It is said that speculative manias like the one gripping our housing market are a form of mass insanity. I have speculated it is a manifestation of Southern California’s Cultural Pathology. Whatever the truth, the results of herd mentality can be seen in our local housing market.
Asking Price: $639,800
Purchase Price: $183,500
Purchase Date: 2/2/1995
Address: 29 Marsala, Irvine, CA 92606
Beds: 3
Baths: 2
Sq. Ft.: 1,070
Lot Sq. Ft.: 2,975
Year Built: 1995
Stories: 1
Type: Single Family Residence
County: Orange
Neighborhood: Westpark
$/Sq. Ft.: $598
MLS#: S483960
Status: Active on market
On Redfin: 36 days
From Redfin, “Desirable End of Cul-De-Sac Private Location. Single Level. Highly Upg raded with Hardwood & Designer Ceramic Tile Flooring, Upgraded Wall-to-Wall Carpeting, Tile Kitchen Counters, Microwave, Dishwasher & Oven Included, Plantation Shutters, Custom Drapes, Window Blinds, Mirrored Wardrobes, Rollup Garage Door, Vaulted Ceilings, Recessed Lighting, New Custom Paint, Built-in Entertainment Center and Large Private Backyard”
Two bedrooms, 1000 SF and they want $598 SF? WTF! They didn’t even update the old white tile with granite tops.
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(No Pictures Available, but it is identical to the other two listings)
Asking Price: $599,900
Purchase Price: $595,000
Purchase Date: 12/16/2005
Address: 15 Marsala, Irvine, CA 92606
Beds: 2
Baths: 2
Sq. Ft.: 1,000
Year Built: 1995
Stories: 1
Type: Single Family Residence
County: Orange
Neighborhood: Westpark
$/Sq. Ft.: $600
MLS#: S489460
Status: Active on market
On Redfin: 1 day
From Redfin, “Single level detached home with 2 private yards. Cathedral ceilings, p lantation shutters, designer carpeting, travertine flooring in the kitchen. Living room with fireplace. Mirrored wall in living room. Mirrored wardrobe doors and built-in shelves in closets.”
IMO, this is the buyer / flipper / seller who started this mess, but more on that later…
Asking Price: $619,900
Purchase Price: $227,000
Purchase Date: 5/25/1999
Address: 6 Marsala, Irvine, CA 92606
Beds: 2
Baths: 2
Sq. Ft.: 1,000
Year Built: 1995
Stories: 1
Type: Single Family Residence
County: Orange
Neighborhood: Westpark
$/Sq. Ft.: $620
MLS#: S483966
Status: Active on market
On Redfin: 36 days
From Redfin, “BEAUTIFUL TWO BEDROOMS AND TWO BATHROOMS SINGLE STORY DETACHED HOME IN WEST PARK 2, LOCATED IN A QUITE AND INTERIOR NEIGHBORHOOD. LAMINATE WOOD FLOORING IN LIVING ROOM, DINING ROOM, AND KITCHEN. PLANTATION SHUTTERS AND NEW CUSTOM PAINT, THROUGHOUT THE HOUSE. NICE BACKYARD AND SIDE YARD, VERY OPEN FLOOR PLAN. SHORT WALK TO SCHOOL, THREE ASSOC. POOLS AND SPA, TWO TENNIS COURTS AND PARKS. TWO CAR ATTACHED GARAGE.”
ALL CAPS IS REALLY ANNOYING! This is another tiny, 2 bedroom unit where they didn’t bother to update anything.
Let’s look at these three properties and see what we can determine. First, the $600 SF pricing is ridiculous. Most of Westpark is priced in the $400s per SF, and even the overpriced smaller products are in the low $500s. There is no justification for thinking $600SF is a good price. For the same $600,000 asking price, one could buy 37 Alcoba, 1407 SF, 3/2. For $500,000, one could by 6 Marbela, a 1083, 2/2. Both of those Westpark properties give much more for much less, and they have been on the market for over 280 days. So why do the sellers on Marsala believe they can get $600 SF?
Perhaps this is an instance of setting one’s own comps. The seller at 15 Marsala paid almost $600 SF at the end of 2005. I would imagine when the other two properties went on the market last month, they used 15 Marsala as a comparable, and they figured their properties must be worth $600 SF.
Are you starting to get a sense for how the “greater fool” theory operates? 15 Marsala was a fool when they paid $600 SF at the end of 2005, now they and two of their neighbors (dumb, dumber, and dumberer) all need to find a greater fool to buy them out.
For their collective greed and stupidity, for believing their little neighborhood is “different,” and for setting their prices 20% to 30% above the market, all three sellers on Marsala get our WTF Award.
