Jan 21st, 2007
Today's OC Register (Marketplace Page 3) runs a modified version of the same story they ran last weekend. It reads more like a builder's marketing piece than a news article. I wouldn't be surprised if California Pacific PR people had a hand in its creation.
I was really peeved when I read the first version of this article last week. It stated that Bowen Court (Woodbury) and Vientos (Portola Springs) were designed for singles, part-time parents, and gays and lesbians who wanted to hide their true relationship and appear to be just roommates. I'm not kidding. It really said that! Interestingly, today's article says nothing about gays and lesbians. Perhaps I was not the only person who was bemused and dumbfounded by that statement?
"Bartender Shaun Karpow didn't think he could afford to by a house he liked in Orange County, much less Irvine, on his own. He was considering a move to Nevada when a relative told him about a neighborhood in Portola Springs called Vientos, where detached homes are designed for single buyers or a divorced parent who might get the kids on weekends. The homes in the neighborhood range from 990 to 1,405 square feet and are priced from $393,720 to $572,030. Unlike traditional condos and townhouses, buyers own the land the house is on, and there are no shared walls."
"After choosing some upgrades, Karpow, who is single, paid $450,000 for the 1,087-square-foot "OneXM" model and moved in last month."
"Homebuilders, real estate experts and marketers said the Vientos project is rare for Orange County."
"That's quite unique to find detached homes with that small of a square footage, but that does make it more affordable," said Linda Mamet, a vice president of sales and marketing for the John Laing Homes' South Coast Division."
I find it interesting that Brian Martinez, the author of this article, chose to interview competitor John Laing Homes to provide commentary on this development. I visited John Laing's "Sendero" in Portola Springs yesterday at their grand opening, and I also visited Laing's "Four Quartets" when that debuted a few months ago in Woodbury. I found both developments to be ho-hum at best. Many of their floor plans are "carriage-style" with just the garage on the first floor, or just the garage and a tiny study. The kitchens are pretty decent, but the models all felt like upscale apartments to me. I would consider renting one certainly, but I'd never purchase one of these awkwardly-designed townhouses. Sendero's floor plans run from 1,312 to 1,958 square feet, 2-3 bedrooms, and are listed as starting from $532,880 to $657,880.
All things considered, I like the Vientos/Bowen Court 1,405 square foot Model Four a lot better than any of the Laing offerings. I like the way it offers a small courtyard and, in Woodbury's version, the builder even offers to open up a wall of the second single car garage to create a loggia off of the living room. That appeals to my desire to enjoy the "indoor-outdoor California lifestyle." What I don't like about Model Four is the stupid, stupid, stupid placement of the microwave, at knee level, in the kitchen. They really designed this for part-time parents, huh? Guess the architect, David Ko of Angelino Associates, wasn't really paying attention when his kids were in the toddler/preschool age. Visions of my pots and pans or, even worse, my cat, being stuck in that kid-friendly-height microwave would keep me from sleeping at night.
Going back to the brochure (oops, I mean the OC Register article), " 'One model in Vientos has two equally-sized master bedrooms, which can be purchased by two singles,' Ko said."
That was the paragraph that in the previous version of this article, discussed the benefits of such an arrangement for "in-the-closet" homosexuals. I just have nothing at all to say about that selective editing. Good grief.
And finally, "One of the models at Bowen is designed for [part-time parent architect] Ko's situation. Since the buying power of a single parent tends to be low, Ko looked to cut costs wherever he could. So he designed a two-bedroom house that has a half-bath downstairs and only one full bath upstairs, which the parent shares with his or her children on the days they stay there."
That would be Residence Two, which is about 1,030 square feet. Back when Vientos first debuted this model was listed from $500,000. Now it's priced at $445,000.
I am a (almost full-time) single mom. (My son stays with his dad every other weekend.) I do NOT consider my buying power to be all that low. As many readers of our blog already know, I have an MBA and earn $120,000 a year (and will soon earn closer to $130k after my raise next month) in addition to receiving child support every month. I have almost $150,000 stashed in high-yielding CDs from my half of the proceeds of selling our home in January 2006 when we divorced. Given all this, it simply blows my mind that a 20-something BARTENDER paid $450,000 for one of these cramped little units. How the HELL can he afford that much mortgage? Unless mommy and daddy gave him a couple hundred thou as down payment, his monthly payments (including the roughly $1000 per month Mello Roos and HOAs) have got to be close to $3500-$4000! I consider $500,000 to be pushing the top of my sanity limit for a home purchase. And there is no way that ANY of these little units are worth what the builders are asking for them, even after the recent price drops.
Good luck with that creative marketing, friends. Just beware that the majority of the people that I have seen traipsing through your models were moms and dads with little kids. Because whether or not you want to admit it, your little boxes that were not designed for families are still out of reach of most fiscally sane families in Irvine.
Address: 206 Garden Gate, Irvine, CA 92620 (Northwood Pointe)
Plan: 1200 sq ft - 2bd/2.5ba
MLS: S469456 DOM: 22
Sale History: 9/1/2006: $625,000
Current Price: $665,000
This Plan 2 in the Glenneyre at Lanes End tract built by California Pacific Homes in Northwood Pointe was most recently purchased on 9/1/2006 for $625,000 with 5% down. And it went back on the market less than 3 months later. Did someone really buy this home in September 2006 with the intent to flip it?!?! Or could it be a forced relocation or something else?
Anyways, it was relisted at a price $40k higher the day after Christmas. (I'm pretty sure prices did not move up 6.4% since September.) Why $40k? Well if they get their asking price of $665k and we assume 6% in selling costs.. Suprise, surprise, they will have sold their home for the same price they bought it for. Too bad this probably isn't how it's going to play out. For $665k there are a lot of other options in Irvine and in this market the seller will be hard pressed to find a GF.
We're in the process of accumulating tract specific pricing for the various new home neighborhoods in/around Irvine. Sometimes it's nice to know what the exact prices are without having to visit the models or call the sales office up. All the data we've collected is located in our forums here: http://forums.irvinehousingblog.com
Several members have added information they've collected and this makes it easy to see how much prices have come down in some of the new neighborhoods (Over $100k drops in some tracts). If you have info on any of these tracts, I encourage you to share it here. If you feel like creating a thread for a neighborhood that hasn't been posted, please do!
We'll get back to some blog posts on flips/sales soon!
Jan 13th, 2007
Big price reduction from $630,000 to $560,000. Sellers are getting smart or scared, I suppose it depends on your point of view.
Come fly with me, let's fly, let's fly away
If you can use some exotic booze
Once I get you up there where the air is rarefied
We'll just glide, starry-eyed
Come fly with me, let's fly, let's fly
Pack up, let's fly away!!
Come Fly With Me -- Frank Sinatra
Link to Music Video
Isn't this song the ode to the relationship between every Californian and the housing market? Grab that exotic loan and let prices fly to where the air is rarefied. It certainly made everyone starry-eyed.
Asking Price: $630,000
Income Requirement: $157,500
Downpayment Needed: $126,000
Purchase Price: $670,000
Purchase Date: 8/1/2005
Address: 4392 Skylark St., Irvine, CA 92604
Sq. Ft.: 1,493
$/Sq. Ft.: $422
Lot Size: 5,669 sq. ft.
Type: Single Family Residence
Year Built: 1974
Stories: One Level
Area: El Camino Real
On Redfin: 12 days
From Redfin, "Large corner lot with spacious front and backyards. Flowing floorplan with berber carpet, laminated wood floors, recessed lighting, Enjoy the living room with vaulted ceiling and a warm fireplace. Nice grass backyard with paved side yards with brick accents and patio cover. Master bedroom with nice garden atrium. Association pool and parks."
Assuming a 6% commission, and assuming the seller gets their asking price, they stand to lose $77,800.
Since the theme of this post is flying, I thought I would share two more properties with you because of their names. These are actually in Tustin, but Tustin Fields is close to Irvine, and it is southeast of Jamboree. In fact, I didn't realize this was Tustin until Redfin told me so. No matter...
Asking Price: $565,000
Income Requirement: $157,500
Downpayment Needed: $126,000
Purchase Price: $623,000
Purchase Date: 9/7/2005
Address: 319 Flyers Lane, Tustin, CA 92782
1st Loan $497,504
2nd Mtg. $62,188
Sq. Ft.: 1,488
$/Sq. Ft.: $380
Lot Size: -
Year Built: 2005
Stories: Two Levels
Area: Tustin Field
On Redfin: 16 days
From Redfin, "MOVE IN READY, upgraded to the nines, and in IRVINE SCHOOL DISTRICT! Private interior location, Granite countertops, 18x18 porcelain tiles, upgraded base and crown moldings, newer stainless steel appliances, and a tumbled edge travertine marble backsplash. Private patio area, fully landscaped, automatic sprinklers, and slate stone throughout. Custom interior paint throughout entire home, and lots of storage areas. Master suite complete with large walk-in closet and gorgeous master bath!!"
upgraded to the nines but selling in the fives.
This seller is looking at a $91,900 loss after a 6% commission. Actually, this seller is going to lose their entire $63,308 downpayment, and the bank is going to lose $28,592.
Asking Price: $550,000
Income Requirement: $137,500
Downpayment Needed: $110,000
Purchase Price: $600,000
Purchase Date: 11/4/2005
Address: 1 Aviator, Tustin, CA 92782
Sq. Ft.: 1,600
$/Sq. Ft.: $344
Lot Size: -
Year Built: 2005
Stories: Three or More Levels
Area: Tustin Field
On Redfin: 82 days
From Redfin, "* * FORMER MODEL HOME * * SHORT PAY-OFF SALE * * REDUCED! * * HIGHLY UPGRADED * * IRVINE SCHOOL DISTRICT * * 3 BR 3.5 BA * * PLANTATION WOOD SHUTTERS * * GOURMET KITCHEN * * GREAT RM W FIREPLACE & BUILT-IN ENTERTAINMENT CABINET * * PARK VIEW FM GREAT RM & KITCHEN * * X'LNT CORNER LOCATION LOCATION "
*** CAPS LOCK AND ASTERISKS *** X'LNT!
Another ADHD listing with 3 word phrases.
Another gourmet kitchen. Must be the white tile that makes it so special.
What is the deal with the picture of the doll?
This seller is going to lose $83,000 after commissions.
What can you say about this string of $75K to 90K losses? Well, everyone should be a bit less starry-eyed.
Fly me to the moon
Let me play among the stars
Let me see what spring is like
On a-Jupiter and Mars
In other words, hold my hand
In other words, baby, kiss me
Fill my heart with song
And let me sing for ever more
You are all I long for
All I worship and adore
In other words, please be true
In other words, I love you
Fly Me to the Moon -- Frank Sinatra
Link to Video of Bellagio Fountains
Link to Studio Music Video
Originally posted January 8, 2007
Most of our readers are probably familiar with who he is but just in case... Jon Lansner is the business columnist for the OC Register. He also keeps a Real Estate blog that has some great information. Some find him too bullish on real estate and others find him to be too much of a bear. I think he does a pretty good job of staying abreast of and keeping us informed of what's going on in Orange County.
The Orange County Real Estate Forum is a group that meets on the 2nd Tuesday Thursday of every month. I've only been to one meeting and it seems geared towards the small investor. There are people pitching all kinds of investments from all over the country as well as services for the small real estate investor. One of the things I liked about the meeting I attended was that they had some great speakers who give their perspective on various topics. The meetings are open to the public and the cost to attend a meeting is $25 and it takes place at the Double Tree Hotel in the Irvine Spectrum. You'll see all kinds of people (young and old, casually and formally dressed, flippers, contractors, agents, etc).
This Thursday from 7-10pm, the OC Real Estate Forum is having it's monthly meeting and one of the guest speakers is Jon Lansner. His topic is "How Far Down Will Real Estate Slide in Orange County in 2007" and that's got me interested.
Anyways, I'm considering checking the meeting out and thought some of you might be interested as well.
UPDATE #1 - January 12, 2007
Soo.. I attended the meeting and saw and heard a few interesting things. Too bad it cost me $25 and 3 hours of my time :( The first half of the meeting was led by Norm (from www.normandmike.com). Apparently they have a radio show that they've been doing for some time. Norm asked everyone what they wanted out of the monthly meetings. Many of the people that voiced their opinions said they did NOT want speakers that were there to 'educate' and sell them some sort of package. They wanted real education on a number of real estate investment topics. Norm completely agreed with them. Interesting, because one of the first things I see when I click on his site is an advertisement for a Mortgage Accelerator package that he is selling for $1295. I'll give him the benefit of the doubt until I get to spend a little more time figuring out what they are all about.
In between the first and second parts of the meeting, there were about 15 minutes where people had the opportunity to network and get to meet each other. There was also some free time like this before 7pm. I heard 'the regulars' throw around names like Guy Kawasaki and Donald Trump while they were hawking their their flyers (I should have scanned them all and posted them but alas I threw them all away). I heard people talking about how they want real estate to create passive income for them (don't we all want passive income?? ). Others were saying how they want to invest in real estate so they can retire comfortably and take care of their kids.
I'm sure there were some seasoned real estate investors there but there was definitely NO shortage of people who did not know what they were doing. Yet some of these people were buying (or had already bought) with the intent of flipping. A couple guys were talking about how they were working a couple of short sales. One of them admitted he did not know what he was doing and he wanted to sell to someone else (hopefully in the audience). Good luck!
Another guy started investing 20 years ago and paid off a condo that is now generating positive cash flow. He also went on to share that he bought a couple more properties in the last few years (one in Phoenix I think and one elsewhere) that are producing a slightly negative cashflow. He's confident those markets will pickup and so were most of the people in the room.
One gentlemen started 'investing' in 2005. He bought homes in Las Vegas and Temecula. Unable to flip either of them (even below their appraisal price - surprise, surprise), he's stuck paying the mortgages on both now. His experiences sounded like he may have been scammed. He really believed the homes were worth what they were appraised at (most likely by a scammer).
Overall though, I'd have to say the majority of the group (a few dummies disagreed) did not think it was a good idea to buy an investment property in OC at the time. They were interested in foreclosures, out of state investing, tax liens, etc. Although there was definitely some interest in buying a fixer and selling it (IMHO that's just foolish for the inexperienced in today's market).
The second half of the meeting was Jon Lansner speaking about where real estate is headed in 2007. He showed chart after chart of various OC trends (real estate price change, population, etc). It would be nice if he puts them up somewhere. At the end, he had a little survey where he asked everyone what they predict the market will do in 2007. Most believed the market would slide between 0-10% in 2007. When asked what he though, Lansner said when he did the survey himself, his prediction was a 3-4% slide. He felt that the OC economy was very strong. But he was definitely worried about how little the absolute population growth in OC has been lately.
Lansner was definitely trying to stay on the fence in regards to being bullish or bearish in Orange County. He thought the high rises were not a good idea for an investment property but that there are people who enjoy that lifestyle and will pay for that. He joked about how bad the traffic would be over there once they build it all out and that a bridge that Lennar is planning to build (any details anyone?) will probably not do much to alleviate the future traffic there.
All in all, it was a good talk. I'd much rather have preferred to watch a webcast of it from the comfort of my own home. Would I go back? Maybe.. if they had some real educational topics.
Anyone else attend and have comments?
Originally posted January 1, 2007
Address: 3141 Michelson Dr. #405, Irvine, CA 92612 (Park Place)
Plan: Plan B - 1293 sq ft - 2/2.5
MLS: S465221 DOM: 56
Sale History: 02/16/2006: $623,012
Current Price: $650,000
Our first post on the Marquee Park Place continues to get a lot of interest, so I decided to do another one. It seems like this unit is in the same building and on the same floor as the unit we first blogged about (3141 Michelson Dr. #402).
From the tax records, we see that this unit was purchased on 2/16/2006 for about $623,012. On the same day, it was put up for sale on MLS (#U6600114) at a price of $850,000! Easy money? I don't think so.. 177 days later the listing expired even though the price was reduced to $785,000. The flippers waited a couple months before listing again - It was relisted (MLS #S465221) on 11/06/06 at the current price of $650,000. On 12/07/2006, it was also listed as a rental at $2800/month (MLS #S468478).
From what I can gather, it's been vacant the entire time. Those holding costs must be huge (it's been almost a WHOLE year)! Renting it out at $2800/month isn't going to come even close to covering the mortgage on this. Remember, HOA dues themselves are over $1000/month. If you or someone you know is interested in having their luxury high rise lifestyle subsized by someone else, this is a good opportunity to try it out for only $2800/month!
At the current asking price of $650,000, this flipper stands to lose about $12,000 (assuming 6% in selling costs). The true loss will be considerably more when taking into account the holding costs.
UPDATE #1 - January 5, 2007
What? An update already?! Well thanks to a astute comment by Dog on this post, I've found out that the price on this property was reduced by $20,000 on January 4th. The new asking price is $630,000. If sold at this price (assuming 6% in selling costs), this flipper is facing a loss of over $30,000.
$630,000 seems like a lot at first but I'd rather live here than one of the apartment/condo units at Watermarke or Avenue One that are going for the same price:
- 3233 Watermarke Place - 2bd/2ba - 1250 sq ft - MLS #: S469343 - $630,000
- 3335 Watermarke Place - 2bd/2ba - 1137 sq ft - MLS #: S468091 - $635,000
- 3221 Watermarke Place - 2bd/2ba - 1250 sq ft - MLS #: S464778 - $659,000
- 3334 Watermarke Place - 2bd/2ba - 1250 sq ft - MLS #: U6602684 - $699,000
- 2406 Scholarship - 1bd/1ba - 923 sq ft - MLS #: P541743 - $615,000
- 2402 Scholarship - 2bd/2ba - 1213 sq ft - MLS #: S446440 - $654,900
Address: 326 Quail Ridge, Irvine, CA 92603 (Quail Hill)
Plan: 1656 sq ft - 2/2
MLS: S468816 DOM: 22
Sale History: 01/26/2006: $635,000
Current Price: $668,000
Here’s the 3rd flip we've spotted in the Ambridge tract in Quail Hill. This condo was purchased on 1/26/2006 at $635,000 with 10% down. Less than 11 months later and it's back on the market for $668,000. If sold at this price, the owner is facing a loss of about $7,000 (assuming 6% in selling costs).
What I find interesting about this one is that the original owner/flipper bought the condo from William Lyon Homes towards the end of 2005 yet still managed to find someone to pay $80,000 more only 3 months later! Let me know if I'm mistaken but I don't recall it being that hard to buy a home straight from the builder at that time.
What do you think this property would realistically sell for today?