Housing Market Watch #7

This is the seventh episode of Housing Market Watch (see the previous episode here), where I focus on what's happening with home prices in Southern California using specific examples from the Multi-Listing Service (MLS).

Today's property is in the city of San Diego in a community called Rancho Cerro.

Type: SFR
Status: Active
MLS#: 081004555

Sq. Ft.: 1,710
Lot Size: 5,000 sqft
Year Built: 1970

Beds: 3
Baths: 2
Stories: 2
On RedFin: 120 days

Description

$$$!!!HUGE PRICE REDUCTION!!!$$$ SUBMIT ALL OFFERS!!! LARGE HOME WITH MANY UPGRADES!! GRANITE IN KITCHEN AND BATHROOMS! NEWER CABINETRY!! LARGE BONUS ROOM UPSTAIRS!!! LET OUR TEAM SHOW YOU HOW EASY A SHORT SALE CAN BE!!!GREAT OPPORTUNITY TO OWN, SO BRING ALL OFFERS! ALL BEDROOMS CONVENIENTLY LOCATED DOWNSTAIRS. OPEN FLOORPLAN AND HUGE BONUS ROOM UPSTAIRS WITH BALCONY! MANY UPGRADES THROUGHOUT!

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Sales History

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Date	Sold Price	Gross Gain	Change ($)	Change (%)
11/16/04	$350,000	N/A	N/A	N/A
05/10/05	$510,000	+$160,000	+$160,000	45.71%

This home has appreciated tremendously during the Great Housing Boom. Unfortunately for it's last owner, this is like a game of hot potato, and they got stuck with it.

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Pricing History

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Date	Asking Price	Gross Gain	Change ($)	Change (%)
01/17/08	$410,000	-$100,000	-$100,000	19.61%
02/19/08	$340,000	-$170,000	-$70,000	17.07%
04/02/08	$180,000	-$330,000	-$160,000	47.06%

The median home price has declined by 19.4% in San Diego County (when comparing the numbers from March 2007 to March 2008); however, this episode's home has declined in value by 64.71%, a mind blowing $330,000, since its last sale in May 2005.

As I've demonstrated in previous episodes of the Housing Market Watch, if an uninformed buyer were to have purchased this home before April 2nd, that buyer would have lost $160,000 of real money. To put those savings into perspective, the savings would almost allow you to buy two of these homes!

My Thoughts

If you're one of those people who think, the property values in my city can't fall by much more because the prices are already down to what I paid for my home... think again!!! Home prices are going to continue to fall, and denial won't change it's affects. The only thing you can do now is to prepare yourself, and make sure your not in a position to become another unfortunate victim of the Great Housing Crisis.

UPDATE 01/08/09: This property was sold for $275,000.