patrick.net

Might just be the classic underpricing game like you said about froth -- meaning they won't accept their asking price. They're just hoping to get free advertising and perhaps get bidders to blindly bid above asking, never knowing if there are really any other bids at all.

And it did succeed in getting you to notice it, and in getting me to comment. So the free advertising bit definitely worked.

Oakland? That might be overpriced for the area.

That area is pretty nice but the price doesnt seem that low as you can see from the similar sales on that page. I think you can do better in Oakland but you have to know where to look.

on redfin i like to set it to sale records and choose ALL.
so you can see which houses were sold during the bubble and prices people paid.

I just found out that in 2003 my next door neighbor paid about 6 times more than i paid in 2011.
I wonder if hes interested in doing a short sale?

This is a foreclosure, sold Feb 03, 2011. It is also a duplex. A nearby foreclosure, 3867 Patterson Ave, is offered at $180/sf, so the price of $187/sf may be about right.

Thanks for the comments.

Can anyone enlighten me how the property/history pricing works in regards to foreclosures?

For example, this house shows a foreclosure price of $458K. What does this number indicate? What the bank wrote off? Or?

Er,sorry if this is a noob question.

Generally speaking 458,150 should be the unpaid loan balance.

Malkovich says

For example, this house shows a foreclosure price of $458K.

Many times the bank will make what's called a "credit bid" of the full amount of the loan. So the $458,150 is likely the balance left on the prior loan.

Did the prior owner really put that much down, or was there a second mortgage on the property?

It was 77,000 in 1995. Accounting for low inflation, this shouldn't be much above 100.

So it sold for $768,000 in 2004. This is CLASSIC bay area bubble. I wouldn't consider it "too good to be true" by any means. Just because others overpaid so egregiously, doesn't mean it's a deal now!

FortWayne says

It was 77,000 in 1995. Accounting for low inflation, this shouldn't be much above 100.

CPI since then is up 48.2%, so $114K is the equivalent. However, this property may have had work done since that time, so that might not be an apples-to-apples comparison.

Looked at this place with my used-housesalesman today.

House just got cleaned yesterday. There was a bunch of garbage in it from the losers who signed on the dotted line and were foreclosed upon.

Pretty nice place. My used-housesalesman called the selling used-housesalesman and turns out there are already 8 offers on it since yesterday.

So, as I had thought, the used-housesalesman priced it below market and the sharks with cash are circling.

Is it what it is. I suppose I can always get some crappy place in a dangerous part of West O provided it is overpriced and falling apart and not in any way a lucrative opportunity for the cash-sharks.

=)

Yes, I agree. There should definitely be some regulation.

For all I know, the used-housesalesman representing the bank is selling the place to a friend and/or is a dual-agent and thus making up the 8 bids.

Realestate and Realtors.... I am amazed at what a shady business it is.

Paid $748K what the F*** were these people thinking ?

$290K seems very pricey even today. Between 100K and $150K seems more rational.

Under better economic conditions it took 15 years for prices in BA to double.. so $77K in 1995 would be $150K or so by 2010.

Malkovich says

Realestate and Realtors.... I am amazed at what a shady business it is.

With the climate today can say that about the banks and wall street.. God forbid you say it regarding REIC and Realtors.

thomas.wong1986 says

Paid $748K what the F*** were these people thinking ?

It was probably 100% financing, so what was the risk to the buyer really? That they would have to walk away? Big deal. Mortgages in CA are non-recourse. Quite rational to spend an infinite amount in that case.

The risk was all on the bank, but actually not even that -- ultimately the risk was all on the taxpayer.

$290K seems very pricey even today. Between 100K and $150K seems more rational.

If you just look at the pic it probably doesn't look like much. However, it does have a large 1/1 on the lower level and the main level is actually a 2/1. The deck is quite large on both levels. Though the house was built in '31 everything was refreshed in the last few years: stucco, roof, interior, water heaters, etc. I would love to pay $290K for this place. My guess is someone offered cash in the mid-300s range or even higher. Or maybe the selling used-housesalesman's bro-in-law or business partner bought it for list. Hard telling.

The view was incredible. But, yes, back to looking for a multi in the slums for me. I don't know what I was thinking...believing I could buy this place for asking.

thomas.wong1986 says

Let the record show it wasn't quite that bad -- only 90% financing on the $768k purchase.

How do you know about the 90% financing?

This place sold for $300k. I rent a house down the hill, and this is considered a nice area - I think it's part of Redwood Heights. Many people - especially agents, of course - would consider $300k a great bargain in this location, especially for a duplex.

The 'nearby similar sales' and 'nearby similar listings' at the bottom of the page are inaccurate - they are nowhere near that house. They're all in areas that are generally considered much less desirable, on the Bay side of 580. The skeptic in me wonders if this was done intentionally to prop up prices near this property.

Here's a house across the street that sold in July - 3658 Virden:

http://tinyurl.com/42l2u2z

Not exactly comparable - it's larger, and a SFR rather than a duplex, but I don't get why it wouldn't show up in 'nearby sales.' Notice that during the bubble, this one sold for $600k, making the $768k paid for that duplex look even more jaw-droppingly insane.

I don't think 3867 Patterson, which was mentioned above, is a fair comparison - it's a serious fixer with a weird layout and crappy (and probably illegal) additions in the lower level. (I viewed it this summer.) It's not far away - just down the hill - but in an area generally considered less desirable. It did sell, and yesterday I saw folks working on it...

Bob

Yep. This was a nice place alright.

Turns out the buying and selling broker were the same and I'd bet dollars to donuts it was an all-cash deal.

I really would have dug sitting out on that deck and, being an avid mountain biker, living so close to Joaquin Miller park and being able to just ride there would have been just wonderful (right now I have to fight traffic for 30-40 minutes to get to any trails).

Also would have been nice to have the tenant in the lower unit pitching in $1k or so to help with the mortgage.

Hoping there will be more inventory in the next year or so. There is simply nothing worth a crap coming on the market for OAK at all.

On the bright side, I am looking and learning and when the right deal comes up I hope to have a great idea of the market. Moreover, if need be, by next year I will probably be one of those all-cash buyers and will know to simply approach the selling realtor for the most likely chance of getting the deal.

I'd love to see more inventory, but I'm not holding my breath. And even if there is, I think the bubble hasn't fully deflated in the mid-range market here in the E. Bay.

And to make things worse, last Thursday Sens. Boxer and Feinstein voted yes to an amendment to a bill (H.R. 2112) that would restore the higher limits on conforming loans to $729,750 in 'high cost areas'. The amendment was approved in the roll call vote, though the final bill still needs both senate and house approval.

As of October 1, that higher limit had expired, falling to $625,500 - which is still ridiculous (it used to be $417k). If this bill gets passed, it'll just be a handout of cheap loans to the wealthy, and it'll help perpetuate the bubble.

In 'All the Devils Are Here: The Hidden History of the Financial Crisis,' the authors call the original increase in Feb 2008 (from $417 to $729k) 'stunning and unnecessary.' It was supported by both Nancy Pelosi and John Boehner. (Hey, at least Dems and Repubs can agree on helping out their affluent friends.)

Realtors are excited, saying it makes homes more affordable to more people - which is the opposite of the truth.

I wrote to Boxer and Feinstein objecting to this, but I suspect they'll continue to support it.

eastbay19 says

As of October 1, that higher limit had expired, falling to $625,500 - which is still ridiculous (it used to be $417k). If this bill gets passed, it'll just be a handout of cheap loans to the wealthy, and it'll help perpetuate the bubble.

Agree, extended bubble prices is bad policy. I don't necessarily disagree that you can pop the bubble all at once, but we've had so much government stimulus go into housing for the last few years that we're not really seeing market prices. It'd be nice to start pulling back some of the strong support and see if it causes too much chaos. Dropping the limit to $625,500 is a good start, but I agree it's time to drop it back to $417K or lower. Limits that are too high don't really fit with the original intent of the programs.