32% off the peak in Mission Viejo

Hat tip to MJA for pointing out this Mission Viejo property that's undergone a severe discount, but still can't seem to find any takers. There are no photos despite the fact that the listing is showing up as 286 days old in Redfin. A search of the address did yield an online listing and picture, that is above. Here are the basic details:

26861 Goya Circle, Mission Viejo, 92691
Asking price: $749,900
Asking price/sq ft: $229
Purchase price: $938,212
Purchase date: 11/20/2006
Other sales history: 1/3/2005: $1,100,000 6/11/2003: $718,000
9/15/1999: $380,000
6/23/1997: $285,000
Listing description: BEAUTIFUL POOL HOME WITH SPA & WATERFALL ON A LARGE LOT ON A SINGLE LOADED STREET IN A CUL-DE-SAC. FIREPLACE IN LIVING ROOM. THREE BEDROOMS DOWN. STONE COUNTERTOPS, HIGH CEILING PROPERTY SOLD IN ITS PRESENT 'AS IS' CONDITION. BUYER AND AGENT TO VERIFY ALL INFO. ALL OFFERS W/ PRE-APPROVAL LETTER

The bare-bones description and use of the terms "as is" and "all offers w/ pre-approval letter" would lead one to believe that this is a bank-owned property. However, it would seem odd that a lender would just sit on this property for so long (though, to be fair, they have cut the price aggressively). Use your imagination as to what's wrong with this property since it still hasn't sold. ZipRealty shows the following reductions:

Price Reduced: 3/14/07 -- $900,000 to $830,000
Price Reduced: 6/19/07 -- $830,000 to $779,900

Don't forget to check out that asking price per sq ft - $229. At that cost, a 1,500-sq ft house would go for $343,500, and a 2,000-sq ft property would be valued at $458,000.

The difference from a sale at today's asking price compared to the peak price in 2005 is $350,100, or 32% - no sales costs included. The potential decline, when compared to the previous transaction Redfin shows in 2006 is $233,306, including 6% selling costs.