16% below '03 price in RSM

Here we have a condo in RSM that is well beyond a 2003 rollback. It's also about 44% below the 2006 bubble price.

18 Dianthus, 92688
Asking price: $267,500
Asking price/ sq ft: $223
Bank purchase price: $291,565
Purchase date: 12/3/08
Size: 2 beds, 2 baths, 1,200 sq ft (built in 1988)
MLS: U8005499 (3 days on Redfin)
Zillow Zestimate: $304,500
HOA dues: $240
Type: Condominium
Style: Mediterranean
Stories: 2
From listing: OUTSTANDING LOCATION AND AN OUTSTANDING UNIT IN THE SOUGHT AFTER CITY OF RANCHO SANTA MARGARITA. THIS IS A TWO BEDROOM PLUS LOFT, TWO BATHROOM CONDO THAT FEATURES CLOSE TO 1200 SQUARE FEET OF INTERIOR LIVING SPACE. YOU WILL ENJOY THE PRIVATE DECK THAT IS JUST RIGHT FOR ENTERTAINING. THE ASSOCIATION FEATURES NICE COMMAON AREAS, CLUBHOUSE, POOL, SPA, TENNIS AND SO MUCH MORE, IT IS LIKE LIVING IN A RESORT. THE LOCATION IS IDEAL, YOU ARE CLOSE TO ALL THE GOOD THINGS IN THE CITY; SCHOOLS, PARKS, RECREATION, SHOPPING AND ENTERTAINMENT. SO COMEHOME TO RANCHO SANTA MARAGRITA, AND START LIVING THE ORANGE COUNTY LIFESTYLE TODAY.

Only three typos. They probably should have tried harder to spell the city name right at the end of the description.

Here's one of your stereotypical 100% financing deals from the bubble years. Bankrupt subprime Brea-based lender ResMAE - bought by Citadel in 2007 - is the one to blame this time.

If we assume the bank will unload the property at the current price, it would be 44% below the 2006 price of $480,000 and 16% below the 2003 price of $320,000. Can you imagine this property going for almost half a million dollars? To legitimately afford that using normal lending standards, you should be making about $120,000 per year.

With a 20% downpayment, you're also likely at rental parity, since the principal and interest payment would be $1,148 per month with a 5% interest rate. Your rate could easily be different. Of course, this is before other associated dues, fees and the tax break.