North park flips… relatistic prices?

[jpinpb]

In looking at other properties in 92104, I came across 3584 Felton.

This was sold Sep 09, 2009 for 265k. I thought a good price. Then there’s the flip attempt in November for 529k. I remember how I had to grab some tissue b/c I laugh so hard I was crying.

They’ve been putting it on and off the market since then. Now listed for 489k. Still over 200k more than they bought it.

Doesn’t look like they put much money into it.

[SD Realtor]

JP I have seen a number of flips that are starting to go sideways. That is, the flippers are gonna be lucky to take minimal losses. We had all pegged the home in PQ (northeast) that we talked about awhile ago and that was destined for a small loss at best. 92111 has several of them as well that are still pretty cushioned but have been sitting on the market for awhile and are starting to reduce pricing. Another issue is some flippers target properties in high FHA zones and they were not aware of the seasoning rules that changed back and forth recently so they are stuck with the home for a few months.

[SD Realtor]

JP I have seen a number of flips that are starting to go sideways. That is, the flippers are gonna be lucky to take minimal losses. We had all pegged the home in PQ (northeast) that we talked about awhile ago and that was destined for a small loss at best. 92111 has several of them as well that are still pretty cushioned but have been sitting on the market for awhile and are starting to reduce pricing. Another issue is some flippers target properties in high FHA zones and they were not aware of the seasoning rules that changed back and forth recently so they are stuck with the home for a few months.

[SD Realtor]

JP I have seen a number of flips that are starting to go sideways. That is, the flippers are gonna be lucky to take minimal losses. We had all pegged the home in PQ (northeast) that we talked about awhile ago and that was destined for a small loss at best. 92111 has several of them as well that are still pretty cushioned but have been sitting on the market for awhile and are starting to reduce pricing. Another issue is some flippers target properties in high FHA zones and they were not aware of the seasoning rules that changed back and forth recently so they are stuck with the home for a few months.

[SD Realtor]

JP I have seen a number of flips that are starting to go sideways. That is, the flippers are gonna be lucky to take minimal losses. We had all pegged the home in PQ (northeast) that we talked about awhile ago and that was destined for a small loss at best. 92111 has several of them as well that are still pretty cushioned but have been sitting on the market for awhile and are starting to reduce pricing. Another issue is some flippers target properties in high FHA zones and they were not aware of the seasoning rules that changed back and forth recently so they are stuck with the home for a few months.

[SD Realtor]

JP I have seen a number of flips that are starting to go sideways. That is, the flippers are gonna be lucky to take minimal losses. We had all pegged the home in PQ (northeast) that we talked about awhile ago and that was destined for a small loss at best. 92111 has several of them as well that are still pretty cushioned but have been sitting on the market for awhile and are starting to reduce pricing. Another issue is some flippers target properties in high FHA zones and they were not aware of the seasoning rules that changed back and forth recently so they are stuck with the home for a few months.

[CA renter]

[quote=pemeliza]”Sure. Off the top of my head, there was one on Babilonia that sold for ~$645K at auction. The flipper sold it with little or no improvements in the $900K-$1MM range.”

I may be mistaken but I think you are talking about the house on Bolero that sold for 910k. At 910k
the ppsf is $198 which sounds about like market value for something in that area with that kind of view (at least at the time it was purchased).

The REO at 2618 Obelisco place sold for 880k and was smaller and probably didn’t have quite as good a view. That house came on at 800k and got bid up to 880k. The demand was strong on that house because I bid 825k all cash and I did not get the house. I serious doubt the end buyer of Obelisco or Bolero was an FHA buyer with 3% down.

I would say the flipper bought the house on Bolero probably for a 1998-1999 nominal price. I believe this because I looked at and seriously considered buying a similar but smaller house in the area that sold for 700k in 2000.

I would say with some degree of confidence that the flippers have had no impact on the market values of houses in La Costa Estates.

BTW, the market is still screaming to the downside in that area as evidenced by the two 1M listings on Babilonia that are dueling it out. You may have lost the battle for Bolero, but you are clearly winning the war as your deflation thesis seems to be gaining traction.[/quote]

Yes, Bolero! 😉

Thanks for correcting me on that. It killed me to know what the flipper got that for. I would have bought it in a heartbeat for that price!

[CA renter]

[quote=pemeliza]”Sure. Off the top of my head, there was one on Babilonia that sold for ~$645K at auction. The flipper sold it with little or no improvements in the $900K-$1MM range.”

I may be mistaken but I think you are talking about the house on Bolero that sold for 910k. At 910k
the ppsf is $198 which sounds about like market value for something in that area with that kind of view (at least at the time it was purchased).

The REO at 2618 Obelisco place sold for 880k and was smaller and probably didn’t have quite as good a view. That house came on at 800k and got bid up to 880k. The demand was strong on that house because I bid 825k all cash and I did not get the house. I serious doubt the end buyer of Obelisco or Bolero was an FHA buyer with 3% down.

I would say the flipper bought the house on Bolero probably for a 1998-1999 nominal price. I believe this because I looked at and seriously considered buying a similar but smaller house in the area that sold for 700k in 2000.

I would say with some degree of confidence that the flippers have had no impact on the market values of houses in La Costa Estates.

BTW, the market is still screaming to the downside in that area as evidenced by the two 1M listings on Babilonia that are dueling it out. You may have lost the battle for Bolero, but you are clearly winning the war as your deflation thesis seems to be gaining traction.[/quote]

Yes, Bolero! 😉

Thanks for correcting me on that. It killed me to know what the flipper got that for. I would have bought it in a heartbeat for that price!

[CA renter]

[quote=pemeliza]”Sure. Off the top of my head, there was one on Babilonia that sold for ~$645K at auction. The flipper sold it with little or no improvements in the $900K-$1MM range.”

I may be mistaken but I think you are talking about the house on Bolero that sold for 910k. At 910k
the ppsf is $198 which sounds about like market value for something in that area with that kind of view (at least at the time it was purchased).

The REO at 2618 Obelisco place sold for 880k and was smaller and probably didn’t have quite as good a view. That house came on at 800k and got bid up to 880k. The demand was strong on that house because I bid 825k all cash and I did not get the house. I serious doubt the end buyer of Obelisco or Bolero was an FHA buyer with 3% down.

I would say the flipper bought the house on Bolero probably for a 1998-1999 nominal price. I believe this because I looked at and seriously considered buying a similar but smaller house in the area that sold for 700k in 2000.

I would say with some degree of confidence that the flippers have had no impact on the market values of houses in La Costa Estates.

BTW, the market is still screaming to the downside in that area as evidenced by the two 1M listings on Babilonia that are dueling it out. You may have lost the battle for Bolero, but you are clearly winning the war as your deflation thesis seems to be gaining traction.[/quote]

Yes, Bolero! 😉

Thanks for correcting me on that. It killed me to know what the flipper got that for. I would have bought it in a heartbeat for that price!

[CA renter]

[quote=pemeliza]”Sure. Off the top of my head, there was one on Babilonia that sold for ~$645K at auction. The flipper sold it with little or no improvements in the $900K-$1MM range.”

I may be mistaken but I think you are talking about the house on Bolero that sold for 910k. At 910k
the ppsf is $198 which sounds about like market value for something in that area with that kind of view (at least at the time it was purchased).

The REO at 2618 Obelisco place sold for 880k and was smaller and probably didn’t have quite as good a view. That house came on at 800k and got bid up to 880k. The demand was strong on that house because I bid 825k all cash and I did not get the house. I serious doubt the end buyer of Obelisco or Bolero was an FHA buyer with 3% down.

I would say the flipper bought the house on Bolero probably for a 1998-1999 nominal price. I believe this because I looked at and seriously considered buying a similar but smaller house in the area that sold for 700k in 2000.

I would say with some degree of confidence that the flippers have had no impact on the market values of houses in La Costa Estates.

BTW, the market is still screaming to the downside in that area as evidenced by the two 1M listings on Babilonia that are dueling it out. You may have lost the battle for Bolero, but you are clearly winning the war as your deflation thesis seems to be gaining traction.[/quote]

Yes, Bolero! 😉

Thanks for correcting me on that. It killed me to know what the flipper got that for. I would have bought it in a heartbeat for that price!

[CA renter]

[quote=pemeliza]”Sure. Off the top of my head, there was one on Babilonia that sold for ~$645K at auction. The flipper sold it with little or no improvements in the $900K-$1MM range.”

I may be mistaken but I think you are talking about the house on Bolero that sold for 910k. At 910k
the ppsf is $198 which sounds about like market value for something in that area with that kind of view (at least at the time it was purchased).

The REO at 2618 Obelisco place sold for 880k and was smaller and probably didn’t have quite as good a view. That house came on at 800k and got bid up to 880k. The demand was strong on that house because I bid 825k all cash and I did not get the house. I serious doubt the end buyer of Obelisco or Bolero was an FHA buyer with 3% down.

I would say the flipper bought the house on Bolero probably for a 1998-1999 nominal price. I believe this because I looked at and seriously considered buying a similar but smaller house in the area that sold for 700k in 2000.

I would say with some degree of confidence that the flippers have had no impact on the market values of houses in La Costa Estates.

BTW, the market is still screaming to the downside in that area as evidenced by the two 1M listings on Babilonia that are dueling it out. You may have lost the battle for Bolero, but you are clearly winning the war as your deflation thesis seems to be gaining traction.[/quote]

Yes, Bolero! 😉

Thanks for correcting me on that. It killed me to know what the flipper got that for. I would have bought it in a heartbeat for that price!

[CA renter]

[quote=sdrealtor]
Follow up questions for CAR. Did you go to the auction and get outbid on Babilonia? Assuming it went on the open market like you would have wanted it to with an online bidding system with complete transparency we know it would have sold for the $900 to $1m the flipper sold it for. Would you have paid that?

Did you bid on Park and lose it? It was on the market and you had a chance at it. At its lisitng price, I dont see it being flipped for a profit. What makes you think its a flipper?

I’m sorry but I’m just not seeing it yet.

BTW, flippers are willing to pay less than owner occupants not more because they need to make a return that an owner gets by living in the house. Its the shady deals being sold undermarket that are the problem not the flippers. If the shady deals were gone the properties would sell at retail, the flippers wouldnt have a profit margin and owner occupants would get a better shot at some of the houses they would like. You might get a house you want but you wouldnt be getting the great deal you want.[/quote]

No, I didn’t go to the auction because I had not been following the trustee sales closely. Again, the flippers are there en masse. What would TS prices look like if there were no flippers at the auctions?

What would prices look like if there were no flippers in the market sucking up inventory and sitting on it at very inflated prices?

See, there are smart buyers who don’t want to give flippers a profit, but there are enough foolish buyers in this supply-constrained market who will bid the asking price on a flipper’s property. So, while “the market” (buyers?) sets the price, it is the most foolish buyer who’s willing to take the greatest risks who sets the price in a supply-constrained market.

Yes, flippers absolutely affect prices because they remove supply at a certain price and add it back (slowly, if prices are not working in their favor) at a much higher price.

Flippers are willing to pay more than o/o buyers because they are gambling on the FHA buyers who are willing to overpay and who will likely be in foreclosure within the next five years. For the more conservative buyers like us who have good credit and a large downpayment to lose, we’re not banking on rising prices; we’re making allowances for wage cuts and extended periods of unemployment and pension cuts. It’s a very different mindset.

If we had a market where the only bidders were organic (owner-occupier) buyers with a minimum 20% down and 28% DTI ratios (which should be the max DTI ratio on *after tax* income — the original ratio was made for better times; we all need to be more realisic about deflationary trends and a very different job market going forward), I think prices would be much lower than they are today. Add to that the supply that is being held off the market by lenders and the govt, and prices would probably be 20-30% lower *even in the “sacred” NCC areas.* Imagine what prices would do if we also allowed interest rates to float freely and if the govt stayed out of the mortgage market! (I can dream, can’t I?) 😉

If we had done things my way, there never would have been a foreclosure “crisis.”

[CA renter]

[quote=sdrealtor]
Follow up questions for CAR. Did you go to the auction and get outbid on Babilonia? Assuming it went on the open market like you would have wanted it to with an online bidding system with complete transparency we know it would have sold for the $900 to $1m the flipper sold it for. Would you have paid that?

Did you bid on Park and lose it? It was on the market and you had a chance at it. At its lisitng price, I dont see it being flipped for a profit. What makes you think its a flipper?

I’m sorry but I’m just not seeing it yet.

BTW, flippers are willing to pay less than owner occupants not more because they need to make a return that an owner gets by living in the house. Its the shady deals being sold undermarket that are the problem not the flippers. If the shady deals were gone the properties would sell at retail, the flippers wouldnt have a profit margin and owner occupants would get a better shot at some of the houses they would like. You might get a house you want but you wouldnt be getting the great deal you want.[/quote]

No, I didn’t go to the auction because I had not been following the trustee sales closely. Again, the flippers are there en masse. What would TS prices look like if there were no flippers at the auctions?

What would prices look like if there were no flippers in the market sucking up inventory and sitting on it at very inflated prices?

See, there are smart buyers who don’t want to give flippers a profit, but there are enough foolish buyers in this supply-constrained market who will bid the asking price on a flipper’s property. So, while “the market” (buyers?) sets the price, it is the most foolish buyer who’s willing to take the greatest risks who sets the price in a supply-constrained market.

Yes, flippers absolutely affect prices because they remove supply at a certain price and add it back (slowly, if prices are not working in their favor) at a much higher price.

Flippers are willing to pay more than o/o buyers because they are gambling on the FHA buyers who are willing to overpay and who will likely be in foreclosure within the next five years. For the more conservative buyers like us who have good credit and a large downpayment to lose, we’re not banking on rising prices; we’re making allowances for wage cuts and extended periods of unemployment and pension cuts. It’s a very different mindset.

If we had a market where the only bidders were organic (owner-occupier) buyers with a minimum 20% down and 28% DTI ratios (which should be the max DTI ratio on *after tax* income — the original ratio was made for better times; we all need to be more realisic about deflationary trends and a very different job market going forward), I think prices would be much lower than they are today. Add to that the supply that is being held off the market by lenders and the govt, and prices would probably be 20-30% lower *even in the “sacred” NCC areas.* Imagine what prices would do if we also allowed interest rates to float freely and if the govt stayed out of the mortgage market! (I can dream, can’t I?) 😉

If we had done things my way, there never would have been a foreclosure “crisis.”

[CA renter]

[quote=sdrealtor]
Follow up questions for CAR. Did you go to the auction and get outbid on Babilonia? Assuming it went on the open market like you would have wanted it to with an online bidding system with complete transparency we know it would have sold for the $900 to $1m the flipper sold it for. Would you have paid that?

Did you bid on Park and lose it? It was on the market and you had a chance at it. At its lisitng price, I dont see it being flipped for a profit. What makes you think its a flipper?

I’m sorry but I’m just not seeing it yet.

BTW, flippers are willing to pay less than owner occupants not more because they need to make a return that an owner gets by living in the house. Its the shady deals being sold undermarket that are the problem not the flippers. If the shady deals were gone the properties would sell at retail, the flippers wouldnt have a profit margin and owner occupants would get a better shot at some of the houses they would like. You might get a house you want but you wouldnt be getting the great deal you want.[/quote]

No, I didn’t go to the auction because I had not been following the trustee sales closely. Again, the flippers are there en masse. What would TS prices look like if there were no flippers at the auctions?

What would prices look like if there were no flippers in the market sucking up inventory and sitting on it at very inflated prices?

See, there are smart buyers who don’t want to give flippers a profit, but there are enough foolish buyers in this supply-constrained market who will bid the asking price on a flipper’s property. So, while “the market” (buyers?) sets the price, it is the most foolish buyer who’s willing to take the greatest risks who sets the price in a supply-constrained market.

Yes, flippers absolutely affect prices because they remove supply at a certain price and add it back (slowly, if prices are not working in their favor) at a much higher price.

Flippers are willing to pay more than o/o buyers because they are gambling on the FHA buyers who are willing to overpay and who will likely be in foreclosure within the next five years. For the more conservative buyers like us who have good credit and a large downpayment to lose, we’re not banking on rising prices; we’re making allowances for wage cuts and extended periods of unemployment and pension cuts. It’s a very different mindset.

If we had a market where the only bidders were organic (owner-occupier) buyers with a minimum 20% down and 28% DTI ratios (which should be the max DTI ratio on *after tax* income — the original ratio was made for better times; we all need to be more realisic about deflationary trends and a very different job market going forward), I think prices would be much lower than they are today. Add to that the supply that is being held off the market by lenders and the govt, and prices would probably be 20-30% lower *even in the “sacred” NCC areas.* Imagine what prices would do if we also allowed interest rates to float freely and if the govt stayed out of the mortgage market! (I can dream, can’t I?) 😉

If we had done things my way, there never would have been a foreclosure “crisis.”

[CA renter]

[quote=sdrealtor]
Follow up questions for CAR. Did you go to the auction and get outbid on Babilonia? Assuming it went on the open market like you would have wanted it to with an online bidding system with complete transparency we know it would have sold for the $900 to $1m the flipper sold it for. Would you have paid that?

Did you bid on Park and lose it? It was on the market and you had a chance at it. At its lisitng price, I dont see it being flipped for a profit. What makes you think its a flipper?

I’m sorry but I’m just not seeing it yet.

BTW, flippers are willing to pay less than owner occupants not more because they need to make a return that an owner gets by living in the house. Its the shady deals being sold undermarket that are the problem not the flippers. If the shady deals were gone the properties would sell at retail, the flippers wouldnt have a profit margin and owner occupants would get a better shot at some of the houses they would like. You might get a house you want but you wouldnt be getting the great deal you want.[/quote]

No, I didn’t go to the auction because I had not been following the trustee sales closely. Again, the flippers are there en masse. What would TS prices look like if there were no flippers at the auctions?

What would prices look like if there were no flippers in the market sucking up inventory and sitting on it at very inflated prices?

See, there are smart buyers who don’t want to give flippers a profit, but there are enough foolish buyers in this supply-constrained market who will bid the asking price on a flipper’s property. So, while “the market” (buyers?) sets the price, it is the most foolish buyer who’s willing to take the greatest risks who sets the price in a supply-constrained market.

Yes, flippers absolutely affect prices because they remove supply at a certain price and add it back (slowly, if prices are not working in their favor) at a much higher price.

Flippers are willing to pay more than o/o buyers because they are gambling on the FHA buyers who are willing to overpay and who will likely be in foreclosure within the next five years. For the more conservative buyers like us who have good credit and a large downpayment to lose, we’re not banking on rising prices; we’re making allowances for wage cuts and extended periods of unemployment and pension cuts. It’s a very different mindset.

If we had a market where the only bidders were organic (owner-occupier) buyers with a minimum 20% down and 28% DTI ratios (which should be the max DTI ratio on *after tax* income — the original ratio was made for better times; we all need to be more realisic about deflationary trends and a very different job market going forward), I think prices would be much lower than they are today. Add to that the supply that is being held off the market by lenders and the govt, and prices would probably be 20-30% lower *even in the “sacred” NCC areas.* Imagine what prices would do if we also allowed interest rates to float freely and if the govt stayed out of the mortgage market! (I can dream, can’t I?) 😉

If we had done things my way, there never would have been a foreclosure “crisis.”

[Author]

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