All together now...

...The...high...end...is...not...immune! Thanks to reader mja for leading us to this property in upscale Nellie Gail Ranch in Laguna Hills. Quick, snatch this place up before the opportunity passes...

26241 Hitching Rail Rd, 92653

Asking price: $1,499,900

Asking price/ sq ft: $357
Original asking price: $1,924,000 ($424,100 reduction)
Income requirement: $374,975
Purchase price: $1,824,000
Purchase date:10/27/2006
Size: 4 beds, 5 baths, 4,200 sq ft (built in 1980)

MLS: S482980 (213 days on Redfin)

2006 property tax: $11,838
HOA dues: $80
Type: Single Family Residence

Style: Contemporary

Stories: One level
Lot size: 0.85 acres
From listing: Located In Prestigious Nellie Gail, This Single Story Corner Lot Estate Home Sits On Nearly One Acre. Completely Remodeled W/ Designer Travertine & Hardwood Flooring. Dual Master Bedrooms With Luxurious En Suite Bathrooms. Each Master Has A Separate Sitting Room Or Home Office Attached. The Open Plan Kitchen Has Custom Cabinets, Granite Countertops & Stainless Steel Appliances. French Doors From The Living Room Take You To The Resort Style Terraced Backyard With Pool, Spa, BBQ & Patios.

Sounds like this modest-looking-on-the-outside house has just about everything one would want in a property: A nice-sized lot, a good location and recent upgrades in some key areas. Could the problem be the price tag?

Check out the recent sales history:
6/2/2000: $765,000
7/30/2003: $1,010,000 (9.2% appreciation per year)
10/27/2006: $1,824,000 (20% appreciation per year)

Cheers to the owners who held the property between 2003 and 2006. Their profit was $704,560 assuming 6% selling costs (but obviously not including any renovation costs). Talk about a valuable contributor - the house therefore "earned a yearly salary" of $234, 853.33 for those three years.

Under the "what if there were no bubble and no significant renovations" assumption of 7% per year appreciation every year since 2000, the property would now be worth $1,228,422.83 .

Also interesting to note the sellers originally set a bail-us-out wishing price of $1,924,000 - which is $100,000 more than they paid. No deal. The property is well into the 200+ days on Redfin club without a sale.

Assuming a buyer materializes and pays full asking price, the loss would be $414,094 in just over a year of ownership, assuming 6% sales costs. In other words, this property would have declined in value by about 18% in a year.