Massive 26% Markdown on Carmel Valley McMansion

[Coronita]

SDR,

What could be the reason the buyer bought in 7/05 and wanted to sell in 8/06? At 6%, transaction costs would be about $100K. Was this a case of pure speculation or something else? The reason I am asking this is, I see many transactions like this – buying and then trying to sell in 12 -18 months. Surely, they didn't plan on living there just for a year.

 

Actually, this sort of thing happened TWICE on my street, with both buyers buying in 2006.

The first buyer overbid in a multiple offer situation (in 2006 !) for a home and paid close to $1.15 million for a home, spent another $100k in remodeling..Then 3 months later, they turn around and sells it at a loss for $1.1 million. At least it has an ocean view (sort of) compared to….

Couple number two spent $1.1 million on a home that has no ocean view in the same complex with the same sqft. Was sold by the "antique" wood floor, etc,etc. Spent also $100k in upgrades…3 months later, it's back on the market listed for $1.05-1.15 million.

 

I'm finding out lots of people make their biggest financial decisions when it couldn't be possibly any worse time to do it.

Couple #1 was having marriage problems and thought buying a home and living together would help. The stress of a new home purchase and all the hoops they had to jump through to remodel didn't help. The marriage ended in a divorce 3 months later, and they had to sell the home at a loss.

Couple #2 again overpaid on the home, probably a FTB. I haven't talked to this neighbor to figure out what happened, they're a quiet asian couple that keep to themselves…But my hunch is a FTB that overstretched and underestimated the total cost of ownership. 1 months after they buy, both couples show up in brand new Bimmers, and start a $100k makeover in the home. Anyway, it's 3 months since they moved in, and they put it back on the market. It's definitely not a flip attempt, as their asking price (with a ridiculous $100k spread) won't cover their total cost of the intial purchase plus all the remodeling they've been doing. Never see husband and wife going out together, always separate. My guess would be possibly the home was purchased with the hope to add some stability to a family too. But that's just a guess.

Why do so many couples make their biggest financial decisions when their personal life are at distress? When my wife and I bought our place, we felt such a big purchase was enough stress by itself. Dealing with issues here and there, fixing up the place and making it the way we wanted without blowing budgets was enough for us who normally don't fight to get on each other's nerves… I can't imagine how two people not on good standing would be able to do it.

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

 

 

[meadandale]

You got to love a 2 year old house with not a lick of landscaping on the entire property.

Can you say ‘flip’?

[meadandale]

You got to love a 2 year old house with not a lick of landscaping on the entire property.

Can you say ‘flip’?

[meadandale]

You got to love a 2 year old house with not a lick of landscaping on the entire property.

Can you say ‘flip’?

[meadandale]

You got to love a 2 year old house with not a lick of landscaping on the entire property.

Can you say ‘flip’?

[meadandale]

You got to love a 2 year old house with not a lick of landscaping on the entire property.

Can you say ‘flip’?

[SD Realtor]

Like I said, not many flippers come in with 300k cash.

I would be willing to bet this was not a flip.

SD Realtor

[SD Realtor]

Like I said, not many flippers come in with 300k cash.

I would be willing to bet this was not a flip.

SD Realtor

[SD Realtor]

Like I said, not many flippers come in with 300k cash.

I would be willing to bet this was not a flip.

SD Realtor

[SD Realtor]

Like I said, not many flippers come in with 300k cash.

I would be willing to bet this was not a flip.

SD Realtor

[SD Realtor]

Like I said, not many flippers come in with 300k cash.

I would be willing to bet this was not a flip.

SD Realtor

[bsrsharma]

Couple #1 was having marriage problems and thought buying a home and living together would help.

I had this hunch based on a couple of empirical observations. Interesting to see another data point. I think some wives in difficult marriages grasp at homebuying (or having a baby) as a cementing factor. Looks like it usually fails (and if anything, contributes to accelerating the fracture). On the other hand, I have also observed some good marriages fall apart after buying an unaffordable home and the resulting financial distress from it.

I think the correlation between housing bubble and its impact on marriages would make a fine subject for a few Ph. Ds in Sociology!

[bsrsharma]

Couple #1 was having marriage problems and thought buying a home and living together would help.

I had this hunch based on a couple of empirical observations. Interesting to see another data point. I think some wives in difficult marriages grasp at homebuying (or having a baby) as a cementing factor. Looks like it usually fails (and if anything, contributes to accelerating the fracture). On the other hand, I have also observed some good marriages fall apart after buying an unaffordable home and the resulting financial distress from it.

I think the correlation between housing bubble and its impact on marriages would make a fine subject for a few Ph. Ds in Sociology!

[bsrsharma]

Couple #1 was having marriage problems and thought buying a home and living together would help.

I had this hunch based on a couple of empirical observations. Interesting to see another data point. I think some wives in difficult marriages grasp at homebuying (or having a baby) as a cementing factor. Looks like it usually fails (and if anything, contributes to accelerating the fracture). On the other hand, I have also observed some good marriages fall apart after buying an unaffordable home and the resulting financial distress from it.

I think the correlation between housing bubble and its impact on marriages would make a fine subject for a few Ph. Ds in Sociology!

[bsrsharma]

Couple #1 was having marriage problems and thought buying a home and living together would help.

I had this hunch based on a couple of empirical observations. Interesting to see another data point. I think some wives in difficult marriages grasp at homebuying (or having a baby) as a cementing factor. Looks like it usually fails (and if anything, contributes to accelerating the fracture). On the other hand, I have also observed some good marriages fall apart after buying an unaffordable home and the resulting financial distress from it.

I think the correlation between housing bubble and its impact on marriages would make a fine subject for a few Ph. Ds in Sociology!

[Author]

Posts