Usually there is no professional management company with a small development, and one needs to be very cozy with neighbors to work matters out. . .I have heard some recent horror stories about board members fighting at small developments like this. At least at large developments like LaVita or the Grande, etc. things are a bit more impersonal, and a management company can keep fights to a minimum. . .

Mr. Brightside said...

Hi Mark,

I agree that a smaller project could get really problematic as one or two unstable owners could really make it hard to live there. I have to wonder if HOA drama is a fact of life, sounds like there is some of that going on at La Vita right now over on one of the sdlookup.com forums:

http://www.sdlookup.com/Discussions/Communities/tabid/59/forumid/8/postid/39/view/topic/Default.aspx

It would be interesting to hear some more details on this and the other disputes you mention, while qualitative I don't think people would want to buy into a high drama project so being able to read about it online would help.

I also wonder that given the price declines taking place that the environment could get really tense in some of these buildings, especially if a lot of people are sitting on 20% losses.

Mark in San Diego said...

Mr. Brightside -

Yes, there were some letters from an irate homeowner in LaVita that was distributed to all of our doors a few weeks ago. . .seems there was a very noisy neighbor and the management company/board would not do much about it. My understanding (as a renter) is that the old management company got the boot, and a new one is coming on board. . .My big concern about buying in downtown right now - or in the Spring, is no longer about getting a good price, but I am very concerned about buying into a problematic HOA. I have been on the board in Northern California, and know that if the Homeowners Association has a lien against a property, it is worthless if there is no equity when the bank forecloses. . .even a large association could have problems if 3 or 4 units default owing 6 months of back dues. . . the whole mess makes me want to rent for a few more years until this runs its course. . .my guess is that some high service buildings like the Grande, will need to cut back on 24/7 service if too many defaults. . .HOA's at the Grande are already over $700.

Mr. Brightside said...

Mark,

This is excellent insight on a very rarely discussed risk factor. I would be interested in trying to track HOA quality.

One question I do have is are the HOA fees at the same level as mortgage and taxes when it comes to the foreclosure process?

Anonymous said...

This unit would be perfect for me. Except that the price is still too high. I love small building with no amenities since i hate paying for service I don't use.

Mark in San Diego said...

Homeowner Fees vs. Taxes and Mortgages. . .

It is my understanding from my previous experience in Walnut Creek,CA in 1990 that lenders come first, taxes second, and everyone else down the line including HOA's. Lenders also attach a lot of fees to the balance of the loan, so it ups the amount owed (i.e. legal fees, etc.) When I was on the board in 1987/90, we were not really seeing decreases in prices (that happened in 1993) but an individual could not pay mortgage, and had only 10% down. . .the bank essentially dumped the property at below market for a quick sale, so there was no money left for the lien the association had filed.

Sven said...

I would like to see someone start a tracking site for problematic HOA's. I had an issue with a HOA in clairemont that was actually making up stories about me and some other residents that they didn't like. (It was an elderly association, and they were actively trying to force the younger professionals and couples out of the complex) A tracking site to warn people not to buy in those complexes would definitely serve the consumers well.