Perhaps you thought we were kidding when, in a recent post, we showed that a number of 2003 rollbacks are coming on to the market in South OC.
This REO in Aliso Viejo is tough to ignore. It's fresh on the MLS for more than 40% off the 2006 price. How many offers do you think this one will receive?
12 Los Palos, 92656
Asking price: $472,900
Asking price/ sq ft: $236
Income requirement: $118,225
FB purchase price: $825,000
FB purchase date: 9/20/06
Size: 3 beds, 3 baths, 2,000 sq ft (built in 1997)
MLS: S537806 (2 days on Redfin)
Zillow Zestimate: $599,000
2007 property tax: $10,170
HOA dues: $55
Type: Condominium
Style: Contemporary/Modern
Stories: 2 Levels
From listing: Gorgeous and Elegant two story 3 bedroom, 2.5 bath condo. Full custom features throughout entire home. Beautiful marble floors and cozy fireplace in living room. Upgarded kitchen with black granite counter tops and black GE appliances. Wrought iron stair railing leads to upstairs bedroom. Nice paronamic canyon and mountain views. Beautiful front and rear yards with custom landscaping.
View Larger Map
By our rough estimate using a form of Case-Shiller methodology, this property's asking price makes it a mid-2003 rollback.
The previous owner used 100% financing from a lil' old company called Countrywide when they "purchased" the property in 2006. The property went into default and eventually went back to the bank in April for $510,000.
Like yesterday's property, this was not the former owner's primary residence.
The property is priced aggressively - for comparison, 2 Leon is asking $639,900, and 4 Alegre is trying to get $615,000 even though it's smaller. Today's listing should complicate things a bit.
Assuming the property is (only) sold for the full asking price, it would mean a depreciation of $352,100 or 43% in less than two years. It also would be $296,100 or 39% less than the 2004 price. That would effectively wipe out the majority of bubble appreciation.
No bottom on pricing yet...
Friday, June 27, 2008
"Gorgeous and elegant" Aliso REO
Friday, June 06, 2008
(Another) Dove Canyon REO/rollback
Two Dove Canyon REOs in the same week? Believe it.
29 Muirfield, 92679
Asking price: $689,900
Asking price/ sq ft: $287
Income requirement: $172,475
FB purchase price: $699,000
FB purchase date: 11/24/03
Size: 4 beds, 3 baths, 2,400 sq ft (built in 1990)
MLS: U8001604 (62 days on Redfin)
ZipRealty price tracker: Price Reduced: 5/22/08 -- $714,900 to $689,900
Zillow Zestimate: $835,500
Type: Single Family Residence
Style: Cape Cod, Traditional
Stories: 2 Levels
Lot size: 6,270 sq ft
From listing: Beautiful 4 bedroom pool home with view located in Dove Canyon. Open bright floor plan, Pool Spa, Gated community!
The photos and description leave something to be desired. It will be interesting to see how low the bank will go - and how quickly it will continue the price cuts, if at all.
Either way, this is not good for two other properties on the same street: 32 Muirfield has the same number of bedrooms and bathrooms, but is larger. Asking price is $720,000, and it has been on the market for a while. And, 1 Muirfield comes in with a crazy-high price tag of $889,900, despite the fact that it's smaller and has one fewer bedroom than our subject property. Market time is about a month and a half.
After purchasing the subject property with 85% ($594,150) financing five years ago, the previous owner re-fied into an $807,500 adjustable loan in 2005.
That effectively liberated the downpayment and then some. Oops. The property eventually went back to the bank in February for $706,500 and is currently held by Deutsche Bank.
Two months on the MLS as an REO has not yet yielded a willing and able buyer, but it certainly has produced a 2003 rollback.
Thursday, June 05, 2008
$234/sq ft in Lake Forest
We've appreciated the updates from one of our readers about Lake Forest, which continues to experience price declines even though sales volume has recently picked up.
(By the way, everyone is always welcome to send tips, thoughts or local market observations either to the comments section beneath each post or to our e-mail)
Today's property is one of those that continue to apply downward pressure on prices in the area. At first we noticed this phenomenon primarily in small condos, but now it appears to be spreading into larger single family homes as well.
24256 Larkwood Ln, 92630
Asking price: $390,000
Asking price/ sq ft: $234
Income requirement: $97,500
Purchase price: $630,000
Purchase date: 5/2/05
Size: 3 beds, 2 baths, 1,670 sq ft (built in 1964)
MLS: S534907 (3 days on Redfin)
Zillow Zestimate: $463,500
Property tax: $6,746
Type: Single Family Residence
Style: Contemporary
Stories: 1 Level
Lot size: 7,363 sq ft
From listing: (No description)
View Larger Map
Assuming this one can rent for $2,300 per month, the target break-even price for an owner-occupant would be around $368,000, using a GRM of 160. Not quite there, but, like yesterday's property it is at least in the ballpark.
We mentioned downward pressure on prices, so here is an indicator of what is going on in the immediate area around this property - on the same street:
- 24276 Larkwood received its notice of trustee sale in late April. That owner bought with $0-down financing in 2005 and paid $575,000. This property is a bit smaller than our subject. It's for sale for $449,000.
- 24191 Larkwood is for sale and is asking $470,000. It's even smaller than the other two properties we just mentioned. The owner paid $593,000 in 2005 but only had to put $400 down. If the property sells for the asking price, the loss would be $151,200, including 6% sales costs. We should probably also mention that the property has begun the foreclosure process.
Our featured property is asking $234 per sq ft. The other two are asking $372 and $410. Sorry, but this is far from 2005, so they might need to re-adjust their expectations. However, considering how much debt is on those properties the wiggle room likely is nothing or next to nothing.
If our subject property is able to sell for the full asking price (we would guess the lender(s) involved would play a big part in this), it would be $240,000 off the 2005 price and $145,000 off the 2004 price. It would also mean a depreciation of 38% off the 2005 sale and 27% off the 2004 price - leading us to believe this would likely be a 2003 rollback. None of these calculations include sales costs.
Wednesday, April 23, 2008
Agent's trick in RSM?
Any time we see something like this - a property new to the market asking significantly (and we mean significantly) less than the previous sale price - we are tempted to assume the real estate agent or owner who ultimately had the final say on the price decided to come in low and hope to drive up the price through a bidding war.
Today's subject property with that characteristic is a single family home in RSM that has recently come on to the market...
3 Via Felicia, 92688
Income requirement: $100,000
Purchase price: $625,000
Purchase date: 6/18/04
Size: 3 beds, 3 baths, 1,447 sq ft (built in 1986)
2007 property tax: $9,006
HOA dues: $39
Type: Single Family Residence
From listing: View of Saddleback Mountains-large corner lot. Large front yard, and a good size back yard. Very well maintained property.
(The photo to the left is from the previous listing in 2004)The asking price is just $50,000 above the 2002 price. It is clear, then, that the owner who held the property from 2002-2004 might as well have hit the real estate jackpot. After buying the home for $350,00, they sold for $625,000 in June 2004. That represented a gain of $275,000 before sales commissions and money spent on upgrades.
Think about it - the home "earned" them $137,500 a year for two years of ownership.
The current sellers will probably soon be dealing with a competitor in 12 Via Felicia, an REO that went back to the bank for $435,281 at the end of March that also happens to be the same model as our subject property.
And, considering the amount of debt on 18 Via Felicia (a $468,000 first loan that is now in default, plus a $117,000 second and a $24,900 credit line as well that may or may not be tapped), it is possible that down the road this other property could be joining the sad parade of foreclosed homes as well.
You could rent a property like this for about $2,300 per month. So, if the property were actually able to be sold for $400,000, we would already have achieved rental parity, because a GRM of 160 values this property at $368,000. The question is whether the property is able to be sold for the current asking price.
Assuming a successful sale for the asking price, it would mean a loss of $249,000, including 6% sales costs. It would also be a depreciation of 36% off the 2004 price, not including sales costs.
Saturday, March 15, 2008
Back to '03 in Aliso Viejo
Here is an Aliso Viejo single family house - not a small condo, not in San Juan or Lake Forest - that has virtually reverted to the price paid in late 2003. Is this the bottom, or will values in general here continue to slide?
Keep an eye on foreclosure numbers, because as long as they continue to remain at high levels, there will be downward pressure on prices.
9 Tanglewood, Aliso Viejo, 92656
Income requirement: $162,500
Purchase price: $641,500
Purchase date: 12/1/03
Size: 4 beds, 3 baths, 2,200 sq ft (built in 1990)
Zillow Zestimate: $736,500
2007 property tax: $8,752
HOA dues: $83
Type: Single Family Residence
Lot size: 4,000 sq ft
From listing: Panoramic View from Backyard and Master Bedroom! Large Master Bathroom with Separate Tub and Shower. Walk-in Closet in Master. 4 Bedrooms all upstairs. 3rd Car Garage Built Out as Office. Could easily be converted back to garage if needed. Inside separate laundry room.
See if you can figure out what is on the TV in this picture. Golf tournament? Huge hunk of mold?The backyard appears to be a minus, since the picture makes it look like all you would get is a thin slab of concrete.
Assuming a sale at the current asking price, minus 6% in sales costs, the loss would be $30,500. Of course, this does not include any improvements. There is a solid chance the current owners were the ones responsible for converting the garage, and that obviously would have cost some money.
How does this compare to nearby homes for sale?
- 25 Tanglewood is a bit bigger model, and is asking $844,500. Days on Redfin: 66.
- 1 Heatherwood has only 3 bedrooms, but is on a bigger lot, and is asking $779,000. Days on Redfin: 7
- 43 Coppercrest is a bit smaller, but also is on a bigger lot. Asking price is $772,000, and the time on Redfin is 101 days.
Tuesday, February 12, 2008
'03 rollback/comp killer in Aliso Viejo
More and more 2003 rollbacks seem to be popping up in South OC, but the majority tend to be small, older condos at the lower end of the price spectrum. Here's a rollback and potential comp killer of a different sort in Aliso Viejo...
Income requirement: $162,500
Purchase price: $949,000
Purchase date: 9/2/2005
Size: 4 beds, 3 baths, 2,200 sq ft (built in 1991)
HOA dues: $82
Type: Single Family Residence
Stories: Two Levels
Lot size: 4,500 sq ft
From listing: ROCK POOL & SPA W/ 2 WATERFALLS. UPGRADED FLOORS. MASTER BEDROOM RETREAT.
Note: Photos of this property are not yet in the system. So, the images are from back in 2005, when the property was last listed for sale. Who knows what the current owners have decided to change.Comp blowup watch: 38 Sandbridge, with a bigger lot, is asking $834,900. 32 Sandbridge, which appears to be a bit smaller in terms of square footage, is asking $799,000. Despite the differences it seems pretty apparent this property would blow the other two out of the water, if in fact it successfully sells.
Assuming a sale at the current asking price (and that if it's a short sale, the lender would sign off), the loss would be a staggering $338,000, including 6% sales costs - roughly an $11,600 deterioration per month of ownership.
Not including transaction costs, this represents a depreciation of 32%. The sale also would be $25,000 below the August 2003 price of $675,000.
Friday, February 08, 2008
Helping to lead the decline in RSM
We're continuing our tour of South OC price leaders in Rancho Santa Margarita thanks to reader Travis pointing out this possible comp killer-in-the-making. The original asking price appears to have been a bluff, considering it was dropped by $100k relatively soon after being listed.
5 Via Olorosa, 92688
Income requirement: $112,500
Purchase price: $630,000
Purchase date: 6/29/2006
Size: 3 beds, 2.5 baths, 1,551 sq ft (built in 1986)
2006 property tax: $2,933
HOA dues: $46
Type: Single Family Residence
Lot size: 7,000 sq ft
From listing: New Gourment Kitchen some upgrades 3 spacios bedrooms and spacious master bath. New Interior and Exterior many upgrades, premium corner location
Art Deco style? I wish. Also don't think this place is "one level." I'm also interested to see how exactly a "gourment" kitchen compares to the more-pervasive "gourmet kitchen."
Redfin shows a low list price of $350,000. If a sale goes through at that price (I'm guessing the lender would probably have something to say about that), it would represent a loss of $301,000 including 6% sales costs, or a 43% decline not factoring the transaction costs in. It would also be $226 per square foot.
If it magically sold for the full asking price, the loss would be $207,000.
How does this compare to its competition?
26 Via Ulmaria is a fellow price leader. It's exactly the same model and is asking $417,000. Days on Redfin: 36.
51 Via Zapador is about a third of a mile away from our original property, and is ever-so-slightly bigger. It's also three years newer, and has some upgrades. Asking price: $639,500. Days on Redfin: 120.
35 Allyssum is also around a third of a mile away. It's about 100 square feet bigger and is one year newer. Asking price: $559,000. Days on Redfin: 90.
6 Calle Passiflora is a little more than 100 square feet bigger but also has the added advantage of a 4th bedroom. Asking price: $529,900. Days on Redfin: 120.
Saturday, February 02, 2008
Lake Forest comp killer
A reader alerted us to this Lake Forest home that is threatening to help re-write the comps in the immediate area. It still seems a bit pricey at $371 per square foot, but it's certainly lower than the competition, which we will also review.
24242 Palmek Circle, 92630 (easy address number to remember)
Income requirement: $106,125
Size: 3 beds, 2 baths, 1,144 sq ft (built in 1965)
Type: Single Family Residence
Lot size: 7,434 sq ft
From listing: Single story home in a safe and quiet neighborhood features 3-bedroom, 2-bath, spacious backyard with raised patio area, trees and flowers that provide a cozy space to make the perfect place to end your day. Property is sold in 'AS IS' condition with no warranties. Bring your best offer.
We don't have any sales history for the property, but from the description it's a pretty safe bet that this is either a short sale or a full-blown foreclosure situation. It's also apparent from the price slash on Jan. 24 that the seller/bank is anxious to get out of this place.
How does this compare to what the neighboring properties are asking? Glad you asked. While we obviously can't compare the exact condition of the properties (in fact, we guess our subject property is likely the worst of the bunch), it gives us a general indication of the direction of the market, with our property as the low-priced leader.
All of these comps have the same number of bedrooms and bathrooms, and are roughly the same size as the subject property.
24221 Ankerton is slightly smaller. Asking price: $589,900. Days on Redfin: 29. Zillow says the owners paid $648,000 in 2006, so it looks like they're desperately trying to cling to as high a price as possible.
24276 Larkwood is a bit larger. High asking price: $550,000. Days on Redfin: 26. Sellers paid $575,000 in 2005.
24191 Larkwood is virtually the same size as the subject and is a fixer. This is probably the closest match to our original property. Asking price: $470,000. Days on Redfin: 17. Last sale was for $593,000 in 2005.
23911 Landisview is somewhat larger than the subject and has a nicely remodeled kitchen. It's being marketed as a move-in-ready property, so we can expect a small premium on this over the project that is our original property. Asking price: $549,900. Days on Redfin: 30. Last sale was back in 2001 for $269,500. The question is how much money was spent remodeling. Theoretically, the sellers will realize a good profit when they find a buyer.
It's clear that, compared to our subject property, all of these competitors now look very overpriced. We can also conservatively estimate that property values in this immediate area have probably fallen anywhere from about 20-30% from the peak, based on past sales and current asking prices.
The race to the bottom has begun.
