El Cajon Condo Blowout! (-27% in 8 months)

[patientrenter]

Gary, that last chart of the prices of the 2/2 units is… stunning. I know we’ve all seen data showing prices rising, and we – the old ones like me anyway – remember prices back in 1997 and 1989 and so on, but the memory gets a bit fuzzy at times.

This chart is one of crispest and most irrefutable encapsulations I’ve seen of what happened, and what’s happening now, to prices. It’s amazing how little data is needed to get good information if it’s this well-chosen. Thanks.

Patient renter in OC

[garysears]

That was so fun I decided to do all the data for Bradley Condos at 745 E Bradley Ave 92021. There are 58 total units, 50 2bd/1ba 806sf and 8 1bd/1ba 568 sf. I think this shows the same historical price trend as the 465 E Bradley graph, only better because there are more data points. I got all the data from SDlookup.com in case anyone wants to check my work. I believe this data is accurate as it crosschecked with the data at the county recorder’s office when I was looking at 465 E Bradley units.

The one bedroom sales data is pretty sparse and there hasn’t been a sale in a few years though one is listed now for under 140K.

1bd/1ba sales data:
http://i16.tinypic.com/5zmkww4.jpg

2bd/1ba sales data:
http://i11.tinypic.com/4ktys7s.jpg

Temeculaguy, I think you should take a look at the data for 465 and 745 E Bradley Ave. Previously you said:

“I think those sub 40k prices may be misleading as they sometimes are fractional numbers of a multi-unit sale or a transfer between corporate divisions or relatives in order to keep the property taxes low. I could be wrong but even in the 1980’s it was hard to find a 2br for under 500/mo in the seediest areas making those a steal.”

I don’t see how this data can support the theory that the sales listed may be fractional. I believe they are likely full sale single unit prices. This would be verifiable with a little time spent at the recorder’s office. I was blown away that prices in the early 80’s were higher than the late 90’s but this graph of 745 E Bradley along with the 465 E Bradley graph and supporting data is overwhelming proof to me. You could in fact have bought a 2bd condo in El Cajon for under 40K in the late 90s. Note that one of these units sold for just under $33K in May of 1996.

The other part that was interesting to me is that most of the buyers seem to be long term owners. Maybe they were picking up these “steals” under 40K and renting them as investments. There are not that many sellers past 2000 that took advantage of the bubble prices. The second highest sale price has already been foreclosed. I wonder how the owner of the all time high of $274K feels about the purchase now that a unit sold for $174K and it looks definite #41 will sell for less than that (currently REO, listed at 175K). That is a 37% hit in complex comparables and dropping.

(By the way, the chart for the 2/1 is cut off on the bottom. The axis dates listed represent October of each year. I should have played with it to set the date in January. Oh well. That is why the data may look shifted by almost a year).

[garysears]

That was so fun I decided to do all the data for Bradley Condos at 745 E Bradley Ave 92021. There are 58 total units, 50 2bd/1ba 806sf and 8 1bd/1ba 568 sf. I think this shows the same historical price trend as the 465 E Bradley graph, only better because there are more data points. I got all the data from SDlookup.com in case anyone wants to check my work. I believe this data is accurate as it crosschecked with the data at the county recorder’s office when I was looking at 465 E Bradley units.

The one bedroom sales data is pretty sparse and there hasn’t been a sale in a few years though one is listed now for under 140K.

1bd/1ba sales data:
http://i16.tinypic.com/5zmkww4.jpg

2bd/1ba sales data:
http://i11.tinypic.com/4ktys7s.jpg

Temeculaguy, I think you should take a look at the data for 465 and 745 E Bradley Ave. Previously you said:

“I think those sub 40k prices may be misleading as they sometimes are fractional numbers of a multi-unit sale or a transfer between corporate divisions or relatives in order to keep the property taxes low. I could be wrong but even in the 1980’s it was hard to find a 2br for under 500/mo in the seediest areas making those a steal.”

I don’t see how this data can support the theory that the sales listed may be fractional. I believe they are likely full sale single unit prices. This would be verifiable with a little time spent at the recorder’s office. I was blown away that prices in the early 80’s were higher than the late 90’s but this graph of 745 E Bradley along with the 465 E Bradley graph and supporting data is overwhelming proof to me. You could in fact have bought a 2bd condo in El Cajon for under 40K in the late 90s. Note that one of these units sold for just under $33K in May of 1996.

The other part that was interesting to me is that most of the buyers seem to be long term owners. Maybe they were picking up these “steals” under 40K and renting them as investments. There are not that many sellers past 2000 that took advantage of the bubble prices. The second highest sale price has already been foreclosed. I wonder how the owner of the all time high of $274K feels about the purchase now that a unit sold for $174K and it looks definite #41 will sell for less than that (currently REO, listed at 175K). That is a 37% hit in complex comparables and dropping.

(By the way, the chart for the 2/1 is cut off on the bottom. The axis dates listed represent October of each year. I should have played with it to set the date in January. Oh well. That is why the data may look shifted by almost a year).

[temeculaguy]

I looked at the data and my assumption was wrong because the sales are spread out too far. I was trying to remember my college days and what rents were, I remember in the mid 80’s paying 600-700 month for 2br/2ba rentals, not just at sdsu but in gangland within 5 miles of school. Compared to the areas I lived in, El Cajon would have been a step up (bed placement was always based on where stray gunfire was most likely to come from). I also remember in 1991 looking to buy my first house and the condo’s were close to 100k, even in Oceanside and Vista so it seemed har to believe that 40-60k was the price for a condo in El Cajon. During a down cycle there are always huge bargains to be found where rentals can be cash positive from day one and these may have been just that, too bad we missed it. I still hold to my assertion that you will see a time where the one you want will find it’s way below 150k and will not find it’s way below 100k.

[temeculaguy]

I looked at the data and my assumption was wrong because the sales are spread out too far. I was trying to remember my college days and what rents were, I remember in the mid 80’s paying 600-700 month for 2br/2ba rentals, not just at sdsu but in gangland within 5 miles of school. Compared to the areas I lived in, El Cajon would have been a step up (bed placement was always based on where stray gunfire was most likely to come from). I also remember in 1991 looking to buy my first house and the condo’s were close to 100k, even in Oceanside and Vista so it seemed har to believe that 40-60k was the price for a condo in El Cajon. During a down cycle there are always huge bargains to be found where rentals can be cash positive from day one and these may have been just that, too bad we missed it. I still hold to my assertion that you will see a time where the one you want will find it’s way below 150k and will not find it’s way below 100k.

[PerryChase]

Great charts, Gary. And thanks for sharing your work.
With this kind of analysis, I’m sure that you’ll eventually find a good home at the right price.
In order to post a picture on Piggington, compose a message like usual and click “add image” at the bottom of the message box.

[PerryChase]

Great charts, Gary. And thanks for sharing your work.
With this kind of analysis, I’m sure that you’ll eventually find a good home at the right price.
In order to post a picture on Piggington, compose a message like usual and click “add image” at the bottom of the message box.

[garysears]

When I click on “add image” it seems to be trying to get me to submit a new thread. I guess maybe I’m just computer challenged.

Here is a chart I made today of the Stone Court Cir/Ct/Dr Condos. There is good data for the 2bd/1.5ba 1063 and 1110 sf condos. There is a 1063 sf unit on the market right now. From the pictures it looks like a really good place and is fully remodeled. The best part by far are the balconies and 2 car garage. The quality here looks a lot better than some other places. This place will certainly command a premium over your basic 800sf 2bd/2ba. I’d pay a lot more for an extra 260 sf and 2 car garage + in home laundry. I think high 190’s to low 200’s might make sense for a lot of people. I’m guessing you could rent these out for 1200-1300 or so. I’d have to look into that.

The thing to point out from this graph is the lack of sales since 11/06. The unit for sale (#1573) is asking 250K-279K and does not appear to be a short sale just by looking at the owners’ purchase price. Just visually look where that point will be on the chart. The peak was $340K for 2 units. If 1573 sells in the range it will represent between 18% and 28% off peak. It would be interesting to see what the new condo numbers for the 92021 zip look like. This type of decline has been typical of all 3 condo complexes I’ve analyzed this week in the immediate area.

We’re partying like it’s 2003 in El Cajon.

http://i9.tinypic.com/63kdm4j.jpg

[garysears]

When I click on “add image” it seems to be trying to get me to submit a new thread. I guess maybe I’m just computer challenged.

Here is a chart I made today of the Stone Court Cir/Ct/Dr Condos. There is good data for the 2bd/1.5ba 1063 and 1110 sf condos. There is a 1063 sf unit on the market right now. From the pictures it looks like a really good place and is fully remodeled. The best part by far are the balconies and 2 car garage. The quality here looks a lot better than some other places. This place will certainly command a premium over your basic 800sf 2bd/2ba. I’d pay a lot more for an extra 260 sf and 2 car garage + in home laundry. I think high 190’s to low 200’s might make sense for a lot of people. I’m guessing you could rent these out for 1200-1300 or so. I’d have to look into that.

The thing to point out from this graph is the lack of sales since 11/06. The unit for sale (#1573) is asking 250K-279K and does not appear to be a short sale just by looking at the owners’ purchase price. Just visually look where that point will be on the chart. The peak was $340K for 2 units. If 1573 sells in the range it will represent between 18% and 28% off peak. It would be interesting to see what the new condo numbers for the 92021 zip look like. This type of decline has been typical of all 3 condo complexes I’ve analyzed this week in the immediate area.

We’re partying like it’s 2003 in El Cajon.

http://i9.tinypic.com/63kdm4j.jpg

[garysears]

Rustico, thanks again for pointing out the Sunterra condo conversion on N. Johnson. I got a call today from a realtor about a new listing there. One of the 2bd/2ba 896sf units just listed for 179K-199K (short sale subject to lender approval). There are other listings for what appear to be the exact same condo for up to 282K-295K! You are right about the 40K to 90K estimate now I think. Even the sale in January of this year looks like it is going to be upside down by 40K. Even if this latest listing price isn’t accepted by the bank I think it sets a certain price expectation on the part of buyers. The price reductions are really stunning to me (even though I have been hoping for them). The real time price trend here is accelerating regardless of what the latest median statistics show.

The collective wisdom of this board is proving correct to me so far. That gives me further confidence that some of the more bearish predictions are increasingly likely. I am especially grateful for the post I ran across on Craigslist back in late 2005 / early 2006 that pointed me here. Thanks Rich for the site and introduction to the housing bubble analysis.

[garysears]

Rustico, thanks again for pointing out the Sunterra condo conversion on N. Johnson. I got a call today from a realtor about a new listing there. One of the 2bd/2ba 896sf units just listed for 179K-199K (short sale subject to lender approval). There are other listings for what appear to be the exact same condo for up to 282K-295K! You are right about the 40K to 90K estimate now I think. Even the sale in January of this year looks like it is going to be upside down by 40K. Even if this latest listing price isn’t accepted by the bank I think it sets a certain price expectation on the part of buyers. The price reductions are really stunning to me (even though I have been hoping for them). The real time price trend here is accelerating regardless of what the latest median statistics show.

The collective wisdom of this board is proving correct to me so far. That gives me further confidence that some of the more bearish predictions are increasingly likely. I am especially grateful for the post I ran across on Craigslist back in late 2005 / early 2006 that pointed me here. Thanks Rich for the site and introduction to the housing bubble analysis.

[NotCranky]

You are welcome Gary,
I think I saw one for 199k-219k not a short sale. I don’t think very many will sell in this price range. I think you get what direction I am pointing in. 200k was considerable money for a condo just a few years ago. That actually is kind of an understatement.
Best wishes

[NotCranky]

You are welcome Gary,
I think I saw one for 199k-219k not a short sale. I don’t think very many will sell in this price range. I think you get what direction I am pointing in. 200k was considerable money for a condo just a few years ago. That actually is kind of an understatement.
Best wishes

[garysears]

Update time. It’s been 3.5 months since the last post on this thread. So far the price declines have been steeper and faster than I imagined. In mid July I reported the bottom end of the 2bd El Cajon condo price range was 170k-180k. Today it is 140k-160k. My observation is at least a 10-20% reduction in asking prices across the board. I would actually say it has been breathtaking to watch day by day. In August there were about 25 2bd condos priced under 200k. Today there are about 50.

In general it looks like we are already back to 2003 prices. I’m thinking 2000-2001 nominal prices are possible.

On July 15 Temeculaguy posted that the condos at 469 E Bradley could be worth around 150k next year. That prediction seems dead on. None of the units originally listed have sold and I doubt any of them will until they are REOs. The lowest priced unit (199k) has not reduced the price at all and is now competing with units offering garages.

Based on price to rent ratios Bugs speculated investors might begin to bite at the 150k level. It looks like they are going to wait a little longer as a few units are now available in the price range with no apparent action.

PerryChase advised me to wait it out because he believed I would see the 150k price again. It was a short wait. The complex at 745 E Bradley currently has an REO priced at 140k. It is the same unit that represented the complex peak in 2005 at 274k. If anyone wants to win the 50% off previous sale contest you can definitely do it with this unit. It will be interesting to see what it goes for when it is finally sold. It is the cheapest 2bd in El Cajon right now.

4plexowner pointed out how rising interest rates might set a floor closer to 100k for similar units. Based on this early price action with rates the way they are and many more REOs to come, I would agree. A significant rise in rates might push them under 100k. I believe Rustico speculated the 2bd condos at Sunterra might sell under 100k in the next few years. That scenario seems plausible.

Temeculaguy advised me I need to save 30k for a down payment in the next 18 months or so to be ready for the bottom. 30k already represents 20% down for the bottom end units.

I made an offer on an REO at 745 Bradley for 120k when it listed for 181k. Today I wouldn’t do the same for the 140k priced unit (same building). I am afraid they might accept. I am readjusting my sites towards better units with a garage, and possibly a SFR. I am thinking under 200k for an older SFR with garage might happen. I might even find a good deal in a better area in a few years.

In conclusion, I wish I could relabel this thread “50% off Condos in El Cajon”. I have found the first one and this may become common for units sold 2005-2006. I just didn’t think it would happen this year. The REO at 745 Bradley will undercut the last 24 sales, including a knife catcher recently at over 170k. I wonder how many buyers who could actually keep paying the mortgage will just stop paying and walk away.

Still waiting and feeling better every day. I’m thinking 2/3 off peak (nominal prices) could happen in El Cajon given the right conditions. That would require significantly rising rates in the next few years. Anyone else that big a housing bear?

[garysears]

Update time. It’s been 3.5 months since the last post on this thread. So far the price declines have been steeper and faster than I imagined. In mid July I reported the bottom end of the 2bd El Cajon condo price range was 170k-180k. Today it is 140k-160k. My observation is at least a 10-20% reduction in asking prices across the board. I would actually say it has been breathtaking to watch day by day. In August there were about 25 2bd condos priced under 200k. Today there are about 50.

In general it looks like we are already back to 2003 prices. I’m thinking 2000-2001 nominal prices are possible.

On July 15 Temeculaguy posted that the condos at 469 E Bradley could be worth around 150k next year. That prediction seems dead on. None of the units originally listed have sold and I doubt any of them will until they are REOs. The lowest priced unit (199k) has not reduced the price at all and is now competing with units offering garages.

Based on price to rent ratios Bugs speculated investors might begin to bite at the 150k level. It looks like they are going to wait a little longer as a few units are now available in the price range with no apparent action.

PerryChase advised me to wait it out because he believed I would see the 150k price again. It was a short wait. The complex at 745 E Bradley currently has an REO priced at 140k. It is the same unit that represented the complex peak in 2005 at 274k. If anyone wants to win the 50% off previous sale contest you can definitely do it with this unit. It will be interesting to see what it goes for when it is finally sold. It is the cheapest 2bd in El Cajon right now.

4plexowner pointed out how rising interest rates might set a floor closer to 100k for similar units. Based on this early price action with rates the way they are and many more REOs to come, I would agree. A significant rise in rates might push them under 100k. I believe Rustico speculated the 2bd condos at Sunterra might sell under 100k in the next few years. That scenario seems plausible.

Temeculaguy advised me I need to save 30k for a down payment in the next 18 months or so to be ready for the bottom. 30k already represents 20% down for the bottom end units.

I made an offer on an REO at 745 Bradley for 120k when it listed for 181k. Today I wouldn’t do the same for the 140k priced unit (same building). I am afraid they might accept. I am readjusting my sites towards better units with a garage, and possibly a SFR. I am thinking under 200k for an older SFR with garage might happen. I might even find a good deal in a better area in a few years.

In conclusion, I wish I could relabel this thread “50% off Condos in El Cajon”. I have found the first one and this may become common for units sold 2005-2006. I just didn’t think it would happen this year. The REO at 745 Bradley will undercut the last 24 sales, including a knife catcher recently at over 170k. I wonder how many buyers who could actually keep paying the mortgage will just stop paying and walk away.

Still waiting and feeling better every day. I’m thinking 2/3 off peak (nominal prices) could happen in El Cajon given the right conditions. That would require significantly rising rates in the next few years. Anyone else that big a housing bear?

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