Auction style in Nellie Gail

It's on! You've got just one chance to (literally) bid up this Nellie Gail property. Don't even look at the asking price...it's just the "suggested opening bid."

27642 Hidden Trail Road, 92653
Asking price: $1,995,000
Previous sales price: $1,600,000
Previous sales date: 8/25/09

Beds:	5
Baths:	4.5
Sq. Ft.:	7,082
$/Sq. Ft.:	$282
Lot Size:	0.92 Acres
Property Type:	Residential, Single Family
Style:	Two Level, Other
View:	Canyon, City Lights, Mountain, Panoramic
Year Built:	1988
Community:	Laguna Hills
County:	Orange
MLS#:	P711507
Source:	SoCalMLS
Status:	Active This listing is for sale and the sellers are accepting offers.
On Redfin:	14 days

From listing: AUCTION - $1,995,000 Suggested Opening Bid - See Remarks, Beautiful Custom Estate in Nellie Gail, Large 40,000sf Equestrian Lot in prime Nellie Gail neighborhood with panoramic views, gated entry, open floorplan, grand entrance with spiral staircase, large family room with full bar, gourmet kitchen, office/library on main floor, large master retreat with fireplace & private deck, backyard perfect for entertaining with pebble-coat pool, spa, built-in BBQ area, Marble fireplace, stained leaded glass windows, instant hot water in kitchen sink, (2) central vacuum systems

We wish we knew how much the current owner expects to pull once everything is done .... $2.1 million? $2.3? More?

One thing to note is this property went for $2.6 million at the peak in 2006. You don't suppose this property has magically appreciated back near there, do you?

Us either. We'll keep our eyes peeled to see what this one eventually goes for.

Not so good in Laguna Hills

Not only are a few arguing the market is past the bottom, they see what approaches double-digit appreciation by the summer. If the market as a whole went up almost 10%, and swept up this property with it, would you be willing to pay that much more for this Laguna Hills property?

24692 Julie Ave, 92653
Asking price: $649,000
Previous sales price: $395,000
Previous sales date: 8/14/00

Beds:	5
Baths:	2.75
Sq. Ft.:	2,900
$/Sq. Ft.:	$224
Lot Size:	8,125 Sq. Ft.
Property Type:	Residential, Single Family
Style:	Two Level, Modern
Year Built:	1978
Community:	Laguna Hills
County:	Orange
MLS#:	V09110998
Source:	CARETS
Status:	Active
On Redfin:	17 days

From listing: Very nice beautifully maintained home with open floorplan & high ceilings, set back from the street yet has a good size backyard w/ covered patio, grassy area & side patio. A gardener's delight, landscaped yard has brick trimmed planters on both sides of the house. Freshly painted inside & out. Main level has four bedrooms including a master suite, two baths, huge living rm, dining rm w/ french doors that opens to side patio, big cheerful kitchen with newly reglazed countertop, family rm w/ fireplace that opens to covered patio, yard & spa. Dont miss the spacious suite on the 2nd level accessed thru the door to the garage. It has a living rm, huge walk-in closet and a cozy bedrm, dressing area and bathrm. The garage has room for one car, partly used for stairway access, but driveway has parking area for at least 4 more cars, plus a covered carport big enough for a boat or RV. Truly a delightful home in a great convenient location to shops and freeway access.

This is one of those that we wouldn't really want to own at any price because the property just isn't our thing. The architecture and layout is dated, plus you back to a shopping center, which backs to the freeway. Yikes.

As Redfin says, the current owners have held this property for almost a decade and are now ready to move on. To be more precise, they've already moved on as you can see from the fact that the house is empty.

If one were to look at asking price per square foot, at $224 it doesn't seem too outrageous - considering the house is 2,900 square feet. But the price tag of nearly $650k for this 30-year-old house without many frills seems like a reach.

But, if there is the appreciation predicted by First American CoreLogic (referenced at the top of this post), this property could soon be well over $700k by summer. Chuckle.

What's the deal?

What an amazingly hot weekend. And, what an amazingly confusing local housing market. Here's an example of an REO in Laguna Hills that normally wouldn't make sense but is all too common these days.

26165 Bridlewood Dr, 92653
Asking price: $1,399,000

Beds:	5
Baths:	4
Sq. Ft.:	5,300
$/Sq. Ft.:	$264
Lot Size:	0.57 Acres
Property Type:	Single Family Residence
Style:	Mediterranean
Stories:	2
Year Built:	1986
Community:	Laguna Hills
County:	Orange
MLS#:	P699016
Source:	SoCalMLS
Status:	Active
On Redfin:	18 days

From listing: GREAT OPPORTUNITY - ESTATE HOME IN NELLIE GALE. Grand formal entrance with dual staircase. Bright interior with spacious rooms and high ceilings. Formal dining room. Gourmet kitchen with granite counters, 2 sub zero refrigerators, 2 dishwashers, dual oven, and lots of room for storage. Fireplace in family room, living room, and master retreat. Master suite with retreat and private balcony. Master bathroom has dual sinks, vanity, spa tub and large shower. Bonus room downstairs - perfect for office/den. Patio area with built in BBQ for entertaining framed by lush landscaping with fountains. Gated circular driveway with porte cochere.

The listing agent probably should go back and figure out how "Nellie Gail" is actually spelled. After all, this is a million-dollar listing.

This property went back to the bank for $1,464,750 in July. It's already back up for sale in August. If all foreclosures moved that fast through the system we'd be on the road to recovery in no time.

Redfin says the previous sale was for $1.15 million in 2001.So, if we can locate a buyer willing to pay the full asking price, then this property would be $249,000, or 22% above the 2001 price.

Must sell in Nellie Gail

We're back in Nellie Gail (Laguna Hills) wondering why a property with the phrases "must sell fast" and "drastic change in price" is priced so insanely above its bubble price.

25526 Lone Pine Circle, 92653
Asking price: $2,299,000

Beds:	4
Baths:	4
Sq. Ft.:	4,694
$/Sq. Ft.:	$490
Lot Size:	1.01 Acres
Property Type:	Single Family Residence
Style:	Mediterranean
Stories:	2
View:	City Lights, Mountain, Has View
Year Built:	1988
Community:	Laguna Hills
County:	Orange
MLS#:	S568413
Source:	SoCalMLS
Status:	Active
On Redfin:	148 days

From listing: Drastic change in price. *MUST SELL FAST* This resort style classic Mediterranean custom estate located on one of the most unique prime location has a 1.1 acre lot Perfectly positioned at the end of the cul-de-sac among jewels of Nellie Gail Ranch with private pool, spa, built in BBQ, Fire Pit, Gazebo, Orchard with over 300 fruit trees of avocados, oranges, tangerines, apples, lime and lemons, mangoes pomegranate, guava and grapefruits surrounded by over 60 queen palm trees with access gate to the horse trail. Elegantly designed with vaulted ceilings and adequate lighting, highly upgraded & tastefully decorated interior with 3 fireplaces, Marble floor through out the lower level, Master bedroom with fireplace, retreat or office, totally remodeled kitchen with new cabinet, granite etc., and cozy family room leading into a sun room. Downstairs has a bedroom suite and an office plus a powder room, Central Vacuum and more, Plenty room for barn and horses. Very special location 'MUST SEE'

The drastic price change they're talking about is going from $2,699,000 to the current asking price - a decrease of $400,000. But, the asking price was $2,199,000 at one point and the asking price was actually raised back up.

The previous sales price? Redfin has it pegged at $1,405,000 in 2003. Do you think this property appreciated 64% since 2003?

Nellie Gail on sale

What might have gone wrong for this Nellie Gail property in Laguna Hills? If the records are correct, quite a bit...

25501 Lone Pine Cir, Laguna Hills 92653
Asking price: $2,499,990

Beds:	6
Baths:	6
Sq. Ft.:	6,500
$/Sq. Ft.:	$385
Lot Size:	0.42 Acres
Property Type:	Single Family Residence
Style:	Other
Stories:	2
View:	City Lights, Mountain, Has View
Year Built:	1989
Community:	Laguna Hills
County:	Orange
MLS#:	S563645
Source:	SoCalMLS
Status:	Active
On Redfin:	185 days

From description: Custom Newly Remodeled Nellie Gail Estate, Entertainers Delight! *Majestic Mountain & City Lights Views *Sparkling Pebble Tec Pool & Spa *Pavilion w/Fireplace & Ceiling Fan *Outdoor Kitchen w/Custom Pizza Oven & BBQ *Gorgeous Curb Appeal w/Circular Driveway & Stately Columns *Formal Entry w/Custom Iron Double Doors *Elegant Living Rm & Formal Dining Rm + Butlers Pantry w/Built-In Wine Rack *Gourmet Kitchen w/Travertine Floors, Coffered Ceilings, Granite Counters, & Stainless Steel Appl. *Large Family Rm w/Fireplace & Built-Ins *Luxurious Master Suite w/Retreat, Bar, & Fireplace + Lavish Master Bathrm w/Jetted Tub +Shower + Walk-In Closet *2 Additional Mainflr Bedrms + 3 Second Level Bedrooms *Office + Mainflr Bonus Room w/Bar (Great as Game Rm) +Upstairs Bonus Rm (Great as 2nd Family Rm) *Exterior Exercise Rm *Extraordinary Appointments include Travertine Flring *Custom Paint *Custom Lighting *Art Niches & Columns *French Doors *Marble & Granite Accents *Rich Toned Cabinets & Built-Ins

Property History

Date	Event	Price	Appreciation	Source
Aug 07, 2009	Price Changed	$2,499,990	--	SoCalMLS #S563645
Apr 24, 2009	Price Changed	$2,999,990	--	SoCalMLS #S563645
Apr 04, 2009	Price Changed	$3,249,000	--	SoCalMLS #S563645
Mar 17, 2009	Price Changed	$3,375,000	--	SoCalMLS #S563645
Feb 13, 2009	Listed	$3,499,900	--	SoCalMLS #S563645
Dec 20, 2004	Sold	$2,750,000	6.9%/yr	Public Records
Apr 28, 1995	Sold	$1,450,000	-4.9%/yr	Public Records
Sep 30, 1992	Sold	$1,650,000	--	Public Records

Too many asterisks and abbreviations for our taste in the description. As you can see from the info above, Redfin says this previously sold for $2.75 million in 2004. If that's correct, and the owners spent some additional dough remodeling the property, it's going to be a pretty big money pit when and if it sells.

The owners tested the market by listed the property for $3.5 million in February, only to slide down to its current asking price of $2.5 million.

Assuming the house can be sold for the current asking price, it would be $250,010 below the 2004 sales price, not including sales costs and any renovation costs.

REO in Nellie Gail

Who knows...perhaps this bank-owned property in Laguna Hills' Nellie Gail will become more common as things go, considering the middle and high ends are showing more distress.

25022 Buckboard Ln, 92653
Asking price: $808,800
Asking price/ sq ft: $270
Bank purchase price: $1,100,000
Bank purchase date: 10/9/08
Size: 5 beds, 3 baths, 3,000 sq ft (built in 1978)
MLS: S574560 (59 days on Redfin)
ZipRealty price tracker: Price Reduced: 06/05/09 -- $844,800 to $827,800
Price Reduced: 07/09/09 -- $827,800 to $808,800
Zillow Zestimate: $996,000
HOA dues: $82
Type: Single Family Residence
Style: Contemporary
Stories: 3+
Lot size: .57 Acres
From listing: This 5 bedrdoom fixer is ready for your ideas. added living space and pool and spa + horse property make this a must see. You won't find a better price in Nellie Gail.

Sure, you won't find a better price in Nellie Gail, but it's also unlikely you'll find a property there in worse condition than this one. Fixer is right. Take a look at the photos and you will see this property is certainly in need of some sprucing up.

Would you like to spend 4/5 of $1 million on a fixer-upper? It depends how much you want to live in Nellie Gail, and whether you think this is a good opportunity.

The Redfin property records also show this property sold for $690,000 in 2004. Considering there is work to be done now, and assuming that record is correct, do you really think the property has gone up in value since then?

The bank has reduced the asking price by $36,000 so far. Did you also notice the abundance of lucky 8s in the asking price? Perhaps whomever takes possession of this property next will be able to create some of their own luck.

Little chance in Laguna Hills

Here we have another case of a short sale where the property is hiding more debt than meets the eye. This one is in Laguna Hills...

26131 Buena Vista Ct, 92653
Asking price: $689,000
Asking price/ sq ft: $251
Purchase price: $846,000
Purchase date: 5/25/05
Size: 4 beds, 3.75 baths, 2,741 sq ft (built in 1979)
MLS: S573884 (18 days on Redfin)
Zillow Zestimate: $696,000
Type: Single Family Residence
Style: Traditional
Stories: 2
Lot size: 7,000 Sq. Ft.
From listing: Beautiful Stratford Ridge in Laguna Hills...located prime inside corner lot with great curb appeal. Vaulted Ceilings, open kitchen with large family room and separate dining room. One bedroom down with full bath and huge master suite. Great back yard with patio cover and inviting pool/spa - lots of privacy...

This property nearly doubled in value between 2001 and 2005 - from a $463,000 sales price in 2001 to $846,000 almost four years exactly to the day. The new owners in 2005 used 80% financing and a $169,200 downpayment. Only a couple months later, an $84,000 second loan was added from JP Morgan Chase.

Less than two years after that, there was a third loan of $155,700 from Countrywide. The total amount of mortgage equity withdrawal could have been as high as about $240,000, and total combined debt on this property could easily have been more than $900,000. The owners, who presumably could have taken all their downpayment plus a bunch extra out of this house, listed it for sale at a huge discount off the previous sales price.

How much? If the property can be sold for the current asking price, it would mean a depreciation of 19% off the 2005 price. But as you know, the lenders involved would be taking even more of a hit than that.

Selling short in Laguna Hills

A commenter pointed out to us that this Laguna Hills property has been sitting for some time, so we thought we'd take a look...

25222 Pike Road, 92653
Asking price: $485,000-$496,000
Asking price/ sq ft: $235-$240
Purchase price: $680,000
Purchase date: 4/7/05
Size: 4 beds, 2 baths, 2,066 sq ft (built in 1969)
MLS: S531040 (378 days on Redfin)
ZipRealty price tracker: Price Reduced: 08/04/08 -- $649,900 to $524,900
Price Reduced: 02/04/09 -- $524,900 to $496,000
Zillow Zestimate: $554,187
HOA dues: $235 Type: Single Family Residence
Style: Mediterranean
Stories: 2
Lot size: 5,406 Sq. Ft.
From listing: REDUCED TO SELL NOW!!!Spectacular Former Model Home-desirable Floor plan 4 BEDROOMS/2 BATHS/2 CARGARAGE,Upgraded some areas,great-large Master bedroom at main level plus another bedroom with wood floors & remodeled full bath with marble floors, newer fixtures, glass block walls & more.Cathedral ceilings plus a huge Bonus Room/Family room overlooks to living room with wetbar, pergo floors, custom window coverings, tract lightings, ceiling fan,french doors & windows through out. Redone kitchen with travertine counter top, newer cabinets, range, dishwasher,sink, fixtures & sound proofed bevelled windows & sliding doors. Separate formal living room with newer plush carpet, fireplace, scraped textured ceilings. Custom front, side hardscaped & landscaped, backyard have waterfalls, streams, ponds, patio cover & trees-great Japanese style garden, re-roofed approx 2005.Still need some finishing touches!!! NO HOA & LOW TAX RATE-NO MELLO-ROOS

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This property has been for sale for almost a year, so we have no idea what it actually looks like inside these days. The fact that the commentor said "it basically looks like a foreclosure with the yard unkept" isn't a good sign, either.

Here is what we do know about this house: The current owners paid $680,000 in 2005, using 80% financing and a $136,000 downpayment. In 2007 they added a second loan to the property for $80,000 that liberated some (not all) of their stake in the property.

The first loan (of $544,000) went into default in August 2008, and a notice of trustee sale was filed in December in the amount of $550,710. As you can see, this means that after interest and fees, the amount owed is above the original loan balance from 2005. According to ForeclosureRadar.com, the property is scheduled for auction on June 8.

With an asking price of $496,000, it would represent a 27% decline off the 2005 price, not including sales costs. We're still not sure the bank will even let the house go for that price, though it wouldn't be surprising if it would be cheaper than going through the foreclosure process and dealing with this property afterward when it becomes an REO.

Custom built, cookie-cutter problem

Sure, this Nellie Gail mansion has all the touches you'd expect from a custom house. But it's also a short sale and in preforeclosure just like so so many others...

27462 Hidden Trail Rd, 92653
Asking price: $2,299,000
Asking price/ sq ft: $329
Purchase price: $2,600,000
Purchase date: 1/6/06
Size: 5 beds, 4.5 baths, 6,995 sq ft (built in 1988)
MLS: S571123 (11 days on Redfin)
Zillow Zestimate: $2,297,500
HOA dues: $80
Type: Single Family Residence
Style: French
Stories: 2
Lot size: 0.92 Acres
From listing: THIS BEAUTIFUL CUSTOM BUILT HOME IS SITUATED IN A PREMIER LOCATION IN THE SOUGHT AFTER NEIGHBORHOOD OF NELLIE GAIL RANCH ON ALMOST 40,000 SQFT LOT. THIS ESTATE HOME HAS A GATED ENTRY AND AN OPEN AND FLOWING FLOOR PLAN & A GRAND ENTRANCE WITH SPIRAL STAIR CASE. OVERSIZED FAMILY ROOM W/FULL BAR AREA. LARGE GOURMET KITCHEN, HUGE MASTER BEDROOM W/RETREAT & FIREPLACE. OFFICE/LIBRARY WITH BUILT-INS ON THE MAIN FLOOR. ENTERTAINER'S GROUNDS FEATURE POOL, SPA, LAWN AREA WITH MATURE TREES AND AMAZING CITY LIGHTS, SUNSET AND MOUNTAIN VIEWS. LOW HOA DUES, LOW 1.1% TAX RATE AND NO MELLO ROOS. THIS IS A SHORT SALE.

Check out the photo of the kitchen in the listing. Needs some serious updating for a $2 million+ house. Where's the granite!? Stainless steel? Shoot us now...

The current owner paid $2.6 million at the peak of the bubble. As you can see by the asking price today, they don't expect it's worth as much these days.

We're not sure what the financing was at the time of purchase (if any) but we do know there was a $1.84 million loan from Downey Savings in April 2007. That's what is now in default.

There also was a $650,000 second loan from Wells Fargo in April 2007, for a total of $2.49 million in debt. If the property can be sold for the current asking price, it would mean a loss of $438,940, including 6% sales costs.

Not anymore in Laguna Hills

Today marks the blog's 500th post. To commemorate the occasion and celebrate its unexpected yet continued longevity, we're going to show you an example of the type of financing that once used to be widespread, but now is long gone.

Here's the house - an REO in Laguna Hills' Moulton Ranch...

27142 Woodbluff Rd, 92653
Asking price: $999,000
Asking price/ sq ft: $286
Bank purchase price: $1,192,500
Purchase date: 11/25/08
Size: 4 beds, 4 baths, 3,498 sq ft (built in 1993)
MLS: S563682 (4 days on Redfin)
Zillow Zestimate: $1,146,500
HOA dues: $95
Type: Single Family Residence
Style: Other
Stories: 2
Lot size: 0.34 Acres
From listing: 4 bedroom. 4 bathroom, *BANK OWNED* in Moulton Ranch. City lights view. Property needs TLC.


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This property's last "normal" sale was for $1,140,000 on April Fool's Day 2005. Yep, the joke was on the lenders. Countrywide gave the borrower $1,026,000, and the previous owner came up with the remaining $114,000 as a downpayment.

About a year later, another lien for $399,000 was added. In September 2006, the owner refinanced into $1.36 million worth of loans from Greenpoint Mortgage Funding (Capital One's Alt-A mortgage outfit). You should know Greenpoint shut down in 2007 because of loans like these.

The owner lost his house (which is now apparently in bad condition) and credit; the bank lost a bunch of dough. Assuming the house sells for the current asking price, it would be a mere 12% off the bubble price, not including any sales costs. That's not a very big discount at all - particularly considering the property is a fixer.

Just goes to show you that not all REOs are at fire-sale prices.

Just one of many in LH

Here's your typical foreclosure property in Laguna Hills - 25726 Califia Drive. This 4-bedroom, 1.75-bath house previously sold for $575,000 in 2004. There obviously was a lot of debt on this property, as it went back to the bank for more than $660,000 in July 2008. Now, it's on the market for $430,000 - 25% below the '04 price.

Let's take a look at some of the pictures:

Welcome to your vintage bathroom...
Walls could use some touching up...
Here's our favorite: Proof your new home was recently cleaned! Why the heck would you a) take this picture, and b) post it with the listing? Awful photo indeed.

$900k+ debt to REO in LH

This Laguna Hills property didn't stand a chance - not while its previous owner was pulling out the kind of cash he was. Now, it's an REO and a 2003 rollback.

25251 Barents, 92653
Asking price: $595,900
Asking price/ sq ft: $176
Bank purchase price: $648,000
Purchase date: 10/15/08
Size: 5 beds, 2.75 baths, 3,394 sq ft (built in 1977)
MLS: S554084 (52 days on Redfin)
Zillow Zestimate: $711,000
HOA dues: N/A
Type: Single Family Residence
Style: Cape Cod
Stories: 2
Lot size: 0.26 Acres
From listing: 5 BEDROOMS, 3 BATH BANK OWNED ON CORNER LOT IN CUL-DE-SAC. OPEN FLOOR PLAN, CLOSE TO SHOPPING, SCHOOLS AND FREEWAYS.


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We'll spare you the details on all the re-financing, but the bottom line is the previous owner paid $668,500 in 2003 and purchased the property using 90% financing. The loans at that point totaled $601,650.

By August 2006, the total debt was up to $945,000 thanks to two loans from Greenpoint Mortgage Funding. That company blew up in mid 2007. The property began the foreclosure process when a notice of default was filed on the first loan in April 2008. The bank took back the property in October.

Assuming a sale for the current asking price, this property would have gone for $72,600 or 11% less than its November 2003 price, not including any additional costs or fees.

Up for grabs

Another day, another bank swallowed up - this time Wachovia. And, we're finding out that foreclosure starts in OC are way down. Not because people are making payments again, but because a new law went into effect that delays the process.

Today's property is an REO in Laguna Hills/Aliso Viejo (it's in the Aliso Viejo ZIP code). Perhaps if the timing were different, it would have been helped out by this new law. Then again, when one buys at the peak of the bubble and can't (or won't) make the payments anymore, would a delay matter, or would it only be postponing the unfortunate, inevitable outcome?

26286 Eva St, 92656
Asking price: $659,000
Asking price/ sq ft: $313
Bank purchase price: $588,800
Purchase date: 8/26/08
Size: 4 beds, 3 baths, 2,104 sq ft (built in 1989)
MLS: S526222 (190 days on Redfin)
HOA dues: $61
Type: Single Family Residence
Style: Mediterranean
Stories: 2 Levels
Lot size: 4,022 Sq. Ft.
From listing: RUN...don't walk! This is the best location in Laguna Hills and it's an absolute KNOCK-OUT!!! This very well appointed 4 bedrooms 2.75 baths La Posada home has too many upgrades too mention...but we'll try. From the hardwood, ceramic tile and tumbled travertine flooring, to the custom recessed lighting, custom paint, upgraded carpets and padding, remodeled bathrooms, built-in entertainment center, crown molding, custom window blinds, newer HVAC system, two separate fireplaces, eat-in kitchen, center island and lush landscaping....this home has it all! This development has one of the lowest HOAs in Laguna Hills and a very low Mello Roos. Centrally located. Easy freeway and tollway access. Close to shopping and the beach. Better grab this one before someone else does!

Customized financial info:
Minimum Income Requirement (using 30Y Fixed): $141,000, assumes no other debt/obligations.
Downpayment needed: $23,650
Monthly Payment on 30Y Fixed at 6.25% with property taxes and FHA mortgage insurance estimated: $5,016.28
Minimum Income Requirement (using 5Y fixed): A client wouldn’t take an ARM under this scenario as FHA Jumbo Financing is being used and the ARM rates are above Fixed rates because of the severe credit market disruptions. Investors have little appetite for high loan to value ARMs.
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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The previous owners bought the property in 2005 for $759,000 using a $607,200 1st loan (80%) from Lehman Bros and a $75,900 second (10%) from Wells Fargo. The home went into default in February and was eventually sold back to the bank at auction in late August.

Unfortunately, the previous owners did put some of their own money into the property - and it sounds like a lot of upgrading took place. Still, the lenders were the largest losers, since they're now having to deal with the REO now.

The current asking price is certainly not a fire sale - it's $100,000, or 13% off the previous sales price. It will be interesting to see if this property can be sold for the current price, and if not, how low it will need to go to find a qualified buyer.

Falling back in Laguna Hills

Today we're checking out an upscale Laguna Hills property that could change hands for the third time since early 2005. Each time since that peak price three years ago, it appears the next sales price will be progressively lower.

26682 Bridlewood Dr, 92653
Asking price: $757,900
Asking price/ sq ft: $246
Purchase price (bank?): $837,815
Purchase date: 7/27/07
Size: 5 beds, 3 baths, 3,079 sq ft (built in 1989)
MLS: S543900 (26 days on Redfin)
ZipRealty price tracker: Price Reduced: 8/26/08 -- $789,900 to $757,900
Zillow Zestimate: $934,500
HOA dues: $95
Type: Single Family Residence
Style: Contemporary
Stories: 2 Levels
Lot size: 6,940 sq ft
From listing: Spacious four bedroom with bonus room plus three full bath home offering over 3,000 sq.ft. Two story entry leads to formal living room and dining room. Large kitchen with upgraded granite counter tops, center island over looks familyroom with destinctive fireplace and wetbar (also with granite counter). One bedroom / bathroom downstairs. Spacious master bedroom suite with retreat and fireplace. Panoramic views of the Saddleback Mountain range. Spacious secondary bedrooms plus bonus room.

Customized financial info:
Minimum Income Requirement (using 30Y Fixed): $165,000, assumes no other debt/obligations.
Downpayment needed: $28,422
Monthly Payment on 30Y Fixed at 6.25% with property taxes and mortgage insurance estimated: $5,422.52
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: $5,188.04
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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What do you know...you can see a for sale sign next to this home in the Google street view. Wonder when that photo was taken?

This home sold for $850,000 at its peak in 2005. After that, it's a little shaky. We know this home was a Countrywide REO at the end of last year (listed with the same agent) and was asking as much as $949,900. Then, it was down to $864,900.

That means the 2007 price should be the amount the property went back to the bank for at the foreclosure auction. However, we don't know the full history since we could not find a current record of the property on ForeclosureRadar. Either way, someone (or some entity) is not doing so well by holding onto this place.

The asking price is already $32,000 lower than when the home was listed.

Assuming the property sells for its current asking price, it would mean a decline of $92,100 or 11% off the 2005 top price, not including any sales costs. That of course would mean someone is ready to pay full asking price for this property. Heard about what's going on with Fannie Mae and Freddie Mac?

Big discount in Laguna Hills

This Laguna Hills "POOL HOME" is an REO testing the $700,000+ market in South Orange County. It's been up for sale for about three weeks so far...

24811 Solano Ct, 92653
Asking price: $729,500
Asking price/ sq ft: $266
Income requirement: $182,375
Bank purchase price: $750,000
Bank purchase date: 4/18/08
Size: 4 beds, 3 baths, 2,470 sq ft (built in 1979)
MLS: S540097 (24 days on Redfin)
Zillow Zestimate: $740,500
Type: Single Family Residence
Stories: 2 Levels
Lot size: 7,000 sq ft
From listing: POOL HOME..4 Bedrooms..Cul De Sac, 3 Fireplaces, New carpet....Fresh Paint....Open Kitchen..Family room with Fireplace.....Formal Dining Room....Large Master bedroom with fireplace, Built in BBQ on Patio . Nice curb appeal.


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The story on this property is likely familiar to you by this point: The former owner purchased the home during the bubble for $920,000 using 100% financing from Fremont Investment & Loan. They quickly defaulted and received a notice of default in June 2007.

The notice of trustee sale was delivered in March 2008 and demonstrated that the $736,000 first loan was now being strangled by $846,884 worth of unpaid principal, interest and fees.

The home went back to the bank at the foreclosure auction in April when no bidders stepped forward to take the property for $750,000.

Assuming the lender unloads this property for the full asking price, it would mean a depreciation of $190,500, or 21% off the peak sales price, not including any sales costs.

51% off in Laguna Hills

It may be a fixer-upper REO now, but this Laguna Hills home sold for more than $600,000 just three years ago.

24981 Presidio Dr, 92653
Asking price: $309,900
Asking price/ sq ft: $220
Income requirement: $77,475
Bank purchase price: $594,517
Purchase date: 6/6/08
Size: 3 beds, 2 baths, 1,409 sq ft (built in 1971)
MLS: S540854 (3 days on Redfin)
Zillow Zestimate: $442,000
2007 property tax: $6,632
Type: Single Family Residence
Style: Bungalow
Stories: 1 Level
Lot size: 5,630 sq ft
From listing: Great Opportunity for 1st time buyer or investor. This single story home offers a 3 bedroom floorplan on a spacious corner lot. Previously remodeled, this home needs a little TLC to recapture it's former beauty. Customized floorplan can be converted back to it's original functionality. Traditional home offers value with front facing garage and driveway, no homeowner's association dues, and full wrap-around yard. Close to freeway, shopping, schools and parks.

There aren't any interior photos, so we can only speculate what the property looks like inside to warrant the "previously remodeled but needs TLC" label.

The previous owner-occupant bought the property right around the peak of the market for $635,000. The seller had purchased the home near the bottom of the market in the mid-90s, so they ended up making $485,000 before sales fees and renovation costs.

The peak buyer used 95% financing from Southstar Funding. He pulled out his downpayment plus some extra in August 2006 by adding a $100,000 loan from Bank of America. Almost a year later to the day, a notice of default was filed on the first loan. The property ended up going back to the bank in June for $594,517.

The bank looks like it's serious about getting this one off the books, and has priced the property accordingly. Assuming a sale for the full asking price, it would mean a depreciation of $325,100 or about 51% off the peak 2005 price.

Near the '02 price in Laguna Hills

The OC Register is reporting that by S&P-Case/Shiller methodology the current real estate bear market has caused greater price declines in 15 months than those seen during the entire 71-month downturn in the 1990s.

Today's property is evidence of the accelerating downward trend of property values in the area. It's a short sale in Laguna Hills that is asking far closer to its June 2002 sales price than the amount "paid" in 2006.

The real estate bubble is long gone.

16 Carriage Hill Ln, 92653
Asking price: $399,000
Asking price/ sq ft: $212
Income requirement: $99,750
Purchase price: $635,000
Purchase date: 8/25/06
Size: 3 beds, 3 baths, 1,879 sq ft (built in 1982)
MLS: S520441 (142 days on Redfin)
ZipRealty price tracker: Price Reduced: 2/05/08 -- $590,000 to $535,000
Price Reduced: 3/03/08 -- $535,000 to $499,000
Price Reduced: 3/31/08 -- $499,000 to $465,000
Price Reduced: 5/04/08 -- $465,000 to $449,000
Price Reduced: 6/06/08 -- $449,000 to $399,000
Zillow Zestimate: $557,500
HOA dues: $240 + $32
Type: Single Family Residence
Style: Contemporary
Stories: 2 Levels
Lot size: 4,000 sq ft
From listing: One of the largest private lots in The Indian Creek Homes Community. This home offers a spacious floor plan with a living room and formal dining room and an abundance of light with all the windows. Peaceful backyard with a weatherproofed deck, lighting and sprinklers. Kitchen has been upgraded granite countertops and new appliances. Lowest priced home in this community...you wont be disappointed!


The owner financed the entire purchase price using a $508,000 first loan and a $127,000 second. The original asking (wishing) price was $590,000. No go. Now, the property has been reduced by $191,000. It's still on the market.

Here is the sales history:

Aug 11, 1988: $195,000
May 04, 1990: $249,000
Jun 10, 2002: $375,000
Jul 24, 2002: $359,000
Sep 27, 2004: $575,000
Aug 25, 2006: $635,000

Between 1990 and 2002 (around the beginning of the 1990s downturn to the beginning of the last housing bubble) the property appreciated by $126,000. That's a total of 51% over the course of about 12 years. Not bad at all.

From 2002 to its sale at the peak of the bubble in 2006, the property sold for $635,000. That's an increase of $260,000 or 69% or in just four years. When compared to some of the other escalating property values around South OC, this is actually a relatively modest appreciation.

Assuming a sale can go through for the current asking price, the lender would lose $259,940, including 6% sales costs. It would also mean a depreciation of 37% in less than two years, not including any sales costs.

An OC castle's dark side

This extremely high-end property in Laguna Hills' Nellie Gail is a multi-million dollar home with just about every imaginable upgrade and luxury. There's a game room and underground wine cellar. The 360-degree views are pretty nice as well.

We also should probably mention it's in preforeclosure.

26192 Oroville Pl, 92653
Asking price: $6,599,000
Asking price/ sq ft: $574
Income requirement: You can't afford it
Purchase price: $5,325,000
Purchase date: 5/25/05
Size: 7 beds, 10 baths, 11,500 sq ft (built in 1986)
MLS: S510018 (242 days on Redfin)
Zillow Zestimate: $3,671,500
2007 property tax: $56,791
HOA dues: $80
Type: Single Family Residence
Stories: 3+ Levels
Lot size: 2.11 acres
From listing: Orange County Castle designed for grand scale living. This magnificent residence offers stunning views from nearly every room. A sweeping staircase on the 2nd level balcony leads to the turret with 360 degree views. Main residence encompasses a 12 seat theater, game room & subterranean wine celler. Guest quarters offers 2BR/2BA & full kitchen. The grounds include a tranquil stream with bridge, waterfalls & lush landscaping while showcasing the panoramic hillside & mountain views.


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They're asking $6.6 million and they can't spell wine "cellar" correctly? We're not even going to get into the grammatical errors.

The current owner bought the home in 2005 using 70% ($3,727,500) financing from Bank of America. Less than two weeks later, they got a loan for $1.8 million. That means they now had $5,527,500 worth of debt on a property they had just paid $5,325,000 for. Instant equity!

In February 2008 there was another lien added against the property for $1 million. That means, then, the asking price probably puts them close to, if not at, the break-even point for being able to get out with all their debts paid off.

The original loan received a notice of default in January for $149,508. The notice of trustee sale came in April, for $3,762,325. The second, $1.8 million loan received its notice of default in April for $123,193.

Before you get your hopes up of taking this one at a foreclosure auction, ForeclosureRadar.com shows three previous defaults on this property and three notice of trustee sales that were all eventually cured, so there is certainly a chance it will be redeemed.

If not, OC would have one heck of an REO on its hands.

41% off in Laguna Hills

Can you imagine paying more than $500,000 for this 1,213 sq-ft, 29-year-old Laguna Hills condo? Someone did in 2006. A relatively small percentage of people in America could have been able to afford this property using conservative (historical) lending standards.

But, more people can afford this place at its current - and much lower - price. The question is whether or not anyone wants it now, or if they are waiting for it to drop further.

22512 Caminito Costa #9, 92653
Asking price: $299,000
Asking price/ sq ft: $246
Income requirement: $74,750
Purchase price: $510,000
Purchase date: 5/1/06
Size: 3 beds, 2 baths, 1,213 sq ft (built in 1979)
MLS: S529863 (32 days on Redfin)
Zillow Zestimate: $391,500
2007 property tax: $4,736
HOA dues: $340
Type: Condominium
Style: Colonial
Stories: 2 Levels
From listing: Condo situated near the Irvine Spectrum in the community of Laguna Village. Master bedroom has access to green belt situated in the back of the property. Two car enclosed attached garage. Kitchen has granite counter top. Inside laundry & good size living room. Property close to the 405 & 5 Freeways. Complex has pool, spa, tennis and basketball courts.

This condo is affordable to a household making around the median income in Orange County. Do you think this is the type of home that a median income warrants (don't forget to factor the granite countertops into your decision)?

This looks like the least-expensive property in the Laguna Village complex. Others include 23235 Caminito Andreta #48, which sold at the peak for $475,000 but went back to the bank for $196,989 and is for sale asking $309,900 (35% discount).

At least two properties nearby are for rent: 23422 Caminito Flecha is asking $1,995 per month, and 23395 Caminito Juanico #298 is asking $2,150. If we assume our subject would rent for $2,000 per month, this property would be valued at $320,000 to an owner-occupant, using a target GRM of 160. Rental parity shows itself again!

Assuming our subject property can actually be sold for the full asking price (remember, this is a short sale that has been significantly discounted), the loss would be $228,940, including 6% sales costs. Not including sales costs, it would equate to a depreciation of 41%.

Via Lomas: Street in despair

You may remember the OC Register report on Camile Street in Santa Ana. That neighborhood was doomed by the very subprime loans that once helped fuel the real estate boom that propelled prices to beyond-belief levels.

Camile is not the only Orange County street that's now full of broken real estate dreams, though.

Via Lomas in Laguna Hills also is suffering immensely from the real estate downturn. The homes in this area (highlighted in blue in the image above) are modest condos built in the early 1980s, and are of the typical starter-condo variety.

In 1999, you could buy one of these properties for about $100,000-$125,000. By 2002, homes were selling for closer to $200,000. In 2003-2006, prices continued to climb at a startling rate. For instance,25791 Via Lomas #183 (pictured at the left), a 3-bed, 2-bath, 1,173 sq-ft home sold for $410,000 in 2005. That signaled an 87% appreciation from the 2003 price of $219,000, and a 329% gain from the 1999 price of $95,500.

Obviously, these kind of prices were not sustainable in the least, and when the market did inevitably turn, it caused buyers to become scarce and financing to tighten. Values on this street predictably came crashing down.

There are 16 properties showing up as actively for sale today, according to ZipRealty. Below is a Redfin map of the street. The properties for sale show up as green dots:
Now, here is the ForeclosureRadar map of properties that are in some stage of foreclosure on Via Lomas:

There are currently 28 properties - yes, on this one street alone - that are working through the foreclosure process.

We (predictably) noticed some overlap between the properties are for sale and the ones that are in some stage of foreclosure. Properties for sale today include:

• 25812 Via Lomas # 68 - 2 beds, 2 baths, 897 sq ft. Asking $320,000. Preforeclosure that the seller purchased for $379,000 in 2005 using 100% financing from First Franklin.
• 25752 Via Lomas #103 - 3 beds, 2 baths, 1,357 sq ft. REO asking $230,000. Peak purchase made in 2006 for $425,000 using 100% financing from Resmae. A sale at full asking price would be 46% off peak price.
• 25775 Via Lomas #166 - 2 beds, 1 bath, 896 sq ft, sold for $338,000 in 2006. Buyer used 100% financing from Resmae and later took out a new, bigger loan for $355,500; it's now an REO.
• 25896 Via Lomas #6 - 2 beds, 2 baths, 897 sq ft. Asking $190,000. Preforeclosure the seller purchased for $330,000 in 2004 using 100% financing from BNC. New loan for $334,000 in 2006. Additional lines of credit established in 2006 and 2007 totaling $151,000 from First Source Funding and BofA. If sold for asking price, loss of 42% from previous sale, not including sales costs.
• 25886 Via Lomas #23 - 2 beds, 2 baths, 897 sq ft. Asking $279,000. Not in foreclosure. Zillow shows the owner purchased in 2001.
  

What is there to say about a street like this - one that's being decimated by declining values, foreclosures and properties in various stages of distress? It is hard not to feel sorry for many of the residents who purchased before the boom and are now living amongst the carnage.

Fortunately, many purchase transactions here during the bubble were completed with financing that used little or no money down from the buyer, so the bulk of the losses are falling to the lenders as opposed to the borrowers. The lenders acted as enablers by allowing people to take out the loans that are now exploding.

We're sure many who purchased properties during the boom who are now facing foreclosure were only doing what they thought was best at the time, so it's hard to find fault with them, either. They must have believed the notion that "investing" in real estate was their key to wealth and financial security. Sadly, that is not how things played out.