I would like to introduce a new category of property to the blog today: the Rollback.
You may have seen this graphic before on other posts. I copied it from Wal-Mart, so I hope they don’t sue me. I think it is very fitting because Wal-Mart is very proud of the price rollbacks and savings they bring to consumers. I have used it when I have found a property that wasn’t a flip — meaning bought and sold within a year — but properties that were selling below prices from more than one year ago. These properties were not common a few months ago, but now I am finding more and more of them. Since I expect to find even more, and since today’s Rollback is such a great find, I am formally introducing the category here.
Purchase Price: $613,909
Purchase Date: 4/16/2003
Address: 34 Poppy #52, Irvine, CA 92618
Sq. Ft.: 1,344
Year Built: 2000
Neighborhood: Oak Creek
$/Sq. Ft.: $438
Status: Active on market
On Redfin: 30 days
From Redfin, “Upgraded ‘Gula’ model w/ 2BR/2BA carriage unit (all on one level)+2-Car Direct Access Garage; G8 rm w/ upgraded sandstone fireplce & media niche; private balconies off formal dining & MBR; upgraded kitchen w/ dark maple cabinetry, corian countrtps, recessed liting; upgraded carpting, flring & custom paint. GE Profile range/oven/dishwasher recessed liting w/ dimmers in LR, MBR, & DR; Master BA w/ walk-in clst+ closet organizers; wide baseboards; dark maple stairway handrail+more!Resort-style amenities+GR8 schools”
Let that date sink in for a minute… This property is going to sell for a loss to a buyer from 2003. Assuming they get their price, after a 6% commission, this person is going to lose $60,249 after 4 years of ownership.
The bubble rally extends from 2001 to 2006. A transaction below 2003 prices wipes out half the bubble. Are we having fun yet? Have a good weekend…