San Diego real estate market in freefall; Banks dumping REOs 30-60% below bubble prices

Earlier posts here have given examples of a house in trendy Mission Hills falling 44% in price, and a condo in Cortez Hill selling at 58% below its 2006 price.

These are not just extreme examples, 30-60% losses are becoming the norm in many San Diego neighborhoods. Here are examples from Downtown, Imperial Beach, Chula Vista, and Spring Valley. These neighborhoods represent a good cross section: an urban area, a beach town, a big suburb, and a big exurb.

Spring Valley (A big exurb)

1034 Leland St #2x
sold 1/05 $275
Bank owned foreclosure, for sale at $135K
-$140,000 (-51%) loss

3557 Kenora Dr #5x
sold 7/05 $285K
Bank owned foreclosure, for sale at $120K
-$165,000 (-58%) loss

6xx La Presa Ave
sold 5/06 380K
resold 1/08 220K
-$160,000 (-42%) loss

102xx Madrid Way
sold 1/06 $240K
resold 1/08 $130K
-$110,000 (-46%) loss

 

Imperial Beach (a beach town south of San Diego)

5xx 7th Street
sold 5/06 $475K
resold 1/08 $275K
-$200,000 (-42%) loss

832 13th Street #x
sold 6/056 $326K
resold 11/07 $200K
-$136,000 (-39%) loss

 

Downtown (an urban area with lots of condo towers)

AcquaVista Condo Tower #170x
sold 6/05 $983K
resold 12/07 $595K
-$343,000 (-39%) loss

Trellis Gaslap District Condo #20x
sold 7/05 $445K
resold 12/07 $309K
-$136,000 (-31%) loss

Discovery Cortez Hill Unit 21x
sold 7/04 $699K
resold 12/07 $470K
-$229,000 (-33%) loss

Union Square #240x
sold 9/04 $385K
resold 12/07 $270K
-$125K (-30%) loss

Laurel Bay on Banker’s Hill #11x
sold 9/05 $407K
resold 12/07 $280K
-$127,000 (-31%) loss

 

Chula Vista (San Diego’s biggest suburb)

289 Tiburon Dr #18x
sold 11/05 $410K
listed as a shortsale for $245
-$165,000 (-40%) loss

710 Eastshore Terrace #1x
sold 7/05 $316K
resold 12/07 $207K
$109,000 (-34%) loss

13xx Silver Hawk Way
sold 12/05 $936K
resold 1/08 $608K
$328,000 (-35%) loss

If you are a bank or happen to own mortgage-backed securities, this is what is happening to your collateral. With losses like these, plus holding costs (maintenance and repairs, monthly HOA fees, property taxes) plus foreclosure costs, plus commissions to Realtors and/or auctioneers, I wonder if loss severities of 50-70% will become the norm in the many foreclosures in this area.

Since California is a non-recourse state, there are vast numbers of new suburban subdivisions, apartment to condo conversions, and new condo towers that were built here in San Diego in the past few years where virtually every buyer is underwater and has a financial incentive to walk away. The combination of record foreclosures and record loss severities suggest the huge 4th quarter write downs by all the banks that are long mortgage debt are just the beginning.

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2 responses to “San Diego real estate market in freefall; Banks dumping REOs 30-60% below bubble prices

  1. Greg,

    Good stuff. But I wouldn’t call Spring Valley an exurb. It’s closer to downtown SD than Chula Vista. (And, no, I don’t own in SV, fortunately!). A better example of an exurb would be Alpine.

  2. When you actually see the numbers speaks volumns!

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