Comments on: Real Estate The Best Investment? Some Sellers Are Banking On It http://blog.redfin.com/sfbay/2008/01/real_estate_the_best_investment_some_sellers_are_banking_on_it.html Redfin Bay Area Sweet Digs Tue, 07 Feb 2012 16:59:16 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: Real Estate The Best Investment? Some Sellers Are Banking On It | ImmediateRealEstate.com http://blog.redfin.com/sfbay/2008/01/real_estate_the_best_investment_some_sellers_are_banking_on_it.html/comment-page-1#comment-2501 Real Estate The Best Investment? Some Sellers Are Banking On It | ImmediateRealEstate.com Thu, 24 Jan 2008 16:02:39 +0000 http://blog.redfin.com/sfbay/2008/01/real_estate_the_best_investment_some_sellers_are_banking_on_it.html#comment-2501 [...] admin article is brought to you using rss feeds.Here is a great article on the latest real estate buying and selling news.Last sale: $1000 (8.24.2007). Difference: $605000 in 5 months [or $121000/month value increase!] 927 Euclid Avenue, Berkeley 94708 (pictured above middle). Asking: $1075000. Last sale: $806000 (6.8.2000) … [...] [...] admin article is brought to you using rss feeds.Here is a great article on the latest real estate buying and selling news.Last sale: $1000 (8.24.2007). Difference: $605000 in 5 months [or $121000/month value increase!] 927 Euclid Avenue, Berkeley 94708 (pictured above middle). Asking: $1075000. Last sale: $806000 (6.8.2000) … [...]

]]> By: tracey.taylor http://blog.redfin.com/sfbay/2008/01/real_estate_the_best_investment_some_sellers_are_banking_on_it.html/comment-page-1#comment-2367 tracey.taylor Thu, 10 Jan 2008 17:45:22 +0000 http://blog.redfin.com/sfbay/2008/01/real_estate_the_best_investment_some_sellers_are_banking_on_it.html#comment-2367 Curious: You are of course correct. Thank you for your insight. But even investors need a roof over their heads. Curious: You are of course correct. Thank you for your insight. But even investors need a roof over their heads.

]]> By: curious http://blog.redfin.com/sfbay/2008/01/real_estate_the_best_investment_some_sellers_are_banking_on_it.html/comment-page-1#comment-2365 curious Thu, 10 Jan 2008 08:26:14 +0000 http://blog.redfin.com/sfbay/2008/01/real_estate_the_best_investment_some_sellers_are_banking_on_it.html#comment-2365 Looking at dollar amounts, rather than rates, of appreciation can be misleading. To put the numbers in context: looking at the Euclid property, for example, if you had put the original purchase price in an investment earning 4.0% per year, the expected value at the end of the same period of time would be approximately $1,081,650. The compounded rate of appreciation is 3.87%, without taking into account any costs of ownership (such as the annual ding of $9,000 or so for property taxes). Hardly the extremely high rate of appreciation implied. As Mr. Knoble has pointed out, the actual return on investment is highly dependent upon the transaction structure and includes, in addition to the factors noted in his comment, the tax ramifications of the transaction. Looking at dollar amounts, rather than rates, of appreciation can be misleading. To put the numbers in context: looking at the Euclid property, for example, if you had put the original purchase price in an investment earning 4.0% per year, the expected value at the end of the same period of time would be approximately $1,081,650. The compounded rate of appreciation is 3.87%, without taking into account any costs of ownership (such as the annual ding of $9,000 or so for property taxes). Hardly the extremely high rate of appreciation implied.

As Mr. Knoble has pointed out, the actual return on investment is highly dependent upon the transaction structure and includes, in addition to the factors noted in his comment, the tax ramifications of the transaction.

]]> By: Tracey Taylor http://blog.redfin.com/sfbay/2008/01/real_estate_the_best_investment_some_sellers_are_banking_on_it.html/comment-page-1#comment-2359 Tracey Taylor Wed, 09 Jan 2008 22:13:56 +0000 http://blog.redfin.com/sfbay/2008/01/real_estate_the_best_investment_some_sellers_are_banking_on_it.html#comment-2359 Toady: Ouch! Toady: Ouch!

]]> By: Toady http://blog.redfin.com/sfbay/2008/01/real_estate_the_best_investment_some_sellers_are_banking_on_it.html/comment-page-1#comment-2358 Toady Wed, 09 Jan 2008 21:12:41 +0000 http://blog.redfin.com/sfbay/2008/01/real_estate_the_best_investment_some_sellers_are_banking_on_it.html#comment-2358 Haskell is actually bank-owned. The $1,000 sale in August was just an accounting transfer from the lender to an REO holding company. It was last sold for $750k in August of 2006. As I recall, it was listed last summer as a short sale at somewhere around $725k. So even if they could sell it at $606k, and they clearly can't since it's been on the market for at least two months at that price, nobody's going to make any money on it. The previous owner made out though; purchased for $440K in 2004. About $135k/year in appreciation. Nice neighborhood, too. Very convenient for one's crack cocaine and prostitution needs. Haskell is actually bank-owned. The $1,000 sale in August was just an accounting transfer from the lender to an REO holding company. It was last sold for $750k in August of 2006. As I recall, it was listed last summer as a short sale at somewhere around $725k. So even if they could sell it at $606k, and they clearly can’t since it’s been on the market for at least two months at that price, nobody’s going to make any money on it.

The previous owner made out though; purchased for $440K in 2004. About $135k/year in appreciation.

Nice neighborhood, too. Very convenient for one’s crack cocaine and prostitution needs.

]]> By: Tracey Taylor http://blog.redfin.com/sfbay/2008/01/real_estate_the_best_investment_some_sellers_are_banking_on_it.html/comment-page-1#comment-2356 Tracey Taylor Wed, 09 Jan 2008 19:45:36 +0000 http://blog.redfin.com/sfbay/2008/01/real_estate_the_best_investment_some_sellers_are_banking_on_it.html#comment-2356 Thank you Lance for exposing my ineptitude when it comes to matters financial. Anna: I will do as you suggest and follow up. Thank you Lance for exposing my ineptitude when it comes to matters financial.
Anna: I will do as you suggest and follow up.

]]> By: Lance Knobel http://blog.redfin.com/sfbay/2008/01/real_estate_the_best_investment_some_sellers_are_banking_on_it.html/comment-page-1#comment-2354 Lance Knobel Wed, 09 Jan 2008 19:34:10 +0000 http://blog.redfin.com/sfbay/2008/01/real_estate_the_best_investment_some_sellers_are_banking_on_it.html#comment-2354 Be careful with your language. You're not describing return on investment. You're describing merely the capital appreciation of the asset. To know the return on investment you would need to know what the purchaser's downpayment was, what the terms of their mortgage were, and what the transaction costs were. The world of housing is filled with people who will claim houses are great investments in all circumstances, but don't take into account all the factors that truly determine investment return. For a recent debunking of this notion see http://www.portfolio.com/views/blogs/market-movers/2008/01/08/the-national-association-of-realtors-fuzzy-math Be careful with your language. You’re not describing return on investment. You’re describing merely the capital appreciation of the asset.

To know the return on investment you would need to know what the purchaser’s downpayment was, what the terms of their mortgage were, and what the transaction costs were. The world of housing is filled with people who will claim houses are great investments in all circumstances, but don’t take into account all the factors that truly determine investment return.

For a recent debunking of this notion see http://www.portfolio.com/views/blogs/market-movers/2008/01/08/the-national-association-of-realtors-fuzzy-math

]]> By: anna http://blog.redfin.com/sfbay/2008/01/real_estate_the_best_investment_some_sellers_are_banking_on_it.html/comment-page-1#comment-2353 anna Wed, 09 Jan 2008 19:29:46 +0000 http://blog.redfin.com/sfbay/2008/01/real_estate_the_best_investment_some_sellers_are_banking_on_it.html#comment-2353 Interesting stuff here, Tracy- a very cool spin on the Submedian data. Love to see if you can follow up when they actually sell, to see how the investment actually pays off. -Anna Interesting stuff here, Tracy- a very cool spin on the Submedian data. Love to see if you can follow up when they actually sell, to see how the investment actually pays off.
-Anna

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