There are plenty of statistics, reports and graphs dealing with the presence of foreclosures in current real estate market in Los Angeles. However, sometimes studying one individual case can present a clearer picture than all the combined data.
This bank owned duplex in Highland Park is located in the hills overlooking York Valley. City records indicate appoximately 2,000 square feet, built in 1960. The listing remarks indicate a 3-bedroom, 1-bath unit upstairs, and a 2-bedroom, 1-bath unit downstairs. It is currently offered for sale at $339,000.
It originally sold 1976, for $82,500.
The next sale, over 30 years later, in December, 2005, was for $630,000, with a mortgage loan of $504,000.
The Notice of Default was filed February, 2008.
The Notice of Sale was filed May, 2008.
The Trustee Sale took place June, 2008.
The property is tenant occupied. The listing remarks indicate gross rental income of approximately $2,000.
Consider this: With a loan of $504,000, the previous owner's monthly mortgage payment would have been approximately $2,800. The previous owner's annual property taxes would have been $7,875 per year (or approximately $650 per month). Add in water, gardening, and a little for repairs and maintenance, and it appears the previous owner would have been running a negative of over $1,500 every single month.
Compare with this: The payment on a loan of $271,000 (80% of the current asking price) would be about $1,500. Annual property taxes on a sale price of $339,000 would be approximately $4,200.00.
Someone buying this bank-owned property at the current asking price of $339,000, actually has a good chance of breaking even each month.
This article is not intended as an advertisement of any property listed by another brokerage firm. It is intended only as a report of current real estate market conditions.
Interesting mathmatics! We are experiencing the very same ting in our market! The great undec ided factor in our area is the property tax.
The assessor is very quick to raise taxes when the market pops us, will they be so quick to lower them accordingly? Hmmmmm?
Here in California. a change in assessment is tied to a transfer of title, thanks to our famous Proposition 13.
Under Prop 13, a property's assessment was locked in at the 1978 assessment value, until a transfer in title occurred, and then the property was re-assessed based on its value at the time it transferred.
I haven't researched the numbers, but my guess is that very few properties now remain until the original 1978 Prop 13 assessment. :-)
The county says assessments are now going to be adjusted based on the state wide decline in value ... but then what?
I wonder if the day is coming when we will end up returning to a system where properties are regularly reassessed to their current market value, regardless of whether or not they transfer ownership.
Is this house availble to look at 323 314 3844
Dan