As you are all aware, we bought our house during what may well have been the very apex of the so-called bubble. I had been consoling myself with the thought that we could dine out on this tidbit for years -- "That's right! We bought the house and then the market sputtered to a halt! Make us the anecdotal lede in a story on bubble madness! Ha ha ha!" -- except a re-appraisal report came back with unexpectedly good news. We couldn't afford our house if it were on the market now.
So we are very lucky. I think?
Anyway, I was looking at the Alameda listings because I like to see how my micro-market is doing, and two gave me pause.
This house is what sucked us into the active house-hunting phase. When it was listed in April 2005, it was going for $390K. This was due, in no small part, to it having 80-year-old electrical wiring and no actual kitchen. Innocent as we were to the ins and outs of the fixer-upper lifestyle, we figured, "Why not throw our hats in the ring here? How hard can it be to live with a small fridge and a grill while we tackle the kitchen?" HA. I say again to you, HA.
The place went for $450K in April 2005, then flipped again -- with new wiring -- for $490K a mere six months later. It is currently on the market for $595K. Looking at the photos, it's clear everything, from the floors to the bathrooms to the kitchen, has been redone. Behold the flipping phenomenon!
"This would be a great way for you to get a toehold in the market," our realtor said. "Perhaps you should consider adjusting your expectations."
"Hell, no," I believe I replied. And then, "Perhaps we shouldn't talk again until there are listings that meet my expectations."
The place got a $500K bid that day. What is scary and a little sad now: it's on the market for $450K, and the terse description reads, "Motivated seller, home under pre-foreclosure."
What is the worst thing about this scenario? That it's a foreclosure? Or that the house lost 10% of its value from 18 months ago?
I don't know enough about either house to make an informed conclusion about the market in my zip code. Maybe it comes down to a house having good bones and being a genuine diamond-in-the-rough. Maybe it comes down to not buying on a negative pitch like "It's this or nothing at all." I don't know. I'll just keep watching and see what else pops up on the market.