Update on Three Hard Cases

Posted by Dave Fratello on Saturday, September 22nd, 2007 at 4:08pm.

We had no idea when we featured a few specific homes on MBC that they'd be with us for months and months.

You get the feeling that nothing has changed with these listings, despite step-by-step price cuts. Something is keeping the buyers away. Now it seems all three sellers, who bought their homes within the last couple of years, will lose money.
  • 758 14th, in the Arbolado Ct. development, surely harmed its own chances by overpricing to start. On March 1, this one began at $1.990m, fully $295k more than the owners had paid 9 months earlier, in July 2006. The list price has edged down a bit at a time, so that it's now at $1.699m. Loss with 6% cost of sale: $97k.
  • 3009 Highland (listed now as "232 30th Pl" - click for details), first drew MBC's notice (see "Decelerating Returns") because the same home had been sold over and over in the last several years:
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.
At the time, MBC cheered the sellers' modest demand for 10% gain over 2 years, and took it as a sign of slower times. That was 4 1/2 months ago. With a new price of $1.315m, the sellers are poised to make just $10k – at 6% cost of sale – not 10%, and it isn't hard to believe they could take a loss just to make a sale.
  • 601 Larsson is a short sale in the Hill Section featured on MBC several times (here, here and here, for instance). Two years ago (Sept. 2005), the current owner paid $2.0m. The home hit the market at $2.695m on March 20. In the background, the home has been facing foreclosure auction on and off throughout 2007.
After price drops failed to move it, the seller tried to get a buyer to take over the loans. Finally the lenders approved a short sale, and the home came up at $1.999m. Now it's at $1.849m. Since the seller is a realtor, we're guessing there's no seller agent commission, so the cost of sale at 2.5% to the buyer's agent would be $46k. Total loss against the 2005 price: $197k, presumably most or all of that being a hit to the lender.
It seems clear that folks are passing on 3009 Highland and 601 Larsson due to location issues. 14th simply seems to be a bit tired and, likely, still overpriced.

Every one of these listings has tried cutting, but as Summer turns to Autumn, and buyers are both challenged and picky, how are these sellers going to shake it up?
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