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Monday, July 23, 2007

Housing in San Jose

For the record, I'm not moving to Alameda right away. I own a house in San Jose. For me to move will be a long process. I need to decide whether or not to keep/rent out my current house or sell it. I've got a great interest rate on it and it's a good investment, so there are things to consider.

Add to that, now is NOT the right time to sell my house. There are four other properties on my street, and dozens in the neighborhood, and nothing is selling.

However, in the fashion of a time where housing prices are falling, there can be some comedy gained from watching the folly and misfortune of others.

There is one very reasonably priced house for sale one block from our house. It's a great property on the best block of my street. The add on bedroom and bathroom were done very well. The yard is gorgeous. The house is well cared for. So, as a starting point, imagine that this lovely 3 bedroom, 2 bath home is offered at $649k.

This stands as a counterpoint to the other houses for sale on the block. Take the duplex across the street from our house which earns a total of $1650 a month in rent for the two 2/1 units. Asking $640k for this just doesn't make sense. You can't make the math work on that. It has sat without interest for several months.

Or three doors down from that duplex is the little 2/1 house for $599k. The front yard is totally cemented in and there's a studio in the back that was built without permits. I don't know what condition the house is in, but this may actually be the second best option on the street, but still not nearly attractive enough to interest buyers in a falling market. Oh, and by the way, it has no garage. Yeah, not going to happen.

But the one that makes me laugh out loud, the house that made us raise a brow when it went on the market the first time, the house that left us shocked and staring when it sold, and then was slightly fixed up and put right back on the market a few months later, is the crookedest little house on the street. This house needed to be torn down when it went on the market earlier this year. What you can't see in this picture is that the front porch and living room exist at rather a drooping angle. The house stank of urine and the walls were stained. It looks like the original purchaser went through with a bunch of paint, some new flooring, and generally cosmetically upgraded the place a bunch. But they didn't fix the foundation, and that is visible from the street. Oh, and they're asking twenty thousand dollars more than the gorgeous Victorian down the street (that does have a solid foundation).

So this is what happens when the market shifts and people aren't really dealing in the realities of it all: a mismatch between asking price and actual value. And what's more, Carolyn (who owns the Victorian) isn't having much luck selling her place either, so the other three don't have a chance.

Meanwhile, I'm still dreaming of a day when I'll live in Alameda, but one thing is certain: I've got to wait for the next market shift before I do anything. On the plus side, rents are going up finally, so there is some hope that I could reasonably rent out my place in San Jose and hang on to it. We shall see. Things to think about for the next couple of years.

2 Comments:

  • There's always people who get caught up in a market that turns downward. Whether it's real estate or stocks.

    By Blogger Chris, at 2:46 PM  

  • Wanna see something interesting?
    Here is a list of the homes that Countrywide has repossessed due to defaulted mortgages along with presumably the amount left on the mortgage.

    http://www.countrywide.com/purchase/f_reo.asp

    By Blogger Chris, at 2:48 PM  

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