Address: 301 Rathbourne, Irvine, CA 92620 (Northwood)
Plan: 1481 sq ft - 3/2.5
MLS: S470313 DOM: 26
Sale History: 5/25/2005: $625,000
5/17/2001: $310,000
6/30/1998: $190,500
Price Reduced: 01/16/07 -- $684,900 to $649,900
Current Price: $649,000
This is the second flip that we've reported on in the Greystone Villas tract in Northwood. Built by Greystone Homes (now Lennar?), this home originally sold for $190,500 back in 1998. Our seller bought it for more than 3 times that price in May 2005 and it looks like they put $225,000 down.
Why are they selling? No idea, but if it closes before 5/25/2007, they won't realize any of the tax breaks on capital gains. Wait! I suppose to need to make money on the deal for that to matter.
Anyways, on 1/5/2007, the home was listed for $684,900. That would have provided a profit of around $18k (after 6% in selling costs). 11 days later, the price was dropped by $35,000. At the new asking prices of $649,000, the seller will be in the hole by about $14,000 (assuming 6% in selling costs).
These were the sales in the last year for the same plan:
- 963 Somerville - Sold 1/12/2006 - $628,000
- 401 Ridgeway - Sold 6/29/2006 - $636,000
- 39 Darlington - Sold 8/22/2006 - $680,000
- 449 Ridgeway - Sold 9/12/2006 - $640,000
And here's what available for the same plan:
- 601 Newcastle - MLS #:P553200 - $649,000
- 135 Islington - MLS #:S451311 - $614,900 (Originally at $669,900)
- 161 Islington - MLS #:S458167 - $699,000 (Originally at $724,000)
135 Islington is a former model home and it has the lowest price. We'll see if it gets the tract prices to begin sliding.
And this is what is currently
Originally posted October 5, 2006
Address: 27 Maywood, Irvine, CA 92602 (Northpark)
Plan: 3250 sq ft - 5/3
MLS: P513737 DOM: 139
Sale History: 4/22/2005: $1,250,000
3/19/2001: $578,500
Price Reduced: 06/25/06 -- $1,359,900 to $1,329,000
Price Reduced: 08/05/06 -- $1,329,000 to $1,299,900
Current Price: $1,299,000
Here's a Plan 2 in the Brentwood tract built by Warmington Homes in 2001. The flipper bought it in April 2005 and listed it in May 2006 hoping to make around $100,000. It looks like the flipper has loans totaling $1,200,000 on his $1,250,000 purchase! If sold at the current asking price and factoring in 6% in selling costs, he is facing a loss of about $29,000. I just noticed the property is listed as vacant so once you account for carrying costs, the pain is even greater!
UPDATE #1 - January 30, 2007
First of all, I want to mention that this flip was first uncovered by OC Fliptrack. I can't believe I didn't realize that when I featured this flip here in October (especially given that I commented on the original thread at OC Fliptrack!). All I can say is that I apologize and that it wasn't done intentionally. Are we still cool OC Fliptrack?
Now to the update. This home finally closed escrow on January 25, 2007 (241 DOM) at a price of $1,175,000. Assuming 6% in selling costs, the seller probably lost around $145,000! And that does NOT include the carrying costs for having a vacant $1.25mil place for 8 months.
Comments have been purged and reopened. Play nice this time! 
Let's welcome graphrix and his blog, OC Econ 101, to the blogosphere! "This blog will be on the economics of OC and the various industries contributing to the local economy."
He's already got some great posts on OC job growth (and RE related job growth), foreclosures, and of course all the headlines for "housing market" from the OC Register from 1987-1993.
There's already some great stuff there and I'm looking forward to reading more. Check it out!
Verandas, a William Lyon tract in Columbus Square, had their grand opening today. These are single family detached homes (or so they say) in the City of Tustin. They ARE detached but the size of the yard? is similar to many of the detached condos in Irvine.
We stopped by a little after lunch and I was really surprised how many people were out and about looking at homes. Perhaps all the balloons, hot dogs, and Villages of Columbus stamped cookies brought everyone in today. I didn't visit any of the other neighborhoods today as I was primarily interested in what the pricing would be at Verandas. The models at Verandas saw a good amount of traffic (as even finding a parking spot was a little tough). From the looks of it, some people were seriously considering purchasing. Others weren't so pleased.. I overheard some guy say that the floor plan on Model 1 was crap lol 
We took a quick tour through the three models and weren't too impressed. Everything felt cramped even though there was plenty of square footage (1887-2394 sq ft). In general, I like the large kitchen that opens into the great room. None of the models felt like that to me and I'm having a hard time thinking about something positive to say about them. They aren't all that bad, but for a new home my expectations are just different I suppose.
Perhaps the pricing is what is most appealing about this tract. The Plan 1's start at $674,990. That's a pretty competitive price (isn't it?) for the market right now. A quick ZipRealty search of similar homes didn't provide too many results. You can find the rest of the pricing in the Verandas thread on our Forums.
Did anyone else check these (or any other) models out? What did you think?
I found this gem thanks to Saving in LA on Lansner's Blog. Full article at:
OC Register
Here are some snippets:
"The builder, one of the biggest developers in Orange County with 8,000 to 14,000 homes on the drawing board, began circulating letters and meeting with subcontractors earlier this month, seeking cuts that reflect lower home prices, said Jeff Roos, Lennar's Southwestern U.S. regional vice president."
"Lennar's demand is the latest example of how falling home prices are sending ripples through the entire housing economy. The missive is at least the second Lennar has sent out since June seeking price cuts. And industry officials say most homebuilders are pressuring contractors for reductions in future bidding."
" "It's almost like asking your employees after they've done the work … to take a pay cut," said Brad Diede, executive vice president of the California Professional Association of Specialty Contractors, with 500 member companies in the state. "It's kind of an unjust tactic to ask for retroactive concessions." "
While reading the thread about the Bowerman Landfill in Irvine, I saw a post by EvaLSeraphim that mentioned a development called Stonegate to be built just north of Woodbury (across Irvine Blvd). I tried to find more information about this but so far I haven't had much luck.
During my search, I came across the City of Irvine's Zoning Map:
If you haven't seen this yet, check it out! This map is dated 1/22/2007 so that's pretty cool. From looking at this map, you can see that the Landfill is closest to Portola Springs (Planning Area 6).
Address: 45 Nightshade, Irvine, CA 92603 (Quail Hill)
Plan: 1553 sq ft - 3/3
MLS: S469390 DOM: 37
Sale History: 3/31/2005: $647,000
11/26/2003: $438,000
Price Reduced: 01/10/07 -- $709,000 to $685,000
Current Price: $685,000
This is a former model home in the Casalon tract built by John Laing Homes in the village of Quail Hill. The current owners bought this place almost 2 years ago with 10% down. In December 2006 they put it on the market for $709,000. I'm pretty sure they didn't get a good response so a few weeks later they dropped the price by $24,000.
It's also available as a rental (MLS #S469388) for $2700/month (originally at $3000). My guess is that if it sells soon, the price will be pretty close to what they paid for it. If sold at the current asking price (assuming 6% in selling costs), they are looking at a loss of around $3000. And that does NOT include the money they are losing every month while it is sitting there vacant!
You would think that everyone at this point would understand that real estate cannot continue to appreciate indefinitely. But I'm sure there are still tons of misinformed buyers out there. If you come across one, send them this way!
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
11/10/2004: $527,500
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!
