[quote=AN]How do you know this home didn’t have any of those upgrades built into the house? I can see landscaping being extra ad on later, but shutters, usually, people get that upgrade from the lender. Especially people in this price range. They don’t have the time and energy to shop around aftermarket. Talking about landscaping, the front hard looks dead and the backyard is just hardscape. So, lets say it cost them $100k to do the backyard hardscape, it would still only give this house ~12-15% premium. So, 12-15% premium would bring the 2000 price to be around $670k-$690k.
This was built as a luxury home, so a lot of upgrades might be built into the house when it was first built, so as you said, some of the best one went for $1.77M. I assume those are the ones w/ 30000 sq-ft lot in the best location. This one has one of the worse location, hence the 2007 sold price. Wasn’t this home sold for $1.21M.
OK, if you’re so adamant about not using Palomino house as referent point, then lets use the Tea Tree house. As you said they’re very similar in built quality. However, the Tea Tree house is not backing up to Camino del Sur. Back in 2007, the Rising River was sold for $1.21M while the Tea Tree house were going for closer to $1.6-1.7M (it already have all the premium built in, since it was resale in 2007). So, add your $170k in upgrades to the Rising River house, 2007 price would be around $1.7M. Which still put it at around 15-20% premium when comparing the 2 properties. So, back in 2000, the Tea Tree sold for $730k, add in landscaping, would put it at around $830k, then subtract 15-20%. We would then have $664k-$705k. That’s where I’d put this house 2000 price to be, not $800k.[/quote]
Good point on the difference between this home and say another one in Avaron that sold for $1.77 million. Now that’s a $500k difference during the peak of bubble years.
Now the truly typical Avaron homes during the peak were really $1.4 to $1.5 million. The other corner backing to Del Sur went for $1.35 million. So we know this guy really got it without any options and got a “good deal.” Now assuming most of Avaron on standard lot size average $1.45 million. Factor in lot premium, upgrades, and you can balloon to $1.77 million easy. So then the question is, why the price difference between $1.2 million vs $1.45 million. it is a smaller lot, it is right next to the gate, can that fully explain things?
What we do know if during the peak lot premiums are exaggerated. So a typical $100k lot premium is exaggerated to a $200k difference. when you return to 2000 pricing, you also need to reduce that premium differential. I know you seen that as well when you look at homes sold in 2000, the price differential between homes in the same community simply did not have that dramatic spread as sales during the peak of the bubble.
I started the whole comment here in term of Avaron in general. My feeling is this home as a resale commands about mid to high 800k and this is the bottom. other Avaron homes on more typical lots will be more along the high 900k to $1 mil range. As for those that went for $1.77 million back in the peak, bottom would probably feel like $1.1.
And that is the Big Squish Down that Rob Dawg was talking about. A $500k spread narrowed to just $250k spread as things move downward.
