June 10, 2008
Taking Advantage of the Buyer’s Market
As prices continue to drop, smart buyers, including many who comment regularly on this blog, are making their moves. Does $355,000 for a four-bedroom, three-bath Contra Costa house sound like a sweet deal? Gregg Winchester snapped up the 2,430-square-foot Brentwood house the day he saw it, according to a story in last week’s Contra Costa Times.
Brentwood had 22 months of inventory last January, meaning it would take nearly two years to sell all the homes already on the market if no new ones went on sale. Now, it’s 4.9 months of inventory. Hoo hah! (Brentwood is at the far northeast end of Contra Costa County; the city is not a foreclosure-riddled as nearby towns such as Antioch and Pittsburg.)
Commenters on this blog have talked about how foreclosures and plummeting prices are a natural outcome of the previous housing bubble, and how they may help make homes affordable for the average Joe and Jane. According to the National Association of Home Builders/Wells Fargo Housing Opportunity Index, price drops have indeed changed affordability in the Bay Area for the better.
In the East Bay, 32.4 percent of residents could buy a home in the first part of 2008 as opposed to only 17.4 percent in late 2007.
So, just in case all this information might make you feel inclined to check out Brentwood, here’s some of the lowest prices per square foot currently on the market there. Just remember, it’s important to do your homework and get a sense of what the neighborhoods are like. (Photo: neubie.)
982 Whitehall Lane, Brentwood: 3 bedrooms, 2.5 baths, 1,804 sq ft. $260,000. Purchased for $453,000 in 2005 (yes, another example of an underwater Contra Costa County home). Fireplace, deck, fenced yard, patio.
139 Trent Place, Brentwood: 4 bedrooms, 2.5 baths, 2,082 sq ft. $300,000. Yes, this is a foreclosure. Looks lovely in the photos. This sounds like an amazing deal.
131 Havenwood Avenue, Brentwood: 4 bedrooms, 3 baths, 2,524 sq ft. $364,899 (what’s with all those odd numbers?) Though it’s a foreclosure sold “as is,” the listing says it’s in move-in condition, with a private master suite, upstairs laundry room, three-car garage and a huge patio. Man, this one broke somebody’s heart, for sure.
1845 Alexander Way, Brentwood: 5 bedrooms, 3.5 baths, 3,273 sq ft. $475,000. Like all the other houses in this post, this is a single-family detached home. Looks lovely in the photos, and is described as “never lived in.” Therein must hang a tale! It’s close to a neighborhood swim center and a park.
Colin said:
Median price per sq ft is still dropping pretty consistently in Brentwood. Seems like there may be a lot of knife-catchers out there.
June 10, 2008 3:47 PM
Janis Mara said:
Hey there, Colin! I am embarrassed to ask, what is a knife-catcher?
June 10, 2008 11:01 PM
Red said:
Knife catcher
(From Wikipedia, the free encyclopedia)
A knife catcher in economics is a term for a purchaser of a good at a point when the price of that good is declining sharply in value.[1]
As in anyone who believes “you can’t time the market bottom, so buy now!” Patience and caution should be employed ….
June 11, 2008 1:12 PM
Janis Mara said:
Good to see from you, red! Thanks for supplying the definition. Just as “shadenfreude” became a popular term during the dotcom bust, I bet “knifecatcher” will become popular during the housing bust.
I’m thinking it’s all relative. If you buy now, you’ll get a good deal with a low interest rate (assuming your credit is good) and will be a zillion times bettah off than the people who bought between, say, 2002 and 2005. So, why not jump now? The water’s fine, seems to me! What do you think?
June 11, 2008 8:18 PM
Colin said:
Janis, I think you are a prime candidate for a knife catcher with those sentiments
Just because you are getting a better deal than folks who bought in ‘02 thru’ ‘06, doesn’t mean you are getting “a good deal” now. Prices have further to fall out there in relation to historic norms versus income/rents, imo.
June 12, 2008 8:44 AM
dg said:
And remember that you can always refi at some point in the future, but you can never get the price back. You buy on PRICE, and NOT interest rates.
Once the bottom comes in your particular areas, prices will be flat for awhile anyway because everyone (mainly the media) will be scared to death of RE and no one will want to buy anything.
I have been reading about the knife-catchers since late 2007. It is referenced often actually.
June 13, 2008 12:34 AM
Janis Mara said:
Hahahaha you are right, Colin! And dg, that is an EXCELLENT point. You know, it seems to me that most trends are like that. It’s not like kapow, the high point (or in this case, the low point) is reached, and then it’s over before you have a chance to do anything.
June 13, 2008 1:27 PM