Wheel's falling off

OK, so this was a "gimme" headline considering this nice-looking home is located in Wagon Wheel - very close to the lofty gates of Coto. But it's pretty fair considering this property is almost 20% discounted from its sales price in 2006.

53 Gingham St, 92679
Asking price: $725,000-$750,000
Asking price/ sq ft: $302
Purchase price: $915,000
Purchase date: 6/14/06
Size: 5 beds, 3 baths, 2,400 sq ft (built in 1997)
MLS: S545242 (12 days on Redfin)
Zillow Zestimate: $733,671
HOA dues: $50
Type: Single Family Residence
Stories: 2 Levels
Lot size: 6,040 sq ft
From listing: Location Location Location ... Wagon Wheel Canyon ... Just Outside South Gate Of Coto De Caza with beautiful Sit down views! Enjoy 3 bedrooms + retreat/office/opt.BR + loft/opt.BR ... including main floor bedroom/den with full bath! Vaulted ceilings at elegant formal living & dining room. A gourtmet's eat-in kitchen features corian counter tops and island/breakfast bar that opens to spacious family room warmed by your fireplace. Your lovely master suite includes a luxurious bath, 2 closets and nice retreat ... and yes, breathtaking views!! This is a great home for family and excellent for entertaining! Plus walk Wagon Wheel Elementary.

Customized financial info (based on $750,000 asking price)
Minimum Income Requirement (using 30Y Fixed): $165,000, assumes no other debt/obligations.
Downpayment needed: $22,550
Monthly Payment on 30Y Fixed at 6.25% with property taxes and mortgage insurance estimated: $5,410.34
Minimum Income Requirement (using 5Y fixed): $156,000, assumes no other debt/obligations.
Monthly Payment on 5Y fixed at 5.75% with property taxes and mortgage insurance estimated: $5,176.49
Disclosure: All rates offered to the client with 1 point cost. Rate quotes assume a purchase transaction with the required minimum down payment, 720 credit score, full income qualification and required reserves. Rates are subject to fluctuation. Custom rate quotes and rate lock advice are available by visiting www.thegreatloan.com.

As you can see from the financing rundown, a potential buyer would be able to purchase this property for about 4.5 times their income - assuming they make $165,000. But, that also assumes they have no other debts.

This is obviously a nice property, but it begs the question of whether many people making this kind of money would want to live out in the Coto area considering the likelihood of permanently higher gas prices. You also would have to think about the fact that the area is far from major employment centers.

Granted these concerns aren't too big for some of the uber rich living in the area - but the type of person/family who likely would be interested in this house would probably have to give the issues a second thought. Perhaps one of them works in RSM, which would help the situation.

Assuming the property can be sold for the current asking price, it would mean a loss of $221,750 assuming 6% sales costs and that the home sold for the midpoint in the asking price range. It also would equal a depreciation from the peak of 19%, not including sales costs..