South Park drama

[anon]

Long time lurker here. I had to post this and see what everyone here thinks.

1801 Friedrick Drive – 92104 is located slightly northeast of South Park/Golden Hill area (may still be considered South Park but I’m not too familiar with this area so I don’t know). Anyways, I know that an offer of $550K was recently submitted on this house which is listed at $600K. I figure the seller will definately take it but instead they are coming back and saying they want soemething like $570K!!! They bought for $380K several years ago and will be making a big profit but they are either too greedy or in denial to take $550K right now.

1801 Friedrick (house for sale): 3/1.5 (bed/bath) – 1,223 (interior ft2) – 6,000 (lot ft2)

Comps for the area are:

3450 Fir (sold 3/23/07 $560K) 3/1.5 – 1,223 -8,646
3440 Fir (sold 3/19/07 $540K) 3/1.5 – 1,242 – 7,731
1703 Petra (sold 1/29/07 $520K) 3/1.5 – 1,280 – 7,600

So I figure that since the comps all have much bigger lot sizes and equal or slightly greater interior square footages, 1801 Friedrick should be fairly valued in the very low 500s…and then accounting for the declining market, I would say it should be selling in the high 400s…what are these sellers thinking!

[sdappraiser]

Not happy with the counter offer they sent you?

[blahblahblah]

This will probably end up being recorded as a $595K sale. What won’t be shown in the county record is the $40K in buyer kickbacks/cash back that they’ll have to agree to to unload it. This will allow them to save face and tell their friends that they sold the home for $600K and are big real estate geniuses. They will then take their proceeds and leverage them into a $1M home somewhere. This thing is nowhere near unwinding yet, it’s gonna take time folks…

Also, by my reckoning that beauty is $450sf at $550K. Must be those great South Park schools…

[SD Realtor]

non they are thinking what alot of sellers are thinking.

All it takes is one buyer to come and buy it…Also have you checked to see if they pulled cash out of it or refinanced? They may have a larger debt load then you assume.

Politely tell them thanks but no thanks and then check in with them a few weeks later. Alternately have your realtor send the listing agent comps and ask them what justification they have to get such a premium. The market will dictate if they are being outlandish.

SD Realtor

[anon]

Thanks for the thoughts…no, I am not the potential buyer. I checked on their loans and they did $0 down in 2003 and then did a $25K cash-out refi a year later. No additional debt. They put in stainless steel appliances, granite countertops, and painted the interior. I have not seen the actual house but I am not giving these “improvements” much value because they are pretty nominal…still just a 3 bed/1.5 bath. The lot size is significantly smaller than the comps…I have tried to warn these people to walk if the seller is going to be ridiculous but it may not help…

[Bugs]

You’re going to get excited over a $25,000 difference in offers? You can easily make that up with concessions.

I would tell you if this was an outrageous price, but from looking at the sales in the area I can definitely see where the seller is coming from. The photos depict a very nice kitchen remodel and back yard improvements. Its true that there is a pretty big range of pricing in the area but the lower priced homes don’t appear to be as nice.

Did you check out the closed sale at 1811 Friedrick? Same side of the street and a similar sized house. Not quite as much curb appeal if the photos are an indication. Somewhat inferior kitchen. It just closed at $550k. It’s definitely a comp any appraiser would be looking at.

Counteroffers are made to be countered. If you’re serious about the house try going to $560k and see what happens.

[anon]

Point taken Bugs. I am getting my comps off of Zillow so I did not know about 1811…its right next door and has the same square footage…so yes, it is a good comp.

I just don’t see these prices as sustainable…especially in this area, and after looking at comps in mid/late 2006, it is clear that there is some pretty good negative momentum in this area (and all of SD). I imagine that these homes could easily be going for mid/high 400’s at this time next year. But Americans aren’t known for being patient…

[poorgradstudent]

Since no one else has mentioned it, I will:

Who the hell would pay $550K to live in South Park???

Sure, gentrification is creeping in that general direction, but it’s still a fairly rough neighborhood on a block-by-block basis. I guess it must be a couple of DINKs, possibly hipsters who want to live as close to downtown as they can afford?

I’m not saying South Park is unlivable, but I’d definitely prefer to rent there than buy, but maybe that’s just personal preference. My friends wouldn’t touch Mira Mesa with a 20 foot pole, but I find it inoffensive.

[El Jefe]

HA… I wouldn’t even touch Mira Mesa with YOUR 20 foot pole!

[Critter]

South Park is comin’ along. It has a cool business district on Juniper east of 30th. Lots of nice homes along the Burlingame fringe – well-maintained, built in the 30s and 40s. Big, beautiful homes are on Capitan and Laurel – several on the national list of historic places.

[an]

We all have areas we wouldn’t touch with any length pole. I don’t see the point in stating your personal preference in a way that would offend people who are living there or are looking to live there. It’s just distasteful and classless. Just my 2 cents.

[enriquecoronado]

In Nov 2005 we were in escrow on a house on Fir on the other side of Fern, 2865 Fir between Granada and 29th. We canceled 2 days in because of the airplane noise, and the fact that its a tiny house on a tiny lot (780sf/2600sf lot). All that area is under the flightpath, granted its less noise than further west in bankers hill. We’ve been renting elsewhere in North Park ever since, and its the best financial decision my wife and I ever made! The house sold a few months later to somebody for about 10K less than what we offered.

We are renting way more house in Burlingame (nicest part of South Park) for much less than what our monthly costs would have been for that dinky little house on Fir. South Park is definitely an up and coming neighborhood, but lets put this into context- home prices in San Diego are ridiculous everywhere, even in the cool, up and coming, fashionable places like South Park.

I’ve been keeping my eyes on this place which is 1 block over from where I live:

3151 Palm St, 92104 Sales Prices
10/03/2006: $755,000
08/24/2001: $441,000

These folks bought it in Oct, fixed it up a little, and tried to rent it for about 3 months, gave up and put it back on the market. I hear they were trying to rent it for $2600. Now they have it back on the market for $799-$889, the $799K being conveniently 6% above their purchase price so they can cover broker fees. MLS says its pending, but its been that way for over a month now, and I’ve seen no activity that somebody new is in there, and there is still the prudential realty sign out there without any indication of a sale (“In Escrow” etc…) A comparable house right behind this one on Olive st sold for 680K in June 06. Are these guys kidding???

[taz]

well said, asianautica…

as a long time lurker here, I appreciate the analysis but get tired of hearing people’s homes/neighborhoods referred to as, for example, a “POS.”

[temeculaguy]

While the points about not disrespecting someone’s community are valid, throwing up a post about a potential purchase deserve honesty. The flight path noise in the previous post is a prime example of something a buyer might not know. The comment about how the area is “block to block” is also helpful, maybe the buyer didn’t wander far or at night. It is also helpful to hear the opinions of others because opinion drives the market and negative opinions of certain areas will minimize possible buyers.

My .02 is that at the beginning of a downturn (right now), stay clear of the battlelines of redevelopment, that tide can turn and the frontline blocks fall first. At the beginning of the next upswing the fringe and even a few blocks beyond will become good investments again.

[an]

temeculaguy, I have no qualm with people stating the facts about certain area, like flight path, noise, gangs, violence etc. These are all great things to learn about an area you’re interested in buying because it’s much more real than what you can read in reports. However, I’m referring to baseless statements of “I wouldn’t touch

with a 10 foot pole” is tasteless to me and have no real value. If you say I don’t like so and so area because of this and that, hence, I would never consider living there. That’s perfectly fine with me. Something that would bother one person to a point where they would not consider living in such an area might not bother the next person.

[Author]

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