A great deal - Ocean Front, Santa Cruz

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On one of the biggest doomer's web site, patrick.net, it was posted:
House prices drop [..] As an example, a property in Santa Cruz was listed, where the Zillow estimate (Zestimate) was $1,500,000 and it was listed for $650,000

I saw the information, doubted it, and looked at the referenced listing.

The property in question was the second house from the ocean. Ocean views from upstairs and downstairs. 1630 sqft, 3 bedrooms, 2 bathrooms. Bank owned.
The listing had come on the MLS on 7/3/2008 and they said they would review offers after 7 days (7/10/2008). $650k is an awesome price for that area. The zestimate of $1,500,000 was ok, but this property was under construction. An unfinished project.

I went there with a contractor and he estimated another $130k of cost minimum, better $200k because it is an upscale area - you cannot buy the cheapest materials for this location. The previous owner had started out with the expensive style. Electric and plumbing was in place, windows and roof as well. Needed dry wall, flooring, bathroom and kitchen.

So with about $850k investment, you would have a house worth $1,500,000, and yes, this house would sell instantly any day if priced a bit below. The fact is, that there are no other properties like it on the market. The closest comparable was a house with slightly less views for $1,895,000

I called the city planning department to find out about red-tagging and maybe to get a copy of the plans/ permits, and the gentleman there recommended that I forget about it. They had been swamped with calls, and many of them being from cash buyers.

My lender told me I could get the financing, but I would need to submit the plans. Cash buyers don't have this little problem.

How much to offer? Certainly more than asking. Yes, the doomers won't like to hear this. Above asking?

I did give up on it, since I didn't have $900k (price plus cost of repairs) in cash/ credit lines.

I will update this page once I know how much it sold for. It did sell instantly after being on the market for a week, only question open is, for how much. I suppose I could call the seller's agent.

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