Today we have two properties that could not be more different. One is a 69 year old “sold as-is” home located in the Northern hills of Arcadia. It isn’t a flattering place but you supposedly get a “Great city light view”.
The second property is a typical 5,100sf McMansion located near Longden and Baldwin Ave. It boasts of granite counter tops, grand staircases and even a guest house.
They both share one thing: the sellers are stuck in 2006 pricing and hoping to make hundreds of thousands of dollars after a few years of ownership.
- Beds: 4
- Baths: 2.25
- Sq. Ft.: 3,124
- Lot Size: 0.28 Acres
Dec 13, 1995 $430,000 ($137/sf)
Mar 13, 2003 $665,000 6.2%/yr ($212/sf)
After 5 years of ownership, the owner is currently listing the property for $805,000 more than what he/she paid for it. Did the “city view” get a lot better over the last couple of years?
732 W Lemon Ave.
Arcadia, CA 91007
- Beds: 6
- Baths: 5.5
- Sq. Ft.: 5,100
- Lot Size: 0.47 Acres
This seller bought the McMansion in 2005 for $1,690,000 and has relisted it for nearly $2,000,000. $2MM is easy to stomach when there’s no 20% down payment requirement and you’re on a interest-only mortgage plan. Now take away all that and your buyer pool is quite limited. If I had $400,000 for a down payment, I can think of several dozen homes I’d rather buy than to sink it into this monstrosity that doesn’t even offer proper landscaping:
Oct 07, 1988 $154,000
Mar 27, 2002 $508,000
Sep 30, 2005 $1,690,000 ($331/sf)
Currently listing for $1,988,888 ($390/sf)
There is absolutely nothing wrong with trying to maximize your profits when selling a home. You would be crazy to argue otherwise. Unfortunately, what we see here are uninformed sellers stuck in yester-year’s pricing and the Realtor is going along with it. A quick look on Redfin will reveal grander McMansions being sold for under $1.8MM so $1.988 for the one above isn’t even within kife-catching territory.
11 thoughts on “Tale of Two Properties”
If they are lucky, it will take about 15 years (in 2023) to sell at their asking prices.
By then the fixed 15 year should have been paid off. It will be all equity.:-)
Just curious, say a potential buyer has the 20% downpayment, what is the current rate for a non-conforming jumbo loan?
Despite all the negative talk about housing, Arcadia homes are still being sold at around $390-$400 per sq. ft. Inventory has inched up slightly but looks like sellers are still holding out for knife catchers to take the bait. Not only Arcadia, but the price per sq./ft in the SGV (S. Pas, Pas, San Marino, Arcadia, Temple City, San Gabriel, MP, Alhambra) has held up pretty well despite dwindling sales. How much longer do we have to wait to see substantial price reductions in the SGV? SGV has very few foreclosures compared to exurbs like Pomona or Riverside.
In Arcadia, the values of older condos and fixer uppers have dropped significantly. If we’re talking about single family homes and PUDS, yes, price per square foot still seems pretty high. Of course, there is no comparison to two years ago. There will be plenty of knife catchers over the next 2-3 years.
Take for instance the following property. It was purchased in 2005 for $899,000 (443/sf) and recently sold for $720,010 ($356/sf). That’s a $178,990 price drop (-20%).
$356/sf may seem high but I have no doubt it will keep dropping for another two years. It’s a slow but steady process since, as sellers are finding out, real estate is highly illiquid during market downturns.
If I may add my 2 cents to this…
First of all, I LOVE the $2 million pool! Always wanted to have one like that. Thought it was too funny that it was highlighted on the photo by I assume the realtor.
Second, the interest rates for a fixed non-conforming loan with FICO scores over 705 are around 7.375 – no points. Although there are lenders offering 5/1 loans interest only at under 7%.
As far as values in San Gabriel Valley holding, it truly depends on the specific area. Some are doing very well and seeing multiple offers still and other areas are tanking. The wealthier the area, the less effect on price we see.
Thanks you. I had no idea rates had broken 7 and a quarter. I’m guessing a sub-700 FICO score would increase that interest rate to 7.5% or higher.
Of course, the rates for conforming loans are still holding around 6.5. A little higher than previously, but still pretty good.
I used to think the sellers were clueless but now I place the blame with the realtor. Why on earth take a listing you KNOW you will never sell anywhere near that price? You KNOW no other broker will show it and you KNOW no bank will finance it because it won’t appraise. Why?
As for price stability in Arcadia, I disagree. Prices have come down a lot. For some reason Redfin will show some expired listings as sold. In other parts of the SGV there are plenty of empty homes held by ‘investors’ waiting for an escape which we all know will not come.
I see this all ending sloooowly. Zero appreciation for the most of the SGV over the next 8-10yrs. Cant happen? Look back to the 1990-2000 period.
Oh, that McMansion is an embarassment. Fugly.
Just use your “stimulus” check to help make the payments. =o)
Why, not? Half of Congress takes bribes and payoffs, take their sweet time, while we “eat cake”
Where did everybody go?
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