San Diego Housing Market News and Analysis
Alder Woods Condos El Cajon
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Submitted by garysears on July 21, 2007 - 10:27pm
Alder Woods Condos at 1423 Graves Ave, El Cajon is a fairly interesting microcosm of the deflating real estate bubble locally. It is a condo conversion project that started selling in late September 2005 and is now selling the final phase. I was playing around on the county assessor’s website and found I could list all of the 95 units sold.
I was interested by this data because it seems a lot better than monthly sales data from multiple complexes or a whole zip code. I view it as being nearly as good as same unit resale data, only maybe better because there probably aren't significant upgrades and the quality and condition should be identical.
This data probably eliminates a lot of the variation that is normal due to complex location, floor plan layout and size, condition, construction date, etc... There is remarkable consistency in the units released and the sale dates are fairly evenly spaced throughout. You can see how 1bd vs 2bd condos are holding up in value. There were only a few data points that were sources of noise or significantly out of place in the grand scheme of things.
I don't know what kind of concessions or upgrades might be included but after visiting the sales office I get the impression there isn't much if any custom work done. I also note that they have been advertising since release "0 down and 0 closing costs." That tells me a lot of the units may be bought with the same preferred lender. I don't know what kind of variations might be hidden in the data to make the sales work.
When I went by the sales office I was told the final phase includes the most desirable units in the complex because they are centrally located around the pool, etc... I guess they sold the ones around the edges of the property first so they could maximize the price of the last phase. I don't know if this is artificially inflating the latest data.
So far the county has recorded 95 sales. I don't know how many are left to sell. Anyway I decided to have some fun and put it all into a spreadsheet to make charts and graphs.
After the first phase started selling the last few days of September 2005 the prices peaked within about 6 months (3 peaks, 1 for each floor plan actually) and have mostly continually declined since. You can definitely see the local bubble in the data. It is also interesting to see who vastly overpaid for their unit and who got a comparatively good "deal" at the time. Again, I'm not sure what kind of funny reporting may be going on with the sales prices. But it looks like some people overpaid because they didn't do basic research. Or maybe the sales hadn't been officially recorded before they signed the contract.
I sorted the data, graphed it, and found a maximum value that represents at least 2 condos sold or more. I made a "market value" around the prices the most recent have sold for.
The results may not be interesting to a lot of people but there are enough data points to clearly spot some trends. Note how the relative values for the different floor plans have faired.
Plan #Sold SF Max $ Recent %Decline
To be conservative, the max price is not from a single unit. The 1b/1ba represents 2 sold around or above the value. The 2bd/2ba represents 5 units and the 2b/2ba represents 8 units. I have not used the lowest value for the most recent sales either. Both the max and recent values are even amounts that seemed reasonable and conservative when I was looking at the graphs.
The most paid for each floor plan represents a peak date of MAY '06 for the 1/1, JAN '06 for the 2/1, and OCT '05 for the 2/2. So the smallest units peaked later but declined faster than the biggest ones.
It is a little more interesting to look at the graphs, but look how the 1bd are getting hammered compared to the 2b/2ba!
I think this is pretty concrete evidence for the ongoing correction in El Cajon condo land. The fact that these are "new" fairly identical units seems to give a pretty accurate reflection of the market conditions over time.
I'm thinking of doing this for other condo conversions in the area. It is pretty easy to do and entertaining. It is a bit of a morbid mystery to sort the data to find the buyer that got the worst deal and how the data will look when graphed vs time.
The one thing I have been wondering about is how many of the late 2005 / early 2006 buyers might already be in trouble with their loans. There are several in El Cajon who have already lost their condos since buying in '05 or '06. It would be interesting if short sales or REOs were to happen in a complex that is still releasing the last phase. I'm sure that won't be allowed to happen if the lender is the project's preferred lender.
It will get real interesting when these things start hitting the market as forced sales in the future.
Any thoughts? I think it shows pretty clearly a conservative decrease of at least 13% since the middle of last year.
I wish I knew how to post graphs but I don't. This makes for a pretty long post but here is the data in case you want to manipulate it yourself:
UNIT B/BA SF PRICE SALES DATE
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