Will my property be affected with a foreclosure on my street?

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ladera1_IHB

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Over the past few months (years) the properties on my street and in my neighborhood have seen a steady but slow decline. Houses have been selling at the following $926k-april08 $889k-april08 $1.02m-may08 $892k-may08 $874-jun08 $859-jul08.



There is now a home that is in foreclosure, and it is for sale for $829. Do you think that this will force the next sale on the street to drop to $829? or does 1 forclosure not affect the prices that much?
 
[quote author="ladera1" date=1219805696]Over the past few months (years) the properties on my street and in my neighborhood have seen a steady but slow decline. Houses have been selling at the following $926k-april08 $889k-april08 $1.02m-may08 $892k-may08 $874-jun08 $859-jul08.



There is now a home that is in foreclosure, and it is for sale for $829. Do you think that this will force the next sale on the street to drop to $829? or does 1 forclosure not affect the prices that much?</blockquote>


Yes it will. And yes they affect prices greatly. It matters not that it is a foreclosure. It matters greatly that it is the last sale.
 
WHat reall gets me is that the owner of this home took out his equity completely over the last year or so (he probably pulled more than $700k in equity- which was more than the home was worth). He then tried to sell it but couldnt because he had to price it over 1.2mil to break even. So he decided to just walk away. He told me he bought a home in Newport with the equity he pulled out. So, his stupidity cost us all our equity.
 
Seriously, take no_vas's advice and sell now. Ladera is going to get so hammered over the next few years you will be wishing for $829k
 
[quote author="ladera1" date=1219808792]WHat reall gets me is that the owner of this home took out his equity completely over the last year or so (he probably pulled more than $700k in equity- which was more than the home was worth). He then tried to sell it but couldnt because he had to price it over 1.2mil to break even. So he decided to just walk away. He told me he bought a home in Newport with the equity he pulled out. So, his stupidity cost us all our equity.</blockquote>


So he's bragging that he robbed a bank. :)
 
[quote author="PadreBrian" date=1219812659][quote author="ladera1" date=1219808792]WHat reall gets me is that the owner of this home took out his equity completely over the last year or so (he probably pulled more than $700k in equity- which was more than the home was worth). He then tried to sell it but couldnt because he had to price it over 1.2mil to break even. So he decided to just walk away. He told me he bought a home in Newport with the equity he pulled out. So, his stupidity cost us all our equity.</blockquote>


So he's bragging that he robbed a bank. :)</blockquote>


ha ha... I woulden't brag about being a douchebag too much....

sheesh.



-bix
 
[quote author="ladera1" date=1219808792]WHat reall gets me is that the owner of this home took out his equity completely over the last year or so (he probably pulled more than $700k in equity- which was more than the home was worth). He then tried to sell it but couldnt because he had to price it over 1.2mil to break even. So he decided to just walk away. He told me he bought a home in Newport with the equity he pulled out. So, his stupidity cost us all our equity.</blockquote>


I would be skeptical that he was telling the truth.
 
[quote author="awgee" date=1219815299][quote author="ladera1" date=1219808792]WHat reall gets me is that the owner of this home took out his equity completely over the last year or so (he probably pulled more than $700k in equity- which was more than the home was worth). He then tried to sell it but couldnt because he had to price it over 1.2mil to break even. So he decided to just walk away. He told me he bought a home in Newport with the equity he pulled out. So, his stupidity cost us all our equity.</blockquote>


I would be skeptical that he was telling the truth.</blockquote>


I wonder if Gary Watts is his "financial advisor"?
 
<a href="http://ocbiz.freedomblogging.com/2008/08/26/three-oc-cities-rank-near-top-in-us-income/">http://ocbiz.freedomblogging.com/2008/08/26/three-oc-cities-rank-near-top-in-us-income/</a>



What makes Ladera so special it carries a premium of 8x over the Irvine median income?
 
I don't think that one foreclosure will necessarily affect other home prices. I live in a fairly stable neighborhood where most owners have lived for over ten years. One house was bought by a flipper and is now bank owned. The bank has listed the house at 30% below the price the flipper paid -- I have to admit the flipper paid too much and it looks like fraud may have been involved. Two other houses have gone on the market and sold during this time and they both sold for what I would consider to be 2006 prices.
 
[quote author="mvgrl" date=1219836352]I don't think that one foreclosure will necessarily affect other home prices. I live in a fairly stable neighborhood where most owners have lived for over ten years. One house was bought by a flipper and is now bank owned. The bank has listed the house at 30% below the price the flipper paid -- I have to admit the flipper paid too much and it looks like fraud may have been involved. Two other houses have gone on the market and sold during this time and they both sold for what I would consider to be 2006 prices.</blockquote>


Has the foreclosure/REO sold? When it does, it will be a comp.
 
<<Seriously, take no_vas?s advice and sell now. Ladera is going to get so hammered over the next few years you will be wishing for $829k >>



Actually, I don't live in Ladera any more. I live in a very well established neighborhood.



And yeah, I don't know how truthful one can be after losing their home. A nosey neighbor told me that she thinks they live in an apt complex in Irvine. Who knows.





Also, Does this mean I can petition to have my property taxes lowered? Is that easy to do? Will I be able to use this 1 comp even though the other homes are selling for much higher?
 
<blockquote>Over the past few months (years) the properties on my street and in my neighborhood have seen a steady but slow decline. </blockquote>




well, I would guess that no matter the neighborhood, with that kind of pricing action, the same outcome will occur. maybe not as bad as Ladera so long as most of the houses were purchased pre year 2000, but it will still happen.



house values are determined on the margin, ie the few sales that take place.



unfortunately, tax values somewhat less so.
 
you can petition to have your property taxes lowered. deadline to file is 9/15. however you can only use comps within 3 months of jan 1, 2008.
 
[quote author="acpme" date=1219900967]you can petition to have your property taxes lowered. deadline to file is 9/15. however you can only use comps within 3 months of jan 1, 2008.</blockquote>


Acpme,



I am sure a lot of homeowners would be interested in this thread.



A step by step plan would be helpful like where to apply at the county and how to acquire comp info that is acceptable by the reviewer.
 
It's a fairly simple process to fill out the form. Due date to get your appeal in is Sept 15.



<a href="http://assessmentappeals.ocgov.com/aa/">File online</a>



<a href="http://egov.ocgov.com/portal/site/ocgov/menuitem.4981dc715fc6e27bdadd603d100000f7/?vgnextoid=529dc85ae0ba5110VgnVCM1000000100007fRCRD&vgnextfmt=default">Instructions and FAQ</a>



or pick up the forms at <a href="http://egov.ocgov.com/portal/site/ocgov/menuitem.02b739dec30413a69add603d100000f7/?vgnextoid=558c8754917f5110VgnVCM1000000100007fRCRD&vgnextchannel=529dc85ae0ba5110VgnVCM1000000100007fRCRD&vgnextfmt=default">these local libraries.</a>



The formal appeal requires appearing before a 3-member appeals board on a scheduled date. There's also the option of having a one-on-one hearing with an appeals officer. You will be required to show 3 comparable sales that closed within 3 months of Jan 1, 2008 (oct 1, 07 to mar 31, 08). They will put the most weight on sales closest to Jan 1. Also, make sure your comps are as close in specs to your home as possible. Shouldn't be too hard if you live in an Irvine tract home. That means same number of bed/bath and sq footage.



I imagine they're swamped this yr and trying to resolve as many appeals as possible before getting to formal hearing. I've gotten called twice by the appeals officer already who tried to negotiate with me.



One tip for everyone is they don't look at price per sq ft, they look at sales price. It can be somewhat of a dilemma if you have an odd property type with smaller than normal square footage. Take a 3bd/2 ba 1400 sq ft SFR with an assessed value of $600k. The nearest comps might have more common floorplans like 3bd/2ba 1800 sq ft with a $600k sales price. You would assume based on the price per sq ft the larger unit sold for, the smaller home should get assessed down. Nope, they don't look at price per sq ft!



They are either incompetent or too concerned with maintaining tax revenue as opposed to doing a fair job -- probably both. My assessment went down 8% this yr. I have a neighbor -- same tract, same neighborhood, his floorplan has 1 more bedroom -- got the full 2.5% increase. How is that explained? The whole process has made me feel very negatively of the county tax assessors. Not sure what I can or should do about it though.
 
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