Slow bleed in Ladera Ranch

The real estate market continues to sour in Ladera Ranch - almost 40% of the 301 properties for sale there are either foreclosures or short sales, according to the latest Steve Thomas report.

Here is one of those distressed properties that's logged a lot of time on the MLS. Will it finally sell, or is it destined to end up a full-fledged foreclosure?

10 Garrison Loop, 92694
Asking price: $365,000
Asking price/ sq ft: $243
Income requirement: $91,250
Purchase price: $555,000
Purchase date: 2/22/06
Size: 3 beds, 2.5 baths, 1,500 sq ft (built in 2001)
MLS: S508210 (276 days on Redfin)
Zillow Zestimate: $402,000
HOA dues: $160 + $190
Type: Condominium
Style: Craftsman
Stories: 2 Levels
From listing: Fantastic price for a light and bright end unit. 3 Bedrooms, 2.5 baths, attached 2 car garage. Family room with mirrored media niche and granite faced gas fireplace. Granite counters,crown molding and baseboards, inside laundry. Internet included in HOA. Master suite w/dual vanities and walk in closet, ceiling fan. Short walk to restaurants, shopping, walking trails.


View Larger Map

We purposely left off the ZipRealty price history so we could show it to you here:

Price Reduced: 10/15/07 -- $445,000 to $425,000
Price Reduced: 10/26/07 -- $425,000 to $418,000
Price Reduced: 11/02/07 -- $418,000 to $405,000
Price Reduced: 2/16/08 -- $423,000 to $415,000
Price Reduced: 3/11/08 -- $415,000 to $399,000
Price Reduced: 3/21/08 -- $399,000 to $389,000
Price Reduced: 6/12/08 -- $389,000 to $379,000
Price Reduced: 6/20/08 -- $379,000 to $375,000
Price Reduced: 6/24/08 -- $375,000 to $370,000
Price Reduced: 7/02/08 -- $370,000 to $365,000

The owner used 100% financing from New Century when he purchased the property at the peak in 2006. The jig was painfully up as they decided to list the property in October for $445,000 - more than $100,000 less than they had paid about a year and a half earlier.

Then the mortgage went delinquent. A notice of default in the amount of $24,592 was filed against the $444,000 first loan on the property in April. This is one of five properties on the street that ForeclosureRadar.com lists as being in some stage of foreclosure: One REO, two that have received their NTS and two (including our subject property) that have had a notice of default.

There have now been 10 price reductions for a total of $80,000 off the original asking price, and the property is still up for sale and approaching the 300-day mark.

Assuming the property can be sold for the full asking price, it would mean a loss of $211,900, including 6% sales costs. Not including sales costs, it would signal a depreciation of 34%.