Zip Codes: 91006, 91007
Current Market Listings as of May 24th, 2008*
Properties for Sale: 230 (+10)
Median Listing Price: $768,880 (0%)
Weekly Foreclosure Update*
Properties in Foreclosure: 25 (0%)
Properties in Pre-Foreclosure: 66 (-3)
*+/- is compared to previous week’s data.
REOs Crashing the Party
Yesterday I wrote about how we will start seeing more homes going for under $300 per square foot after this housing crisis plays itself out. Foreclosures will lead the way in dragging down home prices and we have a prime example right here:
250 E Floral Ave
Arcadia, CA 91006
This is an REO currently listing for $459,900 ($282 per sf.).
- 1,628sf
- 2 bedrooms
- 1.75 bath
- 5,989sf lot
It was bought in 2005 for a whopping $630,000 ($387 per sf.). Aside from speculation, I can’t see anybody purchasing this home for a penny over $400,000. If we go with the standard appreciation calculation, then even $400k is asking too much:
2001 purchase price: $258,000
Apply 7 years of appreciation:
3% – $317,307 ($195 per sf.)
4% – $339,510 ($208 per sf.)
5% – $363,031 ($223 per sf.)
It is no wonder this home went into foreclosure! The lender is taking a minimum $171,000 loss on this property and they only have themselves to blame. Although some knife catcher may come in and purchase the REO for over $459k, the listing price alone is enough to further drag down the neighborhood’s value.
Despite what some people may say, I don’t see wealthy Asian immigrants snapping up homes fast enough in this area to maintain our current bubble prices.
Property and foreclosure numbers obtained from U.S. Census, ZipRealty, Trulia, Yahoo Real Estate and Foreclosure.com. Market listings and price data obtained from DataQuick News.
today is open house sunday! you should do a list of homes for visitors to check out in arcadia. hint hint. 🙂
Are agents holding open houses on Memorial Day weekend?
Yes. I saw many open house signs on my way back from lunch. Did anyone go to any today? If so, let us know how it went.
This Floral house listing is a joke. I suspect the previous owners trashed the place. How can they sell wihout water heater bracing? No smoke detector? Isn’t that the law?
Whatever….it sounds like a lot has been taken out or maybe damaged and removed by the bank to prep for sale.
Figure the new owner will have to put in tens of thousands to make it acceptable for decent living.
We need more like this to bring down the comps.
Hi Arcadian, Thanks for this blog. I may have been one of those “others” on this blog who mentioned the overseas money angle. I didn’t mean to say that prices wouldn’t come down, but I expect prices to be stickier than other areas, particularly those areas where schools are less highly rated.
In addition to “rich” immigrants are the average immigrants who have saved over the years and don’t mind living three generations to a household to afford the property, many of which are bought all cash or with small mortgages remaining. Don’t underestimate the effect of families doing whatever is needed financially to get their children into good schools.
Also, what is it with the nasty tone of the listing information? It’s as if it was written in anger. Certainly doesn’t sound professional.
RE: Despite what some people may say, I don’t see wealthy Asian immigrants snapping up homes fast enough in this area to maintain our current bubble prices.
From what I have seen Asian communities have some of the shrewdest buyers with a unique sense of value. They love to drive a Lexus or Benz, most carry a LV/Gucci/designer bag, yet they prefer to eat at the $5 carry out or relatively cheap Dim Sum.
They also live 2-3 generations in one home. Even though these homes are zoned SINGLE FAMILY, they bring in ALL of the extended family.
I have also seen many families rent out complete homes room by room! They rent out each room to a different person/family. The going rate is about $500-700 for a room. I know of places that have people living in the garage and large utility closets. (I am NOT kidding.) The landlords are awful, they often don’t run the A/C and they don’t allow washer/dryer. (Rowland Heights has more of this then Arcadia, but it’s here if you look for it, it’s better if you can read the Chinese newspaper.)
In looking for homes, I have seen some disgusting messes to say the least. Many with kitchens wrapped in tin-foil and grease everywhere. (I don’t know why, but I have seen that in 3-4 homes.)
I think Arcadia is a great area, but if you get a rotten neighbor you are really going to suffer. Since I currently rent I swore NEVER to buy a condo because of this! Last condo (very new complex 600K+ unit) had a neighbor who seemed to cook 24/7 and the whole unit smelled like I was living inside Popeye’s Chicken. Awful! If I had owned that unit I don’t know how I could have ever sold it.
Arcadia Lost,
I think we both agree that prices will come down. I just believe that the decline will be bigger than what most people will expect. But as you said, Arcadia will no doubt carry a stickier premium over its neighbors (i.e. monrovia, tc, san gabriel, ect).
Also, I’m one of those who grew up in a 4 generation household. Despite the crowding, our family did whatever was necessary to stay in a better neighborhood.
It sounds like whoever typed up that listing believes it to be PRIVILEGE for you to bid on this trashed property.
Wealthy asians won’t across Huntington Dr. for housing. They don’t speak proper (or none) English and they feel warm staying with each other. Sorry, no offense though, I’m an Asian too. I just don’t understand why people come to US but wanna stay out with other cummunitis but theirs. Why bother coming here if you don’t try to fit in?
I received an upadte from my realtor about this house:
“Just want to give you an update of 250 Floral. They got more than 100 offers and more than 30 were over $600K. They did not counter any offer. They pick one with over $600K and with no contingency offer to open escrow.”
Unbelievable!!
Thanks for the update! I’m always interested as to what kind of offers some listings are getting. It is interesting to see so many people wanting this property for $600k. That’s over double what the sales price just 7 years ago.
$600k+ for a 61 year old small home, small lot and bordering Monrovia (just go East 2 blocks). I suppose they can build an oversized McMansion on it and flip it for $1MM!
I CALL BS! I am willing to bet your realtor is not trustworthy. I highly doubt they got 100 offers with 30 over 600K for that place. In this market realtors are asking for ANY offer on a home.
In a month we should see what the house sold for. Maybe some chump bought it for over 600K, or he is getting cash out and lowered points etc.
100 offers LOL – seriously ask any realtor (even at the peek of the market in 2005 if there were getting 100 offers with 30 of them 150K over asking.)
I saw a lot of people go to see this house. Of course, mot of them are Chinese.
This house does look good right now because the previous flipper has renovated the house and added a room without permit. One realtor told me that the flipper put the house on the market in 2007 for $880K. No bite. Then to $660K. No bite either. Then the flipper run of money and gave the house to the bank.