What the home price collapse looks like in a neighborhood

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As I’ve mentioned before, I live in Ladera Ranch, CA a nice community-known unfortunately as the home of Laurie Waring, a Real Housewife of Orange County-feeling the price crunch of the housing meltdown.

We hear a lot of numbers and statistics about price drops and foreclosures but I thought I’d share with you how the whole thing is shaking down in my neck of the woods for some man-on-the-street coverage aka what it looks like in real life. I should note Ladera is only suffering modest declines of 1-2% (as reported) nothing like inland California where foreclosure-villes are popping up everywhere.

In my “neighborhood” of Ladera Ranch here are some items that I have observed that point to the meltdown at my doorstep. For reference, I originally bought our home for $610,000 in 2005 putting down $122,000.

8 months ago the home right behind mine (a bit nicer, but same model) sells for $697,000 – neighbors rejoice.
5 months ago a neighbor a few houses over needs to sell their home (identical to mine) in a hurry for a new job opportunity and sells for $639,000 – the neighbors get pissed.
4 months ago 4 homes go on sale in our neighborhood at $635,000 – one sells at that price; the other 3 are still sitting. Neighbors get concerned.
3 weeks ago a neighbor refinances their home and gets an appraised value of $670,000 (apparently the appraiser is pushing value) with a high loan to value – I think are they under water? Probably.
3 weeks ago a neighbor with a nicer home than mine lists for $635,000; although it is the same property type it has granite and travertine throughout with custom everything – neighbors wince.
2 weeks ago a home goes on MLS in short-sale for $595,000 this home has a 4th bedroom and an extra 300 square feet – neighbors vomit.

Where do you price your home when there is a short-sale up for $595,000 with an extra bedroom and square footage? Much lower I imagine. Now the neighbors are just praying that the short-sale isn’t approved for that dollar amount so that we don’t look as bad-off as we actually are.