Pacific Beach Housing Bubble Blog

Wednesday, April 18, 2007

Another property drops below 2003 price

Something to keep in mind is that if prices drop below 2001 levels, we've basically evaporated the entire housing boom that we had. This is something the mainstream press should be advising possible real estate buyers in today's market. Basically, if you look for it, you can get a place for 2002-2003 prices quite easily. It would be like telling everyone going to a car dealership that they can bargain the price down 30% or so.

1801 Diamond St #113 (Don't have a picture, but it's in the plaza)
San Diego, Ca. 92109
2 bdrm, 2 bath, 1032 sqft condo
Year Built: 1975
HOA: N/A (probably ~$325)
Purchase Price (12/03): $367,000
Sale Price (03/07): $363,000


Purchase Price $367,000.00
Sale Price $363,000.00
Association Dues $325.00
Holding Period(mo) 40
Mortgage Paid $79,516.67 (6.5% interest only)
Closing Costs $4,000.00
Property Tax $15,291.67
Estimated Monthly Rent $1,500.00
Estimated Monthly Loss $638.59 (if rented)
Estimated Monthly Tax Savings $556.62 (using 28% tax rate)
Sales Commission $21,780.00



Total Loss $55,323.67


Some links from the mystery reader:
US Homebuilder bankruptcy risk in '08
Article on the Bubble People on Counterpunch
California foreclosure rates nearing all-time record levels (yikes)
From Foreclosure Forum, chart of NOD rates
David Lereah's condo investment is going down (righteous!)
Housing Boom tied to sham mortgages (washington post)


annnnd, details coming up, but I'm looking for some people who have been doing a lot of research on... well these kind of topics to start a weekly podcast with me. I've mentioned it before, and some of the local bloggers showed interest, but I never followed through. I think it might be a better medium to discuss what is going on then through a blog in the near term.

posted by Sven at 12:44 PM

13 Comments:

  • Wow, that sham buyers story explains a lot!

    http://www.washingtonpost.com/wp-dyn/content/article/2007/04/09/AR2007040901463_pf.html

    By Anonymous Anonymous, at 8:35 AM  

  • great blog. I wanted to point the home on 1500 block loring. It is now preforeclosure. Its out of most people price range but points out that foreclosure issues are not isolated to lower priced units

    By Anonymous Anonymous, at 9:50 AM  

  • I think you are jumping the gun on this. A friend of mine paid $300,000 for the same model a couple doors down in 2003. Still a looooonnnngggg way down to get to 2002

    By Anonymous Anonymous, at 5:47 PM  

  • Thanks guys for the feedback.

    Anon 5:47, I figure that prices aren't a well defined value like a stock, and some people will just get better deals than others at specific times. I actually have a few examples of people who bought properties for 2002 prices listed in this blog. Your friend just got a better deal than the person featured here.

    anon 9:50, I agree. I always laugh at people who think their "sector" of any economy is exempt from something happening to everyone else. It's like when the stock market was going down and people were saying "just find the stocks that dont' go down". Well yeah, some stocks did go up, but you were better off just putting your money into a completely different investment vehicle. The same applies for real estate. Values are going down, but there will be some properties in this country that either don't change or actually appreciate during all this. I don't think those properties are likely to be in San Diego, but there could be a few that just win out for some special reason. For those that say that the rich will somehow be exempt from the real estate crunch are delusional. The 8 million dollar houses of today were the 2 million dollar houses of 7 years ago. There's no way that should make sense.

    anon 8:35, Thanks for the link, I'll check it out. I do agree that the mortgage industry is mostly to blame for this housing bubble, but they were just reacting to all the investors dumping money into mortgage backed securities.

    By Blogger Sven, at 11:33 PM  

  • anon 547 here,
    I think you are wrong sven. The doors of these units are a couple feet away from each other and there is no way a better deal was had by one than the otherof this magnitude. The difference was a few months with the $300,000 price occuring close to the beginning of 2003. By the price on the current unit, prices are still more than 20% higher than there than in 2002.

    By Anonymous Anonymous, at 11:46 PM  

  • Hey I got a tip for you in OB.

    4965 Cape May Ave. MLS 076031484

    Single family 2 bedroom cottage, 2.5 blocks from beach. good part of town.

    Sold for 500K even in 2005

    listed for 385-435!

    Jesus H Christ! Single families are supposed to hold up better than condos, but here is one down more than 20%!

    If this sold it would be the second cheapest single family house near the beach in recent memory. The record was a run down 1-bedroom 380SF shack that was infested with termites and rats, for $375 mid last year.

    By Anonymous Anonymous, at 12:00 AM  

  • Another OB loss, asking price 3% below June 2004 price.

    http://www.sdlookup.com/Property-0FC02D82-2251_Caminito_Pescado_56_San_Diego_CA_92107

    By Anonymous Anonymous, at 4:00 PM  

  • Yet another OB loss, a sale this April for $97,692 below the 2006 price.

    1828 Cable St, San Diego, CA 92107

    Sale History
    04/05/2007: $572,308
    06/23/2006: $670,000

    By Anonymous Anonymous, at 5:21 PM  

  • Sven,

    Here is and interesting comaprison. The PB McMansion on Missouri. MLS ID#: 076025598 Decent looking place, nice street.

    The price has been dropped to $488K and still no takers. I rode by it today. Bank repo, so the sign says. The interesting thing is that just next door is a double of the same 4plex unit. One of those 4 is for rent. They look like they were built by the same builder. Same roof, same windows etc.

    Since they are exactly the same, it would make for an interesting comparison of rent vs. own.

    The one for sale must be $3,000/mo + including property tax and HOA dues.

    3 bed rental, no garage is going for @ $1,800 - $2,300 in PB. But there is so much stock for rent in the area it could probably be had for the lower end. 'for rent' signs are everywhere.

    Even as the lowest priced 3 bed attached in PB by $100K or more (according to the MLS)....still no takers and still cheaper to rent.

    Wow!! What a crap market to sell. What are the other 30 3bdrm listings on the MLS thinking ??

    What on earth are people buying if not this unit ?

    Ferris

    By Anonymous Anonymous, at 5:43 PM  

  • To think 2007 is only THE BEGINNING, man 2008 is going to be much worse:

    http://tinyurl.com/yogwpa

    By Anonymous Anonymous, at 7:56 PM  

  • Hey, this owner is the couple who bought my home at Carmel Moutain Ranch, which is closed on 4/13/2007. I know they sold their condo somewhere, but didn't know they were at loss. But they moved up to a 581k house which doubles their original size

    By Anonymous Anonymous, at 10:46 PM  

  • The bubble is huge, yes. But keep in mind that these bubbles are regional. Look at how well places like Austin, Texas, are doing. We have never had a national housing collapse except during the Great Depression. Regions like San Diego that have been hit and will fall further will be much higher in the next 10-15 years. A bubble yes, but opportunity awaits.

    By Anonymous Ames Tiedeman, at 8:07 PM  

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