July 1, 2006 at 11:23 AM #6798homeyParticipant
I bought my SD house at the for a little less than $500 exactly two years ago.
I put a lot of work into the house and about $25K in improvements. It is now completely imaculate.
I recently sold it for about $500K. Thus I lost money when I consider the money spent on improvements.
I have a lot of trouble reconciling this with the articles I read about how the median home price is still rising. In fact it has consistantly risen since I’ve purchased the home yet I’m selling at a loss.
Did I overpay when I bought it or are others experiencing something similar??
It if funny when I go to a party and talk about my story. People cannot believe that I didn’t make a killing on real estate in San Diego. Some even question me……as if I’m lying.July 1, 2006 at 11:32 AM #27641BugsParticipant
Unfortunately, there are some people in different areas here who are now chasing their 2004 and 2005 purchase prices and coming up a little short. If you’ve come up short you’re hardly the first, and you surely won’t be the last.
I realize taking even a small loss is painful but look at the bright side – your timing was good enough to get off with only a minor loss. If the current trend continues a lot of people are going to lose a lot more than you.July 1, 2006 at 11:35 AM #27642lindismithParticipant
What made you sell it so fast? It sounds like you bought it with the intention of flipping it? Is that the case?
Was this your first time doing something like this?July 1, 2006 at 12:01 PM #27644Mr_BrightsideParticipant
You are likely not the first nor the biggest loser.
My blog tracks specific properties that are for sale or sold for less than the previous purchase price.July 1, 2006 at 12:33 PM #27645homeyParticipant
Nope. I intended to stay there for years and really love the house. I sold because of a job change and relocation.
I seriously considered keeping the house and renting it out. However the math really doesn’t work. Even though I have a nice 30 year fixed mortgage, I’d be feeding the alligator to the tune of $800 to $1000 a month.
The good thing is that I held out for more money. I did not sell under pressure. I had a number of offers that were 5 to 7% below what I paid for the house 2 years ago. The realtors were pressuring me to take these offers.
The only reason I got the price I did was because the house is in such good shape (thanks to all of my weekends and $25K).
It is hard. I knew that, financially speaking, it made sense for me to sell for whatever I could get. I just had issues letting go of the house I loved for less than I paid…..especially given all of the press about people making money hand over fist.
I read sites like these because they make me feel better about selling. 😉July 1, 2006 at 1:51 PM #27646aguhoParticipant
There are many others in the same boat as you.The real estate market here in the South Bay has been basically flat since late 2004.We sold our last rental house in I.B. April 2005.It was on the market for 4 months and sold for 505,000.The single woman that bought the property is now trying to sell it.She started at 585,000(LOL)and has reduced it 2 times down to its current price of 515,000.I doubt that she will be able to sell at that price either.She’ll be LUCKY to get 500,000.Either way,this person will be bringing a check to the closing.The only question that remains is how much will she have to bring? We came away from our closing with a check for 120,000.We win she loses.We sold at the top and she bought at the top of this current real estate cycle.
I personally know 3 other people who have homes for sale in Otay Ranch(bought in late 2004)750,00-850,00 range that also will be bringing checks to the closing.That is if in fact they CAN sell them at all.There are an enormous amount of homes for sale in the 91913,91914,91915 zipcodes and many of them have been on the market for a long time.
There is something that all 3 of these folks have in common.That is,each one of them is burned out of paying 4000-5000 a month for a place to sleep.They can’t take it anymore and want out.At least these 3 people want to do the honorable thing and are willing to pay for their mistake at closing.How many others will just walk away from their obligations,or try the fraud route errrrrrrrrrrrrr file bk.
Mr.Homey,I know it’s little consolation to you now,but you did the right thing and honored your obligation.At least your credit is intact and you learned something from this experience.Now,save all your dough for the next 5 years and buy at the bottom of the real estate cycle.There will be lots of great deals waiting for those who have cash and excellent credit.
Moral of the story…….Timing is EVERYTHING !!!!!! If you buy at the top of any market you lose.
aguhoJuly 1, 2006 at 2:34 PM #27647AnonymousGuest
I think there is probably more sellers headed for disaster than we think. Friend’s of ours have been shopping to buy a house in the Pt Loma area. They went back and forth making an offer on a 3/2 for 607K. Then, they saw a smaller house in a better location. The house has been on the market three months. The sellers live next door; they bought the one they’re selling in 2003 for $550K, and recently bought the house they’re in for $750K. My friends made an offer below asking (asking $650) and got turned down, The realtor told them the sellers have had four offers (all lower than asking) and turned them all down. She encouraged my friends to offer again, because the sellers are struggling now with two mortgages. My friends got fed up and decided to rent for another year (thank god).July 2, 2006 at 5:58 AM #27661lindismithParticipant
You were actually lucky Homey, to get out when you did.
When you bought in 2004, had you heard about the bubble – had you heard real estate values were seriously over-inflated? Or were you someone who believed the mantra that ‘real estate only goes up in value’?
Lastly, was your job change a complete surprise? Or was that something you also knew could happen in the future, but didn’t consider because ‘real estate only goes up’?
Am just trying to understand the mentality of people who bought at the top of the market.July 2, 2006 at 11:12 AM #27671LookoutBelowParticipant
Hey Homey ….Does it make you wonder if all the crap you’ve been reading in the paper is propaganda ?
Do you really think a “news” organization would actually shoot themselves in the foot with the “true” stories of the average real estate sales ? Ever since the big corps have bought these news organizations, in the late 80’s, ANYTHING you read, negative or positive, of ANY issue is suspect. Its not news….its propaganda. You got a good taste of it. Feel lucky you didnt get creamed…..like the rest soon.July 2, 2006 at 11:25 AM #27672UP IN ARMSParticipant
“I think there is probably more sellers headed for disaster than we think”
Oh for sureJuly 2, 2006 at 11:27 AM #27673Mr_BrightsideParticipant
First of all I sense the rah rah pro-real estate bias in the media as well.
I don’t really think it’s a big corporate conspiracy though. The most bullish media outlets in San Diego are the San Diego Daily Transcript and the San Diego Metropolitan. Who owns them? They appear to be fairly small businesses.
The Union Trib has been publishing realistic articles on the housing market.
I do think that to some degree the media is just a reflection on the current mass think anyway so I wouldn’t look for any breakthroughs from the media on any topic.
My final thought here is that sit back and think of the times that you saw a news event first hand or happen to be an expert in the field that a journalist is reporting on. Almost without exception in these cases the media account is very much flawed. This makes me think that most news is either biased or more like hapless.
I do have friends that are journalists and frankly they need to crank out work just like the rest of us do, there isn’t any time to become an expert in the field.July 3, 2006 at 3:23 AM #27684powaysellerParticipant
The median was rising for the last year because the distribution of homes sold had shifted. The lowest priced properties went flat in 2004, the lower end softened in 2005, but the high end stuff was still selling like hot cakes, driving up the median. Eventually, the rising interest rates and ripple effect of the first time buyers squeezed out worked its way up the tier of homes. Last month, I think we were down year-over-year for the first time.
The median tells you a trend one year after it was established. It doesn’t tell you what’s going on now. Same with the media.
We sold our house in January 2006, at a time when the bubble articles were still in their infancy. The local media was still high on real estate.
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