Asking prices for "lower-end" properties in Orange County continue to decline. Here's an Aliso Viejo REO that blew the doors off of aggressive pricing, and is now pending sale.
It looks like we have another 2002 rollback on our hands.
23593 Los Adornos, 92656
Asking price: $185,000
Asking price/ sq ft: $148
Income requirement: $46,250
FB purchase price: $468,000
FB purchase date: 12/9/05
Bank purchase price: $210,000
Bank purchase date: 4/3/08
Size: 3 beds, 2 baths, 1,246 sq ft (built in 1971)
MLS: S533952 (on market 5/29; pending 6/5)
Zillow Zestimate: $299,000
2007 property tax: $4,854
Lot size: 2,351 sq ft
From listing: Single Story 3 Bedroom, 2 Bath Townhouse With Enclosed Patio. Walking Distance To Association Pool. Close To Schools, Freeways , Shopping And Schools.
Looking at the previous sale (before the home went back to the bank at auction), it's easy to see how the "investment" was doomed from the start. The buyer received 100% (80/20) financing from Freemont Investment & Loan. They fell behind on payments on the first loan and received a notice of default in December 2007.
The NTS was for $394,246 in March, yet the lender discounted significantly to try and get this place sold at auction. It didn't work, and the property went back to the bank for $210,000 in early April. As you can see by the asking price, when the property came on to the market as an REO the bank wasn't messing around. If all banks discounted like this, we would be at the bottom in pricing in no time.
We estimate you could probably rent this property out for about $1,800 per month. So, that would make the target price $288,000 for an owner-occupant, using a GRM of 160. The asking price puts the property at a GRM of about 103. From here, this looks like an excellent deal.
One thing to be careful of is foreclosures. There are four other properties on the same street that are in some stage of preforeclosure right now, which could help keep prices depressed or even make them fall a bit lower, despite the fact that we are already well below rental parity.
Assuming the property closes for the full asking price (considering how low this property was priced, the final sales price could easily be higher), it would signal a depreciation of $283,000, or 60% off the 2005 price (not adjusting for any sales costs).
It also would be $60,000, or 24% below the December 2002 price of $245,000.
Friday, June 13, 2008
60% off in Aliso Viejo
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5 comments:
I checked the link and it shows the property recently sold for $210,000 - was that the bank auction or did the bank get its auction price back? Even at $210,000 it may be a good rental investment.
That was the price the bank took back the property for. You're right - even at that price it could pencil out as a good investment.
This area is total ghetto. My son and I went to this park for some activities last summer and noticed that everyone living in these condos across from Iglesia Park was Mexican, and not second generation English speaking if you know what I mean. Next to the park is a Boys and Girls Club and there was not a white, black or Asian kid in the bunch, only illegal anchor babies! Not a desirable area.
Thanks, Anonymous 10:16. I will consider this area no longer. I am hoping 4 bedrooms will start falling this fast. Why buy a 3-bdrm when you can buy a 4-bdrm a few months later for the same price.
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