Despair Reaches New Heights
High End Properties Increasingly Vulnerable
As loan defaults begin to move up the food chain, a growing number of high-end properties are showing signs of distress. This month’s update of the Desperate Sellers Database includes 15 million-dollar properties, that have seen significant price reductions, rendering some million-dollar no more.
Consider this 6,000 SF villa on the Alameda Ridge. It comes with an indoor lap pool, a built-in pipe organ and four fireplaces. Pretty soon it will be celebrating its first anniversary on the market and is now available at a 30% discount over the original ask price of $1.9 million.
Not into pipe organs? How about a 1,900 SF luxury downtown condo on the 26th floor. Seller paid $1.1M in late ’06. Will now start negotiating at $200 less than what he paid for two years ago. Similar situation unfolding on the 25th and 27th floor.
Prefer the waterfront? Take your pick from several homes in the sky, now available at down-to-earth prices such as a 2,000 SF unit on the 21st floor of the Meriwether, that started out in the millions but is now available for less than 800k.
One In Five Database Properties On The Market For More Than A Year
Approximately 20% of all properties included in the Database – which only counts vacant properties - have been on the market for more than one year. Roughly 30 properties originally hit the market as far back as mid ’07. Based on the Database’ median ask price of $425,000, the average leveraged owner is carrying roughly $2,000 each month (assuming 20% down, 5.5% interest rate). Multiply that by 12, add in taxes and HOAs and you’re probably looking at roughly 35 grand down the drain and no end in sight. That ought to create some motivation to negotiate!
