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copyright, View from Silicon Valley, 2007. All rights reserved.
Clearly, everybody will continue
to buy every piece of real estate in our neighborhood that ever comes up for sale. At any price. Forever.
Even so, we doggedly keep checking for signs of a trend change.
In an effort to make the listings easier to compare,
at the risk of leaving out some of the juicier tidbits, we standardized the format for each house.
# Bd/Bth/Gar SqFeet LotSize Built RE Tax/LastSold/Cost Ask
Zestimate
# Bd/Bth/Gar SqFeet LotSize Built RE Tax/LastSold/Cost Asking Zestimate 5)
3/2.5/2 2,291 11,761 1942 $3,084/~1970s/~$125K $1.899 $1.649M ---Still
listed for sale.
Well, at least one over-priced, 65-year-old PoS didn't sell.
#
Bd/Bth/Gar SqFeet LotSize Built RE Tax/LastSold/Cost Asking Zestimate 4) 3/2.5/1
2,600 4,000 2004 $10,022/ 2002 /~$750K $1.995 $1.461M ---Still listed for sale.
Yikes,
is this a trend? The lay-out, closet space and overall set-up were awful and maybe this time some of that actually mattered?
If we were correct in surmising this flipper carved a second house out of this property, he may be willing to wait a loooong
time to move this slapdash set-up.
# Bd/Bth/Gar SqFeet LotSize Built
RE Tax/LastSold/Cost Asking Zestimate 3) 4/ 3 /2 2,519 14,374 1952 $12,233/
2003 /~$950K $1.780 $1.800 ---Shortly after publishing last month's piece, the RE agent returned an
e-mail to say this house was under contract. She stated they received two offers within five days of listing the house
and expected to close about September 15. (i.e., It probably sold above list.)
#
Bd/Bth/Gar SqFeet LotSize Built RE Tax/Last Sold/Cost Asking Zestimate 2) 4/3.5/2
3,000 10,000 "2007" -- / -- / -- $2.75M n/a ---This
was the one guarded by a real estate harpie who seemed very irritated to have to explain this was "new construction."
Zillow hasn't yet added this address making it difficult to determine how it ended up. The saga on the next house suggests
$2.75M might have been a tough sell.
# Bd/Bth/Gar SqFeet LotSize Built RE
Tax/LastSold/Cost Asking Zestimate 1) 5/ 4 /2 4,100 14,000 1999 $14,513/ 2005
/ $1.2M. "$2.0M"$1.561M ---This is the house slated to go up for auction on September 29. We stopped
by that afternoon and were told papers had yet been signed if we wanted to put in a bid. The agent said the high bid
to that point was $2.2M.
This is a long way below the flipper's original $2.7M asking price. At $1.2M +$200K
for two-plus years' carrying costs +$200/square foot times 4,000 square feet = $2.2M costs.
Was a $2.2M sale a zero
cash profit for this flipper?
Out of last month's five houses, one sold above list, one auctioned off $500K below the
original asking price.
Now if #1)'s 4,100 square feet only went for $2.2M, who is going to pay $2.75M for #2)'s 3,000
square feet? I guess you never know, particularly after you see one of this month's new listings:
# Bd/Bth/Gar SqFeet LotSize Built RE Tax/LastSold/Cost Asking Zestimate 6)
4/3.5/2 3,600 12,000 2007 $13,172 /2005 /$1.172 $3.090 $1.819 ---This
was a 3/2 with 1,600 square feet a flipper tore down and replaced so the Zestimate is relevant only to the original house.
The new 3,600 square-foot house is poorly thought out and, despite the marble counter-tops and stainless appliances, shoddily
executed. The brochure touts the developer's alleged experience building top-tier hotels yet some planks in the wood
floors felt warped to our show-less feet and we stumbled into several uneven seams throughout the wood and tile floors.
The off bedrooms were small and the master bathroom had only one sink.
I guess we'll see if our neighborhood will support
another $3M+ house.
# Bd/Bth/Gar SqFeet LotSize Built RE Tax/LastSold/Cost
Asking Zestimate 7) 3/2.5/2 2,395 13,400 1959 $12,499
/ 2001 /$960K $1.688 $1.742M ---The agent claimed the overall market was still strong but there had been
very little traffic at this house for the two weeks since she listed it.
This might be most nearly-reasonable off the
listings left but would have to be graded significantly inferior to #3) whose 2,519 square feet sold above $1.78M last month.
A
couple conclusions stand out this month: 1) The "sweet spot" in 2002 was ~$1.2M which by 2004 increased to ~$1.4M.
Even though rates are higher, the "sweet spot" today seems to be ~$1.8M? (Or at least there is some hesitation to buy
a complete PoS at $2.0M.)
2) There no apparent limit to what flippers will pay if the lot is big enough to build a
second house.
* * * * The above and any linked article,
website or advertisement are not intended as advice to buy, sell or hold any stock, bond, real estate nor any other financial
product or service. Buy and sell at your own risk (just like we do.)
