Decelerating returnsPosted on Sunday, April 29th, 2007 at 9:21pm.
A frequently sold home at 3009 Highland is for sale now at $1.369m. The sellers bought it for $1.225m at the peak in July 2005.
Here is a case of fairly realistic sellers. They don't expect a pot of gold for the trouble of living in the house for < 2 yrs. They're just ready to move on. They have room to offer price reductions without selling for less than they paid.
The home turned over a bit during the boom years, and previous owners did carry away gold. 3009 Highland sold for $510k in Oct. 1999, then for $789k in July 2003. Precisely 2 years later (July 1 '03-July 1 '05), it went for $1.225m to the current owners. (That was $400k in tax-free profit. Nice.)
Today's sellers put their 1400 sq. ft. home on offer in early April in a market with little competition. There's only one livable, directly comparable SFR for sale now (204 El Porto at $1.299m). Which is to say: it's hard to suggest what they should get.
These sellers' hope for a modest 10% gain over 2 years can be read as a signal of the MB market's slowing pace.
By contrast, two other Sand Section sellers seek nearly 20% each after just a bit more than 2 years:
224 31st Pl. – paid $1.4m in 3/04, now seeking $1.639m
225 1st St. – paid $1.685m in 12/04, now seeking $1.995m
We'll see how they fare. 31st Place is a new listing. The 1st St. house is at 90+ DOM and is due for a reduction.
Homes that turn over this year after being purchased at the peak will convey something about the state of the market and, perhaps, the future of prices in MB. This is one reason MBC's Market Updates take note of recent sale dates and prices. Turnover after 2-3 years provides good fodder for comparison.
One of the bellwethers MBC first sought to use, 864 12th Ct., recently was canceled after two months without a bite. Those sellers hoped for just $80k more than they'd paid in August 2005 ($1.469m), but apparently couldn't get it and wouldn't take less than they paid.
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