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Friday, May 02, 2008

Stuff of Memories: From Front Page (in 2005) to Short Sale

by Calculated Risk on 5/02/2008 05:36:00 PM

The following image is of the front page of the O.C. Register from July 19, 2005. The featured house sold for $600K in July 2005, and is now listed on RedFin as a short sale for $559K (good luck!). (hat tip ID)

OC Register, Front Page Click on photo for larger image.

Click here for PDF of entire front page. The caption read:

SOLD: Sergio and Monica Anaya and their two children left their rental and bought this three-bedroom Costa Mesa home after signing two loans (including an interest-only mortgage) and taking on two boarders who occupy one of the bedrooms.
Anyone surprised that didn't work out? The house previously sold in September 1994 for $177,500.

Using the Case-Shiller Home Price Indices for Los Angeles and San Diego (there is no index for Orange County), with typical appreciation for the area, the house should have sold for $567K to $592K in July 2005 based on the Sept '94 price. Pretty close.

Using the February 2008 Case-Shiller HPI, the house should now sell for $455K to $494K, well below the short sale asking price (once again based on the 1994 price).

One of the headlines in the Register is "Stuff of Memories", hence the title for this post. Another headline is "Expert expects $1 million median". Very funny.

Note that the 405 Freeway is directly behind the house (see freeway sign in photo).

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