IHB News 3-6-2010

Today's featured property is a beautiful Shady Canyon mansion.

Irvine Home Address … 66 GOLDEN EAGLE Irvine, CA 92603

Resale Home Price …… $9,950,000

{book1}

Come out upon my seas

Cursed missed opportunities

Am I a part of the cure?

Or am I part of the disease?

Coldplay — Clocks

IHB News

Today's featured property uncovered a subtle error in my post calculations. Properties where the loan is in excess of $1,000,000 cause the income tax deduction to be larger than it really is. I modified the formula to catch that and cap the interest deduction.

I find multi-million dollar properties amusing from a financing standpoint because you quickly realize that owning a property like this does not come from obtaining an 80% loan. Can you imagine spending more than $50,000 a month on housing? I don't spend in housing costs each year what the owner of this house will pay in property taxes. In other words, I couldn't even own this property free-and-clear because I couldn't afford the taxes.

This weekend, we will be updating our graphics to incorporate the new IHB logo. We are keeping the current colors.

Housing Bubble News from Patrick.net

Don't Be Brainwashed by the Housing Cult (blogs.wsj.com)

Let the housing market stand on its own (articles.moneycentral.msn.com)

Pending Sales of Existing Houses Decline (bloomberg.com)

Housing is "in a precarious state" says Yale's Robert Shiller (finance.yahoo.com)

Longer jobless benefits the cause of long-term unemployment? (chicagotribune.com)

The costs of financial reform: realistic interest rates (blogs.reuters.com)

America, the fragile empire (latimes.com)

China trading dollars for US real estate (latimes.com)

Germans Suggest Greece Could Sell Islands to Cut Debt (cnbc.com)

Secret millionaire leaves fortune to Lake Forest College (chicagotribune.com)

Rise in Arizona pre-foreclosures dulls hopes for recovery (azcentral.com)

Orlando house prices expected to fall (orlandosentinel.com)

Hefty tax bill may hit those who lost house (signonsandiego.com)

Increasing numbers of Californians are suing lenders to avoid foreclosures (mercurynews.com)

Another Financial Crisis on Way to U.S. Economy (abcnews.go.com)

Untold Story Of How AIG Destroyed Itself (businessinsider.com)

China Overtakes U.S. in Attracting Most Property Investment (bloomberg.com)

Australian easy-lending bubble mistaken for "demand" (smh.com.au)

The Case Against Greenspan and Bernanke (marketoracle.co.uk)

Hovnanian's first-quarter profit tied to gift from taxpayer (nj.com)

Rush Limbaugh looks to sell N.Y. penthouse for $14 million (money.cnn.com)

$1 trillion worth of ARMs still face resets (snl.com)

House-Price Drop in U.S. Supports Low-Rate Outlook (bloomberg.com)

California job losses grow (contracostatimes.com)

Unused vacation time draining CA of millions (sfgate.com)

In Nevada, begging for a lower house value (latimes.com)

Tax credit for houseowners not helping sales (heraldtribune.com)

What Will Happen to the Housing Market When Tax Credits Expire? (palletenterprise.com)

Fannie Mae Lost $74B In 2009 And May Have Changed Mission Statement (portfolio.com)

8 reasons wall street loses another 20 in this decade (finance.yahoo.com)

Mutual Fund Trading Costs Go Unreported (online.wsj.com)

High FICO Scorers Now Default on Mortgages More Than Credit Cards (dsnews.com)

Foreclosures now are just 'tip of the iceberg' (mortgage.freedomblogging.com)

The Impact of Prop 13: Death For California (kpbs.org)

Mortgage Interest Deduction Killing America, But Untouchable (online.wsj.com)

Soros Unhappy With Bailouts (online.wsj.com)

Soros Signals Gold Bubble as Goldman Predicts Record (bloomberg.com)

Paulson buying dirt (reuters.com)

Restructured loans may only postpone bank losses (marketwatch.com)

FDIC-insured "problem" institutions: Botched banks (economist.com)

What to do when a bank is a deadbeat? (marketplace.publicradio.org)

Billionaire Banker's Blowout Year (forbes.com)

Feelings Toward Debt Transform in Housing Bubble Aftermath (irvinehousingblog.com)

Fed looking into Goldman role in Greek debt crisis (money.cnn.com)

Greece Now, U.K. Next as Scots Ready for Pound Plunge (bloomberg.com)

Israel houseowners may take bath as housing bubble bursts (haaretz.com)

Qatar Real Estate: Tepid Demand Following Property Crash (nuwireinvestor.com)

Housing Crisis Information and Tools (housingcorrection.com)

Housing: Time to Pull the Plug on Government Support (businessweek.com)

Housing Recovery Is Looking A Lot Shakier Than Expected (cnbc.com)

Housing sales drop (washingtonpost.com)

New Year, new misery for housing market (miamiherald.com)

Freddie ends buying of failing interest-only mortgages (well, maybe in September) (reuters.com)

Fannie Mae asking for another $15.3 billion to pay for gifts to banks (money.cnn.com)

ROI: When It's OK to Walk Away From Your House (online.wsj.com)

Weighing the ramifications of simply walking away (lancastereaglegazette.com)

Many borrowers in default live for free as lenders delay evictions (latimes.com)

Los Angeles on brink of abyss (guardian.co.uk)

California is a greater risk than Greece, warns JP Morgan chief – Telegraph (telegraph.co.uk)

Mortgaging Our Souls In Paradise, Part 5 (Vancouver Real Estate)

The Clarks: An American story of wealth, scandal and empty mansions (msnbc.msn.com)

What do we need health insurers for anyway? (latimes.com)

House Valuation Tools

From Housing Crisis Information and Tools (housingcorrection.com)

Breaking News

Case Shiller House Price Index – Compares 20 U.S. cities and two composites. (standard Case Shiller Index)

Case Shiller Absolute House Price Index – Compares 20 U.S. cities and two composites. (values shown in absolute prices)

Case Shiller Absolute House Price vs Median Household Income (U.S. Census version) – Compares 20 U.S. cities and two composites. (Compares House price to Median Household Income)

Case Shiller Absolute House Price vs Median Household Income (Office of Financial Management version) – Compares 20 U.S. cities and two composites. (Compares House price to Median Household Income)

Median Home Price Charting Tool – Compares median home prices in 330 U.S. cities (1985 to present).

Median Home Price vs. Mortgage Rates vs. GDP Charting Tool – Compares median home prices in 330 U.S. cities to Mortgage Rates to GDP.

Median Home Price vs. Compound Interest Charting Tool – Compares median home prices in 330 U.S. cities to annually compounded interest.

RealtyTrac Interactive Foreclosure Map – Dynamic map of United States foreclosures by county. Courtesy of reatlytrac

New York Times buy vs. rent calculator – Buy vs Rent calculator to check affordability in your area. Courtesy of nytimes

Zoyzoy Interactive Housing Maps – Excellent set of interactive house price valuation tools. Courtesy of zoyzoy

Chart of Alt-A and Option-ARM resets – Chart showing upcoming 2nd wave of mortgage resets could be worse than the subprime nightmare. Courtesy of Credit Suisse

Dynamic Map of Unemployment Rates – Dynamic map of U.S. unemployment rates January 2007 to present. Courtesy of Latoya Egwuekwe

Dynamic Map of Moody's Jobs Forcasts Through 2012 – Courtesy of USAToday

Dynamic Chart of Global Insight's Economic Outlook Index and It's 11 Component Indicators – Courtesy of USAToday

Dynamic Map of Non-Prime Mortgages – Dynamic map of the United States showing the rate of high-risk mortgages per state. Courtesy of Federal Reserve Bank of New York

Home Prices in Selected Cities – Dynamic chart of home prices in 20 U.S. cities, historical to present. Courtesy of New York Times

In Deep: Underwater Borrowers – Dynamic map of the U.S. showing the percentage of borrowers with negative equity in the 3rd quarter of 2009. Courtesy of Wall Street Journal

PNC economic reports – Ongoing monthly economic reports. Courtesy of PNC

Irvine Home Address … 66 GOLDEN EAGLE Irvine, CA 92603

Resale Home Price … $9,950,000

Home Purchase Price … $4,550,000

Home Purchase Date …. 10/25/2005

Net Gain (Loss) ………. $4,803,000

Percent Change ………. 118.7%

Annual Appreciation … 17.8%

Cost of Ownership

————————————————-

$9,950,000 ………. Asking Price

$1,990,000 ………. 20% Down Conventional

5.01% …………… Mortgage Interest Rate

$7,960,000 ………. 30-Year Mortgage

$2,062,591 ………. Income Requirement

$42,780 ………. Monthly Mortgage Payment

$8623 ………. Property Tax

$800 ………. Special Taxes and Levies (Mello Roos)

$829 ………. Homeowners Insurance

$600 ………. Homeowners Association Fees

============================================

$53,632 ………. Monthly Cash Outlays

-$3584 ………. Tax Savings (% of Interest and Property Tax)

-$9547 ………. Equity Hidden in Payment

$3881 ………. Lost Income to Down Payment (net of taxes)

$1244 ………. Maintenance and Replacement Reserves

============================================

$45,626 ………. Monthly Cost of Ownership

Cash Acquisition Demands

——————————————————————————

$99,500 ………. Furnishing and Move In @1%

$99,500 ………. Closing Costs @1%

$79,600 ………… Interest Points @1% of Loan

$1,990,000 ………. Down Payment

============================================

$2,268,600 ………. Total Cash Costs

$699,400 ………… Emergency Cash Reserves

============================================

$2,968,000 ………. Total Savings Needed

Property Details for 66 GOLDEN EAGLE Irvine, CA 92603

——————————————————————————

5 Beds

7 full 1 part baths Baths

10,500 sq ft Home size

($948 / sq ft)

37,113 sq ft Lot Size

Year Built 2007

674 Days on Market

MLS Number U8002042

Single Family, Residential Property Type

Turtle Rock Community

Tract Shdc

——————————————————————————

With panoramic views of the canyon and the golf course, Villa Monticello may well be the finest estate on the market in Shady Canyon. This three-level, 5 bedroom grand villa, masterfully built on a large private lot is breathtaking. The front exterior highlights are courtyards, beautiful stonework and red terra cotta colored walls, an elevated terraced garden, petite vineyard with citrus trees and 500 white roses flowering as hedges. The side/rear grounds offer covered loggias, water features, fountains, fire pit and an exquisite pool & spa with full kitchen and bath under the cabana's roof. The interior offers 5 full bedroom suites including a private guest quarters, a chef's dream kitchen, theater, gym & sauna with private massage suite, a grand elevator & 5 fireplaces. Special touches are hand laid antique demi tile mosaics in the entry, ceiling murals done by European Artisans, beam and vaulted ceilings, custom cabinetry, seasonal closets and designer lighting fixtures.

Virtual Tour #1 (External Link)

The virtual tour is well done.

3 thoughts on “IHB News 3-6-2010

  1. Alan

    It is a beautiful house, though not my taste in furnishings. Not much yard for the price, but maintenance and upkeep will be expensive anyway. I know I’m supposed to want it, but I don’t. Even if I had enough cash that the purchase and everything after wouldn’t matter, I don’t think I’d be happy for long having to deal with living in such a place. Is this what the death of consumerism feels like?

  2. tonye

    I dare say that your mortgage calculation are out of scope with something like this. I mean, as you yourself noted, it’s highly unlikely that the Arab Sheik that buys this place (and paints it pink) will bother to take a mortgage from anywhere but his own bank.

    Also, I noticed this place has a name… but it’s only a “villa”. I refer to my humble abode as a “chateau” which means I can charge more per square foot, huh?

  3. newbie2008

    Kalifor-i-a in worse shape than Greece.
    May the grate state of Kalifor-i-a can declare war on Nevada to get the sheeple mind off the bad economy.

Comments are closed.