In addition to tracking home listings in Arcadia, I also try to stay updated in the rental market. My usual sources are the following:
- Rentals.com
- Apartments.com
- Craigslist
- Newspaper Classifieds
This weekend I came across a new site: oodle.com. Their property rental section somehow pulls listings from several other sites and aggregates them into a searchable database. I decided to give it a test-run to see what the largest and most expensive rental in Arcadia currently is.
Magnificant Brand New $2.5 Million Dollar Home
$3,500
5 Bed
4.5 Bth
5,000 Sq. Feet
Property Description
~Save money by living in this beautiful home while it’s for sale.
Stunning brand new Tuscan influenced home with many extras.
Would you bother renting a house if the owner told you it was listed on the market and at anytime you’d have to move out after a 30 days notice?
If this home really is listed for $2,500,000, then it is definitely cheaper to rent it for $3,500. Your typical mortgage on this fella would be $12,640,! I would really like to know the history behind this property. Was a it new construction that won’t sell or a failed flip? Unfortunately, we weren’t able to find the listing on Redfin. Perhaps you guys will have better luck at hunting down the address?
Pending home sales in the U.S. were up in April by more than 6%.
http://money.cnn.com/2008/06/09/news/economy/pending_home_sales/?postversion=2008060911
Ofcourse this “good news” came from the NAR, the people that wants to see a fast recovery of the housing market. Just wondering what you make of this piece of housing news, and how it may affect prices here in SoCal.
You can find this ” Tuscan influenced ” POS because it’s probably not even in Arcadia but in another zip code. Yet another realtor game?
BTW, what he heck is ” Tuscan influenced “? I’ve been all over Italy and never saw any homes looking like this!!!! Yet another snow job by builders?
Lastly that home is uglier than tract homes in Sun City!
I’ll have to agree with you regarding the “Tuscan” influenced homes. If you look at Orange County, many people are sold to on the new Tuscan Villa inspired architecture. Tan boxes sitting on 7,000sf lots don’t really inspire me.
T K Eng,
My guess is that the NAR is trying to find a silver lining to the current housing crisis. Take a look at the headline:
“Pending home sales up 6.3%; prices seen falling”
This CNN article is trying to play it neutral by giving the Pending Home Sales Index some merit. Unfortunately, they only briefly cover the fact that YOY is down 13.1% and down 29% from 3 years ago (2005).
Although many investors are still optimistic and believe that we’re nearing the bottom of housing decline, they forget that the average frugal 9-5 worker still can’t afford a median-priced home. As another reader pointed out, 10-30% downpayment is now being required by lenders. Yes, I’ve seen some 30% programs!
With the way our economy is heading, how many people are willing and able to shell out $100k+ in cash to buy a home? Even the relatively strong sub-market of San Francisco is reporting flat numbers this quarter.
I believe SoCal will return to 2002/2003 prices and remain flat for a few years. What then? Another bubble will form of course!
For those who are still touting that the market has bottomed and/or prices in the desirable SGV cities like Arcadia will not fall much from here, take a look at the numbers. Rental rates are a great way to gauge the market because you’re comparing the same/similar products at different prices.
The asking price is $2.5MM which means that a 20% downpayment is $500k (crikeys). At 6.5% 30-fixed interest the monthly payments are estimated to be $12,640 and would require an annual gross income of $640k to comfortably afford this mortgage. By the time you factor in property tax (over $2k/month), insurance and maintenance costs, the monthly baggage to own this “Tuscan-influence” piece of garbage is around $18k. Even after tax breaks it’ll be well over $15k/month.
$15k/month mortgage payment vs. $3500/month rent. That puts the GRM at a whopping 714!!! Why would anyone pay $11,500 more EACH MONTH to own this home when you can rent it for a fraction of the price? Unbelievable!
My question is, why bother with 3500 in rent when a bad renter could trash the place and stay in it without paying rent for several months? If really worth 2.5M (unlikely) or something close, why take the risk for so little gain?
I actually called to find out more about this house. The company, http://www.showhomes.com, offers a service for “home managers,” where renters actually have to pay to furnish the house, and act as a staging manager to help sell the house. Thus, the cheap rent does not include the cost of furnishing the home and keeping it in pristine condition. Still, services like these tells you luxury homes ain’t selling like they were a few years back.
Not worth the risk for rent that won’t even cover your mortgage.
Wow, I didn’t know stuff like this existed. It is very interesting indeed and sounds like a lot of extra “fluff” to get homes sold.
I still believe the most efficient strategy is to price your home correctly.
This is very much a real ad –
Showhomes has been helping home owners and their Realtors sell upscale vacant homes such as these for almost 3 decades. Check out our website – http://www.showhomes.com or blog, http://www.activerain.com/blogs/thomscott to learn more about what we do.
With 29 offices in 19 states, many home owners have found that using Showhomes to recruit a Home Manager (a person who moves into a vacant home for sale with great furniture) is a very cost-effective way to get a whole house staged so that it looks and shows like a model. Since the staging fees are pay at close, it is increasingly popular. In fact, Showhomes has helped sell over 25,000 homes valued at well over $8 billion using this very effective technique.
Using a Home Manager to stage a home for sale such as this is a marketing strategy to make the house sell far faster and for a higher price. These days, especially in this area, homes staged by Showhomes are some of the only ones selling.