May 6, 2006 at 4:49 PM #6574
6xx7 PASEO JAQUITA, Carlsbad, CA 92009
Sq ft: 2,430
Year built: 2000
List Price: $679,000 – $719,000
Listing Date: 02/09/06
3xx3 Paseo Estribo, Carlsbad, CA 92009
Sq ft: 2,430
Year built: 2000
Both of these properties are in the Rancho Carillo section of Carlsbad right next to San Marcos. Per Zillow both are on the same sized lots. Of course, they are of the same model, same sqft.
The one currently on sale, Paseo Jaquita, has granite countertop, wood flooring, and marble fireplace.
The biggest difference, and the reason why in late 1999 the Paseo Estribo property was sold $22,000 lower than the Paseo Jaquita property is that the fairly busy Melrose Dr is right adjacent to the Paseo Estribo property.
Comparing the two, if the listing price of $679,000 takes, that’s a straight 7% price reudction. But if we factor in the difference in sale price in 1999, we are looking at a 10% price reduction between the two paired property.
What do you guys think?May 6, 2006 at 5:16 PM #25066
First issue, you can’t compare the two original purchase prices unless you know when each owner put down their original deposit/reservation. 3xx3 Paseo Estribo may have been resereved many months before the other property, therefore locking in a lower phase purchase price.
First phase releases have typically been priced lower to generate interest and to reflect the added risk of buying into an undeveloped project. You must also have data relating to original builder upgrades that may have been added into the purchase price. Even though they are model matches with similar upgrades today, one unit may have been sold with inferior upgrades 6 years ago and subsequently upgraded by the owner. Although rare in this day and age, some upgrades may have been paid with cash or outside of escrow and would not be reflected in the final sales price. In this case, I don’t believe you should place much weight, if any, on the original sales price comparison.
Second issue, 3xx3 Paseo Estribo has an overall superior panoramic view from the rear. Sometimes AVM programs like zillow.com do not factor in view or location premiums correctly. Public records do not typically list these characteristics which is what is usually fed into these AVMs.
Based on a brief glimps at both properties in MLS, the 3xx3 Paseo Estribo property looks to be superior and all things being equal should command a higher sales price. This is a clear case of apples to oranges and I don’t think this example shows ample evidence of a trend in sales prices.May 6, 2006 at 5:38 PM #25068
Here is a much better example in an adjacent neighborhood.
3xx2 Rancho Famosa
Last Sale 7/13/2005 $700,000 (off market date 6/6/05)
Currently listed for $699,000-739,000 (DOM 58).
If they receive an offer on the high end, they break even after commissions. Anything lower and they have a net loss. Fortunatley, the original purchase was not 100% financing.
This example (depending on final sales price) might leave one to believe price levels in this neighborhood have been fairly stable over the last 11 months.May 6, 2006 at 5:51 PM #25069
street noise would make a property superior and command a higher price?
that make sense…May 6, 2006 at 6:09 PM #25070
An elevated 180 degree panoramic view makes a property superior and command a higher price. You were comparing two properties that were not as similar as they appeared.
Consider this, during periods of rapidly increasing prices and limited supply (like the last 3-5 years), issues like traffic noise and less than perfect location were not serious deal breakers to typical buyer. They just ‘wanted in’.
A couple years ago, it was not uncommon to see a condo that backed to a freeway sell for the same price, or more, than the last sale which was a similar unit in a location with no traffic noise. In many cases, paired sales analysis showed minimal price impact on properties with external obsolescence like traffic noise. Of course, there are always exceptions.
During periods of price declines and massive supply, the typical buyer has many more choices and the same property that backs to the freeway is going to have a much harder time competing with a similar property with no noise. Location premium spreads will increase and the properties with negative external influences will sell for significantly less as compared to similar properties with no negative influences.
Make sense?May 6, 2006 at 6:38 PM #25071
thus if the 3xx3 property goes on the market now, it will not command the same price as it did a year ago. 3xx3 is the property with the traffic noise. 6xx7 is selling at a lower price and it doesn’t have the traffic noise. A year ago the market was a lot stronger, the traffic noise issue was most likely ignored, hence the seller got away with the higher price. Would buyers still ignore the traffic noise today and pay that price?
As for the view, here’s the problem with that “premium”. #1, for the noise to be decreased, tall/thick trees would have to be planted on the slope between the rear of the property and Melrose Dr. #2, if there’s noise reducing trees, there goes your 180 degree panoramic view. If there are no trees, the view is saved, but the noise would be deafening.
I don’t think the two properties are apple vs. orange. I think it is more like an apple vs. an apple with a worm.May 6, 2006 at 6:53 PM #25072
Maybe red apples vs. green apples.May 7, 2006 at 8:53 AM #25080rankandfileParticipant
Red or green, the price for these apples is way too high for me. I’ll eat something else for now, or buy an apple from another store.
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