patrick.net

A million dollars is a lot more today than it was in 2005.

stocksjustgoup says

A million dollars is a lot more today than it was in 2005.

Did you look at the listing? This house is 70%+ / 1MIL OFF? It has undercut everything else on the market and still not selling? And it's in a desirable neighborhood.

Tude says

Did you look at the listing? This house is 70%+ / 1MIL OFF? It has undercut everything else on the market and still not selling? And it’s in a desirable neighborhood.

You need to look at 2005/2006/2007 prices as MSRP. Yeah, that's what they COULD charge, but nobody actually pays that amount. It's really just an artificial number. The real value is always much, much lower.

I agree with Tude. I'm not saying the house is worth that much, I'm just saying that with it being 70% off I'm surprised it hasn't snagged a knife catcher.

This is a relist of a relist ... here's some price changes from last time ....

Mar 24, 2009 Price Changed $617,900 -- EBRD #40379355
Mar 03, 2009 Price Changed $639,900 -- EBRD #40379355
Feb 11, 2009 Price Changed $649,900 -- EBRD #40379355
Feb 10, 2009 Price Changed $664,900 -- EBRD #40379355
Jan 20, 2009 Price Changed $674,900 -- EBRD #40379355
Jan 06, 2009 Price Changed $727,900 -- EBRD #40379355
Dec 15, 2008 Price Changed $738,900 -- EBRD #40379355
Nov 25, 2008 Price Changed $749,900 -- EBRD #40379355
Nov 04, 2008 Listed $774,900 -- EBRD #40379355
Sep 12, 2008 Sold $731,200 -17.4%/yr Public Records
Jun 29, 2005 Sold $1,350,000 23.0%/yr Public Records
Nov 30, 2000 Sold $523,800 50.9%/yr Public Records
Dec 29, 1998 Sold $237,500 -- Public Records

This house is so cheap because it is on the brink of being condemned. it’s in the heart of the keith landslide zone and the foundation is beyond repair.

Also seen on another blog:

I agree with option arm on the mortgage fraud. I’ve seen this elsewhere on other properties and there is no way that house would have sold for 1.35 million honestly.

And, Corona Court is in a slide zone; about 20 years ago a house just suddenly slid down the hill there after heavy rain. Look at 1115 Arch - in need of a foundation.

If you buy in a slide zone, you need to buy at a steep enough discount to rebuild or walk away, since homeowners’s insurance typically does not cover earth movement. I avoid looking in that whole area. High Street is in that slide area too.

thanks for the info kirsten. here's my question: for any of these "slide zone" houses, is it legal to buy and live in it prior to rebuilding? when you say the foundation is "beyond repair", i'm assuming you could lift the house and build a new foundation?

Kirsten, thanks for update; I've noticed the property for the past half year and was wondering what was going on. For those unfamiliar with the slide issues in the Berkeley Hills, here is a good primer from the Chronicle.
But Mathews learned recently of two bitter property-line disputes just blocks away that city records show are in a landslide hazard area. In one case, an arbitrator ruled that although the land had moved, a survey determined ownership -- and thus a couple of feet of disputed earth belonged to the downhill neighbor.

I'm a little late to the blog party but it's nice to see the ol' house still standing. I was the last person to live in it, up to about 20s before midnight of the 1998 closing date. My stuff was literally out on the sidewalk as I carried off the last pieces to my next place in Kensington. One note to add about the difficulty of selling it is the house right next door on the west side. It's about as dilapidated as they come and no one in their right mind is going to want that house as a neighbor, especially if there are young children around and there were always plenty moving in and out with their parents. And true enough, my bedroom had separated from the house by 1-2 inches.

Me, I'd love to move back in as a renter but my few attempts to make contact with an agent seemed like it was met with a fair amount of contempt. :(

1997 prices or so.. $237K plus inflation gets you back to normal !
What cost $237 in 1997 would cost $315.42 in 2009 with inflation.
Oh well... Its pretty close anyway, i guess at 359K!

Should have gone lower!

Certainly will not see 600K for sure!

Great example on how the rest of the Bay Area will correct.

Property History for 2350 Corona Ct
Date Event Price Appreciation Source

Sep 30, 2009 Sold (Public Records) $359,000 -26.8%/yr Public Records

Bubble years... ignored

Dec 29, 1998 Sold (Public Records) $237,500 -- Public Records

As someone who is thinking of buying in the area a few years from now, I hope you're right thomas, but I don't think a decent, trouble-free Berkeley Hills home is ever going to go in the neighborhood of $360k. It looks like prices are in the $700ks now, so the worst-case double-dip scenario is they settle around the $550s.

Looks like they were trying hard to rent it out, repeatedly lowering the rent, too:

Date User Source (optional) Apt BR Price Rent
2010 Aug 6th M D Patrick http://sfbay.craigslist.org/eby/apa/1885... 3 $3,600
2010 Aug 12th M D Patrick http://sfbay.craigslist.org/eby/apa/1894... 3 $3,400
2010 Aug 16th M D Patrick http://sfbay.craigslist.org/eby/apa/1901... 3 $3,400
2010 Aug 19th M D Patrick http://sfbay.craigslist.org/eby/apa/1907... 3 $3,300
2010 Aug 23rd M D Patrick http://sfbay.craigslist.org/eby/apa/1914... 3 $3,300
2010 Aug 25th M D Patrick http://sfbay.craigslist.org/eby/apa/1918... 3 $3,000
2010 Sep 4th M D Patrick http://sfbay.craigslist.org/eby/apa/1936... 3 $3,000

sam1 says

As someone who is thinking of buying in the area a few years from now, I hope you’re right thomas, but I don’t think a decent, trouble-free Berkeley Hills home is ever going to go in the neighborhood of $360k. It looks like prices are in the $700ks now, so the worst-case double-dip scenario is they settle around the $550s.

Nothing special in Berkeley today vs pre-98 bubble years. The same was true with many other metros. Eventually you go back to the long term trend line. Im sure it was desirable, by some, years back as well.

Its really funny, sometimes in a sad way, when I think about all the people who kept saying in 2007 prices of home were going to be flat for years.

Over 25% of the Berkeley Unified School District's budget is from a special parcel tax (BSEP). This, combined with urbanization trends, has helped the city do better than most. Will be interesting to see if the market holds.

EBGuy says

This, combined with urbanization trends, has helped the city do better than most. Will be interesting to see if the market holds.

What trends? This is Berkeley.. its not some dinky town that came out of nothing over the past 10 years. This place has been an urban center for over 100 years.

Factoid ..
In 1908, a statewide referendum that proposed moving the California state capital to Berkeley was defeated by a margin of about 35,000 votes.

Population
1890 5,101
1900 13,214
1910 40,434
1920 56,036
1930 82,109
1940 85,547
1950 113,805 Peak
1960 111,268
1970 116,716
1990 102,724
2000 102,743
2005 100,744
2007 101,377

What trends? This is Berkeley...
White flight reversed about a decade ago -- no small feat considering general demographic trends in California.

The FHFA graph above indicates a trend towards more price differentiation, with higher prices in places like the Berkeley Hills. I guess it's based on the fact that there are a lot of wealthy buyers whose housing decisions are primarily based on their wealth rather than incomes. this kind of makes sense when you consider that the number of millionaires in the US (households with a net worth of $1 million or more excluding wealth derived from a primary residence) is around 7,000,000.

Extrapolating, very roughly, California has at least 1-1.5M of those, so NorCal at least 500,000, and those people aren't going to live in Vallejo or West Oakland, they're mostly in the affluent neighborhoods of the inner bay, of which the Berkeley hills are a part.

If you were to lower that wealth cutoff to say $500,000, I'd reckon the number would double. That's why you're never going to see houses in great neighborhoods going at $350k, like they used to in the 90s.

sam1 says

If you were to lower that wealth cutoff to say $500,000, I’d reckon the number would double. That’s why you’re never going to see houses in great neighborhoods going at $350k, like they used to in the 90s.

It sold for Sep 30, 2009 Sold (Public Records) for $359,000. So why were'nt these homes back in the 90s sell for $500K or more if such a thing as affluency existed in Berkeley?
This home went twice into foreclosure after selling above $500K and once over $1.3M.

As long people blow up housing with all the silly reasons beyond the normal historical trends there will be a bubble and it will take additional years and more foreclosures until we get back
to normal balance between price and income.

http://www.redfin.com/CA/Berkeley/2350-Corona-Ct-94708/home/691965

Property History for 2350 Corona Ct
Date Event Price Appreciation Source
Sep 30, 2009 Sold (Public Records) $359,000 -26.8%/yr Public Records
Sep 21, 2009 Delisted -- -- Inactive EBRD #40409366
Sep 01, 2009 Price Changed ** -- Inactive EBRD #40409366
Sep 01, 2009 Relisted -- -- Inactive EBRD #40409366
Aug 04, 2009 Delisted -- -- Inactive EBRD #40409366
Jul 15, 2009 Price Changed ** -- Inactive EBRD #40409366
Jul 14, 2009 Relisted -- -- Inactive EBRD #40409366
Jul 08, 2009 Delisted -- -- Inactive EBRD #40409366
Jun 23, 2009 Price Changed ** -- Inactive EBRD #40409366
Jun 01, 2009 Price Changed ** -- Inactive EBRD #40409366
May 13, 2009 Price Changed ** -- Inactive EBRD #40409366
May 11, 2009 Listed ** -- Inactive EBRD #40409366
May 11, 2009 Delisted * -- Inactive EBRD #1
May 07, 2009 Price Changed * -- Inactive EBRD #1
Apr 15, 2009 Price Changed * -- Inactive EBRD #1
Mar 24, 2009 Price Changed * -- Inactive EBRD #1
Mar 03, 2009 Price Changed * -- Inactive EBRD #1
Feb 11, 2009 Price Changed * -- Inactive EBRD #1
Feb 10, 2009 Price Changed * -- Inactive EBRD #1
Jan 20, 2009 Price Changed * -- Inactive EBRD #1
Jan 06, 2009 Price Changed * -- Inactive EBRD #1
Dec 15, 2008 Price Changed * -- Inactive EBRD #1
Nov 25, 2008 Price Changed * -- Inactive EBRD #1
Nov 04, 2008 Listed * -- Inactive EBRD #1
Sep 12, 2008 Sold (Public Records) .. $731,200 -- Public Records
Jun 29, 2005 Sold (Public Records) $1,350,000 30.6%/yr Public Records
Nov 30, 2000 Sold (Public Records) $523,800 -- Public Records
Dec 29, 1998 Sold (Public Records) $237,500 -- Public Records

thomas.wong1986 says

sam1 says

If you were to lower that wealth cutoff to say $500,000, I’d reckon the number would double. That’s why you’re never going to see houses in great neighborhoods going at $350k, like they used to in the 90s.

It sold for Sep 30, 2009 Sold (Public Records) for $359,000. So why were’nt these homes back in the 90s sell for $500K or more if such a thing as affluency existed in Berkeley?
This home went twice into foreclosure after selling above $500K and once over $1.3M.
As long people blow up housing with all the silly reasons beyond the normal historical trends there will be a bubble and it will take additional years and more foreclosures until we get back
to normal balance between price and income.

Clearly you can't use this particular property as an index for that market, as it has major foundation/soil issues. A "normal" listing will go within the normal sqftage price range, currently in the high $300s. We might well see a double dip scenario where things drop to the mid or low $300s, but we'll never see $200/sqft averages in the Berkeley Hills again.

Berkeley might have lagged behind SF a bit because a lot of the local market is made up of affluent transplants who discovered the area a little later.

Wealth is a factor here. It's a bit like the market in say, Carmel. I'm not saying that Berkeley is like Carmel, but that income levels *alone* don't drive the market to the extent that they do in other places. This explains the fortress dynamic and the spread that has been building up between bay area markets as shown in the graph above.