Irvine Housing Blog

Land of the Rising Sun

Bamboozled

Canyon’s Edge - Is it worth more than it was in May 2005? - UPDATE #1

Originally posted November 17, 2006

Address: 29 Shade Tree, Irvine, CA 92603 (Turtle Ridge)
Plan: 1993 sq ft - 3/2.5
MLS: U6603755 DOM: 4
Sale History: 5/13/2005: $1,010,000
06/02/2003 — $701,500
Current Price: $1,150,000

Here we have a detached condo in the Canyon's Edge tract built by Standard Pacific in Turtle Ridge. This home was purchased in May 2005 with 5% down.

I don't have much to say on this one yet. If they get their asking price, they stand to make about $71k after 6% in selling costs. Pretty nice return on their $50,500 investment in 18 months.

Has anyone been inside this tract? It's part of Turtle Ridge but it is completely separated from the rest of the homes in Turtle Ridge which are all off Summit Park. Strange location...

UPDATE #1 - March 26, 2007

Thanks to a tip from Owen in the forums, I've come to realize that this home has been relisted (MLS U7000708) and the price has now been reduced to $1,099,000. Assuming 6% in selling costs, their expected profit is now about $23k. Where did the other $48k go?

Bitter Buyers say William’s Lyin’

Today was a beautiful, blue-sky kind of day, the kind of day that reminds me why I love Irvine so much. My little boy and I played for quite a while at "Bob the Builder Park" (aka, Colonel Bill Barber) as well as a small pocket park in Westpark. But first, on our way over to Bob the Builder park, I couldn't resist making a short detour. I pulled into Columbus Grove and saw the line-up of protest signs along the main thoroughfare, Sweet Shade. I pulled up to the curb, put on my blinkers, gave my boy his Clifford Reading game on his Leapster, and chatted for a few minutes with homeowner Bob Spillar. He was sitting in a beach chair with, at the time I was there, two other men whom he identified as neighbors. I told Bob I was a blogger, writing for a blog on the local housing bubble, and Bob didn't quite seem to get what I was referring to. (First clue, right? Too bad Bob hadn't spent some time here, or over on
Ben's housing bubble blog or on Rich's site...) Bob was very eager to share his story with me. Here it is:

This is their second weekend protesting William Lyon Homes, Inc. He and 17 other buyers of Phase I Lantana homes plan on sticking it out for the foreseeable future, until Lyons makes appropriate restitution. They have clearance from the Irvine police to hold this protest; they are on public land and Lyon has no recourse to remove them. Bob said that Lyon has not tried to make them leave.

Mid-2005 Bob decided to buy one of the homes in Phase I. He closed in May 2006. He received lots of assurances from the salespeople that prices would not drop in future phases. He said that he feels "coerced, manipulated." Bob acknowledges that he should not have signed the contract without reading it in its entirety (no kidding!), however he said the sales team promised him he didn't have to do so. After the purchase, he and his 17 neighbors read "Addendum G" in their contracts which apparently states the standard legalese stuff about this written contract being the only legal agreement, that any verbal agreements not included in the contract would not be considered valid, etc.

So now, Lyon has dropped asking prices significantly in newer phases, and he and the neighbors are hoppin' mad. Bob told me that he put 20% down when he purchased this home - he said that it was a requirement and you couldn't buy the house from Lyon unless you put 20% down. (I don't quite believe this could be true, however this is what he told me). He further told me that he took out a 100k second mortgage to pay for landscaping, etc., and that its rate is going to adjust in August and he is going to be forced to refinance in order to afford his payments. He believes that most of his neighbors also took out seconds that will be adjusting and they are all in the same boat. The whole "I put 20% down but took out a 100k second" just didn't quite sit right with me, but I didn't push it since my boy was itching to get going to the park!

He handed me a copy of the protest letter he and his neighbors wrote, letter to Lyons (new information: here's the back of the petition)as well as a one-page flyer they are apparently giving to would-be new homebuyers who come to check out the models. Take a look: Experience the Lies

In their letter to Patrick McCabe, Project Manager for Lyon Homes in Newport Beach, the neighbors have this to say, "The undersigned phase I residents in the Lantana neighborhood are writing to you today to ask for your consideration to make things right...During the selling process, given the real estate market uncertainties, we had numerous conversations with the sale staff (Nancy, Jennifer, etc) about prices and we were reassured that the home purchase prices would remain stable throughout the development of our community. We believed in the community and you. We understand fluctuations and economics, but a $75,000-$200,000 price reduction? What does that say to your phase I buyers?...Given all the startup problems we endured through the first phase of development, we are asking for William Lyon to consider some type of compensation to all of us. Afterall, when we think of the sub-contractors and laborers that completed work; the quality was average at best. We trusted in you and now feel like we were misled and betrayed..."

So I asked Bob what exactly he wanted from Lyon. He stated that he does NOT want a "refund." He wants Lyon to refinance the Phase I owners into lower-rate loans; he wants a "small stipend" and he wants free upgrades, retroactively. He said Lyon had already met with the protestors and informed them that the contracts they signed were completely legal and they had no intention of giving the homeowners anything they were asking for now.

So I thanked him and drove away, not having the heart to tell this poor, sweet guy that the carnage had just begun and his equity evaporation was just going to get worse over the coming several years. Best of luck to you and your Lantana Phase I neighbors, Bob.

Who is responsible for this mess?

Dream Big

Make me move; no, just let me out!