Huge Loss on 2bd Condo in Penasquitos

[PerryChase]

10333 AZUAGA ST #235
Rancho Penasquitos, CA 92129

List Price: $220,000 – $270,000
MLS# 066081376

Sold 06/14/2004: $345,000

[Anonymous]

Ouch!

[no_such_reality]

That’s only 20% on the high-end. Provided it sells.

What’s more concerning is that idiotic spread, it is 20% by itself.

[4plexowner]

“Condo” will be a 4 letter word before this correction is over.

Condos are only one rung above mobile homes in the ladder of real estate.

[Chrispy]

You forgot a rung between mobile homes and condos… and that is the dreaded condo conversion. In other words, a poorly rehabbed apartment becomes a condo conversion – impossible to sell, rent unless at a huge loss, or lease.

[sdrealtor]

The most astounding thing about this to me is that there were approximately 80 sales in this complex of 300 units since early 2004. This could be flipper central!

[salo_t]

Funny that you bring up this property. I actually have a workmate that bought here in 04. He used to boast about how it was expensive but its all about location blah blah blah. Now the guy is very quiet and never brings it up.

[lindismith]

That loss is crazy!

I did an exercise the other night – checked the first 10 condos in my area to see the purchase price, and what they’re now listed for. It was very interesting, with 50% now listed for their 2003/4 purchase price. I’ll post the details later tonight.

I think this is going to get so ugly.

[PerryChase]

I wish that someone with real estate sales database and MLS access would setup an ongoing listing of all the properties sold or listed at or below purchase price since 2001. San Diego Market Monitor is a good start but we need a spreadsheet type database for the whole county.

I’d do it if I had data access. If I were a real estate or economic student, I’d make it my project. I suppose that if you had County sales records, you could match up the resales by parcel number.

Stats are too impersonal. Nothing is as powerful as real life examples.

[Coronita]

Wow! I love this website. Nowhere can find a larger group of the biggest sour pussies asses than on this site.

See, the way I look at it is, you got a bunch of people hoping that the housing market crashes, because essentially you guys missed all the hype that could have made you rich. I’m not disagreeing that things are going to crash. No doubt about that.

But what it sounds like is most of you probably sat out the housing boom for whatever self-justified reason. And now in hindsight, it sure sounds like you guys have the sour pussy syndrome you get from realizing you missed it.
That’s why you’re “looking forward” to any downturn (IE payback)…Because if you didn’t miss the windfall, you’d be talking about how great things were….

Sorry to burst your bubble folks, but a lot of people got rich during this time while you slept the past few years. Yes, some people are going to get screwed. Hopefully, you’re not one of them…but those people had it coming when they made purchases that they couldn’t afford. I’m sure that you wouldn’t be so bent out of shape of you were one of them that sold a $300k condo for $700k….

But let’s do a reality check for the average person here…

(1)How many of you are just kinda bitter that you were left out, because you didn’t spot the opportunity when it happened?????

(2)If you were one of those that self-justified the reason not to buy 4-5 years ago as : “the house prices at the current level are too expensive”….Was the reality more like “I can’t afford it”??? Because if so…
Even with 20%-30% correction, what makes you think you’re going to be able to afford it this time around.? It’s not like the interest rates are going to stay put at these levels….Yes, the price of the home is less. However, unless you’re sitting on a wade of cash and you plan on putting a hefty down payment (which would be stupid), you end up paying higher interest payments anyway. You might say, we’ll I’ll just refinance later. Ahhhh, good luck waiting for rates to go down after you purchase. Rates have nowhere to go but up long term.

(3)Let’s say though that you are sitting on a wade of cash, and plan on putting a larger down. But this won’t make financial sense, because why would you want to sink in that much money into an asset that you believe won’t be appreciating for 10 years????? If you are able to predict the bottom (you won’t, which is another point) and buy exactly at the bottom, it will take years if not decade for homes to re-appreciate. So putting too much capital into a home is like sinking dead money…what you should be doing is sinking that cash into assets you think will appreciate during that time (perhaps stocks/indexs/foreign exchanges/etc).

(4) You won’t be able to predict the true bottom. So those of you talking about buying at the bottom are full of shit. Why? Because you are the same people that talked about waiting to buy stocks they crashed…You waited, and waited. And then the crash came…But you never re-entered the markets after 2001 because you got scared shitless seeing the sky fall around you…you became too scared to enter yourself, although logically the best time to buy is when no one else is buying.

The same scenario will play out for homes. A lot ( and I mean a lot)of you (even with the financial means) will miss out on opportunity of the downturn..Because you are waiting for that magic catestrophic downturn year after year. waiting and waiting.. And finally when it happens, you will run shitless…Because when you start seeing your neighbor and friends lose their jobs left and right, home values continuing to slide, and inventory continuing to build up, you’ll keep saying to yourself that “now is not the time to enter”…And since most likely your own financial well-being it tied to your local economy, you probably will have the same concerns that everyone else will at that point: will i lose my job, will i be one of those screwed people that I use to gloat over, what if I can’t hold out long enough to bear this downturn, what if, what if???? Afterall, what will make you so special? It it the same financial astuteness that you used to sit out the entire housing market boom? Was it the same financial astuteness that led you to sit out of the stock market completely?

(5) Meanwhile, if you’re renting your living cost is going up. Especially since in San Diego County, the shear volume of condo-conversions is sucking the rental inventory dry. Ironic isn’t it? You have a bunch of condo-converts that aint selling. But you have less rental inventory.

Reality Check:
The only people who will really benefit from this cooldown are

(1) the few gutsy people and I mean a very small percentage of you guys who will take a risk (and it will be a risk) on picking something up cheap, because you aren’t really rich enough to throw around that much money and not “worry” about it
or

(2) the really rich people who can throw around assets left and right without worry about losing it. These folks people stand to benefit the most, because a 1million lose is peanuts for them. So they can afford to take these risks.

or

(3) Homes purchased out of a necessity to satisfy a material desire. For example, you need to purchase a home because you have a new child and your wife/husband keeps complaining about renting.

The rest of you however most likely won’t…because although you don’t like to admit it, you run with the rest of the pack, and in some cases you run behind it. You lack the very balls you need that would have got you in the game to begin with. We all are like that to some extent. We all have perfect vision in hindsight.

[FutureSDguy]

Still feeling roudy after some good friday night bar hopping? I think you over generalize by inferring that all bubble blobs are visited by disenchanted people. The population who post here are not all just waiting for the best time to buy (which would include me). They are also realtors who have an interest in knowing the pulse of the market, and recent sellers who did make a killing and are offering their experiences. The people who dominate in these forums are rather smart in the area of real estate economics–sour pussies they are not. I think you’re feeling insecure about someting and need to go on an attack. My guess is that you’re resenting the fact that buyers are not buying into your “real estate always goes up” mentality and you’re about to lose money, so it may be you who is the bitter one (1).

(2) You’re not being very coherent here. People make purchasing decisions based on what their needs and abilities at the time–no one can control interest rates, and in most cases you can’t time your decisions on it. You appear to argue that ARMs are a bad idea. Yes, most people say the same thing, especially in light of the fact that people foolishly gave up their 5 or 5.25 fixed loans for teaser rates that would reset in a rising interest rate market. But this forum is not populated by people commisserating on their ARM loans–in fact they’re probably more focused on either selling their homes or fixing their finances, not blogging.

(3) I am assuming you’re talking about down payment. Appreciation is relative to the purchase price, not the down payment. Other than PMI avoidance, you make a larger down payment so the bank charges you less interest, and that you have more cushion to keep yourself from going upside down on a loan.

(4) True, you can’t predict bottoms in advance, but you can know that you’ve already past it (with various degrees of certainty) and can still make decisions accordingly.

You seem to hold people who take financial risks in high esteem and look down on people who really work hard for the money and thus don’t have the disposable income to gamble with. Risky behavior in the stock market, on average, loses money.

In general, I think you’re stuck on the delusion of grandiousity in that “this market can do no harm” and “prices are high simply because they are.” I believe all markets have cycles. The fundamentals support this also: the population isn’t changing (except for immigrants from the south who aren’t participating much anyway), and incomes aren’t either. The market you see started from extra cash floating around (investors moving away from the stock market, and low interest rates), and was continued by panicky buyers afraid of being left out of the game. What happened next is that the 1. cycle naturally ended 2. interest rates went up and 3. way too much supply as a result of builders building too many houses and people leaving San Diego. This is a perfect storm that is causing more hurt for people who bought recently than the ones who sat out. The people who sat out and rented instead aren’t putting their families in financial jeopardy, so you may want to think through your pompous criticism of this class of people.

The mistake made in this market has not been buyers being too chicken, but rather the other way around: buyers borrowing money they could not repay.

Yes, there is fear in the market. And like a shark you smell blood and go in for a kill because it satisfies your juvenile ego. If you think having balls and partaking in a risky market is a noble thing, then someday your luck will run out, and it will be the careful planners who will be able to retire in comfort while you are standing in line for your next social security check.

[4plexowner]

Fat_Lazy – be careful of generalizations

I increased my net worth by a factor of 100 in the last eight years by investing in San Diego real estate and then selling it near the top.

I’m one of the ‘sour pusses’ predicting a 40-50% decline in the local market.

Do I have sour grapes about ‘missing out’?

Yep – I sold most of my property too soon – LOL (all the way to the bank)!

[Stu949]

Fat_Lazy

Amazing, you figured everyone out – Good job!

What category do I fit in?

Mid 20s, just got married, my wife’s income just jumped (she’s now a Controller), so our combined income just went from the mid $100,000s to the mid $200,000s in the last month.

Usually it went that after you got married, you saved for a down payment and eventually bought a house – to live in, not to make you a millionaire overnight.

These days, and living in south OC, $200,000 will hardly get you into a 2 bedroom townhouse. We’re told by everyone that we could afford more. Just cause we can get into IO/ARM/or Option ARM doesn’t mean we can actually afford the current prices.

Are we bitter? I don’t know? We just want a house to live in – we’re not looking for appreciation (like 99% of the buyers who bought the last couple of years), but we are looking for a place to live. Imagine that, people who just want to buy a home to actually live in, not to live off of… I guess that makes us sour pusses!

[Bugs]

Speaking personally, I bought pre-bubble and it doesn’t matter to my living arrangements whether prices go up or down. I couldn’t rent for anywhere near as little as my mortgage payment. My home is my home, not some fabulous wealth building system.

We may not be able to predict a bottom – and we never claimed to – but we can recognize a declining market with no end in sight when we see it. Waiting for the market to correct before entry or re-entry is a sign of optimism, not sour grapes. We’re looking forward on our decisions, not backward. That’s why most of us aren’t stressed – we’re in a good place now and it’s just getting better.

If anything, your rant seems to be indicative of no small level of bitterness. What happened? Did your ARM reset and now you have to fork over another 20% on your condo payment? Did the market turn before you could complete your flip? Did you just get laid off your job because construction is slowing down? Something pissed you off, what was it?

[PerryChase]

Also speaking personally, I bought in 1989 so I don’t really care where the market goes in the future. I agree, a house is to live in, not to live-off of.

Having bought at the top of the last downturn (1990s), I certainly learned my lesson and will never do that again. While I was never upside down on my house, I can assure you that it’s no fun knowing that your more recent neighbors bought for less than you paid several years back.

Yeah, life is about careful planning, not gambling and following the pack.

[Author]

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