How can you explain this price history?

Question

Hello, I am just looking for some advice from more experienced investors. I was casually browsing Zillow and I see that this 2/1 condo in Saint Petersburg, Florida hit the market. It is in an OK area.

Looking at the Price History below, a few things stand out:

1) The appreciation from 1981 to 2015 (35 years) when it was sold was around negative $5k! That is terrible. Why is that?

2) Seems like someone purchased it and remodeled it, and offering to sell it for some profit. Is the investor who is going to buy this going to have almost zero appreciation as well, based on the history?

Typical SFH a few blocks south appreciated by more than 200% over the same period. This does not make sense to me. Can someone offer any explanations?

Thanks

Faisal Farnas · Answer

Thank you everybody for the thoughtful responses.

Logan Allec kid nailed it though! That is why the more I learn about real estate the more I like SFH more than condos and apartments!

Zach Kidd · Answer

I'm familiar enough with the area.

Firstly, it's only 815 sf., and the neighborhood is just "okay".

Next is the fact that it's a condo. An 35 year old condo conversion from an apartment complex. That's not really desirable either. Apartments are built for short term living, condos are built with the long term strategy.

The market in 1981 was entirely different - it was a good bargain in those days.

Assuming the condominium complex is well maintained, it is still "dated", and more importantly the assessments (HOA fees) are $255 a month.

Let's toy with a retail sale scenario.

List price is $64500.

At 10% down, the mortgage would be about $274 a month.

And the assessments are almost equal.

Total, that's roughly $530 a month, which is equivalent to a $112k mortgage.

It simply can't compete with single family homes at that price point.

And at 815 sf in a condo, there ain't much you can do to improve the value, and you'd still need to be concerned about the Condominium Association having a Special Assessment, lawsuit, etc.

So, given the location, condition, comps, price point, etc., it's pretty much topped out at $65k.

Jean Bolger · Answer

Could be big trouble with the HOA. Could be the property is soaked in cat urine and cigarette smoke. Could be that Zillow has something wrong. Could be one of those Florida properties where the flood insurance costs more than the value of the house. Or it could just be where you are in the market cycle; a few years ago in my town a huge number of condos were selling way below their original sale price. Now they are way way up.

appreciation is never guaranteed!

Logan Allec · Answer

I would imagine that the July 2015 sale was distressed.

Faisal Farnas · Answer

@larry woods here is the address

3148 30th Ave N APT 205,Saint Petersburg, FL 33713

I am questioning why there isn't an increase in price over a 35 year period ( i think you misunderstood my original post)

How can you explain this price history?

How can you explain this price history?

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