A great deal in Laguna!

A great deal that is, if you'd like to rent this Laguna Beach property instead of own it. At least, it's a great deal compared to the asking price. Hmm...maybe the asking price is just flat out of whack. See what you think...

820 La Vista Dr, 92651
Asking price: $1,469,000
Previous sales price: $1,296,500
Previous sales date: 7/24/09

Beds:	3
Baths:	2
Sq. Ft.:	-
Lot Size:	6,550 Sq. Ft.
Property Type:	Single Family Residence
Style:	Cottage
Stories:	1
View:	Catalina Island, City Lights, Ocean, Panoramic, Treetop
Year Built:	1956
Community:	Laguna Village
County:	Orange
MLS#:	L30869
Source:	SoCalMLS
Status:	Active
On Redfin:	19 days

From listing: Location, location, location! A three bedroom home with a view of Catalina and the city close to Laguna Beach High School, Anneliese Pre-school, tennis courts, swiming pool, stores, restaurants, beaches; all walking distance away. The home is on a quiet Cul-de-Sac and has a THREE car garage! Plans for a second story, approved by Design Review Board, soft contemporary design are included. This home offers quiet solitude and the proximity to action as well. What a bargain!! Seller financing available! Also offered for the lease @ $3,250.00 per month

Based on the previous sales date and the fact that this one is not listed as an REO, we would also seem to be in the midst of an attempted flip .... and a profitable one based on the current asking price and assuming no renovations were done.

Either way, it's interesting to see how the rental asking price compares to the for sale asking price. If we were to assume $3,250 is the "real" value of this property that a renter would be willing to pay each month to live here, the house "should" be worth about $585,000 based on an estimated target GRM for an owner-occupant of 180. We used 180 instead of the typical 160 because we're building in the fact that we would guess an owner would be willing to pay a bit more to own in Laguna Beach.

Let's just say the asking price is a tad above that.

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?

Re-inflate the bubble?

That would be just fine with these sellers. Here are a couple head-scratching pricing examples we noticed as we checked Redfin recently...

105 Avenida Del Reposo Unit 1-R, San Clemente, 92672
Size: 3 beds, 2 baths, 1,525 sq ft
Asking price: $795,000
Previous sales price: $540,000
Previous sales date: 9/4/03
Justification: "...HIGHLY UPGRADED OCEAN VIEW BEACH CONDO! TURN KEY AND MOVE IN READY. BRING YOUR PICKIEST CLIENTS AND THEY WILL BE BLOWN AWAY WITH THIS ONE."

25201 La Cresta Dr, Dana Point 92629
Size: 3 beds, 2.5 baths, 3,100 sq ft
Asking price: $1,780,000
Previous sales price: $1,345,000
Previous sales date: 2/23/07
Justification: "Gorgeous and extensive remodel of this stunning contemporary home boasts a full Viking-appliance kitchen, new Kohler fixtures throughout home, new wood flooring, etc."

32611 Sea Island Drive, Laguna Beach 92651
Size: 3 beds, 2 baths, 2,700 sq ft
Asking price: $2,599,900
Previous sales price: $2,000,000
Previous sales date: 3/3/05
Justification: "The huge charming entry court yard will allow plenty of room for expansion, the side and back yards will accomodate a beautiful pool and spa."

22811 Tindaya, Mission Viejo 92692
Size: 4 beds, 4 baths, 4,000 sq ft
Asking price: $2,579,000
Previous sales price: $1,300,000
Previous sales date: 8/22/03
Justification: "Beautifully remodeled custom Mediterranean lakefront home...Stunning upgrades including travertine, marble, and granite throughout. Gourmet kitchen overlooking lakefront has granite counter tops and stainless steel appliances with cherry stained cabinets."

Keep dreaming in San Clemente

Did you know the recession's over (says Merrill Lynch)? Did you also know home prices are on the rebound (at least they are on the newest DataQuick report)? Is it time to party that happy days have returned?

We hate to be pessimistic because we're naturally optimistic - believe it - but from where we stand on the ground level of Main Street, Orange County (not at Disneyland, though wish we were there) things here aren't getting much better. Not when the county's largest employer is getting ready to dock its employees' salaries varying degrees through furlough days. State workers are also earning and spending less. And, let's not forget the state government itself is...well...we'd like to think things will improve soon, but we're just not seeing it - not any kind of speedy recovery that is.

On that happy note, here's today's property, in San Clemente. The asking price is likely wishful thinking as well.

222 Calle Roca Vis, 92672
Asking price: $1,895,000
Asking price/ sq ft: $657
Purchase price: $1,560,000
Purchase date: 8/16/04
Size: 4 beds, 3 baths, 2,886 sq ft (built in 1978)
MLS: L29193 (117 days on Redfin)
ZipRealty price tracker: Price Increased: 03/25/09 -- $1,970,000 to $1,975,000
Price Reduced: 04/14/09 -- $1,975,000 to $1,970,000
Price Reduced: 04/29/09 -- $1,970,000 to $1,895,000
Type: Single Family Residence
Style: Spanish
Stories: 2
Lot size: 5,975 Sq. Ft.
From listing: One of a kind ocean view home conveniently located in the desirable neighborhood of SW San Clemente. Located just steps away from San Clemente's beautiful own Lost Winds Beach and Leslie Park. Unobstructed and stunning ocean, Catalina, San Clemente pier, Dana Point Harbor and coastline views from roof top deck. Walking distance to restaurants, shopping, and the pier. Ocean views from most rooms. Large street to street lot with endless possibilities. 3-car garage. Turnkey floor plan. Rests only four homes from the Water. A MUST SEE!

Whoops...the original asking price was just too low! Good thing it was adjusted up by $5,000, only to be later dropped to where it originally was, and then again below that.

As it stands, the asking price is $335,000 above the 2004 price. It's probably not realistic, but who knows - maybe someone will want to live in a house that "rests" only four homes from the water, so they will step up. Until then though, this place will just sit and wait.

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.

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.

Not selling at $249k? Try $1.165 million

The current owner of this San Juan property - a 2003 rollback - has tried a few typical tricks, and so far none seems to be working. We'd like to point out that one of these moves includes jacking up the asking price by almost $1 million.

26405 Smoketree Ln, 92675
Asking price: $249,000
Asking price/ sq ft: $208
Purchase price: $302,000
Purchase date: 11/21/03
Size: 2 beds, 1 bath, 1,200 sq ft (built in 1973)
MLS: S556969 (88 days on Redfin)
ZipRealty price tracker: Price Reduced: 02/26/09 -- $269,000 to $249,000
Price Increased: 03/08/09 -- $249,000 to $1,165,000
Price Reduced: 03/09/09 -- $1,165,000 to $249,000
Zillow Zestimate: $293,500
HOA dues: $112
Type: Single Family Residence
Stories: 1
Lot size: 3,000 Sq. Ft.
From listing: Single-Level Home on Cul-de-Sac with Excellent Community Recreation! Outdoor Courtyard Living! Granite & Tile Kitchen. Dining Room + Covered Dining Patio! Big Living Room Floorplan currently set-up as small Living Room + Den/3rd Bedroom. Big Master & 2nd Bedroom w/Walk-In Closets. Full Bath w/Tub. Garage, Carport, Driveway plus low-cost community RV/Boat Parking. EZ Commuter Access for I-5 & 73. Near Shops, Harbor & Beach. WOW~Community Fishing Lakes, Pools, Parks, Sports Fields & Courts, Tot Lots, Nature Trails surrounded by open Countryside!


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This property has come up for sale a few times recently asking in the $260,000-$280,000 range. It also was for rent in 2007 asking $2,200 per month.

We have to admit, though, the move to change the asking price from $249,000 to $1,165,000 is a pretty original one. Now that the price is back to $249,000 (it was changed back the next day), it must seem like a bargain. Of course, there's always the possibility it was a mistake, but if it was they should have known better.

Assuming the property sells for the current asking price, it would be a loss of $67,940 off the 2003 sales price, including 6% sales costs.

NIMBY in San Clemente

Housing bubble? Bad economy? Bah! Here's how the thinking might have gone: "Let's price this San Clemente property 43% more than we bought it for in 2004, put it on the market and let the buyers fight it out!"

We're now into triple-digit days on Redfin (110 and counting) without a sale...

309 Calle Felicidad, 92672
Asking price: $1,395,000
Asking price/ sq ft: $581
Purchase price: $975,000
Purchase date: 10/13/04
Size: 3 beds, 3.75 baths, 2,400 sq ft (built in 1966)
MLS: S553540 (110 days on Redfin)
Zillow Zestimate: $823,500
Type: Single Family Residence
Style: Contemporary
Stories: 2
Lot size: 7,686 Sq. Ft.
From listing: Breathtaking Panoramic Ocean and City Lights view from the entrance, dining room,living room and bedrooms. Welcoming decorator, double-door entry with a beautiful foyer. Gourmet kitchen with extensive custom built-in cabinets, decorator lighting, granite countertops and island, travertine tile flooring, and walk-in pantry with a second refrigerator. Remote-controlled gas log fireplace. Downstairs master suite and an upstairs master suite. Fourth bedroom is currently an office but would be perfect for any student who needs lots of shelves and an extended counter for the IPod,Playstation,webcam,computer,video game collection, CDs,DVDs, books, projects, craft supplies, etc, etc. The jeans and clothes fit nicely in the large drawers and there is room for a bed. When he/she moves out, the room becomes an office again. 50' Plasma TV and pantry refrigerator included. No Mello Roos, No Homeowner Dues, No Homeowners Association.


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After 110 days on the market, it would appear the buyers are not leaping to snatch up this property. Perhaps it is time for a (major) price reduction?

Assuming the house somehow sells for the current asking price, it would mean a profit of $336,300, after 6% sales costs. That would be a pretty remarkable gain considering the owner bought in 2004 and most of the rest of the county is now well below 2004 price levels. More likely is this is a complete wishing price that will never happen in the real world.

Over the top in Foothill Ranch

It's amazing how quickly popular sentiment has changed in light of the deteriorating economy. If you follow baseball, you probably know the New York Yankees recently signed pitcher C.C. Sabathia to a completely outrageous, $160 million contract. Typically, the reaction would be: "Well, they're the Yankees. They can do whatever they want."

But, this free agent move has stirred up some questions and ill will - even from some Yankees fans. How could they carelessly throw that kind of dough to one guy while raising ticket prices when so many of us are barely getting by?

And, for that matter, how the heck could those car company CEOs step off their private planes and then convincingly argue how they desperately need money? We know, we know - safety issues.

Not too long ago, over-improved homes with all the amenities were put on a pedestal. And why not - with home prices rising and seemingly endless access to improvement funds, your imagination was the limit. Your home really could become your castle...decked to the hilt with stainless steel and granite.

Today, this sort of over-the-top opulence and shameless consumerism kind of seems...wrong and out of place. See what you think about this Foothill Ranch property.

30 Flores, 92610
Asking price: $1,240,000
Asking price/ sq ft: $344
Purchase price: $1,100,000
Purchase date: 3/17/06
Size: 4 beds, 4.5 baths, 3,601 sq ft (built in 1991)
MLS: P660018 (62 days on Redfin)
Zillow Zestimate: $713,000
HOA dues: $70
Type: Single Family Residence
Style: Santa Barbara
Stories: 2
Lot size: 6,391 Sq. Ft.
From listing: **STOP**The pictures in listing truly tell the story, nothing misleading here. **NO Detail missed**. Every Bedroom is a suite with it's own full bath, new cabinets/granite, 3 bedrooms include wall mounted Hi def LCD TV's. Located at end of cul-de-sac this home has well over **$200k+** in recent high end upgrades that include new windows throughout, custom wood flooring, new carpet, wood/wrought iron staircase, big open gourmet kitchen, new built in fridge, high end appliances and new cabinets. Tons of custom lighting, Big Bonus room with upstairs inside laundry room. All Plumbing internally epoxy coated. Noritz tankless water heater with commercial grade water softener system. Dual AC units and furnaces only a few years old. Hard wired alarm system with heat/smoke detectors and full outdoor security with 4 cameras. Custom outdoor patio with 4 built in heaters. Garage has custom cabinets and flooring. Home has 8 flat screen TV's that are negotiable as is the furniture. Move-in & Relax.

8 TVs. Really. 'Cause 9 would have been way over the top.

This property was listed in May for $1.28 million, and without a buyer fell off in July. That description may have been even worse: "Tired of looking at homes with no upgrades, old cabinets, flooring and windows that barely work and more. This home has over 200k in upgrades, new windows, High end wood flooring, new carpet, wood/wrought iron staircase, Kitchen just redone, new built in fridge. Tons of new lighting, canned lights, 200 amp panel.High end window coverings. Bedrooms have full baths and granite and new cabinets. Large Bonus room and upstairs laundry. Garage has custom cabinets, carpeted, overhead storage and new Garage doors and openers with the highest insulation value..."

We sincerely hope that someone shopping for a house that costs more than $1.2 million would be able to find others without "old cabinets, flooring and windows that barely work." Just a thought.

Do you think - including the $200,000 in upgrades - this property is now worth $140,000 more than its 2006 price? Doubtful.

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...

"The phone is ringing off the hook!"

15 Amarante in Laguna Niguel is a single-family residence in Marina Hills that came up for sale a couple weeks ago with an asking price of $599,000.

The owners' situation is sketchy at best. Zillow shows this property sold for $810,000 in 2005, but it has also been on the market as a rental, first in September 2006 with a monthly asking price of $2,650, and again in October 2007 with a monthly asking price of $2,600.

We're not sure exactly what the house did end up being rented out for in the past, but there is no rational way the rent could even approach covering the mortgage, so it is possible the owner was banking on rapid appreciation to bail them out of a bad investment. If you're curious, the investor-friendly 120 GRM estimate has this place valued at $312,000 - assuming a rental rate of $2,600 per month.

Listing description (our emphasis in bold): Gorgeous single story detached home in the desireable Marina Hills. Remodeled kitchen with cherry wood finish cabinets and modern granite tile counters. Gorgeous travertine floors and plush carpet. Leaded glass front door with beautiful porch. Low maintenance private back yard with lovely landscape and flowers beds. Hurry on this one the phone is ringing off the hook!

If the phone is "ringing off the hook" with interest, then why did we see this today on ZipRealty?: Price Reduced: 3/31/08 -- $599,000 to $589,000

Guess you don't have to be in quite as much of a hurry as the listing leads you to believe.

LA Times tells backstory behind Ladera luxury foreclosure

Photo credit: LA Times

Those of you who do a lot of clicking on listing sites like Redfin and ZipRealty may have come across 3 Magnolia in Ladera Ranch. It's a very nice-looking place with 4 bedrooms and 3 baths, and it sold for $1.2 million at the peak in 2005.

The recent listing price was $429,000 (obviously, way too low to be a regular sale, even REO), with the following in the description:

'Property To Be Sold At Public Auction Event March 15Th At The Pomona Fairplex. List Price Is The Starting Bid For This Home, Subject To A Reserve Price And Lender Confirmation. You May Bid At The Auction, Or Via Live Internet Web Cast, Or Via Absentee Bid ( Written Offer ) Submitted In Advance Of The Auction. No Offers Will Be Accepted Prior To Auction. Homes Open For Inspection From 10Am To 4Pm On Sat And Sun March 8Th And 9Th. For Property And Auction Information Contact Listing Broker'

Peter Viles of the LA Times' excellent L.A. Land blog posted on the fate of this property today. Some snippets:

"Because the opening bid was so low, there was a spirited bidding war for the home. ...

Here's what happened: The winning bid for this home came in at $705,000. Remember, the bidder agrees to pay an additional 5% premium to the auction companies. So the total bid was $740,000 -- a 38% discount from the peak sales price of $1.2 million. However, the bank or lender that owns the home reserves the right to reject the high bid as too low, and that is what happened here."

To recap, the auction established that a buyer was willing to pay a total of $740,000 for the property. The bank said no.

In fact, it looks like the bank may already be trying to get more for the property. It's showing up in Redfin with a new asking price of $915,000.

*There is also an interesting LA Times video Viles did on the auction, specifically on the Ladera Ranch property. See it here.

Are the squatters out yet?

If you happened to want to preview this Mission Viejo REO townhouse right when it came on the market a little more than a month ago, you would've probably been disappointed. The listing description says it all:

REO--Bank Owned. Property sold AS-IS, but in great condition. Current occupants will be evicted from the home on 2/2/08 so the home cannot be shown at this time. This home is a rare 3 bedroom, 3.5 bathroom condo in a great neighborhood.

The bold is obviously our emphasis. Funny how the listing mentions the property is in "great condition," considering at the time it was being possessed by people about to get the boot, who, ostensibly, had not much to lose. Who knows what damage, if any, took place as the day of reckoning arrived.

The bank is asking between $474,900 and $529,900, so they must believe the house is still in top-notch condition. That's still near the bubble price for this place - $535,000 - which was recorded in late 2005, so it appears this property has a ways to fall. The value in 2002 was a "mere" $271,000.

How does this compare to other properties in the neighborhood? 27692 Argyll #113 is the same model and is asking $475k. It has been sitting on the market for more than 3 months without a sale. 27672 Falkirk #93, which is also the same model but is asking $439,900. Time on Redfin: 78 days.

And, don't forget about 27776 Berwick #22 - the low-price leader at $405,000. All in all, there are about 8 properties for sale in Highland Park.

But, the neighborhood should now be short at least one evictee.

$6 million bubble profit in Laguna?

That's exactly what this Laguna Beach owner is hoping to achieve after holding their luxury property for less than two years. Never mind that even this market has shown a few small cracks in recent months (the latest DataQuick figures reveal sales volume is down more than 50% and the median is down about 10% from the same time last year, though these numbers are very volatile).

And, never mind that this property was purchased about as close as it gets to the peak of the Great Housing Boom. Well, with a property this nice, perhaps anything is worth a shot...

14 Lagunita Drive, 92651

Asking price: $16,989,000

Asking price/ sq ft: $3,951
Income requirement: Ridiculously high
Purchase price: $11,000,000
Purchase date: 5/18/06
Size: 4 beds, 5 baths, 4,500 sq ft (built in 1963)

MLS: U8000760 (4 days on Redfin)

2006 property tax: $71,647
Type: Single Family Residence

Stories: Three or More Levels
Lot size: 6,370 sq ft
From listing: Lagunita oceanfront residence that is a work of art in itself. Crashing white water and pristine sand at your doorstep with direct steps to Victoria Beach. Panoramic 180 degree oceanviews. Soft contemporary style architecture. Custom teak doors, art glass walls etched with sea life motifs, a copper roof, and climate controlled wine loft that holds approx. 800 bottles.

Obviously, this property is marketed towards a very select group of possible buyers - the all-cash variety, to be specific. Let's look at a portion of the sales history that shows up in Zillow:

June 1988: $1,225,000
December 1997: $2,150,000
May 2006: $11,000,000

Taking this information into account, we see it took about nine years for the property to increase in value by 76% between 1998 and 1997. That's a pretty significant amount, but hey, this is a luxury property, so the rules are different. The nominal increase in value between those two sales was $925,000.

Then, between 1997 and 2006, the property increased in value by $8,850,000, or 21.4% per year for a total appreciation of about 412%. We speculate that some significant remodeling took place in order to increase the value by this much, but in a bubble market all bets are off.

The latest owner is gunning for a $5,989,000 profit, not including sales costs. That would equate to an appreciation of about 54% during a horrible housing downturn - now that's bubble immunity if we ever saw it.

If we were to tack on 6% in transaction costs, the profit would "dwindle" to $4,969,660.

The 365 club

We are aware that properties aren't quite selling as quickly as they used to. But this is ridiculous. All of the following properties are members of my not-so-elite "365 club" - they've all been on the market for more than a year without a sale. All are still active on Redfin. Get 'em while they last...

35 Wightman Court, Dana Point
Days on Redfin: 539
Asking price: $849,900 ($773/sq ft)
Original asking price: $849,900
Purchase price: $816,000
Description quote: "Ready to move in and selling furnished."
Analysis: Think price is an issue? There's another same-size unit for sale that's asking $719,900, and it's been on the market for 123 days. Does not bode well for either of them.

437 Calle Empalme, San Clemente
Days on Redfin: 425
Asking price: $895,000 ($597/sq ft)
Original asking price: $895,000
Purchase price: $195,000
Quote: "COULD PUT ADDITIONAL GARAGE, MORE LIVING SPACE, YOU NAME IT!"
Analysis: Despite the can-do description, this property is priced about $150,000 more than a nearby (bigger) place sold for in October. The purchase price would imply the owners should have plenty of equity...simple indifference to selling or HELOC implosion?

32501 Vivente De Marlita, SJC
Days on Redfin: 527
Asking price: $839,990 ($341/sq ft)
Original asking price: $869,990
Purchase price: $551,000
Quote: "Nearly new immaculate home; doesn't look lived in."
Analysis: Last price drop: July 1, 2006. Think how much has changed since then. And not in a good way. Previous sale amount again suggests there could be a HELOC/bad loan in play.

31867 Circle Drive, Laguna Beach
Days on Redfin: 501
Asking price: $1,950,000 ($1,315/sq ft)
Original asking price: $2,695,000
Purchase price: $408,000
Quote: "...totally redone in beach chic style with fantastic ocean views and access to two beaches"
Analysis: "Beach chic?" OK, so the house isn't selling, but no need to just start making words up. In all seriousness, the ocean views from this place look incredible.

24 Northwinds, Aliso Viejo
Days on Redfin: 392
Asking price: $785,000 ($375/sq ft)
Original asking price: $879,000
Quote: "PRICED RIGHT!!... 3 car garage for all your toys"
Analysis: Sure it's priced right. That would explain why it's only been on the market for 13 months. Give me a shout once you've arrived back on planet Earth.

Good luck with that

Despite buying near the peak, at the peak, or just as the real estate market began to fail, these owners have already placed their properties back up for sale.

These owners are not looking to barely break even on their purchases. Instead, they're hoping to cash in for a profit. Maybe we'll be proven wrong, and some buyers will come out of the woodwork. Then again, maybe not.

31597 Via Cruzada, S.J. Capistrano, 92675
Asking price: $1,775,000
Purchase price: $1,369,000
Purchase date: 6/1/2004
Days since previous sale: 1,228
Potential profit (incl. 6% selling costs): $299,500
Potential appreciation per day of ownership: $265.51

856 Calle Pluma, San Clemente, 92673
Asking price: $567,500
Purchase price: $494,545
Purchase date: 1/9/2006
Days since previous sale: 641
Potential profit: $38,905

Net potential appreciation per day: $60.69

29 Abyssinian Wy, Ladera Ranch, 92694
Asking price: $1,269,000
Purchase price: $846,500
Purchase date: 10/21/2004
Days since previous sale: 1,086
Potential profit: $346,360

Net potential appreciation per day: $318.93

24451 Los Serranos Dr., Lag. Niguel, 92677
Asking price: $977,000
Purchase price: $875,000
Purchase date: 8/18/2005
Days since previous sale: 785
Potential profit: $43,380

Net potential appreciation per day: $55.26

225 Glenneyre St. #1E, Laguna Beach, 92651
Asking price: $975,000
Purchase price: $690,000
Purchase date: 10/14/2004
Days since previous sale: 1,093
Potential profit: $226,500

Net potential appreciation per day: $207.22

File this one under "makes completely no sense"

The California Association of Realtors' chief economist made a quasi apology about a prediction she made two years ago that "dismissed fears of a bursting California real estate bubble and called for only modest sales declines."

In fact, CAR said it predicts prices in California to fall 4 percent in 2008, which would mark the worst year since 1993.

As the real estate market here in Southern California continues to slowly implode, this seller in Mission Viejo had an idea. A big idea. A bold idea. Here it is: Buy a modest-looking 25-year-old house. Build on an addition to bring it up to a mind-boggling 7-bedrooms, 7-baths and 2,460 square feet. Then proceed to remodel and overimprove the heck out of it with granite and stainless steel in the kitchen, travertine and tile floors, plus a new roof, carpet and paint.

Then, to top it off, set the asking price to $280,900 more than you paid for it in July 2006, which happened to be right as the real estate bubble was beginning to deflate.

This seller is either incredibly shrewd and gutsy, or destined to fail miserably. Want to take bets as to how much money they poured into this place? One thing they forgot to pay for was a good photographer. Check out the picture to the left. The red arrow is pointing to someone who appears to have been caught talking on a phone in the backyard.

New rule to RE agents/people who take pictures and then put them on the MLS: At least glance at your pictures before you post them. Having people/animals accidentally appear in your photos only makes you look unprofessional.

26291 Avenida Calidad, Mission Viejo
Sales history
7/12/2006: $669,000
5/30/2006: $412,500
Asking price: $949,900 (32 days on Redfin)
From listing: "New addition with everything redone in & out. New appliances, new tile roof, new paint in & out, new carpet, new travertine floors, new kitchen cabinets. A must see. .. . too many to list. Bring your big family to this one. .. ."

Big family is right. Who needs that many bedrooms? The Brady Bunch would probably have considered it unnecessary. You might as well be running a small dorm with this many rooms. Or perhaps, even an elderly care facility.

Oh yeah, the three closest single family houses for sale are asking the following: $690,000; $589,000; $618,000. Doesn't appear that the neighborhood supports this kind of price, considering it's about $300,000 more expensive on average than the others.

Assuming they find someone who wants a 7-bedroom house of this size, in this location, at this price, the potential profit would be $223,906, including 6 percent selling costs. Then subtract from that however many thousands they spent "upgrading."

Quote of the year, revisited

A while back, I vented on the complete ridiculousness that is "My House Is Worth What?" on HGTV.

Well, what do you know...Newsweek columnist Daniel McGinn recently used the show as an lead-in to a very good article about the changing nature of property appraisals and the real estate downturn in general.

As the real estate market continues to look gloomier, I couldn't help but rehash the most obnoxious, disturbing, and yet telling exchange I've seen in a while involving an ignorant person's perception of how real estate "investing" works versus reality. An edited piece of the original post appears below. To see the whole thing, click on the link in the first paragraph.

Essentially, in "My House Is Worth What?" a RE agent takes a look at a person's house, points out some pluses and minuses, and then tells them what they would list it for.

Positive factors the RE agent finds about this particular homeowner's property, located somewhere in LA: There is a guest house on the property that she renovated and is renting out. There's also an outdoor patio that would be good for entertaining (is it just me or is that feature very overrated - sure, we would like some nice outdoor space, but just how often do we really use it?)

Minuses: No air conditioning. Washer and dryer literally within arm's reach of the sink in the kitchen, out in plain sight. Kitchen needs major work and has awful looking cabinets and counters. Floors in the kitchen should probably go, too.

She paid $550,000, and spent $25,000 renovating. So, she's in for $575,000 but is hoping it's "worth" about $775,000 - so that way, she says, she could have a big enough down payment to trade up for a bigger and better place. This doesn't pass the smell test, and you can tell the real estate agent sensed it too - $200,000 appreciation in two years, considering we're now in a major buyer's market? (Note: This was a number of months ago. Things obviously have only gotten worse since then)

The agent, confused, asks her: "How did you arrive at that figure?" (What he really means: What the @#$* are you thinking?)

Her answer: "Well, I've lived here for two years, and I heard you just add on $100,000 a year kind of thing..."

Excuse me while I hurl. This is a prime example of complete ridiculousity at work. That statement concisely sums up why we're in the situation we are now. People have been conned to believe that you can't go wrong with real estate, it always appreciates, blah, blah blah. This is one piece of the explanation as to why prices are now through the roof.

Cue the agent's nervous laugh, and joke about "Well, this is LA, right..." (What he really means: "You nut case! How can you possibly think that your house went up $100,000 each year? Good luck finding a buyer.")

He proceeds to tell her he would list it for $669,000 - still a whopping $94,000 above her costs (and she'd better try to get out now, otherwise she could be in for a surprise as the market continues its downward swing).

Despite what is in actuality very good fortune (and luck) for her, she pouts as we fade to commercial.

Oh, what I wouldn't give to see where she's at these days. Was she actually able to convince a greater fool to take this place off her hands? Did she then "trade up" to an even bigger, more expensive house with an equally large mortgage?

They should start doing follow ups with some of the more ridiculous people they've had on the show to see how their incredibly lame brained plans panned out (like the couple who wanted to pull all the equity out of their townhouse to buy themselves an over-the-top wedding they shouldn't possibly afford).

Only problem is, it would probably be way too realistic and depressing. And that, folks, is not good TV.

Burned by fire sale

Try to put yourself in the place of the owner of 26966 El Retiro in Mission Viejo (pictured above). They paid $317,000 for this 3-bedroom, 2 bath house in March 2002, and are now hoping to sell it for $619,000. There are also probably a few jokes to be had here with the street name, but we'll leave those alone.

They've added granite countertops, maple cabinets and "newer" appliances in the kitchen, plus a new roof, water heater and carpet, among other improvements. So, that should justify their asking price, right? Potential profit (minus 6 percent selling costs) assuming a sale at this price is $264,860. Obviously, it's going to be much less in reality considering the work they've done on the house has no doubt cost a decent amount of money.

But, let's assume that despite the repair/upgrade work, they're still in line to make a nice little bit of cash because they didn't tap into their home equity and/or were able to pay cash for the repairs. Perhaps it's time, these owners decide, to move up into a larger house. After all, the NAR says it's a buyer's market and therefore a great time to buy!

Meanwhile, there's a blowout sale going on just one street over, because the owner of 26926 Colmenar (pictured at left) has taken a large, sharp machete to the price of the property. Once listed for $629,000, the house is now showing up in Redfin at a price range of $499,000-559,000 (a discount of anywhere from $70,000-130,000, or 11-21 percent, depending on which part of the range you're calculating from).

Since these owners paid $673,000 in January 2006, the projected loss could be as much as $203,940 if we figure a sales price at the bottom of the price range, and factor in 6 percent selling costs.

This Colmenar property, by the way, is a bit larger and has one more bedroom than the El Retiro house.

Is there something we're not seeing here? It's very clear that the Retiro house is drastically overpriced considering the competition. By the way, this argument receives more support from neighbor 26971 Retiro, which is the same size as the other house on that street and appears to be an REO. The asking price on this property is $564,900. It's been sitting on Redfin for 130 days.

Uh oh.

Does the first Retiro property and its "totally turnkey!" condition justify the ridiculously high premium, considering it's smaller and has one fewer bedroom? No way, and these sellers are probably going to have to cut their price to keep up, despite their home's slight advantage in terms of repairs/improvements. Again, remember the principle of substitution. That's all you need to know.

They just don't get it

Here's a quick-hit list of local properties that have all been listed on Redfin for laughable amounts of time. Are these owners finally ready to deal, or are they still hoping for buyers to materialize who can pay these high prices? Click on the address to see the complete Redfin listing.

26482 El Mar Drive, Mission Viejo, 92691
Asking price: $829,000
Size: 4 beds, 3 baths, 2,897 sq ft (built in 1969)
Days on Redfin: 305
Original asking price: $949,000
Last sale: $725,000 on 11/16/2004

15 Calle Gaulteria, San Clemente, 92673
Asking price: $1.595 million
Size: 4 beds, 3.5 baths, 3,705 sq ft (built in 2005)
Days on Redfin: 200
Original asking price: $1.795 million
Last sale: $1,273,500 on 12/17/2004

31423 S. Coast Hwy #86, Laguna Beach, 92651
Asking price: $1.995 million ($1,814 per sq ft!)
Size: 1 bed, 1 bath, 1,100 sq ft (built in 1970)
Days on Redfin: 526
Original asking price: $2.395 million
Last sale: $1.395 million on 1/31/2006

32501 Vivente De Marlita, S.J. Capistrano, 92675
Asking price: $839,990
Size: 4 beds 3 baths, 2,466 sq ft (built in 2003)
Days on Redfin: 475
Original asking price: $869,990
Last sale: $551,000 on 3/7/2003

35 Wightman Court, Dana Point, 92629
Asking price: $849,900 ($773 per sq ft)
Size: 2 beds, 2 baths, 1,1oo sq ft (built in 1989)
Days on Redfin: 487
Original asking price: $849,900 (no change)
Last sale: $816,000 on 5/26/2006

Here's one more owner who really doesn't get it...
2 Sidra, Newport Coast, 92657
Asking price: $2.45 million
Size: 4 beds, 2.5 baths (built in 2002)
Days on Redfin: 191
Original asking price: $2.595 million
Last sale: $540,500 on 3/21/2003