L.A. story: Was $545,000, now $125,000
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Back story: Earlier this week I blogged about a foreclosed house that had been reduced 57% in price from its peak sales price to its current asking price. In response, commenter ‘E’ maintained that 57% was no big deal and that he could easily find a foreclosed house discounted 75% or more. Taking up the challenge, I responded that if he could find the house, I would drive over and take a picture of it. No slouch, ‘E’ quickly found this listing from Redfin.com.
So about two hours ago I motored over to Highland Park and shot the picture you see. By my math, the house is being offered at a discount of 77% from its peak sales price, but it’s a listing that raises a few questions. I’ll explore them below.
More on the house: It’s a bank-owned, two-bedroom, one-bath on a half lot in Highland Park that’s been on the market 225 days. Agent’s description:
‘PROPERTY SITS BEHIND ANOTHER PROPERTY YOU MUST GO UP A WALKWAY NEXT TO A DRIVEWAY TO GET TO THE HOUSE. NO FHA OR VA OR LOW DOWN FINANCING PROPERTY WILL NOT QUALIFY THIS IS A FIXER. LENDER OWNED REO PERFECT STARTER HOME, SOLD AS IS NO TERMITE NO RETROFIT. ALL OFFERS MUST INCLUDE PRE-APPROVAL LETTER W FICO SCORES AND PROOF OF FUNDS AND COPY OF EARNEST MONEY DEPOSIT CHECK.’
Here’s the sales and listing history, also from Redfin.com:
Sold: April 2005 for $240,000
Sold: June 2005 for $410,000
Sold: April 2006 for $545,000
Foreclosed: September 2007 by Morgan Stanley Trust, $385,000
Listed for sale: January 2008 for $300,000
Reduced: February 2008 to $179,900
Reduced: April 2008 to $169,000
Reduced: June 2008 to $149,900
Reduced: August 2008 to $125,000
Questions: What happened between April and June of 2005 to cause the price to nearly double in two months? And how did the house -- wedged into a half lot in a backyard with no parking -- ever appraise for more than half a million? I called the listing agent, Zita Doyle, who said, ‘Honestly, I don’t know how anybody could have appraised that house for that amount of money.’ I’m curious to hear your thoughts on this.
-- Peter Viles
Photo Credit: L.A. Land