1227 Fulton St, Palo Alto, CA 94301
By Patrick Follow Mon, 30 Mar 2009, 5:33pm 6,555 views 19 comments
In Palo Alto CA 94301
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46 male
Menlo Park, CA
This one has been for sale for a while, and it's clearly overpriced at $1,595,000. That price is from the flyer on the signpost.
It's true value, given that you could rent it for less than $3,000 per month, is something like $540,000.
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46 male
Menlo Park, CA
Still for sale, and it looks like the weeds are taking over.
Perhaps it's not really worth $1.6 million? Horrors!
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This house was foreclosed on earlier this year.
I walked through it the other day. Whatever the past purchasers were smoking was some pretty heady stuff. They way overpaid at 1.7 million and never did any restoration work on it--which it needs desperately. It was once a beautiful small house and with about $250k or more could be again.
But no way in the world it was worth 1.7 those years ago.
Palo Alto real estate is absolutely crazy, so someone might buy it at its current price, but who knows?
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46 male
Menlo Park, CA
mersenne says
Good to know! How did you find out about that foreclosure?
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The Palo Alto Weekly lists foreclosures, but in a rather inconvenient way. Check page 5 of this pdf:
http://www.paloaltoonline.com/weekly/morguepdf/2010/2010_07_16.paw.section2.pdf
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46 male
Menlo Park, CA
I see, you have to flip a few pages into that PDF file to see the foreclosure data.
Was it an investor who just now paid $1.1 million, or the bank itself that bought it back as a trustee? I'm not very clear on these things.
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It is in a millionaire neighborhood. This home sold for 330K as far back as 1986. So even assuming a 100% appreciation every 10 yrs, which is normal for desirable neighborhoods, it looks like fairly priced. I really do not have anything complimentary to say about people shelling out that kinda money to buy a 1924 built home though. I think the home has no value. Just the lot is a million dollar lot.
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You nailed it Patrick at $350K today, if that, let alone once at $1.5 million JEEZ. IMHO I have seen blind greed and fantasy but come on. I am so thankful I stayed out of this real estate mess. I guess it's true ...a fool and their money ARE soon parted.
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To call that a "millionaire neighborhood" is misleading. What it has is a mix of millionaires coming through and buying nice properties and staying for a few years, and old-timers who bought their house for a few hundred $K, could not afford to buy it now, and are staying put to retain their low property taxes. So it is Prop-13 weirdness, not a proper millionaire neighborhood (in the local area that would be something like Los Altos Hills or Atherton).
Why do the millionaires come and go? If you really have the bucks, it is a big world, you can live anywhere. It can get boring living in a place like Fulton Street, paying $25K/year in newcomer property taxes to support a bulging city government while your old timer neighbors are paying a fraction of that.
$350K is an OK price for the lot. Let the recession carry on for a few more years.
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Redwood City, CA
That would rent for more than 3k, though. In that location 4k should be a breeze, maybe 5k.
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I doubt you could get 4K rent for that house. I would be very surprised.
Only the newcomers are millionaires in that neighborhood. When it was built the houses were average sized 3/1s on relatively small lots. The classic middle class place. This house was once among the nicer in the neighborhood, but it has gone to hell.
What I don't get is why the previous owners let it go into foreclosure over 1.1 million--they lost everything. They had been trying to sell it around 1.5 million, but surely a fire-sale at 1.3 or even 1.2 is better than losing everything..
Perhaps there was a second mortgage I don't know about?
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ptiemann, Nice research! It just gets better, as it appears 1017 Fulton has a tax basis around $75k. Wouldn't want to compete with those folks to find the bottom of the market...
I'm not seeing a mortgage by FORCE INVESTMENT LLC, who bought the property at auction ($1.1million as previously noted). Nothing like a cash buyer; these folks are like shock absorbers in the system. Deflation nation...
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Mountain View, CA
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ptiemann
how do you find this data?
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1017 Fulton is a probate sale. The previous owner died inside not too long ago. This one might rent for $4k or $5k. It's in better, but not great, shape and has a separate 1/1 unit--which I doubt is permitted, but I don't really know. Between the two units you could see $4-$5K..
1211 Fulton is also on sale, but actually livable and basically nice, but has sat for a while too. The neighbors have already complained about 1211 advertising an unpermitted cottage, so you might not have very compliant neighbors if you are renting out the second unit in either 1017 or 1211. Hard to say what the discount rate should be for that issue. 1211 is smaller than the other two and has a pool. The pool is really squeezed in though, very, very little room around it. I wouldn't let kids or senior citizens in that back yard.
But with three houses for sale on the street, it should be really interesting to see what happens with them all.
To make matters crazier, the house on the end of the street, whose address escapes me at the moment, is in financial distress too. I don't know where it has progressed to, but it made burbed.com:
http://www.burbed.com/2010/04/30/excellent-investment-opportunity-corner-lot-residence-in-palo-altos-best-neighborhood/
It's also suffering from lack of maintenance.
But if you want to live on this block, seems like you could scoop something up relatively cheap. People in Palo Alto are nuts though, so who knows what they will actually sell for.
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Teddybearneil says
Uh! since when is it "normal". It took 15 years for prices to double, 1980 to 1995, and that was under fundementally strong reasons, growth jobs and incomes. From 1997-2000 prices doubled and tripled in 10 years, and for all the wrong reasons, lower wages and lower workforce. Today we are in a state of abnormal prices.
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at auction, you *HAVE* to buy cash
Duh-oh (so true)! Admittedly, though, I've seen (foreclosure) flips where they have longer hold times (to do several months of fixing the place up) and they'll have a Deed of Trust recorded a couple of weeks after the sale. Usually, this is with another "investor" LLC that brings money to the table so that the foreclosure flipper can continue to invest in other deals at the courthouse steps.
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mersenne says
When I was a kid in East San Jose, a school friend of mine walked home from school to find a family member's face splattered all over the kitchen from when he killed himself with a shotgun. The rest of the family moved on and the house was vacant for a long time and then changed hands a few times. I always wondered how the current occupant owners would feel, especially being from a culture known for superstition, if they knew what happened in their kitchen 40-ish years ago.
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13 DOM and above asking means very little. It was on the market for nearly a year, and priced much higher than 1.3M prior to the foreclosure. The official stats will show above asking and short DOM, but that isn't an accurate view of what actually happened.
It simply shows that when you price a house correctly (or slightly under correctly), it will sell in short order. That was the original buyers' mistake, thinking his 1.7 mil was really what the property was worth.
The 1.7 mil in years past will be there forever though.
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Redwood City, CA
Taxes, interest for holding it 2 months, and any transfer fees and loan fees. And realtors fees!