| Asking Price | $770,000 | ::: | Sq-ft | 1,735 |
| Purchased Price | $800,000 | ::: | Lot Size | 0.33 acres |
| Purchased Date | 08/23/2006 | ::: | Beds | 3 |
| Days on Redfin | 58 | ::: | Baths | 1.75 |
| $/Sq-ft | $444 | ::: | Year Built | 1947 |
| 20% Downpayment | $154,000 | ::: | Area | Santa Anita/fwy |
| Income Required | $192,500/yr | ::: | Type | SFR |
| Est. Payment* | $3,893/month | ::: | MLS# | A08027588 |
*Estimated monthly payment assume 20% down, 30-yr fixed @ 6.50%
Because of the previous community profiles, I’ve been profiling homes in the northern part of Arcadia for the past few weeks. During the weekend I had made up my mind to start moving south a bit to capture other parts of the city, but I couldn’t pass up on this pre-foreclosure short sale I came across today.
This property is on a busy street bordering the Highland Oaks community and is just a few blocks away from the house up for auction TheArcadian posted the other day. Distressed properties are often the first to go under and this is no exception. Public records show a first loan of $640k and a secondary mortgage for the remaining $160k giving us another 100% financing deal gone wrong. At some point you start to wonder how many of these bad loans the lenders can absorb before they get thrown under the bus.
Sales History
05/17/1988 – $275,000
07/17/1998 – $295,000
06/09/2003 – $312,500
04/14/2006 – $770,000
08/23/2006 – $800,000 ($30K HELOC?)
12/23/2007 – $25,000
It’s great when I can find a listing that has a full sales history going back 20+ years because it shows how a particular home fared in the past. To me, the first two numbers speak volumes. Over the course of 10 years this house appreciated a whopping 0.7%/yr. That is actually a loss when you account for the 3-4% annual inflation. That period started near the top of the previous cycle (late 80s) and ended around the bottom of the downturn (late 90s). This property actually recovered fairly well by 1998 to allow the owner to somewhat breakeven (minus property tax and maintenance of course).
The current asking price of $770,000 is a stated short sale to be approved by the lender. The owners are desperately trying to let go of the property before it goes into foreclosure. Given the previous sale price, the lenders might actually let this one slide – assuming they can find a knife-catcher. Since the market in 1998 was pre-bubble mania and prices were stable, let’s use that as a baseline. If I apply the following annual appreciation rates, the property would be valued as listed below.
3%/yr $394,455
4%/yr $436,672
5%/yr $480,524
Personally I don’t like the location of a property on such a busy street and wouldn’t pay $770,000 for it. Given the large lot size, this listing isn’t as outrageous as some others we have profiled, but it’s still overpriced. Would you pay $770,000 to bail out this distressed homedebtor?
Hell no. 60 years old structure? Knife catcher should at least wait until it is $500k.
Near the next bottom, this one probably will be valued at $2500 monthly rent and 170 GRM – $425k in 2010.
Look at the previous sales price of $312,500. Anyone doing their research would not have purchased this property at over double its value just 3 years prior.
This is another example that Arcadia is very far from bottoming out.
In other “bubble proof” communities such as Glendale, foreclosures are typically listed for 60 to 70% of the last selling price (if sold in 2005-2007). That is once they are bank owned and back on the market, listed by the bank.
A “short sale” asking price of $770,000 is not going to go anywhere. Short sales are taking way too long for a retail buyer. By the time the lender will give you an answer your approved loan terms and rate may not be available anymore.
Unfortunately for the current owner in foreclosure, waiting for the proeprty to come back on the market as a bank owned listing is a much better bet for a potential buyer at this point.
I have read that lenders are just toying with distressed homeowners and letting the short-sale process drag out. This way, they get to collect a couple extra months of mortgage payments.
I think this is the house that I spoke to the realtor about. Supposedly they were seeking “back up offers”. That conversation was almost 2 months ago. So are the requests for backup offers supposed to bring out the buyer frenzy in all of us? I guess that strategy isn’t working.
I don’t think that makes any sense. Lenders are NOT collecting any monthly mortgage payments on short sale proeprties, because they are in default and the borrowers have long stopped making payments.
It would be in lenders’ best interest to cut their losses early, but I think they are bona fide overwhelmed by volume. Plus, they’re not working with future projections in the pre-REO stage of foreclosure, only with existing sold comps, and (to some extend) with comparable active listings.
Unfortunately, MLS Short Sale listings are at a big disadvantage right now. Read more about “Why Short Sales Don’t Work With Realtors“.
Don’t homeowners resort to a short sale in order to keep their credit intact? Otherwise, they would just go into foreclosure and not even think twice about making payments during the interim period.
Sellers may be upside down on their mortgage and have no other choice but to request approval for a short-sale. In which case, wouldn’t the seller continue their monthly payments just to get out of this deal without additional derogatory items on their credit?
I was curious about this house and I drove by on the way home to take a look at it. My previous post said it’ll probably go mid to high $600’s. Probably a bit optimistic. I never realized that Foothill Blvd was so noisy, plus you have the 210 not too far away. The constant noise of traffic would drive most people nuts. The house will be a hard sell because of the busy street and fwy.
The place I currently live in is located about the same distance from a freeway. There is no doubt that freeway noise is always in the background (except during gridlock hours).
I can only imagine would the evenings would be like butted up against Foothill and 2 blocks away from the 210.