Holycow on Holyoke

I'm sure this is a story repeated thousands of times... people buying houses, thinking they're getting a great deal, really proud of their decision. One of our favorite Housing Bubble Realtors Agents wrote about such a purchase, and how smart they were for it. It's easy to write with praise about these decisions when they happen, but how do they turn out in the long run? Let's take a look.

Here it is, courtesy of Sacramento Real Estate Gal:

2007-07-16: One Sacramento Neighborhood has Newcomers!
These are my new clients that just bought a home in Sacramento. They moved here from Florida and have the cutest accent.

It was such a pleasure working with them because they weren't the least bit jaded about the real estate market. They realized they were getting a good deal and jumped on it with no hesitation. The market analysis confirmed their happiness. Of course, it helped that they had done their own research online and knew the style and neighborhood of the home they were looking in.

They actually made an excellent purchase because of the following:
- they bought in a slow market
- they had done a lot (I mean A LOT) of research beforehand
- this one is the most important: the market analysis showed that homes in their neighborhood in a half-mile radius sold for anywhere between $30,000 more than they paid for their home to $200,000 more than they paid. Which means that every dollar they invest into the home will have more potential returns than say a neighborhood with a ceiling of say, $20,000 under all comps.

This is an excerpt from one of their emails:
"Thank you for all of your help and patience with this property and me! Thanks again. You are a wonderful agent."

Here is the house...

5001 HOLYOKE WAY, Sacramento, CA
4 beds, 2.0 baths, 2,155 sq ft
Year built: 1970
Sale History
11/09/2006: $326,000
Zestimate: $224,500 (Aug 8, 2010)

And here is the great big problem...

5009 Holyoke Way, Sacramento, CA
4 beds, 2.0 baths, 1757 sq ft
07/15/2010: $189,000

5101 Hemlock St, Sacramento, CA
4 beds, 2.0 baths, 2,126 sq ft
02/23/2010: $160,000

4910 Holyoke, Sacramento, CA

03/19/2010: $185,000

4906 Holyoke, Sacramento, CA
05/27/2010: $179,500

And I count no fewer than 7 foreclosures in the neighborhood, two of which are on Holyoke.
Put simply, this purchase was one of those life-impacting, bad decisions.

Addendum:
Calculated Risk just posted on a story about real estate Northeast of Silicon Valley. While it didn't touch on Sacramento, it does illustrate the continued problems in housing and unemployment in California. We've got a long way to go.
2010-08-09:

East of San Francisco: 20% Unemployment, House Prices off Sharply
In Stockton, which had one of the highest foreclosure rates in the nation, the median home price of $100,500 is down from $397,000 at the height of the boom — a stunning 74% drop.
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