Whoa dudes. WHOA.

Last Saturday, we went to see 110 Camden St, Enmore. A deceased estate nestled in a sweet little pocket of Enmore where it meets Newtown and St Peters.  Situated on a corner block, this little ramshackled house is in sore need of major renovations. Click on the link to see more:

http://www.domain.com.au/Public/PropertyDetails.aspx?adid=2008038905

A renovator's delight, is it not? So when the agent told us we were looking at about $600k, we promptly walked away. 

It just sold for a whopping $674000.

My mind is struggling to understand the logic.  In a property market where land size seems to play a bigger role in the valuation of a property, I can't understand how a 10x18m block can attract such a huge price.  The house itself is certainly no big selling point.  So location it is. I've seen much better houses in the same area go for less. Ye gods!

Is Camden St some sort of Erko Golden Triangle-esque utopia? Please explain.

Can It Get Any Worse? And Other Rants, In Which the Word 'Ridiculous' is Overused, but Heartfelt.

Well, I've not been updating much because every time I look at the housing listings it's so very depressing I'd rather go go do something else, you know, something mindless like weeding the garden, reading pulp fiction, or curling up into a ball and sobbing bitterly, the usual kind of thing. I'm not sure if this is the case for other dabblers in the muddy puddle of a kiddie pool that is the inner west housing market, but has anyone noticed prices being even more ridiculous than usual? I needn't post an example, I am sure everyone knows what I mean. In the cases where you can actually see the prices that is, as agents these days seem to be very cagey about letting out the details of how much a property ended up going for. Being so secretive initially helps out the vendors, sure, but more often than not, vendors are also buyers, and many of those people I'm sure are also being priced out of the market, so what's the deal? Not revealing the price just helps the agents in the end. It should be compulsory for this information to be made publicly available, especially if an agent is involved.

Of course I'm a bit of a broken record about this, but it's already difficult enough to know how to value a property without having to pay $50 for a property report that doesn't tell you anything but the last price of the place you're looking at. And what's with the new law with underquoting prices - I've been very curious about how such a law can even be policed. I certainly don't see any differences in how agents are stating price ranges. There's money, and a whole lot of it, being passed on in all directions, from the companies compiling property reports out of what should be public information, to building inspectors to advertisers to solicitors to the government and especially to real estate agents. The only place the money isn't going to is the buyer (and if someone says FHOG of course I will automatically laugh in a sort of robotic monotone since I can't work up the enthusiasm to do much else).

Just recently we looked at a house that was supposedly in the mid-500 to late-500 range on a very busy street, and then later sold for $650,000, and that is not even a particularly wild example, just the recent one that came to mind. There's a pattern of properties being underquoted by at least 10% I reckon, and usually more. 10% might not sound like a lot, but it really is (if you're a first time home buyer and green... around the gills)! Fellow city-dwellers, I don't think this is supposed to be normal that properties sell for 10 - 40% above the estimated price.

My favourite analogy at the moment is the price of jeans in this country, which quite frankly is exorbitant. I am just as likely as the next person to pay high prices for good quality products. I do like to get my money's worth. But if you leave aside the ones that are organic cotton made by the hands of hipster elves in Sweden, jeans that are mass produced overseas with cheap materials, probably in sweat shops, are selling here for $150 or more. You know, because we're so far away and different from everyone else, so the price has to be 3 times as much. Right. Eventually people who've been grumbling about the price have to cave and learn to accept the price as normal, as the price goes higher and higher. Because there isn't really an alternative and they really need a new pair of jeans. If everyone else is paying a hundred bucks for jeans that happens to be 50% cheaper overseas, that's the price, right? Because the really high end jeans are now $300 so what a bargain you're getting at only half that. And yet, it's just ridiculous to pay that much for mass-produced jeans that wear out in a year or two. It's not a real price. People, it's not normal! But we all do it. Right now I am looking at properties I would have laughed at in April (and not in a servile robotic monotone either, more in a full-on evil scientist kind of way), and I actually catch myself thinking, oh, $650k for a small two bedroom terrace, that's not bad is it? Er, what?! You have to keep reminding yourself that these hugely inflated prices that are only marginally less high than other prices you're seeing are not bargains just because by looking at all these listings all the time, you become conditioned to expecting high prices and come to accept them as normal. That's a long sentence but you know what I mean. The only solution is not to buy at these prices until the market adjusts or someone adjusts the market, but sometimes that's not possible. You still need a roof over your head, even if you don't need a pair of jeans.

From being burned before, we no longer get building inspections done prior to making an offer. In Canberra I believe it's compulsory for the vendor to get a building inspection done, and then after an agreement the costs are split between the vendor and the buyer (or so I hear). (Or is that the Netherlands? I get confused reading too much property news). Sounds sensible to me! Why isn't that the case in Sydney so buyers don't have to lose $500 a pop every time on housing inspections? The incidental costs really stack up, in time as well as money, the more you keep looking, and hoping, and being eventually crushed. As I said, ridiculous. But I'm looking at you vendors-who-are-also-buyers. Is it really that important to scrape every last red cent from buyers such that you're willing to obfuscate the price or the condition of the property, because if everyone did that it would only come back and bite them in the bum later when they become the buyers. It makes sense to make a single building inspection available to everyone on the condition that the eventual buyer pays half the fees, and keep these incidental costs down for everyone.

Well, since this rant is just ranty, not very well thought outy, and not at all newsy, I leave you, dear reader, with this interesting recent article:

http://www.smh.com.au/national/firsthome-buyers-face-price-caps-20091031-hqfw.html

Will caps really do anything to lower prices? I think not, at this stage, where the price rises have sort of taken on a life of their own. Will it stop prices from rising? Hard to say but I would imagine that if prices stopped rising it wouldn't be because of these caps. I reckon loads of people have already just given up and are mostly not that desperate to get the grant anymore simply because prices are too ridiculous to contemplate now, grant or no grant. But I'm curious where all these other buyers are coming from who are willing to pay such gobsmacking silly prices for little shoeboxes. I mean I love the inner west as much as the next inner westie but This Is Ridiculous.

Pardon Me? You Want What for Wha...?

Greetings fellow house hunters of the inner west, I have returned after spending some time overseas and seeing how much more reasonable property prices are when you're not here. Cry, sob, facepalm, headwall. I was really taken with the old Arts and Crafts character houses of the Pacific Northwest, and in the Glebe equivalent of Seattle, a nice little neighbourhood called Wallingford, 3/4 bedroom houses of this type on a good bit of land I saw were going for about $US450,000!

Oh well, I thought, the situation in the inner west is bad but surely can't get much worse. There's only so much griping you can do about Sydney property prices. Oh how wrong I was. How very, very wrong. Prices seem to have got ever more ridiculous while I was away, and now it seems people are expecting to pay over mid 6s for 2 bedroom houses, standard, in lands far, far away from the city, though granted many of these may have studies or extra storage convertible to a 3 bedroom, or are on largish (over 250sqm) blocks.

But then I saw a posting today that truly incensed me.

Check this out: 18 Philpott St

The first thing is, um, nice deck? Which is probably why they went with that as their star photo. The place seems renovated, but nothing amazing from the photos. It's on 117sqm (tiny), it's a terrace, not free-standing, and it's in Marrickville (nice, but a bit far out from the city), quite a walk away from the train station. And they're asking OVER $650,000. When I think of the other places we have seen in Marrickville, that were free-standing Victorian houses, also 2 bedroom but much more nicely renovated on double or almost triple the land size going for just over $650,000 just a couple of months ago I am just flabbergasted. Words fail me. At this point you'd be overpaying for the air space inside the place. Ridunkulous!

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How's the Inner West looking now?

NOT GREAT, my friends.

This blog hasn't been updated for a while, mostly because B1 - main blogger - has buggered off overseas leaving me at the front lines, which is fine, but blogging about the horrors of house hunting isn't as cathartic as one would hope.

I have been to two auctions since the last post, and there have been very slim pickings indeed. First up was 78 Victoria St Lewisham. Vic St is lovely, it's tree-lined and wide, all the houses are nice, and blocks of land are decent enough for the inner west, it's full of young families and what not, and it's spitting distance to the train station. The house itself, however, was a tad old and run down. Certainly livable, but screaming for a new kitchen and some new floors, and the deck out the back was rotten through. To get the house meeting it's full attention the place called for some serious layout changes, but otherwise you know, it was ok. The price guide was over $650k, and how much did it go for? A WHOPPING $796000!

Are you for real?!

The turnout for the auction was huge. Some idiot middle aged man started the bidding at $700k before the auctioneer had even called for bids, a clear attempt to psych out any other prospective bidders. Little did he know there were bigger chumps than him out to play that day, and in the end it came down to two other middle aged dudes, and if I might make a judgement call on their appearances, they seemed like guys who might do their own renovations and own utes and stuff.

Anyhoo, let's just de-brief on the final cost of the house, with my primary-school level maths. I estimate that with a new kitchen and layout changes and architect and new deck and skylights and what have you, to achieve that "open plan", french-door schtick we're all mad about in this town (including me), you're staring down the barrel of $100k. Is 78 Victoria Street Lewisham a $900k house? I say, HELL NO. Not to mention the stress of doing the renovations to begin with - how do you put a cost on that? Then again, the idea of renovating something myself makes me want to cry.

CONCLUSION: chumps - the lot of you! Or maybe the chump is me, because I STILL don't have a house to live in. Not that $800k is anywhere near my budget.

The second house was 12 Jarvie Ave, Petersham. A lovely double fronted freestanding house on a giant block of land, with a lovely layout and potential to extend into the attic. Renovated up the wazoo, apart from the odd bit of peeling ceiling paint. How much did that go for? $726k. Chumps, again. I don't think I like auctions very much. At the end of the day, nice as it was, Jarvie was a small house, although I guess you are paying for 280sqm and a carspace. The jury's out on the level of chump factor involved in this transaction, although I WILL say that just down the road in March, 20 Allans Ave Petersham sold for $680k at auction and at the time I thought the nice looking lesbian couple who bought it were chumps too, and that the place wasn't worth a dollar more than $625K, but it turns out these ladies totally knew what they were doing. In comparison to Jarvie, Allans had 3 bedrooms (the main being an attic conversion with a study nook, wads of storage space and a sweet balcony looking over the backyard) and sat on a healthy 246sqm and had that open plan living space we all dream of. I guess it didn't have a car space. Still, an extra $45k for a carspace? Whatever dude.

Man, I have been househunting for a LONG. TIME.

37 Florence St, a Sad Tale of Woe

Florence St puts me in mind of Florence Nightingale, who had quite a bit to do with dormitory style beds in hospitals wings. I think the tenants who lived at this address took the word association game a little too literally.

Ah, 37 Florence St! You looked so good in the photos! Nowhere on the Domain ad does it say anything about the photos being from years ago - in fact, the last time it was sold. When we rocked up to the open house, there were three agents standing in the front yard, all looking very worried. One welcomed us in, another told us that the photos were not really how the place looked. They had had tenants, who were still there (another thing not mentioned in the description), and they had apparently really let the place go. Ok, ok, we thought, not to worry.

You never saw a place so different from the photos. Walking in, we were surprised to see that each of the 3 bedrooms had 4 bunk beds lined up, creating an instant dormitory for 12 people living in a small family home with one bathroom. The place was a real mess. Whoever signed the lease must have been making a packet. Say the home was rented out for $400 a week or so. Charge each tenant $50 and you're still making $200 a week. One of the tenants had made the mistake of staying in the living room while the open house was on, and tried not to make eye contact while strangers streamed in staring at the state of the place.

However, the place did have good bones, even if it was quite rundown. They were asking $650,000+, and as we left the property the third agent assured us we'd have to get in quick, because they already had an offer of $675,000. The property finally sold for the minimum asking price, $650,000. As a first home buyer with not much experience, the longer I look the more jaded I become about what agents say. There are nice agents, and rude agents - all sorts of personalities you have to deal with - but I wonder how many agents just make up offers to try and lure buyers into offering more? Shady...

Lewisham, 17 Denison St

Denison St in Lewisham is a great street. But 17 Denison is a tiny tiny 2 bedroom terrace, and they're asking over $650,000. You practically have to sidle to get from one end to the other. A nearby 2 bedroom terrace on Victoria St on the Lewisham border, which is an even better street in my view, just parallel to Denison, recently sold for $659,000, and I thought that was already pricey - and it was much bigger, with more space and storage, and a nice quiet backyard. You could swing a cat in every room, nay, two cats! A tiger! Often venders and agents seem to just go with how many bedrooms a property has for comparison, but all bedrooms really aren't created equal. 

17 Denison has bedrooms sized: 2.3 x 3.7 and 3.1 x 3.6

The Victoria St Terrace: 4.0 x 3.7 and 4.8 x 3.7

I really wish there was some standard way to compare properties rather than having all this speculation raising up prices. Don't be fooled buyers, and above all, stand your ground!