Job Transfer Blues

Posted by Dave Fratello on Tuesday, June 17th, 2008 at 5:47am.

A Hill Section listing has now officially joined a small parade of $2m+ listings on which losses will be incurred due to job transfers.

701 Dianthus (click for pics & details via Redfin – note: all links now fixed) was purchased for $2.53m in Feb. 2006, but became available all over again just less than 2 years later, in late January this year.

The explanation was that the owners faced a job transfer.

Despite the need to sell, the listing started with a nice markup. At $2.775m, the sellers sought a boon of $245k (+10%).

Part of the rationale? The owners had spent $150k+ on upgrades and custom paint.

The listing has spent the most time $200k lighter than the start, at $2.575m. Monday it dropped to $2.499m, meaning the sale price will definitely be lower than the acquisition price two-plus years before.

A couple of other listings of newer homes in the Tree Section, both reputed to be job transfers, are in similar boats:
  • 621 Marine (5br/4ba, 3100 sq. ft.) was purchased for $2.436m in March 2007, about a week ago in real estate time, and came right back in March 2008 at $2.489m. That was already flat, but it's at $2.349m (-$87k) now.
  • 616 29th (4br/5ba, 3500 sq. ft.) could wind up as the most severe case of job transfer blues. Almost 3 years ago, the home was purchased for $2.425m. It's now done 7 weeks of service time at $2.475m – a hair above the 2005 price, but obviously a net negative after costs of sale.
The problem for 29th is that resales aren't coming in that high these days. The best comp may be nearby 612 30th, a bit older and comparably sized, which grabbed $2.270m in late February. The 29th St. home itself is clean and newer, but it is not blowing anybody away, and may have farther to fall.
In recent years, relos could actually be profitable to the sellers who were moving. (Thank you, RE bubble.) But the best case for these sellers is that their employers will cover any losses. Sometimes on a relo, commissions and any losses are picked up by the company requesting, or ordering, the transfer; indeed, the whole sale process may be managed by a relo company. Relos have a reputation for slashing prices quickly to get out of a property, but we haven't seen much of that yet on these 3 listings.

Meanwhile, these 3 offer examples of prices that are flat or declining after 1, 2 and 3 years.

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UPDATE: The links to the 3 properties mentioned in this story did not work properly at first; they are now fixed.
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