It was September, 2006 that the famous coffee bet took place.
I had put forth my hypothesis on how the downturn would end up, adding that with my prediction and about $4 you could get a cup of coffee.
Here’s a link for those who’d like to review the hypothesis:
I said that ‘superior homes’ might only lose 5-10% of their value, but inferior homes were likely to get clobbered, losing 40% to 50%, resulting in a combined blended loss of 33% in median home price.
Here was the justification:
Three general reasons the high-quality properties will do better:
1. They’re older houses, owned by older people, with less debt.
2. They have it so good, there’s no better place to go.
3. Buyers are holding out for the good stuff.
Because of these three reasons, the supply-and-demand curve is much more healthy in the high-quality-home market.
I was vilified by most of the commenters, one in particular, the infamous powayseller. It might have been the impetus for her to finally start her own blog?
Rob Dawg calmly offered, “I’ll buy you that $4 cup of coffee if you can find anything that isn’t off at least 10% from the peak this time next year.”
So I took the challenge, and mentioned three neighborhoods (Terramar, Olde Carlsbad, and La Costa Oaks - Davidson tract) that I thought could beat the odds. When we reviewed them a year later and put it to a vote, I came out slightly ahead.
Where do we stand now?
Let’s start in Olde Carlsbad – 92008
For those who know Olde Carlsbad, I think you’ll agree that it’s a mixed bag – many older, smaller SFRs interspersed with new or remodeled houses and estates, many with ocean views. Determining values is always a challenge around 92008, but you decide.
Here are the same-house sales that have closed in 92008 since June, 2008:
1295 Cynthia 3 br/2 ba, 1,400sf YB:1960 short sale
$615,000 10/05 $411,000 9/08 Difference = -33%
2728 Forest Park 4 br/3 ba, 2,248sf YB:1985 REO
$647,000 6/04 $435,000 8/08 Difference = -33%
1726 Forest Ave 3 br/2 ba, 1,900sf YB:1962 REO
$545,000 8/04 $535,000 7/08 Difference = -2%
(former owner pulled a $720K loan and did full remodel, then had medical prob)
3255 Monroe 4 br/2 ba, 2,124sf YB:1964 REO
$700,000 7/05 $575,000 6/08 Difference = -18%
2051 Laurie 4 br/2 ba 1,937sf YB:1960 flipper
$460,000 2/08 $616,500 7/08 Difference = +34%
(seller/agent did full remodel, probably made $20-40K after costs)
450 Anchor 3 br/2 ba 1,877sf YB:1982
$655,000 7/06 $650,000 6/08 Difference = -1%
(buyer exchanged into this year’s purchase, paid all-cash)
5111 Delaney 4 br/3 ba, 2,856sf YB: 2004
$885,000 8/06 $875,000 6/08 Difference = -1%
3912 Garfield 2 br/1 ba, 832sf YB:1940
$850,000 8/05 $853,000 6/08 Difference = 0
2168 Dickinson 5 br/4.5 ba, 3,043sf YB:2004
$758,000 5/04 $915,000 9/08 Difference = +21%
(new in 2004)
2178 Twain 5 br/4.5 ba 3,737sf YB:2004
$727,000 1/04 $1,030,000 6/08 Difference = +42%
(new in 2004)
155 Chinquapin 4 br/4 ba, 2,292 sf YB:1990
$1,200,000 2/04 $1,225,000 9/08 Difference = +2%
There were 79 sales closed since June 1st, and these eleven purchased since 2004. The remaining 68 who purchased in 2003 or earlier all sold for more than they paid.
Can I call the results a mixed bag too?
More later on the other two areas in question!