Big potential loss in San Juan

Today's luxury property in San Juan represents a huge potential loss - that is, if this short sale can actually find a buyer at a price the bank is willing to take...

27301 Corte Montecito, 92675
Asking price: $1,070,000
Asking price/ sq ft: $268
Purchase price: $1,567,000
Purchase date: 4/25/06
Size: 5 beds, 4.5 baths, 4,000 sq ft (built in 2006)
MLS: S570216 (112 days on Redfin)
ZipRealty price tracker: Price Reduced: 04/30/09 -- $1,150,000 to $1,070,000
HOA dues: $295
Type: Single Family Residence
Stories: 2
Lot size: 0.28 Acres
From listing: exclusive william lyon home in the gated community of Floralisa in Racho Madrina.Fully upgraded through out with hardwood flooring,marble and travertine in master bath. Custom cabinets in kitchen with granite counter tops,stainless steel appliances and sub-zero. Crown molding,surround sound systems with speakers and custom built ins. master bedroom and an additional bedroom with bath downstairs. Cul-de-sac location with circular driveway. Very private location.

It's obvious there's a problem today when you consider we're looking at a McMansion-sized property built at the peak of the bubble with all the bubble interior touches. This isn't going to fly in 2009.

Redfin says the sales price was $1.567 million. Imagine how much extra was probably spent on upgrades, furnishings and everything else to make this property a home.

If we were to assume the bank can and will take the current asking price as an approved sales price, and the transaction goes through, the loss would be about $500,000 - before figuring in sales costs and not including any extra money spent on upgrades.