Julian St. as I mentioned before has been one of the hardest hit streets I have visited. This foreclosed house is listed on the market for 51k. Hard to imagine it was purchased for close to 300k a few years ago. Someone with a stencil threw up some graffiti on the boarded up windows of this house and its next door neighbor.
Nearby Houses:
None yet photographed. Please take a picture if you see one.
You beat me to it. I was going to photograph this one. This is the house my father owned for almost thirty years. He sold it in 07 for 297,000. Now it just rots. 3 car garage in back. Wine press in cellar. Alot of memories. Very eerie. I showed him this picture,and his reaction is indifferent. He saved it thirty years ago, but unfortunately no one can now.
Thats really sad to hear. We’ve gotten a lot of comments from people who used to live on Julian St. I guess there used to be a good neighborhood vibe and it was an ok place to live not too long ago. Its a shame to see what that street has become.
I am always astounded when I hear the sale prices. For generations the rule of thumb for class “B” residential property was that a purchaser could not pay more than 6 times the annual income. This rule took into acount financing costs, insurance, tax burden and a reasonable profit to the owner. It still allowed a reasonable reserve for repair. Under that rule, this property would have to produce 50K of income.
With “easy financing” and a mortgage of nearly $300,000, the monthly debt service would be around $2,000. To the debt service add a tax burden based on an assessment of $278,000, insurance and profit. Clearly this property was “under water” from the date of purchase. A reserve for repairs was never posible.
One of the things that went wrong is that this “6 times income” rule became skewed by “easy financing”, “tax incentives” and “rent subsidies” (Section 8). The most corrosive part of Section 8 (unless changed) is that the government would pay a rent which was 120% of market rates, this was an incentive to the owners. The “unintended consequence” of this was that unsubsidized owners would realize that the guy next door was getting $840, against his $700. “Well, if the government is paying that, that must be what it is worth”, so everyone raised their rents to $840. Thus, the “market rate” became $840. This automatically increased the subsidized rent level and the cycle repeated itself.