Address: 1225 Washington #8 - 90403Details: 2 bed/1.5 bath 1,204 sq ft condo, 1959 building, $161/month HOA, Foreclosure
Description: *reo* this 2 bedroom 1.5 bath condo with a great santa monica location is conveniently located close to shopping, schools and the freeway. Features of the property include laundry in the unit and much more.
Previous Purchase: 3/9/05 - $649,000
Bank Buyback: 10/16/09 - $487,441 (New Century)
Listing History: 3/9/10 - $679,000
This does not seem like a very attractive price, but given the state of the market somebody might (incorrectly) think they are getting a deal because this is a foreclosure.
You may also recognize this building as I have featured it before when other units also went through foreclosure.
Unit #3 -- Previous Purchase: 3/7/05 - $441,000 ($0 down, Countrywide loans)
Lender "Buyback": 1/28/08 - $393,638 (also the amount "owed" to Countrywide)
Listing History: 4/29/08 - $414,900
SOLD: 6/25/08 - $399,000
Unit # 2 -- Previous Purchase: 1/27/05 - $419,000
Listing History: 6/15/09 - $299,000
SOLD: 11/13/09 - $355,000
Both units #2 and #3 sold for well below 2005 prices...yet the bank listing #8 right now is hoping for a mid 2005 price. I think this comes down to whether the cheap government financing (FHA, etc) and incentives (first time buyer credit) are enough to get someone to overpay for this.
Thanks to the government, there is zero downside to buying this at any price. Basically the message is that as long as something costs $729,000 and less, you can buy it with close to nothing down (FHA loan at 3.5% down). If the price goes up by $100k, just take the equity back out and buy an SUV and a vacation.
ReplyDeleteIf the price goes down by $100k, that's even better: stop paying the mortgage immediately. For two or three years, you will live rent-free, and the whole time the banks and government will be kissing your behind trying to lower your mortgage while you stall them and while the government puts one moratorium after another against being foreclosed. When it's finally time to leave, the idiot banks will actually give you $10,000 as "cash for keys". It's money they give you, after you've lived rent free the whole time, so that you won't trash the place and destroy it when you're done with it.
Don't feel guilty about any of this, they are literally incentivizing you to act this way. Have fun, and don't worry about purchase price.
To be fair, this list price for #8 is a better price per square foot (about 17% better) than what #3 went for.
ReplyDelete#8 has more than double the square footage, significantly less than double the price.
Just saying.
Economies of scale...unit #3 is a 1 bedroom and unit #8 is a 2 bedroom.
ReplyDeleteBad comparison to go pure $/sq ft on the two. I think the year rollback method is better.
I assume you're saying this with a wink, Arti, and we're definitely on the same page about current government incentives for housing being ill-advised, market distorting, and unsustainable. Still, any plan to walk away must confront the credit score hit, no?
ReplyDeleteTerrible credit can be a pretty irritating thing to try to recover from... I wouldn't want to deal with it.
I should also have noted, prices in this range for 2 bedroom condos are absurd. There are options around $500,000 if you show some patience, and that's all the rent levels in the area can justify.
ReplyDelete$500k-$800k in SM walking distance to the beach gets you a dump. I wouldn't live in any of the places I have seen in that price range. They are either neglected, old or had a cheap remodel with sub-par materials. There is no quality for that price.
ReplyDeleteGreat point LosAngelian, thanks. Nevermind the value of living within walking distance of the beach, or having access to SM schools. What's a better option for a first-time buyer who can barely afford something in the middle of that range?
ReplyDelete