As we wrote in February:
Listed for $1,199,000 last July, 42 Mars closed escrow for $1,240,000 six weeks later. It’s back on the market seven months later and asking $1,239,000.
Will multiple offers magically materialize on Mars once again?
Three days ago the sale of 42 Mars closed escrow with a reported contract price of $1,260,000 ($725 per square foot). We’ll take that as a yes.
∙ Will Multiple Offers Magically Materialize On (42) Mars Once Again? [SocketSite]
The roof appears to have a bow in it.
Transfer tax: $10K
1 point on loan 12K
Realtor, etc 63K
$85K, about $12K per month, plus the ownership premium of at least $1K per month, so they pissed away $13K per month, every month above what it would have cost to rent.
Nice job.
I guess there *is* life on Mars…
Is there typically a story when someone goes and sells so soon after buying? Buyer’s remorse? Financial problems? Something horribly wrong with the property?
Unless they were relo’d and then the monthly cost would be substantially lowered.
@tipster / @ GF, both your comments are accurate if those were the circumstances. Obviously buying and holding a property for this short a period of time is a recipe for disaster. But I’m becoming less and less concerned with the individuals P&L associated with these situations and focusing more on the nominal comp figure. This is a pretty strong indicator that the market is hanging on in light of some difficult market challenges.
well said, eddy. it’s a truism to note that, absent huge appreciation, you’re going to lose a lot of money owning in the short term. i find the individual loss/inflation-adjustment calcs less and less interesting as time goes on.
the direction of the market is far more important.
And for those that always criticize SS on their bias; give a little credit for posting an update that isn’t entirely bearish. 🙂
But it’s also the case that housing busts often work through the system with somewhat nominally flat prices with inflation eating away at real prices. I think a lot of people see this as “hanging on,” but it’s really not.
You can see this in the “Prestige Index” from 1990 to 1Q 1997 — during that time, inflation was approximately 20%:
http://www.firstrepublic.com/lend/residential/prestigeindex/sanfrancisco.html
And you can see the same result during that period in Case-Shiller top tier:
https://socketsite.com/archives/2010/03/january_caseshiller_index_bottom_tier_up_middle_and_top.html
The individual loss calculations are interesting as an allegory of boomtime behavior where everyone thinks they’re an investor, but you’re right that the direction of the overall market will be what’s interesting in the end. Given the long property holds in large parts of “prime” SF, it’ll be interesting to see if generational factors crop up too, although I don’t have enough information to make any predictions there.
Sorry, that should be “approximately 23%,” not 20%.
(see usinflationcalculator.com, based on CPI with all of its quirks)
Two sales in nine months, the latter for slightly more. Bring out the pretzel logic!
@eddy: It’s more interesting as a sign of health in the market. It’s also an attractive house that’s been nicely remodeled and priced right.
As for losses, I suspect there was either no mortgage or a substantial down payment. The owners may have decided a quick move was in their best interests overall. Life happens. Sounds like they had a good realtor, too.
Talk about pretzel logic, why isn’t flujanonn whining that it doesn’t count because it was ‘competitive’? Guess that only happens when it demonstrates a loss.
anon.e.mouse,
which assets outpaced inflation over that period?
especially, which investment decisions outpaced inflation and satisfied you housing needs at the same time?
did you make lots of dough not buying real estate?
Good apple showing that prices appear to be increasing in SF.
Pricing since mid-2009 has increased. The 1st question was always is this real or is this a function of gov’t intervention. The 2nd question was will this continue.
From my perspective. With regards to #1 – both. With regards to #2 – likely to trade within 5% band over the next 2 years.
You say “doesn’t count.” I say “take into consideration.” The same thing? YMMV. But regardless, this wasn’t a 10 percent overbid without precedent.
anon.e.mouse,
“as an allegory of boomtime behavior where everyone thinks they’re an investor”
where are you? tell us what did better than your inflation numbers, please.
Median prices on SFDs were up 23% from Jan 09 through Dec 09. That’s pretty impressive:
http://www.pegasusventures.net/wordpressblog/wp-content/uploads/2010/02/2009-Median-Prices-SFDs.jpg
Condos/TICs ended the year virtually flat:
http://www.pegasusventures.net/wordpressblog/wp-content/uploads/2010/02/2009-Condos-All-Districts.jpg
I tend to agree with SFRE, though I’d put the band, both up and down, at around 10%. The positive economic signs do seem to be accumulating, but I think there’s still a political risk of the govt turning off the credit spigot too soon, or jobs not getting traction, or some international economic shock — China bubble? Euro collapse?
[Editor’s Note: Medians Are Up, But Don’t Confuse That With Increasing “Prices”.]
“where are you? tell us what did better than your inflation numbers, please.”
Hey anonee, I don’t tend to read SocketSite on weekends. Even though I don’t always quote the S&P 500 for these sorts of things (because I don’t think it’s the end-all of investments), even the S&P 500 did better from 1Q 1990 to 1Q 1997 than inflation. Over 100% higher in that period.
Are you suggesting that buying housing at a peak and selling at a trough would be a good thing if that’s what you happened to do? 5-7 years is not an odd holding period for many people.
Btw, none of that is to suggest that most people’s housing decisions should be investments or treated as investments. The average buyer would be better off not thinking of housing as an investment and rather as a place to live. During the boom, people lost sight of this.
There is such thing as real estate investing, but that requires a lot more knowledge, a lot more study, a lot more calculation, and a lot more anticipation of trends.