For a while now I have estimated that Arcadia home prices will drop down to $250/sf for low-end condos, $300-350/sf for average single family homes and $400/sf in the most desirable neighborhoods. Of course, there are factors such at views, large lots, gated communities and property age that will command a premium beyond $400/sf.

Let’s take a look at 2 properties today that have recently sold. They are great examples of where prices are heading:

725 Tiffany Terrace
Arcadia, CA 91006

Sold For: $930,000 ($334/sf)

• Beds: 4
• Baths: 3
• Sqft: 2,777
• Year Built: 1985

We profiled this property back in February when AHB was just getting started. At the time, its DOM (days on market) was 101 and listed as a shortsale.

Sales History
Oct 18, 1996 $470,000
June 5, 2007 $1,038,000
June 6, 2008 $930,000

Listing History
Oct 28, 2007 $1,138,000
Nov 14, 2007 $1,080,000
Dec 18, 2997 $998,000

At $930,000, this home sold for $208,000 lower than the initial listing price of $1,138,000. There is even a possibility that the property never sold and was just taken back by the bank. What do you think?

The seller had put a  $109,500 down payment on this home and lost the entire thing. How many people can stomach that kind of loss?

So $334/sf to live borderline Monrovia is still pretty high but this property’s history will drag down its neighborhood like a dead weight.

737 Sharon Rd.
Arcadia, CA 91007

Sold For: $1,160,000 ($291/sf)

• Beds: 4
• Baths: 4
• Sqft: 3,990
• Built in 1991

This is a large home located in an Ok area; right off Baldwin Ave. and 3 blocks South of the Pavilions and 99 Ranch plazas. One of the great phenomenons during the housing bubble was large homes selling for more dollars per square feet than comparable smaller properties. In a normal market, more square footage should yield a lower dollars/sf asking price.

We have seen many large properties asking (and selling!) for over $400/sf. Today, at $291/sf, this home will no doubt run chills down someone’s spine.

Sales History

Feb 10, 1993 $600,000 ($150/sf)
May 28, 1996 $542,500 ($135/sf)
Jan 14, 2000 $570,000 ($143/sf)
Jul 08, 2008 $1,160,00 ($291/sf)

I won’t kid you though. Plenty of single family homes in Arcadia have sold for over $400/sf in the last 3 months. It will take 2-3 years for prices to fall within fundemental values and it will be interesting to see how low the outlying areas near Monrovia and El Monte will fall.

*** EPIC FAILURE – I profiled the following property and praised it for being priced correctly. Unfortunately, some other listings have convinced me that this is a 55+ senior condo complex. If that is really the case, then $383,900 is probably near the highest this property would go for. ***

1126 W Duarte Rd #5
Arcadia, CA 91007

Price: $383,900 ($295/sf)

• Beds: 2
• Baths: 2
• Sq. Ft.: 1,300
• Property Type Attached, Condominium

After all the heat we give Realtors and homeowners about listing their home for “show” rather than to sell, I’m happy to say that not all hope is lost. Today’s REO is listed at $159,100 below its 2006 sales price of $543,000 (this figure has not been confirmed). That’s a 29% price reduction.

With a 20% downpayment, your mortgage will be approximately $1,941 per month. Propety taxes and HOA fees will bring your total to $2,412; about $200-400 more than what it cost to rent. Factor in some tax savings and it becomes a reasonable Buy VS Rent decision.

At this price point, I can see many buyers/investors showing up to bid on the condo. Built in 2006, well maintained, decent square footage and lower HOA fees than the Huntington Dr. condos. The only problem I see is that this section of Duarte tends to be busy… but for $383k, not too many people with complain.

587 Fairview Ave.
Arcadia, CA 91007

Price: $400,000 ($350/sf)

• Beds: 2
• Baths: 2
• Sq. Ft.: 1,144
• Lot Size: Attached, Condominium

This is part of the whole community of condos and apartments on the South-side of Huntington Dr. and Baldwin Ave. It’s not exactly a flattering property and $400,000 is definitely a wishing price. Add in the $260/month HOA fees and this is a BAD deal.

Valuation #1 – Appreciation

Last Sales Price: Dec 13, 2001 $179,000 ($156/sf)

After 7 years of appreciation:

3%    $220,147    $192/sf
4%    $235,552    $206/sf
5%    $251,871    $220/sf
6%    $269,150    $235/sf
7%    $287,435    $251/sf

Valuation #2 – Rental evaluation

Average cost to rent a 2/2 apartment in Arcadia: $1,500/month

Gross Rent Multiplier

150 x 1,500 = $225,000 ($196/sf)
180 x 1,500 = $270,000 ($236/sf)
200 x 1,500 = $$300,000 ($262/sf)

Based on these two valuations, this 2/2 outdated condo is worth $250,000 to $270,000. If you factor in the $260 HOA fees, it’s worth even less.

220 E Sycamore Ave.
Arcadia, CA 91006

Price: $887,000 ($435/sf)

• Beds: 4
• Baths: 2.5
• Sq. Ft.: 2,038
• Lot Size: 0.27 Acres

Today’s featured profile is at the request of an AHB reader. If you are ever interested in a property, feel free to shoot me a email with the address and Redfin link. I won’t promise anything but we’ll try our best to meet all requests.

This home is in need of 2 things:

• Fresh coat of paint.
• A new listing price.

Although the listing says this is located in the Highland Oaks area, it doesn’t change the fact that it’s bounded between a school/track field and what looks to be a commercial center to the South. Other than that, I’m a big fan of the circle driveway and lush landscaping.

Valuing this property based on last sales price will be difficult because the current owners have lived in it since 1964! Their purchase price? $39,500. It must be nice to sit on $887k of paper equity.

Applying the standard appreciation table we get the following values:

After 48 years of ownership:

3%    $163,224    ($80/sf)
4%    $259,536    ($127/sf)
5%    $410,850    ($202/sf)
6%    $647,558    ($318/sf)
7%    $1,016,292    ($499/sf)

Not surprisingly, the 6% appreciation gives us $318/sf, a reasonable price for this property.

Of course, you can argue that “true” market value is what other comparable properties have sold for in the last several months. So here’s one located on the East side of the race track and looks to be in much nicer condition:

400 Hillcrest Blvd.
Arcadia, CA 91006

On June 3rd, it sold for $950,000 ($359/sf).

• Beds: 4
• Baths: 3
• Sqft: 2,644

Based on $359 per square foot, today’s property would be worth $731,642; about 12% more than the $647,558 value based on 6% appreciation. With the direction this housing market is taking, I’m almost certain that we’ll be seeing over 12% drops over the next 2 years.

Would you rent for 2 years if it could save you a quarter million dollars?

330 W. NAOMI Ave.
Arcadia, CA 91007

Price: $3,680,000 ($451/sf)

• Beds: 7
• Baths: 7.5
• Sq. Ft.: 8,166
• Lot Size: 0.59 Acres

Words cannot describe what I feel abou this property. Although I can understand why your multi-millionaire dollar celebraties and sport stars would buy an 8,000sf+ mansion/estate, why would anyone spend $3.6MM on a McMansion in the middle of Arcadia? Ok, I know Jet Li used to live here but even he has left town in search of bigger and better things.

Check out the photos. Apparently, no expense was spared.

As with the trend in Arcadia, developers just assume that the Chinese don’t use their backyards. All this “UNPARALLELED ATTENTION TO DETAIL” we reserved for the actual house – nothing was spent on landscaping:

For $3.6MM+ I would, at the minimum, expect a custom-designed pool with running waterfall and spa. Heck, even the equally bizzare 705 Carriage House has more to offer (minus the square footage).

Carried Away with the House
Price: $3,238,000 (Redfin link)

News – $262,000 price reduction!