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Retirement

Oct 18th, 2007 by IrvineRenter 

Old days
Good times I remember
Fun days
Filled with simple pleasures
Drive-in movies
Comic books and blue jeans
Howdy doody
Baseball cards and birthdays
Take me back
To a world gone away
Memories
Seem like yesterday

Old days
Good times I remember
Gold days
Days Ill always treasure
Funny faces
Full of love and laughter
Funny places
Summer nights and streetcars
Take me back
To a world gone away
Boyhood memories
Seem like yesterday

Old Days -- Chicago

Link to Music Video

I wrote this in Brio New World "Previous 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."

Today's property is an example of someone living by the old formula.

Asking Price: $799,000

Income Requirement: $199,750

Downpayment Needed: $159,800

Purchase Price: $112,500

Purchase Date: 8/23/1979

Address: 9 Williams, Irvine, CA 92620

Beds: 4
Baths: 2.5
Sq. Ft.: 2,101
$/Sq. Ft.: $380
Lot Size: 6,030 sq. ft.
Type: Single Family Residence
Style: Contemporary
Year Built: 1979
Stories: Two Levels
Area: Northwood
County: Orange
MLS#: S457142
Status: Active
On Redfin: 407 days
Unsold in 90+ days

From Redfin, "HUGE CULDESAC LOT! Northwood charmer! Spacious home, well located, in quiet neighborhood. Downstairs den can easily be converted to 4th bedroom. Cathedral ceilings! New Appliances. Tons of storage space. Two fireplaces (Living Room & Master Bedroom). Walk-in closets in Master & guest rooms. Ceiling fans throughout. Over-size living area! Balcony off Master bedroom! Huge back and side yards with Gazebo style Jacuzzi! Close to shopping, schools, and freeways. NO MELLO ROOS AND NO ASSOCIATION FEES!!"

INTERMITTENT caps LOCK!

Exciting EXCLAMATIONS!!!

Tons of storage space? Mixing measures, weight and volume?

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This is the quintessential example of an owner who does not need to sell. The house was purchased in 1979 for $112,500. There is a first mortgage for $62,400 that is probably nearly paid off. The owners have a mailing address in Grants Pass, Oregon which is likely where they are living in their retirement.

They have two choices:

  1. They could rent this place for an easy $3,000 a month, or
  2. They could sell the place and put the proceeds in the bank at 5%.

Surprisingly enough, either choice nets about the same income depending on the amount of capital gains taxes. It does make me wonder if they have a renter in the house now. You would think that if they decided to sell the place, they would lower the price to sell it immediately or take it off the market and get a renter in there. Sitting empty, this house makes them nothing.

If this were your retirement nest egg, what would you do?


Posted in Uncategorized

Holly’s Rollback

Oct 17th, 2007 by IrvineRenter 

I ain't got no home, I'm just a-roamin' 'round,
Just a wandrin' worker, I go from town to town.
And the police make it hard wherever I may go
And I ain't got no home in this world anymore.

I Ain't Got No Home -- Woody Guthrie

Link to Bruce Springsteen Remake Music Video

Asking Price: $700,000

Income Requirement: $175,000

Downpayment Needed: $140,000

Purchase Price: $840,000

Purchase Date: 11/08/2006

Address: 2 Cypress Tree Lane, Irvine, CA 92612

Beds: 5
Baths: 2.5
Sq. Ft.: 2,419
$/Sq. Ft.: $289
Lot Size: 6,000 sq. ft.
Type: Single Family Residence
Style: Other
Year Built: 1970
Stories: One Level
Area: University Park
County: Orange
MLS#: P589071
Status: Active
On Redfin: 92 days
Unsold in 90+ days

From Redfin, "OPEN FLOOR PLAN. THERE ARE LOTS OF ROOMS. FAMILIROOM. , SUN ROOM AND BIG KITCHEN, TWO FIRE PLACE IN THE FAMILYROOM, AND IN THE LIVINGROOM. BIG MASTER BEDROOM. BATH ROOMS HAVE DOUBLE SINK."

Ordinarily we don't mention names here at the Irvine Housing Blog. There is no need to, but this realtor chose to feature a picture of the house with her for sale sign prominently displayed, so I have elected to make an exception in this case. Unfortunately, the sign is the most interesting part of this elevation.

Holly, please turn off your CAPS LOCK.

FAMILIROOM?

Anyone want to back on to the 405?

There are no pictures of the kitchen which makes me suspect it is of 1960's vintage.

Do you think the flowers dressed up the computer printer and cables? Nice staging...

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This was perhaps the worst trade we have seen to date. This buyer purchased in November of 2006, and it is already worth almost 20% less than they paid -- 20% off in one year. I could not find any mortgage information on this property, so if someone would be so kind as to enlighten us, it would be appreciated. Any bets on 100% financing?

If the seller gets their asking price and pays a 6% commission, they stand to lose $182,000. IMO, that is a lot of money...


Big Wheeler

Oct 16th, 2007 by IrvineRenter 

Left a good job in the city,
Workin for the man evry night and day,
And I never lost one minute of sleepin,
Worryin bout the way things might have been.

Big wheel keep on turnin,
Proud mary keep on burnin,
Rollin, rollin, rollin on the river.

Proud Mary -- Creedence Clearwater Revival

Link to Music Video

IMO, there are four kinds of people in the market right now:

  1. Those who are stressed out and losing sleep because of the housing slump.
  2. Those who are in denial and not stressed out yet.
  3. Those who can afford their payments and don't care about prices.
  4. Those who are not in a market position and can watch the carnage from the sidelines.

BTW, Group 4 is also sleeping well at night. Big wheel keep on turnin...

Asking Price: $850,000

Income Requirement: $212,500

Downpayment Needed: $170,000

Purchase Price: $880,000

Purchase Date: 9/21/2005

Address: 20 Wheeler, Irvine, CA 92620

1st Loan $650,000
Downpayment $230,000

Beds: 4
Baths: 3
Sq. Ft.: 2,574
$/Sq. Ft.: $330
Lot Size: 5,000 sq. ft.
Type: Single Family Residence
Style: Other
Year Built: 1986
Stories: Two Levels
Area: Northwood
County: Orange
MLS#: S509104
Status: Active
On Redfin: 2 days

From Redfin, "This is a fantastic highly desirable corner lot home in the wonderful city of Irvine. This two floor home is great for entertaining with open areas, beatiful back yard, and a bbq area. This home features 3 bedrooms upstairs, one of which is the master bedroom, and two full bathrooms. Downstairs you will find an additional bedroom with another full bath. The kitchen has been remodeled recently and has a breakfast area. There is an indoor laundry room with room for full size washer and dryer."

Highly desirable corner lot. You mean the one backing onto the arterial at the main entrance where you will have maximum traffic?

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The seller of this house put up a substantial downpayment, so this is not a short sale. If they get their asking price and pay a 6% commission, they stand to lose $81,000.

I don't know why they are moving, but I admire that they are selling at a loss when they are not being forced out in a foreclosure. Perhaps they recognize they will lose all their equity if they wait. If so, it is a smart move.

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This has nothing to do with the post, but I am always scared by this graph -- updated in September 2007.

From our friend at Piggington's.


Posted in Price Rollback

Eve of Destruction

Oct 15th, 2007 by IrvineRenter 

Don't you understand, what I'm trying to say?
Can't you see the fear that I'm feeling today?
If the button is pushed, there's no running away,
There'll be noone to save with the world in a grave,
take a look around you, boy, it's bound to scare you, boy,
but you tell me over and over and over again my friend,
ah, you don't believe we're on the eve of destruction.

Eve of Destruction -- Barry Mcguire

Link to Music Video

Do you get the sense that our real estate market is on the eve of destruction? Prices on the leading edge of the decline are already 20% off peak, credit is tightening and will continue to do so, the inventory is mounting, and the number of foreclosures keeps rising (We are behind San Diego, but on the same path.) There are no signs of any of these trends reversing.

What is really scary about the foreclosure trend is the fact that it does not include any of the homeowners represented in the chart above (remember the ARM reset problem?) The foreclosures and REOs we are seeing today were caused by people who started defaulting in 2006. Now that prices are clearly off the peak, most of the people needing to refinance will not be able to get it. In short, many of the homeowners represented on this chart are going to default and become REOs.

Since it takes at least 6 months to become an REO after the homeowner stops making payments, and since most people will exhaust all other forms of credit before they succumb to foreclosure, we can assume there will be a 1 year lag from the peak of the ARM reset chart to the peak of the REO problem. That puts us into March of 2009 before there is any hope of the number of REOs declining. Since it will also take some time to sell this inventory (we currently have a 20 month supply,) that puts the earliest possible bottom of the market in the Summer of 2010. Realistically, the selloff will continue into the 2011 buying season with the spring of 2011 being the earliest possible bottom.

If we are 20% off now, how low will we go?

We profiled another property near today's recently: Run Away. They gave up on selling and pulled their property off the market. Today's neighbor is in similar circumstances, but they have decided to get out -- with a hefty loss...

Asking Price: $350,000

Income Requirement: $87,500

Downpayment Needed: $70,000

Purchase Price: $390,000

Purchase Date: 6/2/2004

Address: 131 Huntington #255, Irvine, CA 92620

1st Loan $316,000
2nd Mtg. $79,000
Downpayment $-5,000

Beds: 2
Baths: 2
Sq. Ft.: 1,000
$/Sq. Ft.: $350
Lot Size: -
Type: Condominium
Style: Cape Cod
Year Built: 1987
Stories: One Level
Area: Northwood
County: Orange
MLS#: S509250
Status: Active
On Redfin: 1 day
New Listing (24 hours)

From Redfin, "Short Sale! THis home has a newer kitchen appliances and flooring and is in good shape. Needs some paint but has a lot of potential. Come and get it won't last long. Nice view of the trees and parking near the unit. Probably the best 2 bedroom 2 bath condo in Irvine."

Probably the best 2 bedroom 2 bath condo in Irvine? This realtor is probably full of $hit.

Nice view of parking?

Nice picture of kitchen clutter. I particularly like how the bottle of Comet cleaner is prominently featured.

Check out the curio cabinet in the living room...

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Look at that rollback: $40,000 or 10% off a 2004 price. Wow! (pardon the exclamation point.)

Another one of those surprising 100% financing deals going south. This buyer may have even obtained cash at the closing. Either way, they are walking and leaving the bank to hold the bag. If this property sells for asking price minus a 6% commission, the bank stands to lose $66,000.
This property has an interesting sales history:

Date Price Appreciation
06/02/2004 $390,000
08/03/2000 $180,000
04/01/1996 $122,500
12/13/1995 $120,000
09/25/1990 $159,000

Apparently, we have seen 20%+ drops before...


Posted in Price Rollback

Market Sales Updates

Oct 14th, 2007 by IrvineRenter 

Courtesy of Irvinexpat

Closed sfrs last 30 days: 42
address area tgn sale prc bd/bt sqft
29 Marsala Irvine/ Westpark 860C3 $540,000 3 2 1100

WTF Winner -- $100K off asking

12 Woodland Drive Irvine/ Woodbridge 860D4 $550,000 3 2.5 1655
4 Terracima Irvine/ Northwood 830H7 $614,500 3 2.5 1549
30 Le Vanto Irvine/ Westpark 860C3 $590,000 3 3 1300
30 Appomattox Irvine/ Northwood 860H2 $613,600 3 2.5 1504
14871 Larkspur Circle Irvine/ El Camino Real 860G3 $580,000 4 2 1400
9 South Cherry Irvine/ University Park 860E7 $655,000 3 2 1550
14592 Sweetan Street Irvine/ El Camino Real 860H3 $640,000 3 2 1482
4052 Williwaw Drive Irvine/ Northwood 830G7 $687,000 4 2 1640
19 Sweet Rain Irvine/ Woodbridge 860D5 $685,000 3 2.5 1571
40 Finisterra Irvine/ Westpark 860B5 $685,000 3 2 1353
1 Wintersweet Way Irvine/ University Park 860B7 $680,000 4 2.5 2500
46 Willow Tree Lane Irvine/ University Park 860C7 $720,000 3 2.5 1708
14 Flaxwood Irvine/ Woodbridge 860E6 $705,000 3 2.5 1786
78 Summerstone Irvine/ Woodbridge 860c6 $745,900 4 2.5 1887
16 Wakefield Irvine/ Northwood 860G1 $738,000 4 2.5 2148
61 Finisterra Irvine/ Westpark 860B5 $747,000 3 2.5 1600
3 Recinto Irvine/ Northwood 830J6 $760,000 4 2 2000
11 Solstice Irvine/ Northpark 830G6 $775,000 3 2.5 2013

Sold for $75,000 off asking and $175,000 off peak.

104 Monticello Irvine/ Northwood 830H7 $830,000 4 2.75 2718
8 Champlain Irvine/ Northwood 830H7 $855,900 4 3 2718
7 Tory Corner Irvine/ Northwood 860H1 $870,000 4 2.5 2279
16 Glen Ellen Irvine/ Northpark 830H5 $855,000 4 2.75 2250
21 Valente Irvine/ West Irvine 830G4 $895,000 5 4 3200
23 Decente Irvine/ Westpark 860C5 $900,000 4 2.5 2446
22 Bamboo Irvine/ Northwood 860J2 $950,000 3 2.5 2460
14 Carnelian Irvine/ Woodbridge 860E6 $975,000 4 3 2600
48 Whitford Irvine/ Northpark 830F6 $1,050,000 3 3 2765
31 FLORA SPGS Irvine/ Northpark 830G6 $1,100,000 3 2 2850 28 Vacaville Irvine/ Northpark 830J4 $1,150,000 3 2.5 2468
6 Figaro Irvine/ Westpark 860D3 $1,265,000 5 4 3115
21 Breezes Irvine/ Woodbury 861A3 $1,312,384 5 4 3531
19151 Beckwith Terrace Irvine/ Turtle Rock 890C4 $1,320,000 5 3 3000
24 Bayporte Irvine/ Woodbridge 860E6 $1,675,000 5 3 3472
12 Dreamlight Irvine/ Quail Hill 890H3 $1,660,000 5 4.5 3700
50 Cezanne Irvine/ Turtle Ridge 890C6 $1,600,000 5 4.5 3660

WTF award winner. Sold for $300K off asking.

37 View Terrace Irvine/ Turtle Ridge 890C6 $1,949,000 4 4.5 3700
23 New Dawn Irvine/ Northwood 831A6 $1,875,000 5 5.5 5045

WTF award winner. Sold for $125K off asking. Lucky, IMO.

51 Hidden Trail Irvine/ Turtle Ridge 890C6 $2,250,000 4 4.5 3690
3 KENT Irvine/ Turtle Rock 890D2 $2,420,000 5 4.5 4894
17 Taggert Irvine/ Turtle Rock 890D2 $2,350,000 6 5.5 4515
22 Cactus Irvine/ Turtle Rock 890F4 $0 5 6 6250


Posted in News

Summer Solstice ** Sale Update **

Oct 13th, 2007 by IrvineRenter 

This property sold for $775,000. That is a $175,000 or >20% off the peak price.

The summer solstice is the longest day of the year. According to The American Heritage Dictionary, the solstice is "A highest point or culmination." Interesting that our housing market peaked in June of 2006 coincidentally with the summer solstice.

Today's seller purchased a property on Solstice street at the highest point in the market. Now, they are trying to sell before the sun sets on their bank account.

Asking Price: $849,900

Purchase Price: $950,000

Purchase Date: 7/31/2006

Address: 11 Solstice, Irvine, CA 92602

Beds: 3
Baths: 2.5
Sq. Ft.: 2,013
$/Sq. Ft.: $422
Lot Size: 5,800 sq. ft.
Year Built: 2002
Stories: 2
Type: Single Family Residence
View: Trees/Woods
County: Orange
Neighborhood: Northpark
MLS#: S497016
Status: Active
On Redfin: 10 days

From Redfin, "Well located on one of largest lots in tract!!! Culdesac, long drivewa y, very private. Beautiful new lush landscaping w/ palm trees! Terrific entertaining area w/ BBQ and firepit. Interior is upgraded throughout!! Exquisite hardwood flooring, upgraded carpet, 2-tone paint, custom fixtures, gourmet kitchen, walk in pantry, stainless steel appliances, etc. .. Great community and facilities."

The exclamation points are back, and so is the gourmet kitchen.

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Another property for sale 10% off the top in Northpark. If this seller gets their asking price, and after a 6% commission, they stand to lose $151,094 after one year of ownership. If they intended this as a flip, I would say they were not entirely successful.

And with that, the sun sets on another week at the Irvine Housing Blog.

Next week, I will be featuring properties from Quail Hill, so come back to see what's happening. Have a great weekend.


Posted in Price Rollback

Westpark Rollback

Oct 12th, 2007 by IrvineRenter 

Said there ain't no use in crying.
Cause it will only, only drive you mad
Does it hurt to hear them lying?
Was this the only world you had? Oh-oh

Houses of the Holy -- Led Zepplin

Link to Music Video

Todays property is a large SFD in the heart of Westpark, and it is going to sell at a loss. The entire market spectrum is showing weakness now.

Asking Price: $819,000

Income Requirement: $204,750

Downpayment Needed: $163,800

Purchase Price: $865,000

Purchase Date: 1/6/2006

Address: 14 Posada, Irvine, CA 92414

1st Loan $691,840
Downpayment $173,160

Beds: 4
Baths: 3
Sq. Ft.: 2,000
$/Sq. Ft.: $410
Lot Size: 3,800 sq. ft.
Type: Single Family Residence
Style: Contemporary/Modern
Year Built: 1986
Stories: Two Levels
Area: Westpark
County: Orange
MLS#: U7004191
Status: Active
On Redfin: 5 days

From Redfin, "READY ! 4 BR (1 BR/BA DOWNSTAIRS)HOME ~ APPROX 2000 SQ FT ~ FRESHLY PAINTED / GLAZED TILE FLOORS / LIGHT BERBER CARPET ~ LIGHT AND BRIGHT KITCHEN W/ STAINLESS REFRIGERATOR INCL ~ '1' LOW ASSOCIATION ($46/MO) ~ FRONT ATRIUM FULLY LANDSCAPED/REAR YARD W/ PATIO COVER ~ FRENCH DOORS AND SHUTTERED THROUGHOUT ~ GREAT NEIGHBORHOOD IN DESIRABLE 'WESTPARK' !"

I GUESS IT IS ALL CAPS WEEK.

READY ! Do I need to be prepped for a listing?

Slashes and tildes, / how ~ interesting!

Do you think the champagne and the candle distract someone from the 1986 tile kitchen?

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This owner stands to lose $95,140 assuming a 6% commission.

Another week has gone by, and we have seen a bevy of rollbacks. They aren't difficult to find these days. For those of you who are not members of our forums, you should check out the thread on Losses Outside of Irvine. All of Orange County is getting hit. We have one asking price 38% off the peak in Anaheim!

I hope you are enjoying our tour of the ‘the seventh circle of real estate hell.’ Have a great weekend.


Posted in Price Rollback
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