Buying opportunity

[sdrealtor]

Might not be the same property but there is one on the market that is 5/2.5 2,910 sq ft 6,600 sq ft lot and listed at $1.499 to $1.599M. Has been listed about 1 year at higher numbers.

In the last 4 years, I see 4 sales between 950K (3/2 1600 fixer) to 1.165M (4/2 2000 sq ft fixer). Beyond that there were sales at 1.9M (5,000 sq ft on Cordova), 2.05M (Sunset Cliffs) and 3.1M (Sunset Cliffs).

[hammer]

Not the same property. I believe that one has sibling issues etc.. Been on the market for over a year. Seller wasn’t motivated.

Area is tough to comp, with the lack of product moving in the last few years. 3000ft for 1.1 seems fair even in this gloomy outlook. These lots are tough to come by. It certainly could be worth 900,000 in a few years, but this is a house I want to grow old in.

Just trying to figure out its worth today, and it is tough.

thanks sdrealtor

[4plexowner]

Hammer – I feel for you on this one – it’s a tough choice

The area you are talking about is great – I think I would prefer a view of the harbor vs the ocean (harbor is more dramatic at night) but the view from south Sunset Cliffs doesn’t suck

Another factor for me at this point in my life is commuting – getting from south Sunset Cliffs to the freeway is not fun – I think for the commuting factor I would choose Pt Loma over Sunset Cliffs although it is probably a toss-up

I don’t have need of a big house right now so $1.1 mil wouldn’t cause me to bite today – it might make sense for you however if this is really the house you want to live in for the next decade or so

[Chris Scoreboard Johnston]

Chris Johnston

If that house is truly worth 1.4 by current comps, and you can get it for 1.1 and can afford it you should buy it. Prioes are never going to plummet in an area like that. Manhattan Beach has been soft now for 2 years, so you should be getting a pretty good discount off the peak.

Leave the ego at the door with the timing, that is water under the bridge. You did time the top poorly, so be it. If you can buy this 20% + under the market you should do so because the drop will unlikely be that much anyway basis the median.

I bought a home recently with Adams help, and still cannot believe what I got for the price I paid. There are bargains out there now that may not be there when the overall market is in a more depressed condition. I am familar with this area having lived in El Porto many years ago, and I do agree about your assessment about future availability of homes there.

Best of luck and definitely lets us all know if you pull the trigger.

[SD Realtor]

Hammer – Sorry I didn’t get back to you last night. I have been crazy busy.

I have read each entry in your posting and you have implied more then once that this is the home you could grow old in. It is always interesting reading into the potential buyers who post here. I would suggest there is a large contingent of other potential lurkers who are possible buyers but don’t want to get slammed so they don’t post. Back to the point, it sounds like this home would not be a short term purchase AND that you can afford it. It also sounds like this is a house you really do like. Best of all the location sounds ideal FOR YOU. Maybe others don’t like OB or the Sunset Cliffs commute. It does sound like it works for you though.

Without even doing the comp search this is a strong argument for the purchase.

This area is hard to comp like you said. The location is so unique that looking at the few comps and the history of them may be the best data you can get.

4425 Casitas is active at 1.499 to 1.599. sdr already pointed this out to you. This property has already expired twice at listings of 1.75M and 1.599-1.699 respectively.

849 Sunset Cliffs is at 3.399 to 3.69 for a year now. Prior to that they were at 3.985 and expired. They bought the home in 2003 for 1.7 and they say that is a complete remodel.

Monaco is pending at 950k-1.15 and makes the home you described look like a great deal. Monaco doesn’t have much of a view at all and is a small home.

817 Cornish is interesting. It is in escrow at 1.15-1.25 with previous expirations. It originally listed at 1.399 and sat for 180 days and then expired at 1.15 – 1.25. This home was purchased in 2004 for 1.1 even.

866 Cordova is pending at 1.4-1.549 after 100 days on the market and looks like a very nice home.

There are a couple 2006 sales but on a price per sq foot basis you will get a smoking deal as they are smaller homes.

So this may not be much help but it is the MLS data. I am sure there are other private sales out there.

*******

There is a high probability the property will decrease in value. Again, if you are okay with that and can afford it then it sounds like it could be the home for you. Do you love the home? Can you afford the home? Will you be able to live in the home for a long period of time? If the answer to these 3 questions is yes then you may be overthinking the decision. Also I feel that these are the types of properties that will appreciate faster once we do bottom out.

Many people work hard for much of their life to achieve things. At some point timing markets and such becomes secondary to lifestyle, again this is not well documented on this site.

Finally ask yourself, how genuine is this opportunity? There is not alot of inventory in this particular subdivision. Will these people perhaps change their mind and not sell in the future? If they did sell and listed it on the MLS could/would someone else but it? I will not argue that you will not get a better deal in the future, however it may not be for this home. This appears to be a pretty good deal on a home in a very unique location.

That is about the best I can do.

SD Realtor

[Reality]

“If your analysis shows that it would sell for 1.4 M in today’s market and you are getting it for 1.1. M, isn’t this a no-brainer ? It would be for me.”

Not likely. Unless the seller is his mom, I doubt he’ll buy it for $300,000 less than current market. He’s just trying to talk himself into buying, and what better validation than having a bunch of bears say it’s OK?

If somehow he did luck into such a deal, he should flip it, not live in it.

[Anonymous]

No Brainer my ass! There is little doubt that property values are going to drop considerably in the coming years, and Pt loma is no exception. Purchasing a home that is likely to drop in value (considerably) makes no sense unless you have money to burn.

[hammer]

SD Realtor,

Thank you very much for your time and insight.
I am going to think about it this weekend. Probably going to make a run next week. The clincher was looking at the aerial on google maps. Since I am going to be in the house forever, and can afford it, I would be kicking myself if I had to settle for a different lot. So maybe it would be worth less if it were on the market in 15 months, but a location like this with unobsrtucted views is tough to find. Only 8 sales have ocurred in this subdivision over the last 3 years. It could be 10 years before a lot like this comes around
I am taking the quality of life route that SD Realtor speaks about. I will let you know if the seller is real

[SD Realtor]

Guys I guess it is easier to write then it is to read. Why is it that some people don’t accept that the epicenter of the universe is not the same for all people? Never did Hammer or sdr or myself say that the market wasn’t going to drop. Why is it that some people so readily discount factors that others hold closer to the heart. It is not like Hammer didn’t straight out admit that yes this property could go down and most likely will go down. I just don’t understand the animosity that some people carry in posts when other people are thinking of decisions that are contrary to anything but trying to buy at or near the bottom. Don’t mistake this post for me saying the market is wonderful or that the value of the property will not go down. However does everyone think it will not ever go up again as well? How many of all of you out there have ever even owned beach property? I grew up in Venice and my parents had an opportunity to buy beachfront and they did. They held the home for 30 years through good and bad cycles and never had a complaint. They found a home they loved. I can honestly say that out of the homes I have had be it occupied or rentals, I never really loved them. In every case because I am not wealthy they were more practical and served a purpose for me. Someday when I have the money, if I do find the home I love I will most likely jump on it unless I find an extremely compelling reason not to. Granted this may not be for awhile because I know that home will be at or near the coast, and it will cost me, but I will most likely do the same think Hammer is considering. SDR made a point about the price of admission and this is a crucial point yet I am not sure if it was well understood. To say things like buying a home that is likely to drop in value (considerably) makes no sense indicates a clear lack of understanding of the situation. It makes no sense to some but it makes perfect sense to others because the driving reasons for the purchase differ sharply for each person.

[4plexowner]

How rare is a 7000 sqft ‘level’ lot in one of these areas: Sunset Cliffs, OB, Pt Loma, Mission Hills, Bay Park?

It sounds like Hammer is talking about a fairly level lot and not something clinging to the side of a hill

If one of your criteria for a view property is having all of the main living area on one level and also having a decent size usable yard, how many properties of this type are there?

I’ve seen several view properties with funky floorplans (eg, kitchen is upstairs from entry level) to take advantage of the view – and only a few view properties with a decent sized level yard – perhaps I have only seen the ‘entry-level’ view properties in these areas?

Anybody with view property experience want to chime in?

[Reality]

SD Realtor,

My post was more an opinion that the original poster is delusional if he thinks he can buy a home $300,000 under market value in an arm’s length transaction. Whatever he pays IS market value, and if he needs this rationalization to pull the trigger it may not be such a great idea.

[Critter]

SD Realtor,

How often do you see these types of deals where people sell to friends or family “under the table” just so they don’t have to deal with open houses, agents, etc? Is it common or extremely rare?

I ask because in 2002 I found out that my recently-deceased neighbor’s house was up for sale on the QT. The guy who ran the estate sale for that home nabbed it for about 20% under market, offering cash. He had a home inspector come out and find a boatload of flaws which “justified” the low offer. The heirs just wanted to sell it quick – they could have gotten more if they held out or perhaps had a separate home inspector.

Thoughts – not just from SDR?

[anon]

Why not offer $950K and hopefully settle out at close to $1 million? There is always a little wiggle room…

[SD Realtor]

John – Gotcha, I understand.

SD Realtor

[SD Realtor]

Hi Critter –

I don’t see it all to often. It is a double edged sword for both parties when the home is sold as a quick between friends sale. The buyer though (IMO) has the advantage is they play the cards right. That is inspect the HECK out of the home. Don’t just spend a few hundred on a physical inspector, maybe get a roof guy, a foundation guy, other specialists and make really really sure you will know what you are in for when you buy the home. Of course this gives additional negotiating leverage. Also do the diligence on the comps or surrounding areas.

My main point was, that this “appeared to me” to not just be a decent deal for Hammer, but it also sounded like he really did love the location, and the home. So I am factoring that into the equation as well. Maybe I read to much into that in his posts. You see what I am saying?

SD Realtor

[Author]

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