Good deal? Be the judge

Today we're looking at a Mission Viejo investment property for sale. We say investment because the description explains it's already being rented until 2009. They even were kind enough to tell us how much the rent is:

INVESTORS LOVERS,PROPERTY RENTED FOR $2100 PER MONTH TO VERY NICE TENANT TILL FRIST MONTH OF THE NEXT YEAR.PRICE JUST REDUCED TO SELL FAST,UNBELIEVABLE SADDLEBACK VALLEY VIEW FROM ENTIRE BACK OF HOME AND WRAP-AROUND THE DECK,LOCATED ON A QUIET NEIGHBORHOOD,CLOSE TO LAKE MISSION VIEJO,SHOPPING,PARKS,SCHOOLS AND RESTAURANTS,THIS END UNIT,3 BD,2.5 BA,TOWNHOME FEATURES OPEN FLOOR PLAN,ROMANTIC FIREPLACE IN LIVING ROOM,SURROUND SOUND SYSTEM,WASHER/DRYER INCL,CENTRAL AIR,OWNERSHIP INCLUDS LAKE TEMBERSHIP,SECURITY SYSTEM AND SUPER LOW TAX BASE AND MUCH MORE.

Typos are the order of the day here, unless since we last checked "first" became "frist," "includes" became "includs," and "membership" devolved to "tembership." We're not going to touch "investors lovers."

There is no photo with the listing, so we went with the Google street view.

Would you bite on this as an investment? Even if you wanted it to own it and live here, you couldn't for a bit because you would have to honor the terms of the lease. Our goal is for an owner-occupant to pay about 160 times the market monthly rent to buy a property, which would theoretically allow it to cost about the same each month to own as it would to rent.

We know market rent for this unit is $2,100. That means it should be worth about $336,000 to someone who would want to buy and then live in this condo, which is $114,000 below the asking price. Uh oh. There's also the question of whether or not someone would even want to buy a property like this to live in, considering it's been a rental and probably isn't a long-term solution.

Cashflow investors typically would want a GRM of around 100-120 to ensure their investment will be profitable. So, they would probably be interested in the property if it were priced in the neighborhood of $210,000-$252,000. Not even close. Oh, and don't forget about the extremely high HOA dues ($312 per month and $19 every quarter).

Notice these are only rough estimates, but since the numbers are so off that it seems unlikely anyone could rent this out and be cashflow positive (barring an excessive downpayment or an exotic loan that doesn't really exist anymore) the point is made that this appears to be a very poor investment opportunity.

The only other approach we could think of is someone willing to take a loss each month as a trade-off for anticipated appreciation. That is a deadly game, particularly in a down market.

Perhaps we'll wait for the next "deal" to come along...

"The phone is ringing off the hook!"

15 Amarante in Laguna Niguel is a single-family residence in Marina Hills that came up for sale a couple weeks ago with an asking price of $599,000.

The owners' situation is sketchy at best. Zillow shows this property sold for $810,000 in 2005, but it has also been on the market as a rental, first in September 2006 with a monthly asking price of $2,650, and again in October 2007 with a monthly asking price of $2,600.

We're not sure exactly what the house did end up being rented out for in the past, but there is no rational way the rent could even approach covering the mortgage, so it is possible the owner was banking on rapid appreciation to bail them out of a bad investment. If you're curious, the investor-friendly 120 GRM estimate has this place valued at $312,000 - assuming a rental rate of $2,600 per month.

Listing description (our emphasis in bold): Gorgeous single story detached home in the desireable Marina Hills. Remodeled kitchen with cherry wood finish cabinets and modern granite tile counters. Gorgeous travertine floors and plush carpet. Leaded glass front door with beautiful porch. Low maintenance private back yard with lovely landscape and flowers beds. Hurry on this one the phone is ringing off the hook!

If the phone is "ringing off the hook" with interest, then why did we see this today on ZipRealty?: Price Reduced: 3/31/08 -- $599,000 to $589,000

Guess you don't have to be in quite as much of a hurry as the listing leads you to believe.

LA Times tells backstory behind Ladera luxury foreclosure

Photo credit: LA Times

Those of you who do a lot of clicking on listing sites like Redfin and ZipRealty may have come across 3 Magnolia in Ladera Ranch. It's a very nice-looking place with 4 bedrooms and 3 baths, and it sold for $1.2 million at the peak in 2005.

The recent listing price was $429,000 (obviously, way too low to be a regular sale, even REO), with the following in the description:

'Property To Be Sold At Public Auction Event March 15Th At The Pomona Fairplex. List Price Is The Starting Bid For This Home, Subject To A Reserve Price And Lender Confirmation. You May Bid At The Auction, Or Via Live Internet Web Cast, Or Via Absentee Bid ( Written Offer ) Submitted In Advance Of The Auction. No Offers Will Be Accepted Prior To Auction. Homes Open For Inspection From 10Am To 4Pm On Sat And Sun March 8Th And 9Th. For Property And Auction Information Contact Listing Broker'

Peter Viles of the LA Times' excellent L.A. Land blog posted on the fate of this property today. Some snippets:

"Because the opening bid was so low, there was a spirited bidding war for the home. ...

Here's what happened: The winning bid for this home came in at $705,000. Remember, the bidder agrees to pay an additional 5% premium to the auction companies. So the total bid was $740,000 -- a 38% discount from the peak sales price of $1.2 million. However, the bank or lender that owns the home reserves the right to reject the high bid as too low, and that is what happened here."

To recap, the auction established that a buyer was willing to pay a total of $740,000 for the property. The bank said no.

In fact, it looks like the bank may already be trying to get more for the property. It's showing up in Redfin with a new asking price of $915,000.

*There is also an interesting LA Times video Viles did on the auction, specifically on the Ladera Ranch property. See it here.

Are the squatters out yet?

If you happened to want to preview this Mission Viejo REO townhouse right when it came on the market a little more than a month ago, you would've probably been disappointed. The listing description says it all:

REO--Bank Owned. Property sold AS-IS, but in great condition. Current occupants will be evicted from the home on 2/2/08 so the home cannot be shown at this time. This home is a rare 3 bedroom, 3.5 bathroom condo in a great neighborhood.

The bold is obviously our emphasis. Funny how the listing mentions the property is in "great condition," considering at the time it was being possessed by people about to get the boot, who, ostensibly, had not much to lose. Who knows what damage, if any, took place as the day of reckoning arrived.

The bank is asking between $474,900 and $529,900, so they must believe the house is still in top-notch condition. That's still near the bubble price for this place - $535,000 - which was recorded in late 2005, so it appears this property has a ways to fall. The value in 2002 was a "mere" $271,000.

How does this compare to other properties in the neighborhood? 27692 Argyll #113 is the same model and is asking $475k. It has been sitting on the market for more than 3 months without a sale. 27672 Falkirk #93, which is also the same model but is asking $439,900. Time on Redfin: 78 days.

And, don't forget about 27776 Berwick #22 - the low-price leader at $405,000. All in all, there are about 8 properties for sale in Highland Park.

But, the neighborhood should now be short at least one evictee.

$6 million bubble profit in Laguna?

That's exactly what this Laguna Beach owner is hoping to achieve after holding their luxury property for less than two years. Never mind that even this market has shown a few small cracks in recent months (the latest DataQuick figures reveal sales volume is down more than 50% and the median is down about 10% from the same time last year, though these numbers are very volatile).

And, never mind that this property was purchased about as close as it gets to the peak of the Great Housing Boom. Well, with a property this nice, perhaps anything is worth a shot...

14 Lagunita Drive, 92651

Asking price: $16,989,000

Asking price/ sq ft: $3,951
Income requirement: Ridiculously high
Purchase price: $11,000,000
Purchase date: 5/18/06
Size: 4 beds, 5 baths, 4,500 sq ft (built in 1963)

MLS: U8000760 (4 days on Redfin)

2006 property tax: $71,647
Type: Single Family Residence

Stories: Three or More Levels
Lot size: 6,370 sq ft
From listing: Lagunita oceanfront residence that is a work of art in itself. Crashing white water and pristine sand at your doorstep with direct steps to Victoria Beach. Panoramic 180 degree oceanviews. Soft contemporary style architecture. Custom teak doors, art glass walls etched with sea life motifs, a copper roof, and climate controlled wine loft that holds approx. 800 bottles.

Obviously, this property is marketed towards a very select group of possible buyers - the all-cash variety, to be specific. Let's look at a portion of the sales history that shows up in Zillow:

June 1988: $1,225,000
December 1997: $2,150,000
May 2006: $11,000,000

Taking this information into account, we see it took about nine years for the property to increase in value by 76% between 1998 and 1997. That's a pretty significant amount, but hey, this is a luxury property, so the rules are different. The nominal increase in value between those two sales was $925,000.

Then, between 1997 and 2006, the property increased in value by $8,850,000, or 21.4% per year for a total appreciation of about 412%. We speculate that some significant remodeling took place in order to increase the value by this much, but in a bubble market all bets are off.

The latest owner is gunning for a $5,989,000 profit, not including sales costs. That would equate to an appreciation of about 54% during a horrible housing downturn - now that's bubble immunity if we ever saw it.

If we were to tack on 6% in transaction costs, the profit would "dwindle" to $4,969,660.

The 365 club

We are aware that properties aren't quite selling as quickly as they used to. But this is ridiculous. All of the following properties are members of my not-so-elite "365 club" - they've all been on the market for more than a year without a sale. All are still active on Redfin. Get 'em while they last...

35 Wightman Court, Dana Point
Days on Redfin: 539
Asking price: $849,900 ($773/sq ft)
Original asking price: $849,900
Purchase price: $816,000
Description quote: "Ready to move in and selling furnished."
Analysis: Think price is an issue? There's another same-size unit for sale that's asking $719,900, and it's been on the market for 123 days. Does not bode well for either of them.

437 Calle Empalme, San Clemente
Days on Redfin: 425
Asking price: $895,000 ($597/sq ft)
Original asking price: $895,000
Purchase price: $195,000
Quote: "COULD PUT ADDITIONAL GARAGE, MORE LIVING SPACE, YOU NAME IT!"
Analysis: Despite the can-do description, this property is priced about $150,000 more than a nearby (bigger) place sold for in October. The purchase price would imply the owners should have plenty of equity...simple indifference to selling or HELOC implosion?

32501 Vivente De Marlita, SJC
Days on Redfin: 527
Asking price: $839,990 ($341/sq ft)
Original asking price: $869,990
Purchase price: $551,000
Quote: "Nearly new immaculate home; doesn't look lived in."
Analysis: Last price drop: July 1, 2006. Think how much has changed since then. And not in a good way. Previous sale amount again suggests there could be a HELOC/bad loan in play.

31867 Circle Drive, Laguna Beach
Days on Redfin: 501
Asking price: $1,950,000 ($1,315/sq ft)
Original asking price: $2,695,000
Purchase price: $408,000
Quote: "...totally redone in beach chic style with fantastic ocean views and access to two beaches"
Analysis: "Beach chic?" OK, so the house isn't selling, but no need to just start making words up. In all seriousness, the ocean views from this place look incredible.

24 Northwinds, Aliso Viejo
Days on Redfin: 392
Asking price: $785,000 ($375/sq ft)
Original asking price: $879,000
Quote: "PRICED RIGHT!!... 3 car garage for all your toys"
Analysis: Sure it's priced right. That would explain why it's only been on the market for 13 months. Give me a shout once you've arrived back on planet Earth.

Good luck with that

Despite buying near the peak, at the peak, or just as the real estate market began to fail, these owners have already placed their properties back up for sale.

These owners are not looking to barely break even on their purchases. Instead, they're hoping to cash in for a profit. Maybe we'll be proven wrong, and some buyers will come out of the woodwork. Then again, maybe not.

31597 Via Cruzada, S.J. Capistrano, 92675
Asking price: $1,775,000
Purchase price: $1,369,000
Purchase date: 6/1/2004
Days since previous sale: 1,228
Potential profit (incl. 6% selling costs): $299,500
Potential appreciation per day of ownership: $265.51

856 Calle Pluma, San Clemente, 92673
Asking price: $567,500
Purchase price: $494,545
Purchase date: 1/9/2006
Days since previous sale: 641
Potential profit: $38,905

Net potential appreciation per day: $60.69

29 Abyssinian Wy, Ladera Ranch, 92694
Asking price: $1,269,000
Purchase price: $846,500
Purchase date: 10/21/2004
Days since previous sale: 1,086
Potential profit: $346,360

Net potential appreciation per day: $318.93

24451 Los Serranos Dr., Lag. Niguel, 92677
Asking price: $977,000
Purchase price: $875,000
Purchase date: 8/18/2005
Days since previous sale: 785
Potential profit: $43,380

Net potential appreciation per day: $55.26

225 Glenneyre St. #1E, Laguna Beach, 92651
Asking price: $975,000
Purchase price: $690,000
Purchase date: 10/14/2004
Days since previous sale: 1,093
Potential profit: $226,500

Net potential appreciation per day: $207.22

File this one under "makes completely no sense"

The California Association of Realtors' chief economist made a quasi apology about a prediction she made two years ago that "dismissed fears of a bursting California real estate bubble and called for only modest sales declines."

In fact, CAR said it predicts prices in California to fall 4 percent in 2008, which would mark the worst year since 1993.

As the real estate market here in Southern California continues to slowly implode, this seller in Mission Viejo had an idea. A big idea. A bold idea. Here it is: Buy a modest-looking 25-year-old house. Build on an addition to bring it up to a mind-boggling 7-bedrooms, 7-baths and 2,460 square feet. Then proceed to remodel and overimprove the heck out of it with granite and stainless steel in the kitchen, travertine and tile floors, plus a new roof, carpet and paint.

Then, to top it off, set the asking price to $280,900 more than you paid for it in July 2006, which happened to be right as the real estate bubble was beginning to deflate.

This seller is either incredibly shrewd and gutsy, or destined to fail miserably. Want to take bets as to how much money they poured into this place? One thing they forgot to pay for was a good photographer. Check out the picture to the left. The red arrow is pointing to someone who appears to have been caught talking on a phone in the backyard.

New rule to RE agents/people who take pictures and then put them on the MLS: At least glance at your pictures before you post them. Having people/animals accidentally appear in your photos only makes you look unprofessional.

26291 Avenida Calidad, Mission Viejo
Sales history
7/12/2006: $669,000
5/30/2006: $412,500
Asking price: $949,900 (32 days on Redfin)
From listing: "New addition with everything redone in & out. New appliances, new tile roof, new paint in & out, new carpet, new travertine floors, new kitchen cabinets. A must see. .. . too many to list. Bring your big family to this one. .. ."

Big family is right. Who needs that many bedrooms? The Brady Bunch would probably have considered it unnecessary. You might as well be running a small dorm with this many rooms. Or perhaps, even an elderly care facility.

Oh yeah, the three closest single family houses for sale are asking the following: $690,000; $589,000; $618,000. Doesn't appear that the neighborhood supports this kind of price, considering it's about $300,000 more expensive on average than the others.

Assuming they find someone who wants a 7-bedroom house of this size, in this location, at this price, the potential profit would be $223,906, including 6 percent selling costs. Then subtract from that however many thousands they spent "upgrading."

Quote of the year, revisited

A while back, I vented on the complete ridiculousness that is "My House Is Worth What?" on HGTV.

Well, what do you know...Newsweek columnist Daniel McGinn recently used the show as an lead-in to a very good article about the changing nature of property appraisals and the real estate downturn in general.

As the real estate market continues to look gloomier, I couldn't help but rehash the most obnoxious, disturbing, and yet telling exchange I've seen in a while involving an ignorant person's perception of how real estate "investing" works versus reality. An edited piece of the original post appears below. To see the whole thing, click on the link in the first paragraph.

Essentially, in "My House Is Worth What?" a RE agent takes a look at a person's house, points out some pluses and minuses, and then tells them what they would list it for.

Positive factors the RE agent finds about this particular homeowner's property, located somewhere in LA: There is a guest house on the property that she renovated and is renting out. There's also an outdoor patio that would be good for entertaining (is it just me or is that feature very overrated - sure, we would like some nice outdoor space, but just how often do we really use it?)

Minuses: No air conditioning. Washer and dryer literally within arm's reach of the sink in the kitchen, out in plain sight. Kitchen needs major work and has awful looking cabinets and counters. Floors in the kitchen should probably go, too.

She paid $550,000, and spent $25,000 renovating. So, she's in for $575,000 but is hoping it's "worth" about $775,000 - so that way, she says, she could have a big enough down payment to trade up for a bigger and better place. This doesn't pass the smell test, and you can tell the real estate agent sensed it too - $200,000 appreciation in two years, considering we're now in a major buyer's market? (Note: This was a number of months ago. Things obviously have only gotten worse since then)

The agent, confused, asks her: "How did you arrive at that figure?" (What he really means: What the @#$* are you thinking?)

Her answer: "Well, I've lived here for two years, and I heard you just add on $100,000 a year kind of thing..."

Excuse me while I hurl. This is a prime example of complete ridiculousity at work. That statement concisely sums up why we're in the situation we are now. People have been conned to believe that you can't go wrong with real estate, it always appreciates, blah, blah blah. This is one piece of the explanation as to why prices are now through the roof.

Cue the agent's nervous laugh, and joke about "Well, this is LA, right..." (What he really means: "You nut case! How can you possibly think that your house went up $100,000 each year? Good luck finding a buyer.")

He proceeds to tell her he would list it for $669,000 - still a whopping $94,000 above her costs (and she'd better try to get out now, otherwise she could be in for a surprise as the market continues its downward swing).

Despite what is in actuality very good fortune (and luck) for her, she pouts as we fade to commercial.

Oh, what I wouldn't give to see where she's at these days. Was she actually able to convince a greater fool to take this place off her hands? Did she then "trade up" to an even bigger, more expensive house with an equally large mortgage?

They should start doing follow ups with some of the more ridiculous people they've had on the show to see how their incredibly lame brained plans panned out (like the couple who wanted to pull all the equity out of their townhouse to buy themselves an over-the-top wedding they shouldn't possibly afford).

Only problem is, it would probably be way too realistic and depressing. And that, folks, is not good TV.

Burned by fire sale

Try to put yourself in the place of the owner of 26966 El Retiro in Mission Viejo (pictured above). They paid $317,000 for this 3-bedroom, 2 bath house in March 2002, and are now hoping to sell it for $619,000. There are also probably a few jokes to be had here with the street name, but we'll leave those alone.

They've added granite countertops, maple cabinets and "newer" appliances in the kitchen, plus a new roof, water heater and carpet, among other improvements. So, that should justify their asking price, right? Potential profit (minus 6 percent selling costs) assuming a sale at this price is $264,860. Obviously, it's going to be much less in reality considering the work they've done on the house has no doubt cost a decent amount of money.

But, let's assume that despite the repair/upgrade work, they're still in line to make a nice little bit of cash because they didn't tap into their home equity and/or were able to pay cash for the repairs. Perhaps it's time, these owners decide, to move up into a larger house. After all, the NAR says it's a buyer's market and therefore a great time to buy!

Meanwhile, there's a blowout sale going on just one street over, because the owner of 26926 Colmenar (pictured at left) has taken a large, sharp machete to the price of the property. Once listed for $629,000, the house is now showing up in Redfin at a price range of $499,000-559,000 (a discount of anywhere from $70,000-130,000, or 11-21 percent, depending on which part of the range you're calculating from).

Since these owners paid $673,000 in January 2006, the projected loss could be as much as $203,940 if we figure a sales price at the bottom of the price range, and factor in 6 percent selling costs.

This Colmenar property, by the way, is a bit larger and has one more bedroom than the El Retiro house.

Is there something we're not seeing here? It's very clear that the Retiro house is drastically overpriced considering the competition. By the way, this argument receives more support from neighbor 26971 Retiro, which is the same size as the other house on that street and appears to be an REO. The asking price on this property is $564,900. It's been sitting on Redfin for 130 days.

Uh oh.

Does the first Retiro property and its "totally turnkey!" condition justify the ridiculously high premium, considering it's smaller and has one fewer bedroom? No way, and these sellers are probably going to have to cut their price to keep up, despite their home's slight advantage in terms of repairs/improvements. Again, remember the principle of substitution. That's all you need to know.

They just don't get it

Here's a quick-hit list of local properties that have all been listed on Redfin for laughable amounts of time. Are these owners finally ready to deal, or are they still hoping for buyers to materialize who can pay these high prices? Click on the address to see the complete Redfin listing.

26482 El Mar Drive, Mission Viejo, 92691
Asking price: $829,000
Size: 4 beds, 3 baths, 2,897 sq ft (built in 1969)
Days on Redfin: 305
Original asking price: $949,000
Last sale: $725,000 on 11/16/2004

15 Calle Gaulteria, San Clemente, 92673
Asking price: $1.595 million
Size: 4 beds, 3.5 baths, 3,705 sq ft (built in 2005)
Days on Redfin: 200
Original asking price: $1.795 million
Last sale: $1,273,500 on 12/17/2004

31423 S. Coast Hwy #86, Laguna Beach, 92651
Asking price: $1.995 million ($1,814 per sq ft!)
Size: 1 bed, 1 bath, 1,100 sq ft (built in 1970)
Days on Redfin: 526
Original asking price: $2.395 million
Last sale: $1.395 million on 1/31/2006

32501 Vivente De Marlita, S.J. Capistrano, 92675
Asking price: $839,990
Size: 4 beds 3 baths, 2,466 sq ft (built in 2003)
Days on Redfin: 475
Original asking price: $869,990
Last sale: $551,000 on 3/7/2003

35 Wightman Court, Dana Point, 92629
Asking price: $849,900 ($773 per sq ft)
Size: 2 beds, 2 baths, 1,1oo sq ft (built in 1989)
Days on Redfin: 487
Original asking price: $849,900 (no change)
Last sale: $816,000 on 5/26/2006

Here's one more owner who really doesn't get it...
2 Sidra, Newport Coast, 92657
Asking price: $2.45 million
Size: 4 beds, 2.5 baths (built in 2002)
Days on Redfin: 191
Original asking price: $2.595 million
Last sale: $540,500 on 3/21/2003

Strange on multiple levels

Quick...guess which Mission Viejo property is listed for $1.23 million:

Property A









Property B









You probably assumed this was a trick, and you were right. The answer, somehow, is Property A. Check out the listing description on this sucker: This Rebuilt Home Has 7 Bedrooms 7 Baths All In One Level. * * * CURRENTLY OPERATES AS A HIGH-END BOARD & CARE FACILITY * * * Large Kitchen With Granite Counter Tops, Stainless Steel Appliances. Large Dinning Room. Each Bedroom Equiped with Plasma TV, Intercom, Ceiling Fan and Designer Carpet. Travertine Flooring Including Bathrooms. Lake Mission Viejo Access Is $325/Year. Low Tax Rate. No Mello Roos.

Would you want to spend this much money to buy an outdated-looking home with some granite and stainless steel that currently is a senior care facility? Me neither. But, on the plus side, each room is "equipped" with a plasma TV.

Also check out the sales history: $665,000 in 2005, and then $1,030,000 in 2006. Think it went up another 17 percent in value since last October? The sellers seem to think so. Or, perhaps, they're just hoping a buyer who does materializes.

Update: Still not desperate, "just motivated"

I featured a Rancho Santa Margarita property at the end of August where the listing description claimed, "Not a short sale-just motivated sellers." The original post appears below this one. By the way, this is the second consecutive property we've profiled with "light and bright" in the description. Can we please stop the insanity?

It's now almost month later, and the decidedly not desperate but motivated sellers have still not unloaded their property. The Redfin days on the market count is now 75, and the price has been lowered a whopping $19,100 - all in one price reduction that took place Sept. 11. Old price: $429,000; New price: $409,900. Does this sound like motivation to sell to you?

As I said in the original post, the sellers paid $136,000 in 1996, so much of their equity is still theoretically intact. Notice, I said theoretically.

ORIGINAL POST:
182 Calle De Los Ninos is for sale in Rancho Santa Margarita and has been on Redfin for 51 days. Here are the details:
Size: 2 beds, 2.5 baths, 1,000 sq ft (built in 1996)
MLS: S496422
Asking price: $429,000 (new price is $409,900)
Asking price/ sq ft: $429
The interesting part is in the listing description: Cute 2 bedroom detached home that is priced to sell. Not a short sale-just motivated sellers. Travertine downstairs, 2 car attached garage with direct access. Recently painted, sellers will give a carpet allowance. Large rear yard, fireplace in living room, two master suites upstairs with their own bathroom plus 1/2 bath down. Light and bright. Near corner of calle de vida and calle de los ninos-1st cdc.

Translation: "I know what you potential buyers are thinking...if it's actually priced semi-aggressively, it must be a short sale out of sheer desperation, right? Well would you believe that these sellers are actually pricing their property low on purpose? They're motivated, but not because they're in trouble with their lender."

Wonder what their motivation is - relocation because of work or desire to live out of the area, or a more tragic reason like divorce or death? First property listing I've seen that specifically points out that it's not a short sale - the fact that the listing references short sales the way it does shows you how prevalent they've become. Is this only the beginning?

These buyers paid $136,000 in 1996, so a good portion of their equity is still intact (theoretically). This property is $10,900 less than a similar property on the same street (10 Calle De Los Ninos, but this listing says it is only 913 sq ft. Also, this other property last sold in July for $417,646) and $15,900 less than 26 Calle De Los Ninos (same square footage).By the way, 26 Calle De Los Ninos has been on the market for more than 300 days. These sellers theoretically have plenty of equity too, as the last sale was for $139,500 in 1997, but they have only lowered the price once.

How will things end for our non-short sale but motivated owner? Time will tell.

No guarantees

The Redfin sales history on 23 Camino Silla says it all: Things got completely out of hand, and now this Talega property looks like it's an REO.

6/13/2007: $779,000
4/17/2006: $950,000
3/30/2005: $810,000
10/15/2003: $620,000
3/07/2001: $357,000

Other info:
Current asking price: $719,000
Days on Redfin: 57

An intriguing element is the listing description: One of the very best values in the sought after city san clemente. Four bedrooms and a loft, 3 bathrooms. Upgrades throughout. Everything is close: the talega swim & athletic club,golf, parks etc... All this and the ocean is just down the street!! Home is being sold 'as-is' and 'where-is' without warranty. Come start living the beach lifestyle here in san clemente today...

The as-is part is understandable. But "where-is?" What the heck does that mean - are they implying we can't buy the property, come over with some hardcore construction equipment, uproot the house right off its foundation, and then drive it up the 405 to a different lot in Newport Beach?

In case anyone was wondering, the loss on this property (assuming it sells for this asking price, minus 6 percent selling costs) would be $103,140. This also would represent a dip of $231,000 (about a 24 percent loss in value) from the peak price of $950,000 in April, 2006, according to the sales history on Redfin.

Not desperate..."just motivated"

182 Calle De Los Ninos is for sale in Rancho Santa Margarita and has been on Redfin for 51 days. Here are the details:

Size: 2 beds, 2.5 baths, 1,000 sq ft (built in 1996)

MLS: S496422

Asking price: $429,000

Asking price/ sq ft: $429

The interesting part is in the listing description: Cute 2 bedroom detached home that is priced to sell. Not a short sale-just motivated sellers. Travertine downstairs, 2 car attached garage with direct access. Recently painted, sellers will give a carpet allowance. Large rear yard, fireplace in living room, two master suites upstairs with their own bathroom plus 1/2 bath down. Light and bright. Near corner of calle de vida and calle de los ninos-1st cdc.

Translation: "I know what you potential buyers are thinking...if it's actually priced semi-aggressively, it must be a short sale out of sheer desperation, right? Well would you believe that these sellers are actually pricing their property low on purpose? They're motivated, but not because they're in trouble with their lender."

Wonder what their motivation is - relocation because of work or desire to live out of the area, or a more tragic reason like divorce or death? First property listing I've seen that specifically points out that it's not a short sale - the fact that the listing references short sales the way it does shows you how prevalent they've become. Is this only the beginning?

These buyers paid $136,000 in 1996, so a good portion of their equity is still intact (theoretically). This property is $10,900 less than a similar property on the same street (10 Calle De Los Ninos, but this listing says it is only 913 sq ft. Also, this other property last sold in July for $417,646) and $15,900 less than 26 Calle De Los Ninos (same square footage).

By the way, 26 Calle De Los Ninos has been on the market for more than 300 days. These sellers theoretically have plenty of equity too, as the last sale was for $139,500 in 1997, but they have only lowered the price once.

How will things end for our non-short sale but motivated owner? Time will tell.

Comp killer

Three sellers on Tortuga Cay in Aliso Viejo, Calif. are all playing nice and fair with each other by setting fairly similar asking prices in terms of square footage. Then there's the fourth property, a short sale, with the possibility to shake up the neighborhood. First, the three similar ones:

32 Tortuga Cay
Size: 2 beds, 2.5 baths, 1,436 sq ft (built in 1989)
Asking price: $519,900
Asking price/ sq ft: $362
Days on Redfin: 15


78 Tortuga Cay
Size: 3 beds, 3 baths, 1,602 sq ft (built in 1994)
Asking price: $559,000
Asking price/sq ft: $349
Days on Redfin: 38

33 Tortuga Cay
Size: 3 beds, 3 baths, 1,602 sq ft (built in 1990)
Asking price: $589,500
Asking price/ sq ft: $368
Days on Redfin: 23

Bottom line...the 33 Tortuga Cay property is overpriced. These sellers paid $537,500 in May, 2005 and are wishing for someone to materialize in order to bail them out. One noticeable difference between 33 and 78 Tortuga Cay is that 33 has a driveway, but is it really worth that much extra?

By the way, 78 Tortuga Cay sold for $325,000 in 2002, so you would suspect then that the sellers of that property should have some more wiggle room to lower the price accordingly. No price reductions on either of these properties yet.

You could also estimate that the value of a third bedroom would be about $39,000, by comparing the two-bedroom property's price to that of the cheaper three bedroom.

Then, there's 6 Tortuga Cay. I'm going to say it: There goes the neighborhood.

Size: 2 bedrooms, 2.5 baths, 1,602 sq ft (built in 1992)
MLS: F1724911 (38 days on Redfin)
Asking price: $435,000
Asking price/sq ft: $272
Purchase price: $438,000
Purchase date: 3/10/2004
Other sales history: 05/16/2: $260,000
06/01/1998: $175,000
10/20/1994: $157,000
ZipRealty price tracker:Price Reduced: 08/05/07 -- $495,000 to $435,000
From listing: Shortsale subject to bank approval. Spacious floorplan, full driveway, large rear patio. $20,000 price reduction for fast sale. Please verify building sq feet. The building sqfeet on the listing is according assesor.