|
|
|
|||
|
code
|
|
from ’06
|
|
from ’06
|
|
92602
|
$630,000
|
-14.9%
|
19
|
-36.7%
|
|
92603
|
$1,058,000
|
8.7%
|
20
|
-41.2%
|
|
92604
|
$587,000
|
-13.8%
|
19
|
-24.0%
|
|
92606
|
$688,500
|
0.0%
|
15
|
7.1%
|
|
92612
|
$695,000
|
8.2%
|
19
|
-32.1%
|
|
92614
|
$657,500
|
20.6%
|
21
|
-27.6%
|
|
92618
|
$463,500
|
-20.8%
|
18
|
38.5%
|
|
92620
|
$790,000
|
-7.8%
|
34
|
-43.3%
|
Monthly Archives: September 2007
Shady Canyon Rollbacks
Big money goes around the world
Big money take a cruise
Big money leave a mighty wake
Big money leave a bruise
Big money make a million dreams
Big money spin big deals
Big money make a mighty head
Big money spin big wheels
Sometimes building ivory towers
Sometimes knocking castles down
Sometimes building you a stairway
Big Money — Rush
The high end is immune, right?
There are not many properties in Shady Canyon, and even fewer on which I can find the purchase information; however, there are three rollbacks sighted so far. Will there be more on the way?
The first of this is Mark McQuire’s old place. This property is the market leader on the way to the bottom. The price was just reduced again. The flipper is looking at a loss of nearly a million dollars after commissions. That property is clearly leading in our race to the bottom, but the two properties we have today are working to catch up.
Asking Price: $3,998,000
Income Requirement: $999,500
Downpayment Needed: $799,600
Purchase Price: $4,030,000
Purchase Date: 1/6/2006
Address: 25 Golden Eagle, Irvine, CA 92603
Beds: 4
Baths: 5
Sq. Ft.: –
Lot Size: 0.59 acres
Type: Single Family Residence
Style: Mediterranean
Year Built: 2003
Stories: One Level
View(s): Hills
Area: Turtle Rock
County: Orange
MLS#: S498428
Status: Active
On Redfin: 63 days
From Redfin, “Single Story Custom Home in Shady Canyon. Great, private cul-de-sac location with only one adjoining neighbor. Unobstructed views of pastoral canyon and hills. Tuscan style home beautifully finished with Richard Marshall wood and stone. Spacious grounds with custom built fireplace, BBQ, spa and Wolf appliances throughout. Ideal for family with small child or retired couple. Blueprint and specs for the house are available. Opportunity to expand this single level house to 5900 sq ft.”
What is Richard Marshall wood and stone? I guess I am I not cultured enough to know these things. I Googled them. I guess I should be impressed?
Are Wolf appliances better than Viking or Sub-Zero?
Ideal for family with small child or retired couple? I am sure there are many families with small children who want them running around in a museum with hard floors, not to mention the large numbers of families with small children who can afford this place. I don’t know about you, but I will not want a 5,000+ SF McMansion when I am retired.
.
.
If this seller gets their asking price and pays a 6% commission, they stand to lose $271,880. There is no mortgage recorded on the property (at least in my database,) so this flipper can absorb the loss.
Asking Price: $4,495,000
Income Requirement: $1,123,750
Downpayment Needed: $899,000
Purchase Price: $4,550,000
Purchase Date: 8/8/2005
Previous Purchase Price: $3,553,500
Previous Purchase Date: 12/15/2004
Address: 50 Vernal Spring, Irvine, CA 92603
1st Loan $2,985,000
2nd Mtg. $200,000
Downpayment $1,365,000
Beds: 4
Baths: 4.5
Sq. Ft.: 5,000
$/Sq. Ft.: $899
Lot Size: 0.57 acres
Type: Single Family Residence
Style: Spanish
Year Built: 2005
Stories: One Level
View(s): Mountain
Area: Turtle Rock
County: Orange
MLS#: U7001638
Status: Active
On Redfin: 159 days
Unsold in 90+ days
From Redfin, “Model perfect single level Masters located in the exclusive golf community of Shady Canyon. This single level home offers three bedrooms plus bonus room and a rare four car garage at the main house and a 4th bedroom and office which is attached but functions as a separate casita! The stunning exterior landscape includes a long gated driveway, pool, spa and covered cabana with fireplace all with fantastic views!”
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What I find interesting about this property is how much the previous flipper made: a hair under $1,000,000 in less than 9 months. No wonder our WTF winner from $1,000 Grand thought this was possible. Well, it looks like the supply of greater fools has run out, and this owner is now the bagholder. If they get their asking price, they stand to lose $324,700 after a 6% commission.
These losses are staggering. I don’t care how rich you are, when you are losing a quarter of a million dollars or more, that is Big Money.
Time keeps on slippin’ slippin’, slippin’, into the future… Or is that Time keeps slip sliding away… I hope you aren’t Ticking away the moments that make up a dull day…
Another week has passed at the Irvine Housing Blog. Come join us next week as we continue to chronicle ‘the seventh circle of real estate hell.’ Have a great weekend.
🙂
Is fear gripping the market?
On the brink of self destruction
Widespread panic
Broken glass inside my head
Bleeding down these thoughts of
Anguish… mass confusion
Panic Song — Green Day
When I am preparing posts, I scan Redfin for properties. When I first started doing this in the spring, rollbacks were hard to find, and most sellers were still trying to make a profit or at least cover their commissions on a sale. As spring gave way to summer, I began finding more and more rollbacks, and foreclosures and short sales were becoming more common. As the summer progressed, I began finding more REOs and deeper rollbacks. It was a relatively quick (for a real estate market) transition from a bull market to a bear market. However, recently I have noticed a more significant change.
In August when the credit market seized up, sales — which were already low — almost completely stopped. This credit event and the problems it has created has been widely covered by the mainstream media which has brought it to full public awareness. Over the last few weeks, I have really noticed a change in the market I was not expecting until the winter: fear is gripping the market.
In the post Houses Should Not Be a Commodity I described the stages of a bubble market in great detail. IMO, the developments in the credit market have prematurely jolted the consciousness of the market from denial into fear. A change in market consciousness is a gradual transition as each of the markets participants has a different psychological makeup, but the behavior of many homeowners in the market is evidence that this transition has begun.
Back in mid-July, before the big credit market meltdown in early August, I profiled a series of properties in Oak Creek. There were a few rollbacks, but there wasn’t that much inventory, and no real signs of fear or panic. In the last few weeks, there have been several listings of condos and entry-level housing appearing on the market.
Notice the density of green house symbols in certain neighborhoods. In particular the northernmost neighborhood has shown a dramatic increase in the number of listings, and many of these are rollbacks. This is fear in action.
Another neighborhood showing increased listings and more racing to find the bottom is Northwood II.
Like all the new neighborhoods in Irvine, this one is populated by specuvestors who are starting to realize they made a terrible mistake. The homes priced in the $750K to $950K range, so these are not the small condos we are seeing struggle everywhere else. This is the first sign of fear spreading from the low-end of the market to the move-up SFD market.
Another neighborhood showing and increase in listings and a decrease in pricing is Northpark.
In particular, the neighbhorhoods adjacent to the 261 are showing fear transitioning to panic. There have been a large number of foreclosures there, and new listings are popping up to try to get out before the tsunami of REOs washes away whatever equity these owners have left.
Of course, we have our neighborhoods where fear and panic have already set in…
Westpark condos above and Orangetree below…
Quail hill (not shown) is also showing distress. I invite you to go to Redfin and check out the market for yourself.
Fear in the market is not something that can be quantified; however, evidence of fear can be inferred from the behavior of market participants. An increase in listings and lower asking prices is fearful behavior. When the race to the bottom becomes more feverish and sellers start aggressively lowering prices to get out of the market, you will know fear has taken hold and capitulation is right around the corner.
Happy Birthday IHB!
I can’t believe it has already been 1 year since we started the Irvine Housing Blog. A lot has changed in that time: lending standards have tightened, OC inventory has continued to pile up, OC builders have reduced their pricing, foreclosures have picked up, sales have slowed down, 160 major US lending operations have “imploded”, and the US Dollar has set record lows.
Although not as drastic as what has happened to the housing market, IHB has gone through a number of changes as well. ISM and I began this without knowing whether anyone would be interested in what we were going to write. Lucky for us, two sites that provided our inspiration (OC Fliptrack RIP and Bubble Tracking), linked to us and that really got things moving.
Take a look at our stats:
We went from less than 50,000 pageviews in October 2006 to over 550,000 pageviews in August 2007. Do a Google search for ‘housing blog’ and IHB is the 5th site (6th link) listed! There are a few items on this chart I’d like to point out (1, 2, and 3):
- The IHB Forums were launched on January 2, 2007. What began with a slow start eventually turned into a very active and knowledgable community. We have 525+ members, 940+ threads, and 17,000+ comments and every day these numbers continue to grow. There is a wealth of information here ranging from Irvine tract and village information to discussions about architecture and design to threads devoted to wine and beer. The forums also gave rise to our IHB T-shirts (thanks Nude!). More recently, we implemented a live chat (thanks Caycifish!) that has proven to be quite popular.
- Irvine Renter joined the IHB team with his first post on February 27, 2007 and he’s been simply incredible! Although I realized he knew his stuff, I was still surprised by the sheer volume and depth of topics that he has educated all of us on. He has taken this blog to another level and we’ve received tons of positive feedback from people who have enjoyed and benefited from his writings (especially his analysis posts). The community profiles that he has written clearly show his love for the City of Irvine; take a look at the beautiful pictures and you may discover a park or tract that you weren’t aware of before.
- An article by Daniel Gross of slate.com linked to IHB on July 26, 2007. The article was syndicated in the Washington Post and Newsweek/MSNBC and brought some great national exposure to our site.
Many thanks to ISM, graphrix, and socalhousingbubble for their solid contributions. In addition to the main blog posts, there have been numerous blog comments that have provided insight into the feature properties. An interesting stat is that our spam blocker has caught 20,072 spam comments as of this moment. I also want to thank Redfin and our other site sponsors for their support!
Thanks everyone for a fantastic year! All of your contributions are what has made this site become what it is. What’s next? We want to keep the momentum going and we’ve got some ideas for the site that we are planning to implement soon. As always, we’re happy to listen to your suggestions on how to bring more value to our readers.
Go IHB!
$1,000 Grand
If I had a million dollars (If I had a million dollars)
Well I’d buy you a house (I’d buy you a house)
And if I had a million dollars (If I had a million dollars)
I’d buy you furniture for your house (maybe a nice chesterfield or an ottoman)
And if I had a million dollars (If I had a million dollars)
Well I’d buy you a K-Car (a nice reliant automobile)
And if I had a million dollars, I’d buy your love
If I had a million dollars I’d build a tree-fort in our yard
If I had a million dollars you could help, it wouldn’t be that hard
If I had a million dollars — Barenaked Ladies
$1,000 Grand: a million dollars. Today’s WTF award winner thinks his house has appreciated $1,108,000 in the last year — a year in which we have shown rollbacks of 10%-20%. We even documented a neighbor who went into foreclosure and sold at a 20% loss, but somehow this house has appreciated 25%. WTF?
Asking Price: $4,495,000
Income Requirement: $1,123,750
Downpayment Needed: $899,000
Purchase Price: $3,387,000
Purchase Date: 5/19/2006
Address: 25 Grandview, Irvine, CA 92603
Beds: 5
Baths: 5.5
Sq. Ft.: 5,900
$/Sq. Ft.: $762
Lot Size: 0.32 acres
Type: Single Family Residence
Style: French, Traditional
Year Built: 2006
Stories: Two Levels
View(s): City Lights, Hills, Mountain, Panoramic, Trees/Woods, Valley, Has View
Area: Turtle Ridge
County: Orange
MLS#: U7003538
Status: Active
On Redfin: 37 days
From Redfin, “Beautiful La Cima estate in Turtle Ridge. 5 Bed, 5.5 bath with exceptional panoramic views of hills and city lights. Built in 2006 by Laing Luxury, enjoy an upstaris Master and a downstairs Jr Suite, downstairs playroom, and upstairs bonus room. 4-car garage, 1,200 bottle climate-controlled wine cellar, pre-wired for custom sound in and out. Approved plans for custom pool and spa.”
Approved plans? You mean you want a million dollars more than you paid, and you didn’t even bother building the pool? WTF?
Maybe this seller put a million dollars worth of wine in the cellar? He must have added some value…
This appears to have been purchased new from the builder. Nice to know the builder found their bagholder.
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Weren’t the bubble years great? You could just buy a property, hold it for a year, and make a million dollars. Isn’t that the way it works? Everyone is making 25% more money each year, right?
When you see a listing like this, do you get a sense of what a Ponzi Scheme this whole bubble really was? When does it all end? Will this house be worth $6,000,000 next year, and $8,000,000 the year after that?
This seller is certifiably crazy in my opinion. Do you think kool aid intoxication a disease? I wonder if there is a treatment? I suppose this seller could be made to read the Irvine Housing Blog every day. A few weeks of reading here should cure almost anyone.