Monday, April 14, 2008

Sellers are right. Miracles do happen.

One of my more eloquent readers points out that a home I profiled a few months back sold at list price (contrary to my opinion that the house in question didn't have a ice cube's chance in hell). Here's the link to the original post (complete with eloquent comment from said reader). But, in short, the home at 5762 Andasol Ave. in Encino Village recently sold for a whopping $770k (or $403/sq.ft.).

So, are miracles still happening out there? They are! A Van Nuys adjacent house can still sell at $400 sq. ft. and I think that's a bloody miracle.

Nevermind that the seller paid $772,500 back in January '05. (That's right, he sold for $2,500 less than he paid over three years ago, in case you failed to notice). And let's not forget the $46k in Realtor commissions. Oh, and the interest payments (approximately $48k per year times 3 years = $144k). Dang, when you add it all up ($190k), that was one expensive rental (about $5k/month). Oops! And that doesn't include three years of property tax & maintenance. And closing costs, twice. I'm pretty sure you could rent a 3+2 house in the area for less than half that. And, I dunno, maybe put the other $2,500 a month toward a 401k. Call me crazy.

But the seller still sold at a remarkably high price given market conditions. The Realtor Team who pulled this off? The Fred Meyer Team, on the web at http://www.fredmyer4u.com/. So if you want to sell your house for slightly below what you paid in 2005, you might want to give them a call.

Let's talk about the buyer for a second. Sure, shaving off the last three years of property value increases is sweet! But, umm, you realize that most of the bubble increase was pre-'05? Maybe I should draw you a picture of what I mean. Here's the Zillow graph of the property value for your house (your house is in dark blue and your zip code average is in light blue):


What I find really interesting is how much the gap between your home's value and the average home value in your zip code has shrunk. Back in '05, there was a $300k spread. Now there's just a $200k spread. See, that's interesting because it means that your house is losing value faster than the zip code as a whole. I bet that trend will continue. But, you know, I've been wrong before. Like when I thought nobody would pay list price for your house. I guess you showed me!

10 comments:

Anonymous said...

Something tells me this was one of those wink wink nudge nudge cash back sales you've previously warned us against.

And if that's the case, the house sold for a chunk of change less than meets the eye.

Veronica said...

I read the eloquent comment on the original post as being directed at the person who bought at that price. Simple change of perspective and that comment ceases to be idiotic and suddenly becomes correct.

We got your back, Kate!

JEFF said...

this is a really good post, for what its worth

JBR said...

There are still a lot of folks who believe that prices now are the bargain of a lifetime. Also known as knife catchers. God bless 'em, we need them to help set our lower comps! Thanks for taking one for the team current buyers! Bargain hard. :-)

Anonymous said...

@veronica - I agree with you, that certainly was directed at the buyer. I just saw the redfin info for that house, it went from 180k (1998) to 770+k (2005), wow, maybe that was directed at the seller as well!

Anonymous said...

correction - $105k (1998) to $772k (2005)

Anonymous said...

i hope that blogger's comment wasn't directed at Kate, but unfortunately, i think otherwise. kudos to Kate though for handling the comment smartly and with a bit of humor. the irony of the "eloquent" part went over my head, until i read that blogger's comment. go Kate! i keep reading this site for your insight and thoughts, not because of snarky anonymous comments.

ProblemWithCaring said...

For what its worth:I read this blog all the time and I think it's most hilarious when the stuff like the dumbass comment gets through - hey, at least it wasn't blocked!

Commenters call me dumbass on my blog all the time - which shows how much stock you should put in comments. Clearly, my blog is much more about elitist douchebaggery than pure dubmbassness.

Anonymous said...

don't you have anything better to do with your time? get a real job.

kate said...

Dear Anonymous:

I do have a very real six-figure job. Thanks for inquiring! And thanks for reading.