$1,075/sq-ft on Norman Ave – Update

152 W. Norman Ave.

152wnorman.jpg

Asking Price $1,480,000 ::: Sq-ft 1,757
Purchased Price $1,400,000 ::: Lot Size 0.58 acres
Purchased Date 03/31/2008 ::: Beds 3
Days on Redfin 34 ::: Baths 2
$/Sq-ft $842 ::: Year Built 1949
20% Downpayment $296,000 ::: Area Santa Anita
Income Required $370,0 00/yr ::: Type SFR
Est. Payment* $7,484/month ::: MLS# A08047321

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

I profiled this house a month ago when it was asking for an even more ridiculous $1,888,888. At the time, the lame realtor had posted a picture of the house across the street and after a month or so, it’s finally be corrected. I wonder if she changed the picture after being mocked on this site? I also wonder how many realtors and their cronies know about Arcadia Housing Blog. They probably hate us, but I could care less.

From the recent sales history information listed on Redfin, it looks like the sellers did the unthinkable. When I looked at this property last month, the public records haven’t been updated with the transaction on March 31st, 2008. That appears to be a $50,000 HELOC just 3 months after the January purchase at $1,350,000. The property was listed the day after the heloc was registered for a whopping $1,888,888 or $538,888 profit. Then came a wave of weird price adjustments from the confused seller.

Asking Price History
04/01/2008 $1,888,888
04/18/2008 $1,680,000 -$208,888
04/22/2008 $1,380,000 -$300,000
04/23,2008 $1,888,000 +$508,000
05/01/2008 $1,480,000 -$408,000

Can you say bipolar? Crikeys the sellers and their realtor were high on something. They started out fully intoxicated with kool-aid, but went into rehab a few weeks later with significant price reductions and appear to be going in the right direction. Then all of a sudden, they were back on the crack pipe and wiped out all the reductions except for a measly $888 from the original listing price. Then about a week after that, they came to realization (again) about the market state and dropped the price by $408,000.

That’s $408,888 or 22% off the original listing price. Sounds like a lot, and it is a big number, but it’s still way overpriced. It was purchased back in January of 2008 for $1.35MM and apparently was suppose to make some flipper’s wild dream come true. It’s 2008 and there are still people trying to flip homes – amazing. The sellers did put some downpayment on the house and I expect them to take a 100% loss on that. It may sell for the amount owed to the bank if they drop the price quickly, but if the sellers let it sit, it will fall below $1.1MM and the bank will end up taking a loss.

It sits on a big lot, but the house appears old and dated. There aren’t any pictures of the inside so I assume it’s in bad shape. It’s also right next to the lovely drainage ditch. I must sound like a housing grinch that’s out of her mind, but it’s probably worth about half it’s current asking price. Unfortunately, some knife-catcher might pick it up for around $1million in the next few months. Ridiculous!

12 thoughts on “$1,075/sq-ft on Norman Ave – Update”

  1. The median Arcadia household income is less than $100k, and this old and dated 3/2 is asking nearly $1.5 m? What a bubble it still is.

    Is 1/2 acre lot worth $750k in today’s market?

  2. So interesting comments on the weekending post…

    My two cents, is while there is people out in the market that could buy these houses, I also think that their mentality has changed.

    Meaning if they make that income, and they have saved up enough money, de facto they are smarter then the average consumer and therefore looking at this house in Norman, and asking, “Are you kidding me?”. They are waiting for the year end 50 to 50% off all inventory sale that is coming, but no date has been set.

  3. They hope someone who wants to build a “7,600 square foot home” will pick up this property. Since no investor is going to risk building a McMansion to flip in this market, their only chance is someone who wants to construct a custom home for their personal residence.

    All-in cost could easily exceed $2.2 – $3MM (land+construction)!

  4. I’m not familiar with the area, but is it in the middle of all multi-mil residences?

    Once the bubbly equity disappears and easy credit goes away, things turn upside down quickly.

    This is a potential foreclosure in the making, or is it a pre-foreclosure already?

  5. The realtor says “A very rare opportunity to build a custom luxury mansion in a highly desirable area.”

    That means they are asking 1.4M for .5 acres. Does anyone know how expensive it is to tear down a home? It’s not as easy as putting it in a dumpster. You need to meet EPA requirements, you need to extract any asbestos via strict codes, etc…

    I see a nice 500K piece of property + 100K to clear the lot. Then you can build a custom 3000+ sq ft home for about ~600K. So you are back at 1.2M for a new home!

    Thus 1.4M for this old dump is a joke! Keep it.

  6. I know this area, there are many McMansions nearby made for wealthy foreigners. In fact, this listing agent deals mostly w/such type of buyers. The target market segment of this property is probably not your long time SoCal residents who are familiar with market history/housing condition. Instead, the seller is looking for a knife catcher from overseas, who will probably think in the context of land prices to places like Shanghai or Taipei. As long as wealth foreigners/recent immigrants are interested to live in Arcadia b/c of the school district, restaurants, ethnic market, etc., demand for Arcadia housing will be higher than other places (e.g. Monrovia) and some greedy sellers will continue to fish for knife catchers with outrageous prices. When this phenomenon will stop remains to be seen.

  7. The wealthy Chinese or Taiwanese didn’t get rich by being foolish. They work very hard for their wealth. I don’t think they wouldn’t study the local condition before putting down that kind of money. There are some other listing in the 90210 zip code that would be more realistic than this one. Keep it.

  8. “When this phenomenon will stop remains to be seen.”

    This has already started. Sales volume in Arcadia has dropped by half from the pre-bust numbers. Buyers, wealthy Asian or not, stop buying because they see what’s going on in the market. Just like everyone else, they don’t want to be left holding the bag on an illiquid asset that’s worth less than what they would pay for it today.

  9. That’s exactly what I had in mind but I just want to be polite when I’m in someone else’s home 🙂

  10. i was born in Arcadia in 1952. I lived on So. 1st ave for grades 1-12. Parents bought the house (3-2 5000 sq ft lot ) in 54 for $ 18,500 and sold it in 92 for $375,000. Thats normal appreciation but this market is abnormal even for the Chinese who look at money as a living diety. For the Chinese spending money is like killing the diety a little at a time.Mother still lives in Arcadia in a condo bought in 92 for $325,000. The condo peaked last year at $680.000 now it is $ 525,000 (maybe). When the time comes to sell we will advertize in a Chinese language newspaper in Taiwan. Just thought you would like to know.

  11. Hi tom

    Glad to have you as a reader! I had a question regarding the advertisement on chinese newspaper. Is it normal for Taiwanese to advertise their home overseas?

    Btw, that living diety comment was a first. i love it.

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