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Secret Gold

Oct 11th, 2007 by IrvineRenter 

David CrosbyNo sticks and stones can hurt us
Nor the liars or the thieves
We'll use the stones to ring our garden
And the sticks to gather up the leaves
Brick by brick you know we built it up
Built a house to hold a dream
A shape that's rising from the rubble
Where the shaking death had been
I found a map to buried treasure

Map to Buried Treasure -- Crosby, Pevar & Raymond

Link to David Crosby Music Video

I think we have some buried treasure in Irvine...

42 Secret Garden Front 42 Secret Garden Kitchen

Asking Price: $1,250,000IrvineRenter

Income Requirement: $312,500

Downpayment Needed: $250,000

Purchase Price: $998,000

Purchase Date: 9/15/2005

Address: 42 Secret Garden, Irvine, CA 92620

Beds: 4
Baths: 3
Sq. Ft.: 3,134
$/Sq. Ft.: $399
Lot Size: -
Type: Single Family Residence
Style: Mediterranean, ModernWTF
Year Built: 2006
Stories: Two Levels
View(s): Has View
Area: Northwood
County: Orange
MLS#: P601656
Status: Active
On Redfin: 14 days

From Redfin, "Private location! No neighbor behind! Exceptional upgrades T/O, stainless steel appliances and huge cook island w/ breakfast bar, greatroom style kitchen/DR/FR w/ fireplace. Massive office/bonus room above garage, slate decking at two patios with fountain & rock waterfall, built-in BBQ & frige, ceiling fans in all bdrms & FR, two balconies, porte cochere allows for 3 car storage plus long driveway! Best award winning schools, gated, clubhouse/pool/BBQ community areas"

I think these designs are very boxy. Plus, I would not want to back up through that little tunnel.

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Despite the rollbacks in this neighborhood, this property has appreciated 25% since late 2005. When they landscaped the property, did they bury about $300,000 in gold in the back yard? That is the only way they can get this sales price. What makes me so sure? Let's look at a neighbor...

36 Secret Garden Front 36 Secret Garden Kitchen

Asking Price: $1,079,000IrvineRenter

Income Requirement: $269,750

Downpayment Needed: $215,800

Purchase Price: $1,000,000

Purchase Date: 9/20/2005

Address: 36 Secret Garden, Irvine, CA 92620

Beds: 4
Baths: 3
Sq. Ft.: 3,100
$/Sq. Ft.: $348
Lot Size: -
Type: Single Family Residence
Style: Contemporary
Year Built: 2005
Stories: Two Levels
View(s): Park or Green Belt
Area: Northwood
County: Orange
MLS#: S505877
Status: Active
On Redfin: 20 days

From Redfin, "MODEL PERFECT 4BR W/ 1BR/BA DOWN & BONUS RM/OFFICE ABOVE GAR W/ PVT ENTRANCE. UPGRADED THRUOUT W. CUSTOM PAINT, EXTENSIVE TILE FLOORING ON LOWER LEVEL & LUXURIOUS CARPET IN BRMS. KITCHEN FEATURES VIKING STAINLESS APPLIANCES INCLUDING GAS COOKTOP W/ OVERHEAD VENT; GOLDEN WAVE GRANITE ON CENTER ISLAND; UPGRADED: CABINET COLOR THRUOUT; STAINLESS BATH FIXTURES & KNOBS; BATH TILE & COUNTERS. YARD FEATURES FLAGSTONE PATIO, RAISED PLANTER & COZY FIREPIT; DRIVE HAS PRIVACY GATE. GOOD LOC BY GRNBELT."

ALL CAPS AGAIN!!!

THRUOUT?

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Kool Aid Man

These houses are identical. Well, they are mirror images of each other. They were purchased within a week of each other for a whopping $2,000 difference. These are the best possible comparables. The one that has been on the market longer is priced $171,000 less. That means our WTF winner above saw the listing and decided to list it for $171,000 higher. WTF?

Can't you just hear the BS rationalizations why his house is worth $171,000 more? Give me a break.


Posted in House Flips

Wednesday Sale

Oct 10th, 2007 by IrvineRenter 

Peter, Paul & MaryThis house goes on sale ev'ry Wednesday morning
And taken off the market in the afternoon.
You can buy a piece of it if you want to
It's been good to me if it's been good for you.

Take the grand look now the fire is burning
Is that your reflection on the wall?
I can show you this room and some others
If you came to see the house at all.

The House Song -- Peter, Paul & Mary

Link to Music Video

It is Wednesday, so I assume the house is for sale. I suppose part-day listings is one way to generate a sense of urgency. During the rally flippers were practically day trading houses.

Doncaster FrontDoncaster Kitchen

Asking Price: $585,000IrvineRenter

Income Requirement: $146,250

Downpayment Needed: $117,000

Purchase Price: $585,000

Purchase Date: 12/01/2004

Address: 14781 Doncaster Road, Irvine, CA 92604

1st Loan $468,000
2nd Mtg. $87,750
Downpayment $29,250

Beds: 3
Baths: 2
Sq. Ft.: 1,216
$/Sq. Ft.: $481
Lot Size: 5,000 sq. ft.
Type: Single Family ResidenceRollback
Style: Contemporary
Year Built: 1970
Stories: One Level
Area: El Camino Real
County: Orange
MLS#: S506347
Status: Active
On Redfin: 16 days

From Redfin, "BEAUTIFUL SINGLE LEVEL IN A GREAT LOCATION WITH PRIVATE ENCLOSED FRONT COURT YARD. WALKING TO SCHOOLS, PARK & LIBRARY. NEW KITCHEN, BATHROOMS, HIGH BEAM CEILING, DOBLE PANEL WINDOWS, SLIDING DOORS, SKYLIGHTS, HARDSCAPED, COVERED LATTICE PATIO, 20X20 PORCELAIN TILE, CENTRAL AIR AND HEATING SYSTEM."

ALL CAPS, AGAIN.

What is a DOBLE?

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$481 / SF in El Camino Real? Good luck with that. If this property sells for its asking price assuming a 6% commission, the borrower stands to lose $29,250 (a total loss), and the bank stands to lose $5,850.

What commentary would you like to see closing this post?

  • Greedy buyer gets burned?
  • Poor homeowner leaves broken hearted?
  • The market continues to drop?
  • California dream a nightmare?
  • Stupid buyer should have known better?
  • Another victim of unscrupulous lenders?

How about, "It is what it is?"


Posted in Price Rollback

Another One Bites the Dust

Oct 9th, 2007 by IrvineRenter 

QueenHow do you think I'm going to get along
Without you when you're gone
You took me for everything that I had
And kicked me out on my own

Are you happy are you satisfied?
How long can you stand the heat
Out of the doorway the bullets rip
To the sound of the beat look out

Another one bites the dust
Another one bites the dust
And another one gone and another one gone
Another one bites the dust hey
Hey I'm gonna get you too
Another one bites the dust

Another One Bites the Dust -- Queen

Link to Music Video

7 Hawkcreek Front7 Hawkcreek Kitchen

Asking Price: $695,000IrvineRenter

Income Requirement: $173,750

Downpayment Needed: $139,000

Purchase Price: $730,000

Purchase Date: 7/9/2005

Address: 7 Hawkcreek, Irvine, CA 92618

1st Loan $584,000
2nd Mtg. $146,000
Downpayment $0

Beds: 3
Baths: 2
Sq. Ft.: 1,750
$/Sq. Ft.: $397
Lot Size: -
Type: Condominium
Style: Mediterranean
Year Built: 2001
Stories: Three or More LevelsRollback
View(s): Hills
Area: Oak Creek
County: Orange
MLS#: P603968
Status: Active
On Redfin: 1 day
New Listing (24 hours)

From Redfin, "ABSOLUTELY GORGEOUS DETACHED HOME IN GATED OAK CREEK FEATURES: 3 FULL BEDROOMS & 3 BATHS, SPACIOUS FLOOR PLAN WITH MAIN FLOOR BEDROOM & BATH, LIVING ROOM W/ FIREPLACE, LIGHT & BRIGHT KITCHEN WITH BREAKFAST BAR, FORMAL DINING ROOM, MASTER BEDROOM WITH RETREAT ON TOP FLOOR WITH BEAUTIFUL PARK & HILL VIEW, LONG DRIVEWAY WITH 2-CAR ATTACHED GARAGE! UPGRADES INCLUDE HARDWOOD FLOORS, DESIGNER PAINT, NEUTRAL CARPET, AND CERAMIC TILE. ASSOC. POOL, CLUBHOUSE, TENNIS COURT - A MUST SEE!"

THE CAPS LOCK ATTACK. Am I the only one who finds that painful to read?

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I know it is hard to believe, but I do not set out to find 100% financing deals gone bad. Lately, almost all of the properties up for sale as a short sale are 100% financing. That really should not be terribly surprising. Which homeowners have the least holding power? Those who bought with someone else's money.

If this property sells for asking price, the owner stands to lose $0, and the bank stands to lose $76,700 assuming a 6% commission.

Are these posts getting redundant? Well, so is the market. Loser after loser after loser... Another One Bites the Dust.


Posted in Price Rollback

The Renting Stigma

Oct 8th, 2007 by IrvineRenter 

Buz LuhrmannDon't waste your time on jealousy;
sometimes you're ahead,
sometimes you're behind.
The race is long, and in the end,
it's only with yourself.

Everyone's Free -- Baz Luhrmann

Link to Music Video

IrvineRenter

I have ranted on numerous occasions on this blog about people's desires to feel superior to their fellow man. I find it to be the least desirable feature of California's culture. This need people have to raise their low self-esteem at the expense of other people is part of the impetus behind my posts on The Grand Illusion and The Reservoir of Schadenfreude. Releasing the anger caused by these interactions is part of the energy I find for writing on this blog. Today I want to address one of these California traditions and examine why homeowners feel superior to renters and see if there is any validity to these feelings.

Any group that feels superior to another group can live with their happy delusions forever. Every religious zealot or racial bigot carries a false belief of superiority.Cartoon Cow We can all laugh at them and let them be (assuming the "superior" group is not violent.) If those placed in the inferior position do not share the feelings of inferiority, the "inferior" group is not harmed -- their energy is not stolen. It is when this latter group accepts and believes the feelings of inferiority that harm is done. To put it in terms of the housing market, homeowners can feel they are superior if they want to, but it is only when renters believe it that renters are harmed. Other than than the need to prop up a weak ego, why would a homeowner feel superior to a renter?

There was a time when home ownership was obtainable only by people of character. You knew if you met a homeowner, they went through the rite of passage necessary to achieve that status. Demonstrating the character necessary to become a homeowner used to be a good reason to respect someone -- not anymore. I wrote in the post, Brio New World, "Smiley FacePrevious generations had a formula for a “normal,” happy life. You used to save your money until you had a 20% downpayment, then you bought a house, and if you had increases in income, you could move up to a nicer place. Home ownership was a symbol of success. It proved you could save to reach a goal; it proved you were responsible; it made you happy. It was also a ticket to financial security as your home equity would become a savings account you could use to fund your retirement when you downsized to smaller accommodations. These were the rules of old.

The lending industry changed all of that. They eliminated all measures of responsibility including honesty with “liar loans,” integrity with low FICO scores, and accountability with 100% financing. When homes can be purchased by people who lie, cheat and steal, the prestige of home ownership is diminished — no make that eliminated. Home ownership no longer symbolizes sacrifice and success, instead it now is synonymous with greed and gambling in the commodities market. Welcome to our Brave New World."

It reminds me of fashion fads. When a new fashion comes out, good-looking people buy the fashion, and it becomes popular. FashionAs long as the fashion is the exclusive purview of good-looking people, the fad will remain popular. Eventually, the not-so-good-looking who want to join the club purchase the fashion, and it goes out of style. When people who do not possess the attributes of the club they are trying to join are given access, the prestige of the club is immediately diminished. As Groucho Marx said, "I don't want to belong to any club that will accept me as a member."

Many homeowners are still living with the belief they are superior and they are members of an exclusive club. They turned a blind eye to the not-so-desirable element that was admitted to their exclusive club during the rally. Why would they care when admitting these people made them huge amounts of phantom equity?

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However, the fact remains, there are a great many "homeowners" who are not financially responsible, they do not know how to save, and they do not know what it means to sacrifice. These late entrants to the housing club are now defaulting in record numbers. They aspire to the respect homeowners were given in the past; they desperately want to look down on their renting acquaintances with that feeling of moral superiority of generations past; however, they just don't possess the attributes which made homeowners a group to respect. The presence of these interlopers has made home ownership something to be ashamed of not something to be aspired to.

Foreclosure

Flushing these interlopers out of the system is going to be painful. House prices are going to decline to pre-bubble levels when the fundamentals make sense again. It will be as if the bubble never happened. Homeowners who survive will be left with lingering memories of what their houses were temporarily selling for during the bubble. Those who are not qualified to be homeowners will be forced to rent again after the foreclosure. They will end up in the "renting class" all over again.

When this time comes, many "bitter renters" who sat out the rally and subsequent crash with money in the bank will step in to save the day. After the painful purge, the prestige of home ownership will be restored, as only owners will be the financially prudent who can sacrifice and save money -- the attributes of respect formerly associated with home ownership. These are the times I look forward to. The next time a homeowner denegrates a "bitter renter," I hope they realize these are the people who will step up and restore the prestige of home ownership when the time is right.


Irvine Median Home Price History

Oct 7th, 2007 by IrvineRenter 

I thought everyone might find this data interesting.

Irvine Median Price Data

1988 $216,464
1989 $237,410
1990 $239,024
1991 $242,877
1992 $237,451
1993 $230,598
1994 $228,529
1995 $229,959
1996 $246,865
1997 $245,437
1998 $263,172
1999 $278,148
2000 $308,089
2001 $334,741
2002 $379,852
2003 $461,888
2004 $609,397
2005 $635,675
2006 $722,928
2007 $665,807

Median sale price

Sales volume

ZIP

code

Prev. 4 weeks

change

 from ’06

Prev. 4 weeks

change

from ’06

92602

$650,000

-15.5%

20

-28.6%

92603

$943,000

-3.2%

20

-42.9%

92604

$581,000

-13.9%

18

-33.3%

92606

$735,000

2.4%

15

25.0%

92612

$695,000

12.1%

21

-12.5%

92614

$611,500

11.2%

21

-16.0%

92618

$525,000

-2.2%

19

111.1%

92620

$762,500

-12.2%

30

-50.0%


Posted in News

Has IHB Impacted the Market?

Oct 6th, 2007 by IrvineRenter 

I've got the power hey yeah heh
I've got the power
Oh-oh-oh-oh-oh-oh-oh-oh-oh yeah-eah-eah-eah-eah-eah
I've got the power
Oh-oh-oh-oh-oh-oh-oh-oh-oh yeah-eah-eah-eah-eah-eah
Gettin' kinda heavy

The Power - Snap!

Link to Music Video

IrvineRenter

As you might have surmised, the real estate community is not thrilled with the writings of yours truly and the exchange of accurate, un-bullish information at this blog. Realtors in particular are accustomed to controlling the information regarding real estate, and media outlets like this blog are a threat to their monopoly.

They even have the audacity to criticize anyone who broadcasts a negative truth as if the dissemination of information is the problem and not the information itself. After we published Irvine Realtor Ratings 7-8-2007 the realtors pressured OC Home Review to stop giving the general public access to the information we used in our report. Apparently incompetence and poor performance are OK with the real estate community. It is all part of the old game of blame the media.

Does the real estate community have anything to worry about? Is it possible for the Irvine Housing Blog to have an impact on the housing market?


It Didn’t Work Out

Oct 5th, 2007 by IrvineRenter 

Dixie ChicksShould have been different but
It wasn’t different, was
Same old story, dear john, and so long
Should have fit like a glove
Should have fit like a ring
Like a diamond ring
A token of true love
Should have all worked out
But it didn’t

There's Your Trouble -- Dixie Chicks

Link to Music Video

The rally was supposed to be different this time, wasn't it? People say it every time, but it never is. Today's property was purchased during the peak of the frenzy to buy real estate. It should have been a ticket to riches; it should have all worked out, but it didn't...

73 Chula VIsta Front 73 Chula Vista Kitchen

Asking Price: $649,000IrvineRenter

Income Requirement: $162,250

Downpayment Needed: $129,800

Purchase Price: $685,000

Purchase Date: 6/22/2005

Address: 73 Chula Vista, Irvine, CA 92602

1st Loan $547,920
2nd Mtg. $136,980
Downpayment $100

Beds: 3
Baths: 3
Sq. Ft.: 1,820
$/Sq. Ft.: $357
Lot Size: -
Type: Condominium
Style: Other
Year Built: 2002
Stories: Two Levels
View(s): Has View
Area: Northpark
County: Orange
MLS#: M107208
Status: Active
On Redfin: 91 days
Unsold in 90+ days

From Redfin, "Great Opportunity! Highly Upgraded WIth A View!!!! Short Sale!!! Must Go Fast!!! Priced Below Market Value For Quick Sale!!! Present All Offers!!!"

Enough with the exclamation points. Do realtors realize how incredibly stupid they look when they write like that? My guess is no!!!!!!!!!!!!!!!!!!!

What Is With The Title Case?

Must be written for the ADHD buyer. Each sentence has between 2 and 7 words.

That description is painful to my eyes. If realtors are trying to stand out in the crowd with their descriptions, they are succeeding. They stand out as being terrible.

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If this seller gets their asking price -- which seems unlikely after more than 90 days on the market -- they stand to lose $74,940 after a 6% commission. Of course, the seller is only losing $100, and the bank will lose $74,840. Yet another 100% financing deal gone bad.

I know I am flagellating the equine which has already perished, but 100% financing is hastening the decline of prices. These borrowers have no holding power. These are gamblers who saw an opportunity to make huge sums with no risk, and they acted on it. How many of these properties does it take to cause prices to plummet? How many more of these time bombs are awaiting detonation? If there is any one factor which has the potential to greatly increase the rate of price decent, it is 100% financing deals.

Works for me. I would be happy to buy sooner rather than later...

Does anybody really know what time it is? Sometimes I wonder if I have too much time on my hands.

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.

smile

Circle of Hell


Posted in Price Rollback
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