This listing shows how specific (or how fragile?) the market is these days.
The same floor plan around the corner had about 10 offers on it, and closed last month over list price, for $720,000:
http://www.sdlookup.com/Pictures-090066614
Yet this one isn’t having the same good fortune:
I mentioned in the video that it needed $20,000 to $25,000 – that’s to get it in good enough condition to move in. The eventual owner could easily spend $50,000+ in improvements over the first year, and today’s buyers don’t want the hassle.
If you’re only willing to consider buying the houses in excellent condition, it really narrows down the selection – and inflicts bidding wars in virtually every case.
No kidding about the costs and hassle of fixing up the place. The remod on the bathroom alone will cost a fortune! Who knows how much mold is underneath that bathroom carpet!
I’ve had one of those jacuzzi bathtubs before. A huge pain to keep clean (I failed miserably). That would be the first thing to be thrown out. Never again.
Speaking as a buyer who is in the market right now, I don’t mind the hassle of fixing up a place. What I do mind is doing it for free. If $720k is the price for the completely fixed-up, ready to move in house, and the house in question needs $30k (for example) to get it to the same state, I’m not going to buy it for $690k. My time and hassle are worth something.
Also, if the location doesn’t work (busy streets, backyard surrounded by other houses, etc.), then I don’t even look at it. No amount of money can fix those things.
BTW, my wife and I love this website. It’s informative, and sometimes gives us a chuckle when we’re feeling down about the craziness of this market.
I’m surprised this one hasn’t sold. Don’t get me wrong – I wouldn’t go near it – but the way CV gets gobbled up, this surprises me. There’s been some head-scratcher closings in CV, but I feel like they’re all price related. It seems like the action above $900k has slowed down. Am I right on this?
I wonder if CV buyers are getting more discerning. Maybe people reviewed their W-2’s and realized they can’t afford what they thought. Or maybe since it’s not raining this weekend and the Super Bowl’s done, we’ll see a lot of homes go pending soon.
CV is strongly dependent on QCOM and their stock took a big hit recently.
In my area (92103), sales seem slow for this time of year as well. It might be too early to tell but I feel like we are definitely in the midst of a another leg down in pricing with inventory increasing. Now that the hope for a quick rebound has faded buyers seem to be getting a lot more cautious. Falling rents are probably a big factor as well.
Agreed, and last year’s Spring Kick was a dud, for the most part.
The sellers come out full of optimism that someone will gladly overpay for their house because it’s springtime. Not a recommended strategy.
My wife and I saw this house…we’ve been looking in CV for quite a while and think we have a pretty good feel of the market. At $649K, it’s definitely a good value (for someone), but I couldn’t get over the location. If it were 2 or 3 houses further from Del Mar Trails, it would be a no brainer. For me, that’s something even price can’t fix…at least not this price…
Three days on the market and NO offers! What’s the problem?
Price??
I used to not understand why someone would turn away from a “fixer” but now that I’ve pumped $50k plus into mine, I wouldn’t consider another unless it was dirt cheap.
On our bike ride yesterday, I noticed a house that I’ve always liked in the neighborhood is headed to REO-ville. Nice, old Spanish style with great architectural accents. I don’t even know the price, but a glance in the windows was enough to make me start adding up the improvements needed and killed any interest. They’d have to offer that thing at around $100k to make it worth the work I’d have to put into it. Plus it backs up to a trashy neighbor, so not only are you looking at the dump behind you, there isn’t much usable back yard space either.
What it means is the market will go lower. Just subscribed to foreclosures.com there are 9 pages of houses in Encinintas in preforeclosure most of which will come on the market sooner or later. I sold a lakefront house in LA County in 2007. The people who bought it have been behind in payments since Novemebr of 08 and nothing has happened. The housing market in nowhere near bottom, it will be years until it hits bottom. That is a fact of life get use to it.
What would this rent for? I’m guessing $2400. I don’t get CV.
I honestly don’t think it would rent for any more than $2k. When I was looking into renting a place in CV you could get something nice and new for $2500. Granted that was six months ago, but I doubt rents have increased.
Don’t understand the majority of CV either. People who work at QCom are really bad with their money? Del Mar adjacent? TPHS? Sushi Ya?
The rent vs. buy decision is still screaming rent for most detached houses in coastal areas with the best schools. The value of the dirt under the house is high in the coastal areas and right now renters simply are not paying this location premium because it is a very strong renter’s market.
Since we are on the topic of renting:
After seven years observing the housing bubble emerge and then subsequently burst, my wife and I decided to hire a realtor in 2009 to prepare for a possible 2010 transaction. On Friday we decided to throw in the home buying towel. After some investigating on Craigslist, a quick phone call and a 30 minute tour, we will be upgrading our current rental for a much nicer rental down the street. Based on my rent/buy model, our negotiated rent is pricing the new rental at $100K below its current market value. Renting is just way too good of a deal to pass up. When the bubble started to turn, I thought 2010 would be the optimal year to buy. Never in my wildest dreams did I think it would drag on for this long.
I don’t get CV.
Same here. $360/sf for a fixer-upper in a not-so-hot spot? Insane.
The good thing is that I now have a good reason to release my realtor of he/her duties which will allow me to hire Jim when I get back into the hunt. I wanted to make the transition earlier, but I really hate uncomfortable conversations. Personality flaw, I guess.
TJ, I’ve never understood why buyers fail to incorporate deferred maintenance costs into the bid. Its amazing, really.
Wall to wall carpeting in the bathroom. The second greatest offense of the 1970s-80s after the Chevette.
Hey, a blue Chevy Chevette was my first car.
Yes, it was lame. Only 3 forward gears so couldn’t really drive it on the freeway. Could you imagine driving it to a HS prom?
Back to housing. I never, never, never understand carpet in the bathroom. It’s basically a big sponge to collect moisture and grow mold.
Not just Qcom people. This area is saturated with biotech scientists/folks. Smart-These people will literally cure cancer one day (and get paid accordingly for that ability) but MAN they are a “financially challenged” bunch.
As most are transplants they just say “well everything cost more here” and don’t really question the concept that things CAN be overpriced here. With the declines over the past 2 years more are coming to understand this.
Art,
Your post (#8) shows how the market is starting to get a bit more sane. When the buyers were stampeding into buying whatever was out there for whatever price, they totally overlooked flaws, neighbors, deferred maintenance, etc. Today’s buyers do seem to be a bit wiser. They are calculating what it would cost to get a place fixed up and are discounting it accordingly. Of course, you still see the odd schmoe who comes in (usually from another state or country, like LM alluded to) and overpays for something that was sitting on the market for years without a bite, but at least it’s not quite as bad as it was.
I have been saying for a year, buy in California. In that time, inventory is down and prices are up. Do not look at lagging indicators like the number of preforeclosures. Look at how the inventory is moving off the shelves.