| Asking Price | $900,000 | ::: | Sq-ft | 1,632 |
| Purchased Price | $616,000 | ::: | Lot Size | 10,031 |
| Purchased Date | 12/11/2003 | ::: | Beds | 3 |
| Days on Redfin | 118 | ::: | Baths | 2 |
| $/Sq-ft | $551 | ::: | Year Built | 1956 |
| 20% Downpayment | $180,000 | ::: | Area | Highlands |
| Income Required | $225,000/yr | ::: | Type | SFR |
| Est. Payment* | $4,550/month | ::: | MLS# | 22103393 |
*Estimated monthly payment assume 20% down, 30-yr fixed @ 6.50%
Sometimes I wonder if a seller is serious about selling their property. Even after being on the market for 4 months, they have refused to lower the asking price. What are they waiting for? Do they think they simply haven’t come across a buyer who likes their home? There’s a buyer for every home in every market – at the right price. Apparently, $900,000 is not the right price for this particular property.
Purchase Price $615,454
Purchase Date 12/11/2003
Loan $462,000
Downpayment $153,454 (25%)
With other 3 bedroom SFRs like this and this in the north Arcadia area renting for $3000/month, this property is overpriced. If someone puts down the $180k 20% downpayment, the monthly payment is still 50% more than the comparable rentals in the area.
$900,000 asking price / $3,000 rental comparison = 300 GRM
By extension, if you assume the 300 gross rent multiplier is 50% more than the “right” GRM for a desirable such as the Highlands, that would mean that the appropriate GRM in that neighborhood is a 200. Of course, there’s no hard rule on the use of the gross rent multiplier, but I would say that 200 sounds about right. Rent-savers and investors probably won’t jump in until we reach GRMs of 150-180.
The previous purchase in 1993 was at $362,000. That was about halfway through the 1990s real estate correction which lasted a total of 7 years. This property most likely dipped down to the low $300k in the mid-90s and the made its way back up to the million dollar mark during this recent bubble. How much this home will eventually sell for is anyone guess. If they don’t lower their asking price, buyers will simply overlook the property and the owners will end up chasing down the market like so many others we have seen.
Perhaps they should read about how to sell a house in this market.
Where is Arcadia’s escrow price in terms of year’s roll back? I guess it must be between 2003-2004 for the time being? That means a knife catcher will probably catch this knife at around $650k-700k.
This listing is really at WTF price just to make the owner feel good and rich.
Here is some reality check from http://www.bubbleinfo.com/
Even in this market the seller wants a 46% return on his home after owning it for just 4 years. Although I don’t blame him for wanting to cash out those “gains”, his listing price is reflective of how out of touch people are with current market conditions.
This is a race to the bottom and the smart ones have already sold and are waiting on the sidelines.
I have to dig up my data, but I don’t believe we’re in 2003-2004 territory yet. Arcadia median prices continued to rise into 06 and 07 so we’re probably just into 2005 prices.
February 2008 median price of SOLD homes was down 20.6% YOY to $647k. That’s around 2005 prices.