This youtube video tour highlights the north side of 4S Ranch (West RB, 92127) where the density is high, Mello-Ruze higher, and timing bad – this 3,390sf house was sold new in April, 2005 for $847,000.
I checked the sales when I returned, and they are healthy:
| Sq. Ft. | Sales Price | Date |
| 3,169sf | $650,000 | 6/19 |
| 3,431sf | $658,000 | 7/27 |
| 3,197sf | $670,000 | 7/9 |
| 3,675sf | $735,000 | 7/16 |
Check out Peter Hong’s first attempt at real estate video. He features a 1,092sf house in Los Feliz that just closed for $864,000, which is 2% MORE than it sold for in 2005:
http://www.youtube.com/watch?v=oNecNz4cfBM
Or for the full article in the L.A. Times:
http://latimesblogs.latimes.com/laland/2009/08/some-now-buying-again-at-bubble-prices.html
I can not even imagine how there could possibly be so much mold damage, in a relatively dry climate. I thought the conclusion was that mold was not nearly as deadly toxic as was first thought a few years ago, when you could not insure a home with any sort of roof or water damage.
I’m guessing the mold remediation cost $20,000+ to demo drywall/cabinets and run HEPA fans while dancing around in white moon suits and masking off all areas real official-like.
They must have had a shower pan leak that lasted for days?
Looks like someone turned on the shower upstairs, jingle mailed the keys, and said goodbye 4S.
You stay classy San Diego?
Then again maybe it was an accident.
Jesus, 500K for that? You realize a house like that pre-destruction would run $250-$300K in many places? No you won’t have an ocean view, but you’re not exactly next to the ocean in 4S either.
Anyway good video for a laugh, thanks.
You realize a house like that pre-destruction would run $250-$300K in many places? No you won’t have an ocean view, but you’re not exactly next to the ocean in 4S either.
You won’t find many six-figure jobs in those places, either.
You’re finding less and less six figure jobs in SD as well. And just an FYI but farmers in the Midwest might not pay 500k+ for their houses but I can guarantee they have over a million dollars in farm equipment laying around. Something to think about when you start defining what makes people “rich”.
Who is the idiot who paid $864K for a 1092 sq ft place????
I need to shake his or her hand!!! And well done to Mr. Hong for screwing them over!
My apologies..Hong is the writer…not the agent…I want to meet that agent!!!
No wait it is Mr. Hong…I’m going giddy over this fantastic bargain of a sale!!!!!!
Gosh… that house seems like a lot of work to put back together. Can’t believe that mold problem required taking the entire house apart.
I wonder if its worth $525k? A few months ago, the new builds were only asking $670k for 3000sq ft. Lots of things in 4S are asking $220/sq ft. Unless you can get a good price or know some cheap contractors, the profit margin looks kinda tight to me.
Jim, any chance of an address on this place?
Jim, you sneak! You start off all cheery and happy that the market may be finally starting to become reasonable…
…then we see the damage. 😮
Nice bit of acting there. 🙂
How much would it cost to simply rebuild the entire house? The cost of finishing the repairs could end up being astronomical with no guarantee that the mold problem will be properly resolved.
I’d definitely walk away from this one.
Dead pan. Shower pan. Peter Pan.
“Looks like someone turned on the shower upstairs, jingle mailed the keys, and said goodbye 4S”.
Sdnerd. You nailed it.
We have A LOT of this in metro Atlanta.
Myriad – Jim, any chance of an address on this place?
Check the MLS, its been listed for a week.
Homes in that subdivision are trying for close to 700k. I think if you could get that for 500K, you could probably toss 50-75k into it and turn around a profit on it. Or if you are a family looking for a nice gem under market value and have the cash, fix it up to your liking and hedge the neighborhood’s potential for more downward pricing in the next few years.
Maybeck is still pushing 3K sq ft down the street in the high 600s but those dont have the lot size that this does.
Good video as usual JTR.
17061 Silver Crest, SD, 92127 MLS#090045844
A 3,390sf house on a 5,310sf lot with $415 per month Mello-Roos, yet three offers in because I think you’re right 4S Renter, you could flip this – unless we hit a sudden downdraft.
There are three others on the street who have received their default notices.
That’s a tough MR – essentially adds ~$75,000 to the price at today’s rates. Sure you get some tax break on that, but still.
Then you have to disclose that there was a flood.
I’m not sure how significant telling a prospective buyer that the entire house was flooded is.
I will be surprised if it goes for any less than $575K. Keep in mind, as the buyer of an REO from the bank, rather than the Trustee Sale, the new owner will have to disclose the Mold issue to the next buyer–not sure it would work for a flip over $500K.
I am thankful every day for the home that I bought late last year. No M-R, no HOA for a 1995 home. Woot! 🙂
Jim,
Your video quality is great. What sort of equipment do you use?
Thanks!
from George C.:
Another report from Zillow.com finds that while 60 percent of owners believe their homes have lost value over the past 12 months, but 81 percent think the values will not fall any further in the next six months. Homeowners here in the West are the most optimistic about a market rebound.
I’ve acquired a few devices over time.
The Canon SD970 IS is all you need to produce a decent video, it has some wide-angle for the smaller rooms, and is small and handy.
But I have trouble downloading the videos to a spot where I can find them – my computer doesn’t want to play that type of video, and the files sometimes show up as empty. But I think it is user error more than anything – I don’t like to read instruction manuals.
The Sony Webbie is working its way into the rotation, but it doesn’t have wide-angle for the small rooms. It will upload right onto youtube though with mpg4s.
The primary is the Nikon D90 that I bought in a panic one day on the way to my daughter’s final dance solo. It is really an SLR camera with a video add-on, which doesn’t have auto-focus and why you see me constantly struggling the lens. But it has the cleanest upload and workability on my computer, so it gets most of the action.
I think my all-time favorite is still the one I started with, the Canon SD870 IS – which I like better than the 970 because the screen is much bigger. But it broke.
my computer doesn’t want to play that type of video
http://www.videolan.org/
Arguably the best media player for Windows – plays everything, absolutely free.
Who is the idiot who paid $864K for a 1092 sq ft place????
I need to shake his or her hand!!! And well done to Mr. Hong for screwing them over!
Noz | August 17th, 2009 at 11:31 pm
How about $670k for 1,039 square feet?
In Riverside!
http://www.redfin.com/CA/Riverside/5916-Grand-Ave-92504/home/4946775
Now, that was purchased at the peak (2005), but even then, this should have been worth about half that. Reminds me of the million dollar “Detroit River” house-obvious fraud.
Now on sale for $92,900 as an REO-86.1% off the previous sale.
“You won’t find many six-figure jobs in those places, either.”
SD has least amount of six-figure jobs than anyplace I’ve ever lived.
That’s a tough MR – essentially adds ~$75,000 to the price at today’s rates. Sure you get some tax break on that, but still.
sdnerd | August 18th, 2009 at 8:43 am
Actually, MR are not tax deductible. Many people do it, but if you get audited, you will be in trouble.
Of course, I am not an enrolled agent, but check with yours to see if it is worth the potential risk of back taxes, penalties, and interest before you deduct the MR on your return.
Maybe a flipper can make that work, but let’s be realistic about the repair here. Dry wall isn’t that expensive, but you need trim (and probably more than you would think because you don’t want lines of wood cuts in the trim at knee level. Carpet, complete new paint, and then there is the kitcen. Notice how the tile was cut out? (square cut instead of individual tile removal) might need a whole new tile floor if you want matchy-matchy. Ditto cabinets. Replacement bottoms might not match older cabinets.
Two words: Money Pit.
Since Mello-Roos doesn’t accrue equity it is best compared to the non-deductible interest only loan product equivalent. $75k for a $400/mo M-R sounds about right or a little low.
M-R has become so pervasive I am afraid there might be a majority developing that might modify Prop 13 in exchange for M-R relief. Divide and conquer.
“Two words: Money Pit.” – Former RB Resident
My boys can have that puppy dressed and lipsticked in time for the Harvest Moon Dance (Oct 4th.). I’d choose top of the line Contractor’s Discount Warehouse cabinetry and go with oversized baseboard for the entire house. Engineered true wood flooring in the front of the house and from the stair landing up except for the secondary bedrooms. That upstairs shower goes with a cast pan and sheet Corian. $60k tops and I’d have this ugly duckling humming a wedding march in time for a Tanksgiving closure. (N.B. “Tanksgiving” is not a typo.)
The irony is MR would be cheaper if it were rolled into the house price, where it would become deductible. The reason it isn’t is to help people qualify for homes they can’t afford, and to give the average person the illusion that the house is $75K cheaper than it is.
Interesting idea, Rob… But M-R is pervasive only in new developments. Most large urban centers were developed pre-Mello-Roos, LA, San Francisco, even San Diego proper are predominantly non-Mello-Roos. I don’t know if you’d get a majority.
Another thought on Prop 13 and the state budget. Prop 13 did not stop/hinder people from buying at bubblicious prices during the boom. Presumably that pumped up the tax revenue during those years.
“Presumably that pumped up the tax revenue during those years.”
Actually, Prop 13 probably smooths the revenue out. In theory that would help the state budget. In practice, the problem isn’t so much one of income volatility.
Question of the Day ~ What do you do when you find the perfect lot at the premiere Harbor Island in Newport Beach, CA but there’s already a 9-bedroom/12 bath mansion already on it?
For the answer, here’s the WSJ article with accompanying video and slide show:
http://online.wsj.com/article/SB10001424052970203863204574344950563627732.html#articleTabs%3Darticle
Actually, California is primarily dependent on income taxes, especially capital gains. That’s why we go boom in the flush years and bust in the bad years. This is more true for California than most other states because of the predominance of high-rollers and our high rates of state income tax and our lack of property tax income (as a result of Prop 13) to smooth out the bad times.
This downturn is really bad for most states because both the stock market and real estate markets have dropped substantially over the last year. Property and income tax revenues are therefore lower for every state.