Friday, December 12, 2008

pity the fool



From the comments section:
"Pity the fool who bought this... Buying an asset which doubled in 3 years is nothing short of idocy..."(sic)

5164 Madeira Court
Asking price: $1,090,000
Selling price: $870,000
Previous selling price: $389,750 (2005)
Taxes: $5,240 (2007)
Days on the market: 36
Listing agent: Betsy Carstairs, Park Georgia Realty Ltd.

Even though this 1,972-square-foot house...sold for $220,000 under asking, the selling price was still $480,000 above what (was) paid for it about three years ago.

"Unlike financial markets, real estate is always a good investment," agent Carstairs says. What else is she going to say? The place has shed value in the week passed since it was sold.

...built in 1971, is in need of some (major) updating — brown carpets aren't for everyone — but it has attractive features...it's on a dead-end street... It is fitting that it is on a dead end street, it is a dead end investment.

The new owners are "excited about the idea of giving this '70s-style home a facelift," ...Carstairs says. "They can't wait to roll up their sleeves and work together to create the home of their dreams."
(italics mine)

Now, that is just crazy. They were asking 3 times what they paid for this house three years ago, and got double - without doing anything to the place. The new "owners" will need to put $100K into the place while it is dropping in value. Will it go back to 2005 value? Oh, yeah. Will it go back to 2003? Oh, yeah. How low will she go?

Just imagine paying $500/month in property taxes on top of the mortgage payments, new furnace and windows, new roof, new kitchen, new everything. This place has a great view, but is a bad deal, IMHO. The ones who bought it in 2005 hit the jackpot though...

9 comments:

Anonymous said...

Pure insanity. What is scary is my first thought was $389,000 in 2005 was a good deal. Surprised it sold that low as the market was already on fire then. But then again its a middle class home in a nice area. I remember people buying homes in piont grey in 2008 for $400,000. And I thought that was expensive.

ted

donald said...

I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

Betty


http://www.my-foreclosures.info

solipsist said...

I had the same thought about the 2005 price, ted - then I caught myself. I remember houses on the West Side going for less than houses in the Commercial Dr. area around 1998. I thought things were nuts when a heritage house (that made more than one appearance in The X Files) 1 block from The Drive sold for $400K (1998-99).

You must mean 1998 regarding Point Grey prices?

donald/Betty - figure out your gender/identity issues, and quit spamming. Nobody here is interested. Idiot.

Art Vandelay said...

Hard to believe sellers are still being rewarded for doing nothing to improve their properties. But that's on the buyers. Nobody forces them to buy an over-priced house with deferred maintenance challenges.

Anonymous said...

i am bad good catch solipist 1998 is what i meant.
Its funny you mentioned commercial drive I had a coworker at the time mention how a friend bought there for the price range mentioned. He thought it was a good "investment" I thought I wouldn't want to liver there period. I have a cousing who bought at the peak in east van for over $800,000. He did sell a house that went up in value but I think he bought the 100 year high if we look at real values.

ted

Anonymous said...

Wonderful. After they victorianize it with horrific Home Depot chandeliers and pressboard crown molding and ridiculously wide window moldings and dust catching chair rail molding, all in dirt-displaying WHITE, and paint all the "ugly" dark wood paneling and ceilings and beams and kitchen cabinets WHITE, and everything else in "designer" colors of tan and blood, with a nice netural GREY carpet, they will completely rape the house of any sort of midcentury 70's modern charm it had and make it unbuyable, at any price, to the growing legions of savvy women in their teens and 20's today who want authentic 70's mid century modern and not some victorian frankenstein hybrid with radon outgassing granite countertops.

Oh, make sure to replace all the custom glass wall windows with Home Depot double paned small window crap that will fail in ten years time and fill the surrounding walls with wallboard and insulation to kill the view while you're at it.

Word to the unwise...

Anonymous said...

the knee slapper is it was originally listed in the summer for 1.5M!

Anonymous said...

Pure insanity. What else can be said?

pbell

Anonymous said...

From www.geoweb.dnv.org, the 2005 assessed value was $761,500.

The 2005 sales price is meaningless, as a data point.