La Vista is a 280-unit condo neighborhood in Laguna Niguel, located near El Niguel Country Club and Laguna Niguel Racquet Club. The units were built as apartments in 1989 and later converted to condos during the boom.
Obviously, the timing was bad, and we're assuming that more than a few investors/speculators bought in considering there are currently 18 properties up for sale (or 6.42% of the entire neighborhood). And, a bunch are also up for rent, though there is certainly some overlap as a few of the same units are probably up for both sale and rent.
30902 Clubhouse Drive #27C is one of those seeking renters and is asking $1,695. It has 2 bedrooms and 2 baths, and is about 1,100 square feet. If we were to apply a GRM of 120, the property is worth about $203,400 for a cashflow investor.
The problem is the market is so cluttered with these units that it might be hard to stand out with so much competition, unless the price is right.
That makes it all the more absurd that properties in the tract like this are up for rent for $2,100 for a 1-bedroom and another like this is asking $2,400 for the same model as the first one we mentioned. Why would someone pay 42% more each month to live in another relatively equal unit?
The owner may not know of the principle of substitution, or perhaps that is a wishing price that will cover enough of the mortgage to keep them afloat for the time being.
The cheapest 2-bedroom rental in the neighborhood is asking $1,650. The most expensive rental in the neighborhood was the one priced at $2,400.
With that $203,400 target investor price tag in mind - or, $271,200 with an ideal GRM of 160 for an owner-occupant - let's see what some of the others for sale in the neighborhood are asking (hoping for in many cases):
30902 Clubhouse #13H: 2 beds, 2.5 baths, 1,100 sq ft. Asking price: $519,000. Days on Redfin: 63.
30902 Clubhouse #19G: 2 beds, 2.5 baths, 1,100 sq ft. Asking price: $499,999. Days on Redfin: 61.
30902 Clubhouse #1J: 2 beds, 2 baths, 1,100 sq ft. Asking price: $328,500. Days on Redfin: 122 (backup offers accepted). This property is scheduled for auction April 23rd, and has a notice of sale amount of $405,337.20.
30902 Clubhouse #13D: 2 beds, 2 baths, 1,100 sq ft. Asking price: $299,000. Days on Redfin: 158 (backup offers accepted).
These units went for about $475,000 at the peak in 2005 when they were converted. Recent sales are harder to determine, because it is difficult to distinguish between an actual sale on Zillow and a foreclosure.
Speaking of foreclosures, one went back to the bank in mid-March for $281,200. Another was scheduled for auction Wednesday with a notice of sale amount of about $391,000. And, get this: Six more are scheduled for auction in April!
La Vista is the type of bubble bloodbath that's not good for anyone. The investors (or, more likely, the lenders) lose their shirts, foreclosures and vacancies run rampant and residents get stuck with units that are rapidly depreciating in value in a community that is decimated by turnover.
Thursday, March 27, 2008
La Vista: Whole neighborhood for sale?
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8 comments:
I do kinda like these places, they seem to have some nice views and I like the wall of closet mirrors in one of those bedrooms.
Now for my question. The redfin listings show dues of around 350+ a month. When factoring the GRM, do HOA fees need to be deducted from the rent first?
According to the MLS, the last closed sales on Clubhouse range from $295,000 to $342,000. All of those in escrow are in that range.
Rents have ranged from $1,600 to $1,900 for the 2 bedroom model and $1,300 to $1,700 for the 1 bedroom.
Price and rental price have varied based on location (esp. view) and condition (which varies greatly).
Hope this helps.
"When factoring the GRM, do HOA fees need to be deducted from the rent first?"
I don't factor in HOA fees, simply because I try and keep things as simple as possible (and because the 120 GRM for investor and 160 for owner-occupant is not precise at all and is more of a guide).
But, if you're thinking of buying there, I would absolutely take the HOA dues into account, since it could make the place more expensive than a comparable neighborhood with a bit higher prices but lower dues.
The place is a dump. Who would want to live there?
Another neighborhood in absolute freefall you may want to check out is Quail Creek in Laguna Hills right on the AV border. The cheapest 1 bedroom is going for $180k, and there are current 15 ONE BEDROOM condos for sale there. Yikes.
This is one of the neighborhoods that I track, and gosh, these places go on and off the MLS all the time. It definitely is a bloodbath out there!
I recently visited this development and it is quite nice. Could someone tell me if this complex is in a seismic liquefaction zone? I found the seismic hazard map online but its hard to interpret accurately. Thanks in advance.
We currently live here, and this place is just glorified apartments, even though they say condos. Also, make sure you get a parking permit before parking here, because you'll be towed at 12:01 am if you don't. We've been towed 3 times, because our offsite landlord never knew about any parking system, and therefore never told us when we moved in. The HOA openly admits that there is a severe lack of communication between them, and their every changing policies, and off site owners. What I really think is funny, is that some people actually BUY places here. Are you kidding me? I'm glad that I rent because I can get out and never look back! Spend your money elsewhere!
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