Sunday, January 21, 2007

A sampling of Redondo listings

I thought I'd scrape through my records and see if I could come up with anything interesting. As you know, I scramble real addresses to protect the guilty parties. I list previous sales dates and prices for a property along with the current asking price of that property.

Here are some potential short sales brewing:

5162 Dnalhur #13

10/15/2005  $559,000
now asking: $529,000

-----------------------------

0301 Euneva A

12/13/2005: $870,000
now asking: $919,000

-----------------------------

0122 Swehtam #B

12/14/2004:  $679,000
now asking:  $729,500, down from $775,000

"Great opportunity, built in 2004 by richvr and it is been vacant since. Excellent
move in condition. Plantation shutters, travertine floor, marble, granite counter 
top, ss appliances including refrigerator, washer & dryer.Cherry wood cabinets, 
natural stone tile, fireplace, vaulted ceiling and a lot more. This unit is priced to 
sell. Must see to appreciate. Thank you."

That last one was originally listed at $749,000 in the spring of 2004. I still have that 2004 flyer. They had to knock it down to $679,000 to sell it later that year. Of course, being the busybody that I am, I am wondering, why didn't the December 2004 buyer ever move in?

Moving on, now here's an honest-to-God remodel/flip. Looks like they put a lot of work (and probably money) into it. Will they get a nice profit for their efforts?

044 N. Tcepsorp

5/17/2006:  $775,000
now asking: $949,900, down from $1,175,000

If they sell now at their price, that's a 22% gain, nearly $175,000. If the selling transaction miraculously skims off only, say, $40,000 for the realtors, closing costs, etc, that would leave a $135,000 gain.

The property description states:

"Completely rebuilt and remodeled. All new electrical and plumbing. Beautiful 
hardwood flooring. Beautiful custom kitchen with granite countertops and new 
cabinets, with kitchen aid stainless steele applicances. All new windows and doors. 
Custom finished bathrooms with new fixtures,travertine and stone finishings. Large 
master bed with large walk in closet, custom bathroom with jacuzzi tub/steam shower, 
and his and her sinks."

The number of bedrooms was reduced from 5 to 4, so there must have been some serious wall-knocking going on. I have no idea how much it cost to do all this, but if they sank, say, $75,000 into it, that would leave them a profit of $60,000. Not bad, IF they can sell it at the current asking price. But will there be income tax on the gain? Maybe a blog reader knows. If you live in a house while you remodel/flip it, can you avoid tax on the gain?

And here are some plain old boring properties with some price histories.

6171 Namdoog

2/6/1998:   $320,000
4/27/2000:  $397,000
10/9/2003:  $625,000

now asking: $809,000, down from $849,900

If they sell now for the current asking price, that's a 29% gain from the 2003 sale price, in 3 1/4 years. More than 2X the 2000 sale price, in 6 3/4 years. More than 2.5X the 1998 sale price in less than nine years. This is not a property that has enjoyed the most insane of appreciation rates in Redondo Beach. I think some properties have managed to eek out a double since 2002-2003. But this one still has appreciated quite well.

9022 Ruofud #B

8/8/1986:   $207,502
now asking: $679,000, down from $715,000

#A unit sold for $350,000 in late 1993

What the price record does not show directly is the cataclysmic plunge in the market during the late '80s - mid '90s. If the property is sold now for the current asking price, that is *ONLY* a 3.3X gain since 1986. There is a good possibility that the owner paid too much for it back in 1986, but we've seen how easy credit expansion and a mania can smother over such errors. We know that appreciation rates have been wacko for the last several years, so why such a small gain relative to the other wacko gains we've seen in this neighborhood? The answer is probably because prices fell into a chasm and took a number of years to crawl out. This homeowner was able to stick out the dark years. Fortunately, the neighborhood did not fall apart in that time. Will homesellers as a group be able to clench their teeth and stick it out as we hit the same kind of turbulence down the road? I don't think it's as likely. I expect exponentially greater financial frailty making itself more and more painfully obvious as we move forward, and I expect some socio-economic upheaval in the years ahead.

4062 Setag #2

11/7/1997:  $131,000
2/9/2003:   $285,000

now asking: $484,000

That's a 70% gain in 4 years, if the current owners get that asking price.

I should point out here the 1997 buyer's timing was pretty good, coming off the low in 1995-1996. Too bad he didn't hang on to it. Yes, timing matters, probably above everything. When the gun goes off, all the turkeys fly, and in a market boom, almost any property will sell. Had the 1997 seller hung on to it, he would be dealing with a sale bringing in 3.6X his original purchase price, approaching a quadruple in less than 10 years.

3 Comments:

Blogger Mike said...

good stuff.

But will there be income tax on the gain? Maybe a blog reader knows. If you live in a house while you remodel/flip it, can you avoid tax on the gain?

as far as i understand the law, you have to occupy it as your primary residence for at least two of the past five years in order to get the break. if there are multiple owners then each gets their tax break based on how long they themselves lived there. for example, if you and your mom own a property 50/50 and you live there for two years but she lives in her own residence, you will get out of the capital gains tax on your portion of the rise in value, but she will have to pay the tax on her portion, up to $500k (that's the total appreciation on the property, not each owner's share), or 250k for a single owner.

if i understand your post correctly they purchased it in may of last year, so even if they had been living there they have not been there long enough to avoid a tax on any capital gain.

10:38 AM, January 21, 2007  
Blogger bearmaster said...

I knew somebody out there would know! Bless you Mike!

Yes, according to all the property sale records, it was bought in 2006.

11:26 AM, January 21, 2007  
Blogger bearmaster said...

I stumbled across this on Craigslist today (Jan 22). Of course the foremost question on my mind was, wy are they feeling so shaky that even though the house is in escrow and it had multiple offers, they still want backup offers?

4122 Noslen #A, Redondo Beach - Buy a bargain - IN ESCROW THIS WEEK

This house was on last week's list and it went into escrow this week with multiple offers. They are still looking for backup offers. I will be posting a new great value next week for you. Otherwise, have a look at the other ones on this list.

This is the lowest priced 2 on lot over 2000 sqft in North Redondo Beach. It has 3 Bedrooms 2.5 baths with a traditional floor plan. This house has just over 2200 sqft and 2.5 bathrooms.

The home is in good condition and perfectly livable with no changes. The home is well maintained and comes with 2 patios. One of the patios is off the master bedroom. You will find a cosy fireplace in this home to top it off.

A livable home without pinching your pocket. Quite a bargain.

8:27 AM, January 23, 2007  

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