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
1bd/1ba 24 597 $241K $195K 23.6
2bd/1ba 39 745 $280K $240K 14.3
2bd/2ba 32 801 $310K $275K 12.7

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
130 2/2 801 $304,900 29-Sep-05
126 2/2 801 $289,900 30-Sep-05
131 2/2 801 $299,900 30-Sep-05
227 2/2 801 $294,900 30-Sep-05
132 2/2 801 $309,900 05-Oct-05
230 2/2 801 $309,900 05-Oct-05
127 2/2 801 $289,900 18-Oct-05
225 2/2 801 $309,900 31-Oct-05
244 2/2 801 $316,900 31-Oct-05
232 2/2 801 $312,400 15-Nov-05
144 2/2 801 $309,900 22-Nov-05
141 2/2 801 $309,900 30-Nov-05
125 2/2 801 $309,900 13-Dec-05
226 2/2 801 $299,900 20-Dec-05
241 2/2 801 $309,900 27-Dec-05
171 2/2 801 $294,900 10-May-06
157 2/2 801 $309,900 01-Jun-06
264 2/2 801 $279,900 28-Jul-06
270 2/2 801 $309,900 02-Aug-06
261 2/2 801 $289,900 10-Aug-06
159 2/2 801 $273,000 11-Aug-06
155 2/2 801 $289,900 30-Aug-06
258 2/2 801 $279,900 31-Aug-06
254 2/2 801 $289,900 15-Sep-06
164 2/2 801 $279,900 29-Sep-06
259 2/2 801 $279,900 13-Oct-06
158 2/2 801 $279,900 01-Nov-06
161 2/2 801 $279,900 05-Dec-06
257 2/2 801 $289,900 27-Feb-07
255 2/2 801 $269,900 05-Apr-07
256 2/2 801 $279,900 27-Apr-07
231 2/2 801 $269,900 23-May-07
135 2/1 745 $269,900 29-Sep-05
234 2/1 745 $269,900 17-Oct-05
137 2/1 745 $279,900 28-Oct-05
138 2/1 745 $280,300 02-Nov-05
233 2/1 745 $269,900 04-Nov-05
235 2/1 745 $274,900 15-Dec-05
133 2/1 745 $269,000 19-Dec-05
140 2/1 745 $279,900 27-Dec-05
136 2/1 745 $274,900 28-Dec-05
139 2/1 745 $294,307 13-Jan-06
237 2/1 745 $274,900 26-Jan-06
134 2/1 745 $270,900 31-Jan-06
240 2/1 745 $277,900 02-Mar-06
236 2/1 745 $267,900 06-Apr-06
139 2/1 745 $205,000 25-May-06
247 2/1 745 $247,000 12-Jun-06
239 2/1 745 $274,900 26-Jun-06
246 2/1 745 $254,900 10-Jul-06
148 2/1 745 $259,900 25-Jul-06
166 2/1 745 $244,900 31-Jul-06
266 2/1 745 $244,900 31-Jul-06
165 2/1 745 $244,900 15-Aug-06
250 2/1 745 $254,900 17-Aug-06
167 2/1 745 $249,900 24-Aug-06
267 2/1 745 $244,900 25-Aug-06
268 2/1 745 $241,003 30-Aug-06
245 2/1 745 $259,900 07-Sep-06
168 2/1 745 $244,900 15-Sep-06
149 2/1 745 $259,900 20-Sep-06
145 2/1 745 $259,900 04-Oct-06
146 2/1 745 $254,900 30-Oct-06
150 2/1 745 $254,900 03-Nov-06
251 2/1 745 $249,900 17-Nov-06
265 2/1 745 $244,900 28-Nov-06
151 2/1 745 $249,900 21-Dec-06
147 2/1 745 $249,900 28-Dec-06
152 2/1 745 $259,900 03-Jan-07
238 2/1 745 $244,900 20-Mar-07
252 2/1 745 $239,900 04-May-07
128 1/1 597 $224,900 29-Sep-05
129 1/1 597 $224,900 29-Sep-05
228 1/1 597 $224,900 05-Oct-05
229 1/1 597 $229,900 04-Nov-05
143 1/1 597 $224,900 30-Dec-05
243 1/1 597 $231,900 10-Jan-06
142 1/1 597 $224,900 20-Jan-06
176 1/1 597 $232,900 31-Jan-06
173 1/1 597 $240,396 01-Feb-06
174 1/1 597 $232,900 16-Mar-06
169 1/1 597 $234,900 30-Mar-06
269 1/1 597 $213,137 19-May-06
175 1/1 597 $241,783 25-May-06
262 1/1 597 $224,900 14-Jul-06
162 1/1 597 $199,900 25-Aug-06
163 1/1 597 $199,900 30-Aug-06
263 1/1 597 $204,900 31-Aug-06
272 1/1 597 $199,900 17-Oct-06
160 1/1 597 $204,900 24-Oct-06
260 1/1 597 $204,900 20-Nov-06
253 1/1 597 $205,288 30-Nov-06
172 1/1 597 $199,900 20-Dec-06
153 1/1 597 $189,900 04-Apr-07
208 1/1 597 $199,900 19-Jun-07

Submitted by patientrenter on July 22, 2007 - 12:06am.

Great stuff, Gary. I plotted the 3 series you gave (1/1, 2/1, 2/2) on my own spreadsheet at home, and got to the same conclusions you drew. (I too don't know how to post charts). I appreciate your sharing your original, insightful, and objective research.

Gary, your description of the places in El Cajon you're considering make them seem like slums. Based on the quality of what you've posted, you sound capable and level-headed. I don't mean to offend you in any way, but if someone like you thinks they have to live in a slum, then maybe you're not getting paid your worth. Have you considered finding higher-paying alternatives to your current job or business?

Patient renter in OC

Submitted by PerryChase on July 22, 2007 - 12:38am.

Great work, Gary. Thanks for sharing. :) I know the area that you're talking about as I've been to the DMV other there. I had some business in that area and it's not bad. Actually Lennar is building Sky Ranch in Santee just up the hill. Santee has many new housing developments; and interestingly the median income in Santee is higher than San Diego (most likely because it's fairly new with more recent residents who bought in at a higher cost basis).

Once the 52 connects with the 67 that area will be pretty convenient. You can zoom over to San Diego on the 52. 67 and I8 will take you to SDSU then Downtown SD easily.

If you look at the map, that area will eventually be "central" as more development moves eastwards. Comparing to The OC, this area will become like a Yorba Linda of San Diego.

-----------

Perhaps Gary doesn't want to spend a large chunk of his income on housing. I can understand that. Think of all the people in such communities as Carmel Valley, Irvine and Laguna Niguel who absolutely have to have a certain minimum income income in order to keep the house and the car, not to mention keep the family happy. That's a lot of stress. Most would say that they have nice lives but I think not.

What about doing what makes you happy and live life as the adventure that it should be?

----------
To post graphs, open the window that contains the graph. Do an Alt+PrtSc (print screen). Open a graphic program like Microsoft Paint, paste then save as .jpg. Then post the .jpg file.

Submitted by garysears on July 22, 2007 - 2:30am.

Maybe I am overstating the negative aspects of the neighborhood because I come from a different background with different expectations regarding life in general. In all fairness I can't really say how bad it is compared to other places in the county.

What I can say is I live near an exit off 67 and am located between 2 7-Elevens and 2 liquor stores, a couple of mobile home parks, and a bar. The neighborhood seems full of interesting characters and groups of young people without much to do. But at any given time you could probably go through here and not notice anything out of the ordinary. I haven't actually witnessed the vandalism or thefts, etc. in person, just the aftereffects. It could be a relatively few bad apples here.

I walk to one of the liquor stores or 7-Eleven most days and usually run into people that don't seem highly employed or are prone to mumbling to themselves. That is probably because there are a couple of bus stops in the area. The most popular one is by the DMV and is a common transient hang out.

I don't have to live here but I choose to live here. I was renting in San Carlos / Lake Murray last year and paying 2X as much to rent a house. I made some significant quality of live choices to get my finances under control and to allow for the future possibility of buying a house. I am actually very well paid, probably more so than is really justified. I make more than the median household S.D. income by myself and I have job security if I want to continue in my career. But I have not always been smart with money and I also had some significant life events that caused bills I couldn't avoid. So now I'm trying to make up for lost time and am working on a solid financial foundation.

That extra 1K a month in rent was significant to me.

Is East Bradley avenue really that bad? I don't know.
I can say it is an objective fact that all the realtor signs on the street are vandalised. It is also an fact that there have been several occurances of vehicle vandalism on the street in the 8 months or so I've been here. There were still 3 or 4 cars with their tires slashed today in front of the complex. I guess some people do not have the funds immediately to buy new tires. I kind of assume that from the condition of the cars themselves.

It is a fact my garage has been broken into here. But my house was broken into twice in San Carlos as well and my garage in Spring Valley before that. I was living at La Mirage off Friar's Rd and I-8 and they had vandelism / theft issues there in their underground parking. So maybe it is just San Diego in general going down the toilet.

It is mostly the fact that I half expect to get jumped everytime I leave my apartment complex that is the primary difference. That wasn't the case in any of the previous places I have lived. But I was mostly in the Mission Valley / Mission Gorge area before.

I also note that despite my dislike of some elements there are many families raising children here that will probably get away with it. The kids won't be killed or molested and might even turn out OK. I do see some very young (3yrs old maybe) and unattented kids running around my apartment after dark and even teenage girls walking down the dark street. For the most part they must be getting away with it. This might actually be normal San Diego for all I know.

I don't know what should qualify as "ghetto" and I'm sure I'm overly quick to define many things as "ghetto", but I DO know what qualifies as objectionable. I have to park one of my cars on the street and it is only a matter of time before it is vandalised. I am pretty much resigned to that. Last week one morning there was a used condom on my car windshield.

But again, I am fine living here because I know it is temporary and not required. If I buy a place here it will be less so. For now I have the means to go elsewhere if I decide I can't stand it.

I appreciated the feedback about my little data project. Up till now I haven't really added anything to this site but have taken plenty.

I should add that I finally noticed there are 2 sale prices and dates for #139 (thus only 94 condos). I'm not sure how the unit sold for $294K and then four months later for only $205K. The $205K data point should obviously be disregarded as it is an anomally $35K lower than any other sale.

Submitted by Bugs on July 22, 2007 - 8:15am.

You're analyzing the one neighborhood because that's where you are right now. I think you'll probably wind up waiting until the market settles. By the time it does settle you may change your mind about what your options are. Some areas in El Cajon are better than others. If you go west of 3rd Street you'll probably find the prices for the same types of units are only slighly higher.

You may end up being able to go west instead of east. Who knows, prices may settle so much that La Mesa or San Carlos might be within your reach.

Submitted by NotCranky on July 22, 2007 - 10:46am.

Fearing getting mugged gets old IMO. Fearing that someone you love is going to get mugged is worse.I tried to be non-chalant about repeated break-ins but that gets old too. I am still glad I chose a questionable neighborhood to start my real estate ownership history when I could have borrowed more to go to a better place. Being young and single and helped.

Speculating that the neighborhood would improve was part of the motivation and it did to a large degree. I would have stayed there if I was single still.

It is hard to talk about neighborhoods and housing stock without sounding like a snob or sounding insensitive or competetive or getting defensive. I commend you Gary for being able to talk candidly about your aspirations for lower priced areas. Again, you seem very smart to me. I hope you will enjoy the feed back you get here toward helping you make your eventual choice.

Submitted by patientrenter on July 22, 2007 - 2:42pm.

PC, can you help? I followed your instructions and have the .jpg file. Err... How do I "post it"? I'll need each step. Think posting jpgs for dummies.

Gary, I think we all see lots of people who have high expectations, quite often extending beyond their abilities. Seeing someone like you with modest expectations, that appear to be pitched below your abilities, is refreshing. I think we're all responding to that. I hope that this forum can help get the best possible outcome for you, whatever that is. (And for all our sakes, I hope that's not any kind of slum.)

My own outlook is not that different from yours, but your expectations are even more modest than mine. I hope to pay cash for a simple 2+1 or 2+2 w/ garage in OC for $300K +/- $100K, even though my income and savings are several multiples of the averages, and I have no debt or other obligations. My guess is that you're younger than me, and if I were younger, I'd allow myself a little freedom if it got me my own place in a neighborhood where you felt more at home. (I could buy a place right now within my budget in a bad part of Santa Ana, but if I bought I'd be looking to get out as long as I lived there.)

I have lived for years in places where crime was an issue, and it's wearing. It also costs time and money. It means you can't own a new car without worry. Now I leave my car and apartment unlocked without a second thought, and never have to worry. That's extreme, but the fundamental economics says that someone who's above average should be able to afford at least an average home, and at some point in this cycle that oughta happen.

Patient renter in OC

Submitted by garysears on July 25, 2007 - 9:04pm.

If anyone is interested, here are the graphs of the data in my original post. I don't know how to post a .jpg here if that is even possible.

1bd/1ba condo sales:
http://i17.tinypic.com/4rcz0hs.jpg

2bd/1ba condo sales:
http://i17.tinypic.com/4mkcrye.jpg

2bd/2ba condo sales:
http://i17.tinypic.com/6829181.jpg

Submitted by garysears on October 18, 2007 - 10:32am.

In the off chance anyone cares about this particular thread or condo project, I posted a new thread a few days ago that didn't stay on the front page very long and you probably missed it:

http://piggington.com/reo_vs_developer_i...

It is interesting that the developer is still trying to sell the remaining units in phase 3 while short sales and the first REO in the complex are now on the market. I made the new thread thinking it might be of general interest to the forum. I guess this scenario must not be as unusual as I thought.

Submitted by NotCranky on October 18, 2007 - 10:48am.

I saw it Gary. Not much to say because you have a good handle on it. It looks like it will be getting as distressed as some of the other complexes you have posted about or nearly so anyway. The complex looks nicer than the others we have talked about. Looks like a real condominium community vs. converted apt.(even though I believe it is a conversion? It still could get to be a pretty rough place over time. Not completely unlivable but a little dingy and noisy. That happened to some decent looking places in the last downturn. Might even see stuff like boards on windows and other messes around. Density per unit goes up and at the other extreme there are vacancies where adolescents goof off and vandalize stuff. I imagine this forces people to put up with it or call the police.

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