Thursday, July 19th, 2007 at 1:00 PM
Coffee Update – Summer
My cup-of-coffee bet with Robert was looking pretty good. All I needed was to have sales in Davidson’s La Costa Oaks tract stay in the $1,100,000 to $1,200,000 range until September, and I’d win.
A low sale for $1.05 million was resold for $1.2 million recently, so I dodged a bullet there.
A Plan One came on the market at 7546 Circulo Sequoia listed for $1.2 million, and went pending May 2nd after 12 days on the market, so I’m feeling pretty good.
But then in April the seller of this Plan Three who had it rented and had done no landscaping got bailed out at $1,024,000. The lowest resale price for a Plan Three yet, but it needed work, right? Can I dodge another bullet?
The house right next door to that one, a Plan Two, just went pending that was listed on the range $1.26 to $1.325, so they probably got $1.2-something, so the comeback is alive! A Plan One and a Plan Two both pending around $1.2 million.
The next sale will be critical though, to maintain some momentum. We know that the house right across the street from these last two sales was foreclosed by HSBC in April – when will they list it, and for how much? It’s a Plan One, so you could easily make a case for $1.1 million, and save my bet if it sells for that.
It listed yesterday for $989,000. Ouch. The pictures won’t help much either, but at this price will a waiting buyer jump on it?
Posted on Thursday, July 19th, 2007 at 1:00 PM in Uncategorized | 8 Comments » | 
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Jim I hate to go against you but I hope Robert wins this bet. Personally I think we have not yet seen the real impact from the events in February related to the sub prime blow up. Just in the last week do we hear that many lenders are no longer offering the 2/28, 3/27 types of loans so personally I think the rest of the year will be the period in which the true impact of the sub prime and what looks to be Alt A implosion will be felt.
People are too used to immediate reactions to events and they forget that credit markets and their impact on RE can take 6 to 12 months to work through the system.
So my bet is with Robert. I think loans from here on out are going to be much more difficult than in the first half and when you look at the % of loans in the form of IO and negative Am for purchases in the first half (something around 40% to 50% for key areas) you have to wonder if the changes simply in the last week with teaser rate products could mean 40% to 50% of the buyers are now effectively out of the market — even if they want to buy.
Keep us informed and let us know who buys the coffee. I hear starbucks is offering buy two or more latte’s now with no payments until 08!
Bob | July 19th, 2007 at 5:30 pmWe’re going to put it to a vote on the blog here in September as to who won. Stay tuned!
Another point to consider is the workload of the listing agents on these REOs. This one probably did his BPO after the $1.024 across the street – think he updated it? He has 56 active listings and 20 pendings currently – he’s buried. He sure didn’t put much effort into those pics, he just threw the listing in the MLS and got on with the next one.
If the lenders don’t care who they list with, then the market will worsen quicker.
Of course, the lenders have to want to get ‘em closed too. A reader spoke with the listing agent who said HBSC is taking TWO WEEKS to agree to an offer, and 45-60 days to close, even though it’s vacant!
Jim the Realtor | July 19th, 2007 at 8:26 pmDid you notice the comments on7567 Circulo Sequoia."as is" This will give you an idea.Wells Fargo owns it now according to their web site.
barnett bulkowski | July 20th, 2007 at 4:14 amThe house needs another 100K to bring it up to snuff.Needs new Air units(not put in by Davidson).The Ac units look after market. No landscaping whatsoever. The previous Agent/Owner/Flipper had it on the market for over a year. It went for for 820K.Auction Bid was 834K.
I was at the courthouse in ElCajon on 04/09/2007.The pix do not lie. Top price 875K.
I believe that there will be significant drops in this neigbourhood. . Buy the cofee
I’m running out of time but it is still going to be a long hot dry summer. For the record the bet was structure to be an even bet, no odds, no shaving points. It is still close and Jim has recent prices on his side but I have an acellerating momentum or I should say decellerating sales pace. My only fear is that there will be 20 houses for sale that if they sold would clich my bet but the 2 that do sell will be in Jim’s favor.
Robert Coté | July 20th, 2007 at 3:10 pmCase in point, another Plan One closed this week for $1,175,000. Do I have to mention that it included a 50" Pioneer Elite Plasma TV?
Only four for sale in Davidson currently, but 25 total in area. Can everyone hold out?
Jim the Realtor | July 20th, 2007 at 5:23 pmJim–How did you manage to leave out the one at 7535 Circulo Sequoia that closed on June 19 for $1.050–down from the $1.350 original asking price. Nicely upgraded–the seller was the former CFO of Davidson Communities. Buy that cup of Coffee NOW!!! OUCH!!!!
Local Boy | July 31st, 2007 at 11:42 pmWell;, um,uh
I hoping the more recent sale of a Plan 2 will close higher?
Jim the Realtor | August 1st, 2007 at 1:35 amWe’ll wait to see–By the way–I am rooting for you!!! And I love your site. I think you’re "active to pending" ratio is an excellent approach to watching the market!
Local Boy | August 1st, 2007 at 2:21 am