NY Times..”A Word of Advice During a Housing Slump: Rent “

[ibjames]

Profit is profit in my books, I would treat it like my stocks, when I take my profit and leave I don’t look back and say “coulda should woulda” if I made my green I made the right decision, so did you

[Bugs]

Cashman,

I looked up some data for that area, and based on what I’m seeing I wouldn’t trust the Zillow estimate to be that accurate. A lot of homes in that size range have much larger sites than you have and are sited along that ridgeline to offer some views.

Zillow will work better for homes that are part of of large subdivisions that are built by the same developer. Tract homes. The less homogenous a neighborhood is the less accurate an automated valuation model like Zillow can be. Zillow basically can’t account for site attributes (including noise, view, topography, etc), nor can it account for additional improvements to the site or the home. For instance, a home might have originally been built in 1980, but if it was completely remodeled and updated to resemble a 1990s home those would usually be the more appropriate comparables.

From what I’m seeing you may have sold a year early but I wouldn’t assume the $600,000 figure is anywhere near accurate. The real number could be less than half that.

The other thing that everyone should remember is that Piggington’s is San Diego-centric. San Diego’s dynamic runs on a different clock than the L.A and O.C. markets. Those areas have only recently joined in with our trend.

[Critter]

Cashman –

What it’s worth and what it will sell for are usually two wildly divergent figures. In today’s market, people will pay less than the “valued” price because they anticipate the property losing value in the future. A couple of years ago, the situation was reversed, and people would overbid, confident that the prices would rise to meet what they paid and then some.

In 5 – 10 years, you will see selling a year early, a year late, or right at the peak of the market are all in the “sweet spot.” It is too early now to kick yourself, my friend! There are a lot of people who are envious that you were able to sell at all – and on the high side, at that!

The $600K is indeed a phantom figure – like Marley’s ghost, just an apparition to piss you off.

[gn]

Cashman bought that house in 1994 (near the bottom of the last cycle). And in 2005 (near the top of the current cycle), it only appreciated 42% ?

Perhaps he sold it for less than the market price in 2005 ?
Or, he paid too much for in in 1994 ?
Or, perhaps b/c it is in the most expensive neighborhood of a “not-so-expensive” city (Diamond Bar) ?

Bugs, does this seem strange to you ?

[sdrealtor]

gn,
This goes back to post I made a few months back. Homes do not appreciate in%’s the appreciate in $’s. Forexample, in my area everything went up about $100,000 in one 3 month period (Dec 2003 to Feb 2004). Lower priced homes had a higher appreciate rate but everyone pretty much got the same amount of appreciation dollars. Likewise, on an individaul basis I believe it is ridiculous for a potenital homebuyer to try and predict what percentage the market will go down. You are better served by determining what you want and trying to figure out what the nominal price will be. Admittedly this is not easy but worth the effort. Overall market decline figures are for economists not homebuyers and the only price that really matters is of the home you actually buy unless you are buying as a speculator/investor.

[cashman]

Gn, that’s my point. I think I did sell too cheaply. I was timing the general market, where it probably peaked somewhere late in 2005. Where I made my mistake was not allowing for the specific conditions in my neighborhood, which lagged behind the general market, and we can now see peaked in early 2007. I find the Zillow price history graph classic in the sense that the sharpest rate of appreciation was just after I sold it. Of course! 2006 was a banner year. And to answer your question whether I paid too much for it in 1994, I don’t think so. The builder had sold two other homes on that street in 1991 for $2.0 M and $1.8M. He was asking $1.8M for my house, but dropped it to $1.4M for a quick sale. True, I didn’t buy it at the absolute bottom, as he sold another one in 1995 for $1.1M across the street from me, about the same size with an indoor pool. That was a bargain! But I feel I got a fair price at the time. But getting back on topic with this thread, I think I sold a year too soon, and dished out $50K in rent on top of it. The Zillow numbers are accurate, because other homes in the area have all increased in 2006. For what I sold my home for, you get 2000 square feet less now. I am very tuned into this market because I’ve been renting for a year and half now and was hoping to see lower prices by now so I could buy back in. Looks like I’m gong to have to wait much, much longer.

[gn]

Cashman,

You paid $1.4M for your house in 1994. Someone else paid $1.1M for a comparable house in 1995. That’s a 21% reduction in 1 year.

In a correction, price reduction decelerates near the “bottom”. 1994 is near the “bottom” of the last correction. I don’t think prices (in the LA area) went down 21% in 1 year during that time. I think you paid too much for that house in 1994.

Bear one thing in mind. The median price in southern CA bottomed out in 1996. But the “real bottom” was in 94/95. Here’s why:

At the “bottom”, prices were so low that one can buy a home as an investment (i.e. to rent) and have “possitive cash flow”. As a result many “cash flow investors” jumped in the market and they bought entry level homes (b/c these homes are easier to rent).

Since the median price is the mid-point of the real estate transactions, the activities of the “cash flow investors” dragged the median price down. Even though, in 1996, demand for entry level homes was already up, sowing the seeds for appreciation in the move-up market (mid-range & luxury homes).

I remember this because, in 1996, I lived in SoCal. At that time, I was saving for a down payment. In 1996, I read in the newspapers that the job market was picking up & the number of RE transactions was going up. At that time, I didn’t have enough money for a down payment, I remembered thinking to myself: “If prices pick up soon, I may miss this train …”

[avidsaver]

Cashman,
I’d be skeptical about the zillow values too. Look at the comps. With the exception of one, the others are lower than your selling price. You would know better than we would about how comparable these other homes actually are. Without your former home actually selling, you don’t know what the true value is. Also, what about all of the extra monthly cash flow you have? How have you been investing that? When the time comes, you will have a nice nest egg to put down on the next property at a much lower price.

I’m with ibjames; take your profit, and don’t look back.

[bob007]

you made 400k in profit – not a bad sum
what are you complaining about ?

[Anonymous]

I agree that they have lost lot of money and need to avoid foreclosure.

http://www.thebesthomeoffer.com/

[Anonymous]

I agree that they have lost lot of money and need to avoid foreclosure.

http://www.thebesthomeoffer.com/

[Anonymous]

I agree that they have lost lot of money and need to avoid foreclosure.

http://www.thebesthomeoffer.com/

[Anonymous]

I agree that they have lost lot of money and need to avoid foreclosure.

http://www.thebesthomeoffer.com/

[Anonymous]

I agree that they have lost lot of money and need to avoid foreclosure.

http://www.thebesthomeoffer.com/

[ezpass]

cashman, another thing if you sold for 2 mil, and had your money in a CD or a simple high interest bank account or money market, your interest paid for your rent. Around 5% on 2 mil is 100K in interest, even after taxes that would pay for your rent.

[Author]

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