Case-Shiller from 3 months into the future

Tuesday, June 10, 2008

Three suburbs

I looked and looked at today's post on BMIT and in the end I decided that it could use some hard HPI data.

And here it is.

I basically took HPI profiles for three suburbs and scaled them using known sale prices of those three houses.

Some thoughts. (Read the original post to understand what's going on)

The Temecula house is slightly above median for Temecula-Murrieta area, and it's the nicest of all three. Notice the 10k sf lot and the fact that it has no HOA or Mello-Roos. It is aggressively priced and should not have much trouble selling.

The 4S house is well below median for 4S. It's an 'economy' house. In 4S Ranch and Carmel Valley, everyone and their mother has 3000 sq.ft., and that's not the factor that determines value of the house. The key factor is lot size. BMIT post incorrectly says that 17004 Ralphs Ranch Rd. has 8276 sq.ft. lot. 'Economy' 4S houses never have lots that big. It's really 5300 sf. There may be something wrong with interior and upgrades. Here's a good example of a 'median' 4S house:

15161 Cross Stone Dr, San Diego CA 92127

4 beds, 2.5 baths, 3,031 sq ft, 6,720 sf. Sold for $812,500 on 03/20/2008. 17004 Ralphs Ranch was already listed, and the buyer of 15161 Cross Stone surely must have looked at it before committing to pay 130K more for a different house.

The CV house is below median (it's also on a postage stamp lot). At 920k, it's somewhat overpriced. In today's market, it would have a better chance of selling at 860k.

If CV and 4S were deflated to the same level as Temecula, 17004 Ralphs Ranch would be worth 500k, and 13854 Kerry would be worth 650k.

No comments: