This is brand new construction that was completed in 2007 by an investor who was obviously looking to make some money. It’s a typical McMansion home complete with the ugly 1990s peachy, pink exterior wall color. The interior is actually quite nice with the open layout, big windows and tray ceilings. Unfortunately for this seller, those features won’t be enough to bring in the $2.78MM asking price. I saw this property on Redfin about 4 weeks ago, but it’s posted as a new listing so the realtor took the listing off and re-listed it to reset the days-on-market counter. It’s probably been sitting on the market for quite some time.
|Purchased Price||$1,100,000||:::||Lot Size||0.49 acres|
|Days on Redfin||1||:::||Baths||7|
|20% Downpayment||$556,000||:::||Area||Santa Anita|
|Annual Income Required||$695,000||:::||Type||SFR|
*Estimated monthly payment assume 20% down, 30-yr fixed @ 6.50%
I think this seller drank so much kool-aid during the boom that both he and his realtor are now completely separated from reality. This is suburbia town Arcadia – not Newport Beach, Brentwood or Beverly Hills. My guess is someone making $695k annual income who can afford over $14,000/month mortgage payments won’t chose to live in Arcadia. I for one would prefer a home in Newport so I can wake up to the Pacific Ocean. Even if a buyer preferred a suburbia community in the San Gabriel Valley, they would certainly choose San Marino over Arcadia.
Anyways, I didn’t post this listing only because its overpriced. The main thing I wanted to share with you is this property’s previous sale history. According to Redfin, this particular seller bought in 2005 for $1.1MM, but what’s more interesting are the five transactions before that.
As you can see, the previous house that stood on this property sold for $842,727 in 1992 during the initial decline of the previous bubble (which peaked around 1990). Over the next 9 years, it’s price reductions take off in a logarithmic fashion starting with -1.5%/yr between 1992 and 1993. Over the next 6 years, it would lose a 5.2% each year before coming to a sale in 1999 at $602k. From there, the market continues to plummet a whopping -21.3%/yr over the next 2.5 years to rock bottom in 2001. That makes a total decline of $517,727 or 61% off from peak to bottom.
But I thought real estate is always goes up and everyone wants to live in sunny southern California so prices would never drop here. What happened? Market correction happened. This is a wake up call for the sheeple to stop drinking the kool aid and face the facts. Arcadia home prices will fall and contrary to what the realtors say, it is not immune to the current market conditions. It wasn’t last time and it won’t be this time either.
5 thoughts on “The Real Deal”
Great blog – love to read about my old hometown (I left Arcadia in 1983). When I lived there, Orange Grove was the “it” street. This home seller is clearly delusional given the asking price. You are absolutely right about picking up an ocean view home in the OC for that kind of cash – not oceanfront, but closer than the SG Valley!
Orange Grove Blvd is part of the Santa Anita Oaks area up in the foothills. It’s a beautiful location and still ranks as one of the premier locations in my book.
Have you been back to Arcadia since 1983? A lot has changed since then.
I have been back, for about an hour 🙂
In ’83, there were still plenty of “ranch” houses, one story places, on nearly acre lots. I know most of those are probably gone by now – and in their spots sit gaudy McMansions (has also happened here at the beach). BTW, I found your blog via Irvine Housing Blog.
Let’s see, I had lots of friends on Hacienda, Orange Grove and Singingwood. Huuuuge lots. Arcadia was/is a beautiful place, especially this time of year. Our house was up near Wilderness Park, also a beautiful area. We had deer roaming in our yard, bunnies, coyotes, hawks soaring overhead. You don’t see much of that down here where I live! It seems that although speculation hit the SG Valley, like it has everywhere, it hasn’t hit the heights of the spec down here in OC. Perhaps your market won’t slide as much as ours has started to slide. We have recently cashed out and made a killing, and now we sit on the sidelines and wait. Could be the stupidest move of our lives, or we could be crazy like foxes. Time will tell.
I’m glad someone out there shares my views on those “gaudy McMansions” that replaced the nice ranch homes. The streets your friends live on are special and I pray that we won’t see too many McMansions pop up to ruin it all. From what I see, it’s begun.
Sounds like you live in Irvine, Newport or one of the south OC cities now. Congrats! It’s a nice area and that’s how I found IrvineHousingBlog back in 2006. I read it everyday and it’s inspired me to launch ArcadiaHousingBlog.
You’re smart to cash out and wait as you’re already a winner. The Arcadia market may not have slid as much as Irvine thus far, but it will come.
You’re the point here. The original house was torn down by the current owner and a new home constructed. I believe one wall was left standing for tax or permit reasons.
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