I last featured 1141 26th #D all the way back in January 2008. It is a 1 bed/1 bath 640 sq ft condo near 26th and Wilshire. $285/month HOA, "remodeled bathroom".Previous Purchase: 5/6/05 - $477,000
Listing History: 10/8/07 - $499,000
Reduced: 01/04/08 - to $465,000
Increased: 01/07/08 - to $469,000
Re-Listed: 8/24/09 - $449,000
Reduced down to - $429,000
SOLD: 4/2/10 - $421,000
My listing history info is probably not complete since it may have been re-listed in 2008 and I don't have a record of it. But here we see a unit which was essentially for sale from late 2007 until now. Probably about a mid-2004 rollback, although I don't know when the bathroom re-do was completed and you could also sort of adjust for the tax credit too.
...But here is where things get interesting. I also saw that a similar unit in the same complex just sold about 2 weeks after the unit above did. It was a foreclosure. Check this out.
Address: 1137 26th #A - 90403
Details: 1 bed/1 bath 630 sq ft condo, $285 HOA, REO
Description: Corporate owned. North of Wilshire.Rear courtyard unit that has been upgraded with crown mouldings and hardwood floors. Unit has 1 car garage with storage. Property being sold in its current as-is condition with no warranties or guarantees neither implied nor expressed by seller and or their agents. All offers to include current proof of funds, current letter of prequalification and current earnest money deposit, W-9 from selling agents Brokerage and must be written on current car contract. Property may or may not qualify FHA, VA, 203K ***Please see private remarks***
Purchase History:
8/23/04 - $395,000
4/17/07 - $455,000
Bank Buyback (JPMorgan): 1/27/10 - $347,650
REO Listing History: 2/23/10 - $371,250
SOLD: 4/16/10 - $350,000
Wow! This just sold for $71K less than the first unit I showed. That is a discount of 17% for what looks like a very similar unit (10 sq ft less). Also, look at the previous sale history for this unit. This looks like a solid 2003 rollback. At this purchase price, your interest and property taxes come to about $1,750/month. Add on HOA fees and you are just over $2,000/month. Not quite at rental parity but if you figure in the tax break you probably get somewhat close...So maybe some more downside here but probably not a ton.
While I was doing this post I thought I ought to ask readers if they still want to see coverage of 1 bedroom condos. It is not a segment of the market which I think I will personally ever get involved in and I think someone made a comment recently which went along the lines of "what is the point of buying a 1 bedroom when there is rent control" (which I somewhat but not completely agree with). So I guess I'm just interested to hear from the readers. Leave comments or e-mail me if you want.
As a single dude, I appreciate the one bedroom condo coverage. When you say that it's a segment you will never personally get involved, is that as an investment or as a broker? Do you not recommend one bedroom condos?
ReplyDeleteThank you,
David
It would be interesting to see how rent control has worked historically; I've had several long-term apartment neighbors paying extremely low rents because they had been in the building for 20+ years. I'm too new to the area to know if it's always been like this, though.
ReplyDeleteI think covering 1 bedroom condos is fine. I'm sure you have some entry-level readers for whom such a place might make sense. I also think these might be the first units to return to rental parity, as there's really no justification for an "ownership premium" in this segment.
David, I don't work in the real estate field. When I say that I won't get involved in 1 bedrooms personally I just mean that I don't think I would ever buy one to live in or as an investment. I think for some people it can make sense to own in some cases but generally I think you ought to rent 1 bedrooms instead of own.
ReplyDeleteI also appreciate the condo coverage, though I am searching for a 2 bedroom/1.5 to 2 bath. I enjoy the other listings, though and the comments from all. Thank you for this blog.
ReplyDeleteAs an investor, it's rough to own one-bedrooms for income. They have higher turnover and are harder to lease. You also have to charge a higher rent psf to make up for the higher $ psf you normally pay for buying smaller units. Because of rent control, however, I probably wouldn't buy a rental in SM unless it were vacant and we were in an era of price appreciation.
ReplyDelete