Thousand Oaks Housing Bubble & Crash

Update August 27, 2007: Property listed as SOLD.  No price info yet.

Update August 7, 2007: Price reduced to $569,000

Originally posted: July 6, 2007

Let’s try tracking a house for sale and see what happens. I’ll try and update this every 2 weeks or so.

A house just went on the market yesterday at 638 Shenandoah Drive in Thousand Oaks. It’s a 3 bed, 2 bath, 1040 square foot house built in 1970 listing for $589,000. That works out to $566/square foot. Neither Zillow nor Redfin have previous sale history on this house, so I’m guessing the owner has held it for more than just a few years. The listing claims: “Whet your appetite with this adorable starter home…” Being a “starter home”, you would think it should sell fast, so we’ll see if it does, and if they have to drop the price. With $0 down and 6% interest, this “starter home” will cost $3500/month mortgage. If a “starter” was able to come up with the 20% down on this house ($118,000), his mortgage payment would be “only” $2800/month.

Or, you can rent this house for $2100/month and put $1400/month into a 4% interest account and have $36,000 in the bank after 2 years that you can use on a down payment when housing prices might be a bit lower. Or if you invested that $118k you would have used on a down payment plus the $700/month you are saving it would be worth $144,000 in 2 years.

Check back in 2 weeks and we’ll see if this house has had any action.

UPDATE: 8-27-07

Price has been reduced to $569,000.  I was right about the $599 being too high.  I’m sure this one has a ways to go.

ORIGINALLY POSTED: 8-10-07

66 W Gainsborough Road

List Price: $599,000

The ZipRealty comment says ” Great buy on major fixer. Needs plenty of tlc.” I don’t know about you, but spending $600,000 on a tract home FIXER seems nuts. Neither Zillow nor Redfin have any past sales history on this house, which generally seems to mean that the current owners have owned a home for 10 years or more, but seeing as this is a trustee sale, that may not apply. Either way, if you bought this fixer with 20% down and 7% interest, you are looking at a $3,193 monthly payment. I wonder where you’re going to get the cash flow to fix this thing. It is 6 bed, 3 bath and 2,383 square feet. That actually comes out to about $250 per square foot, which isn’t half bad. Once again, I’m sure this won’t sell for anything near the $599k asking price.

UPDATE: 8/17/07  – I just noticed the price has dropped to $549,000 after fewer than 2 weeks at $575,000.  I bet they’ll take just about any offer at this point.

Originally posted: 8/7/07

920 Bower Way. Seems like so many of the houses for sale in Thousand Oaks right now are in the tiny old neighborhood between the 23, Hillcrest Drive and Hodencamp.

920 Bower Way is listed for $575,000. It was purchased for $640,000 on 1/9/2007. That means the asking price is $65,000 less than they paid for it 7 months ago. They lost $9,285 per month. Plus they probably paid over $3,000/month in mortgage payments. “Close to Civic Arts Plaza, shopping, 23 and the 101 Freeways” That means they are about 100 feet away from the 23 freeway. Of course, even at $575,000 this house seems overpriced to me. I don’t think any house in this neighborhood is worth more than $400,000. I’d have to see inside this one, but I’d guess something around $350,000 might be reasonable. Folks, let’s see if we can keep our heads on when we buy houses after this housing bubble returns to normalcy.

Let’s play the appreciation game. This house also shows a sale price of $175,000 at the end of 1995. That seems like a reasonable price. If this house appreciated 3% per year since then, it would have been worth about $242,000 at the end of 2006 – a few days after the current owners paid $640,000.

 Last week I profiled 676 Glen Oaks. Today their neighbor at 654 Glen Oaks put a house up for sale. 676 Glen Oaks is listed at $399,000. 654 Glen Oaks is listed at $465,000. Both houses are 1,056 square feet. The more expensive home is a 3+1, while the less expensive is a 3+2. 654 has a beautiful chain link fence in the front yard, so maybe that’s what you get for the extra money.

But 654 Glen Oaks is “one of the best priced single family houses in the conejo”. Or…you can go down the street and save about $70k.

Why don’t they close the cabinet door before taking the picture?

What’s up with this floor?

But if you’re looking to spend $440/square foot, this home is for you!

This house was last purchased on 4/3/2007 for $430,462, so I guess they are just looking to flip this baby for a $35k profit in just over 4 months during a crashing market.  You go girl!

Since my blog is a ripoff of irvinehousingblog.com and since he does such a great job analyzing the housing market and financing – much better than I ever could – I just wanted to share this article originally posted by Irvine Renter on March 1, 2007.

Financially Conservative Home Financing

This article is another valuable look at why Adjustable Rate Mortgages have caused our housing market to bubble, and what kinds of things people should be thinking about when they buy houses, to make sure they can afford their homes.