Holdin' the bag in Laguna

Short sales seem to be everywhere these days. Try a before-and-after search on Redfin, once including short sales, and again with short sales excluded, and you'll see what we mean. They're also moving into more expensive areas as well.

Here's one in Laguna Beach that demonstrates very unfortunate timing by the current owner...

600 Loretta Drive, 92651
Asking price: $1,488,888
Asking price/ sq ft: $522
Purchase price: $1,908,500
Purchase date: 3/9/07
Size: 3 beds, 2.5 baths, 2,850 sq ft (built in 2001)
MLS: L27577 (133 days on Redfin)
ZipRealty price tracker: Price Reduced: 11/21/08 -- $1,750,000 to $1,690,000
Price Reduced: 12/17/08 -- $1,690,000 to $1,665,000
Price Reduced: 12/28/08 -- $1,665,000 to $1,599,000
Price Reduced: 01/14/09 -- $1,599,000 to $1,569,000
Price Reduced: 01/29/09 -- $1,569,000 to $1,488,888
Zillow Zestimate: $2,109,500
Type: Single Family Residence
Style: Modern
Stories: 2
Lot size: 9,500 Sq. Ft.
From listing: Stunning and elegant custom home with ocean views! - Expansive living room boast vaulted ceilings, gorgeous fireplace and ocean view. Expansive Gourmet kitchen with large center island with built-in range, top of the line appliances and granite countertops and grand walk-in pantry. Master suite with ocean view, walk-in closet and large private bathroom with spa tub. Home is situated on corner lot, not far from local beaches, shopping and schools.

The mass of 8s in the asking price is probably not a coincidence. The views look stunning. Unfortunately, so do the price drops.

The original asking price was $1.75 million - already a fairly significant amount less than the sales price in early 2007. Now, five price reductions later, the current asking price is $261,112 lower than the current owner tried to sell for when they put the house up for sale a few months ago.

The real winner in this situation was the previous owner. They bought in 2003 for $1,060,000 and then sold four years later for $1,908,500. Huge profit, great timing.

The current owner's bad timing would equal a loss of $508,945.28, including 6% sales costs and assuming the house can sucessfully be sold for the current asking price. At least some would have to be absorbed by the lender. How much, we don't know.

Not including any sales costs, if the house is sold right now for its latest asking price it would be a depreciation of 22%.

Yes, a short sale like this is pretty rare in Laguna, but it's not the only one. Here's another on Katella Street - sold for $1,790,000 in 2006, now on the market for $1,299,999.