Cutting Losses on John

By Dave Fratello | August 23rd, 2007
It was a bad bet.

Someone bought 512 John this February for $4.075m. (We're told it was a builder who took the house in trade.) The bet was that this was actually a below-market price, and the property could be sold for more. Much more.

Six months ago, the day after the new owner's purchase recorded (Feb. 15), 512 John went up for $4.449m. After it lingered a while, the price dropped to $4.349m, but then, 5 weeks ago, the price shot up $400k to $4.750m. (Hint: This tactic apparently never works.)

No takers. No one even took them up on the option to rent the home for $20k/mo.

Now 512 John has dropped $750k (really, $450k) to $3.999m, below the price paid earlier this year. With holding costs and costs of selling, a bit of a bath may be taken.

Chalk it up to a confusing market, a bullish buyer (the builder) and the near-halt to sales activity this month due to the mortgage mess – it was a perfect storm. The seller now sees that it is time to get out ASAP, even if it means taking a loss, because the longer-term outlook suggests that losses could mount.

It's too bad. MBC rhapsodized a bit in the "rent this home" story:
This is a striking masterpiece of a home, built in 2000 in a great location, the kind that some folks are just dreaming about when they write "panoramic ocean views."
And there was more... There's nothing wrong with the home but the very specific style you have to buy into. So much to love (John St! Giant ocean views!).

The problem has been price.

This was a big move, but they still want $4m.

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