The San Diego discount: 30%
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Good Morning, Jeff Tedford, we hope you are not afraid of heights.
As promised, a few notes and thoughts about that San Diego condo auction yesterday. The Union-Tribune quotes real estate agent David Pastor, who says units sold for prices ‘comparable with the market.’
Exactly what those prices were is a bit of a mystery -- the auction of condos and townhomes built by D.R. Horton was closed to the press. But commenter ‘sunsetbeachguy’ directed us to this San Diego real estate website, where a second commenter, ‘Chuck,’ lists what he says are the sales prices. Based on his numbers, it appears most units sold at about 30% to 33% below the price the auctioneer says the units were ‘previously valued to.’
Chuck’s take: ‘I did not buy; prices were about five to ten percent to high for me to be interested, but the auction seemed fair to me and I think people today got a good deal and will do well in the long run.’
Our friend Inland Empire’s take: ‘... the sky really didn’t fall. The buyers got starter homes and the builder got rid of cheap condos in a bad area and can now move on to other projects.’
Our take: A few important caveats here: we don’t know for a fact what these condos sold for, and we don’t know if they were ever worth the ‘previously valued to’ numbers publicized by the auctioneer. If a condo was ‘previously valued to’ $547,000, and sold yesterday for $375,000 (one of the examples given by Chuck), that represents a ‘discount’ of 31%; but it’s a discount from a somewhat meaningless number. Was the condo ever ‘worth’ $547,000? Perhaps. Or, perhaps, that was wishful thinking by a builder with less than perfect timing. In any event, it appears this was a successful auction for the builder, in the sense that condos sold for prices a real estate agent felt were equal to the rest of the San Diego condo market -- in fact, the LATimes yesterday, in a profile of the San Diego market, cited a condo that had sold for 30% less than its peak market value. So these sales appear to be in line with the rest of the market -- there was no ‘fire sale’ yesterday.
Your thoughts? Insights? Email story tips to lalandblog@yahoo.com.
Hat tip: Sunsetbeachguy