Boom, Bust, Bargain
As foreclosures eat into our wealthiest neighborhoods, turmoil hits the high-end market. But the deals are unreal.
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A Silver Lining: The Blackhawk Bargains
Many real estate agents say Blackhawk is among the worst hit of our high-end neighborhoods. “Blackhawk was really attractive during the dot-com boom,” says Wood. “It’s got massive houses, golf courses, all the bells and whistles. There were a lot of big purchases that happened real quick, and people paid too much. Some of those homeowners who bought at that peak are really being affected now.”
According to the MLS, the median single-family sale price dropped almost 28 percent from $1.4 to $1 million between 2007 and 2010, and last year, one in three Blackhawk sales was a distress sale. Given that many short sales aren’t listed as such, that statistic is disconcerting, to say the least.
More encouraging is that Blackhawk sales were up last year, with homes selling quicker than they did in 2009. Maybe people are starting to get wind of the bargains that are blossoming in the ritzy Danville country club. “There are some tremendous buys in Blackhawk. It boggles my mind,” says Sposito. “I used to live in Blackhawk, and when I see the prices of some of the homes coming on the market now, I wish I was a buyer there.”
One three-bedroom, two-bath Blackhawk home sold in 2006 for $1.1 million. Today, it’s pending as a short sale for $780,000. Another with five bedrooms and four bathrooms went on the market a year ago for more than $2 million. Now, it’s a bank sale, offered for $1.2 million. One beautiful, Tuscan-style four-bedroom, four and a half–bath house complete with pool and spa entered the market in August at $2.2 million. Three price reductions later, it’s listed at $1.5 million.
“Anybody who ever wanted to move to Blackhawk, get over here,” says Pat Burgess, an agent at Empire Realty. “Because you can get an amazing deal.”
Warning Signs: Beware of the Basement Bargain
Foreclosure deals are not always what they’re cracked up to be. Owners who have gone through foreclosure are at the end of their tether, and sometimes the house is stripped clean of marketable items (such as kitchen cabinets, appliances, and lighting fixtures) before going on sale.
“I have seen very few amazing buys in foreclosure properties,” says Ron Rothenberg, an agent with J. Rockcliff Realtors. “Buyers need to be aware that banks become the legal seller in a foreclosure transaction, and they can be difficult to negotiate with. They have no duty to disclose anything beyond what they know about the property.”
The first port of call for a foreclosed property is a cash-only auction at the courthouse. “These auctions can be a great value for buying properties, but this isn’t for the weak of stomach,” says Scott Fuller of the East Bay Short Sale Group of J. Rockcliff Realtors. “Homes are usually sold as is and sight unseen [inside], without the ability to do inspections or have contingency periods.”
Most foreclosures don’t sell at auction and end up as bank-owned sales. “I urge my buyers and sellers of default property to consult with a certified public accountant and attorney to determine what tax, legal, and other implications may exist with the transaction before proceeding,” says Fuller.