Friday, December 7, 2007

Downward spiral in Oakland beginning?

Jump down to the UPDATE on 721 Rosal.

2 good examples of the mess (for sellers/owners) in Oakland are highlighted by these properties currently for sale: 6690 Girvin (above) and 721 Rosal (below). Girvin was built in 2001 and sold for $855k in October 2004. It was listed for $1.249M (per zillow) as of 10/12/07 but currently is listed for $799k, an astonishing $450k drop. Rosal is in a fantastic neighborhood in Crocker Highlands hear Piedmont, and was also purchased for $855k (no relation to Girvin) in August 2005. It is currently listed for $829k after a 100k reduction and has been on the MLS for 35 days at the new price. Owners purchased with 100% financing. This is only the beginning, folks... and a major reason I have my radar on certain parts of Oakland for 2008-2009 purchases.

UPDATE 12/19/07: 721 Rosal has been reduced yet again to $749,950 - a total reduction of $180k from original asking price 3 months ago. The trustee sale is still scheduled for Thursday 12/20/07 so this seems to be a last ditch effort as a relist to get an offer before the bank buys it back.

UPDATE 12/9/07: 721 Rosal has been reduced for a 2nd time - now to $799k (down from $929k about 3 months ago). A trustee sale is also scheduled for Dec 20 on the Alameda County courthouse steps in Oakland.

An interesting visit to the vacant open house today revealed the location to be on the far Lakeshore side of Crocker Highlands (not bad, but not great) and the "stylish contemporary home" to be a strange mix of design including strange bright-colored plastic sheets as backsplash and wall panels (not kidding) in the kitchen and "media room."

A discussion with the listing agent revealed his belief that it comps at $850-860k right now - this after I commented on the downward direction of the market in Oakland. He disagreed, and then in true realtor sales-speak said "someone paid that much once, someone else will pay that much again." I was speechless, but then again not surprised. He not only subscribes to the idea of the greater fool but also the idea of the NEVERENDING greater fool! Cheap comedy.

He also claimed that it comped out at the original $929k asking price only 3 months prior. So he admits there has been a drop in "value" of approximately 70-80k in 3 months? But according to Mr. Real Estate Agent, there is no slowdown in Oakland. Of course not.

All asset bubbles burst, my friend. The air leaks slower in some (real estate). Fast in others (dot com bust).


Scott said...

Let's hope not!

Rosal looks nice in the photos, but it's pretty horrible in person. Awkward sloped lot, weird semi-transparent blue plastic walls in the kitchen and living room (seriously), tiny rooms, bad layout, yada yada. It's also not that nice a part of crocker - more than a few really run down houses on that street.

Haven't seen the other one, but I hope its stale fish status is just as easily explained.

Scott said...

This is the one that has me worried:

Nice house, nice street, the sort of place that has been resistant to the downturn so far (as opposed to Rosal), has some deferred maintenance issues, but nothing super horrible and it has been sitting for 50 days with almost no interest.

Or, for the counterpoint, check this one out:

3 beds, 1 bath, 1800 sq. ft. Listed at 899k and closed last week after a 10 person bidding war for $1,057,000.

This one is scheduled to close next week and also had a huge bidding war.

D Gordon said...

I wondered about Rosal - might want to just chalk that one up to a bad top-of-the-market buy 2 years ago. And we all know the less desirable/more dysfunctional properties in even decent neighborhoods can suffer. And if there are several run-down houses on that street, those are what I wanna see!

Girvin has no interior pics but the statistics are large and the "comps" support a much higher price than asking, assuming it isn't insanely bad on the inside.

These might not be the best examples of a current downward spiral, but I believe they are representative of the beginning tell-tale signs, and that there will be plenty more to come to support that.

D Gordon said...

Scott, can't view the mypacunion link you posted. Looks like it is cut off.
What is the address?

I am in complete agreement that the very desirable, higher-end neighborhoods of Oakland, Piedmont, Montclair, and Rockridge are doing fine and can very well continue on that path. I think Lakeshore and Trestle Glen both benefited from a gross under-pricing to entice these bidding wars - not a bad strategy for their respective areas.

I still say these neighborhoods eventually hit a slowdown, or at a least a stalemate. It usually just takes longer for it to reach these smaller hoods. It truly is a supply issue here, whereas the vast Oakland Hills and other nice areas have a plethora of nice homes coming to market every day at or below previous purchase prices.

The really nice part of Crocker Highlands is such a gorgeous area, BTW.

Anonymous said...

Rosal is back, btw. Under $600k.

D Gordon said...

Yup, I saw that. Hadn't had a chance to update yet. Thanks for posting.

I have an even better Oakland hills example that is listed at 410k under its Jan 07 sales price... tasty.