$700k and 4 blocks from Monrovia

1535 Loganrita Ave.
Arcadia, CA 91006

Price: $700,000 ($393/sf)

  • Beds: 3
  • Baths: 2
  • Sq. Ft.: 1,779
  • Lot Size: 0.31 Acres

This is a new listing so no pictures have been posted yet. Fortunately, we won’t need photos to see how this story will unfold. The property is East of 10th Ave. and borderline Monrovia. In fact, it is about 5 big blocks away from the gang shootings earlier this year.

Although I love some parts of Monrovia, Old Town for instance, but the locals on this blog will know how rough some areas can get.

Fortunately for this seller, they purchased the property back in 2004 for $500,000. Applying the standard appreciation table will justify the price:

1995 price: $248,000
2004 price: $500,000

After 9 years of ownership…

5%    $384,729    ($216/sf)
6%    $418,991    ($236/sf)
7%    $455,938    ($256/sf)
8%    $495,753    ($279/sf)

4 years later and the seller wants $700,000 for the same home. There is no mention of upgrades, remodeling or even proper landscaping. Maybe the fruit trees are worth a bundle?

From the description:

What the Owner Loves: The yard is incredible – 3 avocado trees, 3 orange trees, lemon, lime, grapefruit and apple trees. A great house for people with children and/or pets. A separate concrete patio with a grapevine trellis. Corner lot, plenty of space.

Since appreciate is dead for a few years and real estate is, believe or not, depreciating, I’d peg this home at $300/sf – Giving us a value of $533,700.

One last thing. This is a FSBO listing so the seller probably knows $700,000 is just a wishing price. They will most likely find a knife catcher around $650k.

Short Sale on Oxford – 100% financing to failure

315 N. Oxford Dr.
Arcadia, CA 91007

Price: $980,000 ($463/sf)

  • Beds: 2
  • Baths: 2
  • Sq. Ft.: 2,117
  • Lot Size: 14,680sf

Today’s property is a short-sale listing for $120,000 more than its 2006 purchase of $860,000. I’m certain that the buyer went through the following thought process:

  1. Purchase this fixer-upper with 100% financing.
  2. Borrow more money for extensive remodeling and upgrades.
  3. Re-sale the home for $1,300,000+
  4. Profit!!

But in the absence of double digit housing appreciation, this deal has horribly gone sour and now the owner is stuck with a $1,000,000 fixer-upper. What a shame too because this section of Peacock Village is very nice and beautiful.

Listing description:

2 BED 1 BATH 1 STORY HOME WITH LARGE FIREPLACE IN FAMILY ROOM. NEWLY PAINTED THROUGHOUT. SHOWS WELL BUT NEEDS SOME TLC. SHORT SALE SUBJECT TO LENDER APPROVAL. ALL OFFERS SHOULD BE ACCOMPANIED WITH PROOF OF FUNDS LETTER, PRE APPROVAL AND FICO SCORES.

Last month I profiled a nearby home: Uninformed on Oxford. In that post I valued the property at $347/sf. Since this is a fixer-upper, let’s take a look at the valuation range:

$310sf -$656,270
$320sf -$677,440
$350sf -$740,950

Currently listing for $980,000 ($463/sf)

Take a look at the above photo… Would you spend nearly $1,000,000 for this home?

It’s Official: AHB is Worthless

On August 8th, 2008, we received the following comment from “bwrealestate@yahoo.com”. I can only guess that he/she is a Realtor:

You all are idiots, I have a buyer for this property…and no way to contact you.

Great idea, complain, complain…but offer and do nothing effective.

Thanks

Your worthless.

The comment was left on my 300 N. Altura Road post and although I’m used to constant criticisms on AHB, it still makes me wonder why people get so fired up over these blog posts. It’s not like this housing bubble was a made up story. Every single sane economist, financial guru, Wall Street analyst and media outlet will tell you that home prices across the nation are overpriced and we’re looking at steep price reductions in the current and near future.

Even data from the National Association of Realtors reflect the deteriorating housing situation we’re in.

I don’t visit other blogs and bash the author. In fact, I’m a big supporter of local bloggers and Realtors who actually know what their talking about.

But you know what? It’s ok. Whatevers. Maybe they’re just pissed off that they have 25% of the income they did in 2006 and can no longer afford to lease that 5-series bimmer and their house is underwater with an ARM that’s about to blow up next year.

And the prices come tumbling…

For a while now I have estimated that Arcadia home prices will drop down to $250/sf for low-end condos, $300-350/sf for average single family homes and $400/sf in the most desirable neighborhoods. Of course, there are factors such at views, large lots, gated communities and property age that will command a premium beyond $400/sf.

Let’s take a look at 2 properties today that have recently sold. They are great examples of where prices are heading:

725 Tiffany Terrace
Arcadia, CA 91006

Sold For: $930,000 ($334/sf)

  • Beds: 4
  • Baths: 3
  • Sqft: 2,777
  • Year Built: 1985

We profiled this property back in February when AHB was just getting started. At the time, its DOM (days on market) was 101 and listed as a shortsale.

Sales History
Oct 18, 1996 $470,000
June 5, 2007 $1,038,000
June 6, 2008 $930,000

Listing History
Oct 28, 2007 $1,138,000
Nov 14, 2007 $1,080,000
Dec 18, 2997 $998,000

At $930,000, this home sold for $208,000 lower than the initial listing price of $1,138,000. There is even a possibility that the property never sold and was just taken back by the bank. What do you think?

The seller had put a  $109,500 down payment on this home and lost the entire thing. How many people can stomach that kind of loss?

So $334/sf to live borderline Monrovia is still pretty high but this property’s history will drag down its neighborhood like a dead weight.

737 Sharon Rd.
Arcadia, CA 91007

Sold For: $1,160,000 ($291/sf)

  • Beds: 4
  • Baths: 4
  • Sqft: 3,990
  • Built in 1991

This is a large home located in an Ok area; right off Baldwin Ave. and 3 blocks South of the Pavilions and 99 Ranch plazas. One of the great phenomenons during the housing bubble was large homes selling for more dollars per square feet than comparable smaller properties. In a normal market, more square footage should yield a lower dollars/sf asking price.

We have seen many large properties asking (and selling!) for over $400/sf. Today, at $291/sf, this home will no doubt run chills down someone’s spine.

Sales History

Feb 10, 1993 $600,000 ($150/sf)
May 28, 1996 $542,500 ($135/sf)
Jan 14, 2000 $570,000 ($143/sf)
Jul 08, 2008 $1,160,00 ($291/sf)

I won’t kid you though. Plenty of single family homes in Arcadia have sold for over $400/sf in the last 3 months. It will take 2-3 years for prices to fall within fundemental values and it will be interesting to see how low the outlying areas near Monrovia and El Monte will fall.

$383k REO Condo on Duarte

*** EPIC FAILURE – I profiled the following property and praised it for being priced correctly. Unfortunately, some other listings have convinced me that this is a 55+ senior condo complex. If that is really the case, then $383,900 is probably near the highest this property would go for. ***

1126 W Duarte Rd #5
Arcadia, CA 91007

Price: $383,900 ($295/sf)

  • Beds: 2
  • Baths: 2
  • Sq. Ft.: 1,300
  • Property Type Attached, Condominium

After all the heat we give Realtors and homeowners about listing their home for “show” rather than to sell, I’m happy to say that not all hope is lost. Today’s REO is listed at $159,100 below its 2006 sales price of $543,000 (this figure has not been confirmed). That’s a 29% price reduction.

With a 20% downpayment, your mortgage will be approximately $1,941 per month. Propety taxes and HOA fees will bring your total to $2,412; about $200-400 more than what it cost to rent. Factor in some tax savings and it becomes a reasonable Buy VS Rent decision.

At this price point, I can see many buyers/investors showing up to bid on the condo. Built in 2006, well maintained, decent square footage and lower HOA fees than the Huntington Dr. condos. The only problem I see is that this section of Duarte tends to be busy… but for $383k, not too many people with complain.

$150k Overpriced Condo

587 Fairview Ave.
Arcadia, CA 91007

Price: $400,000 ($350/sf)

  • Beds: 2
  • Baths: 2
  • Sq. Ft.: 1,144
  • Lot Size: Attached, Condominium

This is part of the whole community of condos and apartments on the South-side of Huntington Dr. and Baldwin Ave. It’s not exactly a flattering property and $400,000 is definitely a wishing price. Add in the $260/month HOA fees and this is a BAD deal.

Valuation #1 – Appreciation

Last Sales Price: Dec 13, 2001 $179,000 ($156/sf)

After 7 years of appreciation:

3%    $220,147    $192/sf
4%    $235,552    $206/sf
5%    $251,871    $220/sf
6%    $269,150    $235/sf
7%    $287,435    $251/sf

Valuation #2 – Rental evaluation

Average cost to rent a 2/2 apartment in Arcadia: $1,500/month

Gross Rent Multiplier

150 x 1,500 = $225,000 ($196/sf)
180 x 1,500 = $270,000 ($236/sf)
200 x 1,500 = $$300,000 ($262/sf)

Based on these two valuations, this 2/2 outdated condo is worth $250,000 to $270,000. If you factor in the $260 HOA fees, it’s worth even less.