It was by coincidence that I profiled 4 freeway-loaded properties this week. We did not go out of our way to find them and they are all new or refreshed listings. So it did not surprise me to find another unfortunate seller on the market. 13 days running… any guess when the first price drop with come?
Oh My Poor Katherine
750 Katherine Ln.
Arcadia, CA 91006
Price: $850,000 ($392 per sq. ft.)
- Beds: 3
- Baths: 2
- Sq. Ft.: 2,169
- Lot Size: 9,620 Sq. Ft.
Oh poor poor Katherine indeed. This seller purchased the home back in 2006 for $800,000. They put 20% down and took on a conventional 30-year mortgage. Unfortunately, prudent borrowing will not save this family from losing money on their home.
At $850,000, this seller will most likely break even on their purchase (minus 2 years’ interest payment). To purchase an overpriced property sitting next to the freeway was a bad decision:
My Evaluation:
$300/sf – $650,700
$270/sf – $585,630At minimum, this home is $200,000 overpriced.
Other freeway profiles from this series:
Hello,
I think the price drop might be closer to 300k, but that is because things are changing.
Big fan of Itulip.com, and think this article will help you see why I think we are in more trouble then we think.
http://itulip.com/forums/showthread.php?p=39709#post39709
Good article, but nothing that most people paying attention to economy don’t already know on an intellectual level. The problem is how to overcome the emotion and instincts. Those of us who have been through economic downturns and past bubbles, know that things can get much worse than any thought. It’s tough to overcome with the financial news networks and media outlets urging investors to “remain calm” and wait for the recovery, etc. and the natural human tendency to freeze like deers in headlights and do nothing. Anyone still remember the Tan Man, Mozillo, telling investors how great things were last year as he was cashing out?
How bad can it get? Without money and investors from overseas, what prices would in Arcadia? It seems inconceivable the spigot of money from overseas will stop flowing like mana from heaven, right? Asians love the school district and will give their financial lives, living three generations to a house, to ensure the education of their children and grandchildren, right? Uh huh. Using median household incomes and traditional metrics to calculate “normal” housing prices…how much would the house on Katherine sell for…$200/sq foot, less? Inconceivable. Uh huh.
Interesting article with lots of graphs that does not tell me a whole lot more than what most people know. What I do find interesting is that at the very end of the article, the writer presents his current living situation below in quotes. Just substitute Euro for Asian currencies and gee, sounds a lot like Arcadia, South Pas and San Marino doesnt’t it?
“The town is at low risk to significant further home price declines due to a well diversified state and regional economy, unique proximity to several world class universities, and one of the best K-12 school systems in the US. Areas of the US that produce and retain highly trained and thus globally competitive workers will continue to attract population from other areas. For that reason, and due to the strong euro attracting European buyers, home prices actually increased 5% between 2006 and 2007 here and the appreciation is accelerating this year, as a result of migration from areas of the country and European buyers. Now, you didn’t think I’d choose to buy a home in an area where I thought home prices were going to bubble up and crash, did you?”