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Desperation

Nov 17th, 2007 by IrvineRenter 

Throw a dog a bone, I'll take it if I have to
Go real fast like there's somewhere we can get to
What's the use of standing right there on the edge if there ain't nowhere to fall
What's the use in hangin' on tight to the phone if nobody might call

Desperation
There's anger in frustration
Complicated words slippin' off of your tongue and ain't one of them the truth
I'm still desperate for you

Desperation -- Miranda Lambert

Today's listing is the most desperate seller I have seen to date. They are actually giving away a car to their buyer. Next they will be offering a year of free massages with happy endings...

Price: $1,999,000

37 Crimson Rose
Irvine, CA 92603
Beds: 3
Baths: 3.5
Sq. Ft.: 2,900
$/Sq. Ft.: $689
Lot Size: 6,500 sq. ft.
Type: Single Family Residence
Style: Mediterranean, Spanish
Year Built: 2004
Stories: Two Levels
View(s): City Lights, Ocean, Panoramic
Area: Turtle Ridge
County: Orange
MLS#: S495046
Status: Active
On Redfin: 138 days
Unsold in 90+ days

From Redfin, "SPECIAL OFFER TO BUYER: BRAND NEW 2008 MERCEDES BENZ 'GL' SUV OR 'CLK' CONVERTIBLE WITH PURCHASE AT 'LISTING ASKING PRICE'. FORMER MODEL HOME with PANORAMIC CITY LIGHTS/OCEAN VIEWS!One of the BEST and highest view lots in The Summit at Turtle Ridge; Over $500K in designer upgrades; Provencial Style Home; Casita with Bath, custom hardwood flooring/wainscoating walls, faux paint, stone walls and stone flooring, spa-like master bath; covered loggia with outdoor fireplace."

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From the land of WTF listings and denial we have the first signs of desperation: high-end style. What do you think about that?


Posted in Uncategorized

Eboe and Ivory

Nov 16th, 2007 by IrvineRenter 

Ebony and ivory live together in perfect harmony
Side by side on my piano keyboard, oh lord, why dont we?
We all know that people are the same where ever we go
There is good and bad in evryone,
We learn to live, we learn to give
Each other what we need to survive together alive.

Ebony and ivory live together in perfect harmony

Ebony and Ivory -- Paul McCartney and Stevie Wonder

Another day another 2004 rollback. Doesn't the world seem to be in perfect harmony with the bearish predictions we have made on this blog?

Asking Price: $745,000

Income Requirement: $186,250

Downpayment Needed: $149,000

Purchase Price: $752,000

Purchase Date: 9/30/2004

Address: 3462 Eboe, Irvine, CA 92606

First Mortgage $672,000
HELOC $168,000
Total Debt $840,000

Beds: 4
Baths: 2.5
Sq. Ft.: 2,621
$/Sq. Ft.: $284
Lot Size: 5,564 sq. ft.
Type: Single Family Residence
Style: Contemporary
Year Built: 1974
Stories: Two Levels
Area: Walnut
County: Orange
MLS#: S499486
Status: Active
On Redfin: 105 days
Unsold in 90+ days

From Redfin, "BANK SAYS. .SUBMIT!! LARGEST MODEL W/ CUSTOM POOL, SPA, SWIM UP BAR, FIRE PIT, KID'S PLAY POOL, COVERED PATIO. CUSTOMIZED W/ CEASAR STONE COUNTERS, DESINGER TILE BACKSPLASH, CERAMIC GLASS COOKTOP, BUIT-IN FRIDGE & MORE IN KITCHEN. MASTER SUITE W/ CROWN MOLDING, TRAVERTINE COUNTERS & DUAL SINKS, OVERSIZED SPA TUB SURROUND. .. FAMILY ROOM W/ FIREPLACE. BONUS ROOM. .. BAMBOO FLOORS DOWNSTAIRS, 6' BASEBOARDS, DESIGNER PAINT, SCRAPED CEILINGS. SHORT SALE SUBJECT TO BANK APPROVAL."

Another ALL CAPS description... {Sigh}

BANK SAYS. .SUBMIT!! -- We are your masters. You must submit an offer. Save our Christmas bonuses...

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So how much is the bank going to lose? If they get the asking price, and if there is a 6% commission, the total loss is $139,700.

I know we have stated this before, but it bears repeating (pun intended): 20% downpayments will become the standard again. What lender is going to be willing to loan the remaining 20% given all the losses we are seeing on second mortgages? The credit crunch is going to get much worse before it gets any better.

The main reason I believe we are in for a harder landing (prices dropping below the 160 gross rent multiplier breakeven for an owner occupant) is because nobody has saved the 20% downpayments, and no lenders are going to be willing to loan this 20% or any portion thereof.

Over the last 4 or 5 years, nobody needed to save for a downpayment because 100% financing was available. People respond to incentives, and they were incentivized not to save. Savings must come from income, not from a HELOC on another property.

Until prices drop low enough for entry level buyers to come up with a 20% downpayment, and until people actually start saving for this amount, we will not find a bottom. Without entry level buyers, the whole chain of move ups grinds to a halt. This is why sales are so dismal, and it is also why prices will continue to drop precipitously.

Food for thought on the weekend...

It appears there are houses in hell.

So ends another week at the Irvine Housing Blog. I hope you have had a good time with us. We will bring you more next week as we continue chronicling ‘the seventh circle of real estate hell.’ Have a great weekend.


Posted in Price Rollback

REOllback

Nov 14th, 2007 by IrvineRenter 

This song goes out to my new blog helper, Brittany, who has been emailing me great properties to profile and providing me with mortgage data.

Thank you...

You see my problem is this
I'm dreaming away
Wishing that heroes, they truly exist
I cry, watching the days
Cant you see I'm a fool in so many ways
But to lose all my senses
That is just so typically me
Baby, oh

Oops!...i did it again

Oops!...I Did It Again -- Britney Spears

Oops! I profiled another 2004 rollback -- an REO no less. I would make some comment on the line "Can't you see I'm a fool in so many ways," but I will just let it go...

Asking Price: $589,900

Income Requirement: $147,475

Downpayment Needed: $117,980

Bank Purchase Price: $500,474

Bank Purchase Date: 10/5/2007

FB Purchase Price: $595,000

FB Purchase Date: 9/28/2004

Address: 83 Ardmore, Irvine, CA 92602

First Mortgage $476,000
Second Mortgage $119,000
Dowmpayment $0

Beds: 3
Baths: 2.75
Sq. Ft.: 1,638
$/Sq. Ft.: $360
Lot Size: -
Property Type: Townhouse, Attached
Year Built: 1999
Stories: Two Levels
Area: Out Of Area
County: Orange
MLS#: H07158310
Status: Active
On Redfin: 12 days

From Redfin, "Model-like condition, Immaculate, End unit, two bedrooms upstairs-like suites, one bedroom & 3/4 bath downstairs, beautiful new wood floors, new interior paint, new carpet, tile entry, fire place in livingroom, formal dining room, indoor laundry, brand new stove, soaring high ceiling, fenced patio, two car attached garages-direct access, walk in closet, gated cummunity w/ giant community pool & spa, children's play ground, Sheridan Place at corner of portola & jamboree, make all & any offers!!"

cummunity -- I won't go there either...

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So how much will the lender lose on this one? If they manage to get their asking price (doubtful) they will lose the commissions plus a few bucks. No big deal. The real story is the depth of this rollback. The REO price was 20% off a 2004 price. Let that sink in a moment...

Conventional wisdom is that we are 20% off the peak of Spring/Summer 2006. When we start seeing prices 20% off 2004, how low will we go?

I am starting to think the more likely scenario comes from How Bad Could Bad Get?


King Royale

Nov 13th, 2007 by IrvineRenter 

I dreamed I had a good job and I got well paid.
I blew it all at the penny arcade.
A hundred dollars on a kewpie doll.
No pretty chick is gonna make me crawl.

Get on a TWA to the promised land.
Every woman, child and man
Gets a Cadillac and a great big diamond ring.
Don't you know you're riding with the king?

Riding with the King -- Eric Clapton

This song reminds me of all the people who took out liar loans to buy houses in Irvine. They dreamed they had a good job and they were well paid. They dreamed their house would take them to the promised land of Cadillacs and diamond rings, but, of course, they end up selling at a loss. A sad and repetitive story.

Asking Price: $679,000

Income Requirement: $169,750

Downpayment Needed: $135,800

Purchase Price: $699,000

Purchase Date: 6/07/2004

Address: 5112 Royale, Irvine, CA 92604

Beds: 3
Baths: 2
Sq. Ft.: 1,723
$/Sq. Ft.: $394
Lot Size: 6,300 sq. ft.
Type: Single Family Residence
Style: Ranch
Year Built: 1969
Stories: One Level
Area: El Camino Real
County: Orange
MLS#: S512070
Status: Active
On Redfin: 4 days

From Redfin, "Nicely upgraded single story , detached home in The Ranch ! Remodeled kitchen w, maple cabinets and corian counters, Large sunny great room , scraped ceilings, dual pane windows, remodeled baths , newer roof. Check out the attic and see the potential!!!!! Storage galore or could be extra bedroom. "

potential!!!!! Five exclamation points worth. Ummm, if it is nicely upgraded, hasn't it reached its potential?

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Another day, another 2004 rollback. Today's seller stands to lose $60,740 on their 2004 purchase after commissions. With all these 2004 rollbacks, what does it say about those hoping for a profit on their 2005 and 2006 purchases. They are out there trying. Good luck.

Recently, I went through many of the old posts on the blog to look for properties to update. I kept finding the same two things: 1. Properties with minor price reductions chasing the market down, and 2. Properties taken off the market without selling.

Think about what that says about the true market inventory. During the rally, everyone who put their house for sale ended up selling it. There were no sellers unable to get their asking prices. There was no "overhead supply." In today's market, the inventory numbers on the MLS do not represent the true number of potential sellers in the marketplace because there are so many sellers who have given up.

If there was even a small amount of sales activity or price appreciation, these sellers would relist their houses and add their stealth inventory to an already overbloated inventory number. So when you look at the dismal numbers for "months of inventory" on the market, consider that the numbers are much, much worse that the statistics show. If you don't believe me, go through the old posts on this blog and see for yourself. It is hard not to reach the same conclusion.

Check out the data for Irvine on Altosresearch.

For the Eric Clapton fans out there, I leave you with one of his best guitar solos: Cream -- Crossroads


Posted in Price Rollback

Sumacked

Nov 12th, 2007 by IrvineRenter 

Hold it right there, your attention folks
We came here - to fulfill your hopes
But you better WATCH OUT, it might get ugly
Cause you my friend are beginnin to bug me
So here's a little smack, goin back to the grill again
Hit you in the hat like Skipper did Gilligan
So get back, before I snap like a Kit Kat
And pop you in the mouth, quicker than a Tic Tac
Bif bam BOOM like a Batman fight scene
You defeatin U.D. that was a pipe dream
Kickin you around like a hackeysack
With the beats and the raps that be action packed
I'm ready to go, I got my foot on the petrol
And if you didn't know I steal the show like a klepto
I grew up, with the love for rap
But this is combat and you're about to get smacked

Smacked -- Ugly Duckling

Today's seller got smacked by their property on Sumac. This isn't the first property we have profiled from this neighborhood. Anyone remember the Sumac Attac?

Asking Price: $559,900

Income Requirement: $149,975

Downpayment Needed: $119,980

Purchase Price: $590,000

Purchase Date: 7/28/2004

Address: 14821 Sumac Ave., Irvine, CA 92606

Mortgage $560,000
1% Neg Am

Beds: 3
Baths: 2
Sq. Ft.: 1,500
$/Sq. Ft.: $373
Lot Size: 5,000 sq. ft.
Type: Single Family Residence
Style: Contemporary
Year Built: 1972
Stories: One Level
Area: Walnut
County: Orange
MLS#: S511568
Status: Active
On Redfin: 8 days

From Redfin, "BEAUTIFUL, LIGHT & BRIGHT SINGLELEVEL HOME ON A SINGLE LOADED ST. IN A VERY DESIRABLE AREA OF IR. W/ walking distance to schools, parks shopping & freways. This contemperary & cute house is what U R looking for. Lots of CUSTOM Touches Thur-out and a great backyard with fruit trees, large patio cover. Wonderful Association Aminities of College Park area W/ Clubhose+ pool & spa just at the end of the steert. Its a real doll house you can call it HOME. "

"cute house is what U R looking for" and a big loser is what I R looking for.

"Its a real doll house you can call it HOME." Can someone translate that for me? Beyond the poor grammar, is there some kind of secret realtor code when they mention doll houses? Perhaps that means it is a tiny POS?

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Today's seller stands to lose $63,694 after a 6% commission. Actually, the bank will eat this one because of the Neg Am refi, but, this is a substantial loss on a 2004 purchase.

This is a typical HELOC implosion. Remember when the bulls were claiming everyone in Irvine is sitting on mountains of equity? Us bears claimed people took out their equity and spent it, and these people would end up in foreclosure. In one sense both camps were right. There are a lot of financially prudent Irvine residents; however, there are enough like today's sellers to smack down prices.

Since our theme today is smacked, and we are in the rap genre, I have another one for you...

I feel you creepin', I can see you from my shadow.
Wanna jump up in my Lamborghini Gallardo.
Maybe go to my place and just kick it, like Taebo.

And possibly bend you over.
Look back and watch me

smack that, all on the floor,
smack that, give me some more,
smack that, 'till you get sore
smack that, oooh.
smack that, all on the floor,
smack that, give me some more,
smack that, 'till you get sore,
smack that, oooh.

Smack That -- Akon

I would like to offer a special thanks to an anonymous IHB reader who alerted me to this property and provided some detail on the mortgage.

This one is for you lendingmaestro...


Posted in Price Rollback

Southern Cross

Nov 11th, 2007 by IrvineRenter 

When you see the Southern Cross
For the first time
You understand now
Why you came this way
'Cause the truth you might be runnin' from
Is so small.
But it's as big as the promise
The promise of a comin' day.
So I'm sailing for tomorrow
My dreams are a dyin'.

Southern Cross -- Crosby, Stills & Nash

We don't have many properties on water in Irvine. There are two man-made lakes in Woodbridge, and there are some units on these lakes. When I saw the pictures for this unit, it got me thinking...

Anybody want to go sailing?

it's not far down to paradise
At least it's not for me
And if the wind is right you can sail away
And find tranquility
The canvas can do miracles
Just you wait and see
Believe me

It's not far to never never land
No reason to pretend
And if the wind is right you can find the joy
Of innocence again
The canvas can do miracles
Just you wait and see
Believe me

Sailing
Takes me away
To where I've always heard it could be
Just a dream and the wind to carry me
And soon I will be free

Sailing -- Christopher Cross

Would you like to feed the ducks off your patio? I think it would be great.

I like this complex. It isn't very practical if you have small children, but it looks peaceful, and the close proximity to water is always desirable.

Price: $748,600

20 Southwind
Irvine, CA 92614
Beds: 2
Baths: 2
Sq. Ft.: 1,930
$/Sq. Ft.: $388
Lot Size: -
Type: Condominium
Style: Contemporary/Modern
Year Built: 1983
Stories: Split Level
View(s): Lake, Has View, Water
Area: Woodbridge
County: Orange
MLS#: S510180
Status: Active
On Redfin: 18 days
Completely updated architechural waterfront beauty!Features include maple wood flooring in living rm, den/office, kitchen and dining room. Matching wide-blade plantation shtrs. New white kitchen cabinets, black Eurostone countertops, stainless steel appliances, stainless steel sinks. Recessed lights. Cust. living rm fireplace. Totally remodeled bathrms w/ cust. cabinets, pedestal sinks, custom flrs. Designer carpeting. Huge master w/ retreat & double-sided fireplace. Water views from all major rms!!

OK, we have a street named Southwind, we have the song southern cross, the artist Christopher Cross, and finally Christopher Cross's song Ride Like the Wind. We have come full circle...


Posted in Uncategorized

Home Sales Data thru 11-5-2007

Nov 10th, 2007 by IrvineRenter 

Median sale price

Sales volume

ZIP

code

Prev. 4 weeks

change

from '06

Prev. 4 weeks

change

from ’06

92602

$717,500

-6.2%

15

-42.3%

92603

$1,620,000

101.2%

12

-57.1%

92604

$550,000

-14.1%

14

-53.3%

92606

$567,000

-26.7%

11

-50.0%

92612

$575,000

9.0%

22

69.2%

92614

$685,000

-0.7%

16

-30.4%

92618

$615,000

9.8%

 9

-35.7%

92620

$650,500

-15.6%

30

-38.8%


Posted in News
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