San Diego Housing Market News and Analysis
San Marcos Price Reduction
User Forum Topic
Submitted by ocrenter on April 25, 2006 - 11:22pm
I have been giving sdrealtor a hard time at the other topic "Median Price Down in North County" by showing the following two properties:
xx7 VIA DEL CABALLO, San Marcos, CA 92078
and comparing the asking price of the first home with the sale price of the second home.
xx5 Via Del Caballo, San Marcos, CA 92078
There was a lot of back and forth about lot premium and lot size and upgrades to try to account for the $75,000 in price difference in two homes with the same sqft and same floorplan.
All of that, I believe, is now rendered completely pointless because of this new development. As of today 4/25/06, there has been additional price drop down to $539,000 on the first home. Why? Because this home is currently in pre-foreclosure.
If you recall, this home was purchased for $460,000 in 12/03. A look into the loan doc's indicates a 80/20, zero down loan. Assuming a 2 year fixed loan on the 80% portion, this means this person just experienced a reset of his mortgage 12/05. After 3 months of paying at the higher rate, he is defaulting and going into foreclosure.
To avoid foreclosure, all he has to do is keep lowering the price until someone bites, and this can get as low as $490,000 for him not to lose money on this sale. What would the sale of a home at $490,000 do to comps in this neighborhood? Let's not even go so low as that, what would it do to the comps if he gets a buyer at the current reduced pricing of $539,000.
The next question of course is: what happens if there's another foreclosure in the neighborhood and the owner decides to slash prices? Well, we shall see, as xx7's neighbor xx2 has now just entered into pre-foreclosure this month, we'll see if xx2 throw their hat into the ever expanding San Diego Inventory of homes for sale.
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