Big REO discount in Foothill Ranch

Foothill Ranch is holding up better than some other inland-ish areas of Orange County, but it isn't without its cracks. Here is a bank-owned property that is being offered at a healthy reduction from the previous bubble price.

31 Blazewood, 92610
Asking price: $609,900
Asking price/ sq ft: $265
Income requirement: $152,475
Peak purchase price: $808,000
Peak purchase date: 6/21/06
Size: 4 beds. 3 baths, 2,300 sq ft (built in 1994)
MLS: P603386 (247 days on Redfin)
ZipRealty price tracker: Price Reduced: 11/06/07 -- $729,750 to $714,900
Price Reduced: 11/28/07 -- $714,900 to $649,900
Price Reduced: 1/10/08 -- $649,900 to $609,900
Zillow Zestimate: $679,500
2007 property tax: $7,625
HOA dues: $70
Type: Single Family Residence
Stories: 2 Levels
Lot size: 3,610 sq ft
From listing: Upgraded home with tile flooring downstairs and carpet upstairs. Bonus room upstairs, crown mouldings, inside laundry, raised baseboards offered in this home. Private courtyard leads to double door entry. Large private balcony off front two bedrooms. Some minor cosmetic repairs needed. BACK ON MARKET as of 3/24/2008.


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Check out the house in the Google street view above and you'll see some telltale signs of foreclosure: Dead lawn and what looks like an accumulation of some trash out front (you may have to rotate around a bit to find the property, plus be careful of getting the property confused with an identical-looking one across the street).

Talk about great timing: The previous owners cashed in just as the market was beginning to turn in 2006 and walked away with a healthy $326,000 in profit (before sales costs) just for holding the house for three years. Perhaps they did some of the upgrades the listing hints at, but judging by the picture below the kitchen was barely touched, if at all.

The next owner wasn't so lucky.

She purchased the home for $808,000 in June 2006 - a startling amount considering the same home sold for less than $485,000 in 2003. What's not so startling is the financing: $200 down was all that was necessary to take possession of the property, thanks to 99.9% financing from Suntrust Mortgage.

A notice of default was filed in April 2007, and the property ended up going back to the bank in September for $691,338.

It appears the turnaround was quick, as the home was on the MLS in late September. The only thing lacking was a buyer. Now, eight months and $119,850 worth of discounts later, the REO is still on the market.

If the property can sell for the current full asking price, it would equal a depreciation of $190,100, or 24% off the peak price.