When we first got back out to California we rented a townhome for $1900 a month. Sometime near the end of our first year there (and with the lease expiring) the owner called me to inquire if I was interested in buying the unit. I asked how much and she said "$515,000." To which I responded "You gotta be kidding." After that, real estate agents began showing up and calling to view the place (though we had no decrease in the rent for the inconvenience). So, we found another place to rent and now the owner had a tough property to rent (potential sale at any moment means month-to-month and a reduction in rent).
Well, here's the old joint and you can see that the owners had bought near the peak (2005) at $445,000 and their tax assessment shows they made about $9,000 in improvements. The flat sold February 26 of this year (we moved out in August and it appears to have stayed vacant) for $340,000. So, if the owners sold at a loss (I think they got foreclosed) they also lost $13,300 in rent (7 months vacant) and $105,000 in cash for a total loss of $118,300 on a bloomin' condo! The owner, who considered herself a savvy RE speculator/flipper, had 6 or 7 additional properties just like this...Flippin' don't pay and Redfin tells all.
Wow! The amount of money they lost is enough to BUY a 4 bedroom house in Erie.
Posted by: Ray D. | May 16, 2008 at 04:45 AM
Ray,
After the housing market has fully unwound out here homes will be very affordable too.
Posted by: Garrett | May 16, 2008 at 12:23 PM