How is your sense of value? Can you correctly guess the list price of a home after a three-minute tour? I have t-shirts for those who guess the LP.
Extra note on the video: You’ll hear me say ‘bathroom’ when discussing the deconstruction. The garage used to be its own living unit, with bathroom and kitchen – these owners took it out and made it back into a garage.
Richard just uploaded his new La Costa listing this morning at 8:45am, and three offers are already in hand. It’s going to be a wild 2014!
This typifies today’s flipper – get a deal on a lazy short-sale, add lipstick, boast of the improvements (“completely remodeled from top to bottom’), and shoot for outrageous profit. What a country!
This had been on the MLS for less than 24 hours when I went by around lunchtime today, and people were already all over it. Compared to the rest of the recent offerings around La Jolla, it looks like a deal:
In areas where the inventory is close to zero, add the basic flipper package and stand by for offers:
These sellers paid $500,000 in February.
Doomers have claimed that since rates went up, investors are fleeing the market. Thankfully Alejandro of the latimes.com looked into it a bit deeper to find that there are plenty of investors, but it’s finding the deals that is the challenge – an excerpt:
Now the foreclosed homes in those markets are almost gone — yet investors have kept buying, competing with individual buyers in standard sales.
The number of so-called absentee buyers, usually cash investors, has dropped slightly in Southern California since hitting a record in January. But they still account for more than 1 in 4 home purchases in the region. And just 8% of those deals were on foreclosed homes in June, compared with 25% a year earlier and a peak of 55% in February 2009.
“Everybody and their dog is an investor,” said Dick Caley, a Long Beach real estate agent. “It has gotten to the point where I do not even return the call.”
As it turned out, housing investors needed neither the prodding of the Federal Reserve nor the bulk foreclosure sales from Fannie Mae, which never materialized beyond the pilot phase. The single-family rental industry now has several major players in multiple markets, with some recently created companies trading publicly.
The mix of investors and their strategies are shifting, with large financial firms starting to pull back and smaller players moving in, looking to buy, fix and flip homes for a quick profit. But rapid price increases are making it harder for people to afford a house and qualify for a home loan.
The two big Pardee tracts in Carmel Valley haven’t disrupted the resale market – instead, with deliveries being so far out, they have probably helped resales which have a more-immediate occupancy.
Leucadia might be different – Shea is building enough new mid-range homes that the resale market might feel it next year.
At this location off Vulcan, Shea is building 39 houses from 2,520sf to 3,041 sf (which hopefully should start under $1,000,000), and 30 townhouses from 1,276sf to 1,575sf. They decided not to use my suggested Train Track Estates:
The latimes.com featured celebrities who have turned to flipping houses:
This is the 8 br/9 ba, 13,000sf house off Sunset that is listed for $28,800,000:
Back in the old days there were 100-500 foreclosures per year in SD County:
We’ve already had 1,504 properties get foreclosed in the first half of 2013, so historically we’re still at elevated levels.
But with the county averaging 3,000+ total sales per month, lenders will be able to sprinkle in a couple of hundred REOs each month without affecting values much. In addition, flippers will keep doing their share; selling a similar amount of properties for retail-plus.
Lenders must be feeling comfortable at these levels, because the number of total notices were almost identical for the last two quarters. The Notices of Trustee Sale were down 52% Y-O-Y: