|Purchased Price||$124,000||:::||Lot Size||6,098|
|Days on Redfin||17||:::||Baths||2|
|20% Downpayment||$123,800||:::||Area||Live Oak|
*Estimated monthly payment assume 20% down, 30-yr fixed @ 6.50%
“THIS IS YOUR LUCKY DAY!! THIS GREAT BUY IS BACK ON THE MARKET DUE TO AN UNQUALIFIED BUYER!!” $619k for a dated 2bed/2bath. Who’s the lucky one? You tell me.
This is probably happening all over the place, but most realtors don’t advertise that on their listing. Buyers are not only unwilling to pay more than they think a place is worth, but many are now unable to do so because they can longer easily finance large sums of money. If you think about it, the bubble was fueled by the bidding up of prices through the means of cheap loans. Now that those are removed from the system, buyers are no longer able to sustain the insane market of the yesteryears.
This house was purchased back in 1985 and is likely paid off by now. That is both good and bad. Good thing is that the seller is not in any dire circumstance to sell because they’re either not making any mortgage payments and/or the payments are very low. The bad thing is that because they have all the time in the world, they’ll be less willing to settle for a quick sale. Holding out for that ideal price may cost sellers a lot of money, especially in this down market.
If you take the 1985 purchase price and apply a 4% annual compounded appreciation, this property would be valued at $305,675 right now. Since nearby 2bed/2bath properties only cost $1,975/month to rent, this property is still over-priced. If you apply the general rent-saver gross rent multiplier of 160 to the equivalent rental cost, this property should be priced around $1,975 x 160 = $316,000. That is fairly close to the $305k noted above.
So you tell me who’s the lucky one. The knife-catcher who was prevented (by the bank) from buying this house or the future knife-catcher who will buy this home for $619,000? I think we all know the answer.