El Cajon Condo Blowout! (-27% in 8 months)

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Submitted by garysears on July 15, 2007 - 10:33pm

East Bradley Ave, El Cajon Condos

So I've been keeping an eye on the condos for sale right down the street from my apartment in El Cajon. In February a real estate agent came door to door passing out flyers trying to sell one of the units (#11). Since then, two more have come up for sale. I think there are 12 units total, 6 in each of 2 buildings. Several weeks ago some hooligans in the neighborhood vandalized all three of the signs in the yard by the sidewalk but no one has bothered clean them up. One of the signs was put up after the other two were already vandalized. Of course it was broken within a day or two. No real estate agents have bothered to clean up the signs (I wish I had a picture to post right now. Two of them were the nice wooden post signs). I believe one of the units is obviously a foreclosure. Here are the MLS numbers if anyone is curious:

469 E. Bradley Ave #11
List Price: $249,000-$259,000
Original List Price: $279,000
MLS# 076014978
Listed: 2/15/2007

465 E. Bradley Ave #6
List Price: $250,000
MLS# 076037262
Listed: 5/7/2007

465 E. Bradley Ave #2
List Price: $200,000
MLS# 076051074
Listed: 6/14/2007

I say this has to be a foreclosure because it lists a sale date of Oct 31, 2006 for $273,000. Minus 73K out of 273K in less than eight months, or almost 27%! At that rate it should be free in a few years.

I gather the other two will be foreclosures soon. It is hard to compete with someone undercutting you by 50K. I also suspect the foreclosure condo is in the best shape of the three since it is the only one that includes interior pictures on the MLS.

Most interesting to me is the sales history given for #2 on Trulia.com:

$273,000 Prior sale date: Oct 31, 2006
$220,000 Prior sale date (2): May 24, 2004
$104,000 Prior sale date (3): Jan 18, 2002
$55,000 Prior sale date (4): May 25, 1999
$39,500 Prior sale date (5): May 27, 1997
$37,000 Prior sale date (6): Dec 12, 1996

So in less than ten years, the price people were willing to pay for this went from less than 40K to over 270K. That is a 7.38X increase in value in 10 years! I wonder what these condos will be going for in a few years....

Submitted by garysears on July 15, 2007 - 11:02pm.

I wanted to add that I calculated a 22.12 annual rate of return for Unit #2 between 1996-2006 (had the original buyer kept it). SO maybe -25% per year would not be a bad thing for a few years. If you start with a rounded off 40K value in 1996 and use a 6% compounded annual rate you get a present value of about 76K. I know that 1996 was a low year for real estate and maybe it is not a good base year for a comparison. However, if that was the bottom of the last bust it makes me wonder. A value of 76K today is probably a little low if the median household income for San Diego is in the upper 60Ks. Then again, I wonder what the median income was in 1996...

I keep thinking that I can't see paying over 100K for an El Cajon 900 sf 2bd/2ba condo. But I also know that means I will probably never own a place out here. I guess it will never be 2002 again. Or will it?

Submitted by temeculaguy on July 16, 2007 - 12:42am.

It would be interesting to see what the sales prices were in 2003, splitting the difference between the 2002 and the 2004 would be 150k and that would be a reasonable guestimate as to what you will end up finding it will be worth next year. I believe that 2003 should have been the top of the last cycle had the bubble not happened. If you took a vote I bet many here would guess a return to 2003 prices in 2008 is fairly likely and demanded by the laws of economics. Factoring five years of inflation it would actually be close to the 2002 price. I don't know what the rents are but if they are at about $1000 a month or more they will be too attractive as rental to get much lower than 150k. Deciding the bottom is always a guess but if it gets to the point where it is cash positive or neutral from day one then it probably won't get there, I just don't think it will hit 100k if rent is $1000, so what do they rent for?

Submitted by garysears on July 16, 2007 - 8:19am.

I rent at Coral Garden Apts at 425 E Bradley, just about a hundred yards down the street. I pay 1010.00 per month but that includes a one car garage. I have seen other 2 bed/2ba units can advertised for 900-950 per month I think. I don't know specifically what the 465 E bradley condos are renting for. The 900-1000 range is a good estimate.

Submitted by Bugs on July 16, 2007 - 9:33am.

469 / #11 sold in 12/23/2002 for $150,000. I think that would suffice as an early 2003 sale.

I saw 3 early-2002 sales at $105,000 - $110,000, and an mid--2004 sale at $220,000.

Using a 150 gross rent multiplier on a $1,000 rent would equal the $150,000. Many investors would probably bite at that but some wouldn't. A bottomed out $150,000 price would represent a -45% price adjustment off the peak.

Submitted by PerryChase on July 16, 2007 - 9:50am.

Interesting topic. Thanks for posting.

Gary, you should wait it out because I believe you'll see that $150k price again.

Submitted by garysears on July 17, 2007 - 9:03pm.

Since posting a few days ago I also noticed on the MLS that there is a foreclosure just up the street from these condos at 745 E Bradley Ave. While walking around the complex I saw 2 other units that looked bank owned. The only unit I saw listed on the MLS is #41. Units 51 and 45 had lock boxes on the door. Several months ago I saw for sale signs on the corner. I guess no one was able to sell and they got foreclosed.

List Price: $175,000
Address: 745 E BRADLEY AVE 41 92021
MLS #: 078015909
Original List Price: $230,000
Complex: Bradley Condos
Listed on: 2/25/2007

Historical home sale price: $250,000
Prior sale date: Aug 24, 2004

Historical home sale price (2): $45,500
Prior sale date (2): Jan 12, 1996

I see that someone made out quite nicely by selling at the peak on this one! It is especially nice if you consider they probably leveraged the initial 45K considerably.

#45
Historical home sale price: $268,000
Prior sale date: Jan 13, 2005

Historical home sale price (2): $53,615
Prior sale date (2): Feb 9, 1999

This is also quite a good deal for the 1999 buyer. I can’t believe someone paid $268K for that in ’05. I think #41 might likely sell for under $175K. If so, that represents quite a drop from the ’05 price of $268K for a similar condo in the same complex with the same square footage. If #45 sells for 175K that is a 45% drop already! Of course the lender probably has a little more into #45 than does the lender for #41.

#51
Historical home sale price: $102,559
Prior sale date: Jun 26, 2007

Historical home sale price (2): $87,500
Prior sale date (2): Mar 1, 2002

Historical home sale price (3): $38,000
Prior sale date (3): Mar 14, 2000

This one is a 1 bd / 568 sf condo. I didn’t know it was sold until I went to Trulia.com. But the sale price gives me hope that I might get a 2bd/2ba in El Cajon for under $150K. I note that the $175K price on the MLS for #41 does not seem real firm. I think they might even take $150K right now for it. There are several other condos in El Cajon on the MLS with the low side of the range in the 170-180Ks.

Submitted by garysears on July 17, 2007 - 9:55pm.

I took a couple pictures of the signs if anyone is interested. Someone finally picked up the broken pieces, but the broken signs advertise more accurately than the realtors probably intended. This sort of thing is common in this neighborhood, as is vandalism of parked cars on the street. This is not really the place most people really want to spend a quarter a million bucks to live.

This second picture shows something that must be fairly typical in many places. Realtors don't seem to want to continue to refill the little boxes with new flyers. My guess is they realize how unlikely a sale is. It certainly shows lack of interest on their part. You can get a pizza flyer though!

http://tinypic.com/view.php?pic=6ce99mr
http://tinypic.com/view.php?pic=52cha9e

Submitted by temeculaguy on July 17, 2007 - 11:43pm.

You will get there, the pendulum always swings a little too far the other way for a short time so be patient, set your target price and stick to it. The rent multiplier will create a floor and a 1k a month rental will probably never go below 100k and probably will only spend a few months much below 150k before an investor or a renter decides it is close to a wash for them (depending on hoa/taxes being reasonable). Despite the vandals and the crime the numbers make too much sense at those levels. What I can say for sure is that they will not return to those sub 100k levels and I think those sub 40k prices may be misleading as they sometimes are fractional numbers of a multi-unit sale or a transfer between corporate divisions or relatives in order to keep the property taxes low. I could be wrong but even in the 1980's it was hard to find a 2br for under 500/mo in the seediest areas making those a steal. Just think in terms of others, if you rent for 1,000 and can own for 1200 to 1400, after the tax credit it get real close to even and the average joe buys. If the purchase payment is double the rent and the opportunity of huge profits is no longer a near term reality the average joe continues to rent. If you see 130-150 ranges this winter, jump on it. Using this rent multiplier a poway or 4-s home that rents for 2k a month would be priced at 300k and even the most bearish would jump on that train.

Submitted by 4plexowner on July 18, 2007 - 4:52am.

temeculaguy - remember that interest rates may go up as we move further into this real estate correction

you are saying that an El Cajon 1/1 condo won't go below $150K because of the rent-to-own ratio

your analysis is correct (with exception of temporary overshoot below trend) BUT you aren't considering how higher interest rates could change the scenario

here are monthly payments on a $150K, 30 yr fixed mortgage at different interest rates:
7% $998
12% $1543
15% $1897
18% $2260

at current interest rates and rents, a floor value of $150K makes sense

if mortgage interest rates rise to just 12%, we have to lower the condo value to $100K to make the rent vs own numbers work ($100K mortgage at 12% gives $1028/mo payment)

at 18% interest rates, which were reached in the late 1970's - early 1980's, the condo is worth $70K ($1055/mo payment)

Submitted by garysears on July 18, 2007 - 2:47pm.

Thanks for the comments guys. Whenever I do buy I won't be interested at all unless my total payment, including HOA and insurance and taxes is covered by the market monthly rent. I am not entirely ready to jump on a 30 year commitment without an out and I'm not willing to presume on my future ability to pay S.D. rents long term. I have no interest in not having my head firmly above water. The only question is how much of a down payment will be required to make the numbers work for me. At least I think I have some time to save now. For me this current downturn trend is a relief and I'm not in a hurry for it to end just yet.

Submitted by temeculaguy on July 18, 2007 - 7:28pm.

4plex, you are right I did not calculate interest rate fluctuation nor did I even look at what a natural disaster or serious loss in employment would do to rents, I was simplifying it. I was actually thinking the 2/2 had a floor price of 130-150, not the 1/1.

Grey, don't think you have ten years to save and it may be too optimistic to think you will be paying under market rent to buy from day one, those opportunities are rare. Just like the up cycle didn't last forever despite popular opinion, nor will the down cycle. The overshoot time period can be a year or less so you need to be ready now and you need to be prepared to pay more than market rent for a few years in order to buy. My rule of thumb is that with 20% down and all closing costs paid upfront (not rolled in) it should be equal to market rent so the overage is the loss of interest on your downpayment. Another goal is to be paying 25% under market rent within seven years so if you choose to convert it to a rental there is enough cusion for it to always be cost nuetral or positive since you need the extra to cover repairs, vacancy, etc.

Don't just hope it goes down, get ready for 12 months from now by deciding what you have saved and how much you need to save to meet a 20% on 150k=30k, you have 12-18 months to save a total of 30k or you may miss this one.

Submitted by garysears on July 20, 2007 - 6:46pm.

Out of morbid curiosity I made an "offer" on 765 E. Bradley Ave #41. (MLS #078015909) It is a REO unit that has been on the market for 5 months. The original asking price was 230K and was reduced to 175K at some point. I just wanted to see what kind of reaction I might get (or none at all) if I were to offer what I really want to pay. I am curious to see if I get a reply. If so, I think it means there is absolute desperation setting in on the part of the banks. Because I want a 50% discount on the original asking price.

By the way, regarding the crime and vandalism in this particular part of El Cajon, this morning when I was walking out to my car on the street to go to work I saw that 3 or 4 cars had had their tires slashed overnight. They were parked right on the street in front of the unit where everyone has to park. And there was also at least one attempted car jacking of a resident here who parked on Bradley Ave. Gangs are sometimes just hanging out on the steps of the complex. Hooligans seem to rove pretty freely around here at night.

Anyway, here is the text of my email offer in case it is entertaining. I know it is naive and ridiculous, but I am doing it for my own reasons and an informal test of true market conditions. If they actually make a counter offer and try to split the difference it will give me great hope for a future opportunity somewhere I actually want to live. If they accept my offer, I will be shocked, and ready to move in.

I am not pre-approved. I would have to make an offer based on the condion of getting approval. I was neither planning to buy nor ready to buy in this current market. It is not yet a "buyer's market" IMO. The downturn is just beginning. I think a few more years into this will be much better for families looking to buy. Then I might get a reasonable price on a loan that is made with an actual expectation of eventual payoff.

I firmly believe rising ARM payments are going to force a lot of the increased number of "homeowners" (70% vs 63% historically) nationwide to default, and especially here in S. California with our ridiculous suicide loans. That is why this unit is for sale and many others like it. This growing crisis is already moving lending standards. Establishing basic standards once again is going to be necessary, is already slowly happening, and will further erode property values to more fundamentally sustainable levels.

Having said that, the MLS listing said 175K and make an offer. I went to the condo and toured it the other day. It was really in bad shape. It is in desperate need of new carpets and paint and all the cabinets and tile and fixtures are in poor condition and just plain ugly. (Pretty much what you'd expect from a deadbeat homeowner I guess). Oh yeah, the toilet wouldn't flush. I don't know why, and I didn't spend too much time looking. I didn't try all of the lights and fixtures. There is obviously thousands of dollars of work that will be required to make it something I want to live in. I am looking for a home for myself and my family and not a rental unit. I also note that this is not a desireable community to live in from a basic crime standpoint. (I know because I live at 425 E Bradley Ave).

175K is a bottom end price for a bottom end foreclosed unit in the lowest priced part of the county. I know the asking price supposedly takes into account the condition, based on a perceived fair market value of a liveable unit being in the low 200Ks. I don't believe any unit in the complex will sell for 200K for many years to come.

I note that a 1bd/1ba condo in the same 765 E Bradley complex just sold for 102K (#51). I had a chance to see that unit and it was in much better shape.

I believe the floor of the downturn for 2bd/2ba condos in El Cajon will be set by investors rather than speculators which drove prices out of reach in the first place. Current rents cannot come close to making an investor cash flow positive and there is no longer speculative appreciation to count on.

There is just no sustainable reason for the disconnect between rents and property values.

We are headed dramatically the other way. A bottom end condo in El Cajon in general will likely settle in a few years below 150K, I hope, and I'm not interested in overpaying today. That estimate assumes a liveable, rentable condition unit and that interest rates don't move much in the meantime.

There is also a bank owned (apparently, because it is not on the MLS) condo in the same building (#45). It is in much better shape and a much more desirable unit location. That is the one my wife and I would prefer. It will be interesting to see what the bank unloads it for, or which bank blinks first with the asking price. I haven't got a response from the real estate agent so I don't know what the asking price for #45 is. However, it is by far the more desireable unit.

My offer is 110K for #41 (as is) and I'm not interested in paying closing costs. I have taken into account the increase in rent value of a 2bd over 1bd (which will ultimately set prices again), the recent 102K sale of the 1bd/1ba in the unit, and the money required to make the unit liveable, plus the knowledge of where the El Cajon condo market seems to be quickly headed. My total cost, after renovation, would put it in the price range I am comfortable with. And yes, I know the asking price has already been reduced 55K. I don't know how long that price reduction has been on the market, but it is still chasing the market down IMO (based on the much better unit and 200K asking price for 465 E. Bradly Ave #2).

If the bank is looking to move the condo off the books I can accomodate for 110K. Otherwise I will keep waiting. I just note that the market isn't exactly moving and the "spring bounce" didn't happen here in El Cajon condo land.

I have been watching the condo complex no more than 100 yds up the street from me at 465 and 469 E Bradley Ave. There is a bank owed (I assume based on the 273K sale OCT 31, 2006) foreclosure there for 200K (900sf 2bd/2ba #2) and 2 other units for sale (#11 and #6). The bank owned 200K unit is 50K+ less than the other 2 identical units, yet there has been no action on it for 2 months. It will be interesting to see what price will eventually move it off the books. I anticipate the other 2 will probably end up being foreclosures as well and will have to compete with each other based on the foreclosure sale price of #2 if it ever sells. Anyway, there are no takers on the unit after a 73K decrease in "value" (-27%) in only 8 months. (That unit is bigger and in much better shape than 765 E. Bradley #41 and it is going to sell eventually for a discount on the 200K asking price).

Forced foreclosure sales and auctions will end up setting price expectations, up to the natural floor of price/rent ratios based on the stomach for risk of real investors, IMO.

My offer is significantly less than what the bank is hoping for and I can only assume that if I hear from you again it is because the situation banks are in trying to move REOs off the books is more severe right now than the average person realizes.

Regards,

Gary Sears

Submitted by temeculaguy on July 20, 2007 - 7:23pm.

Awesome offer Gary, rather than say "I want to pay Less" you made a cogent argument why they should consider your extremely low offer. I would be shocked if they entertained it but you never know they may counter with 150 or 160 and you can see where their head is at. Go get pre-qualified just so you don't have to mention that you are not qualified in the beginning of your offer, it makes you more of a player if you can get it off their books in 30 days and throw in the gang members on the steps to the complex in your next offer, they may have never actually seen it and it will scare them, throw in the police case number of the carjacking or a link to the news article, make them feel they are never going to get rid of this thing. Go to megans law website, there are two sex offenders at 675 E. Bradley, one rapist and one child molestor, throw that in for good measure

Submitted by garysears on July 20, 2007 - 7:56pm.

Good idea temeculaguy. In this case I wonder if it matters whether or not I am prequalified. The only way I hear back on this is if absolutely no one else is showing interest. I have suspected that might be the case, which is why I made my offer. I just wonder how much interest there is for foreclosed bottom end properties. But for future lowball offers I will definitely consider getting prequalified.

Submitted by what_a_disasta on July 20, 2007 - 9:31pm.

Why bother? I'd rather live in Dante's Inferno than El Cajones. (sp?)

100k??? Not even if they paid me.

Submitted by garysears on July 20, 2007 - 11:59pm.

Yeah, I know. I actually agree. I'm not thrilled to even be living in SoCal. But then again I'm already currently renting in El Cajon. (There are other more objectionable places in S.D. county I'm sure). The bottom line to me is really the bottom line. At a certain price it will make more financial sense to buy rather than rent. More and more I am finding myself in the "total cost" camp when it comes to life's expenses. A house is nothing more than a large expense that has to be paid at some point. I don't view a house as an investment but I'm not stupid enough to buy if I believe it is going to depreciate.

I moved to El Cajon to stop paying 2k a month in rent in the San Carlos / Lake Murray area. I would rather be renting there but it became hard to justify double the monthly cost. Part of the move here was to get my finances in order in preparation for eventually buying.

Keep in mind people were giving almost 300k for this kind of condo crap in El(Los?) "Cajones" only a year ago. I too think 100K is a lot of money, but at current rental rates it is not. I would buy the apartment I am in now for 100K in a second.

I don't want to be a slave to a big mortgage. I want to buy a basic place, pay it off quickly, and then go on from there if I desire a better standard of living. I want to secure a greatly reduced monthly cost of living first so I don't have to presume on my future income. I don't see any other way than to start with a true starter home. If I can pay it off completely I will gain a lot of financial freedom.

I think financial freedom is actually the American dream and not the "home ownership" championed the last few years by government. It has sounded strange to hear the President call home ownership the American dream and point to the all time record "ownership" levels as proof that life is getting better. Debt is slavery, even if it is called "ownership". The new home ownership is only a form of renting from the bank where you greatly overpay and sacrifice your financial future for the privelage. That will change.

If I'm willing to rent in El Cajon than I certainly am willing to buy a 2bd/2ba condo for 100K.

Submitted by NotCranky on July 21, 2007 - 9:15am.

Hi Gary ,
You don't have to justify your values. I think they are great ideas that you have.I always say "what you don't spend you don't have to earn"
My choice, when I first bought in 1992, was a shack in the Ghetto.My second choice was the same.I have always wanted to live as though it wouldn't even matter if I lost my job.I personally had a great experience going that route and have many friends from that neighborhood. I stuck to those values and now have a wife that shares them. We are debt free including our nice house, not in the ghetto. I can not imagine working to pay for luxuries. Obviously other people don't mind. "Different strokes" as they say. Had I stretched and struggled at the start I could have become a BK statistic instead. I have a friend that went the cheap condo route and stayed single. He has it made as he realised early on that all he needs is shelter for himself and his motorcycle. He can afford to spend a lot of time doing things and going places he would not be going to had he became a debt slave. Instead of spending time most of his time with his boss at work he spends more of it with whoever he wants to.

On the condo note. There are entire condo conversion buildings where nobody got a good deal. One example, in your neck of the woods, is the Sunterra project at 589 N. Johnson.
There are 120 units, almost every if not all buyers are at least 40k-90k upside down.That wouldn't be so bad but their payments are $2000-$2500 for places they could rent for $1000. I believe there are many crazy loans involved. Unless the banks intervene, it would seem that most of these are getting on the foreclosure train. This is scenario is happening all over the county.
Best wishes.

Submitted by PerryChase on July 21, 2007 - 9:33am.

Gary and Rustico, you guys have good values. I agree that the American Dream is about financial freedom. Don't overstretch and do what you want to do. Life is an adventure. Discover it your own way and enjoy it. That's the life.

Submitted by bsrsharma on July 21, 2007 - 9:52am.

"more objectionable places in S.D. county"

Besides El Cajon, what other places can be counted in that? I can think of parts Oceanside, Lemon Grove, National City - Chula Vista - San Ysidro. Anything else?

Submitted by NotCranky on July 21, 2007 - 10:53am.

Spring Valley is one of my least favorite places in SD. All of these locations have some desirable aspects relative to peoples different personalities and values and the costs and benefits of living there,except National City :).

Submitted by jeeman on July 21, 2007 - 10:58am.

kill the italics. This is a test. Oh well, couldn't do it.

Submitted by garysears on July 21, 2007 - 3:59pm.

What is the best free internet out there that lists historical sales data? Is there a really good pay site that is worth the money?

I found you can now search the last 24 months of sales data on the San Diego County Assessors site. I'm sure most people on this site have a better way of getting relevant info but maybe someone will find this useful:

http://arcc.co.san-diego.ca.us/arcc/serv...

The Assessor/Recorder/County Clerk's Office is providing a sales listing for those who are applying for an appeal of their assessed value with the Clerk of The Board of Supervisors. This listing is being provided as a public service and consists of the most recent 24 months of property transfers. The file is updated by the seventh of each month.

Submitted by garysears on July 22, 2007 - 2:01pm.

Rustico, I went back and reread your post and decided to look for sales data for Sunterra. I found 123 units listed on Zillow but only a few "recent sales". I found 13 sales in the last 24 months of sales data allowed by the county assessors website. I haven't been able to get Trulia.com to work with the address. I am pretty new to looking up sales data. Do you know a better way to get older free data online?

This scarce data isn't too exciting but it certainly agrees with your estimate of at least -40K in value for the middle of '05 buyers. I would like to see the early '05 data to see if prices were higher then. Where did you get the 90K from? Do you have access to data I do not?

I haven't physically been by these places in awhile so I don't know if identical floor plans can be considered to have identical furnishings inside.

Unit B/Ba SF PRICE SALES DATE
107 2/1 883 $259,900 7/7/2005
258 2/1 883 $270,900 7/7/2005
207 2/1 883 $254,900 7/14/2005
208 2/1 883 $260,900 7/25/2005
242 2/1 883 $259,900 7/25/2005
134 2/1 883 $250,000 8/15/2005

102 2/2 896 $282,900 7/18/2005
101 2/2 896 $272,900 7/22/2005
125 2/2 896 $286,000 9/30/2005
138 2/2 896 $281,800 4/21/2006
121 2/2 896 $236,000 1/30/2007

239 3/2 1114 $319,900 7/20/2005
146 3/2 1114 $275,000 10/6/2006

Submitted by NotCranky on July 22, 2007 - 9:30pm.

Gary,
To start off the units of similiar description for rooms and baths are similiar with the exception of the number of patios. Some have two and some have one or maybe none. I didn't research it completely. In condo complexes people sometimes give a litle value to corner units tucked away or most convenient parking stuff like that. Right now it isn't worht worrying about stuff like that. The repairs the devloper did are cheesy. These are your basic apartments.

Your link to the tax assessor is a pretty good one. We do obviously get a better look into the details and the current activity using the MLS.

About my 40k to 90k statement. You are going to have to give my hunches a little bit of credit to accept the 90k part but I will explain. You have comps up to the middle 280's for the 2/2 unit and you have a January 2007 comp for the same unit for 236k. I could research that and it would probably show seller paid closing costs and such . Plus you have commissions. Lets say 6k for closing and 10-12k for commissions. So net is down around 220k. So you have 65k for loss from highest to that comp for same unit. So now I go hypothetical. There have been 10-13 units listed continuously at least since January. None have sold but last I checked there was a unit in escrow I think it was the 3 bedroom. Anyway the point is next to nothing is selling there and that is no surprise. So I took the luxury of deciding that it is unlikely that another similiar unit is going to sell for more 220K gross(If it soes it will be a fluke). Subtract the possibility of closing costs and commission for that and you are getting pretty close to an 80k(not 90K)loss from the highest to the lowest. So sorry I didn't let you know that there was a small non -data derived opinion on my part. It makes so much sense that if I had to tell a buyer what was going on there that I would feel comfortable telling the buyer not to touch it with a ten foot pole the next same unit sale or two down the road might be around 200k gross. That will be a forclosure most likely. BTW the list prices are all over the place and most much higher than the January comp. Those are very bad signs.
I am generalizing,in part, because I don't feel comfortable bringing specific MLS data over here. I feel too much like it would be publically tossing around the story of the actual people going through this.

If you are set on living out this way and if you consider a little better area , down Jamacha road, the area is actually Rancho San Diego, there are some nice complexes. They are usually accessed from the 94 coming from downtown, not the 8, but they are on the border with El cajon. The area has real nice ammenities and an improving quantity of them. I have never seen a thug around them. I doubt there is so much distress yet, but there might be, or maybe down the road there will be.

Submitted by garysears on July 22, 2007 - 9:55pm.

Update to 465 /469 E. Bradley Ave:

Since posting the first time I found out Unit #4 at 465 E Bradley sold on May 16 for $197K. That means there is an identical unit in the same complex with a comp 75K below #11. So a 27% decline for #2 and likely #11 (after the bank takes it) seems a done deal. 4 of the 12 identical units in the complex are currently up for sale so it could get worse fast.

Here are the listing prices:

Unit MLS# List Date
2 076051074 $200K 6/14/07
4 SOLD for $197K on 5/16/07
5 078023086 $220K 3/21/07
6 076037262 $250K 5/07/07
11 076057009 $269K 3/26/07

Unit #11 sold for $272K on 04/08/05.
Unit #02 sold for $268K on 10/31/06.

It looks like the owner of #11 is still trying to right the ship, hence the high asking price. I'm real curious to find the last sale data for #5 and #6 as well as the previous sale for #4.

My feeling (hope) is that the low $200K's will be the expectation soon for all your 800-900 sf 2bd condos in El Cajon. We already have some units at least 30% off the '05 to '06 highs. Some distressed units are approaching $200/sf.

745 E Bradley Ave #45 (2/1 806sf)is a bank owed property. It sold for $268K in Jan '05 and is listed for $190K right now (-30% as listed). But it also has to compete with a sale of the same floor plan in the same unit in OCT '06 for $174K. There is another unit (#41) listed for $175K and I think it will probably sell for less.

The apartment complex right next door to me at 457 E Bradley Ave just came up for sale as well (12 units, $1.375M). Anyone in the market for a potential condo conversion?

Submitted by garysears on July 22, 2007 - 10:13pm.

Rustico, your part about publicizing private pain is well taken. I hadn't been considering that at all. I guess it is one thing to be an MLS listing in an anonymous sea of listings, but something else entirely to have someone like me bring up your financial situation to a broader audience.

Submitted by NotCranky on July 22, 2007 - 11:07pm.

I am not saying you have to be sensitive about it although it is a very nice thing to do. Sharing information as you are doing is very valuable to helping people understand what is going on, after all the misleading hype, I can understand feeling justified.Your strategies are top notch and could be replicated for areas that other people are interested in. If you are using your real name and you have talked about where you live I would recommend be cautious about potential reprisals.You don't want to be the next one to get your tires slashed :).
I feel I should repect peoples privacy more because with my experience and the MLS advantage,I am supposed to be more astute at coming up with this stuff (not that I always am). I also meet many people who are in big trouble over these losses and they are really hurting.Wether they deserve it or not doesn't matter to me. Just as many people are not exhibitionists even when they are making a killing. They don't want their business talked about so I figure, why do it , if it is not pertinent to a transaction?

Submitted by garysears on July 25, 2007 - 8:08pm.

I finally figured out how to make a .jpg out of an excel graph. I still can't figure out how to make it show up here if that is even possible. I also found a good site for all historical sales data in San Diego County. Try www.sdlookup.com and go to the "Closed Sales" part.

This is all the historical sales data I could find for all 12 (identical) units in the complex. You might find this interesting:

http://i17.tinypic.com/52w3xnk.jpg

The surprising thing I noticed is that the prices people were paying in 1997 were the same nominal prices as in 1985. That is a pretty flat trend line until late '01 to early '02. The slope of the graph really increases at that point. I think the scale gives a pretty true indication of the effects of easy financing. Note how the "peak" price is really a pinnacle due to the sale earlier this year. The last 6 points represent 5 different units.

I also need to correct my statement earlier. I don't think #5 and #6 will end up being foreclosures due to the fact that the current owners bought these well before the current runup and ridiculous financing. I made an assumption that was unwarranted.

Submitted by drunkle on July 25, 2007 - 8:32pm.

broke

Submitted by patientrenter on July 25, 2007 - 9:40pm.

Gary, that last chart of the prices of the 2/2 units is... stunning. I know we've all seen data showing prices rising, and we - the old ones like me anyway - remember prices back in 1997 and 1989 and so on, but the memory gets a bit fuzzy at times.

This chart is one of crispest and most irrefutable encapsulations I've seen of what happened, and what's happening now, to prices. It's amazing how little data is needed to get good information if it's this well-chosen. Thanks.

Patient renter in OC

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