Free Fall Friday - 5219 SE Belmont St now $999k

Sent in by a reader:

"There's a pretty interesting house on Belmont Street on the lower slopes of Mt Tabor (5219 SE Belmont). MLS# 8088100.

It was purchased in June 2004 for $1.14 million. It's been listed several times since then, first (without a sign, but on the MLS) for something like $1.85 million, then a long period where I think it started at $1.5 million and dropped by degrees. I didn't keep track of the exact numbers. This summer there was an "estate" sale, and the lawn turned brown, a bad sign because the owner was a Willamette Week "Hydro Hog" in 2006 (http://wweek.com/editorial/3247/8039/) who disparaged his neighbors' brown lawns. Now I see that the owner since July is Deutsche Bank Trust which seems to have "paid" $1.3 million for it. Is that a foreclosure? [Yes, that means that was the loan balance and nobody bought it at auction so it went back to DB.]

It's for sale for $999,000, I went through it in 2004 and I'd say it's a lot of house for a million dollars. The current listing really sells it short, as It's formally known as the "Blaine Smith House" and was designed by Ellis Lawrence, a renowned Oregon architect who founded the School of Architecture at U of O and designed many of the buildings on campus. It was a lot better deal in 2004, though, as a historic property tax exemption ran out last year and the taxes went from $2,900 to $19,500, the assessor's Real Market Value being a whopping $1,735,990.

Schadenfreude bonus: The last owner was apparently a mortgage broker."

Trulia lists it as a 7 bedroom, 5 1/2 bath and 6700+ sq ft on a 27,000 sq ft lot, so yeah it is a lot for $1,000,000. It also has 3 kitchens I believe, which I guess is handy if you're hungry and don't want to walk a 1/4 mile to the main kitchen.

It's a beautiful house on a huge lot, I just wouldn't want to heat it. Or water the lawn.

Thanks for the tip Tom, keep them coming everybody!

Free Fall Friday - 4340 SE Madison

Here's another house with an interesting history. 4340 SE Madison.

The house sold for $305k in February 2006. It then sold again for $541 in June 2006 (with 100% financing!), a gain of 77% in just 4 months. It went into foreclosure and was bought back by the bank for $355k in October. Last month it sold to the proud new owner's for $295k. That's 45% off it's high!

Unfortunately the property taxes adjusted upwards to reflect the new $541k price, jumping from $2858 to $4373 in 2007. Ouch.

I don't have insights into what happened along the way, but judging by the state of the pool it was likely vacant for a period of time. Any Realtors out there know the details of any of the recent sales?

I also start to question Zillow's methodology with cases like this. If you look at their home value chart (you'll need to click on the 5 year view for the best picture) it was quick to reset upwards with the sale in June 06, but hasn't come back down to reflect the recent sale price. And after all the best indicator of what something is worth is what someone else will pay for it, in this case $295k, not $496k.

What's that smell you ask? Something between fishy and fraud methinks.

Free Fall Friday - 632 NE Russell - $550k

Here's another case of "instant equity". It looks like this house was bought for $314,550 in 2004, with about 8% down. The house was refinanced on 3/31/2006 for $504k (a 60% increase in 15 months!) with a second loan of $116k taken out on 11/10/2006 for a total of $620k.

It's now for sale for $550k. $70k instant equity!

It's now listed as a short sale, and gotta love the marketing "Charming 4-Square on the edge of Irvington! " Yup, the edge of Irvington would be Elliot. Not that there's anything wrong with that.

"Unfinished attic & basement are framed & plumbed w/good height. Room for garage to be rebuilt. Sale is subject to lenders' approval of a short sale."

Oops, we ran out of money before we finished the attic or basement. But hey, it's got granite countertops!

MLS# 8013821