Here's a short sale that's owned by a real estate agent. The sale also includes three flat panel televisions. These are not included in the loss calcuation.
There were a lot of these 700 square foot units at Union Square that were flipped so one could speculate that there are a number of simiilar units all worth less than what the current owner paid.
Union Square is a three building low rise condo complex in downtown's East Village.
Type: Listed on MLS(#068089931)
List Price: $345,000
(Range priced $325,000 to $365,000)
Cost: $385,000
Loss@6% Sales Expenses: $60,700
Loss%: 15.77%
Purchase Date: 09/29/2004
Holding Period: 26 months and counting...
Bedrooms: 1
Bathrooms: 1
Square Feet: 710
Purchase Details: view
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16 comments:
Ask yourself, if I want to walk to the grocery store, how far do I have to go? That Ralphs is a long walk from most of east village.
Josh
There is a new Albertson's in East Village, pretty close to Union Square.
Swimjet,
I'm working on a post using data from SDLookup.com, it will show the status of Laurel Bay and other conversions that I'm tracking. It will be recent data.
What other projects are you interested in?
Today's article from the UT:
"Of the sellers analyzed in October, 6.4 percent lost money."
This statistic clearly points out that your examples are cherry-picked from a very small set, 6.4% of sales.
That's not surprising actually as we've been watching the market it's usually the resales from 2005 and late 2004 that are in trouble. Also if people closed in 2004/2005 on a new property they likely had contracted for 2002/2003 pricing. This is why I try to point out when a property selling below developer price as that is a useful metric.
I will say that since a lot of people have a lot of equity that prices can continue to go down more since, as you noted from the article 93% of people have room to cut their prices.
Finally if they are analyzing the price paid versus the price sold that will also skew the numbers a bit as real estate has a pretty heavy transaction cost associated. My blog attempts to account for this with the 6% transaction cost assumption.
If you want your blog to serve as a "market monitor" I suggest the following:
Attempt to find the average, median house listed in several zip codes. This would provide much more relevent monitor of the market, rather than what a few extrema are doing.
To keep things average, dig and find out the average date of previous sale (ie, average holding time) so that you're not cherry-picking for properties that just changed hands last year (we all know those are likely to lose money).
Watch for: how long on market, reductions, etc. Provide ratio of sales price to list price. It would be even more intersting if you can dig up info. on kickbacks ("credits") that lower the effective recorded sales price.
Otherwise, I would suggest that you retitle your blog, "flipper monitor" since that's really what you're looking at - recent transactions.
A major point of the blog is to point out specific properties, this is on purpose since the aggregate numbers don't tell the entire story. The blog goes back a solid six months when believe it or not a lot of people didn't think that anyone could sell a property for less than they paid. In that sense the mission of the blog is almost complete, although I intend to keep on blogging since the specific examples are very useful to me and based on feedback I'm getting here an via email useful to a lot of others as well.
I would love to know about credits at closing as they are almost always in the favor of the buyer these credits are in lieu of a price decrease. This information is not available, perhaps when thinking about reform of the real estate marketplace a better way of reporting prices would be a good start.
Finally all this takes a lot of time, how much would you be willing to pay for access to such analysis? While there are ads on this site this is much much more a community service than a business.
As a reader of this blog for at least 4 months, I find the information very useful, especially as it tracks a lot of downtown condos (where I plan to buy). Agree, that the housing price decline will impact only a small percent of the population, but the stagnation of prices will have a much larger inpact - especially on the decline in home equity loans, and refinance to pull cash out. Credit conditions have already tightened as lenders do not want to be stuck with an upside down loan. This translates into slower sales at Home Depot (see today's earnings), fewer people employed in construction (see this week's Business Week), and certainly fewer people selling real estate and mortgage brokers. I find anecdotal evidence much more important that government statistics and statistics from the NAR. I have seen these price reductions all around me - literally here in Little Italy.
For a title, how about "San Diego Loss Monitor"?
You're not monitoring the San Diego RE Market - you are monitoring the loss sector. I agree it's got its place in BlogLand (I even sent you an address in LJ last week), but I'm trying to nudge you into honest and objective reporting.
Anon,
I also post news and analysis of the market and throw in some opinion, at some point when the market is producing good deals I may even start posting them so this is more than a loss blog. The best way to view the market at this time is by looking at specific properties that are being resold. The aggregate numbers have very little value in my opinion.
I don't have an email about a loss in La Jolla, although I'm interested in taking a look so post it here or try again with the email, I get a ton of spam so it may have gotten trashed by the email service.
I'm not a reporter and if you think I'm being dishonest then that's your opinion.
I will say that the numbers here speak for themselves. If you see any errors let me know.
swimjet, i believe sdlookup.com has the data, however it limits the it to the top 30 results, so you have to lookup individual properties for anything beyond the top ones.
From the listing: "Great deal shortsale.Seller is the agent&has great relationship with the bank."
I wonder how good the relationship is now.
The problem with tracking real estate in general is that there are too many unquantifiable factors to work with. It's one thing to say cost per sqft, # bdrms and baths, etc... but even with those metrics, you will find a huge (6 figure) spread on apparently identical units. (Often times even in the same complex)
In some situations, it's like a car sale where one buyer will simply pay more for the same product than another buyer. In other situations, you have extenuating circumstances or under-the-counter deals that can make tracking averages almost useless.
I think my point is that for RE, anectodal evidence like you see in this blog is really the most useful. Armed with this knowledge, a buyer is much better prepared to know what he wants to live in, and what price he could probably get a condo for if he shops around enough.
Unit in LJ: 7322 Via Sonoma #77, 92037. Lender-owned listing. Lost money in 11/25, and is set up for a loss now. Also, note that Zillow's estimate for it is astronomical - the list price is $110k less than what Zillow says, even though there are good data for comps.
This Woodlands unit is directly affected by two major conversion projects in its micro-neighborhood. The Woodlands units are townhome-style with individual garages, much nicer than the conversions (stacked apartment style, common laundry, parking lots), but there's just so damn many of those McConversions for sale.
There 'ya go. Even in tony 92037.
Please forgive my typing, my coffee hasn't sunk in yet. 8322 via sonoma #77 is the address, and it lost $$ in 11/05.
Anon & Brightside,
I am a long time reader and I find this site very useful for the niche it focuses on. There is so much data available for median prices, sales vs asking, etc on other sites. Please do not change for the sake of one cynic.
As for the title of your blog, it's fine too & not misleading. You are monitoring real estate in San Diego. You do not need to change it to "San Diego Marget Monitor, Focusing on a Niche Data Set of Recent Losses". That's just stupid. Intellegent people know that comprehensive real estate information does not come from one source, but many.
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