Condos on Huntington Dr. | Arcadia Housing Blog

1122 W. Huntington Dr. #3
Arcadia, CA 91007

Asking Price	$408,000	:::	Sq-ft	909
Purchased Price	$285,000	:::	Lot Size	(Condo Complex)
Purchased Date	10/29/2004	:::	Beds	2
Days on Redfin	46	:::	Baths	1.75
$/Sq-ft	$449	:::	Year Built	1960
20% Downpayment	$81,600	:::	Area	Huntington/Sunset
Income Required	$102,000/yr	:::	Type	Attached Condo
Est. Payment*	$2,062/month	:::	MLS#	A08044138

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

This property is located on Huntington Dr. along with a whole block’s row of other condominiums and apartment complexes. Take a quick look at this Craigslist search and you will find no shortage of units being advertised for rent. Rents range from $1,000 for a 1br/studio up to $1,695 for a “large” 2 bed/2 bath unit.

If you were to purchase this unit today with a 20% down payment, your mortgage will end up costing you $300 more than a comparable rental. This is on top of property taxes, maintenance and the ridiculous $140 HOA dues.

This property didn’t always carry such a large premium though. Take a look at the following sales history:

Apr 01, 1994 $95,000 —
Oct 18, 2001 $138,000 5.1%/yr
Oct 29, 2004 $285,000 27.0%/yr

Although the housing bubble had started well before 2004, let’s use the $285,000 as our base price and apply the standard appreciation over it:

3% $316,064
4% $326,935
5% $338,070

Currently listing for $408,000, this condo is at least $69,930 overpriced.

The monthly mortgage would actually be $1,709 if you bought it for $338,070; therefore breaking even as a rental unit. Personally, I believe this property is still overpriced and it’s realistic to consider its 2001 sales price of $138,000 to be the base price.

3% $167,232
4% $178,072
5% $189,500

You have two types of buyers who will consider this property. Someone using it as a primary residence and perhaps rent out a room or a cash flow investor. With today’s lending standards and the way the market is heading, would you put $81,600 to pick up this condo?

Comments (7)

george8 · May 12, 2008 #2289

No way. Anyone who does should have their head completely checked out.

It is asking such ridiculous price like the the bubble were still inflating. Let it sit and rot.

george8 · May 12, 2008 #2291

>>. Someone using it as a primary residence and perhaps rent out a room or a cash flow investor<<

Yes, you are right. However, at or near the asking price, neither makes any sense. A knife catcher for any reason will suffer at least $30k/year equity loss for years to come until it sells at around GRM of 150, which is $254k. ($1695×150)

By the way, 909 sf plan for 2 bed and 1.75 bath and someone else above or below you?

This in not desirable as a longer term primary home at all. It is by nature a rental unit.

In 2-3 years, $400k can buy 2 units.

TheArcadian · May 12, 2008

I agree. I just meant the type of buyer that would consider this type of property. $254k is a reasonable price. It accounts for the bubble run-up and the increase of rents over the last several years (thus, 150 GRM).

missedthebubble · May 12, 2008 #2293

How was everyones weekend?

We have RE massive depreciation, in the face of inflation of commodities.

When you show a condo like this, I find it hard pressed to argue this apartment condo conversion being worth 400k. This is a sub 200k property, especially in these economic times with the vacancy rate and the # of foreclosures setting records every month.

However, one thought that kept on occurring to me this weekend, was when gas prices hit $6 or even $8 bucks a gallon, what will change.

Interesting times….

TheArcadian · May 12, 2008

I think it will be easier for house prices to drop than for gas to come down.

Thanks for pointing out that this complex is actually a condo conversion!

AKR · May 12, 2008

Commodity bubble!!!
Oil, natural gas, corn, rice….
This bubble will be worse than the housing bubble.