Remember the three for-sale signs in front of the 13-unit condo building at 1144 17th, just north of Wilshire, back on January 23rd (see PVC's comment then for more background on #14)?
They're still there, becoming landmarks (at least to Bagel Nosh diners)! Let's see what's happened to their prices in the intervening nearly three months:
#8 - 2 bed/1.75 bath, asking $632K, LD=1/10/08, now $598K
#12 - 2/2, asking $655,999, 9/28/07 (sold 3/14/07 for $633K), now $645,899
#14 (front unit) - 3/3, asking $899K, 1/14/08 (sold 3/30/07 for $855K), now $849K
Some reductions, but not enough.
Tuesday, April 8, 2008
17th Street condos update
Subscribe to:
Post Comments (Atom)
15 comments:
great post, thanks.
we should start blaming realtors and real estate agencies for taking listings where a seller is out of their mind. Its the realtor's job to help the client price their property and when they let them put crap like this on the market they should loose their license for misleading sellers. Just say "this is the price I'd be willing to represent the sale of your property on" i guess they just want anything to reverse prospect on. I wouldn't waste my time.
I think professional, established realtors DO pass on the delusional sellers. But the problem now is that there are so many realtors (bubble profession?) that there are many out there who've only worked the last 5 years that will take any listing for any ridiculous price.
"that there are many out there who've only worked the last 5 years that will take any listing for any ridiculous price."
You are correct here. Where I disagree with you, is that very experienced realtors are actually more guilty of that than new agents. I've noticed, all of big name realtors have listing expire left and right, which is an indicator they are delusional, lazy and hopeful.
How long do you think it takes a delusional seller to wake up to the fact that prices won't be heading back up for years, and only after they've gone down further from here?
I really just have no idea. Does anyone know of a good way to get demographic data on sellers? What percentage of sellers have to move? What percentage can no longer afford their mortgage payment? If not in either category, what would ever convince them to lower prices? I don't even have a good guess on this.
yeah, that unit 14 has been on the market forever. You'd think if they REALLY had to sell they would have cut the price, accepted a lowball offer or gone into foreclosure by now. So who knows what the situation is...maybe they just want to sell, but don't want to lose money, so they're leaving it on the market hoping that just maybe, if they wait long enough, some sucker will bite.
Look at the last purchase dates. Two of these are quite recent. I would wager they were purchased with option ARMs, and the owners are now upside down on their mortgages so including the selling commissions, they need to get more than they paid for the units. Problem is, they purchased at the very top of the market. So they have no choice but to sell at close to their purchase price (that way they will only lose the sales commission). Since they can't find anyone as dumb as they were to buy at that price, this is inevitably headed to one place: Foreclosure.
I keep saying it; we're nowhere near the bottom as long as we're in the denial and bargaining stages of grief. It's going to take another year or two for acceptance/capitulation to arrive and then a long stagnation plateau in prices. Best thing to do is to sit on the sidelines and make yourself comfortable for another year or two minimum. Let them go into foreclosure.
Arti
So sad that a lot of these posters....the whole point of this blog in fact, has to do with people waiting to pounce on sellers that have encountered tough times and now may have to sell at a loss.
Why should anyone want to capitalize on another persons misfortune? Why is it so great when someone/some family has to sell at a loss? Who wins here? The person who gets a deal? Sounds very cold and heartless. Bad karma all around....do you think you want people to wish you to fail when you purchase a home? Are you all such geniuses that you can time the market perfectly?
To the poster above: you seem confused, so let me answer your questions and let you know what is going on in the world.
"Why is it so great when someone/some family has to sell at a loss?"
What is great is that by selling at a loss, those who rushed to buy in the last three and four years, either out of greed or out of reckless disregard for the housing bubble, are now un-doing the harm they did. They did great harm to other home buyers who carefully saved their nickels and dimes and did their homework and figured out that if you make a measly $90k a year, you should not be buying a $700,000 condo just because the bank gave you an interest-only loan. I have credit cards that have just under $30,000 limits; it doesn't mean I should go out and use all of that, I pay my bills monthly in full.
These reckless buyers did great harm to those who should be able to afford as well as the economy in general, by bidding up all these homes and being part of the bubble. You can't shed tears for someone that buys with $0 down; that's not a purchase at all, that's deciding to gamble on prices going up, at the expense of the careful among us. Now the chickens are coming to roost.
And these greedies and reckless buyers are the nice ones. The worse ones are those who bought and then cash-out refinanced the second prices went up, so they can buy stuff. Again, they made their gamble, at the expense of others (including the banks, who nevertheless deserve no better).
"Who wins here?"
The economy in general, and buyers in particular, because the quicker these deadbeats are cleared out of these homes, the quicker homes are sold for less than the mortgage on it, the quicker home prices will go down. And the quicker home prices go down to where they should be (probably around 2002 levels where the metrics went haywire compared to rents and incomes per zip code), the quicker will there be buyers again, and the quicker will the economy as a whole recover.
Thank you for your questions.
Anon 5:38 PM: You are so bitter that you either bought during the peak of the bubble or at the very least were one of the "this is California, real estate only goes up" and "this is not a bubble" proclaimers of the last 3 years.
Since you only want to see things from your perspective, let me give you another one. This isn't about emotions, or bad karma, or whatever you want to call it - this is about economics. Welcome to reality. It is insulting TO US to say that people who were smart enough not to buy during the runup did so only to wait a few years so that they could later "capitalize on another's misfortune." On the contrary, we are looking to BUY at a FAIR price - nothing more or less. Your argument isn't so much an argument as it is sad and pathetic whining.
One of the reasons I love reading this great blog are the comments from all the frustrated wannabe owners who just . . . cant . . . wait for those doggone prices to come down so they, too, can own a piece of the SM/Brentwood/MB/you-name-it dream. I can almost see their glinty eyes and drooling mouths everytime they read a post about some poor guy's foreclosure. Wouldn't you just love to have one of these types as your neighbor? Of course, then, all they would talk about is keeping up their property values!
bobg44 would also like everyone to know that the recession we are in and it's rippling effects will have no bearing on anything or anyone. Carry on with your drooling.
To paraphrase bobg44, one of the reasons that makes hosting this blog meaningful is great commenters like Anon 4/8 11:13.
No, we're not seeking misfortune. But we recognize this misfortune was caused by those who created this bubble.
Not that SM prices will come down to Valley levels, but they did fall some 25% in the early 1990s from the last bubble.
"Not that SM prices will come down to Valley levels, but they did fall some 25% in the early 1990s from the last bubble."
Yet this bubble is far, far worse than the one from the 90s. I'd expect a 25% correction to be the best-case scenario for home prices, it can easily be worse. The great decline is only just beginning--as I keep saying, get comfortable where you are now cause it will take a while.
Arti
"And the quicker home prices go down to where they should be (probably around 2002 levels where the metrics went haywire compared to rents and incomes per zip code), the quicker will there be buyers again, and the quicker will the economy as a whole recover."
Where do you come up with 2002 as the point where prices went haywire wrt rents ?
I live in a house that might be worth 1.1 to 1.2 Mil in westwood. Rent is $4000 per month. Funny thing is ... when I run the numbers I find that my cost of renting would be approximately the same as if I bought this place for about $1 Mil with 20% down.
I'm starting to wonder whether there is really as much downside as people tend to think here.
Suppose I purchased at 1.1 Mil with 20% down at 7% 30-year fixed.
Monthly numbers:
Principal = 721
Interest = 5134
Prop Taxes = 1050
Insurance = 100
Total PITI = 7005
Sounds expensive, right ? I am saving 3000 per month, right ?
Well, here's the rub. I just did my taxes. I am in margin tax brackets of 31% federal and 9.3% state.
Suppose I bought and I account for 28% federal tax bracket (after the duduction brings my income down a bit) and 9.3% state.
I already itemize, due to state income taxes and charity donations, so my tax benefit from buying would be about 0.373*(Interst+PropTaxes) = 2290 per month.
SO, my after tax cost of buying would be something like 4716.
Since I would be paying down the loan principal about $721 per month, that would make my monthly nut for buying about $3995, versus my current rent of $4000.
I know that I would be losing the interest on my down payiment, but 200K making 3% interest is about $500 per month.
I have concluded that in my neighborhood the difference between buying and renting is less than the cost of my car payment.
And that is assuming interest rates at 7%.
I am getting frustrated and just can;t see how prices are going to come down more than 5 or 10% from current values over here, unless interest rates go up to 8% or something.
What am I missing ?
Post a Comment