This San Juan Capistrano REO is another example of the accelerating declines various parts of South OC are witnessing this summer. With a spring sales season that appears to be slowing up, what does that foreshadow for the rest of 2008?
If it keeps going on like this, be very afraid...
30896 Calle San Felipe, 92675
Asking price: $339,900
Asking price/ sq ft: $237
Income requirement: $84,975
Bank purchase price: $328,000
Purchase date: 4/7/08
Size: 4 beds, 2 baths, 1,421 sq ft (built in 1971)
MLS: S541124 (2 days on Redfin)
Zillow Zestimate: $441,000
HOA dues: $25
Type: Single Family Residence
Style: Mediterranean
Stories: 2 Levels
Lot size: 3,880 sq ft
From listing: Seller put in new carpet and interior paint. 2 bedrooms downstairs and 2 bedroom upstairs. Romantic fireplace in the living room. High ceiling. Good size yard with lots of potential. Direct access garage. Close to schools, park and shops. Only minutes away to San Juan Capistrano Downtown, Mission Basilica church, beaches and Dana Point harbor.
View Larger Map
The notice of trustee sale amount on this property was $516,826 - meaning what was a $480,000 loan swelled more than $35,000 above its original amount because of accrued interest charges and other fees. The lender went on to significantly discount the minimum bid at auction to attract a buyer (generally the minimum bid will be very close to the NTS amount), but even at $328,000 it ended up going back to the bank.
The interior appears to be very workable - particularly by REO standards. Not a bad job at all by the bank in installing carpet and painting.
Judging by comparable properties in San Juan that are currently for rent, we assume you could probably get $2,300 per month for this property. If we were to go by the 160 GRM rule as being a good target for an owner-occupant, they should value this property at about $368,000, which means that at the current asking price, we estimate this would achieve rental parity and would cost either about the same or a bit less each month to own than it would to rent.
That makes this property appear to be a legitimate good buy - though you probably would have to think about how much it would cost to fix up the backyard and make any other necessary changes considering the home is being sold as-is by the bank.
The GRM of this property as it stands with the current asking price is around 148 - good for an owner-occupant, but the price is probably still too high to attract a legitimate cashflow investor.
Assuming the house is sold for the full asking price (though it would not be surprising if it sold for more), it would mean a depreciation of $224,100 or about 40% off the 2004 sales price of $564,000. That is some serious price erosion.
Thursday, July 24, 2008
40% off the '04 price in San Juan
Subscribe to:
Post Comments (Atom)
4 comments:
The back yard appears to back up to the I-5 Berm.... so the large back yard would have a significant amount of freeway noise.
I seriously doubt you could get $2300 out of this location/size combo. In the current rental market, getting 2000 would likely be a stretch to have it consistently rented. That changes the mix considerably.
When I can get a 1700 sq ft HOUSE in Laguna Niguel for $2500/month, I repeat, you will not get anything near $2300 for this place.
I'm afraid this one is still too far away from rental parity. Getting closer though!
Chuck Ponzi
You're right - the GRM is iffy. You would probably spend too much improving the backyard and making it livable to make it pencil out as a rental at this point in time. The estimate I used was based on a probably over-optimistic set of homes for rent right now on the MLS.
This type of property has more to fall.
Ghetto!
Post a Comment