It’s the Appreciation Stupid!
How many times do I have to say it? Appreciation, appreciation, appreciation. I have little patience for flipping in this market, so that’s not what I’m talking about. I’m not interested in the short timers out there right now. They’re crazy. I’m talking about normal people buying homes that they will live in for 5 years or more. Those people with realistic expectations about buying a house and the promise of growing their investment incrementally over time. No whamboozles, fireworks or quick profits. Just the plain old regular hope that one day, through diligence and care, they will sock away a little nest egg for their futures and that of their loved ones. I think there are two categories of stupid investments. The first being inexperienced investors who haphazardly jump into a deal without doing their homework and laying out a proforma or development/rehab plan and, second, those people who so adamantly subscribe to the American Dream of home ownership that they are willing to do just about anything to achieve it. The second group is feeling the wrath of their hasty decisions and shame on those pirana lenders for capitalizing on their dreams. In keeping with my previous posts, buyer beware. For heaven’s sake pay attention and don’t get sucked into an investment without knowing what you’re getting into. It isn’t hard – I promise. All the tools are right here. With all the good buys on the market, there is surely one for you that will appreciate over time. Maybe your dream home or first pick is not priced right, but there are lots of good properties that will serve you well financially and emotionally. Here are some that missed the mark.
- 1927 single family home with 2 beds, 1 bath
- Sold on 12/14/07 for $455,000 ($632 per square foot – ouch!)
- Last sold on 2/15/91 for $132,500 (double ouch!!)
- Zestimate $447,500 (triple ouch!!!)
- Hillcrest condo with 2 beds, 2 baths
- Sold on 12/11/07 for $610,000 ($537 per square foot – ouch!)
- Last sold on 7/28/05 for $572,500 (double ouch!!)
- Zestimate $599,500 (triple ouch!!!)
- 1939 single family home with 2 beds, 2 baths
- Sold on 12/28/07 for $405,000 ($391 per square foot – ouch!)
- Last sold on 4/27/07 for $365,000 (double ouch!!)
- Zestimate $399,500 (triple ouch!!!)
If you liked this post you might also enjoy:
Rotten San Diego Home Sales – What’s that Smell?!
Hot Deals and Downright Steals (You’re Gonna Get Busted!)
Janet Gates said:
I am sorry, making money is stupid? Is this a hobby for the good people at Redfin? I note that recently several thousand homes in the San Diego market were auctioned for an average of 40 percent of the market valuation. How will the market correct for these comps, you can just explain if you will how you company will adjust for this problem!
February 1, 2008 11:56 AM
Carol said:
Au contraire, it’s all about making money. It’s the act of making an uneducated purchase in a depreciating market that is stupid. Where are those several thousand homes you are talking about? You make that sound like some mass sale, if so I missed the media coverage! Comps are a specific tool with a specific purpose; the market is “correcting” itself, we wouldn’t be so bold as to assert that is our role. You can learn more about who we are here http://www.redfin.com/stingray/do/about-redfin.
February 1, 2008 3:29 PM
Blekbaketub said:
The price one pays for pursuing any profession, or calling, is an intimate
knowledge of its ugly side.
– James Baldwin
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http://ebloggy.com/nedchaneyjg
May 6, 2008 8:08 PM