A Bit of Perspective

My wife Lesley’s aunt Barbara lives in a little town about 30 miles north of Memphis, Tennessee called Munford. It’s sort of a bedroom community, kind of cute and quaint but kind of lacking when it comes to the truly important things in life that we’re used to…like soy latte’s and Pomegranate Jamba Juice smoothies. No 99 Ranch Markets yet in Munford either. You can get great BBQ there though! About 2 and a half years ago we were back visiting Barb and we happened to walk by this house you see above, which was for sale for $499,000. Lesley and the girls just came back from another visit…it’s still on the market. It’s $449,000 now. This house is a 4200 sq ft, 4 bedroom, 3.5 bath palace with 4 car garage on 3 acres with it’s own private lake…and it’s own dock. It also has a formal living room, 2 family rooms and a game room. I sold a house that wasn’t this nice on 1 acre in Atherton in 2006 for $5,975,000. Here’s the key feature…it’s hard to sell! Meanwhile, in Foster City, there’s a 998 sq ft 2 bedroom, 1.5 bath condo at the Admiralty on the market for $469,950…it’ll probably sell for $449,000.

I read alot of other real estate blogs because it really gives me great ideas but also because it gives me greater perspective. Do you realize that in Reno over 50% of the transactions done are short sales and foreclosures right now? That the average days on the market in large parts of Denver are around 200? I heard a realtor from Modesto tell a story about how she had talked to a person about selling their home and the place had almost $800,000 in loans on it…and she figured it’s value to be around $375,000.

I read another blog post about a home in St. Paul, Minnesota that had been on the market 6 months…and during that time had only gotten 2 showings! That’s amazing to me folks, especially since I had over 100 people at my last open house. There’s just no getting around the fact that we live in an incredibly special place. As I said in my podcast, we live in a place where values have only fallen less than 2% this year. I’m sure if you’re a buyer that’s not what you want to hear…because you’re hoping to buy that house in the picture above for $449,000 somewhere on the Peninsula. I’m sorry, but it’s simply not going to happen. We live in an area where, by and large, values are protected by the incredible vibrancy of the innovation economy here…and what better reason could there be to invest in this area.

 

Comments

  1. Nice writing style. Looking forward to reading more from you.

    Chris Moran

  2. Seriously, it makes me sick. I think I may move to Tennessee!

  3. Jim, Very nicely done! You can pay less, as a buyer, just not in some of the prime areas of this country. We have some good premium propertiess here in Ct, too.

  4. Real estate is local. At some open houses here no one shows up. In some neighborhoods we can get as many as 10 at an open house. In some of the burbs open houses almost never get attendance. Real estate is so local that it varies by neighborhood. In some neighborhoods prices have gone up, in others they have gone down.

  5. Jennifer says:

    Has anyone seen the HGTV show “Haulin’ House”? That’s exactly what I want to do with the mansion pictured above. Just need to find a plot of land big enough to drop it in the Peninsula. I don’t mind losing a couple of acres. Sigh…

    Might the reason why it hasn’t sold be that it might be haunted?

    OK, enough rambling for the day…back to work.

  6. Jim Minkey says:

    Amazing, huh! Lesley’s aunt’s place is a typical 1500 sq ft 3 bedroom house on an acre and it’s probably worth around 100k. A pretty nice 4 bedroom house, 2800 sq ft or so would run you between $220k and $250k in the Munford area. $450K is the stratosphere…it’s for rich people don’t ya know.

  7. Though I agree that bay area housing price is sustainable in some degree, it does have a huge affordability issue. So, the premium still has to find a correction sometime, like this year or the next year:)

  8. Jim Minkey says:

    For what it’s worth, I think it’s correcting right now…and as affordability goes, I think that’s pretty subjective. The house in the picture hasn’t sold because folks back there percieve it as unaffordable…yet when we see it we laugh at how low the price seems and wonder if we could stomach living in Munford, Tenn. This area does not lack qualified buyers…it lacks qualified buyers with the confidence to pull the trigger. For example, the listing at 980 Cumberland had 10 disclosure packets pulled last week…and got one low offer. All these folks sitting on the fence will get off sooner or later. That’s alot different than Stockton, for example, where there isn’t anybody anywhere near the fence!

Speak Your Mind

*