Big fat asterisk in Capo Beach

Would you like this REO and 2003 rollback in Capo Beach (Dana Point)? How a out if you knew it could potentially be a huge money pit?

27052 Calle Dolores, 92624
Asking price: $575,000
Previous sales price: $587,710
Previous sales date: 8/17/09

Beds:	2
Baths:	2
Sq. Ft.:	2,291
$/Sq. Ft.:	$251
Lot Size:	4,725 Sq. Ft.
Property Type:	Single Family Residence
Style:	Cape Cod
Stories:	3+
Year Built:	1978
Community:	Capistrano Beach
County:	Orange
MLS#:	U9004239
Source:	SoCalMLS
Status:	Active
On Redfin:	1 day

From description: THE SURF IS UP, BUT THE PRICE IS DOWN HERE AT CAPO BEACH ! WELCOME HOME TO ONE OF THE VERY BEST VALUES ON THE ORANGE COAST. THIS IS THE CITY OF DANA POINT, THE HOME TO THE WHALE FESTIVAL, THE HARBOR, AND SOME GREAT SURFING. THE PROPERTY IS A TWO BEDROOM TWO BATHROOM SINGLE FAMILY HOME THAT FEATURES CLOSE TO 2,291 SQUARE FEET OF INTERIOR LIVING SPACE, AND A LOT OF ALMOST 4,725 FEET. THE LOCATION IS GREAT, YOU ARE CLOSE TO ALL THE GREAT THINGS DANA POINT; THE BEACH, THE HARBOR, SCHOOLS, PARKS, AND SO MUCH MORE. SO COME HOME TO CAPO BEACH, AND START LIVING THE BEACH LIFESTYLE TODAY. DUE TO THE CONDITION OF THE HOME, THE BUYER SHOULD INVESTIGATE THE PROPERTY WITH PROFESSIONAL INSPECTORS. THE PROPERTY MAY, OR MAY HAVE BEEN RENOVATED OR REPAIRED DURING THE LISTING PERIOD. THE BUYER SHOULD REQUEST THE SCOPE OF WORK FROM THEIR AGENT

Is this Capo Beach or CAP-o Beach? Bad joke. But seriously, our eyes are hurting from reading the listing description. Let's take a look at some of the notes on the Redfin listing:

• Additions/Alterations
• Sold As Is
• Fixer Upper
• Rehab Potential
• Cosmetic Repairs
• Major Repairs Needed

As you probably noticed, the house went back to the bank in August and it's already back on the market. Before that, the house sold for $667,000 in August 2003. The asking price today is almost $100,000 less than it sold for six years ago. The actual amount of repairs is a coin flip - better be sure you "INVESTIGATE THE PROPERTY WITH PROFESSIONAL INSPECTORS" to see whether you consider this to be an opportunity or a train wreck.

Between '04 and '06

This Dana Point property is priced essentially in between its 2004 and 2006 prices. Where does

34300 Lantern Bay #112, 92629
Asking price: $1,050,000

Beds:	2
Baths:	2
Sq. Ft.:	2,074
$/Sq. Ft.:	$506
Lot Size:	-
Property Type:	Condominium
Style:	Craftsman
Stories:	1
Floor:	2
View:	Catalina Island, Harbor, Ocean
Year Built:	1985
Community:	Lantern Village
County:	Orange
MLS#:	S578201
Source:	SoCalMLS
Status:	Active
On Redfin:	58 days

From description: Panoramic sit down Ocean and Harbor views from this one level Villa in the gated community of Lantern Bay Villas. Gourmet kitchen with high end stainless steel apppliances, granite counter tops, travertine tile floors and center island. Seperate Dining room next to kitchen.Large great room with area which could be used as office/den with ocean view.Living room with slate gas FP and French doors leading to the deck for outdoor ocean viewing.Wet bar area w/granite,mini refr/ice maker&display and storage.Master suite with slate gas log FP, vaulted ceiling with skylight,large walk in closet,and French door leading to deck.Master bath area with soaking tub,seperate shower,make-up area, vaulted ceilings and additional closets with mirrored doors.Seperate laundry room w/broom-storage cabinet.Plantation shutters throughout and lots of light with the windows and skylights.Two private parking spaces with storage units and an elevator.This property is quality and turn key for ultimate enjoyment .

Sure, there are some great views, but $506 per square foot for a condo with a nicely done kitchen?

According to Redfin, this property last sold for $1,225,000 in mid 2006 and $875,000 in 2004. That means a lucky soul turned $350,000 in profit before any sales and upgrade costs.That amounts to 18.3% appreciation per year. Nope, it's no longer sustainable.

Assuming the property can be sold for the current asking price, it would mean a loss of $238,000, including 6% sales costs.

Going for a discount in Monarch Beach

Make no mistake about it - this is the type of place most of us can only dream about. If you want to pick up one, this might be your chance - a beach-close luxury home is available in Monarch Beach for as much as about $200,000 off the 2004 price.

20 Via Sienna, 92629
Asking price: $2,499,999-$2,600,000
Asking price/ sq ft: $490-$510
Purchase price: $2,677,045
Purchase date: 11/30/04
Size: 5 beds, 5.5 baths, 5,100 sq ft (built in 2004)
MLS: P688020 (76 days on Redfin)
HOA dues: $357
Type: Condominium
Style: Mediterranean
Stories: 2
Lot size: 8,000 Sq. Ft.
From listing: Gorgeous Single Family Home Located In The Exclusive Gate Guarded, Pointe Monarch Community,In Monarch Beach.This Fabulous Home Is Steps Away From The St.Regis Resort & Monarch Links Golf Course.Meander On The Wonderful Walking Path To Salt Creek Beach,Restaurants & More.Only Minutes Away From Dana Point Harbor(More Shops & Restaurants)As Well As San Clemente Pier,Charming,Quaint Laguna Beach & San Juan Capistrano!The Chef In The Family Will Enjoy The Gourmet Kitchen Which Boasts All Top Of The Line Appliances(Dacor,Subzero etc).This Home Is Better Than New With One Of The Largest Lots,A Private Pebble Tech Pool(w/cascading waterfalls),Spa,Built-In Out Door Kitchen,Plantation Shutters,Central Vac,Whole House Surround Sound & Reverse Osmosis Filteration.Each Huge Bedroom Has An Upgraded Private Bath.Enjoy Romantic Evenings In The Master Complete W/Fireplace,Steam Shower,Warming Drawer For Your Towels & Enjoy The Sunsets & View Of The Golf Course From Your Private Deck.Downstairs Suite.

This property came onto the market in May asking $2.9 million. It fell to $2.65 million in early June before completing the journey to its current price at the end of July.

The area is amazing. The house, at least from what we can see in the pictures, is also obviously well done. With this as many other properties, the question is whether someone with the cash to pull off this deal likes what they see.

Assuming the property can be sold at the low end of the asking price range, this would be $177,046 below the previous recorded sales price on Redin in later 2004, not including transaction costs or upgrade dollars spent along the way.

For sale again in Dana Point

The financing mistakes of 2007 are already back on the market as REOs, pushing prices lower. Today we're looking at a bank-owned house in Dana Point (Capo Beach).

26836 Calle Juanita, 92624
Asking price: $479,900
Asking price/ sq ft: $267
Bank purchase price: $569,180
Purchase date: 1/21/09
Size: 4 beds, 2.75 baths, 1,800 sq ft (built in 1974)
MLS: P683765 (1 day on Redfin)
Zillow Zestimate: $589,500
Type: Single Family Residence
Style: Cape Cod
Stories: 2
Lot size: 2,500 Sq. Ft.
From listing: Charming...4 Bedroom 2.75 Bath home near Sunset Park. Fresh paint, carpet. upgraded baths and kitchen. Minutes from Dana Point Harbor, beaches. Priced to sell fast ! ! !

No need for much of a description...price is the main selling point for this property. Just down the street is another REO that's asking $464,900 and is in escrow.

The previous owner paid $710,000 in January 2007. She didn't even have to use any of her own money. The property was in default in mid 2008 before going back to the bank a few months ago. Assuming the current asking price also becomes the sales price - coincidentally, it's the exact same beginning asking price as the other REO we mentioned, and both are for sale by the same real estate brokerage - it would mean a depreciation of 32% in a little more than two years.

For sale since March '07 in Capo

If you were trying to sell a property but couldn't close the deal, at what point would you finally throw in the towel? Six months? Nine months? A year? How about two? That's actually still understating how long this Capo Beach duplex has been on the market.

27072 Calle Dolores, 92624
Asking price: $665,000
Asking price/sq ft: $242
Purchase price: $900,000
Purchase date: 6/25/04
Size: 2,748 sq ft (built in 1988)
MLS: S479639 (762 days on Redfin)
ZipRealty price tracker: Price Reduced: 05/03/07 -- $1,200,000 to $1,150,000
Price Reduced: 06/08/07 -- $1,150,000 to $1,149,000
Price Increased: 06/14/07 -- $1,149,000 to $1,149,050
Price Reduced: 06/09/08 -- $1,149,050 to $999,999
Price Reduced: 06/11/08 -- $999,999 to $999,998
Price Reduced: 09/05/08 -- $999,998 to $750,000
Price Reduced: 01/21/09 -- $750,000 to $675,000
Price Reduced: 02/13/09 -- $675,000 to $670,000
Price Reduced: 02/23/09 -- $670,000 to $665,000
Style: Contemporary
Stories: 2
Lot size: 4,707 Sq. Ft.
From listing: Awesome Custom Duplex built like Townhouse Style Condos! Completely Remodeled! Everything new including appliances, wood floors, granite, tile, kitchen and baths. 2 Bedrooms + Loft for 3rd bedroom or Office. Fireplace, skylights & Whirlpool tub. Each unit has own private deck and patio. New garage doors and openers for large double garages. Walking distance to shopping, dining, theatres and park. Short distance to Sand and Surf!



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This is one interesting listing. As you can see, the asking price has been reduced 45% off the original asking price of $1.2 million. That $1.2 million was obviously a wishing price considering our current non-owner-occupant owners paid $900,000 in mid-2004 using 100% financing. We are guessing the original asking price bailed them out for their purchase, plus whatever they spent on remodels along with some profit.

The current asking price is now just $38,000 above the September 2002 sales price of $627,000. Of course, it took 762 days on Redfin to get there. This property originally went on the market in March 2007 - more than two years ago.

Since the property is considered a multi-family investment property, we also have some rental information, including:

• Actual Gross Annual Income: $41,280
• Monthly Gross Scheduled Income: $3,440
• Capitalization Rate (%): 6.21
• Gross rent multiplier: 16.11
  

This means the current rent is $3,440 per month, for a total of $41,280 collected per year. The gross rent multiplier is the asking price ($665,000) divided by the annual income ($41,280) - the number of years in rent equals a potential purchase price. The cap rate is found by dividing net operating income by the property value (in this case, the asking price).

Assuming the property can actually be sold for the latest asking price, it would mean a loss of about $275,000, including 6% sales costs.

Knock-down short sale in Dana Point

Behind this inviting green construction fence could be your "new" Dana Point (Capo Beach) home. There's even a chance it "could be historical."

26822 Vista Del Mar, 92624
Asking price: $499,000
Asking price/ sq ft: $654
Purchase price: $850,000
Purchase date: 10/4/05
Size: 2 beds, 1 bath, 763 sq ft (built in 1929)
MLS: S555277 (105 days on Redfin)
ZipRealty price tracker: Price Reduced: 01/22/09 -- $595,000 to $499,000
Zillow Zestimate: $621,500
Type: Single Family Residence
Style: Spanish
Stories: 1
Lot size: 8,308 Sq. Ft.
From listing: Spanish style, single level, fixer upper. Could be historical.



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Yep, only $654 per square foot for this fixer-upper property! Who would want to pay that amount for a house in terrible condition in Capo Beach?

Another version of the listing shows us an alternative strategy: Sell it as a teardown for a buyer looking to build their own custom estate. From the description:

Most desirable location in the Capistrano Beach Palisades. Expansive lot, south facing backyard, affords the opportunity to build a custom home. Close to Pines Park and beaches. Survey done, soil report, grading plan and demo permit. House design plans with approved ocean view roof top deck available in listing office.

What, you wouldn't want to get in right away so you can enjoy some amazing home-cooked meals in the current kitchen?

And don't tell us you aren't looking forward to spending lots of time in your new bathroom retreat:

This property is listed as a short sale, and Redfin says the last time it changed hands was in 2005 for $850,000. The house (or, more accurately, the lot with a house on it) was up for sale for $695,000 in September 2008, and then re-listed for $595,000 in November.

Assuming a sale for the current asking price, the loss would be $380,940, including 6% sales costs. It also would be a depreciation of 41%, not including sales costs.

Dana Point REO almost 1/4 off

Here is another REO in a nice South OC area. This time, we're focusing on Dana Point, specifically the part close to the St. Regis and Monarch Beach golf course.

24301 Armada Dr, 92629
Asking price: $565,000
Asking price/ sq ft: $329
Bank purchase price: $565,000
Purchase date: 2/20/09
Size: 4 beds, 2 baths, 1,718 sq ft (built in 1974)
MLS: S565758 (1 day on Redfin)
Zillow Zestimate: $653,000
Type: Single Family Residence
Style: Ranch
Stories: 1
Lot size: 7,150 Sq. Ft.
From listing: Fabulous single level home only a few miles from the beach and Dana Point Harbor. Great floor plan with laminate floors through out. Kitchen opens to family room with cozy fireplace. Corion counters and stainless steel sink! Large private yard with mainly block wall surrounding. This is a great property with tons of potential. Two car attached garage with roll up door. Quiet interior track location. No association, no Mello ROOS, Walk to near by community park.


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We can confidently say the first thing we would do if we purchased this property is re-do the color scheme in the kitchen...yikes. Next on the list would be the backyard, particularly getting rid of the tree stump.

Homes on this street were selling well in upwards of $700,000 in 2006. Now, not so much. This property went up for sale for $735,000 in June 2008, but it came off the market not too long after. Apparently the right offer did not come.

This property probably could rent for somewhere around $2,600 per month, which would translate into a target value for an owner-occupant of about $416,000, based on a desired GRM of 160. At its current price, the home appears to be overpriced by a decent amount - at least by that metric.

The previous owner purchased the house in 2005 for $730,000. Redfin says the house had sold for $640,000 almost a year before to the day in 2004. That means the owner before that saw one-year appreciation of 14.2%. The 2005 owner used 94% financing from Provident Savings Bank. He did not pull any cash out, so the problem could have been that he simply took on too much house.

A notice of default was filed in November 2007, and the home went back to the bank this February. Assuming it sells for the full asking price, it would be $165,000 (23%) below the 2005 price and $75,000 (12%) below the 2004 price.

Little slice 'o heaven in Dana Point

By little we mean little, but that's OK - this is OC coastal real estate! This property is in Dana Point (Capo Beach).

26822 Calle Juanita, 92694
Asking price: $249,900
Asking price/ sq ft: $292
Purchase price: $406,000
Purchase date: 10/12/07
Size: 2 beds, 2 baths, 855 sq ft (built in 1965)
MLS: S562362 (15 days on Redfin)
Zillow Zestimate: $469,500
Type: Single Family Residence
Style: Contemporary
Stories: 1
From listing: Great fixer, close to freeways and area beaches.


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This property already was for sale once beginning in August 2008. The original asking price was $379,900, and eventually fell to $269,900. Then, that listing was removed and the current one with the lower asking price appeared.

Assuming a sale for the current asking price, it would be 38% below the 2007 price (not including sales costs), 36% below the 2003 price of $390,000 and 24% above the 1999 price of $201,00.

47% off in Dana Point?

To answer the question posed by the headline: Yes, and probably no. Yes, this Dana Point luxury property is listed at 47% below what Redfin says is the 2005 sales price. But considering this property is a short sale, and taking into account what the asking price is, we would tend to think that probably no, this property can't be successfully sold as it stands now.

7 Lapis Ave, 92629
Asking price: $1,200,000
Asking price/ sq ft: $255
Purchase price: $2,250,000
Purchase date: 9/30/05
Size: 4 beds, 4 baths, 4,700 sq ft (built in 2003)
MLS: S558832 (22 days on Redfin)
ZipRealty price tracker: Price Reduced: 1/16/09 -- $1,399,000 to $1,200,000
Zillow Zestimate: $1,927,500
HOA dues: $310
Type: Single Family Residence
Style: Contemporary
Stories: 2
Lot size: 0.28 Acres
From listing: This splendid Bal Harbour Beauty in Dana Point has incredible ocean views.The Corner lot location is located on a cul -de sac and is close to schools and the famous Dana Point Harbour. Boasting 4700 sq ft. of living space with the finest appointments throughout including but not limited to a full kitchen with Viking appliances throughout. The backyard has a newer salt water pebble tek pool and Jacuzzi, plus a Barbaque area with lush landscaping.The master bedroom is spacious and adourns a double sided fireplace and an office area. The Balcony off the Master Bedroom really showcases the ocean views of the Dana Point Harbour.There is also an incredible Media Room in the home.Come see this home has it all!!!

Even Zillow thinks this property is "only" worth $1,927,500. While we can't be certain what the previous sales price was or what the actual situation is, we do know this home is being offered for sale for less than what the current owner owes.

We also know the property taxes are majorly delinquent. That wouldn't be a very welcome surprise for the new owner.

It's hard to say much about this kind of situation, but what is clear is this: Either the owner or a bank (or combination of banks) likely stand to lose a lot of money on this property. The rest, as they say, is a mystery.

Ringing in the new year

A new year is always cause for optimism. Today we have the first new post of 2009, so we're going to look at one Dana Point seller who is hoping 2009 will bring them some fortune in the high-end housing market.

The problem? Their ZIP code - 92629 - is seeing both lower prices and fewer sales than a year ago, according to the latest DataQuick report posted on the OC Register Web site.

23791 Salvador Bay, Dana Point, 92629
Asking price: $2,290,000
Asking price/ sq ft: $1,631
Purchase price: $1,860,000
Purchase date: 3/8/07
Size: 3 beds, 2 baths, 1,404 sq ft (built in 1971)
MLS: S548169 (105 days on Redfin)
ZipRealty price tracker:
Zillow Zestimate: $1,254,500
HOA dues: $200
Type: Single Family Residence
Style: Garden Home
Stories: 1
Lot size: 4,500 Sq. Ft.
From listing: LISTEN TO THE SURF AT BEAUTIFUL NEARBY STRANDS. MESMERIZING WHITE WATER OCEAN VIEWS FROM THIS OCEANSIDE OF PCH BLUFF TOP HOME. ENJOY THE CASUAL SURFING LIFESTYLE OF A BEACH BUM WHILE LIVING IN AN EXCLUSIVE GATE GUARDED COMMUNITY. THIS HOME FEATURES 3 BEDROOMS AND 2 BATHROOMS. THE COMMUNITY FEATURES TENNIS COURTS, SWIMMING POOL, PRIVATE BEACH ACCESS WITH PRIVATE PARKING AND PLENTY OF OPEN SPACE. THE HOME COMES WITH APPROVED PLANS FOR A 2,900 SQFT HOME. CONTACT DAVE WITH ANY QUESTIONS. GREAT OPPORTUNITY TO LIVE AMONG SOME OF THE MOST EXCLUSIVE AND EXPENSIVE HOMES IN SOUTH OC.

We know the view from this property is very nice - but would it hurt to include one of the interior? It makes sense when you read on in the description: The property is really being sold as a tear-down opportunity, where someone would drop about $2.3 million ($1,631 per square foot), level this place as it stands now and then begin to build their dream home.

When the property came on to the market in 2007, the listing description included the following: "With Association Approved Plans For Complete Remodel W/ Expansion. City Approvals By End Of Feb/07. Enjoy This Beach Cottage W/Open Beamed Ceilings, 3 Bedrooms, 2 Baths, Family Kitchen Or Remodel Or Build A New Home." So, it appears the remodel didn't take place.

All in the name of living "among some of the most exclusive and expensive homes in South OC." Image conscious much? Guess if you have the kind of dough required to buy this place, you can afford to be.

The current owner paid $1.86 million in March 2007. They listed it for $2,499,000 in September but obviously no go. The price has been cut twice since then for a total of $209,000 off. Assuming the property is sold for the current asking price, it would represent a gain of $292,600, including 6% towards sales costs. Not a bad haul...if only it could happen.

Actually a quasi flip?

A reader pointed out this Dana Point property to us, and we found it interesting as well. There is no sales record on Redfin, but Zillow says this property went for $1.595 million about a year ago. Does this home justify a price that is 44% higher than in 2007?

4 Los Monteros Dr, 92629
Asking price: $2,290,000
Asking price/ sq ft: $628
Purchase price: $1,595,000 (via Zillow)
Purchase date: 10/23/07
Size: 4 beds, 4 baths, 3,648 sq ft (built in 1981)
MLS: S551940 (18 days on Redfin)
Zillow Zestimate: $1,565,500
HOA dues: $245
Type: Single Family Residence
Style: Cape Cod
Stories: 2 levels
From listing: Totally remodeled and reconfigured Villas@Monarch Beach Gavina floorplan located on the golf course with brand new pool and spa and great views from most rooms. Extensive use of travertine, granite, stainless steel appliances, fixtures, carpets, lighting/electrical and more features too numerous to mention. The elegant floorplan has been re-configured including new kitchen open to the enlarged family room, completely remodeled baths and more. The inviting pool and spa feature multiple water features, pebbletec surface and brand new fully automated equipment. Designed and built by and for a builder for his own use with many custom features throughout.

This type of thing may have worked during the real estate bubble, but high-end sales are few these days and the buyers are discriminating. We would think if you were smart enough to have enough cash to buy this property, you would see it's not worth the asking price premium.

The other question is this: Do you think someone fishing to spend almost $2.3 million on a house would buy an upgraded-to-the-hilt tract house without an ocean view? If you want to stay local, we'd personally be happier with this home in Monarch Point for $2 million. It's got an ocean view and 3,000 square feet. To each their own.

Assuming a sale for the full asking price, the current owner is looking to gain $557,600 in a little more than a year after deducting 6% for sales costs. What an extraordinary - and unlikely scenario in today's real estate climate.

Close to '03 rollback in Dana Point

The last property we looked at was nearly a 2001 rollback in RSM. This Dana Point home is getting close to its 2003 price.

25561 Saltwater Dr, 92629
Asking price: $750,000
Asking price/ sq ft: $311
Purchase price: $922,000
Purchase date: 8/30/06
Size: 4 beds, 3 baths, 2,411 sq ft (built in 1981)
MLS: S544176 (77 days on Redfin)
ZipRealty price tracker: Price Reduced: 08/30/08 -- $849,000 to $799,999
Price Reduced: 10/01/08 -- $799,999 to $770,999
Price Reduced: 10/16/08 -- $770,999 to $750,000
Zillow Zestimate: $719,000
HOA dues: $58
Type: Single Family Residence
Style: English
Stories: 2 levels
Lot size: 6,076 Sq. Ft.
From listing: Drastic Price Reduction! Seller says sell now.. This highly upgraded home boasts new vinyl windows, a new roof, cherry floors, travertine floor in dining room, entry, and upstairs baths. This home was previously the model home for the Stratford at the Pacific community. The millwork, crown molding, taller baseboards, room dividers, and wood shutters provide beautiful accents to this luxurious beach property. The kitchen and bathrooms have been remodled with granite countertops and new cabinets in the baths, and tumbled marble with stainless steel appliances in the kitchen. The master bath has an oversized jacuzzi tub with an extra high shower. Custom closets have recently been installed in both of the master bedroom walk in closets and in one of the guest bedrooms. The home has a security system, water softener and water purification system. The back yard is truly an entertainers delight with sparkling pool, spa, and triple waterfall system with a remote control.


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Someone has put a lot of money into this house. Did it happen between 2003 and 2006, when the property changed hands and recorded appreciation of 28%? Let's hope it didn't happen post-2006 considering the owners paid $922,000 and are now asking more than $200,000 below that price.

In fact, the asking price is just $30,000 above the 2003 price. If it goes much lower, we could have a 2003 rollback.

Assuming the property sells for the current asking price, it would mean a loss of $217,000, including 6% sales costs. The depreciation, without sales costs, would be 19%.

Turn and burned in Dana Point

Here we have another property Redfin shows as being purchased in 2007 that is already back for sale at a significant discount. It's clear now how far away the bottom was a year ago - even in an area like Dana Point.

33861 Olinda Dr, 92629
Asking price: $549,900
Asking price/ sq ft: $323
Purchase price: $750,000
Purchase date: 2/26/07
Size: 3 beds, 2 baths, 1,700 sq ft (built in 1977)
MLS: S543962 (9 days on Redfin)
Zillow Zestimate: $656,500
Type: Single Family Residence
Style: Cape Cod
Stories: 2 Levels
Lot size: 2,870 sq ft
From listing: Great Dana point location. Home features Wood floors, recessed lighting,crown & base molding. Remodeled kitchen Granite/ stainless steel appliances.This property is one of the few homes in the area that has an actual backyard area with Built-in BarBQ and flagstone walkways. Two Decks with Ocean view. 3rd bedroom currently set-up as Office/Den.

Minimum Income Requirement (using 30Y Fixed): $134,200, assumes no other debt/obligations.
Downpayment needed: $16,470
Monthly payment on 30Y Fixed at 6.875% with property taxes and mortgage insurance estimated: $4,468.34
Minimum Income Requirement (using 5Y fixed): $129,600, assumes no other debt/obligations.
Monthly Payment on 5Y fixed at 6.375% with property taxes and mortgage insurance estimated: $4,292.29
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.


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It will be interesting to see if this property turns into a 2003 rollback and sells for $495,000 or less. We're not sure of the financials behind this deal, so we don't know if any deal is reliant on lender(s) approval.

The price does appear to be low compared to the competition - and it's likely on purpose to attract buyers.

Assuming the house successfully sells for the current asking price, it would equate to a loss of $233,094, including 6% sales costs. Not including transaction costs it would mean a depreciation of 27% in only about a year and a half

An utter mess in Dana Point

Today's condo is the lowest-price property in the prestigious 92629 (Dana Point) ZIP code. It also happens to be a disaster on multiple levels.

33852 Del Obispo St #119, 92629
Asking price: $199,900
Asking price/ sq ft: $346
Income requirement: $49,975
Purchase price: $226,570
Purchase date: 4/8/08
Size: 1 bed, 1 bath, 578 sq ft (built in 1983)
MLS: P638014 (88 days on Redfin)
ZipRealty price tracker: Price Reduced: 7/23/08 -- $219,900 to $199,900
Zillow Zestimate: $257,000
HOA dues: $348
Type: Condominium
Stories: 1 Level
From listing: Lower level end unit, in a demanded complex. Private patio, laundry hook-ups, view of stream in front of unit, HOA pool and spa. Unit suffered interior water damage at some point. Removal of damaged flooring, drywall, most of kitchen and cabinets is now complete. Mold remediation was also completed and a clear report given. Save money now by making an AS-IS offer why we obtain bids for rehab or wait to rehab is complete.

Despite some of its awkward wording, the listing description is fairly clear: This property requires a lot of work and would probably be a huge gamble. There's also no guarantee real estate values won't continue to soften.

The high $348 monthly HOA dues are another investor deterrent.

The property went for $301,000 at its peak price in the summer of 2005. The current asking price is 34% lower.

Assuming the property can somehow be sold for the current asking price (why oh why would you buy as-is and risk additional problems unless you really knew what you were doing), it also would mean a loss of $60,100, or 23% off the 2004 price.

$255k below '06 price in DP

This Dana Hills (Monarch Beach) home is more evidence that buying at the peak and needing to sell now is a losing proposition - in virtually any area of South Orange County.

The owner is even in danger of losing some of his own money in the deal. Shocking concept, we know...

23 Cassis, 92629
Asking price: $995,000-$1,195,000
Asking price/ sq ft: $498-$598
Income requirement: $248,750-$298,750
Purchase price: $1,450,000
Purchase date: 6/12/06
Size: 4 beds, 3 baths, 2,000 sq ft (built in 1996)
MLS: S534726 (56 days on Redfin)
Zillow Zestimate: $1,317,000
HOA dues: $181
Type: Single Family Residence
Style: Mediterranean
Stories: 2 Levels
Lot size: 5,000 sq ft
From listing: Very Sharp home! Located above the fairways of The Monarch Beach Golf Course. Very short stroll to the beach on a private nature trail. This home has had numerous professional upgrades with new kitchen appliances, cabinets, granite counter top and much, much more! Floor to ceiling drapes outline the tall walls and brightly lighted rooms while the warm wood floors offer a comfortable beach setting. The master suite offers a great ocean view! Walk out balcony overlooks the fairways at Monarch Beach Golf Course! Come see for yourself! Call Jim for a showing appointment.

The current owner had the wrong timing but purchased the property the right way: He paid $1,450,000 and used 80% ($1,160,000) financing from Countrywide. His downpayment was $290,000.

The home is now for sale and range priced on Redfin for between $995,000 and $1,195,000. This makes it seem extremely likely the owner will lose his entire investment - unless he already took some or all of it out of the house through equity extraction (we don't know).

Also working against the owner is the fact that Dana Point homes - and OC luxury homes in general - are taking a while to sell right now because there are few buyers able to afford these properties.

Assuming they get lucky and the property sells at the very top of the asking price range, it would mean a loss of $326,700 off the previous sales price, including 6% sales costs. It also would be $5,000 below the 2004 sales price of $1,200,000 (not including sales costs).

If it gets ugly and the owner is forced to sell for the low point in the asking price range (and assuming it's a short sale, the lender accepts), then that would mean a loss of $514,700, including 6% sales costs. It also would be $205,000, or 17%, below the 2004 price.

Rollback with a view in DP

This Dana Point condo sold for more than $1 million in 2006, but now it's a rollback with lots of debt and a notice of default to its credit. As usual, there's even more to the story than meets the eye...

26042 Vista Dr, 92624
Asking price: $989,000
Asking price/ sq ft: $574
Income requirement: $247,250
Purchase price: $1,038,000
Purchase date: 3/17/06
Size: 3 beds, 3 baths, 1,723 sq ft (built in 1974)
MLS: C102235 (177 days on Redfin)
Zillow Zestimate: $679,000
HOA dues: $299
Type: Condominium
Style: Contemporary
Stories: 2 Levels
From listing: Perched on one of the most beautiful and desirable bluffs in Southern California, this Capistrano Beach residence offers stunning ocean views, magical sunsets and a bright, open and airy floor plan. Extra large terrace off living room, amazing views from the huge master suite with walk-in closet. 2-car attached SxS garage with direct entry. Complex includes Pool, Tennis, Courts & Gym. Priced to sell! First showing:

The current (out-of-town) owner bought at the peak using 90% financing from Countrywide. He then pulled out all his downpayment plus $96,200 more only three months later when he took out an additional $200,000 loan against the property in June 2006. A notice of default was filed against the property for $21,119 in April.

This isn't the only piece of the owner's crumbling mini real estate empire.

He also is massively over leveraged on another of his "investments" - 9774 San Circle in Beverly Hills - by millions of dollars. That property received its most recent notice of default on a $1.5 million loan in May. There also have been two other notices of default filed against the property: one in January against a $200,000 loan and a second in February on a $1.8 million loan. Yes, those are all different loans.

Assuming the subject Dana Point property can actually be sold for the full asking price - which seems unlikely considering how long it has stayed on the market with no price reductions - the lenders/bagholders would lose about $200,000, including 6% sales costs. Thanks to equity extraction, the owner would be out the door sans his credit rating but $96,200 richer.

Want to see this condo in person? The CLAW listing says there is an open house scheduled Sunday from 2-5 p.m.

The fun stops in Dana Point

There is money in Dana Point. Some people made theirs from the stock market, or perhaps through a successful business venture. Maybe they're in health care and are running a popular and well-respected practice.

Others, as you will see, have gotten a boost from real estate. Not buying and then selling it, mind you. All they had to do was hold on.

7 Wightman Court, 92629
Asking price: $729,900
Asking price/ sq ft: $515
Income requirement: $182,475
Purchase price: $935,000
Purchase date: 5/4/06
Size: 2 beds, 2 baths, 1,418 sq ft (built in 1987)
MLS: S525922 (80 days on Redfin)
ZipRealty price tracker: Price Reduced: 3/31/08 -- $799,000 to $779,000
Price Reduced: 4/07/08 -- $779,000 to $749,000
Price Reduced: 5/14/08 -- $749,000 to $729,900
HOA dues: $252
Type: Condominium
Style: Mediterranean
Stories: 1 Level
From listing: Simply gorgeous Ocean and Catalina views from the highly desireable tennis Villa's Home. Upstairs condo with all living space on one level. Live like a one story with a fabulous floorplan. Giant Open Bright Living room with colums and a set back formal dining room. Most every room offers Panoramic Ocean views. Large kitchen with built in frig and large pantry/Laundry room and a big space for a casual kitchen table. The two bedrooms are on opposite sides of the home for privacy and the Masterbath is great! Off the livingroom is a large veranda for entertaining and taking in the views and off the front kitchen is a balcony for relaxing. I wish we had more pictures for you to view!

"I wish we had more pictures for you to view!" Why wish - just go out and take more and then post them with the listing. Problem solved.

Unbelievable that someone actually paid $659 per square foot for this two-bedroom, 20-year-old condo in 2006. It does have an ocean view and is near the St. Regis, but let's get real: This is not a $900,000+ property, and never really was except in world ruled by irrational exuberance.

Want to guess how this place was paid for? No, not 100% financing this time. The owner did pitch in $46,750 of her own money, but Global Mortgage Funding provided the other 95%.

Hold on there a minute, though. Why tie up more than $40 grand in your home (pesky downpayments!), when you can put it to work for you elsewhere? Less than a year later - in January 2007 - the owner pulled out all her equity (and then some) with the help of two loans from Washington Mutual: an $880,000 first, and a stand-alone second for $109,890 more. That equals a total debtload of $989,890.

It is likely more now considering it appears the delinquent loan balance on the first loan is more than $950,000. The notice of default was filed in February for $17,877, and the NTS came in May.

If the property is able to sell for the current asking price - and the lender agrees to take the big hit - it would mean a depreciation of $205,100, or 22%.

But don't forget: This is one of the many properties that face even more significant losses and larger, more crushing amounts of debt than then first appear.

Ritz Pointe REO

Ritz Pointe in Dana Point is, quite simply, one of the most prestigious areas of South Orange County. It's close to the Ritz-Carlton and St. Regis resorts as well as the ocean. The sky is just about the limit for prices here, depending on the size of the home, its view and distance to the water.

But, as we've seen again and again, no neighborhood is perfect nor completely immune from the current real estate struggles. This is a bank-owned property that has recently come up for sale:

30 Vista Sole Street, 92629

Asking price: $1,600,000

Asking price/ sq ft: $400
Income requirement: $400,000
Bank purchase price: $1,506,246
Bank purchase date: 2/22/08
Size: 4 beds, 4 baths, 4,000 sq ft (built in 2000)

MLS: P632216 (9 days on Redfin)

Zillow Zestimate: $2,336,500
2007 property tax: $13,542
HOA dues: $95 + $75
Type: Single Family Residence

Style: Tuscan

Stories: Two Levels
Lot size: 5,500 sq ft
From listing: Beautiful Ritz Pointe home with exceptional quality. Plantation shutters, bay window in living room, French doors in dining room and family room. Kitchen has Viking appliances including built-in refrigerator, center island and granite counters. Fireplaces in LR, FR and MBR. Tumbled tile floors throughout downstairs. Dramatic dark wood staircase and upstairs bonus room + exercise or office area. Recessed lighting, wide baseboards. Huge family room with built-in desk area, fireplace and media niche. Dramatic master bath features Roman tub, triple head shower, dressing table and huge closet. Master bedroom features fireplace, bar area and sliding door to balcony. Exclusive guard-gated complex has pathway directly to beach.

The property went back to the bank in February. The loan that proved to be the killer was for $1,303,250 in 2004 by First Federal. Three additional lines of credit tied to this property also popped up in 2005 and 2007, but we're not sure if those were fully tapped or not. The fact that there were three lines is certainly a hint, though.

The closest recent sale is probably 4 Los Monteros - a property in Monarch Beach that is a bit closer to the ocean, but is smaller and not as new. That home sold for $1.595 million back in October.

If our subject property were to sell for the full asking price, it would mean the property still would have appreciated 9.2% every year since it was built in 2000. What housing bust?

Exclamation point abuse, TMI in Dana Point

A hat tip is again due to a reader - this time BC - for showing us this interesting listing in Dana Point. Pay particular attention to the description.

24065 Atun, 92629

Asking price: $895,000

Asking price/ sq ft: $373
Income requirement: $223,750
Purchase price: $660,000
Purchase date: 3/5/03
Size: 4 beds, 3 baths, 2,400 sq ft (built in 1996)

MLS: S521960 (61 days on Redfin) Craigslist ad

ZipRealty price tracker: Price Reduced: 3/09/08 -- $999,900 to $949,000
Price Reduced: 4/03/08 -- $949,000 to $929,000
Price Reduced: 4/11/08 -- $929,000 to $919,000
Price Reduced: 4/15/08 -- $919,000 to $895,000
Zillow Zestimate: $1,098,000
2007 property tax: $4,772
HOA dues: $190
Type: Single Family Residence

Stories: Two Levels
From listing: !!This is better than a short sale!!! Don t hassle with a REO or a short sale when this Turnkey home in the Guard Gated Monarch Beach track of Montego is the best deal in Dana Point!! This is an Incredible Opportunity to own this home where no expenses have been spared. Brazilian Walnut hardwood floors, 20' Italian Ceramic Tile, and Custom Plantation Shutters, huge private backyard with a breathtaking city lights and mountain views from your Kitchen, Family Room, or the huge Master Bedroom Suite. Inside and out this home has it all!!! Priced Under $400 per square foot in MONARCH BEACH!!!!!!!!! Steal this home and you will be Walking to the Sand in style!!!!Owners have recently become Very Motivated and have priced this home to sell!!!!!!!They had Multiple Offers in the past few months up to $1,070,000.. .. .. .. .. .NOW IS THE TIME TO GET YOUR DEAL IN MONARCH BEACH!!!!!! Massive discount now AT $895,000 for IMMEDIATE Sale. This home in this location cannot be replaced!!!!!HURRY!!!!!

As you can see from the description, this is not a short sale nor an REO, as the homeowner bought in 2003 for $660,000. That could give the property an advantage, because theoretically it would be easier (and faster) to deal with an individual - particularly one who is motivated to sell - than a bank.

This house would prove to be a good investment if they could pull off $895,000, considering it would mean a profit of $181,300 after 6% sales costs but before any upgrades.

Let's look a bit deeper into the description:
"Steal this home and you will be Walking to the Sand in style!!!!" - How much of a steal is this really considering a sale for the full asking price would mean appreciation of 6.25% each year for five years since the purchase - even though the median has fallen to 2004 levels? It's a little blurry about who would be taking advantage of whom.

"Owners have recently become Very Motivated and have priced this home to sell!!!!!!!" - Way to imply that they were unmotivated and unreasonably priced before this point. Was the house previously priced just for looks?

"They had Multiple Offers in the past few months up to $1,070,000" - Hmm, this is odd, irrelevant, and too much information (TMI). They received multiple offers well above the original asking price, and yet have not sold and have needed to lower the price by $104,900. What prevented them from accepting one of these multiple offers, including at least one that was above asking price? Did they think they could get more money and said no? Did the property not appraise and the buyers' lenders balked?

Either way, we don't care what offers you have received. Whatever the market was like back then, it's only gotten worse since and we're more interested what a buyer is willing to pay and you're willing to accept now.

This home in this location cannot be replaced!!!!!HURRY!!!!! - Oh really? Well, technically, you could not rebuild the house and plant it on the same lot unless you bought it in the first place, which would then make a replication of the house utterly ridiculous. You could, however, buy one of these houses:

• 23945 Wanigan Way in Laguna Niguel is bigger and is asking $859,900. Not exactly a big step down going from Dana Point to Laguna Niguel.
  
• 5 Saint Michael just came on the market for a wishing price of $995,000. It's smaller than our subject property.
• 30 Vista Sole Street is a legitimate million-dollar home that is much bigger and closer to the ocean. Asking price: $1.6 million.
  

"Huh?" photo of the week

There is a limited amount of pictures that may be posted on the MLS along with any property listing. So, why wouldn't you want to put the following photo up with this Dana Point condo:
That's right: It's a picture of some dude who just landed a huge fish. Photo number 17 on Redfin. I'm sure he's got a great story to tell, but it doesn't exactly fit right in with the whole real estate theme the MLS usually holds to.

Oh, and this wasn't a totally isolated incident. Here's the photo preceding it:

Too bad considering the photo montage started out relatively well, with this professional-looking image:
Of course, there are no exterior photos of the property. In case you're keeping score at home, here is the count: 8 interior shots; 1 of the deck; 1 of a hill; 4 of the association/pool; 3 of the harbor/beach; 1 of a whale; 1 of a guy fishing; and 1 that's actually three photos in one of the harbor, some people whale watching and some more people kayaking.

On a similar but unrelated note, the property has been active on the market for 166 days without a sale.