Falling down in Downey

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Good morning. Those of you waiting and wondering whether banks will ever reduce prices on foreclosed properties, or REOs, will be interested in this post from Dr. Housing Bubble: It’s a three-bedroom, two-bath, 1,315-square-foot home in Downey; here’s the sales history:

Sold 8/2005 for $542,500
Sold 1/2006 for $640,000 (can you say ‘flip’?)

Now the listing history:
Price Reduced: 06/01/07 -- $727,500 to $686,800
Price Reduced: 07/13/07 -- $686,800 to $652,500
Price Reduced: 09/02/07 -- $652,500 to $619,875

The Doctor: ‘In the span of three months, this home is lowered by $107,625, or $37,875 per month. Now think about this for one second. Did this property actually lose $107,625 over the summer? Of course not. This again is the pie in the sky dreaming of banks trying to unload properties looking at yesteryear appraisals.’

Thanks, Doctor.
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Photo Credit: Dr. Housing Bubble