Zip Codes: 91006, 91007
Current Market Listings as of May 24th, 2008*
Properties for Sale: 230 (+10)
Median Listing Price: $768,880 (0%)
Weekly Foreclosure Update*
Properties in Foreclosure: 25 (0%)
Properties in Pre-Foreclosure: 66 (-3)
*+/- is compared to previous week’s data.
REOs Crashing the Party
Yesterday I wrote about how we will start seeing more homes going for under $300 per square foot after this housing crisis plays itself out. Foreclosures will lead the way in dragging down home prices and we have a prime example right here:
This is an REO currently listing for $459,900 ($282 per sf.).
- 2 bedrooms
- 1.75 bath
- 5,989sf lot
It was bought in 2005 for a whopping $630,000 ($387 per sf.). Aside from speculation, I can’t see anybody purchasing this home for a penny over $400,000. If we go with the standard appreciation calculation, then even $400k is asking too much:
2001 purchase price: $258,000
Apply 7 years of appreciation:
3% – $317,307 ($195 per sf.)
4% – $339,510 ($208 per sf.)
5% – $363,031 ($223 per sf.)
It is no wonder this home went into foreclosure! The lender is taking a minimum $171,000 loss on this property and they only have themselves to blame. Although some knife catcher may come in and purchase the REO for over $459k, the listing price alone is enough to further drag down the neighborhood’s value.
Despite what some people may say, I don’t see wealthy Asian immigrants snapping up homes fast enough in this area to maintain our current bubble prices.