WatchMost mispriced house ever!
Patrick,
I was looking rent a house and came across this listing on Craigslist:
$3850 / 4br - Great House on 5 Acres (woodside) (map)
Date: 2009-09-20, 10:31AM PDT
Reply to: XXXX@craigslist.org [Errors when replying to ads?]Our house is approx. 2700 sq.ft and sits on 5 beautiful and natural acres. The location is amazing! Woodside is between San Jose and San Francisco and literally right behind Stanford University. The house is 2 minutes away from major freeways like 280 and close to the local market (Roberts market) and other great restaurants like the Village Pub and Bucks in Woodside. Our house is perfect for people who enjoy the outdoors, open space, privacy and beautiful areas to live and to explore. The school district is one of the best. --Woodside Elementary and also Woodside high school. * 3 bedrooms, 2 bathrooms * Hardwood floors throughout house – rooms have carpets * Large kitchen * Family Room with a fireplace * Formal living room and dining room. * Study/office area Rent is $3850 & the deposit is $4000 Available September/October. For more information call 650-283-XXXX
For PHOTOS CLICK ON THE LINK BELOW...I am using the photos from when the house was for sale -- we are no longer selling the property (bold is my emphasis).http://homesite.obeo.com/viewer/default.aspx?tourid=444373&refURL=REIL-branded
If you click on the above link and navigate to the Details page (http://homesite.obeo.com/viewer/default.aspx?tourid=444373&refURL=REIL-branded) you will read that the property was last listed for $3,299,000. Based on a normalized Price/Rent ratio of 12, a sane buyer would reasonably expect to pay around $554,400 ($3850 rent*12 months*12 P/R ratio). In essence, for a consumer like me who is agnostic between buying vs. renting a house, it was mispriced by $2,744,600.
---k
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46 male
Menlo Park, CA
And they lied about the location. Google maps has this one in Redwood City, not Woodside.
And that page on homesite.obeo.com that displays it assaults you with unwanted music.
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What do you mean? They're just renting to wait out a bad market. The real estate in the bay area will come ROARING back next year and they can get their 3.3 Million! And that music adds at least $10K to the value don't you think?
Seriously though, holy crap! There was a condo owner that can't sell (for what he wants) sort of near my house in SF, and he was asking $3800/mo for a 3BR *CONDO* in a mediocre area!!!
(Though I think he had as much luck getting that as he did selling it. These places have been sitting mostly empty for a year)
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Beverly Hills, CA
What a difference in perspective for only a 90 minutes drive?
If you want to see one of my local "comps" . Here it is:
5 beds 4 baths built in 2005. Five space garage, 4500 sq ft of living space on 5 acres of tree planted PROFESSIONALLY landscaped acres. Roof mounted solar pool heating.
This is the primary house. It also has an additional 2+2 1,500 sq ft guest house and a separate LARGE workshop. All the amenities you would expect like granite counters, in-ground fenced swimming pool, separate covered jacuzzi, concrete driveways, electric fence. Two fireplaces.
This has been listed since APRIL 2008, that means it is priced TOO HIGH.
They are asking? $899,000!
NO CCR's, NO HOA.
ZIlNDEX is $871,500 This is usually running $50-100 k high in this area when considering the price it actually will sell for. My local guestimate is it has a 'value' of a MAXIMUM of about $450,000. Not a penny more.
The two houses would only cost $292,000 to build. Add the pool, driveway, amenities and lot. It would have a stable value at about $430-450,000 depending on inspections.
Its only my impression, based on the area prices. --I am not an appraiser
You can not even compare to the "wonder" in Redwood city!
Visit www.metrolistmls.com
and enter the following MLS number 80041102 The address is 22385 Elliot Drive Acampo, California
Located in the grape vineyards of East San Joaquin County, CA 95220
ZILLOW:
http://www.zillow.com/homedetails/22385-N-Elliott-Rd-Acampo-CA-95220/15257515_zpid/
Last sold 5/28/2005 for $500,000
Realtor site http://www.dgprealestate.com/html/pix-elliott.html
NOT AN REO.
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So I absolutely agree that it's overpriced, but just to clarify a few things - I saw the posting on Craigslist when it went up too. There are 4 structures on the property, only one of them is being rented for that price (the others are a cottage, a studio, and a barn).
As for Woodside vs. not - Google Maps puts everything in 94062 in Redwood City (I used to live near there, so I know the error it makes). Check out the Woodside Mainstay "Buck's" for example - Google Maps calls that Redwood City too.
It's just overpriced by a factor of 2X, judging from the last sale (2002 @ 1.6MM). However, that makes it just "normally" overpriced, not the most overpriced house ever...
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Wow, I'm very impressed by the tile in the kitchen and the beautiful high-end appliances. The Home Depot sinks and eclectic mismatched tiles in the baths are definitely a plus. This is a steal! They must be pricing it really low in order to get multiple bids. That shed must be where they cook the crack......
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I live in Oakland but in neighboring rich Piedmont with good schools a house (44 Sierra) just sold for $2.5M on 2/27/09 and is having trouble renting at $5000/mo.
Actual sales price was 500 times monthly rent!! In Feb of this year--perhaps the bottom of the market!!
And gross rent is 2% of the price of the house, leaving a net of close to zero!! It gives a whole new meaning to negative cash flow: Buy a house with all cash, and still not get a dime in rent after expenses!!
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I live in LA, and the houses in my area are still outrageously priced too. I've seen people have trouble renting 2 bed/2 bath homes for $2,400, yet one of these same houses sold last month for 1.1 million, or around 458 times rent. These little bungalows could have been had for under $300,000 as recently as 2001. Nuts.
By the way, the rental house that was advertised for $2,400 a month was empty for about 6 months, so it might well have rented for less. Many apartments on my street have been vacant for even longer, 2 of them since last November. Nothing is renting unless the price is reduced at least 15-20% from peak rental pricing.
Now I can understand why so many people are still asking over $1 million for these houses. You look them up on Zillow, and the owners all bought at or near the peak. They are just trying desperately to break even. What I don't get is who the people are that are actually buying at these prices. They see all the for sale and for rent signs all over the place, yet they still take the plunge and pay 3-4 times the price the same house would have sold for 8 years ago. Apparently they have convinced themselves that prices will somehow rebound... despite skyrocketing unemployment, building REO inventory, and all the other signs that point to further price declines.
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33 male
Fort Mill, SC
The house I added is actually not for rent, but it is right next door to the house I rent for $1300. My house is actually 300 heated sq. ft larger with a 3 car garage vs. their 2 car, and it is on a larger corner lot. They paid 375K for it in 2004. There is another house in the neighborhod that is for sale for 599K, and they want to rent it for $1500. It has been for sale/rent for the enitre 4 months I've been in the neighborhood. They paid 535K about 6 months ago. I would actually buy the house I rent if the price were right, but it's not there yet in Jacksonville. People still think they can get rich flipping houses. Alot of falling knife catchers here.
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33 male
Fort Mill, SC
Buy the way, asking 465K for a house worth 240K is overpriced 93.75%. The first house on the list is overpriced 364%. Why did we all choose 7.5% interest rates? I can get 5.25% 30 year fixed right now.
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44 male
Egg Harbor City, NJ
tubby_bartles says
I have the same issue too. My zip code is 08215, because I'm forced to use the zip code of the closest post office, which is Egg Harbor City. EHC is a much lower class area than where I live in Galloway. Estimating Value of a Property based on Zip code alone, isn't always an accurate figure.
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44 male
Egg Harbor City, NJ
srla says
When the Florida Real estate market crashed in 1928, it took over 75 years before there was another simular boom/bubble. I don't think we will see prices as high as the most recent bubble again in our lifetimes.
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San Carlos, CA
Yes, I can confirm per County records this is within the Town of WOODSIDE. Mailing address and SITUS (location) address are often different, anywhere in the Country. It also pisses people off who live in unincorporated County areas in San Mateo County no end. "No, no, I live in Emerald Lake Hills! That is NOT Redwood City". Or, "I live in Devonshire, not San Carlos". Well whatever, if that's where you get your self esteem.
It also looks like a friggin' manufactured house. Just a bit up from a trailer. The land alone is very valuable. The County tax assessor has the Net Assessed: $1,184,016, but the Land: $1,124,691. This tells me the buildings are near worthless. Seems to have sold 12/30/2002 for $1,352,750.
I have seen rentals in this general area where they ask a price in line with the assessed value like $7,000/mo and such. I can't imagine anyone EVER rents for that, but who knows? Maybe a movie star on extended location.
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to do the rent to home price conversion, you need to take into account the mortgage deduction. that will add at least 25% to the home price depending on your tax bracket. not saying that the homes aren't way overpriced, but we should be accurate.
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46 male
Menlo Park, CA
I admit it is crude, but we did consider the income deduction. Owners get that deduction on interest, but they have additional expenses like property tax and maintenance. I talked to a mortgage broker once who told me the deduction pretty well evens out with the extra expenses so you can ignore it.
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Hi, I live in this house. Here is the truth about it. It is owned by a slumlord and everything about it was highly misrepresented. I leased it sight unseen in Oct '09. I am getting out of the lease for a variety of reasons, all due to inhabitability:
1. iIsufficient heat for the house. There is one bedroom that is completely unusable due to no heat. One bath has no heat. The house total has 4 working small baseboard heaters and 3 wood burning stoves, which are all unsafely installed. Neither the stoves nor the heaters can warm this place up in the winter. The house is poorly insulated and has drafts everywhere.
2. Rats and raccoons living in the attic. Landlord has not addressed this correctly. There are still rats getting into the attic. There is rat feces, piss, and blood everywhere.
3. Black mold in one bedroom. I learned from a previous tenant that the back bedroom, the one I am sleeping in, had black mold. I don't think it was properly addressed because this landlord does not properly address anything.
4. Faulty electrical system. This landlord was trying to dump this property on the market, but the reality is the main house needs to be demo'd. Someone has added electrical to this property uncoded, and they did a total hack job to everything that they touched. There is a box label "DO NOT TURN ON" which means someone abandoned wired incorrectly from a box still fed by the power company.
I could go on and on. The mailbox is full of previous tenants' (plural) unforwarded mail and I have heard from a number of people that renters go in and out of that place like a revolving door. As for the rest of the property: the barn is falling down. The current leasees of the barn did quite a few updates to make it livable for horses, then the landlord raised their rent! The house is on a hill, and the entire hills is slipping down into the creeks on either side. You can see in in the rolls of top soil folding down the hill, and the fact that the house itself is slipping from the middle - the floors on either side of the center line slope down the hill. The access is in need of regrading and repaving, which would be very expensive. The house is on septic, which needs to be replaced.
There is an illegal unit being rented to humans in the barn.
The house was described as 'old' to me, which could also be 'charming'...on the very surface (photos) it looks nice, but it is really a piece of junk. Everything is of poor quality, and even poorer workmanship.