Bloodbath in Kensington !

[Ozzie]

I think a small band aid will take care of this “bloodbath”

What amazes me is the apparent glee that some posters derive from trying to find properties where folks have taken a loss. I wonder if they look for stocks that have taken a dive and then go to their message boards to boast how stupid anyone who bought that stock is? I doubt it, but what’s the difference? I guess a home is more personal than buying a stock and those who feel priced out can’t buy a piece of a house whereas they can buy $500 of MSFT and consider themselves partners with Bill Gates.

[Anonymous]

Here is another seller that is going to do well:

55XX Del Cerro Blvd
Purchased 8/23/99 for $340K
Listed 4/6/07 $945K

The sellers agreed to an offer with a contingency after just a few days being on the market.

[Bugs]

It’s kind of hard to tell what happened. The 2004 sale doesn’t show up in the MLS so there’s no way to know what condition it was in at that time.

Not counting carrying costs a $681k sale price just barely breaks even after the costs of sale. Unless the seller spent money on repairs or upgrades in the interim – which is probably only a 50-50 proposition at most – they probably only lost about $65,000 in the difference between the PITI resulting from their ARMS and the market rents.

$65,000 isn’t much money. Most people can clear that in 6 months. Maybe a little longer.

[DaCounselor]

Ozzie – the folks that take joy in others losses in this context, in my opinion, are attempting to offset and obscure the fact that many, many others have made incredible sums of money in a short period of time. It makes them feel better about “missing the boat”.

RiU – excellent example of folks who are cashing in HUGE in a mere 8 years. Wow.

Bugs – your projected $65K loss is based on nothing but speculation – akin to the speculation that the originator of this thread was operating under when proclaiming this deal was a “bloodbath”. You can speculate as you wish and attempt to spin this deal any way you desire – no matter, without some cold, hard facts in support there is simply no way to characterize this deal as a “bloodbath”. And that is my only reason for chiming in on this thread – to point out that the thread was initiated with a screaming, sensational and inflammatory headline that now appears to have fizzled into a “uh…never mind.”

[Ozzie]

These threads are all too common here. There was one about 2-3 weeks ago concerning a La Costa property and it had the same type of title where the home was selling pre-2004 prices or whatever. I did a tax search and the home hadn’t even sold in 2004. The owner was going to make a great profit for a 10 or 15 year holding period. The thread quickly ended when it was apparent that it was just a lie to begin with.

[Anonymous]

Here is another example in Tierrasanta:

Purchased 11/07/90 $370k
Listed 3/22/07 1,150,875
Reduced $985k

Accepted offer after 23 days on the market.

[PD]

Everybody who bought in the 90s made a ton of money. What’s your point Realtor?

The relevant question is whether these people were able to resist the lure of the HELOC.

[Anonymous]

Not everybody who bought in the 90s made a ton of money. Some people who bought as late as 2005 made money.

The two examples I gave the sellers will be just fine. Good thing they are selling now or they would be in trouble. According to some the market will be at mid 90s prices by 2010.

My point is nobody knows for sure what a buyer is willing to pay even in today’s “blood bath” market. Sellers need to be smart about the list price and buyers better think long term. The market could crash or it might not be as bad as some think. Anything can happen.

[PD]

I think your “Point” is that, “Everything is fine, folks. No downturn here.”

Anyone who purchased in the 90s and did not make a bunch of money is either an idiot who paid WAYYYY too much or the unluckiest guy in SD who somehow mananaged to find the one property or area that didn’t double.

Your examples so far have been not furthered the RE discussion in any way. Are there a few people still getting top dollar? Yep. Are there lots of people with lots of equity? Yep. Are these people going to be able to stop the snowball from rolling downhill? Nope.

[Anonymous]

No that is not my point. If you can read I posted “My point is nobody knows for sure what a buyer is willing to pay even in today’s “blood bath” market. Sellers need to be smart about the list price and buyers better think long term. The market could crash or it might not be as bad as some think. Anything can happen.” Sure reads “Everything is fine, folks. No downturn here.”

I have told people they should wait to purchase and watch the market. Some people for whatever reason want to still buy a home now and some are waiting.

Maybe I should have agreed that the seller in Kensington was taking a “blood bath” to further the RE discussion.

[Irish]

As the original gleeful poster of this inflammatory headline I must say a couple of things.
It’s nothing personal, but I was indeed very happy to see this f@#ked buyer taking a “bloodbath” because it’s a sign that the market is finally returning to its fundamentals. This crazy bubble is over and the market is returning to sanity. Yippppeeee! What is the matter with that ?
You all can imagine my horror when I saw the “tickler” price of $595k being withdrawn and then upped to $675k. My guess that this was a marketing ploy to generate a mini-frenzy. It seemed to do the trick, since the recorded sales price is $681k. I remain astonished at the stupidity of this new buyer who rescued this very lucky flipper. It lends credance to the old saw that there is always a greater fool.
To those of you who were offended by my glee and inflammatory headline, I apologize insofar as it may have been premature. I hope you’re all happy that your precious, teetering real-estate bubble is still alive and well in Kensington…at least for a while longer. But if you’ve got eyes in your head and if you have learned anything from our very sage Rich, surely you see that this is not the time to be paying top-dollar for real-estate ? For God’s sake rent a similar place in the same neighborhood until the prices come down to reality, as they surely will. It will save you hundreds of thousands of $$$ over the longterm.
Irish

rish

[Anonymous]

Yes you were premature.
There are stupid people but sometimes people just make mistakes.

[citydweller]

I have to admit that I too feel a certain “glee” at watching the bubble burst, mostly because I’ve been calling it since 2001 and I hate to be wrong.

Has anyone researched this kensington transaction? Who was the realtor? This almost sounds like someone with that “Jannae(sp?) Magic”. Straw buyer or large cash back perhaps?

Yes, I may be grasping at straws (no pun intended), but I hate to think the market is rebounding already.

[Bugs]

Generally speaking, a 1990 purchase was underwater here for 6 or 7 years and didn’t break even again until 1997 or so. Really, it was probably later than that after accounting for the effects of inflation on the dollar. A 1990 dollar was worth more at the time than a 1996 dollar.

Those buyers didn’t have to book their losses so some of them probably didn’t think of themselves as losers, but those losses were there during the mid-90s whether they booked them or not. The ended up okay since then, but only because they stuck with a loser until the market turned. They all would have been a lot farther ahead had they made their purchases in 1995 or 1996.

And therein lies “the point”. You make your money when you buy, not when you sell; and buying at a high point of a known cycle is no way to call yourself a genius or to get ahead. If money is the thing, those 1990 dollars could have been put to much better use, just the same as the 2006 dollars could – for the most part – have been put to better use than buying RE.

If a buyer doesn’t care about the money that’s fine. We should not be characterizing those purchases in terms of financial acumen but instead attribute it to them fulfilling their emotional needs. This here’s America, it doesn’t always have to be about the money.

As for bloodbaths, I wouldn’t have expected Kensington to be a big loser yet. On a geographic basis and all other things being equal a declining price trend will work its way from the outskirts in toward the employment centers, and (locally) from the east to the west. The reverse is true for increasing markets. Kensington is still close to employment so it’s day will come a little later than someplace like Escondido or San Marcos or Chula Vista. That doesn’t mean it won’t happen or that when it does decline that decline won’t make up for lost time. We’re just not there yet, that’s all.

If we assume the aftermath of the unprecedented spike that preceded it won’t have equally unprecedented consequences – and that is an assumption that may prove unfounded – then a person who buys now might indeed recover their position at some point in the future. But I wouldn’t say that the prospects of merely recovering their position after 5 or 6 years (and paying extra for their housing during the process) would economically justify a purchase right now given the current market conditions.

If it is about the money, then wishful thinking shouldn’t be part of your equation. In either direction.

[(former)FormerSanDiegan]

I have to admit that I too feel a certain “glee” at watching the bubble burst, mostly because I’ve been calling it since 2001 and I hate to be wrong.

Hate to say this, but you were already wrong. The RE bubble about doubled from 2001 levels and began bursting in 2005.

No offense, I sold one of my rental properties in 2001 to avoid being overextended in real estate myself. I was wrong as well (but hedged my bets by holding onto another property).

[Author]

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