11% in 3 YearsPosted on Thursday, July 29th, 2010 at 8:07pm.
The modestly sized (3br/2ba, 2000 sq. ft.), remodeled cottage recently closed for $1.4m, a pretty good sign of strength in Tree Section pricing.
As MBC noted in our most recent post on Pine, the home came on in late February at a time of "fairly low inventory below $1.5m." (See "2305 Pine Is Back, 3 Years Later.") List then was $1.449m, so it didn't drop much as the deal was made.
For our market tracking purposes, the intriguing thing about the MLS-reported closed price is that it's down just 11% nearly 3 full years after its August 2007 acquisition at $1.570m.
Looking around town, you'll find plenty of 2007 purchases that have rewound more than 11%. Especially on an overpay situation like Pine seemed to be at the time in 2007 – you'd expect a bigger chop. Here are some '07 purchases resold recently, and their declines in value:
3113 Laurel (5br/5ba, 3400 sq. ft.), purch. March '07 for $2.350m, resold March 2010 for $2.025m (-$325k/-14%);
- 1018 2nd (3br/3ba, 1900 sq. ft.), purch. May '07 for $1.952m, resold May 2010 for $1.545m (-$355k/-19%); and
- 1516 Highland (3br/3ba, 2225 sq. ft.), purch. March '07 for $1.795m, resold June 2010 for $1.6m (-$195k/-12%) – some remodeling work was done after the '07 purchase, so the equity loss to the sellers was likely greater than 12%.
Median prices citywide, meanwhile, dropped closer to 25% from peak to valley, though parts of 2010 have seen an uptrend from the trough. (More on median price trends soon.) What that means for Pine is that a sale midyear last year would have been expected another 5% or more below $1.4m.
The only very recent Tree Section resale from 2007 to perform "better" than Pine just did was 3011 Elm, a special Spanish in a nice location that dropped from $2.650m in Dec. 2007 to $2.475m this year (-$175k/-7%).
We always note that 2305 Pine was the subject of MBC's very first post, after the listing's price increased by $100k at a time that the broader market was strange and seemed mostly to be declining. That move prevented the home from selling during the Great Spring Rally of 2007, but the sellers still got most of their price increase in the Summer.
The buyers from that time, in getting out now, can at least be said to have picked a moment that wasn't the utter bottom to hand the keys over to someone else. Small satisfaction, perhaps, with a dollar loss that easily could exceed $200k, but it could have been worse.
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