21% decline in Laguna Beach

This nice-looking Laguna Beach property appears to be in for trouble. It's been on Redfin for 114 days so far and no sale. If they already did the planned remodel and expansion would it have sold already?

Asking price: $1,400,000

Asking price/ sq ft: $955
Income requirement: $350,000
Purchase price: $1,775,000
Purchase date: 12/15/2006
Size: 2 beds, 1.5 baths, 1,466 sq ft (built in 1953)

ZipRealty price tracker: Price Increased: 8/20/07 -- $1,800,000 to $1,900,750
Price Reduced: 9/20/07 -- $1,900,750 to $1,598,900
Price Reduced: 10/20/07 -- $1,598,900 to $1,475,000
Price Reduced: 11/20/07 -- $1,475,000 to $1,400,000
2006 property tax: $13,814
Type: Single Family Residence

Style: Spanish

Stories: One Level
Lot size: 6,500 sq ft
From listing: Beautiful Spanish style home. Spacious office/den which can be used as a 3rd bedroom. Private courtyard entry with fountain, french doors and windows throught. Two large decks, granite in kitchen and bathroom, stainless steal appliances, saltillo tile. Great for entertaining. Plenty of room expansion and pool! Walk to Cresent Bay beach and restaurants. Includes plans for expansion and remodel.

If the past is any indicator, expect the next scheduled price reduction to occur Dec. 20. I still don't understand the tactic of setting an asking price and then jacking it up considerably the same day. Reeks of attempted deception.

At this price, in this market, I would hope they don't need to play games involving price.

It's also a shame there aren't more pictures - particularly of the outdoor space. It is Laguna after all, right? It is a $1-million-plus property, right?

Judging by the cost of this property, I will speculate the owners put a good amount of money down and will be the ones who will mostly lose out if the property sells at a loss - not a bank. They've chased the market down for nearly four months. How much longer will it take to sell?

Assuming a sale at this price, the loss would be a staggering $459,000 in about a year, including 6% sales costs. Yes - $459,000! The depreciation would then be a mind-blowing 21%, not including sales costs.