Blog photo: This was taken last Friday evening on a ‘gotta get outta the house’ bike ride…about 5:30pm. There was quite a community of fishers at the rock jetty just west of Crown Harbor Beach. The the birds were hovering for handouts.
Blog post: A number of weeks ago I met with a lovely and completely young-at-heart woman who is/was considering selling her house. She bought it seven years ago. Suffice it to say she was talked into it by folks she trusted (don’t get me going on this or I’ll have to find people to slap). Yes, they wanted the best for her by getting her out of Oakland. And yes, she fell in love with the house she bought in Alameda. She still loves it. It makes her really happy! But some things have changed for her and moving seems to her the best choice.
More details can help. It’s very old. She put a lot of money down and a lot of money into electrical and plumbing systems, and a recent total roof replacement. All work was done by reputable vendors. AND It has a brick foundation. AND it doesn’t have off-street parking. Her most trusted adviser told her not to worry about any of that. That’s the guy I want to super slap. He left the state. I think he died. The mortgage broker ‘friend’ died. The agent who was the wife of the mortgage broker sold her own place and she’s gone.
Here’s where I think my job comes in. Can we talk about alternatives? Rent the place? Come back to it before it gets converted by tax law into an income property with the associated tax ramifications? Can it cash flow…no. Can you stay….maybe. Are you comfortable with the payments…no. Maybe a roommate….no. Do I think the price will get back up over the price you paid for it….yes, when people have secure and consistent employment and demand out paces supply. When is that…longer than you want to hear.
The MLS data is invaluable for placing the pieces of the pie together. The marketing history detail provides the back-story of hindsight as we are trying to forge blindly into foresight. We can go back more than 10 years and see what has happened to properties that were sold or NOT sold because the market rejected them. Many local real estate pros and knowledgeable market-watchers know properties around town that have been on and off the market with no sale for 3-10 years!
Like the savings and loan mess in the early 1990’s when I did my first short sales, once we knew when the owners bought a place, we could pretty much tell them what it was worth without seeing it. That’s pretty much how it is now. Yes, we do need to see it. And yes some of the upgrades will help the sale…maybe not by increasing the price a whole lot…but they may assist by reducing the days on the market and encouraging more buyers to jump into the buyer pool.
Back to our story. Similarly aged properties within several blocks and with some similar conditions have closed since our first meeting. That’s good. But they’ve closed because the prices, whether the properties be bank-owned or successfully negotiated short sales or non-distressed sales, have come down to where the market chose to partake of the offerings! And with the closed sales since we first met, we see the value on the house is not nearly as strong as it seemed.
“But that’s not what you told me before!” That’s right. Nobody had that data yet. Nobody. Some places on the market for many months finally came down in price enough to go pending. Some of those have now closed. Others have been presented and priced well and gone pending quickly and will close shortly or have already closed.
Here’s the deal. Nobody knew the market would be going backwards seven years after she bought it. And nobody that age should have been talked into carrying a mortgage that sucks up the income. The money spent is irretrievable. The loan is basically okay…but the value of the property is not.
Not easy to hear, is it? And trust me, it’s not easy to say. But it’s worse to mislead someone. I’d rather not get the job than to be the one who implies profits that may not exist.
ALAMEDA REAL ESTATE THIS WEEK…
The listing at 325 Laguna Vista went pending last Saturday.
Lots of price changes this week.
OPEN HOMES THIS WEEKEND (courtesy Island Blog)
My listing at 108 B Cypress is open Sunday 2-4pm.
Unsold inventory this week 176, 186 last report
Pending inventory this week 81, 78 last report
Broker tour 10 w/ 1 repeat…all 94501. A wonderful bike ride again!
ALAMEDA REAL ESTATE AWARDS THIS WEEK...remember this is only my perspective!
THAT’S A WRAP! CARRY ON! THE SHREDDING PARTY WAS A GREAT SUCCESS AND WE HAD COLD BUT CLEAR WEATHER! THE ALAMEDA BOYS AND GIRLS CLUB WILL BE GETTING A CHECK FROM THE SHREDDERS FOR $200.