Posted by: The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

19 responses to “Cheapest Homes: December 2013 Edition”

  1. Scotsman

    I may check out that South Park gem. I’ve been looking for “an in-city crash pad” for a while. My girls need a place to “host.” Yeah, baby!

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  2. Peter Witting

    That flip should sell quickly, as it has the obligatory massive stainless steel fridge dominating the kitchen.

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  3. softwarengineer

    Sometimes There’s Exagerations About Remodeling Costs

    Most of the work [indirect time/cost] I encountered on my own home was getting rid of all the extra stuff so I could stage the rest and TOTALLY empty areas to remodel.

    Costs also go WAY down if the remodeling does the “whole house”, not just a room or two.

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  4. ARDELL

    RE: Peter Witting @ 2

    It’s already been on market for 77 days, so I think the “should sell quickly” ship has already sailed on that one.

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  5. Macro Investor

    Exaggerating costs could be a tax strategy. Make it look like you had very little profit, or even a loss. Reduce uncle sam’s take, or even get something back. Hey, “uncle” prints money anyways.

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  6. Kary L. Krismer

    RE: Macro Investor @ 5 – Exaggerating costs on a tax return is called tax fraud. More likely just a sales strategy, IF there is any exaggeration going on.

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  7. Scotsman

    And it’s entirely possible they really did sink $80k or something close to it into a bare studs remodel and are about to take it in the shorts. Just think how far ahead they’d be right now if they hadn’t spent the first $5K on a “How To Get Rick In Real Estate” course.

    “Just buy it, Ralph- we’ll make it all back on the first flip”

    The huge, ugly, but stainless fridge is a nice touch- and indicative of an amateur effort where the box for current trends gets checked without any regard for esthetics.

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  8. Craig Blackmon

    I dunno, I agree with the Tim: There’s no way this flipper is embracing a $40k loss. That makes no sense. I think Kary is closer to the mark in calling this a “sales strategy.” But you know what I call a “sales strategy” that is based 100% on a flat-out factual misrepresentation? A Consumer Protection Act claim….

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  9. Scotsman

    RE: Craig Blackmon @ 8

    The real story here is that even after a remodel of $X it’s still selling for $55K less than it did in 2005.

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  10. ARDELL

    RE: Craig Blackmon @ 8

    You have to factor in the Homestead subsidy on this one via Homestead CLT, possibly in combination with Habitat for Humanity. There is an income qualification aspect and this is part of the “rebuilding communities” program with a low to moderate income housing component. The asking price is after the subsidy and the property is only available to those who qualify as to income requirements.

    After considering all of that…I seriously doubt the representations as to $ to improve is erroneous, though I wonder if they are putting a $ amount on any volunteer efforts. There may not have been volunteer efforts. I am not that familiar with the program.

    I think this is the program that sponsored the effort:

    http://www.homesteadclt.org/about-homestead

    “Price is after subsidy from Homestead CLT.”

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  11. Ira Sacharoff

    Hmmm. I’d love to spout off here, but aren’t RE agents still prohibited from commenting about active listings in public forums?
    If I’m told otherwise, I’ll spout away.

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  12. ARDELL

    RE: Ira Sacharoff @ 11

    This in the public remarks of the listing: “This home is offered at an unbeatable value to qualified 1st time homebuyers only, w/ subsidy From Seattle non-profit Homestead Community Land Trust.”

    Publicly available info vs privately available info or personal opinion is likely allowed, especially when you are correcting a misperception that is easily answered via public info.

    I think what I offered is allowable, but Craig is the lawyer in the room. :)

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  13. Scotsman

    So what is the amount of the subsidy? Comparable market price?

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  14. ARDELL

    RE: Scotsman @ 13

    Generally speaking, and not with regard to any particular home in the program, “comparable market price” would normally include a profit amount on the improvements. So no, market price would not likely be part of the calculation. The land stays in the land trust and the buyer of the home is limited to 1.5% appreciation compounded annually (not sure if that % is a constant for all homes in the program) so that the “affordable housing” component is built into future sales, and not just this single purchase. The homes in the program should in the future continue to sell to those who qualify as to income and sell at below market value, as a rule.

    The purpose is to create “a growing legacy of affordable housing”. Interesting program supported by many sponsors and volunteer effort. The buyer of the home is not getting “instant equity”, as they become part of the “pay it forward” stewards of the program.

    Read the material in the link I provided previously yourself and draw your own conclusions. But that’s my take on it and I have seen and managed similar programs in the past.

    In the most recent Annual Report in the link which was for 2011-2012 there were 159 “homes” in the program and there is a map noting where the homes are located. They are not all in Seattle but they do all appear to be in King County.

    The bigger question to The Tim is should these types of subsidized prices be included in the “Cheapest Homes” edition. If short sales are excluded then maybe subsidized program homes should also be excluded for this feature.

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  15. Kary L. Krismer

    RE: Ira Sacharoff @ 11 – I purposefully kept my comment very focused on a particular issue and was responding to a comment which itself was very focused, and not applicable to just one listing. I also didn’t look at the property listed, because quite frankly, I don’t care that much.

    I’m not sure it matters, but I think Ardell provided some very useful information, even if it was more specific than what I would be comfortable with.

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  16. Erik

    RE: Kary L. Krismer @ 15 -

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  17. Scotsman

    RE: ARDELL @ 14

    Thanks. interesting concept. Would be curious to see if there’s enough of an ownership interest under those controlled/limited conditions to foster pride of ownership. On the other hand I guess you could look at it like a whole life policy- not a great investment, but it satisfies a need and does offer some return. What’s the rent/buy calculation under such circumstances?

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  18. Nothanks

    The CLT holds the land and doesn’t sell (actually, to be more specific, they actively acquire land), on the theory that doing so keeps housing prices more affordable. They’ve been around for awhile, but have (understandably) been picking up steam in the last few years.

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  19. Erik

    RE: Craig Blackmon @ 8
    You should change your avatar. You are a lawyer, so everyone already thinks you are slimy. Having your head cocked slightly forward and wearing a suit confirms it for me. You may be as honest as a lawyer can be. Your picture isnt doing you any justice. Kary’s picture looks more trustwothy. Yours looks like a sly fox.

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