San Marcos Price Reduction

[ocrenter]

did you guys see how the picture of the lawn is paintbrushed brown by the selling agent?

so do we know how they got the “selling price” of $640,000 when it foreclosed in Feb 2006?

[sdrealtor]

A little more semantics but all the NOD’s were likely filed against the same property. I checked the tax records and as far as I can tell it is the only property he has ever owned in SD.

[sdrealtor]

It’s in the tax records. That is what teh lender accepted for the note and all unpaid liens in arrears.

[North County Jim]

You may want to check the recorded documents index. I’m guessing – only guessing – that this was not his only default.

[sdrealtor]

no time..no one by his last name has ever owned any other property per the online tax records I have quick access to.

[North County Jim]

I’d rather not post a link to the index of his recorded documents. Trust me, he is the grantee on five separate deeds over a four month period in 2004. In each and every deed transfer, he is the grantor on two trust deeds. I’ll go ahead and conclude 80/20’s all around.

I’ll defer to your knowledge on the foreclosure process but I think it’s a stretch to think that this is his only default.

[jabrwoki]

Any ideas what’s with the unfinished deck for a property owned for more than a year ? What a train wreck !

[powayseller]

RealtyTrac shows 4 NTS on the same property, all filed on 12/8/05. Three are for a house on lot 85, 2128 sq ft. and the last is for a house on lot 83, 2099 sq ft.

[ocrenter]

I would imagine the owner ran out of money! afterall, that lawn is in such a bad shape the agent paint brushed the lawn brown and wrote in the caption “ready for a new lawn.”

[ocrenter]

Well, we now have price reduction to $515,000-$554,876 on this 2,358 sqft home. The listing states: “Urgent urgent sale. Seller must sell now. Vastly reduced”

Bugs and sdrealtor, if they find a buyer at $515,000, what will it do to the comps of that tract? what about the entire zipcode 92078?

[Bugs]

No one sale should make or break a neighborhood. If the average exposure time necessary to get a sale at a reasonable price is 4 or 5 months, that 4 or 5 months starts when the listing price is set at a reasonable level. Being compelled to sell faster changes the conditions of sale from being a market sale (willing seller under no undue pressure to sell) to being a quick sale or liquidation sale. In other words, such a sale is no longer a market sale, per se.

When it starts to get tricky is when a bunch of sellers are compelled to sell. Once it becomes common it is no longer a case of “undue pressure”. Such sales can and do set the market values for everything else because they represent the readily available substitution for the sales that are not discounted.

Saying that a seller is compelled to sell now in a listing is like begging for a further 5% or 10% reduction on every offer that comes in. I wouldn’t read too much into what happens on this sale unless you start seeing several of them.

[Bugs]

Okay, here’s another one to chew on. The best way to track price trends on the neighborhood level is to use sales of the same property that occurred during the time frames in question. These paired sales don’t come up that often so when they do it’s interesting to take a look. As always, one example is just one example. It doesn’t get beyond interesting until we can accrue a bunch of them.

This one is also located in San Marcos near the Carlsbad border; up on the hill overlooking Palomar Airport Road/Rancho Santa Fe Road.

For those who have access to the data, this home is located in the Rancho Dorado subdivision (1128/A-3). It’s a 2001 home of 2680 SqFt with a view amenity, on a 17,000 SqFt lot. It originally sold in 06/2001 for $371,000, which was higher than average for that model at that time and is indicative of above average upgrades and possibly a site premium.

This property has 2 recent sales. It sold in 06/2005 for $767,000 after 7 days marketing time, and was subsequently relisted in 10/2005 for $774,900. It was reduced to a range of $735k – $760k before going into escrow in 03/2006 after 149 days marketing time. It closed in 04/2006 at $740,000.

Now anyone with access to the data can figure out which property this is and verify the facts for themselves. I try to avoid listing addresses on the internet because of privacy concerns, but if someone already has access to the data then my discussion of it is not divulging anything that isn’t already available to them.

Both sales resulted from fairly typical marketing times. There is no indication that the 06/2005 sale was high. In fact, a similar model directly across the street with no view sold 2 months later in 08/2005 for $776,000; and its original sale price in 06/2001 was lower than our subject ($359k vs. $371k). If anything, it indicates our subject’s prior sale in 06/2005 was low, not high.

So, a solid $27,000 reduction in price demonstrated by 2 well exposed sales occurring 10 months apart. The loss itself is less than 4%, but if annualized it would be over 4%. This is by no means a radical loss and it doesn’t necessarily jibe with a blanket assumption (for those who are so inclined) that the market has already receded by 10%. We would have to assume the 06/2005 sale price actually was low to come up with a higher percentage of loss. Obviously, assumptions aren’t what we should be looking for in something like this. It does demonstrate the wisdom in Rich’s motto – “In God we trust – everyone else bring data”.

If this were a cash flow investment it would be a rather painful way to lose the cost of sale ($25,000+), the property taxes ($8,600 or so) and the mortgage payments of at least $25,000. It wouldn’t be quite so bad if this were the primary residence and the interest could be written off and the mortgage payments stacked against the rent. Still, you add it all up and the cash this investment lost in principal loss, carrying costs and costs of sale is nothing to sneeze at if you’re a wage earner here in San Diego County.

I’m headed out of town for a week, so I won’t be following up on this topic any time soon. But if you guys can rustle up some more paired sales we can look at them when I get back.

[ocrenter]

“No one sale should make or break a neighborhood.”

I do agree with that. But I don’t think this will be limited to just one. The foreclosure property found a buyer when the price went down to $515,000. Are there any more?

Answer is yes.

xx7 CAMINO HERMOSO, San Marcos, CA 92078
same sqft, same model. Not in foreclosure. But obvsiously wants to get out before it is too late. Priced at $549,900 – $579,900

So we now have 2 homes both at 2,358 sqft, one sold at $515,000 and let’s assume the second one find a buyer for $550,000. Can the comp for the rest of 2,358 sqft homes still be in the $600,000’s?

[sdrealtor]

Same community
5XX Via De Caballo
4BR/2.5BA, 2172 sq ft, pictures show zero upgrades
closed on 4/26 for 585K with a 15K credit to buyer for closing costs.
Thats a net sale of 570K

They are all different and every situation sill be unique

[ocrenter]

Fools are unique in their stupidity. Why buy the Camary for thousands more when you can buy an Avalon for less?

There are 5 homes with 2172 sqft selling in that community. 4 are priced between $550,000 to $560,000. One is priced at $599,000. It will take a very unique individual to pass up on the 4 to purchase the one for $599,000.

5xx closed late April, meaning it went pending late March. The distress sale at $515,000 and the new listing at $549,000 (both of which 200 sqft larger) came in late April and early May. Do you really think the proud new owners of 5xx are saying to themselves, “these homes are all different and every situation is unique.” More like, “I’ve just caught a falling knife and it hurts like hell!”

[Author]

Posts