More Coffee Bet, 2008

The other two neighborhoods I mentioned as “superior homes” to watch were Davidson’s Starboard tract in La Costa Oaks, and the old beach community, Terramar. How are they doing?

The number of sales have been low, and data scattered in both areas.

Here are the same-house sales in Starboard, listed in chronological order of their resale date, with the only three 2008 sales in bold:

Floor Plan Sales Price, New Resale Price, Date % Diff
Plan One
3,743sf $1.123, 2/05 $1.200, 5/06 +7%
3,743sf $913K, 3/05 $1.130, 7/07 +24%
3,743sf $992K, 4/05 $1.175, 7/07 +18%
3,743sf $997K, 11/05 $1.070, 9/07 +7%
3,743sf $1.008, 4/05 $1.007, 11/07 REO -0-
3,743sf $999K, 12/05 $900K, 6/08 REO -10%
Plan Two
4,000sf $1.025, 12/06 $1.150, 5/07 +12%
4,000sf $983K, 6/05 $1.167, 6/07 +19%
4,000sf $956K, 3/05 $1.200, 7/07 +26%
4,000sf $1.156, 12/05 $1.150, 4/08 -1%
4,216sf $1.065, 9/05 $1.095, 6/08 +3%
Plan Three
4,398sf $1.009, 3/05 $1.165, 10/06 +15%
4,398sf $975K, 4/05 $1.024, 4/07 +5%

The second REO sale had listed for $849,000, and the agent already had the buyer standing by at $900,000 – it went pending the first day, and could have sold for more.

There is an active short-sale listing of a 3,743sf plan, listed on the range $949,000 to $1,049,000, and a PENDING 4,398sf plan, listed for $1,549,000 to $1,649,000.

I think this is going to be typical in the prime areas from now on – lower short-sale or REO listings closing under the trend, interspersed with primo listings going for top dollar. The future sales depend on how many homeowners can’t hang on – about half of them had equity in the 0-20% range.

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Terramar has been beating the odds.

In May of this year, there were three different 1,500sf houses sell in the $800,000s on El Arbol and Los Robles, similar to sales in 2005.

There have been two shockers lately too.

The nutty 1,399sf house with a studio over the garage on the non-oceanfront side of Shore Drive closed for $1,600,000 cash to an Arizona buyer. It had sold in 2002 for $750,000.

And the 2,760sf house at 5390 Los Robles closed at $1,225,000 to a buyer from Simi Valley on 9/4/08. I had it listed for $349,000 in 1995 and couldn’t sell it – everyone thought I was crazy. The owner finally did get lucky and sold it for $762,500 in August, 2003.

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The fewer sales in both areas help illustrate the difficulty for buyers looking for prime properties – do you keep waiting for lower prices, or take your shot when you have it, because of the few choices available?

Coffee Bet Update 2008

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:

https://www.bubbleinfo.com/2006/09/grand-poobah-of-predictions/

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%

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2728 Forest Park  4 br/3 ba,  2,248sf  YB:1985  REO

$647,000   6/04     $435,000   8/08   Difference = -33%

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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)

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3255 Monroe  4 br/2 ba, 2,124sf  YB:1964  REO

$700,000    7/05    $575,000   6/08    Difference = -18%

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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)

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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)

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5111 Delaney  4 br/3 ba,  2,856sf  YB: 2004

$885,000   8/06     $875,000    6/08  Difference = –1%

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3912 Garfield   2 br/1 ba, 832sf   YB:1940

$850,000    8/05    $853,000   6/08    Difference = 0

(remodeled)

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2168 Dickinson  5 br/4.5 ba,  3,043sf  YB:2004

$758,000   5/04      $915,000   9/08  Difference = +21%

(new in 2004)

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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)

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155 Chinquapin   4 br/4 ba, 2,292 sf   YB:1990

$1,200,000   2/04   $1,225,000  9/08   Difference = +2%

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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!

More Fallout from Fraud

What happens to those on the edge of foreclosure?

If you are Jan Terry, owner of this house at 2872 Vista Acedera in La Costa Valley and Jenae’s co-conspirator, you pull out all the stops.

First it was to try their lease-option program, hoping to find a renter willing to cover her roughly $9,000/month obligation. But no takers.

Then she tried the typical short sale strategy, starting with a list price of $1,100,000, which was slightly under her purchase price of $1.25 million, which she financed 100% in April, 2007. She eventually lowered it down to $890,000, but then cancelled the listing.

Now she has reverted to the last resort. We think she must have sent in a short-sale offer to the bank to postpone the trustee sale, which was scheduled for July 17th.

In the meantime, she has rented the house to 14 surly individuals who come and go at all hours, night and day!

The HOA says they can’t do anything. Carlsbad P.D. says they might tow this car that they park around the corner, but that’s about all they can do.

The neighborhood has already suffered from this inflated sale, which contributed to others paying too much – now the impending foreclosure of a house that is surely in disrepair will help tank values further. Thanks Jenae!!!

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