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
Beds: 3
Baths: 2
Sq. Ft.: 1,493
$/Sq. Ft.: $422
Lot Size: 5,669 sq. ft.
Type: Single Family Residence
Style: Ranch
Year Built: 1974
Stories: One Level
Area: El Camino Real
County: Orange
MLS#: S509371
Status: Active
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
Downpayment $63,308
Beds: 3
Baths: 2.5
Sq. Ft.: 1,488
$/Sq. Ft.: $380
Lot Size: -
Type: Condominium
Style: Modern
Year Built: 2005
Stories: Two Levels
Area: Tustin Field
County: Orange
MLS#: S508922
Status: Active
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
Beds: 3
Baths: 3.5
Sq. Ft.: 1,600
$/Sq. Ft.: $344
Lot Size: -
Type: Condominium
Style: Other
Year Built: 2005
Stories: Three or More Levels
Area: Tustin Field
County: Orange
MLS#: P593218
Status: Active
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
10/26/2005: $554,000
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?
Originally posted October 25, 2006
Address: 126 Cherrybrook Lane, Irvine, CA 92618 (Oak Creek)
Plan: 1200 sq ft - 2/2.5
MLS: S463666 DOM: 2
Sale History: 6/16/2006: $615,000
4/18/2003: $390,000
10/8/1999: $220,000
Current Price: $612,000-$639,000
This is a detached (I believe) Plan 1 condo in the Cobblestone tract built by John Laing. It was purchased this summer with 0% down (ok ok, they actually put a whopping $300 down). I'm not sure what the flippers have been doing for the last few months but they just put it on the market a couple days ago. It's listed using range pricing of $612k-$639k. After 6% in selling costs, these sellers will lose anywhere from $14,000 - $40,000 if they get a price in the asking range. To get rid of the home, I think they will have to bring that much money to the table since they don't have any equity in the house.
UPDATE #1 - January 3, 2007
Price Reduced: 12/15/06 — $639,000 to $603,000
If sold at $603,000, the seller (or lender in this case) is facing a loss of over $48,000 (assuming 6% selling costs). I don't think it will sell anytime soon because there is some competition just down the street:
- 146 Cherrybrook Lane - 1200 sq ft - 2/2.5
- Listed on 12/06/2006 at $607,500
- Price Reduced: 12/15/06 -- $607,500 to $605,000
- Price Reduced: 12/19/06 -- $605,000 to $603,000
- Price Reduced: 12/29/06 -- $603,000 to $580,000
- Current Price: $580,000
146 Cherrybrook was purchased on 1/16/2004 for $445,000. The seller is relocating (according to the MLS comments) and I'd imagine that would be some motivation to get this sold soon. They'll still make out with a nice profit. But it looks like our flipper at 126 Cherrybrook will be even more in the hole.
The past few months have been great for the blog. We've been able to post many articles that have generated even more comments. From reading all the comments, it's obvious that there are a lot of Irvine residents that are interested in various topics and communities within the city. We've got a very well informed group here and it would be nice to have a place to discuss all kinds of Irvine Housing related topics. And so the Irvine Housing Blog Forums have been created: http://forums.irvinehousingblog.com/
Check it out and post whatever you want related to Irvine Housing (ie your own reports on visits to Models, updates on pricing at various tracts, questions regarding various tracts and villages, the future Irvine villages, etc.). If things pick up there, we can add categories later. Right now, this should suffice as far as facilitating communication between all of us.
Ultimately, we'd like to have comments from Blog posts integrated into the forum discussions. If anyone is experienced in PHP, Wordpress, and Vanilla and wants to take this on, let me know!
Discuss here
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