Was it only a matter of time before we started seeing major price cuts here similar to the ones already underway in the Inland Empire? This listing provides some anecdotal evidence that it's very possible. Check out this 2-bedroom condo in Aliso Viejo with an asking price very close to its 2002 sales price...
46 Carlsbad Lane, 92656
Asking price: $299,000
Asking price/ sq ft: $272
Income requirement: $74,750
Purchase price: $419,418
Purchase date: 11/09/2006
Peak purchase price: $490,000
Peak purchase date: 5/13/2005
2002 purchase price: $277,500
Size: 2 beds, 2.5 baths, 1,100 sq ft (built in 1996)
Income requirement: $74,750
Purchase price: $419,418
Purchase date: 11/09/2006
Peak purchase price: $490,000
Peak purchase date: 5/13/2005
2002 purchase price: $277,500
Size: 2 beds, 2.5 baths, 1,100 sq ft (built in 1996)
2006 property tax: $6,210
HOA dues: $229
Type: Condominium
HOA dues: $229
Type: Condominium
Style: Contemporary/Modern
Stories: Two LevelsFrom listing: WHAT A BUY! 2 BEDROOM TOWNHOME WITH 2.5 BATHS, DIRECT ACCESS TO TWO CAR GARAGE FOR UNDER #300,000 ! ! ! This one won't last. .. .
"This one won't last" - famous last words. Actually, I do believe this one has a legitimate shot of selling, unlike many other hapless listings that are clogging up the market.My gut tells me this will turn into a workable starter home for an individual or family (with good credit, obviously) that doesn't know too much about the real estate market and is pleasantly surprised that their income is suddenly allowing them to get into this property.
Let's hope they use a traditional loan.
There is a chance, of course, that the market could pass even this listing by on the way down, and the price may need to be reduced for a sale. We will follow it and see what happens. There is also a real possibility that this is a short sale with no hope of approval from the lender.
The neighborhood competition can't be too happy about this development. But considering many have been on the market a long time, it suggests they aren't very motivated anyway. Here are the three other 2-bedroom properties for sale in the Coronado tract that are being undercut by our subject condo:
41 Coronado Cay Lane - asking $340,000. Days on Redfin: 24
85 Coronado Cay Lane - asking $385,000. Days on Redfin: 53
109 Breakers Lane - asking $389,000. Days on Redfin: 69
Assuming a sale at the current asking price, there will be a $138,358 loss on this property, including sales costs. This also would represent a 39% decline from the peak. The purchase price would be a mere $21,500 higher than the October 2002 sales price.
The scary thing would be that even if the owner who bought in 2002 held the property until now and had to sell for the current asking price, they would net a paltry $3,560, assuming 6% transaction costs. Essentially, this means the total appreciation over the past five years has already been reduced to virtually nothing.
9 comments:
Thank you OC tracker! This is what we have been waiting for. Prices getting back to reality and more inline with income levels. At this price it seems the rent versus buy argument is in favor of buying. Can overall prices in AV get this low? I believe they have in the inland empire areas already. I believe they can here also in the next year or so.
OC Tracker, I think that if one of us ends up buying a home that you've highlighted, you should get some kind of commission! THANK YOU -- keep these coming.
Thanks for shining light on the declining market. I am watching the Corona and Chino Hills markets tank and am thankful I didn't buy in those areas in 2005. Looking forward to buying in South OC in Late 2008 or 2009 if this trend continues. I have owned 4 homes before 3 in OC and moved back here in 2005 unable to afford to buy which was when my husband and I realized if we couldn't afford a similar home like we owned before with a large downpayment how would a first time buyer? That's when we knew it would come down, but we lacked zero credibility and our prior friends seemed to pity us. Looks like times are changing as many of those friends are unable to sell their homes and many may unfortunately lose them or be trapped in them unable to move from tiny condos into homes. We warned them but they didn't believe us they were too emotionally attached to their properties to listen.
When i was selling these homes new back in 96 97 that plan B at the bottom of the market sold for $128,000. Just a little reality check for how crazy this market has gone.
Went into escrow today. The seller is an entity, but doesn't look like a bank. This looks like a short sale, so again, the bank may say "no."
Thanks for the update. It will be interesting to see what happens.
The realtor indicated to me today that the buyer offered a price above the listing of 299K but than backed out after "buyers remorse" It is now back on at
329k. Still priced below comps but doesn't look as great now.
Aliso Viejo is NOT a good deal -- take it from someone who lived there a number of years & has watched the decay & blight! 1.) HIGH density housing; 2.) Grossly inadequate infrastructure, esp. police; 3.) Alarming & exponential increase in crime; 4.) Increasingly poor reputation; 5.) City council without vision & poor management skills - too much cronyism and lap-dog mentality; 6.) NO growth in terms of business (in fact, the city council is, in typical moronic form, lobbying against a new post office (!)); 7.) No $$ going into infrastructure; 8.) HOAs going into major financial problems, with end result being increasing blight and decay; 8.) Town Center in dire need of face lift. Just look at the MLS listing for AV -- glut of inventory; people are STUCK & therefore even more cranky. If anyone is dumb enough to be lured into a purchase there...you will probably regret it within 3-5 years. RSM not too different; both communities, but esp. AV, is in a terrible decline. This sub-prime fiasco will only bring in a more undesirable element. Beware!
Readers: AV is a dump & has alot of problems - take it from some one who lived there for years! 1.) High, high density housing (tremendous overcrowding); 2.) Alarming increase in crime w/out comparable increase in police services (city is BROKE and has ZERO $$); 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!
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