I got an automated e-mail today from ZipRealty notifying me of a new listing at 566 Houston Drive in Thousand Oaks. 
This house is being listed for $490,000. But wait. Yesterday I noticed it listed on Redfin for $475,000. Which is it? Well, look at the picture on Redfin. That’s not a very good-looking house. The backyard patio area is so closed in, it looks like a dungeon. Then look at the sales history. In 2002 the house was purchased for $296,500. Assuming 6% annual appreciation, this house should probably be listed at just under $400,000. But considering this house is just 3 bed, 1.5 bath and 1,200 square feet, I’m thinking $400,000 is still quite a bit for a house in one of the less desirable areas of Thousand Oaks.
Wikipedia says the median household income in Thousand Oaks is about $97,000. That seems reasonable. Typically it is advised that a household pay no more than 30% of its annual income on housing. After taxes, that means a $97k family would have about $1,800/month to spend on housing.
At $400,000, 10% down and 6.25% interest, the monthly mortgage on this house would be $2,216.00 – a little above the $1,800 threshold. A house would have to sell for $325,000 with 10% down at 6.25% interest to have a monthly mortgage of $1,800. In order to afford a $2,216/month mortgage, a family would need to earn about $118,000/year.
I wonder if an average Thousand Oaks home will ever get down to $325,000.
I guess I should share yesterday’s ZipRealty notification as well. 202 Tennyson Street for $449,000. Price seems OK until you see the note that says ” Total,total fixer!!! Home has settlement problems. Sold as is.” How much does it cost to lift a house and replace or reinforce the foudation?
July 27, 2007 at 11:24 am
What a dump. Since the subprime implosion, Can the people that like ugly tile floors get loans anymore? $400,000 is high
July 27, 2007 at 4:54 pm
Somewhere I thought I heard that 6% should be considered a reasonable appreciation rate for a home. But more research suggests that homes really shouldn’t appreciate much faster than the rate of inflation.
According to the http://www.misserindex.us website, it looks like inflation average is closer to about 3% per year. I’m going to use that number from now on.
That means this house would be valued at about $343,000 assuming 3% appreciation over the past 5 years.
I still probably wouldn’t buy this house at that price. That street is narrow with no sidewalks. There are power lines hanging above the streets and the houses are too close.
March 20, 2008 at 12:42 pm
This thing is now listed at $350,000.
April 28, 2008 at 12:07 pm
Now it’s down to $294,000 in foreclosure.