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Pretty as a Peacock

Aug 23rd, 2007 by IrvineRenter 

I’m too sexy for my shirt I'm too sexy for my shirt too sexy for my shirt
So sexy it hurts
And I'm too sexy for Milan too sexy for Milan
New York and Japan

And I'm too sexy for your party
Too sexy for your party
No way I'm disco dancing

I'm too sexy for my car too sexy for my car
I’m too sexy
Too sexy by far
And I'm too sexy for my hat
Too sexy for my hat what do you think about that

I'm Too Sexy -- Right Said Fred

Link to Video

During the bubble, weren't we all so enamored with real estate that it was sexy? I imagine when the person who purchased today's property felt pretty as a Peacock when they bought it. After all, they were about to become rich beyond anyone's wildest dreams -- or so they thought. Fast forward 18 months, and their property is in repossession. I doubt that was a turn on.

5 Peacock Front5 Peacock Kitchen

Asking Price: $619,000IrvineRenter

Purchase Price: $497,768

Purchase Date: 3/9/2006

Address: 5 Peacock, Irvine, CA 92604

Sales History
Date Price
06/06/2007 $497,768
11/17/2005 $630,000
04/17/2003 $386,000
09/13/1993 $198,000

1st Loan $472,500
2nd Mtg. $157,500
Downpayment $0

Beds: 3
Baths: 2.5
Sq. Ft.: 1,665
$/Sq. Ft.: $372
Lot Size: 2,720 sq. ft.
Year Built: 1975
Stories: 2
Type: Single Family Residence
View: Park or Green Belt
County: Orange
Neighborhood: El Camino Real
MLS#: S499390
Status: Active
On Redfin: 22 days

From Redfin, "Great value on gorgeous remodel! Granite counters, matching stainless a ppliances, french doors, fireplace, new carpet, custom paint, cathedral ceilings, central air, private courtyard and attached 2 car garage. All located on quiet cul-de-sac near association pool and jacuzzi. Low asssociation with easy walk to shopping and schools. No mello roos."

asssociation? Is that a ssstudder?



In my opinion, this neighborhood is not very desirable. The properties themselves are spacious and the grounds are well maintained, but you have the high school on one side and a commercial center on the other. You could walk to Heritage Park, but you have to pass in front of the high school to do it. This neighborhood lacks the peacefulness and walkability of most Irvine villages.

Walnut Map

Being a less desirable neighborhood, it would have been a prime target for flippers as properties could be picked up less expensively. It isn't hard to imagine the thought process of the flipper: "Buy a cheap property for no money down, and hold it for a profit. If it doesn't go up in value, who cares, just walk away." Unfortunately, this will probably work.

So here we have another 100% financing deal gone bad. What a surprise.

Posted in House Flips

These Dreams

Aug 21st, 2007 by IrvineRenter 

Heart These dreams go on when I close my eyes
Every second of the night, I live another life
These dreams that sleep when it's cold outside
Every moment I'm awake, the further I'm away

These Dreams -- Heart

Link to Video

Everyone has dreams. We would all like to have unlimited money with no effort on our part -- kind of like buying a home was supposed to be during the bubble...

Today's property is clearly dreaming about the next rally where someone will be foolish enough to pay this WTF price. Of course, the market is moving the other direction, and every moment they are awake, their dream gets farther away.

4 Holly Front 4 Holly Kitchen

Asking Price: $1,119,500IrvineRenter

Purchase Price: $405,000

Purchase Date: 7/18/1996

Address: 4 Holly, Irvine, CA 92612

Beds: 4
Baths: 2.5
Sq. Ft.: 2,850
$/Sq. Ft.: $393
Lot Size: 4,876 sq. ft.
Year Built: 1974WTF
Stories: 2
Type: Single Family Residence
View: Pool
County: Orange
Neighborhood: University Park
MLS#: P575451
Status: Active
On Redfin: 110 days
Unsold in 90+ days

4 Holly YardIt seems that this listing has recently changed to 'Hold Do Not Show' status.  Here is the description from Redfin while it was up, "Beautifully upgraded Parkside home with pool and spa. Home has numerous upgrades including 18inch tile flooring, duel drawer dishwasher, granite countertops, custom cabinets in office, new stairway, new chandeliers, pool redone, new window to capture view of pool. Also, a built-in entertainment center, wet bar, french doors, lifetime warranted cement tile roof, surround sound, putting green, new mantel, new AC, furnace, ducts, & 2hot water heaters. And a master bath 'to die for'"

Sometimes a realtors colloquial manner comes off more uncouth than cultured -- And a master bath 'to die for'



This is the only property for sale in University Park for over $1,000,000. This home is large, and they are asking a high dollars per square foot price. In short, this price is ridiculous (and I am happy to ridicule it.)

Do you get the feeling some of these prices are set because people just really like their homes? These people obviously have no real desire to sell their home, or they would have priced it somewhere in the realm of sanity. It probably is worth over a million dollars -- to them. The problem is that nobody else is going to agree.

Just in case you don't think this price is too high, let's see what you can get of similar size in University Park.

18 Foxglove Front 18 Foxglove Kitchen

Price: $819,000

Irvine, CA 92612
Beds: 4
Baths: 2.5
Sq. Ft.: 2,682
$/Sq. Ft.: $305
Lot Size: 3,200 sq. ft.
Year Built: 1967
Stories: 2
Type: Condominium
County: Orange
Neighborhood: University Park
MLS#: U7002268
Status: Active
On Redfin: 83 days
Largest University Park Townhome: 2682 sq. ft. , 4 bedrooms and 2.5 baths. Pristine condition. Located on cul-de-sac. Vaulted ceiling. Light, bright, open floor plan. Walking distance to schools and stores.



This property is almost as large, it is updated inside, and it is $300,000 less expensive. Hmmm...

30 Oak Tree Lane

Price: $719,900

Irvine, CA 92612
Beds: 4
Baths: 2.5
Sq. Ft.: 2,700
$/Sq. Ft.: $267
Lot Size: 3,000 sq. ft.
Year Built: 1969
Stories: 2
Type: Single Family Residence
View: Park or Green Belt
County: Orange
Neighborhood: University Park
MLS#: S495329
Status: Active
On Redfin: 48 days
Great price for so much square footage. Seller is only the 2nd person to live here. Property needs updating, so bring your client who wants to make the changes for themselves and not live in somebody elses remodeling. Ceilings have recently been scraped, freshly painted and new carpeting installed. All termite work has been completed. Quiet location in University Park, backs to greenbelt, excellant association facilities and Uni High School.



WTFThis property is almost as large, and it is $400,000 less expensive. It needs remodeling, but for $400,000, I bet you could do a fantastic job.

My conclusion: the price of 4 Holly is laughably silly. Therefore, we honor these sellers with our WTF Award!

Posted in House Flips

Like a Rolling Stone

Aug 20th, 2007 by IrvineRenter 

Bob DylanOnce upon a time you dressed so fine
You threw the bums a dime in your prime, didn't you?
People'd call, say, "Beware doll, you're bound to fall"
You thought they were all kiddin' you
You used to laugh about
Everybody that was hangin' out
Now you don't talk so loud
Now you don't seem so proud
About having to be scrounging for your next meal.

How does it feel
How does it feel
To be without a home
Like a complete unknown
Like a rolling stone?

Like a Rolling Stone -- Bob Dylan

Link to Video

One of the strongest arguments for a dramatic decline in house prices is the influx of must-sell inventory on the market. The primary sources will be bank REOs and distressed homeowners on their way to becoming bank REOs. The primary group of people who will lose their houses to bank repossession will be overextended buyers who came in late to the rally. They simply bought too much house, and they will not be able to make the payments, particularly after their loan resets. Most of the REOs we have seen to date fall in this category.


(Mortgage Equity Withdrawal -- From Calculated Risk)

However, there is another group of homeowners who will succumb that we have not seen much of yet: home equity line-of-credit abusers. Southern Californian's spendthrift ways were chronicled in Southern California’s Cultural Pathology. We have speculated many homeowners who may have purchased years ago and should be sitting on mountains of equity are not. Many, many people took the equity out of their homes and spent it. This puts them in the same situation as those late buyers -- too much mortgage and too little income. This is how mortgage equity withdrawals will make the foreclosure problem even worse than most imagine.

Todays property has been featured before: Where are the flippers when you need them?

It is a sad story in many ways. The family that used to own this home purchased in 1990, and they HELOCed themselves into oblivion. I am sure they had their reasons for borrowing so much money, but in the end, they are without a home.

4741 Lindstrom Front 4741 Lindstrom Inside

Asking Price: $699,900IrvineRenter

Purchase Price: $689,000

Purchase Date: 5/22/2007

Address: 4741 Lindstrom, Irvine, CA 92604

Beds: 4
Baths: 3
Sq. Ft.: 2,332
$/Sq. Ft.: $300
Lot Size: 5,550 sq. ft.
Year Built: 1971
Stories: 2
Type: Single Family Residence
View: Park or Green Belt
County: Orange
Neighborhood: El Camino Real
MLS#: P591615
Status: Active
On Redfin: 20 days

From Redfin, "Fixer in great Irvine location. Backs Presley Park; very private yard. Good 2-story floor plan with 1 BR/1 BA downstairs & huge bonus room upstairs. This property needs work, but is a great opportunity for a buyer to customize! It is being sold AS IS with no warranties."



This is definitely a fixer-upper. Remember this video? This place was scary.

This was for sale for $647,000 for months before the repossession, so I don't hold out much hope for the bank getting $699,900.

The pieces are all fitting together as many bubble bloggers have theorized. When we first started making these predictions, many chided us at tin-foil hat wearing Chicken Littles. Well, the sky is indeed falling -- as are home prices.

Posted in House Flips

Home Sales Data for July 2007

Aug 19th, 2007 by zovall 

From the OC Register: “For the month of July 2007, sales for all types of Orange County home sales decreased 19.8 percent. The median sales price did not change. The median is where half the homes sold for more and half for less. Types of homes selling, as well as home value changes, cause the median to change.

 "Change" is based on comparison to same period one year ago.

Median sale price

Sales volume



July 2007

% Change

July 2007

% Change









































Source: DataQuick

Posted in News

Guess who can undercut the builder?

Aug 18th, 2007 by zovall 

Address: 1428 Scholarship, Irvine, CA 92612
Plan: 2AL 1213 sq ft - 2+loft/2
MLS: P555577 DOM: 216
Sale History: none
Price Reduced: 04/16/2007 — $624,990 to $594,990
Current Price: $594,990

Although we've covered Avenue One before, I think this deserves another post. 1428 Scholarship is a brand new home (Plan 2AL) listed by K. Hovnanian (the builder). After a couple months on the market, the builder dropped the price by $30,000. Apparently, it wasn't enough to get this place sold (even in the busy summer season). The property is still on the market 4 months after the price cut.

Before we get to who is undercutting the builder, let's see who the builder is undercutting.

Address: 2475 Scholarship, Irvine, CA 92612
Plan: 2AL(?) 1253(?) sq ft - 2+loft/2
MLS: S497758 DOM: 30
Sale History: $687,469 (?) on 4/5/2006 (from Property Tax Records)
Current Price: $669,000

The builder is severely undercutting the investor that owns 2475 Scholarship. This investor (a RE agent) is currently renting out the unit. The price is significantly higher than what the builder is offering. But wait, it comes "Fully FURNISHED!!" It looks like it is the same floor plan as the unit above but I'm not 100% sure.

So the builder is making it hard for flippers and investors to make money. This is nothing new for Avenue One. Now, let's look at a unit that is going to make it hard for the builder to move their product.


Address: 1442 Scholarship, Irvine, CA 92612
Plan: 2AL 1253 sq ft - 2+loft/2
MLS: P593507 DOM: 10
Sale History: $692,595 (?) on 7/26/2006 (from Property Tax Records)
Current Price: $539,900

This looks to be the same exact floorplan as the two properties above. The price is $130,000 less than the investor flip and $55,000 less than what the builder is asking!

How is this possible? How can someone sell a property for less than the builder? Meet the bank smile This is a Bank Owned property but I don't have the details on the foreclosure. If someone has access to the info, please post it.

Perhaps this unit is priced low to generate interest. If it does sell near this price, it's going to hurt the comps in a big way considering that it looks to have been purchased for almost $700k last year.

Any guesses which property (Builder, Flipper, or Bank) will sell first? And when?

Posted in House Flips

Putting on the Ritz

Aug 17th, 2007 by IrvineRenter 

Fred AstaireHave you seen the well-to-do up and down Park Avenue
On that famous thoroughfare with their noses in the air
High hats and Arrow collars, white spats and lots of dollars
Spending every dime for a wonderful time

Putting on the Ritz — Irvine Berlin

Video of Fred Astaire

Aren’t all houses in Irvine on par with the Ritz-Carlton? Judging by the prices, one would think so.

14 Carlton

Asking Price: $747,900IrvineRenter

Purchase Price: $678,868

Purchase Date: 5/17/2007

Address: 14 Carlton, Irvine, CA 92620

Sales History
Date Price
05/17/2007 $678,868
06/01/2006 $825,000

Beds: 4
Baths: 2.5
Sq. Ft.: 2,193
$/Sq. Ft.: $341
Lot Size: 5,005 sq. ft.
Year Built: 1979Rollback
Stories: 2
Type: Single Family Residence
County: Orange
Neighborhood: Northwood
MLS#: S497260
Status: Active
On Redfin: 31 days

From Redfin, “Corner lot with good curb appeal. Ceramic tile kitchen counter tops and wainscoting in bathroom. This home is located near great shopping centers and schools.”

Note the lack of normal realtor BS.



The owner of the property is listed as Citigroup Global Markets Realty, so I assume this is an REO. It appears as if their loss mitigation procedure is to try to get half of their first second (thanks ocbear!) mortgage back. The asking price is 10% under the original purchase price which was likely the amount of their 80/20 loan. It will be interesting to see how much they actually lose before they sell it.

If they got it at auction for $678,868, then the property is probably not worth much more than that. Of course, at an auction you need to be ready with a cashiers check on the courthouse steps, so that does preclude many buyers, but it doesn’t mean they will get an additional $69,032 either.

Posted in House Flips

Racing Rutherford

Aug 16th, 2007 by IrvineRenter 

Johnny RutherfordThe Texas-raised "Lonestar J.R." (Johnny Rutherford) is one of eight drivers to win the prestigious Indianapolis 500 mile race at least three times: in 1974, 1976, and 1980. He was one of the best of his era.

There is another Rutherford involved in a race. This time it is a property on Rutherford Street in Irvine, and the race is to the bottom...

9 Rutherford Front 9 Rutherford Kitchen

Asking Price: $999,000IrvineRenter

Purchase Price: $1,135,000

Purchase Date: 9/28/2005

Address: 9 Rutherford, Irvine, CA 92602

1st Loan $851,250
2nd Mtg. $56,750
Downpayment $227,000

Beds: 3
Baths: 2.5
Sq. Ft.: 2,200
$/Sq. Ft.: $454
Lot Size: -
Year Built: 2003Rollback
Stories: 1
Type: Single Family Residence
County: Orange
Neighborhood: Northpark
MLS#: S497994
Status: Active
On Redfin: 26 days

From Redfin, "Desirable single-level in a cul-de-sac location has large kitchen with granite counters and SS appliances and separate breakfast area. House has custom built-ins, crown molding and HW flooring in the living areas. Master suite has a generous bathroom and French doors leading to professionally landscaped garden. Two additional bedrooms (one could be office) complete this lovely home. The private back yard has a large patio cover, BBQ and Malibu lights. The community offers pool, spa and gym."



You must admit, this is an eye-popping rollback. If they get their selling price, and they pay a 6% commission, these sellers stand to lose $195,940. I admire that these people have accepted the reality of the market and have decided to get out before this becomes a short sale.

The race to the bottom continues...

Here he comes
Here comes Speed Racer
He's a demon on wheels
He's a demon and he's gonna be chasin' after someone.

Video to Cartoon Trailer

Posted in Price Rollback
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