Mountaineer

miss sam, thanks for the great story! it gives me hope that we will eventually find something up here.

i have thought about looking at foreclosures. i guess i need an agent somehow connected to that part of the market. the agents i have spoken with do not show that type of home to me. i suppose i should prod them in that direction. it sounds like you found a great place. your place doesnt seem to match the description of foreclosed homes i hear from agents (totalled, poor locations, lower end, etc etc)

responding to kathy, i found a lake arrowhead agent site with data showing the july yoy decline for lake arrowhead at 32%. dataquick in april showed 40% decline. - Thu Jul 30 2009, 00:31

thanks for the feedback! (btw, we still haven't purchased a house yet)

here's my thinking:
1. re: the 800/600K home issue, i simply looked at the following:
a) last sale price and amount of work done on the house since that time. for example, we were going to make an offer on a place in lake arrowhead. it last sold in late 06 for 740K then listed in early 08 for 970K (and not much work was done on the place). certainly 06 was the peak down the hill and probably close to the peak up here. i would think a price significantly less than 740K would be a proper end price. on top of that the house has wood shingles that will prob need to be replaced. if i suggested making an offer for 600K i think the realtor would either argue or refuse. this happened with several houses we considered making offers on.
b) prices down the hill (dth) v. up here. i have heard from a few realtors that prices up here lag dth. if this is true i would expect prices to continue to fall up here for a bit even after dth bottoms out. i can see prices falling substantially up here over the next year. first in the spring when a bunch of houses come back on the market, then in sept if they are not selling (kind of like in 2008). historically most houses up here were cheaper than their dth counterparts (in decent areas).
c) as a project in early 2008 i took _initial_ list prices of all houses between 600K and 1M. i got this data from a realtor from the local mountain mls. for all houses that sold i figured the % difference between list and sold price. the difference in early 2008 was 17%. this also does not factor in listings that are "freshened" by taking off mls and placing back on at a dif price.

i would think that regardless of dom etc one can determine a peak month and price, if they are willing to make some assumptions or choose a specific metric. for example, lots of areas show housing price trends as median price. certainly that can be done for the mountain area. i would bet that the median price is falling right now, which implies that there was a month where it peaked. i have actually found this data on zillow etc but was hoping for something a little more substantial, like dataquick, so any tips on that would be appreciated. it sounds like you are saying that since it is a closed system up here i won't be finding this data any time soon.

ultimately, you are right, we just need to figure the price we think a house is worth and make an offer at that price. of course, to make an offer we will be working with a realtor and that realtor will probably argue with us about our methodology for determining our offer price, basically thinking we are unrealistic/cheap.

also, interesting that you ended up getting the house for around 25% off list price, which is about the same % diff as 800K/600K.

thanks for taking the time to respond! - Tue Feb 3 2009, 21:37

as an update to my initial post in 6/2008:

we are still looking for a place up here. waiting a year has obviously helped us quite a bit on price. recent data i have gotten from the mountain mls (from various agents) indicates about 260 houses sold up here in the last year. of those, about 20% (~57) were priced at or above 500K. i have a spreadsheet of each of these sales. the spread between the INITIAL LIST PRICE and the SALE price is about 15%. note that this does not take into account freshened listings, where the agent has taken a house off the market for 30 days then put back on (which happens a lot during the winter). i know that some of the houses on my list have been freshened but dont have data going back to the previous listing.

the spread between most recent ask and sale price is 5%. the spread between initial ask and sale in the 700K+ range is greater, at 19%. the spread between last ask and sale is 8%. considering all sales in the last 3 months, the spreads are 18% and 8%.

19 houses sold in the 500-600k range.
8 houses sold in the 600-700k range
10 sold in the 700-800k range
10 sold 800k-1M
~9 sold 1M+ (i think there was another one on palisades that sold right after i got my data).

the average days on market for these solds in 210 days.

there are approx 150 houses on the market right now in the 500K+ price range (according to a realtor up here). 150 / 57 = 2.63 years of supply. clearly some of these houses will either come back off the market in oct/nov or have to lower their price to move. personally i feel like these sellers are chasing the market down. while the lower priced houses are selling a bit more, the 500K+ price range has a lot of issues pushing price down (no move up buyers, poor economy, etc). regardless of what some people/realtors say, there arent that many people willing/able to drop 1M cash on a house these days.

i still see a lot of these 500K+ houses listed for above what they paid in 2005-2007. while some people do upgrade a place, a new wood floor and paint does not equal 200K. while every house is different we have looked at about 40% (60+) of these houses. it is rare that we see enough work to justify a higher price that 2007.

hth - Fri Jul 24 2009, 08:50

i spoke with several mountain realtors in may 2008 asking this very question. they also told me 95-98% of asking price. i found this a little suspicious so i did an analysis on this by taking sales data from 1/2006 through 5/2008 for all properties above 700K (our price range). i compared INITIAL listing price against final SALE price and found that the average property sold for 83% of initial asking price. the average days on market was approx 240 days.

i am also finding some properties purchased in 2006 listed substantially above their purchase price. my opinion is that prices up here are a bit high and that by september prices will drop as people realize they are going to be stuck with an unsold house another winter.

i heard from an area realtor that about 10 houses sold in arrowhead woods in may 2008. fyi there are about 350 realtors in the area.

i suggest asking your realtor what they think the spread is then asking him/her for the data and doing your own analysis. hopefully the numbers will match. - Sat Jun 14 2008, 01:32