myhouse wrote:How about Santa Cruz?
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rents are high in Santa Cruz, i.e. I advertised a 2-BR townhome for $2250 and had a lot of interest (20+ parties within a week) and several qualified applicants ($10k+ monthly income)
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Santa Cruz is a bit behind on the curve compared to Santa Clara County. When the Santa Clara County RE market already took off in 2012, Santa Cruz was still dropping. I would say the bottom in Santa Cruz was probably summer 2012.
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I sold a flip property in May 2012 for $480k to a down-sizer, and the buyer decided a few months later that it was too small for them. They relisted it and it sold in December 2012 for $530k.
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The market below $700k turned first and the prices have gone up there.
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The market $700k-$2mm is still weak, but I hear there is more action now.? I only hear it because I have nothing for sale right now.
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In the $2mm+ market, you can still get unbelievable deals. I am talking about 1999 prices. I wrote an article here:
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http://www.ptiemann.com/j/index.php/santa-cruz/74-
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Their neighbor is now listed:
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http://www.redfin.com/CA/Aptos/600-Hudson-Ln-95003
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This property has phenomenal views, high quality of construction, kitchen is maybe dated.. but very functional. I toured this house. Very nice property, just a bit limited on parking .. guess house has more parking than the main house. 2nd unit on top of garage, detached 3rd unit a mile away (on the same parcel!.. yes.. it's spacious)
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Sold in 1990 for $1.3mm
Sold in 2001 for $4.2mm
Now asking only $2.2mm
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You can buy at 50% of the 2001 price! The neighbor sold in 2011 for $5750k..
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The best deal I saw was a short sale about 2 months ago.. main house had 3500 sqft, 6 car garage, barn, guest house of ~2000 sqft, built in the 1990ies, on .. I believe 7 acres, in Scotts Valley. (Best schools in the County.)
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This should be $2mm easily.. it was offered for $750k and went pending.. issue is, the 2011 rain had caused a land slide and the *public* main road to the property had to be closed. There is a smaller back road. But, as a consequence, supposedly a fire truck cannot access the property. --> Fire insurance is not available, cash offers only.
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Do you want to put $750k on a house and pray for no fire? As soon as the County has money to fix the road, this one will be worth $2mm again or more. This is the ultimate RE gamble.
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So, if you want to buy cheap rentals, you are probably a bit too late for the *best* deals, but with today's interest rates, it can sort of work..
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The luxury properties are still way depressed, but they don't make sense as rentals. Great potential for appreciation, but it's a gamble.
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Source: http://forums.redfin.com/t5/Bay-Area/buying-property-for-investment-Cities/m-p/395062
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