Let's go back to the late spring of last year for a moment. The owners of 91 Rue du Chateau #9 in Aliso Viejo have successfully pulled off a sale of their 3 bedroom, 2.5 bath property for $630,000...$318,000 more than they paid for it almost five years ago to the day. That's an appreciation of 15.3 percent per year since they took ownership. Not bad at all. In fact, fantastic.
Not only did their house work hard for them for the duration of their ownership - earning $63,600 per year - they stuck the unfortunate new owners (bagholders) with a property facing imminent decline as the real estate market begun to unravel.
Fast forward a year and four months later, and things have gotten ugly:
91 RUE DU CHATEAU #9, Aliso Viejo, Calif., 92656
Size: 3 beds, 2.5 baths, 1,400 sq ft (built in 1999)
MLS: S492859 (79 days on Redfin)
Purchase date: 5/3/2006
9/21/1999: $236,500
Price Reduced: 08/25/07 -- $559,999 to $499,000
Link to community map of location (from HOA)
From listing: HUGE PRICE REDUCTION!!! Gorgeous detached home on safe & quiet cul-de-sac. Outstanding light & spacious floorplan features high volume ceilings & a myriad of well placed windows. Elegant living room boasts Pergo flooring + romantic fireplace. Formal dining room. Large chefs' kitchen showcases name brand appliances & large wrap around counter/breakfast bar. Expansive master suite w/ walk-in closet. Dazzling entertainers' yard/patio complete w/ landscaping. Short walk to childrens' play area. WOW!
Question: What's the difference between a "chefs' kitchen" and the ever-used term "gourmet kitchen?" By the way, when I read the phrase "entertainers' yard" I immediately pictured a guy juggling in the backyard with circus-appropriate music blaring. This may or may not be the correct interpretation of the term.Assuming a sale at this price minus 6 percent selling costs, the loss will be $160,940 in 16 months of ownership. In other words, if the property sells for $499,000, it would have declined in value by about 21 percent since the previous sale.
There have already been $100k in price deductions - will this be enough to move the property? For more analysis, let's go to the comps:
There are 11 properties for sale in this neighborhood, and two others have the same number of bedrooms and square footage:
*28 Rue du Chateau #56 is asking $590,000 ($91,000 more than other seller)
*31 Rue du Chateau #32 is asking $598,900 ($99,900 more)
These two sellers are in big trouble - they are each asking nearly $100,000 more for essentially the same property. If you thought there was a problem here, check out these sellers, also on the same street:
*38 Rue du Chateau (no house No.) - asking $579,000 (has only 1,300 sq ft - asking price/sq ft: $445)
*101 Rue du Chateau (also no house No.) - asking $579,900 (only 2 beds, 2.5 baths, 1,234 sq ft -asking price/sq ft:$470 )
*101 Rue du Chateau (a third with no house No.) - asking $580,000 (same size as the one above - asking price/sq ft: $470)
Yikes. When the owner of 91 Rue du Chateau #9 sells - likely considering how much they're undercutting their competition, that's going to dip prices down a full $100 grand. Not a good time to be the other sellers. To be honest, it's not a good time to be any seller in this neighborhood right now.
2 comments:
Readers: AV is a dump & has alot of problems - take it from some one who lived there for years! 1.) High, high density housing (tremendous overcrowding); 2.) Alarming increase in crime w/out comparable increase in police services (city is BROKE and has ZERO $$); 3.) Inadequate planning regarding infrastructure - lack of vision amongst city 'leaders' 4.) NO reserves in city coffers; 5.) A moronic, myopic city council, short on vision, but loaded with cronyism, corruption, entitlement & self-perpetuation; 6.) Stagnant housing sales -- new units (Vantis Project & golf course homes) sitting VACANT; 7.) Entirely a master planned community, which means everything is an HOA - some communities even belong to 3 HOAs! (And, BTW, Merit Property Mgmt tends to have a high presence in this town -- Merit most certainly DOES NOT live up to its name). Alot of these HOAs are financially upside down - if people aren't paying mortages, they're sure as heck not paying HOA fees - hence, landscaping is being neglected everywhere; 8.) Tremendous blight and decay setting in these HOA neighborhoods, and throughout common areas in town; 9.) Decay and decline in sports parks - NO bathrooms for activities!! 10.) General 'trailer trash' feel - go to any city council meeting and watch the show and incompetence! You'll wonder where these people came from; 11.) Vacant homes = blight = crime = blight = decay. There is a quiet, but steady 'exodus' amongst those in the know regarding conditions in the community & amongst those who can afford to leave. This community is on its way to becoming known as South County's Slum, if not already being known for it - beware buyers! AV is not what it was about 10 years ago!
Based on d's comments...
You are pretty much smokin' dope. Apparently, you have a lot to learn when it comes to judging what "quality" is. I you think AV is in bad shape, bon voyage my friend.. You're whole message was complete idiocy. shooo..
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