Since it's the weekend, we're going to go out of town for a day and feature a property in Los Angeles County. There's no photo available of the property, so instead I'm using a generic picture of the city of Norwalk from the 1950s, right after this house was built.
The basic details:
11912 Cresson Street, Norwalk, 90650
Asking price: $459,000
Purchase price: $400,000
Purchase date: 6/27/2005
Size: 2 beds, 1 bath, 749 sq ft (built in 1949)
MLS: P604142 (26 days on Redfin)
Description: Charming home in quiet neighborhood walking distance to Park and Elementary school. The garage has been converted to an extra large bedroom, you get 3 bedrooms for the price of 2. Inside has been remodeled with new paint, carpet, crown molding, tile counters, and cieling fans. Large grass area in backyard along with a nice patio for relaxing.
On the surface, this property is unremarkable (especially since we don't have too much of an idea of what it actually looks like, other than the fact that it's a modest 2-bedroom*, post-WW II house in Norwalk). *-Nothing says class like a property with its garage converted into an additional bedroom.
If we assume the usual 6% sales costs, the gain would be $31,460. Since there is a relatively small potential gain, we would guess the owners don't have too much room to lower the price, despite the fact that larger neighboring 3-bedroom properties are asking $49,100 less and $43,100 less.
That doesn't tell the whole story. Here is the mortgage information for 11912 Cresson, courtesy of PropertyShark:
Purchase price in 2005: $400,000
1st mortgage: $320,000 (adjustable)
2nd mortgage: $80,000 (fixed)
Downpayment: $0
Refi (8/28/07): $417,000 (fixed)
So the owner put nothing down, and then re-fied into a bit larger loan to squeeze some more money out (notice they maxed out on the conforming loan limit of $417k). The current asking price is about 15% more than the current owner paid in '05, when the market peaked. By the way, this property sold for $136,000 in mid 2001, meaning that over the course of four years, this property shot up in value by 194%.
Can you imagine what could happen as prices in LA continue to turn around and head back down?
We're going back to Laguna Beach today for an interesting property that just hit the market.
How would you value this property? Does the artist's workshop do it for you? What if you would rather have all the modern amenities and granite counters instead of a crafstman cottage?
