Hi Fellow Bubbleheads,
No, I didn't disappear into the void, just been busy with, like, life and stuff. Been watching the housing market of course, but mostly via trolling on my fave blogs and not by doing my out and about stuff. Some of my previous out and about visits to open houses and model homes were on my lunch hour...I'm happy to report that my job, which I LOVE LOVE LOVE, has been keeping me pretty busy for the most part so this hasn't been as feasible. 'sokay, tho'. When you really enjoy what you do, and like your coworkers, working hard isn't such a bad thing. (Especially when you make $120k a year!!!)
So I just had to check in to let you know that I got an email from my good friends over at Paloma at Portola Springs today. They wanted me to take an online survey, and if I was one of the first 100 respondents, I'd get a $5 Starbucks gift card.
Well, since I didn't open up this email til after dinner (7pm), I figured there'd be no way I'd get that gift card. However, I just LOVE giving people my opinion (imagine that?) so I dove into the survey nonetheless.
They wanted to know why I hadn't bought yet ("priced out" was my pick), how much I liked the different pictured floor plans and pictures, among other things like my annual income and number of adults and kids in my family. What I interpreted from the survey was a suspicion that they're planning on redesigning their models based on survey feedback (...did you like the furnishings in this picture?)
Uh, guys, your models are just lovely. I told you this already! Listen to mama!
It's the prices, stupid. Three quarters of a million dollars for a two-bedroom condo that also comes with bitingly high mello roos and HOAs? Come on! I'm too damn smart to do that to myself!
I'll try to do another out and about really soon, I swear!
Have a great day and BE PATIENT! Springtime is going to bring us a FASCINATING economic story to watch and talk about.
Update 12/01/06: I forgot to mention that I, in fact, was awarded one of the 100 Starbucks gift cards! I was surprised; but then, maybe not so surprised given the crash we are experiencing.
Garland Park is a tract built from 2004-2006 by William Lyon Homes in the village of Woodbury. These condos have a bit more privacy than the other William Lyon condos at Lombard Court. There are four models ranging from 1,355 - 1,971 sq ft:
- Residence 1: 1,355 sq ft - 2bd/2.5ba
- Residence 2: 1,737 sq ft - 3bd/2.5ba
- Residence 3: 1,878 sq ft - 3bd/3ba
- Residence 4: 1,971 sq ft - 3bd/2.5ba
In Garland Park, there are currently SIX plan 1's listed for sale in MLS. 4 of them are listed by flippers:
Address: 199 Wild Lilac, Irvine, CA 92620 (Woodbury)
MLS: S463131 DOM: 39
Price Reduced: 11/24/06 -- $579,900 to $565,000
Price Reduced: 11/25/06 -- $565,000 to $554,900
Current Price: $554,900
Address: 126 Chantilly, Irvine, CA 92620 (Woodbury)
MLS: S464403 DOM: 28
Current Price: $559,000
Address: 124 Chantilly, Irvine, CA 92620 (Woodbury)
MLS: S464852 DOM: 30
Current Price: $579,500
Address: 181 Groveland, Irvine, CA 92620 (Woodbury)
MLS: S444308 DOM: 172
Price Reduced: 07/17/06 -- $604,900 to $589,900
Current Price: $589,900
Adding to this inventory is the builder who is trying to unload 2 more of the same plan:
Address: 188 Guinevere, Irvine, CA 92620 (Woodbury)
MLS: S464397 DOM: 28
Prior Listing: $580,990 - 41 DOM
Current Price: $574,990
Address: 180 Guinevere, Irvine, CA 92620 (Woodbury)
MLS: S464399 DOM: 28
Prior Listing: $619,990 - 27 DOM
Current Price: $599,990
It looks like the flippers for the most part are lowering prices ahead of the builder. But the scenario could quickly change into one similar to that at Avenue One.
Address: 191 Streamwood, Irvine, CA 92620 (Northwood)
Plan: 854 sq ft - 2/1
MLS: S453757 DOM: 102
Sale History: 7/14/2005: $353,000
1/27/2000: $112,000
Price Reduced: 9/06/06 — $369,000 to $365,000
Price Reduced: 10/26/06 — $365,000 to $359,000
Current Price: $359,000
This Plan F? in the Irvine Springs tract in Northwood was purchased in July of 2005 and placed back on the market about 1 year later. The seller bought it with 10% down and listed it at $369k knowing that they would lose money on the deal after selling costs. A couple of small price reductions later, and this flip is going to be losing at least $15,000 (after 6% in selling costs).
There is also a similar model Pending Sale at $345,000 located at 112 Streamwood.
Address: 213 Lonetree, Irvine, CA 92603 (Turtle Ridge)
Plan: 1790 sq ft - 3/2
MLS: L20117 DOM: 203
Sale History: 9/13/2004: $750,000
9/11/2003: $502,000
Price Reduced: 06/01/06 -- $939,000 to $929,000
Price Reduced: 07/13/06 -- $929,000 to $879,000
Price Reduced: 08/15/06 -- $879,000 to $849,000
Price Reduced: 11/01/06 -- $849,000 to $810,000
Current Price: $799,000 - $810,000
This Plan 5 in the Whispering Glen tract built by Shea Homes in Turtle Ridge was purchased in September 2004 with 100% financing. I wish I could find out what the original purchase price for this property was in 2003. Thanks to our visitor, Westpark, we know the original owner probably purchased in phase 1 and made a nice profit. The current owners will not be so fortunate.
The current owners put the property back on the market about 18 months after they purchased it. They were hoping to make over $132,000 this past April with the initial asking price of $939,000. In June, they also tried to rent the place out for about $3000/month. I don't think they were successful as the listing says this place is currently vacant.
If they had originally listed it at $799,000 they probably would have found a GF during the summer. If sold at the current asking price of $799,000 and assuming 6% in selling costs, the sellers stand to make a profit of about $1,000! But if the property has been vacant since June, there's probably another $23k in mortgage expenses they've had to pay.
Here's what else is available in the Whispering Glen tract:
- 211 Lonetree - Plan 1 - 1500 sq ft - $739,500 - 33 DOM
- 123 Roadrunner - Plan 1 - 1500 sq ft - $724,000 - 52 DOM (~148 DOM Before)
- 114 Roadrunner - Plan 3 - 1589 sq ft - $799,000 - 5 DOM
- 28 Gingerwood - Plan 3 - 1600 sq ft - $824,999 - 126 DOM
- 111 Roadrunner - Plan 3 - 1600 sq ft - $799,000 - 176 DOM
- 236 Lonetree - Plan 5 - 1800 sq ft - $925,000 - 45 DOM
- 124 Roadrunner - Plan 5 - 1800 sq ft - $957,000 - 33 DOM
It's amazing how the other Plan 5s are listed for over $100k more. Our seller is motivated and will likely continue putting pressure on the this tract to lower their prices.
Spotting flips has become a little more difficult lately. Many of the flips featured on this blog have been taken off the market. If they come back, we'll definitely post about them. A few of the featured flips are accepting backup offers so hopefully we'll find out soon if they sell. In the meanwhile, we'll keep searching for flips and blogging about them.
Take a look at how fast inventory has been coming off the market:
Here's the link to the article: Orange County Business Journal
The link currently works but when I tried to access it from my email, it was asking me to pay. If you search for it in Google News, it should come up. But here's the whole text anyways:
Posted date: 11/13/2006
Standard Pacific, Shea Out of Condo Projects
REAL ESTATE: Slowing market, lawsuits are factors
By Mark Mueller
Orange County Business Journal Staff
 |
| 2851 Alton: Shea pulled out of 171-condo project |
Standard Pacific Corp. and Shea Homes, two of Orange County’s largest homebuilders, have backed out of separate plans to build a combined 615 condominiums in Irvine.
It’s the first big example of homebuilders walking away from condo projects in the Irvine Business Complex, the 2,800-acre office and industrial area near John Wayne Airport, since the housing market began slowing earlier this year.
Irvine-based Standard Pacific had planned to build five condo buildings with 444 homes at 2323 Main St. The 10-acre site is at the corner of Main Street and Von Karman Avenue and is home to shoemaker American Sporting Goods Corp., which is moving to Aliso Viejo.
Shea Homes, part of Walnut-based J.F. Shea Co., was looking to build 171 condos at its 2851 Alton Parkway project at the corner of Alton Parkway and Murphy Avenue.
Both builders stepped back from the projects in recent weeks, according to real estate sources.
The condo projects still could move ahead under different owners.
Standard Pacific no longer is under contract to buy the Main Street land. The property’s owners are said to be in talks to sell the land to someone else.
Shea’s Alton Parkway project has shifted hands to Costa Mesa-based homebuilder Warmington Group, according to sources.
The moves by Standard Pacific and Shea come amid a sluggish housing market that has some builders looking to shed land they once planned to build on.
Local home sales in the past six months have been off roughly 30% from a year earlier.
Given the housing slowdown, building in the Irvine Business Complex isn’t as attractive as it used to be.
Homebuilders there face opposition from area businesses worried about homes near their operations and neighboring cities concerned about traffic.
About 40 housing projects totaling about 14,000 homes are on the books for the Irvine Business Complex. Roughly half of those projects have been approved or are under construction.
The 2323 Main St. project, which received City Council approval in August, has seen the brunt of the opposition as of late.
Drug maker Allergan Inc., one of the biggest businesses in the area, and Deft Inc., a maker of finishes and coatings, have sued Standard Pacific and the city to try and halt development.
Newport Beach and Tustin joined the litigation over 2323 Main St., out of concern for increased traffic and environmental issues stemming from the condo development.
The two cities also have filed a separate lawsuit against a 290-unit apartment project planned at the intersection of Jamboree Road and Alton Parkway by Avalon Bay Communities Inc. of Newport Beach.
Officials from Standard Pacific and Shea declined to comment on their decisions to back away from the two projects.
The uncertainty surrounding the lawsuits were a likely factor, along with questions about the demand for homes, sources said.
Another factor that could be weighing on developers: increased development fees in the Irvine Business Complex.
They now stand at about $42,000 per home to pay for road and other improvements in the area.
For the homes that were planned at 2323 Main St., that would mean a city bill of $19 million, about 20% higher than a year or so ago.
Standard Pacific and Shea have been among the county’s most active homebuilders. The two sold a combined 824 homes here last year, most at traditional housing developments.
Each has had mixed results with redevelopment projects.
In August, Shea Homes pulled out of early plans to build a 573-home development in Santa Ana that included a 24-story condominium tower. The company reportedly withdrew its proposal due to rising construction costs and a desire to focus on low-rise homes.
And in Los Angeles, Standard Pacific recently backed out of a $34 million condo conversion project near Union Station after slow sales. The homes are being turned back into apartments.
Address: 8 Del Azul, Irvine, CA 92614 (Westpark)
Plan: 1139 sq ft - 2/2
MLS: R71271 DOM: 15
Sale History: 9/6/2005: $625,000
6/10/2004: $570,000
1/29/2002: $318,000
Prior Listing: 7/17/06 — $719,000 (33 DOM - MLS R67231) - Reduced to $684,000
Prior Listing: 8/19/06 — $683,900 (16 DOM - MLS R68644)
Prior Listing: 9/4/06 — $683,000 (16 DOM - MLS R69211)
Prior Listing: 9/20/06 — $683,000 (21 DOM - MLS R69875)
Prior Listing: 10/12/06 — $683,000 (15 DOM - MLS R70714) - Reduced to $667,000
Price Reduced: 11/09/06 — $667,000 to $645,000
Current Price: $645,000
I believe this is a detached 2bd/2ba SFR home in the Bogatta tract in Westpark. It's hard to tell from the pictures whether it is detached or not but for the price, it better be! Anyone know who the builder was?
Here we've got another buyer that purchased near the peak in the fall of 2005. 10 months later and the property is back on the market. The relisting game is in high gear on this property. A buyer who comes across this property on Zip might think it's been on the market for only 15 days, but when you add up all the DOMs for the expired listings, you'll see that it's been about 116 days!
The initial asking price of $719k would have netted the flipper about $50k. That hope disappeared pretty quickly as they had trouble luring a GF. It looks like the home went into escrow during the first listing but perhaps the buyers got skittish and the escrow fell through. After that, the strategy was to relist the home 4 MORE TIMES AT THE SAME PRICE OF $683,000! Now how does that make sense?
The current asking price of $645k is $74,000 lower than the initial asking price of $719k. An asking price of $645k back in July would have made a sale much more likely. They've just been chasing the market down for the last few months.
If sold at $645k, the seller will lose about $18,700 (after 6% in selling costs). The actual loss will be even higher because the property has been vacant since at least 7/17/2006. I was only able to find one loan on the property for 75% of the purchase price. The private remarks on the listings say that the seller is very motivated and is relocating. If these things are true, then lower the price and get rid of it!
One last interesting thing I've found is that the prior flipper (who bought on 6/10/2004 for $570k and sold on 9/6/2005 for $625k) purchased the home with 100% financing. This prior flipper made $17,500 (after 6% in selling costs) in 15 months using someone else's money. The actual profit was probably less because they used it at a rental and almost all rentals purchased in Irvine in the last few years are cash negative. This prior flipper was lucky to have gotten out!
Address: 77 Canyoncrest, Irvine, CA 92603 (Turtle Ridge)
Plan: 1275 sq ft - 3/2.5
MLS: S460156 DOM: 47
Sale History: 5/27/2005: $759,000
Current Price: $829,000
Here we've got a Plan 3 detached condo in the Chantory tract built by California Pacific Homes in Turtle Ridge. It was purchased about a year and a half ago with 10% down. Assuming 6% selling costs, the sellers stand to make a $20k profit!
In this case, is the potential reward of $20k worth the risk? Don't housing prices always go up? Who cares if you only plan on living in the house for a year or two. Don't rent, just buy!
Anyways, let's see what other Plan 3's are currently available:
- 137 Canyoncrest - $769,000 (originally $795,000) - 95 DOM
- 82 Clouds View - $798,000 - 51 DOM
Address: 11 Remington, Irvine, CA 92620 (Northwood)
Plan: 1016 sq ft - 2/2.5
MLS: S459567 DOM: 49
Sale History: 1/31/2006: $440,000
4/22/1999: $160,000
Price Reduced: 10/04/06 — $445,000 to $434,900
Price Reduced: 10/10/06 — $434,900 to $424,900
Current Price: $424,900
This Plan E in the Horizons tract in Northwood was purchased at the end of January 2006 and placed back on the market about 8 months later. The flipper bought it with 100% financing and originally listed it just a tad higher than their purchase price. The reductions came pretty quick initially and now the this seller will definitely be under water. Check out the pictures! Unfortunately, it doesn't look too appealing (at least to me). That will make it just that much harder to unload.
Since our flipper purchased this home with 100% financing, they will have to come up with a nice sum of money (over $40k assuming 6% selling costs) to get out of this property. Or maybe the lender will have to take the hit on this one.
Address: 108 Coral Rose, Irvine, CA 92603 (Turtle Ridge)
Plan: 1398 sq ft - 2/2.5
MLS: S445098 DOM: 150
Sale History: 3/31/2005: $619,990 ??
Price Reduced: 08/23/06 -- $750,000 to $725,000
Price Reduced: 10/06/06 -- $725,000 to $689,000
Price Reduced: 10/13/06 -- $689,000 to $669,000
Price Reduced: 11/03/06 -- $669,000 to $595,000
Current Price: $595,000
MLS Description: CONDO GIVEAWAY! THAT'S RIGHT $595,000. GORGEOUS MODEL HOME BY SHEA BUILDERS. 2 BD, 2.5 BA. ALL THE GOODIES AND HAS A VIEW. WAS PRICED AT $750,000, AT $669,000----AND NOW YOU NAME THE PRICE!
This is a Plan 7 in the Ashton Green tract in the village of Turtle Ridge. So what's going on here? Your guess is as good as mine! Let me tell you what I've found so far:
- No prior sales history in Zillow or the Title database
- The last plan 7 (actually a 7A which had 1426 sq ft) sold for $815,000 on 5/24/2006 - an all time high for this tract
- Property taxes are listed as UNPAID
- Title lists the owner as "SHEA HOMES LTD PARTNERSHIP" and thus no loan information
I actually found an old listing in MLS (P422498) that shows the property listed by Shea Homes and sold to a buyer for $619,990 on 3/31/2005. The agent representing the buyer in that transaction is the same agent that is listing the property now. **IF** we assume the MLS info for the purchase is correct, then this flipper will lose $60,690 (assuming 6% in selling costs) if they sell at $595,000! They are selling for LESS than what they bought the property for FROM THE BUILDER!
Could Shea possibly still own this home or is the title information just not accurate? Is the seller in default? Why are the prior year's taxes still unpaid? Is the 'low' price an attempt to generate offers after probably receiving none for the last 5 months?
