[quote=drboom][quote=sdrealtor]DRB
You are threadskimming. The guy that bought the house in CM was unrepresented and claimed he got a great deal.[/quote]
Good catch, mea culpa. Cold medicine suppresses more than coughs.
But my objection still stands:
[quote](summing up the mid-2003 RB deal) It was my observation, when running the numbers that the buyer had overpaid by a few percent but that this did not qualify as “getting screwed”.[/quote]
How is overpaying by a few percent at a historic high not “getting screwed”? As a high-risk speculative play, it might have worked out great if the buyer was looking to flip the joint a year or two later. Is that our measure of a good deal around here–some kind of real estate day trading?
This relates directly to the issue of whether an agent saves buyers money: if an agent says something is a “good deal”, as the Clairemont house would have apparently been if it was 5% cheaper, what exactly is the agent saying? Any salesperson’s motivation is to close deals, period. I don’t begrudge someone making a living, but it’s clear that consumers’ and agents’ interests aren’t naturally aligned.[/quote]
Boom:
You are still thread skimming.
It was not the RB deal.
It was the CM deal.
Anyhoo, unless the major distinction of a “good deal” is the year they are bought in (as you appear to be suggesting) the fundamentals are there for it not being a bad deal.
If the argument is that there were no good deals between 2002 and 2007, then I don’t think you will have a lot of disagreement on this board.
That being said, the most accurate predictor of home prices historically is per capita income (except between 2004-2008).
Generally median home price vacillates in relatively short cyclical trends around long term secular income megatrends.
Generally, home prices are 7-10 times per capita income depending on demand.
Mid 2003 the price coefficient was 8.5 or 9 in San Diego (pretty middle of the road).
It was not until a year later that home prices started to become broadly decoupled from income fundamentals.
In short, 2003 was not a crazy year except in hindsight.
If weird lending and syndication innovations had not started kicking in right then, we would probably have considered that year as pretty ho-hum.
If one is looking for more nominally clear signals, here is one:
The same house would go for the same nominal price now.
Still about $400k.
The DIY in question sold it in mid-late 2005 for more than 500 btw.
To your point about aligned motivations:
In many ways the position of any agent or broker (or service provider of any kind) is somewhat misaligned with that of their client.
Any service provider is exchanging service for money.
In our case, we advise people regarding market strategy.
This includes whether or not some transaction favors whichever side we are tasked with helping.
However, markets are bounded in 4 dimensions.
I cannot tell you what a property will be worth in the future.
I can only show you the past info and give you my analysis of it and tell you if this deal looks good at a relative level right now.
It looked okay but not great.
There was no “getting screwed” in evidence.
The only missteps were:
-not predicting the bank strategies of late 2003 (the year before piggington was founded)
-not consulting a buyers agent (but that part is just my opinion)
