San Diego auction: 67 cents on the dollar

Good stuff from the bottom of a Wall Street Journal article about the crisis at Countrywide: At an auction of foreclosed homes in San Diego over the weekend, the average price paid was 67% of the previous price paid for the home. "At a similar auction in San Diego in May, the average was 73%," The Journal reports.

That's a big haircut for lenders. We've written before that auctions are one of the best ways to measure  the value of a given home. How much is that house that's been on the market for three months and isn't selling really worth?  Auction it off and you will have a ballpark answer.  We understand it's not a perfect valuation model, and probably not the best selling strategy, but it gives a real market value to a home.

Hat tip: CD, KNX-AM radio

Comments

[Cal]

Impac mortgage (whose President was quoted in the LA Times article taking 500k out of Countrywide bank) is their "official" lender and pre-qualifier (though you can use someone else) , Impac just recently had to originate conforming GSE loans only. I wondered openly at the time this happened if it would affect the auction. Interestingly, the avg. price paid (as mentioned by Calc. Risk) was 413k, just under the conforming limit. Could be coincidence, maybe not, not enough data, but still interesting.

The San Diego investors club has some interesting things (accusations) to say about this (and other) auctions:
http://www.websitetoolbox.com/tool/post/sdcia/vpost?id=2095894

If they do use shill bidders, I would think that would be completely illegal. I was debating whether to go to the auction on Sunday for "fun" or not, if I do I will let you guys knows any impressions I get.

[ManuLa]

Yeahh. I can't wait for 33% haircut down here in LA.

[AnnS]

Not surprising.

You were posting on this while I was on the phone working on an affordable workforce housing project where the houses are sold with subsidized mortgages and a land trust.

One of the first houses in the project has come avaiable as the first purchaser has married and is leaving the area.

Nothing has sold in this village, and more particularly that small development where the property is located in over 18 months. An appraisal was done on the house in June 2007 using the old comps and speculation. It was appraised at $226,000.

2 weeks ago, a house less than 3000 feet away sold after the owners had slashed the price by 29% to $309,000.

Now the subsidzed home is 1300 sq ft, no garage, gravel drive/parking area on .11 acres.

The house that sold (also built around the same time) was 2275 sq feet, 2 car garage with a paved drive on .4 acres. Neighobring lots are currently priced at $48,000 (desperate seller) to $68,000 (take what is in and get out seller.)

Run a fast comp deducting 975 sq feet at $100 a sq ft, $18,000 for garage and paving, and $24,000 -34,000 for the land. That is a total of $144,500 of the other's price of $309,000. And it brings the house which was "appraised" in at $164,500 - not $226,000. That is a drop of 27%+.

And my banker who writes the loans on these subizdized homes agrees.

[David]

I bought a house in LA last year so I am stuck here for maybe 4 or 5 years. I want foreclosures to keep driving the market down. My dream is to buy a couple apartment complexes and live off the high rent.

[Toby]

Call me when it's .25 on the dollar. Cause even after a third off, it's still way over priced.

[eprobert]

Actually San Diego prices are getting so cheap that I'm thinking of moving there - I grew up there and if it wasn't for the creepy Republican vibe, I might live there today.

At any rate, average houses for $450.000 sound mighty tempting to someone from LA!

Now just to figure out how to move my industry there...

[Greg the San Diego Locksmith]

This is a great website and great blog, I just wanted to reach out and compliment your site and let you know that I work with a lot of real estate agents in San Diego. I am a mobile locksmith in business for 10 years and am available 24/7. Many of the other Realtors that I work with often give a locksmith job as a closing gift for their clients. Please let me know if I can ever help you with anything.

info@leadinglocksmith.com