Baffled in Burbank: 43% off foreclosured house

AK writes, via e-mail, that this one is baffling. Here's the Redfin listing, here's the short history of 1248 E. Elmwood Ave. in Burbank, now in foreclosure:

Date sold        Price

May 1989: $350,000
Dec. 1997: $250,000
Mar. 1999: $364,000
June 2000: $445,000
June 2002: $444,443
Mar. 2003: $640,000
Aug 2003: $675,000
Mar. 2004: $775,000
Dec. 2004: $648,703
Feb. 2006: $812,500
Oct. 2006: $1,150,000
Feb. 2008: $969,000
Now listed for $659,900
Decline in value from peak sales price: 43%

Notes: The $300,000-plus run-up in eight months in 2006 is intriguing. A remodel? Of course, there was a bigger run-up in percentage terms, of almost $200,000, in nine months in 2002-2003.

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com

Comments

[prefab sprout]

It looks like fraud to me......

It also looks like a piece of #$@!. I get a kick out of the listing which calls it a "contemporary". LOL

Let me know when it gets to $300K.....MAYBE I'll be interested.

[dilbert dogbert]

After flying down on Google Earth. This is a WTF house! All the neighbors could hope for would be that it burns down and the owner is not allowed to rebuild. That is a steep hillside behind the house and the front yard is the street.
This house has no value except as open space.

[MyLessThanPrimeBeef]

George Baily would have stopped lending around 2002. You see, he knew all those people around town and how much their houses were really worth.

Instead, all those transactions after 2002 were just some numbers buried deep inside someone's CDOs, not even as impersonal as some blips on the computer screen since no one could see them. Rumors had it that they existed only inside Satan's twisted brain.

[RZ]

Maybe the current price is down 43% from peak sales, but the peak sale price was up way more than that in just a few years. Inflated house prices are as much of the problem with the slumping housing market as fraud, and irresponsible buying and lending.

[TrojanDLA]

Burbank is the "mortgage fraud capital" of America. I'm also a closing attorney and when participating in compliance/fraud seminars, Burbank is always the city authorities like to cite as "the capital".

I have no idea why they chose Burbank. The other big city is the Atlanta metro area.

But yes - one of the tell tale signs of fraud is the high rate of flip and regular rise in appraisal value over a short period of time.

[Cal]

http://www.redfin.com/CA/Burbank/
4208-W-Franklin-Ave-91505/home/5396427

4208 W Franklin Ave
Burbank, CA 91505

From 1.2 mil last sales price to 677k listing price.

Maybe the banks are realizing that the current market isn't a bad one (things could be so much worse), the only thing they have to motivate buyers is price so they get aggressive and hope for a bidding war.

[J.]

The thing that might be fraudulant, is the Redfin page you've linked. Notice the house doesn't even sit on Elmwood Ave on the map, it's the wrong house.

Cross check with Zillow shows the house was recently sold in Feb 2008 for $969k.

There's something fishy about the redfin page.

[peteviles]

J writes, "The thing that might be fraudulant, is the Redfin page you've linked. Notice the house doesn't even sit on Elmwood Ave on the map, it's the wrong house. Cross check with Zillow shows the house was recently sold in Feb 2008 for $969k."

Thanks, J, you are INCORRECT. The Zillow history is exactly the same as redfin's. (You have to dig a bit into the Zillow page, but it's there). Zillow and redfin both show the Feb. 2008 sale for $969K. Zillow marks it with an asterisk to indicate it's a screwy transaction, not included in the Zestimate. Why screwy? That transaction is probably the foreclosure itself, J. Both Zillow and Redfin have the same high-water peak price for the house: $1.15 million. The play stands as called. First down, LA Land! (wild applause)

There's something fishy about the redfin page.

Posted by: J.

[Cal]

We have a whole thread on Burbank RE and our local Burbank "expert" doesn't chime in?

[Ace]

Pete Viles is correct.

The house sold for $1,150k in 2006 and then the bank paid $969k when they foreclosed. The clown that paid $1,150k did 100 percent financing and Washington Mutual was dumb enough to write BOTH loans.

If they get their full asking price... they will only lose $490k plus the cost of foreclosure!

It is funny that Zillow puts a star on it and does not include it in zestimates. If they included it, it would actually bring the zestimates UP.

[Ace]

Cal 'We have a whole thread on Burbank RE and our local Burbank "expert" doesn't chime in?'

Uhh... if she is smart, she is out there right now trying to find a buyer for this house so she can collect the generous 3 percent commission plus $750 bonus!

[TR]

Well I can end the mystery - we bought the house in June 2008. It is a great neighbourhood - quiet, peaceful, cul-de-sac. Yes the house is orange - I would say they got a bargain - it is hideous. We don't know about the history, but the area is worth the price tag for any home up here.
We paid more than what is listed here.

Not a tear down - foundation is solid and in great condition structurally. Was completely gutted, no appliances, no toilets, no nothing - hence the price. Yes fireplace and black marble tile is hideous, we are replacing this. So far we have replaced everything. We replaced plumbing, electrical, added laundry area (there was no outlet for a dryer), replaced drywall, replaced floors, new carpets, added custom closets, new granite and kitchen, heating and air conditioning, all bathrooms redone from scratch, repaired everything, yes yard is small but very usable, back hill behind is rock, it's not going anywhere - we have survived 2 earthquakes already with not so much as a moved glass.

The house will be great when we finish it. Still have to paint the outside to get rid of hideous orange, and get new garage door with opener - current door does not open. We love to renovate and restore homes, and that's what we're doing. Whoever did live here was a piece of work for sure. It will be amazing when we're done, and then we'll put it back on the market, and you will see a well deserved spike in value - because we'll have put at least $170,000 into it.

[Cal]

" It will be amazing when we're done, and then we'll put it back on the market, and you will see a well deserved spike in value - because we'll have put at least $170,000 into it. "

So you paid 665k and have put 170k into it.. add 6% for commission and selling costs and you get a price of around 889k for breakeven.

I see 1 house within +/- 200 sq ft and 3/4 mile that sold within those parameters anywhere close to that price. 1027 Sherlock Dr ...

IMHO if you break even it's a miracle.