2003 Rollback = Approaching Reality??

818 N. Doheny Dr. #303 (90069)
$600,000
2BR / 2BA
1,545 sq ft ($388/ft)
HOD: $807/mo (full service bldg)
On Market: 311 Days

APPROVED!! LET'S OPEN ESCROW TODAY! Best deal in the building! Fantastic opportunity to live at Doheny Plaza, a 1st class full service condominium building across the street from Beverly Hills! Unit is fully remodeled and move in condition! 2bd/2 full baths with travertine and granite mixed. Custom counter-tops & shower. Huge master bedroom with large walk in closet. Recessed lighting, custom bar. Below market value. Seller motivated!!

Sold: 7/03 - $405,000

Sold: 2/04 - $525,000 (+30% in 7 months)

Listed: 7/08 - $750,000

Reduced: (and in one case, increased) a bunch of times until the last reduction to $600,000 in March of this year.

I won't dwell on some of our "favorite" listing tactics (really, this is "below market value"? Whose market?). Although this doesn't show as a short sale, the "Approved" in the listing indicates it might be, unless the real estate broker/clerk is happy that their client "approved" this "below market" price ...

Anyway ... I'm assuming that the "fully remodeled" happened after the 2004 purchase. If that's the case, can we all please see the extent of the bubble - this unit resold for a 30% increase in a 7 month period between 2003 and 2004. If the remodeling happened during that time, this seller was even more delusional with their original listing price.

I'm officially calling this a 2003 rollback because 1) it's languished on the market another 60+ days since the last price decrease, suggesting it needs to drop further, and 2) assuming the seller put $50k or so into the place, you're looking at a true "net" of probably close to $500k (or lower) when all is said and done.

So, the question is ... at $500k, with the high HOD, you're looking at $3000/mo or so after tax cost. This is, of course, in a low rate environment. Would this rent for $3000? Our "affordability" test would indicate that someone making $150-175k or so a year should be able to afford this at $500k - does that feel right for this type of property?