Impact of foreclosure in prices

[sdrealtor]

PK,
Respectfully, the median price figures are a sham. I can think of a few sellers around me that are losing over $100,000 on homes they bought last year. REAL PRICE DROPS have arrived!

[docteur]

SDR – In what area of San Diego would that be occuring?

[sdrealtor]

High end tract homes ($1M to $1.5M) in Encinitas and South Carlsbad.

[docteur]

SDR – Have there actually been closings whereby buyers have sold their homes for $ 100,000 less than they paid a year ago and is it a cash/equity loss (as opposed to a 100% financed deal where they are letting the lender take the hit)?

And are these desperation sellers? What would motivate them to take a $ 100,000 loss? I find that incredible.

[equalizer]

PoppaKoppa

Pardon me but you deserve full wrath of fury for your BS false PR Advertisement disguised as a “blog” website. Some Downtown condos are selling for less than purchase price from 2005 (Someone help me with a link, please).
Market volatility is sharply increasingly, so only way to gauge true market value is to sell it. So go ahead and list your place and lets see you raise the asking prices 3% every month until it sells.

[kiki]

I can suggest some threads :
Kirkwall Driveway
Foreclosure
What’s going on with Pendings? 10% Drops at Bressi Ranch
More North County Price Reduction Examples

all with some examples of prices dropping in same house sales/prices

[Farls]

PoppaKoppa B.S.

The people who read these threads will not fall for your B.S….I know you’re an experienced Realtor….and I’ve spent a lot of time on this board defending Realtors and the profession as a whole. But you just made all my arguments go down the toilet. You sound like a snake-oil salesman with no ethics.

Have you really been telling your clients until now that the market is still appreciating?

How do you explain it when your listings sell for lower than a previous comp?

Take your weak advertising/lead generation attempts somewhere else.

PoppaKoppaSoundsLikeAnUnethicalCarSalesman.com

[sdrealtor]

There is one that I can think of that is about to close $70 to 80K below what they paid in early 2005. Throw in transaction costs and its a hit of about $120K. They sold a house and brought tons of equity when they bought last year. Job relocation forces move.

Unfortunately, a similar situation might just occur in your neighborhood. The record sale in VSB on Valerio Trail was $1.825M in October 2005. It just came back on the market tonight with a range of $1.75M to 1.929M! It’s way to early to tell but with transaction costs of close to $100K and 9 homes on the market their hit could approach 200K.

[Anonymous]

Look at 4130 Acacia in Bonita. Listed about a year ago at near $1.8 million, if I remember correctly. This property fell out of escrow at least 4 times. Finally closed about 30 days ago for $1.1 million. The Home is 3000sqft single story on 1.2 acres. Beautifull property but the house needs a little work.

I’m seeing price reductions all around me in Rancho Del Rey.

I am also seeing reductions in Eastlake. I see a lot of homes on the MLS for 6 to 7 months! I have seen a few at 10 months but you have to watch the listings continuously as the homes go on and off the MLS all the time, as the prices come down.

My hard drive is full of the saved listings so I can go back to them.

[docteur]

I remember that sale and thinking they way overpaid at that point. However, one $ 70,000 loss and another possible sale still doesn’t make a trend.

Question: How do you determine what the transaction costs were/are on a sale? Don’t you need to see a closing statement? I have heard of some brokers in this area selling at reduced fees, which may put the net loss closer to zero, depending on how those costs are calculated.

Incidentally, there are two developments with Santa Barbara in the name in PHR/Carmel Valley: Vista Santa Barbara (non-gated) and Santa Barbara (gated). Same homes, same builders, two totally different neighborhoods.

Vista Santa Barbara in general has much smaller lots and not the quality of views that Santa Barbara has on its northern rim.

Lastly, the first sale was a job location and it sounds like the second one may be a special situation sale also. I will see what I can find out about that.

[sdrealtor]

It probably was a lucky sale but my guess is that everyone in the neighborhood while believing it was too much to pay also felt good and believed their’s was worth that much too.

Here’s how I ballpark tx costs. They are offering 2.5% to buyers broker. The listing agent is likely getting 1.5% to 2.5%. That’s 4 to 5%. Throw in closing costs of roughly 0.5 to 0.75% and you are looking at 5% tx costs, maybe more. It’s just a guess but that would be $90,000 to $100,000 in tx costs.

Thanks for the education on the difference between SB and VSB. Based upon the size of that lot I’m guessing it’s in SB.

I wouldn’t call it a trend either but it hasnt sold yet and who knows how long and for how much it will sell. The owners have a huge equity position and while they probably wont be thrilled, they’ll be fine. Personally, I think 9 homes for sale in a tract of that size is alot and sooner or later someone is going to get desparate for a sale. 2 or 3 of those and voila! New price levels have been set. I guess CV probably wont be immune to what I’m seeing up North a bit just a couple months behind.

[docteur]

SDR – Thanks for your information. However, I did some research on my own and got a little bit different picture than you did.

I found a total of eight homes for sale: two in Vista Santa Barbara (non-gated, smaller lots) and six in Santa Barbara (gated, larger lots). Below I have listed the asking prices as well as the most recent purchase price and date.

In addition, the home you referred to that sold in Santa Barbara was at 5448 Valerio Trial and it sold for $ 1.8250 recently and as far as I know it is not on the market. The listing you refer to at $ 1.929 is at a different address.

According to my research no one has sold for a loss nor have they listed at a price which would produce a loss. I know most of the sellers (or the agents) on the homes listed for sale in Santa Barbara and to the best of my knowledge, none of them are desperate (but they are trying to push the envelope on pricing in some cases), so I don’t see any sales that could produce a loss, except for possibly the first one listed below (assuming they got desperate, which they are not).

For Sale 05/17/09 — Purchase Price/ Date

5492 VT $ 1.9290 — $ 1.8150 09/05
5472 VT $ 1.6950 — $ .8675 07/02
5487 VT $ 1.5490 — $ 1.0250 09/05
13430 EP $ 1.4500 — $ .7390 07/02
13466 EP $ 1.4950 — $ .7850 04/02
13423 MG $ 1.4990 — $ 1.1000 03/04

Another home on Valerio Trail at Santa Barbara recently sold and was listed value range pricing between $ 1.7490 and $ 1.9490 (I believe) and I think it was listed “Help U Sell” or something like that. It was at 5562 Valerio Trail and was purchased in 04/03 for a total of $ .9130 and rented for two years prior to sale. The owner put in a pool, upgraded landscaping and upgrades (new flooring and carpet) prior to sale to the tune of about $ 150,000.

Vista Santa Barbara had two listings as follows:

For Sale 05/17/09 — Purchase Price/ Date

13295 SP $ 1.6990 — $ .9205 07/04
13283 ESC $ 1.4990 — $ 1.0955 08/05

So again, I think predicting the way these sales might go is an interesting exercise but to gauge the market, we need to look at exactly what is happening right now and as I have stated before, I see no losses on purchase prices nor do I see any desperation.

Lastly, six homes in Santa Barbara for sale out of 109 = 5.5 % of the total housing stock there. Not a huge amount in my estimation.

VT= Valerio Trail
EP = El Presidio Trail
MG = Moreton Glen
SP = Sunset Point
ESC = Evening Sky Ct.

[sdrealtor]

There might not be a sign yet but 5492 is on the market as of last night. It closed previously on 10/19/05 at $1.825 per the MLS.

In the mls I currently see 3 on VT, 3 on EP, 1 on SP and 1 on MG. I doubt there has previously been more than 4 or 5 at any given time. I’m sure no one has sold at a loss yet and this could be the first because they bought at the peak. However, while it is too early to tell I suspect SB homes have turned the corner like many other parts of the market. Based upon what you bought in at, you’ll be fine for a long long time. As for the sellers motivation, desparation is a funny thing that kicks in for different reasons at different times. It may not happen to anyone in SB but who really knows. It’s a great community, with gereat homes and a great location. I know you arent woorried nor should you be.

[docteur]

SDR – I listed 5492 Valerio Trail in my previous post but I am showing that it sold for $ 1,815,000 and that the top sale to date in Santa Barbara was at 5488 Valerio Trail (also listed in my post) at $ 1,825,000.

So, I think that’s where the confusion comes in. Either my data or yours is flawed.

And no, I am not worried at all. I paid off my house and intend on staying here for a long time (or until I find a home on the bay in Point Loma – I love to surf and sail and that’s where I grew up, so I have a lot of friends and family still living in that area).

So far, all I see is a slowing down of sales and prices probably reaching a peak at Santa Barbara. I think a lot of these folks will simply pull their homes off the market if they don’t get their prices (at least the people I know whose homes are for sale will do that).

But only time will tell…

Thanks.

[Anonymous]

Whoa from PK Beehive:

Farls: I just rturned from efforts with two buyers and two sellers.. Long day as usual. Thanks for guessing that I have a BS — in Marketing.. I subscribe to the REALTOR Code of Ethics; do you?

My first reply post on this site was June 14, 2006. (more to be answered next week for your follow-up, KIKI) My DISCLOSURE of experience clearly is clearly quoted below:

“Not a slam dunk without knowledgeable realtors, lenders and tax folks! I participate in ShortSaleHomes.com. Please check it out. I’m an experienced realtor, loan officer, property manager, investor and grandfather in San Diego. By prudent investing in a dozen homes over the past 10 years, my realty net worth has grown by 1000%…”

OK, I have personally completed nearly 250 transactions for buyers and sellers via MLS, builders and foreclosures. Most of them have had some difficulties that often give realtors a bad name. To survive for the long haul as a competent middleman in ever changing markets, real estate and lending professionals MUST HAVE FUN!!

When I subscribed to Piggington nothing was said that realtors, snake oil sales and car salesmen were not allowed. What say YOU, Rich??? Great web name Farls. You should KoppaRight it and earn money with your blog talents…

Later, friends, I’m the Guest of Honor tomorrow for a great GrandPoppaKoppa Day. Please continue to be ethical, tolerant and have F-U-N like I do!

[Author]

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