|Purchased Price||$1,038,000||:::||Lot Size||8,625|
|Days on Redfin||101||:::||Baths||3|
|20% Downpayment||$199,600||:::||Area||Near Monrovia|
*Estimated monthly payment assume 20% down, 30-yr fixed @ 6.50%
Here we have another flip gone wrong. It was very tempting for speculators to take part in the bubble when housing prices were ballooning at the alarming rate of yesteryears. This flipper was late to the game and have since lost a chunk of their downpayment and counting. How much will you think they’ll lose when it’s all said and done?
Oct 18, 1996 $470,000
June 5, 2007 $1,038,000
- 1st Mortgage $778,500
- 2nd Mortgage $150,000
- Downpayment $109,500
Recent Listing History
Oct 28, 2007 $1,138,000
Nov 14, 2007 $1,080,000
Dec 18, 2007 $998,000
This flipper ignored signs of the struggling market and bought this flip with just over a hundred grand downpayment last summer. Delusional with promises of never ending double-digit growth, they put this house on the market with new flooring after just 4 months with a $100,000 premium. Just 2 weeks after that, news of the troubled market must have finally scared them and the asking price dropped by $58,000 in hopes of breaking even after fees. By December, it’s still on the market so they proceed to reduce it by another $82,000 to push for a sale.
It’s been 6 weeks since the last price reduction and there’s no end in sight. This is now listed as a short sale subject to final lender approval. My crystal ball says there’s another price reduction coming up soon if they really want to move this property. In this case, the specuvestor gets burned because they put down money and the bank will also lose because the property is no longer worth what they paid just a few months ago.
If you made almost a quarter of million dollars a year, would you plunk down $200k on a $1million dollar property off 8th street near Monrovia? If you had to pay over $5,000 per month in mortgage payments (excluding property taxes, insurance, maintenance etc), is this the kind of house you picture yourself living in? Yeah, I didn’t think so either.
10 thoughts on “Flip ‘n Flop”
Don’t listen to him. It’s a nice house.
I’m seeing a bit of schadenfruede here haha. Your patience will pay off. You’ve been waiting since 2001 so what’s another few years. Way to go!
It’s great to see another well-informed sideline buyer waiting out the market in the SGV area. I’m glad you enjoy the site 🙂
I never said it wasn’t a nice house. I just don’t think it’s worth anywhere near a million dollars.
Do you think it’s nice enough to warrant that price tag? Even if you did, comparable homes in the same area can be rented for far less than $5,000+ month.
There are quite a few 2500-3000 ft2 houses in arcadia with about 15,000 ft2 lots for about $1M. Some are actually in the highland oaks area (northern part of arcadia). For a dated property like this that’s sitting on only a 8600 ft2 lot, it’s well overpriced, especially with its proximity to monrovia boundaries. I see this property going back to $650-$700k.
I too have seen other homes in more desirable locations like the Highlands, Santa Anita Oaks and Peacock Village at around the same price range. This property may very well even dip below $650k when all is said and done, but only time will tell.
Listing agent told us that there are 3 offers waiting for the approval from the bank. One is at $950K, one is at $930K, and the third one is the all-cash offer at $900K.
Thank about it, this propety was sold in 10/1996 at $470K, which is the bottom of last real estate cycle. simply 2x at $940K now after 11.5 years would be quite reasonable.
Home values are determined by market fundamentals (see here https://www.arcadiahousingblog.com/2008/01/29/market-fundamentals/) such as income, supply & demand and comparable rents. The incomes in Arcadia do not support this price, there is plenty of pent up demand and you can definitely rent a similar house for less money.
I do not make $250k/yr, but if I did, this wouldn’t be the house I’d want to live in haha 🙂
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