Email from a realtor

[an]

I agree. Only time will tell. No mater how confident some one is about their arguement, it’s still just an educated guess. In 5 years, we will know for sure who’s right and who’s wrong. Until then, I’ll just sit back and enjoy the ride.

[JJGittes]

There were 3 sales in Rancho Dorado (San Marcos 92078, on Sun Valley and White Sands) in the last month or so. Anybody know if they closed, and what the pricing history was on them? Another one in there that closed a couple of months ago was analyzed elsewhere on this site recently. I am wondering how these three did.

[JJGittes]

I believe they peaked in spring ’05, with the closings taking place in summer ’05. I base my opinion on homes in my neighborhood in 92011 that I watched closely. However, it is very a small sampling admittedly.

[Bugs]

I think you guys might have to split the difference on this one. The original question was whether marketing a property as a foreclosure results in additional discounting. We’ll have to track this sale to see at what price it does eventually sell. I’m betting it will be below the current listing price.

I agree that the 10/2004 sale was $44,000 higher than anything recorded in the MLS for that project. The next 2 highest sales were at $880,000 for a 3974 SqFt unit in 11/2004; and more recently, $879,00 for a smaller 3070 SqFt unit in 05/2006. Using the 11/2004 sale as a benchmark, this property’s 10/2004 sale was way high to begin with. Maybe as much as $60,000. You can’t blame the market for that portion of any losses.

Using the 05/2006 sale, the current listing price may be a little low for a market sale. Or not – there are yet a couple of other actives in this project right now that if they sold within their ranges would indicate to a lower value for this property.

To answer SDRealtor’s comment, a responsible appraiser might have mentioned the $924,000 sale if they were doing an appraisal during that time period, but it stood out so far from the trend that it would have otherwise been discarded as not being representative of the trends at that time. No one sale makes or breaks.

If the lender is compelled to sell they could possibly be forced to accept whatever comes along. Again, if this happens it will represent an isolated incident in this project (so far) and would be rejected as a sale on that basis. It’s when there start to be enough of them to affect the other sales that these forced sales become relevant market indicators.

That’s the thing about using volumes of data – there are always exceptions to the trends and those exceptions only add noise to the analysis. It’s easier to analyze the trends when you toss the outliers.

[powayseller]

I think sdrealtors’ point is well noted – we all think the prices were climbing through summer 2005 because the median was going up. Well, we see how misleading that one number can be. Although we are seeing 5% reductions in many neighborhoods, and I got a 5% reduction in my 2 offers in December 05, the median price is still going up. There should be other metrics which complete the picture of what is actually happening, such as typical home month-month change.

At the current rate of price decrease, it will take many months before the median price reflects it.

This is why I like Bob Casagrand’s reports so much. He digs inside the numbers, and let us know several months ago that the median is up only because the lower end buyer is squeezed out, and proportionally fewer under-$500K homes are sold.

I still wonder how we can have thousands of above $500K sales every month, in a city where the median income is around $60K. How are people affording the $1.5mil homes? ARMs? IO teaser rates?

[sdrealtor]

Not many $1.5M homes selling. In genereal, those that are selling are being bought by wealthy people who can buy whenever and whatever they want.

[lostkitty]

I’ll just never get my head around this. My good friend just sold her house in Orange Co for 740K. Bought it a year ago for 640k. The previous owner paid 280k for it in mid ’01! it is an entry-level family home. No backyard to speak of. Way out east of anything interesting – hot as hell. 740k. She had given up on selling it and was going to just take her husband’s business buyout (the company is moving to TN). GO FIGURE!!!!

[North County Jim]

Update on the two REO’s.

17xx Tara Way: Reduced on June 2 to $799k. Now $62k below sale price from last July.

31xx Sycamore Heights: Reduced another $5k to $850k. Now over 100 DOM.

[JJGittes]

I drove by Tara Way property. I don’t think it will sell at $799. There are homes in the gated areas of SEH not selling at that price point. Some of them even have canyon views with no back neighbors. Overall, I think there is still $100k of froth in that market in the process of evaporating off.

Also, the guy at the welcome center in SEH said 1000 more sfh’s are set to be built in there. There are also seveal new neighborhoods “selling” right now.

I think there will be very good deals in SEH and its cousin, 4S, over the next couple of years.

[Lickitysplit]

I don’t believe I saw it posted before, but the Sycamore Heights house is MLS#061016027. Zillow’s “Zestimate” claims $1.21M, lol… almost the highest in the immediate neighborhood (one higher at $1.24M). I guess Zillow hasn’t gotten the hint that the party’s over, we’re past last call, the lights are on and the bar’s near empty.

Assuming I have the right property (3142), zillow makes these additional claims:

2005 tax assessed value is claimed @ $924,900.
Prior sale 02/15/2006: $774,591.

Not sure what to make of that.

[anxvariety]

..most of the foreclosed homes sell for nearly full market value and often do not represent the “deals” many people expect

Even ‘full market value’ can suck, especially when the supply is pushing market prices down.

[North County Jim]

JJ,

We picked up the sheet from the SEH Welcome Center with currently released homes. There are currently 42 homes available from builders. There’s also 80-something resales out there.

Many of the builder homes were languishing from our last visit over a month ago. Richmond American’s Luminara neighborhood hadn’t sold a single house since our last visit in early May. The same story for DR Horton’s Sonoma development.

What’s amazing to me is the number of near-new homes on the market. Pulte still has 8-10 houses left to sell in its Meridian neighborhood and there’s four units for resale already. All of them, of course, are asking top dollar.

They’re entitled to be made whole, you know.

[JJGittes]

You ain’t kidding about top dollar still being expected. It is getting kind of pathetic now that SD county inventory is approaching 22k.

I looked at a two resales in SEJ about a week ago. Coincidentally, the seller’s agents on both “had just received offers.” (Both houses had been on the market for over 2 months.) I just smiled, looked at the houses, and wished them luck. The house were just fine…. like about 5000 others that have been built in Carlsbad and SW San Marcos over the last 4 years. Funny though, when I just looked them up a few minutes ago on realtor.com, they both are still up for sale. Alas, it seems neither offer panned out. Who woulda thought?

[North County Jim]

There have been additional price reductions on both previously discussed REO’s. The Tara Way property has been reduced another $20k to $779k.

The Sycamore Heights place has been reduced $10k to $839,900.

[powayseller]

What are the best method for price reductions? Is it ad-hoc, or do the seller and realtor have a method?

[Author]

Posts