Tweet
As California's Bubble Bursts ... new time- 12 noon, Monday through Fridays, on KRON TV....
More Bay Area homes sell for less than $60,000
Carolyn Said, Chronicle Staff Writer
Wednesday, August 26, 2009
Condos for $20,000? Single-family homes for under $60,000? What is this, Detroit?
It's the topsy-turvy world of Bay Area real estate. Despite studies showing prices slowly rising overall, homes at the low end appear to be playing a game of limbo, flaunting prices comparable to what you'd pay for a car.
Sometimes those ultra-low prices are come-ons to spur a bidding war; sometimes they reflect abysmal house conditions. It's no surprise that the dirt-cheap properties are located smack in the middle of foreclosure hot spots - Pittsburg, Antioch, Vallejo, Richmond, Oakland. They tend to be either bank-owned foreclosures or short sales (selling for less than is owed).
David Lear of Sotheby's International Realty in Danville is selling a one-bedroom condo in Pittsburg's Lakeview complex near Los Medanos College for $48,000 as a short sale. The owner purchased it three years ago for $228,000.
"It shows you how dramatically the market has declined," he said. "We're not even the lowest-price unit in there; there's a similar one for $38,000."
Just about every owner in the complex owes more than their property is worth, and many are trying to unload their units via short sales, he said. "The whole complex basically has gone to hell in a handbasket," Lear said.
Ricardo Velazco of Century 21 Pinnacle in Richmond sold a Richmond condo for $20,000 during a brief window in March when buyers were fence-sitting so properties went for their asking price, he said.
The parade of bargain properties has helped to spur the fence sitters into action and incite bidding wars, he said.
Banks "have started aggressively pricing property to bring cash buyers out of the woodwork," Velazco said. "A lot of (vacant for-sale) properties were being vandalized; repairs were an extra expense. The longer they sit on the market, the more problems they encounter; in the long run it costs banks more to keep them on the market."
Banks prefer cash buyers because sales are certain to close quickly and cleanly, and because properties that are uninhabitable - because all the plumbing has been stripped out, for instance - cannot qualify for a mortgage.
Barb Sauer of Re/Max Accord in Lafayette has a $69,000 three-bedroom home listed in Pittsburg. "It looks really cute, but (the foreclosed homeowners) left a dog in there, maybe two, and the place is so destroyed," she said.
Similar situations underlie a lot of the cheap prices, she said.
"When people are foreclosed and move, they take everything they can; sometimes they take a sledgehammer to the walls," she said.
Still, she gets multiple offers that push up the prices. "I had one in San Pablo listed at $115,000; we got offers ranging from $120,000 to $165,000," Sauer said. "We threw out the high offer because we didn't think it would appraise" at that price.
Many cash offers
She's seeing a lot of investors making cash offers on the ultra cheap properties. "It's about half and half whether they fix them up and flip them, or keep them and rent them out. You can invest $100,000 (in a home) and get $1,200 a month in rent. What would you get at the bank (on the same amount) - 2.5 percent" annual return?
Many condos are particularly cheap because of financing issues, said Tim Garton of Coldwell Banker in Vallejo. Government-backed loans, which account for 90 percent of mortgages these days, are not available at complexes where too many residents are behind on their homeowner association dues, or too many units are not owner-occupied.
"These red marks tally up, and suddenly there is no financing available," he said. "That takes out a huge percentage of the potential buyers. Your pool of potential buyers becomes very small; just the cash buyers. The fewer potential buyers, the more you have to lower the price."
Is supply dwindling?
Theresa Marquez of Re/Max Accord in Castro Valley did an analysis showing that ultra-cheap inventory in Oakland is dwindling. Sales of Oakland properties under $60,000 have averaged about 27 a month this year, she said, but right now there are just nine properties listed for sale at less than $60,000. "We have less supply and more demand for these houses," she said. "I think that price range is starting to rise up."
The lowball listings are good for some laughs. "Cute and charming on mature tree lined street. This home shows extreme pride of ownership!" reads one MLS description for an Oakland one-bedroom. Sounds delightful, but at $49,000, it's hard to imagine that it lives up to the blurb.
Some are more realistic. "Buyer's gain, seller's loss" says a terse description for a $40,000 condo in Oakland.
$48,000
2247 Lakeview Circle, Pittsburg
Previously sold in 2006: $228,000
Size: Condo, 1 bedroom/1 bathroom, 527 sq. ft.
Year Built: 1989
$62,500
311 S. 16th St., Richmond
Asking price: $49,900
Previously sold price: Unavailable
Size: 3 bedrooms/ 1 bathroom, 925 sq. ft.
Year built: 1958
$69,000
412 9th W. St., Pittsburg
Asking Price: $69,000
Refinanced in 2005: Valued at $242,000
Size: 3 bedrooms/ 1 bathroom, 1,594 sq. ft.
Year built: 1936
E-mail Carolyn Said at csaid@sfchronicle.com.
http://sfgate.com/cgi-bin/article.cg...BUN819BK46.DTL
More Bay Area homes sell for less than $60,000
Carolyn Said, Chronicle Staff Writer
Wednesday, August 26, 2009
Condos for $20,000? Single-family homes for under $60,000? What is this, Detroit?
It's the topsy-turvy world of Bay Area real estate. Despite studies showing prices slowly rising overall, homes at the low end appear to be playing a game of limbo, flaunting prices comparable to what you'd pay for a car.
Sometimes those ultra-low prices are come-ons to spur a bidding war; sometimes they reflect abysmal house conditions. It's no surprise that the dirt-cheap properties are located smack in the middle of foreclosure hot spots - Pittsburg, Antioch, Vallejo, Richmond, Oakland. They tend to be either bank-owned foreclosures or short sales (selling for less than is owed).
David Lear of Sotheby's International Realty in Danville is selling a one-bedroom condo in Pittsburg's Lakeview complex near Los Medanos College for $48,000 as a short sale. The owner purchased it three years ago for $228,000.
"It shows you how dramatically the market has declined," he said. "We're not even the lowest-price unit in there; there's a similar one for $38,000."
Just about every owner in the complex owes more than their property is worth, and many are trying to unload their units via short sales, he said. "The whole complex basically has gone to hell in a handbasket," Lear said.
Ricardo Velazco of Century 21 Pinnacle in Richmond sold a Richmond condo for $20,000 during a brief window in March when buyers were fence-sitting so properties went for their asking price, he said.
The parade of bargain properties has helped to spur the fence sitters into action and incite bidding wars, he said.
Banks "have started aggressively pricing property to bring cash buyers out of the woodwork," Velazco said. "A lot of (vacant for-sale) properties were being vandalized; repairs were an extra expense. The longer they sit on the market, the more problems they encounter; in the long run it costs banks more to keep them on the market."
Banks prefer cash buyers because sales are certain to close quickly and cleanly, and because properties that are uninhabitable - because all the plumbing has been stripped out, for instance - cannot qualify for a mortgage.
Barb Sauer of Re/Max Accord in Lafayette has a $69,000 three-bedroom home listed in Pittsburg. "It looks really cute, but (the foreclosed homeowners) left a dog in there, maybe two, and the place is so destroyed," she said.
Similar situations underlie a lot of the cheap prices, she said.
"When people are foreclosed and move, they take everything they can; sometimes they take a sledgehammer to the walls," she said.
Still, she gets multiple offers that push up the prices. "I had one in San Pablo listed at $115,000; we got offers ranging from $120,000 to $165,000," Sauer said. "We threw out the high offer because we didn't think it would appraise" at that price.
Many cash offers
She's seeing a lot of investors making cash offers on the ultra cheap properties. "It's about half and half whether they fix them up and flip them, or keep them and rent them out. You can invest $100,000 (in a home) and get $1,200 a month in rent. What would you get at the bank (on the same amount) - 2.5 percent" annual return?
Many condos are particularly cheap because of financing issues, said Tim Garton of Coldwell Banker in Vallejo. Government-backed loans, which account for 90 percent of mortgages these days, are not available at complexes where too many residents are behind on their homeowner association dues, or too many units are not owner-occupied.
"These red marks tally up, and suddenly there is no financing available," he said. "That takes out a huge percentage of the potential buyers. Your pool of potential buyers becomes very small; just the cash buyers. The fewer potential buyers, the more you have to lower the price."
Is supply dwindling?
Theresa Marquez of Re/Max Accord in Castro Valley did an analysis showing that ultra-cheap inventory in Oakland is dwindling. Sales of Oakland properties under $60,000 have averaged about 27 a month this year, she said, but right now there are just nine properties listed for sale at less than $60,000. "We have less supply and more demand for these houses," she said. "I think that price range is starting to rise up."
The lowball listings are good for some laughs. "Cute and charming on mature tree lined street. This home shows extreme pride of ownership!" reads one MLS description for an Oakland one-bedroom. Sounds delightful, but at $49,000, it's hard to imagine that it lives up to the blurb.
Some are more realistic. "Buyer's gain, seller's loss" says a terse description for a $40,000 condo in Oakland.
$48,000
2247 Lakeview Circle, Pittsburg
Previously sold in 2006: $228,000
Size: Condo, 1 bedroom/1 bathroom, 527 sq. ft.
Year Built: 1989
$62,500
311 S. 16th St., Richmond
Asking price: $49,900
Previously sold price: Unavailable
Size: 3 bedrooms/ 1 bathroom, 925 sq. ft.
Year built: 1958
$69,000
412 9th W. St., Pittsburg
Asking Price: $69,000
Refinanced in 2005: Valued at $242,000
Size: 3 bedrooms/ 1 bathroom, 1,594 sq. ft.
Year built: 1936
E-mail Carolyn Said at csaid@sfchronicle.com.
http://sfgate.com/cgi-bin/article.cg...BUN819BK46.DTL
Comment