This video was taken a couple of months ago when it went pending, and a good example of how the market has warmed up on the lower ends of every market.
It’s the type of house that is easy to pass on – even if you were a handy fella and wanted a fixer, you’re stuck with this oddball floor plan from the mid-1960s:
But then again, buyers are finding that there isn’t much selection on the low end, and the good ones get snapped up quick. But the oddball fixers? Yep, they’re selling too.
This just closed for $550,000. The buyers used a 20% down payment too.
I’m guessing a lot of buyers would prefer houses just like that.
Quite frankly, it’s probably cheaper to fix that one up to a buyer’s liking than having to rip out all the granite, travertine, and “fix ups” all the flipper idiots have shoved down our throats.
It looks like a house that somebody actually lived in and raised a family in. Just what a house is supposed to look like — Formica and all! 🙂
$589K?!? I was WAAAAAAY off! My original guesstimate was $285K! Still way off from the final selling price of $550K!
I agree with CA renter. It’s definitely what one would call a liveable house. The fact that it’s still standing and in pretty decent condition is a testament to its build quality. It’s only in the addition that Jim smelled any mildew.
As for the “faux” wood floors, I don’t mind them. I have that in my apartment (building completed in 2007), and it’s pretty nice even though the custodian acknowledges that it’s pretty much some cheap stuff the contractor scrounged up somewhere.
The price of the house however is in my opinion way out of line. Then again, I don’t live in California, but in Montreal where real estate is still dirt cheap, even when compared with the rest of Canada.
Keep ’em coming Jim! And don’t be afraid of showing us some decent ones as well! They’re very useful as a point of reference.
I thought Jim was unnecessarily harsh on this house. Yeah, it needs some updating, but that yard!!! Oh my. The things I could do with that. I’d kill off the dining room and turn it into an office that opened up onto the outdoor area. Somebody who was prepared to put in some sweat equity and spent their money carefully could turn that into a nice house — without spending $100k.
$370K… And I thought I was being optimistic
Ummmm… anyone paying attention to interest rate movements today?
These homes with good lots yet are seriously outdated should sit awhile unless they are under priced.
Lets say that the latest owner bought that for about 200K. They should be positive on returns if they didnt get greedy like a lot of society in the past few years. Had they low balled that sucker at 500K, can you imagine the activity it would have gotten? There are a lot of these types of homes throughout the coastal north county that are overpriced due to the seriously dated interiors. They need to start slashing to get some movement. Good stuff as always Jim.
Why yes, tj. As a matter of fact I’ve been watching these Treasury movements with much joy and excitement! 🙂
Can you go into further detail, CA renter?
Is that the house on 2087 Westwood Dr? That wasn’t a good deal at all.
Come on Jim, show us some good deals 🙂
That would be nice.
I’m with CA renter. Low interest rates are deceiving. They seem like they’re helpful for those looking to buy but they’re not.
If $$$ is cheap to rent (borrow in a mortgage) it allows people to acquire more debt. When people have access to debt they get in trouble and it allows lenders to take advantage.
Another downside of low interest rates is savers are punished. First because $$$ has less purchasing power. Second savers get screwed because they don’t get a fair return on their saved money.
If you’re a buyer and you want house prices to go down you’re looking for interest rates to go up.
If you’re a seller you want prices to stay high. Low interest rates allow this to happen.
All of the people who bemoan the McMansions just need to take a look at that master bedroom. I could not imagine paying over $250k for a house with that tiny master, no matter where it’s located.
Can you go into further detail, CA renter?
Susie | May 27th, 2009 at 8:13 pm
What shadash said. ^^^^^^
Interest rates have been artificially suppressed for a long time, wiping out the savings of retirees and others on fixed incomes. It’s also the cause of the bubble and it’s ultimate collapse, because prices that were driven by low rates are generally not sustainable if a rising/floating-rate environment should follow.
If interest rates were not suppressed by the Fed and all the securitized debt and related insurance instruments/guarantees, we would never have had a bubble anywhere near the size we did over the past number of years.
With low rates comes easy lending as lenders/savers go further out on the risk curve when reaching for yield.
If rates were at 20%, for instance, you would not have had neg-am mortgages or the preponderance of ARMs because those types of loans are designed to shift interest rate risk onto the borrower instead of the lender. When rates are high, you’ll see lenders trying to lock in those rates via fixed-rate loans, which are far safer than variable rates where borrowers are concerned.
I think that’s a decent house. I don’t mind dated-I mind broken. There’s nothing broken about that house. The floorplan is fine as well, IMHO. Calling it “turnkey” would be a stretch, but if you really wanted to, I’ll bet you could move in with little to no work done. It’s not a fixer. Fixers have broken windows, leaking roofs, missing appliances/water heaters/cabinet doors/air conditioning units, mold. Maybe there’s mold in that add-on room, but that’s probably it.
So this went for approx. 275 PPSF, the current average is 351. If the buyer sank 100 grand inside (per video comments), they’d be into it for 650, and then there’s the landscape update. No big sweat equity pay day for your trouble in this one. If the market continues trending downward…
Forgot to mention – good things about this property, no HOA and/or Mello Roos.
I’m a longtime fan of this blog, and a CA expat. I live in Columbus, OH now.
I think this property illustrates the absolute insanity of CA real estate better than any vid that Jim has done. My house is in a very similar neighborhood here in Columbus. When I bought the place in ’04, it was in very similar condition, the epitome of early ’60’s well maintained split. Very similar in size, it’s 2050 sqft. Equal lot size. Equal features.
I PAID LESS THAN THE DOWN PAYMENT ON THIS HOUSE!! $93,140, to be exact. At what was arguably the middle of the bubble.
Sooooo, what can you get for $93k in CA? A tarpaper shotgun house on the edge of Barstow, between the SF tracks and I10? A nice doublewide in Bakersfield?
Look, I’ve lived in San Diego, and it’s a great place. But, folks, salaries are not five times higher in SD than they are in OH. A (roughly) $3k/mo payment means that a family with the median income in SD of $75k has $45/day to spend on everything else. If I suddenly woke up in that situation, I’d break my arm looking for a shotgun to suck. And this is in the worst financial downturn since the Great Depression? Baaah. Absolute madness.
Good post bigcat39. Thanks.
What can we tell you Bigcat39? Looks like you made a great choice! Enjoy Ohio because you can’t come back. Like most people with this type of inane rant you’ll never be able to sell your current property to match a California purchase.
By the way, your new home state is depopulating for some reason. Who made the smart investment? The people who bought this coastal fixer or you?
Who made the smart investment? The people who bought this coastal fixer or you?
I’m voting for Bigcat39. I suspect the fixers will be underwater by 10-15% next year.
Who made the smart investment? The people who bought this coastal fixer or you?
That really all depends…
If you make the same wage in both locations. But, the property in Ohio costs significantly less you’ll have more $$$ to save. As long as you can sell it for something close to what you paid your fine. Now if you have to dump 100k into the San Diego coastal property and overall properties in San Diego go down in value over the next few years. Then I’d say Bigcat39 made the right choice.
The priced out of California forever stuff is garbage. Another Realtor trick used to scare people.
Bigcat nailed it.
Who made the smarter investment? Well, assuming Ohio is as artificially inflated as CA (which I seriously doubt,) he could lose about $30k with another 30% drop. The fixer will lose over $150k with the same drop.
Unless, of course, prices are back on the rise in CA . . . (Haha! I couldn’t type that sentence with a straight face.)
Appreciate your comments, shadash and ca renter.
The conversation here and Jim’s videos/insight are the reasons I make bubbleinfo my first stop in the morning.
I’m with Geotpf and Sol – this house isn’t a fixer – it needs cosmetic work but it’s structurally sound. It’s in a good school district with no HOA/MRs.
But then again, I live in a house that’s the same size and built in 64.
I thought calling it “functionally obsolescent” was a bit harsh. Not everyone needs a huge McMansion with lots of wasted space on a postage stamp lot. This is Southern Cal. That backyard can be fixed up nicely so you can enjoy the outdoors.
Apparently my cinematography is still lousy.
Great news, I have a new camcorder on order!
Bigcat39-For $150k, you can now get a 4 bed, 2 full bath, on a 8k+ sq ft lot, 1750 sq ft, single story, with a three car garage, in Riverside-because that’s what I just bought (former owner paid $400k during the bubble). $93k will get you a 3/1.5 with 1,000 square feet here, if you are lucky.
Anything outside the IE, or maybe places like Vista in San Deigo county, forget it. In most of the OC, LA, and SD, $150k might get you a 1/1 condo in a bad neighborhood. Maybe. $93k will get you nothing.
93k will buy you 10 homes in Detroit. Bigcat 39, look north!
Doughboy has the logic! The only issue with living in Ohio is that the economy there is a bit rusty if you get my drift. Nowhere near as diversified as e.g. the Chicago area. And if you look in the nice areas of Chicago, you’d be surprised to find pricing not a whole heckuva lot different than where this house is located.
And guess what? You’re five minutes from the Pacific Ocean beaches in this house, with virtually year ’round outdoor weather. In Ohio, you can save up for your Florida vacation once a year when it is zero outside.
Comparing two houses is irrelevant unless you factor in that tired old Realtor’s(r) saw: Location, location, location.
Park Avenue will cost more than Tobacco Road. Duh.
Bigcat, while this home may or may not be a fixer, Columbus, OH most definitely is a fixer city. There’s a reason it’s cheaper there. And I suspect most would happily suck on that shotgun if they had to live in C-Bus.
Excellent work, Jim!!!!