Before we go on some stats regarding the condo:
Price: $579,000
Bedrooms: 3
Full Baths: 3
Partial Baths: 0
Square Feet: 1,677
Lot Size: N/A
Year Built: 2004
Listing Date: 07/01/06
On Market: 111 days
Type: CONDO/TH
Status: ACTIVE
On the listing we find that a previous twin unit sold for $674,000 and the seller is giving us an “instant $100,000” in equity. How generous of them to think of the nice poor buyer! Who in the world gives you $100,000 instantly? Even Howie Mandel makes you sweat on Deal or No Deal before letting a contestant walk away with $90,000 to $110,000 (the average of all contestants by the way). Is what this seller saying true?
Investigating previous sales records, we find that the previous property, which is smaller than this unit sold in 2004 for $492,000. Not sure where they derived their sky high price and instant Cup ‘O Noodles equity? Maybe using the Zillow.com estimate. Regardless, this property has been on the market close to 4 months. We can see that the above patient has what we call “price so high like a retard and drop instantly for effect” syndrome:
Price Reduced: 07/2x/06 -- $649,000 to $599,000
Price Reduced: 09/0x/06 -- $599,000 to $579,000
Yet the first drop had no effect. Now we are quickly approaching winter and what is this seller to do? For one thing, this place is priced like a home but is only a condo. Second, this seller is fibbing since previous sales data is now easily accessible by the public. On the Dr. Housing Bubble scale of housing bubble pain, this one gets a prescription of:
Digg This!
Add to Reddit!
Save to del.icio.us!
9 Comments:
Love your blog and your commentary Dr Housing Bubble -- your illustrations and use of photos/pictures is great. Keep up the good work.
Thanks. I'll do my best to update this site frequently since I believe 2007 will be an interesting year for real estate.
Here is another concept that people tend to forget. When you sell your home, you get to keep the equity minus the selling cost. When you take out a HELOC or a home loan, you need to pay it back! It doesn’t matter if the rate is 1% or 10%, you need to pay it back eventually.
This case-example is one of many reasons why I believe real estate has gone into the stratosphere these last few years. Somehow folks tend to believe that equity is = to net income. Not until you sell and have a certified check to your name is that equity your’s. These people are quickly realizing this double-edged sword. House rich, cash poor isn’t a cliché just because. That was the case until the mortgage and banking industry figured out a way to stick a spigot into your gold mine and let the liquid yellow come flowing out of your home. Like most non-renewable resources, many folks are going to realizes that sticking 5 ATMs on the side of your house isn’t that smart considering that you haven’t filled the vault in years.
Ah!
Normal Heights..
Land of the barred windows.
Home of the get-rich-quick real estate flippers.
I wouldn't touch these properties with a ten foot pole..
Are there people out there that would actually take a $100,000 instant equity ad seriously? Yikes. Especially for a fu****g condo!
bubble_watcher:
If anything, that is why we are seeing desperate behavior in Normal Heights. Many flippers realized that their condo is not worth $500,000. Problem is many new buyers are realizing this and refusing to pay the price for a Cracker Jack box. Any guess what the prize is inside these fun boxes?
Caroline:
You’d be surprised what behavior happened in 2005. The unraveling is only beginning. Remember the TYCO extravagant party where CEOs made a Romanesque attempt at creating the most opulent show of wealth? Well, looking back at it many were disgusted when they saw the aftermath. Nevertheless, those at the party had a blast. I mean who wouldn’t want nymphs running up and down while they served you glasses of champagne? Yet when the carnage of this mortgage mayhem subsides, people will be left feeling very hung over. Hopefully the nymphs will still be running around!
can you update me on the status of this house? just curious.
george
can you update this listing? what happended.
thanks
Goruck:
Still on the market. Now it is 150 days. Still listed at:
$579,000
Again, this is another case of a "Baghdad Bob of Housing" BBH. They will feel the full effect starting next spring. I'll keep you posted.
Post a Comment