"Santa Monicans are being targeted by real estate agents representing developers looking to turn small homes in desirable neighborhoods into mini-mansions that can be sold for double the original asking price," begins a Santa Monica Daily Press article detailing a set of circumstances tailor-made to freak most everyone out: buyers, sellers, and homeowners alike.
Sellers: With inventory super tight and the market going a little crazy, real estate agents are knocking on doors, cold calling and writing letters, trying to get folks interested in selling their houses, and some are offering incentives if the seller keeps it a secret. The problem? "[A]verage homeowners tend to get more for their properties when they advertise them widely," says the president of the California Association of Realtors.
Buyers: With deep-pocketed developers getting a crack at sellers before houses even hit the market, that leaves even less inventory for buyers who might prefer older, less enormous homes. But now "developers can buy up an old property for a couple million dollars, demolish the existing home and build a two-story luxury home where an old Craftsman once was. Those can sell for $4 to $5 million, even higher if it's near the beach."
Homeowners: Doris Sosin, cofounder of the North of Montana Neighborhood Association, led the McMansion fight in the '90s, and she's not loving the twenty-first century versions, either. They "only succeed in making neighborhoods more expensive to move in to and replace quaint, well-loved homes with larger versions."
The guy who hates cash buyers: These buyers? All cash. Sorry, guy.
So there you have it: how unscrupulous developers and the agents who love them are cheating you out of your money, destroying your neighborhood, and ensuring you can never ever afford a house again.
· Realtors target small homes for redevelopment [SMDP]