Fright week begins!

It's Halloween folks...you know what that means here in Southern California? It means a continuation of 80-plus degree weather and pine trees the same green color they were all year, of course!

Let's begin this week with something "scary" - at least to us. It's the prospect of paying $372 per square foot for this unremarkable-looking 2-bedroom house in Mission Viejo. Someone appears read to, considering it's in the backup offers accepted stage...

22802 La Quinta Drive, 92691
Asking price: $485,000

Beds:	2
Baths:	2
Sq. Ft.:	1,305
$/Sq. Ft.:	$372
Lot Size:	5,890 Sq. Ft.
Property Type:	Residential, Single Family
Style:	One Level, Contemporary
View:	Courtyard
Year Built:	1970
Community:	Mission Viejo North
County:	Orange
MLS#:	S586722
Source:	CARETS
Status:	Active
On Redfin:	63 days

From listing: COMPLETE CUSTOM REMODEL. .Over $150,000 in upgrades on this single story Beauty. Situated on an oversized corner lot in the heart of Mission Viejo, just down the street from Mission Viejo Lake, Seville Park, golfing & shopping. For starters, this home has a fabulous OPEN floorplan with no barrier wall between the living, dining & kitchen area + volume ceilings adding to the spaciousness. Gourmet Kitchen with every amenity a cook could ask for and then some. Granite slab counters & sinks, Gas cook top with Stainless Steel Range Hood, Custom made cabinetry & hardware with pullouts & easy glide drawers, built-in wine cooler, vegetable sink in center island with 2nd disposal. Master suite features dual closets (custom made doors), black-out shades & a luxurious master bath. OVERSIZED jetted jacuzzi tub, surrounded in Granite & custom stone/wall treatments. Step outside to a wonderful wrap around yard with custom inlaid pavers back, side, front & driveway, must see detailed pictures for more

We get the appeal of a remodeled house. But, you can get new construction in Laguna Niguel for less than $300 per square foot, we wonder whether - all things being equal - you would rather take an updated three decades old house or a totally new ... new one. Both have pluses or minuses, or course - and there's also the issue that there aren't even new houses in Laguna Niguel for this low of a price range.

We wonder just how bad this situation turned out for the current seller, considering the listing says there are more than $150,000 in upgrades, yet the 2004 sales price was $488,000 - a virtual wash. If we assume a sale for the full asking price, and only take into account $150,000 worth of upgrades, and also adjust for 6% in sales costs, this could be a loss of about $182,000.

Fate or price?

What's so special about this Mission Viejo condo? Nothing, really. It's one of many properties in the area that are headed to escrow. But its price is something to marvel at - we're looking at almost a 2000 rollback.

25865 Marguerite Pkwy #5202, 92692
Asking price: $169,000

Beds:	2
Baths:	2
Sq. Ft.:	1,040
$/Sq. Ft.:	$162
Lot Size:	-
Property Type:	Condominium
Style:	Contemporary
Stories:	1
Floor:	3
View:	Fields, Golf Course, Greenbelt, Treetop
Year Built:	1970
Community:	Mission Viejo South
County:	Orange
MLS#:	S583722
Source:	SoCalMLS
Status:	Backup Offers Accepted
On Redfin:	45 days

Previous sales price: $140,000
Previous sales date: 9/7/00
From listing: One of the lowest price areas in Mission Viejo. This 2 bedroom, 2 bath condo is an upper unit with vaulted ceiling located in a great location of Casa Loma. There is a beautiful view off of the balcony of the trees and Mission Viejo Country Club Golf Coarse. This is a great location for shopping and freeway access, featuring a community pool and washer and dryer facilities. Affordablity and the safest city in the nation

Would be nice if they could spell "affordability" properly, but hey, nobody's perfect. We would have included a second picture, but the only other photo with the listing was a shot of the pool where someone's doing laps. Not exactly intriguing.

But who cares, anyway? It's not about the property. It's about the price. The asking price of $169,000 is just $29,000 above the sales price essentially nine years ago to the day. Factor in sales costs and other necessary repairs and upgrades, and you've got a problem - you've lived in a starter property for almost a decade and you're still in the hole with a short sale.

And, that assumes there wasn't any refinancing or HELOC money in play. Care to make that assumption? We aren't...

How many days for sale in Mission?

It's All-Star week in Major League Baseball this week. Did you have your money on Prince Fielder to win the home run derby?

Today's property is an all-star in its own right. Any place that's been on the market for 700 days deserves a bit of attention, so here we go with an abridged property profile...

23522 Coso #199, 92692
Asking price: $299,500
Asking price/ sq ft: $225
Purchase price: $137,000
Purchase date: 7/27/89
Size: 2 beds, 2 baths, 1,331 sq ft (built in 1980)
MLS: S501459 (699 days on Redfin)
ZipRealty price tracker: Price Reduced: 11/29/07 -- $449,900 to $419,900
Price Reduced: 02/09/08 -- $419,900 to $329,900
Price Reduced: 07/09/08 -- $329,900 to $319,900
Price Reduced: 10/10/08 -- $319,900 to $314,500
Price Reduced: 11/06/08 -- $314,500 to $309,900
Price Reduced: 02/05/09 -- $309,900 to $299,500
Type: Condominium
From listing: Upgraded 2 bed, 2 bath (2 master suites), with elevated panoramic golf course view from balcony and living room. Approximately 1400 square feet, an original model in the gated condominium community of Finisterra on the green. Close to Lake Mission Viejo with full lake privileges. Plantation shutters in living room. New blinds. Crown molding. Track lighting in entry hallway. Street level walk-in with no stairs. Single car garage with extra storage loft and additional parking in assigned carport. A must see!

These sellers win...we get it...they're not going to sell until they get their price. Geez already.

The first price reduction came in November 2007 (!)...the most recent was in February. So far, we've seen reductions totaling about $150,000. Can you believe this was once for sale asking $449,900 (or $338 per square foot)?

We're not even going to calculate how much potential profit can be made here, because frankly were pretty darn sure this property is going to continue to sit on the market.

'03 luxury rollback in Mission?

We hope everyone had a great weekend. We returned to So Cal after a few days in a bit cooler climate. It's always great to get out for a bit and explore the rest of our country. Now, here's a former million-dollar property in Mission that is a good example of our real estate market's rise and fall.

23381 Rockrose, 92692
Asking price: $879,000
Asking price/ sq ft: $231
Purchase price: $1,015,000
Purchase date: 2/22/07
Size: 4 beds, 3 baths, 3,800 sq ft (built in 1999)
MLS: S572579 (69 days on Redfin)
ZipRealty price tracker: Price Reduced: 6/17/09 -- $915,000 to $879,000
Zillow Zestimate: $786,000
HOA dues: $193
Type: Single Family Residence
Style: Normandy
Stories: 2
Lot size: 6,408 Sq. Ft.
From listing: Spacious 4 bedroom/3 bath home with loft, 3rd story Bonus/Game room and a beautiful city lights and hills view from the pool sized back yard w/BBQ built in and the master bedroom. Large Family room has built in media wall unit, surround sound and 50' plasma t.v. Cozy firelpaces, high ceilings with magnificient crown molding, gourmet kitchen with granite counters, center island w/breakfast bar and eat in kitchen area, formal dining room, formal living room and upstairs laundry room. This house truly has it all. Warm and inviting with great layout perfect for entertaining.

2002 sales price: $605,000; 2007 sales price: more than $1 million. Does this look like the kitchen of a million-dollar property? We don't think so.

This property was competing with 23361 Cobblefield - it's a similar-sized property priced at $875,000 that is now accepting backup offers. That would mean, then, that our subject property may be priced right to attract a buyer.

However, there are two issues: 1) the other property has nicer touches - including a more upgraded kitchen. It's also 2) not a short sale, at least from the description. The Redfin records say this other property last sold for $860,000 in 2003, so that means the current owners will likely be saddled with a loss, once sales costs and money on upgrades are factored in. This potential sale suggests these types of properties in Mission have now essentially rolled back to 2003 pricing.

If our subject property sells for the full asking price, and a sale is able to be completed, it would mean a loss of $136,000 before sales costs.

'01 rollback in Mission

The bank is ready to deal on this apartment-like condo in Mission Viejo. Think there will be a taker or two for this short sale property considering it's priced below the 2001 sales price?

26398 Via Roble #12, 92691
Asking price: $160,000
Asking price/ sq ft: $170
Purchase price: $168,500
Purchase date: 9/25/01
Size: 2 beds, 1 bath, 943 sq ft (built in 1973)
MLS: S527418 (404 days on Redfin)
ZipRealty price tracker: Price Reduced: 06/10/08 -- $350,000 to $180,000
Price Increased: 03/26/09 -- $180,000 to $200,000
Price Reduced: 04/07/09 -- $200,000 to $180,000
Price Reduced: 04/30/09 -- $180,000 to $160,000
Zillow Zestimate: $201,500
HOA dues: $328
Type: Condominium
Stories: 1
From listing: FINALLY.... BANK IS READY FOR OFFERS! Spacious living room has lots of sunny windows, master bedroom is oversized with walk-in closet, inside laundry. Large Patio area, internal tract location.

Can you believe properties in this complex were selling for more than $350,000 in 2005?

Sorry folks, no second photo. So, it seems, after more than a year on the market, the bank is ready to deal. We're not sure what the original financing was on this property, but we do know there is a $294,000 loan outstanding against it that was taken out in 2006. It's delinquent, and the notice of default was filed in March.

The property originally came onto the market asking $350,000 in 2008. Again, very predictable - that was likely the entire loan balance, plus perhaps just a bit extra. The condo came on and off the market more times than we feel like counting, and total discount off the original asking price stands at $190,000, or 54%.

More of the same in Mission

We've said it before, and we're going to say it again: the 100% crazy financing deals from 2004, 2005 and 2006 are old news since many have already exploded. Now, we're starting to see a trickle of later (2007) purchases start to go wrong. The difference is many of these actually used downpayments, so borrowers are feeling pain along with the lenders.

Here is one example in Mission Viejo.

27397 Via Primero, 92692
Asking price: $549,900
Asking price/ sq ft: $250
Purchase price: $860,000
Purchase date: 11/28/07
Size: 4 beds, 2.75 baths, 2,200 sq ft (built in 1973)
MLS: S560020 (83 days on Redfin)
Zillow Zestimate: $663,000
Type: Single Family Residence
Style: Mediterranean
Stories: 2
Lot size: 9,514 Sq. Ft.
From listing: Madrid home is priced to sell! Gourmet Kitchen w Center Island. Formal Living & Dining Rooms, Large family room w/built-ins & wet bar, patio area with pool. Newer Air Conditioner, double entry fron doors, Great family neighborhood. Walk to shopping, parks, YMCA, the Mission Viejo Natadores Aquatics Swim Complex featuring a 50 meter competition swimming pool. Property only has Lake Mission Viejo's Master Association on it which gives homeowner all Mission Viejo Lake Priveledges including boating, fishing, swimming, concerts on the lake etc.

The current owner used 90% financing from B F Saul Mortgage company. A notice of default was filed in December 2008, and the notice of trustee sale came in mid-March.

Comparable houses in Mission are asking $2,500 a month to rent. If we use a GRM of 160 to estimate value, this property would be worth about $400,000 to an owner-occupant. You can see the asking price is essentially $150,000 above that. Remember too that this is a short sale and we're not even sure the lender would let it go for this price.

Assuming a sale for the current asking price, the loss would be $343,094, including 6% sales costs. The owner would be out her downpayment of $86,100 and the bank would be on the hook for the rest. Not including sales costs, it would be a depreciation of 36% in about a year and a half.

25% appreciation since '05?

So we're expected to believe this property on Lake Mission Viejo (a man-made body of water) has risen 25% in value since the peak of the bubble? The Register reports that half of Mission's properties for sale are distressed. Of course, this home does not fall into that category, but you would have to question its timing - and pricing.

27572 San Blas, 92692
Asking price: $3,485,000
Asking price/ sq ft: $506
Purchase price: $2,795,000
Purchase date: 3/31/05
Size: 6 beds, 6.75 baths, 6,894 sq ft (built in 1980)
MLS: S564972 (29 days on Redfin)
Zillow Zestimate: $2,500,000
HOA dues: $430
Type: Single Family Residence
Style: French, Mediterranean, Traditional
Stories: 3+
Lot size: 9,600 Sq. Ft.
From listing: Feel the grandeur the moment you approach the impressive entrance & make your way up to the opulent iron & glass doors. Marvel at spectacular, lakefront views across the back of all 3 stories of this stately home. The gourmet kitchen features Sub Zero & Dacor appliances, gorgeous granite, hand rubbed maple cabinetry & a walk-in pantry. Amenities include gorgeous maple hardwood floors, furniture quality built-ins & designer wall & drapery treatments. On the upper level is the luxurious master bedroom w/ lavish his & hers master baths, & secondary bedrooms all w/ private baths. All floors are conveniently accessible by elevator. The waterfront backyard includes a pool/spa & BBQ area allowing room for plenty of year around gatherings while combining the best of lakefront living w/ backyard entertaining. The first floor recreation room/independent quarters features 2 XL bedrooms, family room, wet bar, wine cellar & opens directly to the fabulous pool area.

We're looking at a previous purchase date of almost 4 years to the day. We find it hard to believe this property has appreciated by $690,000 since 2005.

"All floors are conveniently accessible by elevator." Is this a house or a hotel? In all seriousness though, the description is well written and the pictures are nice quality. Good thing considering the commission would be more than $200,000, assuming a 6% rate.

If the property can be sold for the full asking price, and we subtract 6% for sales costs, the owners stand to make $480,900. More likely: This one will be on the market for quite some time. Properties in the $1 million+ range are not moving very fast these days.

'02 rollback in Mission

Today's property is a short sale/rollback/preforeclosure in Mission Viejo. It's essentially priced the same as it sold for in September 2002.

27465 Cabeza, 92691
Asking price: $359,999
Asking price/ sq ft: $321
Purchase price: $359,000
Purchase date: 9/3/02
Size: 4 beds, 2 baths, 1,123 sq ft (built in 1976)
MLS: S547131 (183 days on Redfin)
ZipRealty price tracker: Price Reduced: 12/04/08 -- $385,000 to $365,750
Price Increased: 12/10/08 -- $365,750 to $370,000
Price Reduced: 3/06/09 -- $370,000 to $369,999
Zillow Zestimate: $404,000
HOA dues: $16
Type: Single Family Residence
Style: Ranch
Stories: 1
Lot size: 5,246 Sq. Ft.
From listing: A MUST SEE!!! Colorful Bright Clean Family Home In Excellent Quiet Neighborhood Close to Shopping, School's, Public Transportation, Easy Access to the Toll Road. Up-Graded Built in Entertainment, Custom wood work in Living Room area, Great for family entertainment. NO MELLO ROOS!!! Nearby Lake Mission Viejo for swimming, fishing sun and sail.


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Sorry, but we don't feel much pity that the current owners are likely going to lose the house. They already spent it away a long time ago. They used 100% financing to buy the house in 2002 from First Franklin Financial.

They have since refinanced six times. The latest was for $625,000 through two loans with SBMC Mortgage in February 2007. The lender is now shuttered.

The property went into default in May 2008, and the notice of trustees sale came in August. The house is scheduled for auction in April with a starting bid of $524,497. That is the NTS amount.

If somehow the property sells for the current asking price before it becomes an REO, someone (not the owners) is going to lose about $286,600.

An interesting aside: Think the bubble was really only from 2003-2006 or so? Check out the previous sales prices on this property. In the three years between 1999 and 2002, it appreciated an unnatural 57%.

5 for 5 in Mission

Some neighborhoods have been hit harder than others. Here's an example of one - Mirasol in Mission Viejo - that happens to have five properties currently for sale on the MLS. All are short sales.

For those who have never visited this neighborhood, Mirasol is a gated townhouse development in the Pacific Hills area of Mission Viejo, right next to a detached condo development called Melrose. At the peak, properties in Mirasol were selling for more than $600,000.

Here are the homes that are now for sale:

19 Brindisi
Asking price: $439,999
Size: 3 beds, 2.5 baths, 1,664 sq ft
Previous sales price: $620,000
Previous sales date: 5/31/05

27 Catania
Asking price: $425,000
Size: 3 beds, 2 baths, 1,700 sq ft
Previous sales price: $350,000
Previous sales date: 7/19/02
This property received its notice of trustees sale in November. Lots of debt on the property.

59 Le Mans
Asking price: $470,000-$485,000
Size: 3 beds, 2.5 baths, 1,936 sq ft
Previous sales price: $430,000
Previous sales date: 8/29/03

17 Luzern
Asking price: $410,000
Size: 3 beds, 3 baths, 1,670 sq ft
Previous sales price: $505,000
Previous sales date: 10/20/04

15 Merano #192
Asking price: $395,000
Size: 3 beds, 2 baths, 1,700 sq ft
Previous sales price: $550,000
Previous sales date: 4/22/05

ForeclosureRadar lists four properties in this neighborhood as in some stage of foreclosure.: 27 Cambria (notice of default); 35 Cambria (notice of trustees sale); 27 Catania (NTS) and 17 Luzern (NOD).

Back to '01 in Mission?

Another couple of weeks, and another market time report about how fast real estate in O.C. is selling. Or, said in another way, the market time report about how buyers heart foreclosures. We would argue buyers don't naturally love foreclosures, but these tend to be the properties that can actually sell - many, many homes on the MLS are short sales.

Why deal with that short sale headache when you could try to get in on a foreclosure that certainly will sell?

Here's a fixer-upper in Mission Viejo that also is a short sale. It's very close to the 2001 price...

26781 Carretas Dr, 92691
Asking price: $479,000
Asking price/ sq ft: $192
Purchase price: $446,500
Purchase date: 8/2/01
Size: 5 beds, 2.5 baths, 2,500 sq ft (built in 1967)
MLS: S563036 (1 day on Redfin)
Zillow Zestimate: $610,000
HOA dues: $55
Type: Single Family Residence
Style: Contemporary
Lot size: 5,000 Sq. Ft.
From listing: Fixer located in the Heart of Moission Viejo


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They could have at least ensured the city name is spelled correctly in the listing description. The "make me move" price on Zillow is $675,000. LOL.

We don't know how far underwater this property is, but it's not showing up as a preforeclosure on ForeclosureRadar.

Will this property actually sell for the 2001 price? Perhaps not, considering we're not sure if the lender(s) approved a sale at this price. We also don't know how badly messed up this house is.

But we can share with you some asking prices from nearby homes for sale:

• 26541 Alicante Dr is smaller and is asking $600,000. It just underwent a "major remodel."
  
• 27041 Condado is bigger by 300 square feet. Asking price of $685,000.
• 24676 San Vincent Ln is 300 square feet smaller and is a 2003 rollback asking $450,000.

Assuming our subject property sells for the full asking price, it would account to a small loss off the 2001 price, if we include sales costs. Since this is not a "normal" sale (fixer-upper in unknown condition; short sale) it's hard to put too much stock into this one. But, it's a bit shocking to see any asking price in Orange County approaching its 2001 value.

Creative photography in Mission

We usually chuckle a bit when we see awful pictures attached to listings. The photos with this Mission Viejo listing are on the opposite end of the spectrum. They're too good.

We're glad the photographer seemed to get creative and have some fun, because it doesn't appear the current owner is considering how much money they stand to lose if it sells.

27546 Berdun, 92691
Asking price: $679,900
Asking price/ sq ft: $274
Purchase price: $830,000
Purchase date: 7/7/06
Size: 4 beds, 2.5 baths, 2,481 sq ft (built in 1978)
MLS: S559477 (2 days on Redfin)
Zillow Zestimate: $645,500
HOA dues: $84
Type: Single Family Residence
Style: Traditional
Stories: 2
Lot size: 5,700 Sq. Ft.
From listing: NOT A Short Sale, BUT Priced Like One. Properties Like This Rarely Come On The Market. Located on a Cul-de-Sac With a Gorgeous View of Saddleback From The Front, It Backs Directly to Minaya Park. Your Backyard View Is The Entire Park! The View From the Kitchen is a Panoramic View of the Backyard, With An Unobstructed View Of the Park Beyond. Double Pane Windows, Brick Fireplace, Large Kitchen. The Lot Has A Huge Side Yard - Possible RV Access?? Large Master Bath, 4 Bedrooms. New AC System, Good Area For Dog Run On Opposite Side. Fireplace in Family Room. This Home Has It All, At an Incredible Price. Check The Active Comps, You'll See What I Mean! **BONUS**! - There is a paved path right next door that leads to Minaya park!! Plus, you get access to MV Lake for Swimming, Boating, Fishing, BBQ's, Picnic Areas, parks, plus much more! All This And NO ***MELLO ROOS***!!!


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As you can tell, the person who wrote the listing description was really excited based on all the punctuation!!!

The listing also says this is not a short sale. So, it appears the owner is going to take a huge loss to keep their credit standing. Just how big a loss? Well, if we assume the house sells for the current asking price, and we factor in 6% sales costs, it would mean a shortfall of $190,894 off the 2006 price of $830,000.

$155 per sq ft in Mission

Today we're looking at a foreclosure that previously sold for almost $1.2 million in 2005. Now, as financing for more expensive homes becomes harder to come by, the bank is trying to get its $774,900 asking price in time for the holidays.

22152 Bande, 92691
Asking price: $774,900
Asking price/ sq ft: $155
Bank purchase price: $1,016,110
Purchase date: 6/16/08
Size: 4 beds, 4.25 baths, 5,000 sq ft (built in 1978)
MLS: S554728 (20 days on Redfin)
Zillow Zestimate: $1,004,000
HOA dues: $70
Type: Single Family Residence
Stories: 2
Lot size: 10,080 Sq. Ft.
From listing: !!!Attention all buyers and agents!!! This is the one that you have been waiting for.. Custom 'madrid del lago' a total remodel, a must show. Great location, 2 stories, 3 master bedrooms + 1 bedroom w/fireplace, 4.25 total baths, 4 fireplaces, office, retreat, family room, den w/fireplace, beautiful tile floors, duel paine windows throughout, exercise room, too! And the inviting swimming pool and spa, looking for big and beautiful? And don't miss the private backyard and dramatic view.

Redfin says this property sold for $390,000 in 1994, $950,000 in 2004 and $1,185,000 in mid 2005. Somewhere during that time the property was remodeled.

We do know the previous owner tried to unsuccessfully lure in a sucker for $1.45 million in early 2007, with this description: "Newly Remodeled VACANT Price below market MOTIVATED SELLER 3 Master Bedrooms 4 Fireplaces Cul-de-sac VIEW Front and Back 5,000 SQFT 10,080 LOT SIZE." They bought the house at the peak for $1.185 million and were trying to say that the $1.45 million asking price in 2007 was "below market?" Yeah right.

We wonder what the plan originally was. It probably involved "easy money" through real estate. And, it didn't work.

Assuming the property is sold for the current asking price, it would mean a depreciation of $410,100 (35%) off the 2005 price and $175,100 (18%) off the late 2004 price - not including any sales costs.

A pricing trickle in Mission

It's not uncommon to have sellers unwilling to lower the asking price of their property by very much at a time. Perhaps they can't afford to lower the price because of debt on the property, or they think that by cutting the price by insignificant amounts it will "stay fresh" and attract buyers looking for properties that have recently had price reductions.

Whatever the cause, it's transparent and unproductive, at least in our opinion. Here is an example in a senior community in Mission Viejo. We're hoping the owner is able to get out from this property without too much financial damage.

28011 Calle Valdes, 92692
Asking price: $364,850
Asking price/ sq ft: $328
Purchase price: $365,000
Purchase date: 3/8/04
Size: 2 beds, 2 baths, 1,112 sq ft (built in 1974)
MLS: S539844 (95 days on Redfin)
ZipRealty price tracker: Price Reduced: 9/11/08 -- $364,900 to $364,875
Price Reduced: 9/19/08 -- $364,875 to $364,850
Zillow Zestimate: $327,000
HOA dues: $301
Type: Single Family Residence
Style: Contemporary
Stories: 1 Level
From listing: Serene and Beautiful Single Story Condo in Casa Del Sol Active Senior Community. Bright and Light with a West facing patio for those beautiful sunset views. Wonderful patio that can be an extension of the living space. Efficient Kitchen with a great view itself. 2 bedrooms - One in which is a beautiful master bedroom with mirrored wardrobe doors and a separate vanity in the master bath. Other bedroom is a spacious one. To truly see this beautiful home, Please click on the 'Media' button and select the Visual Tour to enjoy this home!

Since the listing date, the property has been reduced in price twice - by $25 each time. At this rate, it would take 1,514 more price reductions at $25 each to reach $327,000 - what Zillow says the house is worth (chuckle).

It's hard to say for sure where values actually are in this area - another same-sized house on the same street sold for $375,000 in April. But a lot of bailouts have come since then.

Assuming a sale for the current full asking price, it would be $150 below the 2004 price and $37,850 above the 2003 price of $327,000. Coincidence that it also is the Zillow Zestimate.

Almost '03 again in Mission

Another day, another look at 2003 pricing in South Orange County. This Mission Viejo single family home went for $440,000 way back when. The asking price is very similar today...

26882 Ayamonte, 92692
Asking price: $440,000
Asking price/ sq ft: $259
Purchase price: $660,000
Purchase date: 8/1/05
Size: 3 beds, 3 baths, 1,700 sq ft (built in 1976)
MLS: S545312 (31 days on Redfin)
Zillow Zestimate: $423,500
HOA dues: $27
Type: Single Family Residence
Style: Traditional
Stories: 2 Levels
Lot size: 4,725 Sq. Ft.
From listing: (None)

Customized financial info:
Minimum Income Requirement (using 30Y Fixed): $96,000, assumes no other debt/obligations.
Downpayment needed: $15,400
Monthly Payment on 30Y Fixed at 6.25% with property taxes and mortgage insurance estimated: $3,399.25
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.


We don't know much about the financials surrounding this one, but we do know from Redfin that the current owner paid $660,000 in 2005. Based on available rentals in the same ZIP code, you could easily get into a comparable (or even larger) single family home for $2,600 per month.

So, you'd be saving at least $800 per month by renting a bigger home and not having to worry about depreciation.

If we were to assume the house were sold for the current asking price, it would mean a loss of $246,400 off the peak bubble price, including 6% sales costs. The sale also would be for only $5,000 more than the mid-2003 price.

REO sets the curve in Mission

We're going back to Mission Viejo - and to the Pacific Hills area - to show you an REO townhouse that is leading prices down in the Mirasol townhouse neighborhood.

29 Brindisi, 92692
Asking price: $410,000
Asking price/ sq ft: $212
Bank purchase price: $435,000
Purchase date: 6/30/08
Size: 3 beds, 3 baths, 1,936 sq ft (built in 1994)
MLS: S544115 (7 days on Redfin)
Zillow Zestimate: $463,000
HOA dues: $249
Type: Condominium
Stories: 2 Levels
Lot size: 1,200 sq ft
From listing: This is a 3 bedroom with a loft unit in the beautiful community of Mirasol. It needs a little TLC but in relatively good shape. It includes a formal living and dining room, separate family room with fireplace, breakfast nook area plus an inside laundry area. This is located in the gated community of Mirasol/Melrose in the Pacific Hills area of Mission Viejo. Included is the association pool and spa plus membership to Lake Mission Viejo.

Customized financial info:
Minimum Income Requirement (using 30Y Fixed): $102,000, assumes no other debt/obligations.
Downpayment needed: $12,300
Monthly Payment on 30Y Fixed at 6.875% with property taxes and mortgage insurance estimated: $3,371.61
Minimum Income Requirement (using 5Y fixed): $99,600, assumes no other debt/obligations.
Monthly Payment on 5Y fixed at 6.375% with property taxes and mortgage insurance estimated: $3,246.13
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.

Perhaps "relatively good shape" is the best one should expect when they're dealing with bank-owned properties.

There are two other properties for sale in the same neighborhood. Both are smaller. One is asking $499,999, and the other is hoping to get between $450,000 and $475,000. They've made it known that this one not a short sale, but they won't listen to your offer unless it's within their price range. It's now approaching four months on the market.

The previous owner of our subject property fell victim to the easy money bug. He purchased the home in 2002 for $376,000, using a $357,200 (95%) loan and an $18,800 downpayment. In December 2004 he pulled out his downpayment plus some extra cash by refinancing into a $440,000 loan from Cendant Mortgage Corp.

Wells Fargo enabled $166,000 more equity extraction over the course of the next three years. Doesn't look like too much money went back into the house.

The property's first loan slipped into default in February, and the condo eventually went back to the bank at auction in late July for about $20,000 below the notice of trustee sale amount.

Assuming the property sells for the full asking price, it would mean the home would only sell for $34,000 more than the former owner paid in 2002.

The $1 million party house

This Mission Viejo (Pacific Hills) home seems to have it all: gazebo, gameroom, BBQ, granite/stainless steel kitchen, spa, surround sound...and we could go on.

It's also is up for sale asking well below its bubble price.

27161 Pacific Heights Dr, 92692
Asking price: $1,000,000
Asking price/ sq ft: $238
Purchase price: $1,233,000
Purchase date: 11/17/05
Size: 6 beds, 5 baths, 4,200 sq ft (built in 1994)
MLS: P625352 (169 days on Redfin)
ZipRealty price tracker: Price Reduced: 8/08/08 -- $1,199,000 to $1,000,000
Zillow Zestimate: $906,500
HOA dues: $125 + $17
Type: Single Family Residence
Style: Modern
Stories: 2 Levels
Lot size: 10,000 sq ft
From listing: Impresiveness in this Huge Barrat home in Pacific Hills !! 4,200sft of uniqueness and openess!!6 bedrooms and five bathrooms on a premium location near the end of a culdesac!!! Everything has been remodeled with the best quality and taste!! Marble, travertine, harwood flooring throughout, Gourmet kitchen w/ granite countertops, ALL stainless steel appliances, huge island, breakfast nook, additional gameroom next to family with surround system system, custom paint in and out, wrought iron staircase at foyer, stone chimneys, beautiful wet bar redone, new 3 1/2 baseboards, doors, gourgeous bathroom downstairs! Master Suite is a relaxing getaway! with retreat, fireplace, private balcony and master bath next to walk in closet. Serene huge (10,000sft) parklike view pool size backyard with beautiful relaxing spa, playground for the kids, new BBQ and Gazeebo for your friends and relatives !! Perfect PARTY house, make it yours!! TURNKEY property. Show it to your fuzziest buyers!!

Customized financial info:
Minimum Income Requirement (using 30Y Fixed): $170,400, assumes no other debt/obligations.
Downpayment needed: $271,000
Monthly Payment on 30Y Fixed at 6.375% with property taxes estimated: $5,664.01
Special Note: The rates for 30Y fixed paper that is above the single family conforming limit of $729k in Los Angeles has been in the 8% range for the last few months. There is very little investor interest in fixed paper that isn’t Fannie/Freddie. Most institutions will not do a 30Y fixed for loan amounts above conforming.
Minimum Income Requirement (using 5Y fixed): $174,000, assumes no other debt/obligations.
Downpayment needed: $200,000
Monthly Payment on 5Y fixed at 5.80% with property taxes estimated: $5,810.02
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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"Show it to your fuzziest buyers!!" We were not aware the three bears were in the market for an Orange County property. It is absolutely no surprise that there is a foosball table in the property.

Props to the owner who bought in 2002 and then sold in 2005. Before fees, commissions and upgrades they pocketed $451,000 profit, just for owning real estate for three years. The current occupant isn't as lucky in terms of timing.

Assuming the property can be sold for the current asking price - though it has been on the market since March with no success - it would mean a loss of $293,000, including 6% sales costs. The sale also would mean a depreciation of 19%, not including sales costs.

Market chaser redux in Mission Viejo

We're out for the day and won't be able to do a complete blog post today, but we wanted to show you another example of a market-chasing listing. This one is in Mission Viejo, and it has been on the market for 79 days:

26482 Via Lara, 92691
Current asking price: $599,693
Description: 4 Bedroom Excellence / Value in Mission Viejo! Owners are motivated and it's priced to sell NOW! Brand NEW carpet 6/13/08. Chef's dream kitchen - Custom made cherry cabinets with granite countertops and all JennAir stainless steel appliances. Perfect family home with great floor plan and ALL bedrooms upstairs. True PRIDE of ownership! Upgrades galore. Huge hardscaped backyard with custom firepit, built in BBQ and tropical landscape. Neat, well maintained front yard. Formal dining & living room and upgraded family room. All bedrooms have custom closet organizers. Fresh paint, new tile, base and crown molding and ceiling fans. This home has been maintained by Mr. and Mrs. Clean! Great neighborhood! Near school, park & lake. Member of Lake Mission Viejo. NO HOA and NO MELLO ROOS. Jump on this opportunity before it's too late!

Price Reduced: 04/30/08 -- $599,999 to $599,998
Price Reduced: 05/02/08 -- $599,998 to $599,997
Price Reduced: 05/18/08 -- $599,995 to $599,899
Price Reduced: 05/24/08 -- $599,899 to $599,777
Price Reduced: 06/01/08 -- $599,777 to $599,697
Price Reduced: 06/13/08 -- $599,697 to $599,696
Price Reduced: 06/16/08 -- $599,696 to $599,695
Price Reduced: 07/07/08 -- $599,695 to $599,693

That's eight price reductions in a little more than two months for a total of $306 off the original asking price of $599,999. Or, if you prefer, an average price cut of $38.25 each time.

We also see they "celebrated" the installation of the new carpet on June 13 by lowering the price by a whole $1.

Redfin shows the previous sales price was $287,500 in 2000, so the owners should come out plenty ahead once they sell, assuming they haven't squandered their equity. Mr. and Mrs. Clean - as the listing calls you- how long will you keep chasing the market down?

Good deal? Be the judge

Today we're looking at a Mission Viejo investment property for sale. We say investment because the description explains it's already being rented until 2009. They even were kind enough to tell us how much the rent is:

INVESTORS LOVERS,PROPERTY RENTED FOR $2100 PER MONTH TO VERY NICE TENANT TILL FRIST MONTH OF THE NEXT YEAR.PRICE JUST REDUCED TO SELL FAST,UNBELIEVABLE SADDLEBACK VALLEY VIEW FROM ENTIRE BACK OF HOME AND WRAP-AROUND THE DECK,LOCATED ON A QUIET NEIGHBORHOOD,CLOSE TO LAKE MISSION VIEJO,SHOPPING,PARKS,SCHOOLS AND RESTAURANTS,THIS END UNIT,3 BD,2.5 BA,TOWNHOME FEATURES OPEN FLOOR PLAN,ROMANTIC FIREPLACE IN LIVING ROOM,SURROUND SOUND SYSTEM,WASHER/DRYER INCL,CENTRAL AIR,OWNERSHIP INCLUDS LAKE TEMBERSHIP,SECURITY SYSTEM AND SUPER LOW TAX BASE AND MUCH MORE.

Typos are the order of the day here, unless since we last checked "first" became "frist," "includes" became "includs," and "membership" devolved to "tembership." We're not going to touch "investors lovers."

There is no photo with the listing, so we went with the Google street view.

Would you bite on this as an investment? Even if you wanted it to own it and live here, you couldn't for a bit because you would have to honor the terms of the lease. Our goal is for an owner-occupant to pay about 160 times the market monthly rent to buy a property, which would theoretically allow it to cost about the same each month to own as it would to rent.

We know market rent for this unit is $2,100. That means it should be worth about $336,000 to someone who would want to buy and then live in this condo, which is $114,000 below the asking price. Uh oh. There's also the question of whether or not someone would even want to buy a property like this to live in, considering it's been a rental and probably isn't a long-term solution.

Cashflow investors typically would want a GRM of around 100-120 to ensure their investment will be profitable. So, they would probably be interested in the property if it were priced in the neighborhood of $210,000-$252,000. Not even close. Oh, and don't forget about the extremely high HOA dues ($312 per month and $19 every quarter).

Notice these are only rough estimates, but since the numbers are so off that it seems unlikely anyone could rent this out and be cashflow positive (barring an excessive downpayment or an exotic loan that doesn't really exist anymore) the point is made that this appears to be a very poor investment opportunity.

The only other approach we could think of is someone willing to take a loss each month as a trade-off for anticipated appreciation. That is a deadly game, particularly in a down market.

Perhaps we'll wait for the next "deal" to come along...

Lender-approved sale: New trend?

We've speculated before about whether lenders are actually approving some of the more drastic short sale properties offered on the MLS in South Orange County, because that would mean writing off hundreds of thousands of dollars in losses - per home, in some instances.

The positives: The homedebtor gets rid of the burden of owning the house and avoids foreclosure, the buyer gets a suitable property at a fair price and the bank takes the hit on the sale but does not have to deal with the property in foreclosure.

If banks are willing to let more short sale transactions go through at market prices, we could see escalating price declines and find a bottom sooner than if the banks did not allow short sales and eventually had to sell them months after completing foreclosure proceedings.

Here's some proof some lenders are in fact allowing some extreme short sales to go through - that is, if a willing buyer can be found to pay the approved price. This one is in Mission Viejo.

21145 Foxtail, 92692
Asking price: $555,000
Asking price/ sq ft: $326
Income requirement: $138,750
Purchase price: $740,000
Purchase date: 2/24/06
Size: 3 beds, 3 baths, 1,700 sq ft (built in 1987)
MLS: S519260 (151 days on Redfin)
ZipRealty price tracker: Price Reduced: 1/26/08 -- $650,000 to $620,000
Price Increased: 1/28/08 -- $620,000 to $650,000
Price Reduced: 5/08/08 -- $650,000 to $585,000
Price Reduced: 5/15/08 -- $585,000 to $580,000
Price Reduced: 6/20/08 -- $580,000 to $555,000
Zillow Zestimate: $571,000
2007 property tax: $8,621.88
HOA dues: $68 + $18
Type: Single Family Residence
Stories: 2 Levels
Lot size: 5,200 sq ft
From listing: LENDER APPROVED!! JUST GOT APPROVAL LETTER YESTERDAY!! A FULL PRICE OFFER WILL BE ACCEPTED AND MOVE IMMEDIATLY INTO ESCROW. Amazing two story located on cul-de-sac street. All the upgrades including travertine flooring, granite countertops, ceiling fans, gourmet kitchen and nook! Master bath has duel vanity, seperate stand up shower and tub, beautiful tile throughout. 2 fireplaces!!! Large backyard with huge patio. LENDER APPROVED SHORT SALE!!! HURRY WON'T LAST LONG!!


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This property has been chasing down the market since January, but now its price is lender approved, so don't be surprised if it "WON'T LAST LONG!!"

The owner used 100% financing to buy this property in 2006. First Franklin, which provided the funding, has approved a short sale at $555,000 - a stunning 25% below the previous sales price. Think about that: the lender has acknowledged the property has lost a quarter of its value in less than a year and a half.

We'll assume the real estate agent(s) will take their 6% off the sale of this price. So, if a buyer can be found the current owner will lose no money of their own in the deal since they didn't put any money down. The lender will be out $218,300. The second loan of $148,000 will be completely wiped out, and the first loan of $592,000 also will be affected.

Not a bad deal for the homedebtor; bad situation for the bank. At least it's one fewer foreclosure the courts will have to deal with later.

Oh, and potential buyers might want to make sure this property gets up to date with its 2007 property taxes, since they haven't been paid yet.

Jump on in...water's fine!

Today's REO property in Mission Viejo provides anecdotal evidence that loans made last year are already beginning to blow up and add to the foreclosure inventory in South Orange County.

You'll also love the backyard...

25421 Adriana St, 92691
Asking price: $500,000
Asking price/ sq ft: $194
Income requirement: $125,000
FB purchase price: $865,000
FB purchase date: 5/29/08
Size: 5 beds, 3 baths, 2,72 sq ft (built in 1967)
MLS: P642596 (2 days on Redfin)
Zillow Zestimate: $714,500
2007 property tax: $6,446
Type: Single Family Residence
Style: Contemporary
Stories: 2 Levels
Lot size: 7,540 sq ft
From listing: 4 bedroom 3 bath home. Large backyard with pool. Lots of upgrades although the property does need some upgrades. 2 car attached garage. Living room with fireplace. PLEASE NO FHA offers. See agent remarks


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So the property is upgraded but needs more upgrades. Is that code for "it was nicer before but now it's trashed"?

The previous owner paid $865,000 in April 2007 using 100% financing. The property was already in default by December, and it went back to the bank at auction in May.

Who wouldn't want to take a dip in the backyard pool? Gross.
Assuming the bank finds a buyer willing to take the property for the asking price, it would mean a depreciation of $365,000 or 42% in a little more than one year as the property devolved into a vacant fixer-upper! Never mind the fact that the kitchen had been recently remodeled...

No arguing the property is in a sad state right now. It's even more disheartening when you consider what it looked like right before its previous sale last April, when it was occupied by a family who took care of its home.

These photos are from the 2007 MLS listing....

And here's what we see now on the current listing...

Interestingly, the previous owners who sold in 2007 listed the home at $750,876 but were able to sell for $114,124 more than their asking price.