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Reader SM sent in a note about a short sale he’s about to buy for $500,000. It previously sold for $780,000 in May 2006 — a 36 percent decline in value from the peak. Here’s SM‘s question:
Here is some info I have on a house I’m about to purchase. If you could run it by the Prof. and see how much more he thinks the numbers on this house will fall based on his understanding of what ‘s going to happen.
I cannot predict price changes, but there are a few specific areas of town that are of concern to me. In these areas there is relatively high vacancy, near 10 percent, and massive amounts of foreclosures. They are typically newly built neighborhoods where almost all the houses are underwater on their current market value vs. loans – not the long settled older areas which comprise the vast majority of San Diego properties.
Have you looked at the entire pool of comparable sales in the home’s area? Redfin.com is also a great tool.
If you have more questions for Leonard Baron, please leave a comment or send an e-mail to firstname.lastname@example.org.