Category Archives: Misc. Post

No Appreciation in the Hamptons

Another property has joined the $2,000,000+ club. This one is located in the beautiful Santa Anita Oaks area, or “Upper Rancho Estate”. Bordering close to San Marino and South Pasadena, homes in this community will always carry a hefty premium over other similar Arcadia properties.

Of course, there’s nothing normal about these homes either:

  • 3,000+ square foot homes
  • Up to 1 acre+ lots
  • Well kept neighborhoods
  • Privacy!

All in all, perhaps one would feel like they actually lived in the Hamptons… Not.

1050 Hampton Rd.
Arcadia, CA 91006

Asking Price $2,388,000 ::: Sq-ft 3,649
Purchased Price $1,100,000 ::: Lot Size 0.76 acres
Purchased Date 1/29/2002 ::: Beds 4
Days on Redfin 2 ::: Baths 3.5
$/Sq-ft $654 ::: Year Built 1940
20% Downpayment $477,600 ::: Area Santa Anita Oaks
Income Required $597,000 ::: Type SFR
Est. Payment* $12,073/month ::: MLS# A08087163

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

Despite being in a desirable community located within a desirable city, this high-end home has a story to share with us. Take a look at its sales history:

Sep 02, 1988 $862,500
Jan 22, 1999 $870,000 (+$7,500)
Jan 29, 2002 $1,100,000 (+230,000)

Because the 1988 owner bought at the height of that era’s housing bubble, it took 11 years for the home to regain its value. This is not a theory or economic model. These are real sales figures that reflect what the opportunity costs is when you buy a home at the wrong time.

Fast forward 20 years later and we have the current owner who is trying to sell the same exact property for $2,388,000; a $1,288,000 premium over his 2002 purchase price. Of course, it looks like some remodeling has occurred:

  • Updated bar
  • Entertainment center
  • Glass wall
  • Salted pool & spa
  • “Gourmet kitchen” /w stainless appliances and granite counters
  • Hardwood floors, new carpetting, cabinets
  • New wiring and plumbing

There are two things I know about remodeling homes:

  1. It can get very expensive.
  2. It did not cost the owner even close to $1.2MM to update this home.

Do I blame this seller for trying to make a buck? Of course not. It is my experience that 99% of property owners believe their homes to be more desirable than the surrounding neighbors. Apparently, actual sales and listing data reveals that $2MM+ is asking too much.

Recent Sales

Current Listings

My theoretical offer on this home? I would give it a 5-6% annual appreciation over the last 6 years and maybe buy it for $1.5 – 1.6MM.

$2.5MM Home for Rent

In addition to tracking home listings in Arcadia, I also try to stay updated in the rental market. My usual sources are the following:

  • Craigslist
  • Newspaper Classifieds

This weekend I came across a new site: Their property rental section somehow pulls listings from several other sites and aggregates them into a searchable database. I decided to give it a test-run to see what the largest and most expensive rental in Arcadia currently is.

Magnificant Brand New $2.5 Million Dollar Home


5 Bed
4.5 Bth
5,000 Sq. Feet

Property Description

~Save money by living in this beautiful home while it’s for sale.

Stunning brand new Tuscan influenced home with many extras.

Would you bother renting a house if the owner told you it was listed on the market and at anytime you’d have to move out after a 30 days notice?

If this home really is listed for $2,500,000, then it is definitely cheaper to rent it for $3,500. Your typical mortgage on this fella would be $12,640,! I would really like to know the history behind this property. Was a it new construction that won’t sell or a failed flip? Unfortunately, we weren’t able to find the listing on Redfin. Perhaps you guys will have better luck at hunting down the address?

First look: Trulia Snapshots

Obviously, I’m not up at 5am every morning when the daily posts go ‘live’. Property profiles are written the evening before and set to publish the following morning. Unfortunately for me, it’s 12:00am and both Redfin and NeighborCity are down. I’m guessing the servers are undergoing routine maintenance.

trulia_logo.gifSince this is the case, I decided to skip the regular Property Profile and introduce you to a new web feature we came across last week: Trulia Snapshots. Trulia, similar to Redfin, gathers and display residential MLS and public records data.

Snapshots takes real estate research to the next level by presenting a graphical and interactive display of properties currently on the market.


I’d say give it a run-through and take a break from the usual line-by-line property listings. If you search for Arcadia, CA, It looks like our friend, 388 Torrey Pines, is still the most expensive single-family property on the market at $4,698,000. Although some sites say otherwise (DOM refresh?), Snapshots pegs this property to have been sitting idle for 55+ weeks.

Update on Sale Prices

Here is a list of some properties we profiled the last 3 months. Some have been sold and many are still… not!

35 W. Norman – Listed: $1,338,000, Sold for: $1,100,000

31 Woodlan Ln – Listed: $1,724,980, Sold for: $1,667,500 after 350+ DOM.

750 Arcadia Ave – Listed: $558,000, Sold for: $540,000

707 Joanquin Rd– Listed: $699,000, Now listing for $829,00 ~WTF

930 Panorama – Listed: $1,175,000 , Now listing for $998,000 (270 DOM)

1642 N. Santa Anita – Listed: $928,000, Now listing for $878,000

Most of the listing we profiled since January are still on the market, unsold and reflecting multiple price reductions. Many of the listings have been “refreshed” by the listing agent so the “days on market” figure is actually lower than it is.

In addition to the existing re-sale listing, we’re seeing more REOs and shortsales coming onto the market. As this article from The New York Times state, even Prime mortgages are seeing a spike n foreclosure activity.


Oh look here – It seems like California is leading the way again in distressed properties.

A PUD I’d rather rent.

333 Eldorado St. #A
Arcadia, CA 91006


Asking Price $859,000 ::: Sq-ft 2,578
Purchased Price $357,000 ::: Lot Size Attached Condo
Purchased Date 5/17/1999 ::: Beds 3
Days on Redfin 2 ::: Baths 2.75
$/Sq-ft $333 ::: Year Built 1998
20% Downpayment $171,800 ::: Area East Arcadia
Income Required $214,750 ::: Type PUD/Townhome
Est. Payment* $4,343/month ::: MLS# 22110608

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

This property is part of a cluster of 5 attached and detached PUDs. When we first saw its photo and location, our first thought was ‘hey, theses types of homes were selling around $300k during the late 90s’. Sure enough, this property was first purchased in 1999 for $357,000. Applying the standard appreciation table, we get the following of what this home should be worth:

3% – $465,804 ($180 per sf)
4% – $508,122 ($197 per sf)
5% – $553,824 ($214 per sf)

Now before you argue that anything under $300 per sf is unrealistic, consider that a $88,178 price reduction will bring this property down to $299 per sf; just a mere 10.2% drop in value. In a market where the median sales price is expected to drop at least another 10% in the next year, I don’t think anyone will even consider this property for $859,000. Personally, I think that is a conservative number and 20% over the next 12 months seems more realistic. Don’t forget, this is a national housing crisis and as long as the bad news keeps circulating through the media, potential buyers will choose to stay on the sidelines.

If you look at the listing, this 5-unit cluster comes packaged with a $200 homeowner’s association fee; bringing your total monthly payment to $4,543. As one reader pointed out yesterday, why would someone lock themselves into this financial commitment when they can rent an equivalent property just 2 blocks away for $2,950?

Return on Investment

The seller purchased the property for $357,000 and hopes to make a $522,000 profit after living in it for 9 years. That averages out to a 15% annual appreciation rate over that time period. As is the nature of a bubble (i.e. stocks or real estate), most of that appreciation actually occurred during the last 3 years.

Fortunately for this seller, they bought at a good time and despite where prices are going, they should survive the housing crisis fairly well. I say should because we know way too many people who used their home’s equity as an ATM and have racked up hundreds of thousands of dollars in debt against the property. Let’s hope this seller isn’t one of them!

Hopeful Romantics

That’s who the average sellers are…hopeful romantics. If this were 2005, I can imagine the logic of buy, wait and resell for profit, but I find it difficult to comprehend that silly people were still doing that last year. The numbers are out for the month of April and DataQuick reported that Arcadia zipcode 91007 SFR sales price change dropped 25% from April of 2007.

Today’s featured properties are all in the 91007 zipcode, purchased in 2007 and listed for resale in 2008. Did their asking prices reflect the data? Let’s take a look.

A) 10421 E. Live Oak Ave.
Purchase Date 08/09/2007
Purchase Price $610,000
Listing Date 05/17/2008
Current Asking Price $729,000
Price Change +19.5%

B) 1107 W. Duarte Rd. #B
Purchase Date 11/28/2007
Purchase Price $442,000
Listing Date 05/09/2008
Current Asking Price $559,000
Price Change +26.5%

C) 2105 S. Baldwin Ave.
Purchase Date 06/18/2007
Purchase Price $550,000
Listing Date 05/21/2008
Current Asking Price $573,888
Price Change +4.3%

D) 2029 S. Baldwin Ave.
Purchase Date 05/04/2007
Purchase Price $650,000
Listing Date 05/19/2008
Current Asking Price $718,000
Price Change +10.5%

Are these folks hopeful romantics or what? Instead of following the trend of the market and actually pricing it for sale, they’re still trying to make a profit despite buying in 2007. If these properties were to sell at the 25% discount like the rest of the 91007 properties in April, they would go for A) $457,500 B) $331,500 C) $412,500 D) $487,500 instead of the above listing asking prices.

When will we see these prices on reflected in the market? Soon. Actually the 25% decrease in price from April 07 vs 08 is REAL. It’s not a prediction or a guess; it’s the actual sales prices of homes sold. It’s important to look at data from homes sold and not homes listed on the market. After all, we have seen countless homedebtors romanticizing about selling for a profit – even in this desperate market.

Are you an angry renter?

Are you frustrated about how expensive homes are? Do you feel cheated that people who made $30,000 a year were able to drive that decent $400,000 starter home you’ve been saving up for to over $800,000? Now you’re stuck paying someone else’s mortgage and hoping that you’ll be able to afford a decent condo one day. Are you an Angry Renter? was created to oppose the housing bailout that would reward those homeowners, lenders and builders who got us into this mess. You have probably seen AngeryRenter ads on all the popular housing website:


From their FAQ:

Question: How much could this bailout cost taxpayers?

Answer: According to the latest estimates, if Congress votes on picking up the tab for every homeowner who took out these [exotic] loans, it could cost taxpayers upwards of $120 billion dollars ($120,000,000,000).

I want my tax dollars to go towards public services, education, infrastructure or even pay down our national debt. Why in the world would we want to bailout people who lied about their income, took on exotic mortgages and priced out responsible buyers who worked hard to save a 20% downpayment?

[What are liar loans?]

Liar loans were no doubt the norm in Arcadia between 2004 and 2006. All my residential real estate buddies (now unemployed) made a living selling million dollar homes to households earning less than $100k per year. It absolutely disgusted me and although there are some truly knowledgeable RE agents and lenders out there, the entire industry will be tainted by its actions during the last 4 years.