For the last 6-8 months, the value of the condominiums where I live has been in flux. Nobody really knew for sure what the last ones sold for and since they had stopped selling, nobody knew what they currently were worth. It looks like the dust has settled a little, so let me enlighten you.
These are 3 and 4 bedroom, 2.5-3 bathroom, 1800 square foot, 2 car garage town homes about 3 1/2 miles from Huntington Beach State Park in Orange County, California. They are 30 years old and originally sold for $77,000-$78,000. The location is good. The grounds are spacious with generous green belts and open spaces. They were built poorly with cheap materials and have been maintained in a minimal fashion because of a desire by the homeowners association to keep fees down and poor, often corrupt management.
It turns out at least one person bought for $700,000 before the current economic episode began. Several bought at around $650,000 within the last 18 months and several more bought at around $600,000 in the year before that. It turns out three of these places have sold in the last 8 months. One for $600,000, probably early on. One sold for $485,000 and another for $450,000. This is at least a 30% drop, so far! I think these places still have a fair ways to go as far as bottoming out. Nothing is selling right now and the ones that do, have spent a long time on the market and had the asking price slashed. These places would have to go down to around $350,000 before you could rent them for a positive cash flow on the mortgage. To cover association fees, property taxes and an adequate cushion for maintenance and upkeep $250,000 is probably a better number. I don't see rents going down around here, so that's not a problem. The size of these places does put them at the very top of the rental market. Finding renters with high enough cash flow and the desire to spend it on such a large rental unit could be a problem in hard times without deeply discounting the rent. If they got down to $250,000, I'd certainly start thinking about buying another one, even if the rents weren't going to bring me in a lot of income. That's another big drop in price though, we'll see.
How much has your house decreased in value and how are houses selling in your neighborhood?
1 comment:
Value is somewhat subjective, but we bought our house in 1988 for 200K IN the SFBay area, CA.
I figure the housing market peaked a year ago at about 575K, and our house would probably bring 500K now.
beebs ex-DCA 637class
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