Arcadia Housing Blog

Today’s seller is facing the cold hard reality of our housing crisis and has been forced to reduce his listing price by 26.6%. We originally profiled this property back in March and many of you guys agreed that it was ridiculously overpriced:

Can’t See the Forest for the Trees
Original listing price: $1,350,000 ($614/sf)

38 E. Forest Ave.
Arcadia, CA 91006

New listing price: $990,000 ($450/sf, -26.6%)

• Beds: 4
• Baths: 2.75
• Sq. Ft.: 2,200
• Lot size: 7,570 Sq. Ft.

That’s a $360,000 price reduction! I’m not entirely surprised though because this “$1.35MM” home was situated right next to the 210 freeway, Santa Anita Ave. off-ramp.

For a home located south of Foothill Blvd. and next to the freeway, the price will have to come down a lot more because who in their right mind would spend nearly $1MM for this? If you value it at $300 per square foot, then this cookie cutter home would be worth only $660,000; $350/sf would give us $770,000.

Would you buy this property for $770,000? It might be worth a try because according to the listing,

SELLER’S IS VERY MOTIVATED. BRING ALL OFFERS.

For those who commute into Downtown, Pasadena represents a likely alternative to Arcadia. As apparent by the following profiles, you will get more house for the money but a highly rated school district isn’t something you’ll be buying into.

Pasadena School Rankings vs Arcadia School Rankings

For ~$750,000, you can choose from these 3 homes in Arcadia:

812 Victoria Dr
Arcadia, CA 91007

Price: $748,000 ($596/sf)

• Beds: 3
• Baths: 1
• Sq. Ft.: 1,256
• Lot: 7,675 Sq. Ft.

443 Las Tunas Dr
Arcadia, CA 91007

Price: $750,000 ($735/sf)

• Beds: 2
• Baths: 1
• Sq. Ft.: 1,020
• Lot:     0.26 Acres

209 S Third Ave #A
Arcadia, CA 91006

Price: $759,000 ($324/sf)

• Beds: 3
• Baths: 3
• Sq. Ft.: 2,340
• LOT SIZE:      Attached, Townhouse

You can definitely expect to get more living square footage and land in Pasadena. Unfortunately, there exists many neighborhoods that you will want to stay out of (for safety reasons):

745 E Rio Grande St
Pasadena, CA 91104

Price: $749,000 ($483/sf)

• Beds: 3
• Baths: 2.75
• Sq. Ft.: 1,550
• Lot:     8,208 Sq. Ft.

PROPERTY TYPE:    Single Family Detached, California Bungalow

1700 Whitefield Rd
Pasadena, CA 91104

Price: $750,000 ($250/sf)

• Beds: 6
• Baths: 2
• Sq. Ft.: 3,004
• Lot:     8,550 Sq. Ft.

PROPERTY TYPE:    Single Family Detached, California Bungalow

736 Bonita Dr
South Pasadena, CA 91030

Price: $759,000 ($482/sf)

• Beds: 2
• Baths: 1.5
• Sq. Ft.: 1,576
• Lot:     5,135 Sq. Ft.

PROPERTY TYPE:    Single Family Detached, Mediterranean

Ever since the credit crunch reared its ugly head last year, everyone from realtors to specuvestors to homeowners strapped to their overpriced properties all wished for a quick recovery. Fall and winter came and went with nothing but disheartening news of subprime woes. Spring was suppose to be the turning point, but we’ve heard nothing but increasing reports of foreclosures and delinquencies. After this weekend’s heat wave, I’d say summer is here and all I see are the billions and billions of dollars in upcoming rate resets over the next few years. So to those who say the spring summer will be different, I ask: Where the hell is this summer RE rush I keep hearing about?

We’ve all heard this wishful “prediction” from bankers, brokers, realtors and other hopefuls. Don’t worry, we’re going through a bit of a slump, but once spring rolls around buyers will be geared up for the summer selling season and we’ll “turn around” later this year. Um okay, that’s what you said last year and that’s what you said 6 months ago. Am I going to hear the same thing in another 6 months?

As I was out and about this weekend enjoying my time off, I passed by many for-sale signs and open houses. Some had a car or two parked outside, but most seemed empty. Perhaps the hot weather kept buyers out of the sun, but things aren’t looking too good for these sellers. Time is not on their side and everyday their house sits on the market means money out of their pockets. Whether you believe in the numbers or not, the trend is clear. Sales volume is way down from previous years and prices in all local SGV cities are sliding downward as they buckle under the crushing weight of the struggling economy.

We’ve seen the effects of the tightening lending standards and now we’re all experiencing some rather concerning economic hardship. Gas prices are through the roof with no slowing in sight, gold is off the charts and employment is weak at best. Leisure spending has all but slowed to a crawl and the falling dollar has inflation knocking at our doors. Couple this with low consumer confidence, a huge number of rate resets and the inevitable interest rate increases later this year and the US housing market is toast.

T-O-A-S-T.

So as sellers start to sweat in this heated pressure oven otherwise known as the Summer (RE) Rush, I’ll be that happy renter who’s not worried about losing equity or how long my house has been on the market. There’s no pressure to buy because I’m saving a bunch of cash every month and prices/volume have nowhere to go but down. Don’t believe me? You don’t have to. I put my money where my mouth is and so should you. If prices are going to “rebound” and everything is so fine and dandy, you should hang onto that property you bought a few years ago because it’s such a great investment. *note heavy sarcasm*

Zip Codes: 91006, 91007

Current Market Listings as of June 21st 2008*
Properties for Sale: 224 (+6)
Median Listing Price: $758,900 (0.00%)

Weekly Foreclosure Update*
Properties in Foreclosure: 34(+2)
Properties in Pre-Foreclosure: 68 (+5)
*+/- is compared to previous week’s data.

Despite all the housing doom and gloom news, 33,024 homes were sold in California last month. According to DataQuick, it still “made for the slowest May since 1995 …”

Foreclosures throughout the state plowed through any hopes that Southern California had hit rock bottom.

The median price paid for a home last month was $339,000, down 4.2 percent from $354,000 for the month before, and down 30.0 percent from $484,000 for May a year ago when the median was at its peak. -dqnews

So how did Arcadia and its neighbors do? Were these cities able to buck the trend? The figures below are year-over-year change in median prices (i.e. May 2007 to May 2008).

ARCADIA

• Homes sold: 43
• Price change YOY: $746,500 to $588,000 (-21.23%)

SOUTH PASADENA

• Homes sold: 9
• Price change YOY: $860,000 to $700,000 (-18.6%)

PASADENA

• Holes sold: 107
• Price change YOY: $630,000 to $550,000 (-12.7%)

TEMPLE CITY

• Homes sold: 28
• Price change YOY: $598,000 to $551,000 (-7.86%)

MONROVIA

• Homes sold: 18
• Price change YOY: $575,000 to $490,000 (-14.78%)

SIERRA MADRE

• Homes sold: 9
• Price change YOY: $880,500 to $749,000 (-14.93%)

I predicted that this Summer would continue to break records in terms of declining values and it looks like May got the party started. Screaming headlines like this from the LA Times will no doubt add fuel to the already raging fire…

Median home price in California drops 30% in May

Not everyone is in distress though. Those who have been patient and held off on buying will have plenty of affordable homes to pick from when this crisis plays itself out. It looks like the media is also starting to realize this:

Renters sitting prettier amid house-market upheaval

Temple City is a small community-city bordering Arcadia and even crosses it in some areas. As seen on the map below, it is a little less than half the size of Arcadia,  For all you TC Rams, I’ve highlighted your city in green.

Today let’s look at what $630,000 will buy you in each city.

36 Alta St #b
Arcadia, CA 91006

Listing Price: $628,000 ($458/sf)

• Beds: 3
• Baths: 2.5
• Sq. Ft.: 1,372

This is your typical Arcadia stucco’d box townhouse. You basically have no backyard, no driveway and probably share a wall with the unit next door. For $628k, one can argue that it’s a great price for a newly built property (2007). Unfortunately, the market says otherwise because this particular unit has been sitting on the market for 161 days.

These are popular because many buyers would prefer to not spend the time and money maintaining a yard. Unfortunately, this property comes attached with a monthly $147 HOA fee. So I guess you still end up paying for the maintenace.

5760 Camellia Ave
Temple City, CA 91780

Listing Price: $629,000 ($486/sf)

• Beds: 3
• Baths: 2.5
• Sq. Ft.: 1,295

For this atypical Temple City home, you lose a room and restroom but gain 6,000sf in land. It is a 1931 custom built brick home and located near the corner of Temple City Blvd. and Las Tunas Dr. It is blocks from the Arcadia/Temple City border but that distance is the difference between a single family home and new townhouse.

Obviously, I’m not claiming these are comparable properties. But given $630,000, would you go for an older single family home or the newer attached product? Aside from the different school districts, Temple City and Arcadia basically share all the same amenities in the immediate area.

Holy cow! I can’t keep up with all the new $2,000,000+ listing that keep popping up every other day. This will be an interesting Summer as all the folks who can’t afford their McMansions anymore try to pawn it off to a lucky clueless buyer. Heck, some of them will even try to make a buck or two during the process….

2428 S 2nd Ave
Arcadia, CA 91006

Asking price? A whopping $3,188,000 (478/sf)!

You are in fact getting a lot of home for the money:

• Beds: 6
• Baths: 6.5
• Sq. Ft.: 6,671

It is possible to squeeze 3 families into a home this size. Unfortunately, similar to other million dollar plus homes I’ve profiled, privacy is not something $3MM+ will buy you. This house is sitting on a tiny 1/3 acre:

In fact, if you carefully look, only a 5′+ wall separates you from the neighbor’s backyard (also another McMansion).

At $3,188,000, this seller want to make a cool $500,000 on his investment.

SALES HISTORY

Date Price Appreciation
May ‘91 $340,000
Oct ‘96 $80,000 -23.6%/yr
Nov ‘04 $713,000 31.2%/yr
Nov ‘06 $2,688,000 92.5%/yr

This is ridiculous. Even in extraordinarily pricey areas, $3.2MM can buy you more than a over-sized home. Take Newport Coast for instance. You’re money won’t go too far in this community, but dollar for dollar you at least get a view of the Pacific Ocean.

6 Dolomiti
Newport Coast, CA 92657