Check out this nearby house for sale:
THE ONE AND ONLY JERUSALEM ROAD! A RARE OPPORTUNITY TO BUY ON ONE OF THE SOUTH SHORES MOST PRESTIGIOUS STREETS. THIS 3 BEDROOM, 2.5 BATH GEM BOASTS A WIDE OPEN FLOOR PLAN, AN AMAZING GOURMET KITCHEN, GLEAMING HARDWOOD FLOORS, AND A GORGEOUS MASTER SUITE W/ CATHEDRAL CEILINGS. TWO PRIVATE DECKS PROVIDE A PERFECT SETTING FOR GLORIOUS SUNRISES AND SUNSETS. ALL THIS AND THE ASKING PRICE IS $160K BELOW THE ASSESSED VALUE. WOW
$729,000 for 2,500 square feet of oceanfront property!
On the interior, by my cursory inspection, it needs about 50k of work - which as y'all know is as "move-in" ready as any home on the market.
Not only is this an ocean-side home, it is about a pitching wedge from Black Rock beach - a "town residents only", "no parking spaces", secluded oasis. In other words, it'd essentially be your own private beach. See the satellite map below.
Now, when I first spotted this house, I knew there was *something going on*. It was priced waaaaaay under other local listings. I smelled a distressed sale. The listing broker was obscure and according to its site, it specialized in "REO owned property". That means "foreclosures" (technically it means "bank owned real estate").
I made an appointment and met the broker at the house. I asked him if it was a foreclosure and he responded in the negative. He said it was just a divorced woman who was itching to get rid of the house. Though later on I find out that last year some other broker had it listed at over $1 million. Then further research/gossip has led me to believe it is actually a "short sale". As I correctly figured, the broker was lying to me. If I did buy the house from him, he's the type of guy that I would have to bring a buying broker in at the last minute to halve his commission!
Just kidding. I'll bet the guy firmly believes there is a difference between a "short sale" and a "foreclosure". For my purposes, there isn't.
After I vetted the house - taking little video clips for my wife - Mrs. C-Nut's interest was piqued.
But I've become an expert at this sport of house buying now. Immediately I knew it wouldn't work for us.
For one thing, the towns on our radar are all oceanfront. We don't need to live RIGHT ON the ocean as we'll always see plenty of it. The 7-month winter here ain't no fun either when frigid ocean gusts are slamming into your house. Friends in nearby blustery Scituate have told me that on the ocean, in the winter, "heat just doesn't work".
Plus, this house would be nice for us if we didn't have kids. Sure, I'd like to wake up every morning looking at Atlantic Ocean sunrises, but my kids could probably care less. They'd be better off with more square footage, a better yard, a more kid-full neighborhood, or proximity to something they will be using like a park, town pool, or the library. A peripheral house like this doesn't have good access to main roads either.
This house would be perfect for some businessman moving into town who knows he won't be here too long. It'd be perfect for a buyer who's concerned about buying something that will hold value in the coming sharp downturn. Sure this house may drop to $650,000 with 8.5% mortgages but it won't drop to $525,000 like other homes in this area that are presently trading in the 750k-800k range.
For example, this weekend I looked at three homes in nearby Hingham. All were recently listed and priced in the low-mid 800s. ALL of them were TERRIBLE and yet two of them got immediate healthy bids! One of these POS actually had 6.5 foot ceilings upstairs. I felt like I was in a dollhouse for crying out loud. Right now, I wouldn't pay 500k for any of them, seriously. That's where they're headed regardless.
My farsightedness has paid off handsomely. Three years ago, when I moved to Boston, I knew this crash was coming. Since I've waited this long, surely I can wait another year or two for the bloody bottom. There's no need to jump at this nice house on Jerusalem road because it's just the tip of the iceberg. It's been frustrating looking for homes in the stubbornly high South Shore market, but I can see the huge population of homes idling in the $1-$1.3 million dollar range. This luxurious breed of house will inevitably be trading in the $650,000-$750,000 range. Just you wait and see!
Buying this house would be like buying Cisco Systems after the 2001 NASDAQ crash when it dropped from $72 to $40. Sure, you were itching to buy it the whole way up as it made your friends rich; and it looked downright cheap 42% off its high. BUT, it went to $10 anyway!
The most dangerous falling knife to catch is always the first one.