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Ridin’ The Storm Out

Sep 5th, 2007 by IrvineRenter 

REO SpeedwagonRidin the storm out, waitin for the thaw out
On a full moon night in the rocky mountain winter.
My wine bottles low, watching for the snow
Ive been thinking lately of what I'm missing in the city.

Ridin' The Storm Out -- REO Speedwagon

Link to Music Video

Have you been feeling like we on this blog are Ridin' The Storm Out? I do. Does anyone remember the final scene in Terminator? Sarah Conner is told by a gas station attendant that a storm is coming. She responds, "I know" with a deep reflective look of someone who has seen the future Armageddon. Can you relate?

We have broken an important psychological level for pricing in Quail Hill. Today's property is a bank REO that went for under $500,000 a few months ago. It is back on the market now, and the bank isn't even trying to get above the $500,000 mark.

212 Dewdrop Front 212 Dewdrop Kitchen

Asking Price: $499,000IrvineRenter

Bank Purchase Price: $477,000

Bank Purchase Date: 6/8/2007

FB Purchase Price: $551,000

FB Purchase Date: 6/30/2005

Address: 212 Dewdrop, Irvine, CA 92603

Beds: 2REO
Baths: 2.5
Sq. Ft.: 1,200
$/Sq. Ft.: $417
Lot Size: -
Type: Condominium
Style: Contemporary
Year Built: 2004
Stories: Two Levels
Area: Quail Hill
County: Orange
MLS#: S502633
Status: Active
On Redfin: 7 days

From Redfin, "BANK OWNED !!! Stunning 2 story Townhome with lots of top notch upgrades. Quiet interior street, large living room, dining room, guest bath downstairs, courtyard patio entrance, 2 car attached garage. Walk to Park, Playground and Shopping. Resort living !!"

Is being BANK OWNED something to get excited about? I guess it is worth ALL CAPS and three exclamation points!!!

What are top-notch upgrades? Are there bottom-rung upgrades?

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Bear with me on this conjecture, but based on the REO purchase price, I am guessing this was an Option ARM that exploded. The primary mortgage should have been 80% of the original purchase price or $440,800. If the bank was willing to bid $477,000 at a foreclosure auction, this likely represents the outstanding balance on the first mortgage. Only an negative amortization loan with a low teaser rate would grow by $36,200 over two years.

Negative Amortization loans -- great innovation... Not.

Judging by the description, there is a realtor involved in this transaction. If the bank gets their asking price, and if they pay a 6% commission, they stand to lose $81,940. Although when you think of the other costs involved with the foreclosure, the real loss was likely much higher.

BTW, Do you like our new REO symbol?


Posted in Real Estate Owned

Summer Breeze

Sep 4th, 2007 by IrvineRenter 

Summer BreezeSee the curtains hanging in the window
In the evening on a Friday night
A little light a-shining through the window
Lets me know every thing's all right

Summer breeze, makes me feel fine
Blowing through the jasmine in my mind
Summer breeze, makes me feel fine
Blowing through the jasmine in my mind

Summer Breeze -- Seals and Crofts

Link to Live Performance Video

Link to Studio Version

This property was previously featured in June: Woodbridge Knife-Catchers.

A reader has been watching this property and has emailed me with some juicy details I want to share with you today.

17 Seawind Front17 Seawind Kitchen

IrvineRenterOld Asking Price: $599,900

New Asking Price: $549,000

Purchase Price: $490,100

Purchase Date: 4/30/2007

Address: 17 Seawind, Irvine, CA 92604

Beds: 2
Baths: 2
Sq. Ft.: 1,058Knife Catcher Award
Year Built: 1984
Stories: 1
Type: Condominium
County: Orange
Neighborhood: Woodbridge
$/Sq. Ft.: $519
MLS#: P594916
Status: Active on market
On Redfin: 15 days

From Redfin, “Beautifully upgraded home in Woodbridge near the lake. Highly upgraded with hardwood floor thru entire house, tile floor in the bathroom, granite counter top, crown & base moulding, just painted, private spa in the backyard. Walk to lake, park, and lots lots more!!”

.

.

This unit does not see the lake, it isn’t on a park, it doesn't even have a yard, it is a nondescript, tiny tract home in the middle of Woodbridge — for sale in a declining market. WTF?

WTFWell, this unit was purchased by a realtor. Perhaps business is slow this year? Not long after she put this unit on the market for $599,900, a comparable property at 29 Whitecloud came on the market for $599,000. This unit is 30% larger than 17 Seawind, and it is overpriced as well. Not daunted by the competition, our kool aid addicted realtor actually raised her price to $605,000. WTF?

When both properties languished on the market, the owner of 29 Whitehead lowered their price to the current $569,000. So how does our realtor/flipper/knife-catcher respond? She raises the price to $610,000. WTF?

Well, as you might imagine, neither property sold and they were pulled from the market in order to reset the "days on market" number. Now they are both back for sale, and they are both still overpriced.

At least this realtor has something to do. She can sit in her homedebtor's prison each weekend running an open house. Perhaps she finds some leads on some other overpriced stucco boxes she can fail to sell?


Posted in House Flips

Honey, I Lost the House

Sep 3rd, 2007 by IrvineRenter 

Bitter Reality

Since it is a holiday, I thought we could try something a little different.

When I first saw the cartoon above, I could imagine the final scene played out in millions of households across America as the bubble deflates. At some point, it will become painfully evident to each family that they are about to lose their home. It will not be a happy moment.

How do you feel about that? Sad, mad, glad?


Posted in News

Home Sales Data thru 8-27-2007

Sep 2nd, 2007 by IrvineRenter 

Median sale price

Sales volume

ZIP

code

Prev. 4 weeks

% change

from 06

Prev. 4 weeks

% change

from ’06

92602

$850,000

10.4%

19

-38.7%

92603

$865,000

-17.6%

32

-5.9%

92604

$630,000

-3.8%

24

20.0%

92606

$727,500

-3.0%

20

-4.8%

92612

$685,000

3.4%

43

79.2%

92614

$531,000

-11.5%

11

-62.1%

92618

$590,000

-3.7%

22

22.2%

92620

$750,000

-9.0%

58

-1.7%


Posted in News

Flipper is a Whale ** Update 1 **

Sep 1st, 2007 by IrvineRenter 

Originally posted March 22, 2007.

He's back. The same house; the same price. Still no chance...

Mahogany FrontMahogany Kitchen

Asking Price: $2,299,500

Purchase Price: $2,050,000
Purchase Date: 5/23/2006

Address: 29 Mahogany Drive, Irvine, CA 92620

Beds: 7IrvineRenter
Baths: 6.5
Sq. Ft.*: 4,200
Lot Sq. Ft.*: 12,000
Year Built: 1996
Stories: 2
Neighborhood: Northwood
$/Sq. Ft.*: $548
MLS: S478955
Status: Active on market
On Redfin: 6 days

Redfin, Zillow

Does anybody remember the TV show about the dolphin Flipper? In the world of sea mammals, whales are bigger than dolphins, and in the parlance of Las Vegas, Whales are the biggest of the high rollers. The flipper of this property is a whale. Who else would try to flip a $2,050,000 property? Assuming a 6% sales commission, if he gets his $2,299,500 asking price, he will make a profit of $111,530. Not bad for simply owing real estate for 10 months. Isn't 15% "in the bag?" This guy isn't greedy, he is only looking for 10% or about 1% a month. Unfortunately, the market seems to have moved the other direction at about the same speed.

Our whale may have some difficulty with this one. He bought right at the peak, and Zillow thinks his property is only worth $1,756,674. Not good if you are trying to convince someone you need to get $550,000 more than that. What does Zillow know anyway? Tract homes in Irvine should be going for over $2,000,000. It's the new paradigm.

.Flipper

They call him Flipper, Flipper, faster than lightning,
No-one you see, is smarter than he,
And we know Flipper, lives in a world full of wonder,
Flying there-under, under the sea!


Posted in House Flips

Curly Shuffle ** Update 1 **

by IrvineRenter 

This price was just lowered to $255,000. This is becoming a deep 2004 rollback. Ouch.

The Three Stooges

Well, me and my friends-we all love to see
Comedy classics on late night TV
Those knuckleheads always get in a scuffle
A push and a shove doin' the Curly Shuffle

The Curly Shuffle - Jump In The Saddle

Link to Video of Curly Shuffle

Do you remember the Curly Shuffle, the sliding back-step predating the moonwalk? Isn't that how our housing market works: Two steps forward and one step back?

We had our big rally, our two steps forward. Now it is time for the one step back (or two or three...)

Today's featured property is another distressed low-end unit: a 2004 rollback.

508 Orange Blossom Front 508 Orange Blossom Inside

Asking Price: $265,000IrvineRenter

Purchase Price: $273,000

Purchase Date: 7/7/2004

Address: 508 Orange Blossom, Irvine, CA 92618

1st Loan $218,400
Downpayment $54,600

Beds: 1
Baths: 1
Sq. Ft.: 512
$/Sq. Ft.: $518
Lot Size: 512 sq. ft.
Year Built: 1977Rollback
Stories: 1
Type: Condominium
View: Water
County: Orange
Neighborhood: Orangetree
MLS#: S497083
Status: Active
On Redfin: 24 days

From Redfin, "Best priced condo in the Lake Condos! Beautiful End Unit with private Wood Deck overlooking Stream!Price includes Washer/Dryer and Refrigerator!Amenities include Assoc. Pool, Spa, Tennis Courts, Clubhouse with Workout Room and Barbecue poolside!Enjoy the absolute Best of OC with nearby shopping, entertainment, World Class Restaurants and Oak Creek Golf Course! The Irvine Spectrum is just minutes away with close access to freeway, hospital and college!Don't miss out on this investment opportunity!!"

Notice this is being touted as an "investment opportunity." I guess if flippers are the only ones buying, you need to appeal to them, right?

At over $100 a round, I doubt the resident here will be playing Oak Creek Golf Course very much.

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If this seller gets their asking price, they stand to lose $23,900 on a mid 2004 purchase.

The bottom of the market is being destroyed. What more is there to say? Well, wait until you see tomorrows post...

When me and my friends go out on the town
We can't sit still. We can't sit down
We don't like to fight and we don't like to scuffle
Dancin' all night doin' the Curly Shuffle

Hey, Moe. Hey, Moe.
Well, a nyuk-nyuk-nyuk-nyuk.
La-le-li-li
woo-woo-woo-woo
Well, we never miss a chance
We get up and dance and do the Curly Shuffle


Posted in House Flips

Skinner

Aug 31st, 2007 by IrvineRenter 

Lynyrd SkynyrdIf I leave here tomorrow
Would you still remember me?
For I must be traveling on, now,
'Cause there's too many places I've got to see.

Freebird -- Lynyrd Skynyrd

Link to Music Video

Did you know the bank Lynyrd Skynyrd got their name from their gym teacher Leonard Skinner? I have no idea where the Irvine Company came up with the street name Skinner. The Ranch neighborhood was done in the 70's. Perhaps one of the early project managers was a fan...

5252 Skinner Front5252 Skinner Kitchen

IrvineRenterAsking Price: $725,000

Purchase Price: $825,000

Purchase Date: 6/14/2005

Address: 5252 Skinner ST, Irvine, CA 92604

1st Loan $650,000
2nd Mtg. $175,000
Downpayment $0

Beds: 4
Baths: 3
Sq. Ft.: 2,326
$/Sq. Ft.: $312
Lot Size: 6,000 sq. ft.
Type: Single Family Residence
Style: Other
Year Built: 1972
Stories: Two LevelsRollback

Area: El Camino Real
County: Orange
MLS#: P566766
Status: Active
On Redfin: 160 days
Unsold in 90+ days

From Redfin, "SUPER PLAN 102D! UPGRADED UPGRADED! GRANITE KIT COUNTERS, HUGE LOT WITH A BEAUTIFUL POOL AND SPA, COVERED PATIO WITH POOL TABLE, NO POPCORN CEILINGS, LAUNDRY IN GAR WITH A FULL ENTERTAINMENT CENTER IN GARAGE ALSO WITH BEAUTIFUL NEW FLOORING AND NEW CABINTES, HARDWOOD FLOORS, BONUS ROOM, WITH WET BAR, M U S T S E E !! NO DUES OR MELLO ROOS! Appraisal was done 8/15/2007 hurry!!"

When you read "SUPER PLAN 102D!" did your mind go to the same place mine did? That Lynyrd Skynyrd is the devil.

ALL CAPS and exclamation points -- definitely written by a realtor.

Would you want a full entertainment center in your garage? I guess you don't park there.

Notice the reason to "hurry" is because the appraisal is recent. What does that say to you?

Hurry and buy now because we can qualify you with a bloated appraisal and if you wait the values will drop to the point you can't finance this property?

That is what it says to me. It doesn't make me want to hurry...

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The bank is going to get crushed -- again. Are we seeing a pattern here? Are you surprised about the credit crunch? Do you see why we are having one?

The seller has nothing to lose because they have nothing in to the transaction. The bank will probably not approve anything that imperils there first mortgage, so they have $175,000 to work with. If this sells for asking price, minus a 6% commission, the bank stands to lose $143,500. There is some negotiating room here. Of course, since this house will probably go for $475,000 at the bottom, there isn't enough negotiating room to pique my interest.

Circle 7

So concludes another week's exploration of "the seventh circle of real estate hell." I hope you have enjoyed our posts this week. Come back again next week -- it is only going to get worse.


Posted in Price Rollback
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