Saturday, December 09, 2006

Going Down - High end update


Just when you thought it was safe to go back into the water...

Looks like the locals saved another $29k. This home was originally priced at $1,150,000 and is now listed for $899,900.00. At my last update on December 4, http://bakersfieldbubble.blogspot.com/2006/12/high-end-update.html the home was listed at $929,000.

How much lower will this home go? How could the realtor have missed the market by nearly 30%?

20 comments:

Anonymous said...

If someone will give my gardener a no-doc loan, I'm sure he'll step up to the plate :)

Anonymous said...

Imagine if you purchased this home. You would be screwed!

Bakersfield Bubble said...

To be fair - I think this home is getting close to a "fair" price.
What that is, IMO, $800k or so.

Unfortunately, the realtor screwed the homeowner by not being honest on the market and pricing the home correctly. Now they have to wait until spring before any serious buying will occur.

There are many homes just like this in the same area, seven oaks, that are overpriced and sitting. Mainly, builder spec homes. How much longer can these guys hold out before they start droppping their prices like this homeowner?

Anonymous said...

When the price is down below $100/sqft, it'll be priced appropriately.

We're talking about Bakersfield. Kern county. The place where LA and Ventura counties dispose of their sewage and house their smelly dairy cattle.

It's not even clear why so many opulent homes exist here, as the local jobs and wages don't support such lavish digs. When the tide of EZ credit recedes (as you've noted, it's happening), then we'll see which homeowners are wearing a swimsuit.

Bakersfield Bubble said...

"It's not even clear why so many opulent homes exist here, as the local jobs and wages don't support such lavish digs"


AMEN! Our median income to median price is around 8 times. Pre Boom we were at 2 times. When we get closer to 2, it will be time to buy!

Mozo Maz said...

Absolutely. This is not Beverly Hills, not Carmel, not San Francisco. It's the smelly, dirty, foggy, Central Valley and it's agricultural base.

Today's prices are a mighty mega bubble. I watch this blog having some understanding of the area (1992-1996). I remember perfectly normal homes in the middle of Fresno selling for around $85,000 in those days.

Even allowing 5% annual inflation for 12 years, a basic 1970s ranch home should sell for about $150,000 now.

I'll allow 2x that, for a "nice" new home. Around $300k should be the upper end of this market.

What kinds of jobs are in the Central Valley that will support and $800K loan? I just can't believe the job market has changed that much. There is not a second Gold Rush going on!

Anonymous said...

What makes you think that place is worth $800k? The architecture is boring (I would classify it as god-awful) and the finishes are tract quality, no better (and don't get me started on that dining room). There is nothing upgraded about this place other than possibly the location. If I were building a tract of these, sticks and bricks for this place would only run $60-$65/SF (land, improvements, and overhead would be additional to that). It's way overpriced @ $800k.

Bakersfield Bubble said...

Our current Median HH income is $38,000

Our current Median is $300,000

That is 7.9 times.

If we get down to 4.00 times, that would put the median at $150,000 or so. If that happened how many homeowners would be underwater?

Bakersfield Bubble said...

Last anon- please use name. Thanks.

It is on the golf course in an area with many "million dollar homes". I am talking $800k in today prices. Where will this home end up in 2 years, probably back to $600k or so. That said I agree with you that only a FOOL would pay anywhere near that price.

Bakersfield Bubble said...

Thanks to all who vist. So far this month there have been 1,500 unique IP's that have visited.

I make nothing off this site, but enjoy it. If you have any topics or inside information, especially locals - please email me, I have several locals who are forwarded me information.

Anonymous said...

Anon #1 & 3 here. It's a cool blog, and *should be* of interest to all who own (or intend to own) RE and live in Bako.

I'm subscribed.

Thanks for sharing :)

Anonymous said...

Keep up the good work on your blog! There are many who enjoy your work. I'm in OC, but travel to Bakersfield for soccer occasionally. It's remarkable that the prices got so high! Somebody wrote a song once... What goes up...

crashbabycrash said...

Hi everyone! I have been watching this house on the MLS and also think that it doesn't really match up with the upgrades and quality that other homes in the seven oaks area have. I mean, aside from the fact that it's boring and ugly, the inside looks like a centex home (which I live in! lol)

I am taking a poll. What does everyone think a "high-end" home in 7 Oaks should be worth per sq/ft.? Not what it is worth now, but what you think when it bottoms out in a year or two. Let's say it is a custom home, with a fair amount of custom cabinetry, average lot, totally upgraded inside and out, in other words, a "desirable" seven oaks home.

My take is things will come off about 35% from the high. The high for this type of home in that area WAS about 300 sq/ft. So it would be about 195 sq/ft. Having said that, I think it should be about 150 sq/ft. but I believe it will come off the 35% then stabilize there until inflation causes that price to be accurate.

What do you think?

Anonymous said...

$175 sq ft max!

Bakersfield Bubble said...

crash -

I would say around $110-$150 per sq foot (depending on location and lot size ammenities). I think that continued price reductions depend on tightening of credit. If the mortgage spigot opens up more, then all bets are off and the prices will rise again. However, if credit tightens then LOOK OUT BELOW!


crispy&______

Anonymous said...

We have places in Sacramento that are getting closer to 150 sq foot. Check out flippers in trouble. The bigger the house the less per sq foot. Nobody should buy at more than 150 sq foot.

Mozo Maz said...

The Sacramento Flippers In Trouble estimates don't even take closing costs or commissions into account, and the losses are still jaw dropping.

Anonymous said...

Check the MLS, this one sold today for $800k, you called it.

Bakersfield Bubble said...

got lucky - lol

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