Stunning 42% off in Laguna Niguel

We can say with extreme confidence that this Laguna Niguel property will instantly generate a ton of buyer interest. Whether it can actually sell at the current price, assuming a lender has their say, is to be determined.

This home is beyond priced to sell: $454,000 below what Zillow says the current owners paid in late 2006.

29432 Kensington Drive, 92677

Asking price: $635,000

Asking price/ sq ft: $284
Income requirement: $158,750
Purchase price: $1,089,000
Purchase date: 12/28/06
Size: 4 beds, 3 baths, 2,238 sq ft (built in 1972)

MLS: S523258 (2 days on Redfin)

2006 property tax: $10,103
HOA dues: $68
Type: Single Family Residence

Style: Craftsman

Stories: Split Level
Lot size: 6,440 sq ft
From listing: Great 4 bdrm home in fantastic, beach close Laguna Niguel neighborhood! Lowest priced 4 bed home in town features upgraded kitchen with granite counters, wood floors, wainscoating throughout home, custom moldings, 2 fireplaces and big yard with great views! Located just 3 miles from world famous beaches and harbor, walking distance to award winning schools, HOA ammeneties include huge private park, clubhouse and big pool for some of lowest dues in town. Here is the deal you've been looking for!!

This seems like a no-brainer great deal - particularly when compared to the peak bubble price of $1,089,000. Then again, this property sold for $280,000 in 1997 - barely $5,000 more than its sale price in 1988.

That means in the nine years between 1988 and 1997, it appreciated $5,500. But in the nine years after that, however, the property went on to appreciate by $809,000 - that's 147 times more appreciation than during the late 80s and early 90s.

Cutting to the math: If the property were to sell at the full asking price, the loss would be $492,100, assuming 6% sales costs. It would also be 42% off the previous sale price in late 2006.

How do you think this competitor feels - they're asking $899,900 for a property with a pool.