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!

Before we get started on the next post, I just wanted to point out the Comment Tracker on the right-side of this site. It has been reset to reflect on the current month’s comments. It’s more for entertainment than anything else but perhaps SavedbyGrace will reward the monthly top commenter(s) with some free goodies.

**Our sharp-eyed reader has pointed out that this property is, in fact, part of the El Monte School District. Thank you!**

3119 S. 8th Ave.
Arcadia, CA 91006

Price: $639,900 ($221/sf)

• Beds: 3
• Baths: 2
• Sq. Ft.: 2,898
• Lot Size: 8,902 Sq. Ft.

This is an REO property located on the border of Arcadia and Monrovia. The listing claims that it’s part of the the Arcadia school district but I would definitely double check before even considering this home. Heck, take a look at its location and you will have to double check the city.

From the listing:

REO – Lender Owned Property. Sold As Is, Where Is, And With All Its’ Faults. No Warranties Expressed Or Implied!

Despite its large size of 2,898sf, $639,900 is asking way too much for this property. Take a closer look at the following aerial photo and tell me what that ‘runway’ is behind the back yard. Possibly a drainage ditch? Yes, this property comes attached with many faults…

Sales history:
May 1995 $269,449 ($93/sf)
Mar 1996 $240,000 ($83/sf)
Jun 2005 $695,000 ($240/sf)
May 2008 $630,724 ($218/sf)

The 2005 buyer bought a home that was worth only a third of the price just 11 years earlier. If it weren’t for the housing bubble, this property wouldn’t go for more than $400,000. In addition to being old (although upgraded), it’s located in a horrible location. Personally, I think $400k is still asking too much.

While the 1996 seller walked away with a $455,000 profit, the latest owner and now the bank(s) will be the biggest losers.

Evaluation based on the last 12 years of ownership:

3%    $342,183    ($118/sf)
4%    $384,248    ($133/sf)
5%    $431,006    ($149/sf)
6%    $482,927    ($167/sf)
7%    $540,526    ($187/sf)

You can definitely rent a nice home with better location and much cheaper than what it would take to carry a mortgage here.

41 E Winnie Way
Arcadia, CA 91006

Price: $850,000 ($546/sf)

• Beds: 3
• Baths: 1.75
• Sq. Ft.: 1,557
• Lot Size: 8,100 Sq. Ft.

This is a fairly decent starter home built in 1956. While it lacks the charm or extravagance of newer properties, you get adequate living area, privacy and some upgraded features. Unfortunately, the $850,000 price tag puts this home way beyond the classification of “entry” or “starter”.

First, the seller. They bought in 2003 for $430,000 and put a sizable 42% down payment. Regardless of where the money came from, it was very prudent borrowing. Assuming a 30-year mortgage, their monthly payment should be around $1,500/month. More or less depending on the interest rate.

A $1,500 mortgage on a this property is very reasonable due to the $180,000 down payment. BUT take that $180k and apply it to the current listing price and we have a mortgage of $4,297 per month; not including taxes, insurance, ect. Would you spend $4,300+ a month to own this home?

Given that a property like this will go for $300/sf or less in the near future, the following valuations are still too high:

After 5 years of ownership.

3%    $498,488    ($320/sf)
4%    $523,161    ($336/sf)
5%    $548,801    ($352/sf)
6%    $575,437    ($370/sf)
7%    $603,097    ($387/sf)

$300/sf = $467,100

Current asking price: $850,000 WTF

If I was the seller, I would start slashing the listing price ASAP because once the Summer season is over, we’re looking at a even bleaker housing market the coming Fall and Winter.

2222 S. 2nd Ave.
Arcadia, CA 91006

Price: $2,888,000 ($414/sf)

• Beds: 5
• Baths: 5.5
• Sq. Ft.: 6,981(!)
• Lot Size: 0.38 Acres

Today’s new listing is a 6,981sf McMansion sprawled across a 1/3 acre piece of land. The description calls it a “Gorgeous Luxury Custom Built Estate.” Of course, we all know that this “custom home” was built using a mid-90’s floor plan and originally designed by San Gabriel Valley architects. Don’t believe me? Walk into a dozen McMansions built between 1995-1999 and you will see the same plans used over and over.

There are two things that are rediculous about this property: 1) The nearly 7,000sf living space and 2) a asking price of $2.8MM+. Do you think adding the ‘888‘ will increase this seller’s luck in finding a rich knifecatcher?

Cost to build this McMansion @ $150/sf = $1,047,150
Cost of property purchased in 2003 = $636,000

Total cost = $1,683,150

Current asking price: $2,888,000 = $1,204,850 profit (!)

What does not make sense is why someone would spend nearly $3MM to purchase an overbuilt McMansion when they could build the same thing for much much less. There are several land lots in Arcadia currently asking for ~$1MM. Assuming you spent another $1MM building a custom home, total savings would be over $800k!

48 W Le Roy Ave.
Arcadia, CA 91007

Price: $1,300,000 ($754/sf)

• Beds: 4
• Baths: 2
• Sq. Ft.: 1,725
• Lot Size: 0.44 Acres

This seller did not provide any photos so I’m unable to comment on the physical condition of the home.  All we have for now is a street photo (above) and the following description:

Incredible Value!! One of the best Million Dollar Area. Warm, Cozy home with wood laminating and tile through out. Great back yard with sparkling and gated pool. Guest House over looking the pool and Jacuzzi. This property is good for investor who wants to get immediate income or Built your own Dream Home.

This is a direct copy and paste. The strange use of capital letters and grammar mistakes belong exclusively to the agent. My writing isn’t great but for a potential $39,000 in commissions (3% x $1.3MM), I would make sure this listing is at least presentable.  Hey, maybe the Realtor even knows this is a WTF asking price and no one in their right mind would purchase the 88 year old property for $1,300,000, a whopping $754/sf.

Although here is nothing to indicate that this home was recently remolded or even upgraded, the property looks to be well maintained and shows a lot of potential.

People who tell you that it’s okay to buy now if you plan to hold it for 5-7 years are like the Wall Street idiots who forget any event that is over 4 months. Take a look at the sales history:

Dec. 1988 $500,000
May 1994 $450,000 -1.9%/yr

The 1988 buyer waited 6 years after buying near the peak of that era’s bubble. The result? He lost $50,000 plus several years of paid interest. That was just a 10% loss… can you imagine current buyers who are facing 25-40% price declines?

Using the ’94 sales price, here is my valuation of 448 W. Le Roy:

3%    $680,665    ($395/sf)
4%    $779,254    ($452/sf)
5%    $890,969    ($517/sf)
6%    $1,017,407  ($590/sf)

At nearly half an acre and sitting on a half decent street, I can see someone purchasing this property for around $1,000,000; it’s fundemental value is obviously a lot less. Essentially, you will be acquiring a large piece of dirt… perfect for another Arcadia McMansion.