Ridin 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.
Asking Price: $499,000
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: 2
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?
See 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.
Old 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.: 1,058
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!!”
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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?
Well, 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?
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?
|
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%
|
Originally posted March 22, 2007.
He's back. The same house; the same price. Still no chance...
Asking Price: $2,299,500
Purchase Price: $2,050,000
Purchase Date: 5/23/2006
Address: 29 Mahogany Drive, Irvine, CA 92620
Beds: 7
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.
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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!
