Footing the Bill on Foothill

March 26, 2008 · SavedbyGrace · Property Profiles

Asking Price	$1,998,000	:::	Sq-ft	3,754
Purchased Price	$1,700,000	:::	Lot Size	44,100 (1 acre)
Purchased Date	07/26/2005	:::	Beds	4
Days on Redfin	156	:::	Baths	4.25
$/Sq-ft	$532	:::	Year Built	1956
20% Downpayment	$399,600	:::	Area	Santa Anita Oak
Income Required	$499,500/yr	:::	Type	SFR
Est. Payment*	$10,102/month	:::	MLS#	22100417

*Estimated monthly payment assume 20% down, 30-yr fixed @ 6.50%

I had noted the large lots in this community in the profile on Monday and this property clearly exemplifies that feature with a full acre of land. Sure this is in an older neighborhood, but that’s almost unheard of in Los Angeles. You can fit an entire cluster of those new detached condos on there.

Purchase Date 07/26/2005
Purchase Price $1,700,000
Loan Amount $1,190,000
Downpayment $510,000

This seller put half a million dollars of his own money into this house and thus the bank will not be taking part in the losses. I doubt this property will go below $1.19MM. The seller on the other hand may very well lose a significant part of the $510k downpayment. A price drop down to the Dec 2004 selling price would leave the seller with a 40% loss on their downpayment plus the carrying costs for the 32 months of ownership. OUCH.

Listing Price History
10/29/2007 $2,100,000
02/06/2008 $1,998,000

These folks tried to make $400,000 in 27 months; that’s the equivalent of almost $15k per month. After being on the market for some time, the price has been reduced $102,000 or 4.9% of the original asking price. This sounds like a kool-aid concoction mixed with two shots of greed and served on denial. Don’t get me wrong, it’s a beautiful property, but do the sellers really think they’ll find a knife-catcher at this price? Apparently they haven’t found one yet after 5 months.

Since the original purchase was in 2005, they probably got a great rate on their loan. If it’s adjustable, they may be facing steep resets and want out. Either way, they don’t want to foot the bill for this estate anymore. Including property tax, maintenance and insurance, carrying costs could easily be over $10k/month.

Affordability aside, what would you be willing to pay for this property today?

Comments (10)

AClover · March 26, 2008 #1051

great property but can not afford it. For your question:
“Affordability aside, what would you be willing to pay for this property today?”

My bid today is 1.5M:-)

AClover · March 26, 2008 #1052

just noticed that it was sold in 12/2004 at 1.5M. So here I reduce my previous bid down to 1.25M.

Corntrollio · March 26, 2008

I could go with 1.25M too. The house is pretty big, and the amount of land adds to the value too, although it’s not like you could divide this lot, so it doesn’t add as much as the owner would like.

The comps alone suggest this place is way overpriced, even if they themselves are overpriced. Some of the comps are similar size houses too.

SavedbyGrace · March 26, 2008

I was going to go with $1.35MM but since it’s close to a high traffic street and may need some rennovations, I will also join the $1.25MM crowd.

IdiotBoy · March 26, 2008 #1057

I absolutely *love* this property. I’ve actually been in the house. It needs work. The current owners– not sure if this is a failed flip or circumstances intervened before they could finish renovations– have done some nice work so far, but only got about half way. In this price range, things like the kitchen, master bedroom and baths, etc. really begin to matter. Here, the kitchen is updated nicely, but is relatively small and narrow, while the bedrooms and bathrooms are small, outdated and generally in need of love.

Short story, you probably have to tack on another 100K – 200K of additional renovation work before this house is really where you’d want it to be. It’s a very pleasant house as is, so you could take care of additional renovations over time, but the obvious need for additonal work definitely weighs on what buyers are going to be willing to offer.

What makes this property truly stand out is the yard. This is a full acre, with huge flat patches, that accomodates a pool, a back house and could easily accomodate a sports court without turning the yard into a paved-over mess. The house is also small relative to the lot, and would easily support an up and over or other similar renovation.

I would buy this property today for $1.5M – $1.6M, depending on the terms of financing I was able to put together. And I actually *want* to buy this house if/when it comes down enough in price. My fear is that it won’t come down that far. The lot and location make this unusual enough that it’s probably worth $1.8 to some buyer right now. Once the credit markets get back to normal, I think this will find a buyer relatively quickly.

SavedbyGrace · March 26, 2008 #1062

I like the house too but I doubt something like this will be within my reach even when we hit bottom.

Beachy · March 26, 2008

I’m shocked that people would pay that much for it – maybe I’m becoming too smug of a renter.

To pay over 1.998mm for that, I’d need to have the beach within walking distance. Seriously, why would this be worth even that much? It is probably (backward adjusted to remove the bubble, and including adjustment for inflation) worth about 1.1 to 1.2 mm, max. All you need to do is find similar properties that sold in 2001 or 2002. It’s a large lot for sure, but – so are most of the lots in that adjacent area. A cursory search on Redfin shows sales of 1.1mm and 1.2mm on the same size lots, interior street (superior) locations, in 2001. And that’s forgetting the bubble buildup from ’98 to 2001 in the equation.

And don’t forget Foothill Blvd. is *right* out front, with the 210 freeway a short six homes (stone’s throw) away. Freeway noise is not fun.

Nice house, but 2mm listing is a laughable price.

(Too smug? 😉 )

capbreeze · March 30, 2008 #1154

The freeway noise + foothill traffic noise definitely bothered us. I know you can do water fountains to help drown it out but still the closeness to the concentration of freeway pollution concerns me. This kitchen “renovation” was poorly executed in terms of the spacial planning. It was reminds me of when you wanted to keep the kitchen help sequestered. I’m just scared of what the water bill alone looks like during this drought. Also, I’m not interested in paying so much $$$ for a parking lot in front (the circular + driveway to backyard garage) but I guess you need that considering unattractive tight alley type street it’s on. $1.1M with $100k for renovation in mind.

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