Vulture Patrol

I’ve been looking for real estate that’s a “bargain” for one client. We’re defining, today, a bargain as being property for sale at 2003 prices or below. So far, while I notice a number of properties that ought to be at that level, few are. Maybe in a few months.

I did see that 25 Dorchester Lane in Riverside is still available. This pre-fab with some noise impact from I-95 sold for $2.150 million when it was new in May, 2004. In April of this year it was returned to the market at $2.950 which proved a bit too ambitious. Now, five price cuts along, it’s at $2.340 million. Getting there.

What’s a little scary, in reviewing the listings out there, are the houses whose value stumps me – I’m not sure some of them have any value in today’s market, given their location. That’s probably too pessimistic but when I knock down their price in my head, I come up with better houses at the same new price.  

The best values will probably turn out to be some of the new, unwanted spec houses, when their builders are finally ready to bail out for what they owe in construction owns and accept the fact that they must lose their out-of-pocket contributions. There are certainly houses on the market that won’t justify even the construction loan – houses that should never have been built to begin with and which can’t justify the amount loaned on them. But there are some others which do offer good value. The magic moment to bid on these is, I’d guess, just before the builder turns his project over to the bank. Before then, he’ll refuse to accept his loss; after the bank gets it, it will disappear into the bureaucracy – one division will have written off the loan, the next division will know nothing about the property. How do you know when this opportune time has come? Beats me – I suppose you or your agent could approach a number of spec builders and keep after them. Or if you’re a spec builder reading this and are ready to throw in the towel, contact me: we’ll move that puppy for you.

3 Comments

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3 responses to “Vulture Patrol

  1. Anonymous

    Can you give us an example of a house without “any value…given its location”?

    If you don’t want to be specific, then could you just explain what a truly bad location is?

  2. christopherfountain

    Well a truly bad location might be, say, frontage on a busy road, back yard on railroad tracks or highway, side yard(s) abutting some noxious municipal “improvement”. There must surely be some shelter value in such a house but when you look up what some sucker paid for the land, you might assume that it will go into foreclosure long before the builder admits to his massive mistake.

  3. jess

    What about the bank owned property on Round Hill? Would you consider that a bargain?