Friday, April 11, 2008
Missing the Boat
Missing the boat is a bad feeling and I'm sure there are thousands of local home owners that will have a knot in their stomach when they realize the SS Cashcow has long ago left port. The easy money flips have turned to flops and the "guaranteed appreciation" turned out to be an empty promise, like a ticket on Aloha Airways.
The seller at 1950 Lucy Ln in Corona is one such person. he missed the boat but it looks like he is still standing on the pier, expecting it to return and pick him up. This home was purchased mid bubble in May 2004 for $679k. The house is in a decent area but this was a small tract of large homes stuck in the middle of a bunch of smaller homes that were built in the late 80's and early 90's (or earlier). These homes are a little out of scale for the area in my opinion. This home is just over 4000 s/f and has 5 bedrooms and 4 baths. It sits on a 1/2 acre lot but only about 1/2 of that is usable land, the rest is a steep hillside. The house is currently listed as a short sale for $775k. A short sale for $100k over the purchase price 4 years ago! This intrepid sailor obviously drank heartily from the home ATM fountain! He listed his McPalace in October of 2007 for $900k. Hoping to catch that last wave of buyers I guess. He had reason to feel a little optimistic as his neighbor around the corner at 661 John Drive has sold a slightly smaller home only 10 months earlier for $900k. I'm sure he thought that his house being 400 s/f larger and sitting on a bigger lot would be a slam dunk at his $900k asking price. But alas, he really had missed the boat. By October the market was in full seizure and he has been reluctantly reducing the price ever since.
Unfortunately for this poor fella that neighbor that sold in January and gave him so much hope looks to be a first payment default. The bank has taken that home back already and it's on the market with and asking price of $416k. That would be a loss of $484k or 54%. I'm going to give this home honorary membership into the 500K club. It's soooo close and the 54% loss is very impressive considering it was done in just over 1 year.
All this talk of boats is getting me excited about my upcoming cruise, 22 days and counting......