Irvine Housing Blog

Scorched Earth

Ashton Green - Another Turtle Ridge Flip Gone Bad - UPDATE #3

Originally posted on September 30, 2006

Address: 235 Danbook, Irvine, CA 92603 (Turtle Ridge)
Plan: 1155 sq ft - 2/2.5
MLS: P537174 DOM: 18
Sale History: 04/21/2006: $625,000
Current Price: $619,000

The interesting thing here is that they listed it for less than what they purchased it only 5 months ago! They'll have to go lower if they want it to move. This plan 2 has PLENTLY of direct competition:

• 205 Coral Rose – Plan 4 – 1181 sq ft - $619,000 – 57 DOM
• 121 Jadestone – Plan 4 – 1181 sq ft - $619,000 – 3 DOM
• 250 Coral Rose – Plan 2 – 1155 sq ft - $619,000 – 80 DOM (~125 DOM Before)
• 266 Coral Rose – Plan 2 – 1155 sq ft - $625,000 – 183 DOM
• 127 Jadestone – Plan 4 – 1181 sq ft - $625,000 – 123 DOM (~38 DOM Before)
• 207 Danbrook – Plan 3 – 1185 sq ft - $639,000 – 44 DOM (~160 DOM Before)

Factoring in an estimated 6% to be paid out in commissions, the owner will be in the hole for at least $43,000. OUCH!

UPDATE #1 - October 31, 2006

I just noticed that the price on this home was reduced on 10/24 to $612,500. I don't know if the lower price will bring in (m)any offers considering the competition has also lowered their prices (notice that some have played the relist game):

• 205 Coral Rose – Plan 4 – 1181 sq ft - $599,000 – 88 DOM
• 121 Jadestone – Plan 4 – 1181 sq ft - $609,000 – 34 DOM
• 250 Coral Rose – Plan 2 – 1155 sq ft - $619,000 – 111 DOM (~125 DOM Before)
• 266 Coral Rose – Plan 2 – 1155 sq ft - $615,000 – 29 DOM (~188 DOM Before)
• 127 Jadestone – Plan 4 – 1181 sq ft - $615,000 – 25 DOM (~170 DOM Before)
• 207 Danbrook – Plan 3 – 1185 sq ft - SALE PENDING $639,000 SOLD at $610,000 – 56 DOM (~160 DOM Before)

How low could these go? Many of these sellers have a lot of wiggle room since their homes appreciated so much since they've bought. But our featured flipper at 235 Danbrook unfortunately does not have that luxury. If they sell at the current asking price, their loss including 6% in selling costs will be almost $50,000!

UPDATE #2 - November 15, 2006

We've got another price reduction on this home. On 11/13 the price was reduced to $599,000. The pricing by the competition is still the same as the last update. After 6% in selling costs, a sale at $599,000 will cause the flippers to lose almost $62,000! RiDiCuLouS!

UPDATE #3 - August 14, 2007

Well, 235 Danbrook finally sold about 8 months later on 5/21/2007 for $604,000. The loss was about $57,000 (assuming 6% in selling costs).

Here's what else is going on in the tract:

• 110 Jadestone - Plan 4 - 1200 sq ft - $578,000 - 2 DOM
• 239 Coral Rose - Plan 3 - 1181 sq ft - $580,000 - 73 DOM
• 240 Coral Rose - Plan 4 - 1181 sq ft - $588,000 - 29 DOM
• 127 Jadestone - Plan 4 - 1181 sq ft - $589,000 - 146 (+119 +41 + 129 + 42) DOM
  • Original asking price was $695,000
• 234 Coral Rose - Plan 2 - 1181 sq ft - $594,000 - 193 DOM
• 231 Danbrook - Plan 4 - 1200 sq ft - $599,000 - 82 (+180) DOM
• 217 Danbrook - Plan 2 - 1155 sq ft - $599,000 - 22 DOM
• 227 Coral Rose - Plan 4 - 1181 sq ft - $610,000 - 17 (+153) DOM
• 105 Coral Rose - Plan 4 - 1181 sq ft - $619,000 - 109 DOM
• 100 Coral Rose - Plan 2 - 1155 sq ft - $629,000 - 13 DOM
• 107 Coral Rose - Plan 3 - 1181 sq ft - $648,000 - 21 DOM
• 116 Jadestone - Plan 2 - 1155 sq ft - $659,000 - 109 DOM
• 145 Danbrook - Plan 7 - 1400 sq ft - $659,900 - 39 (+379) DOM
  • Original asking price was $804,995
• 226 Coral Rose - Plan 7 - 1400 sq ft - $669,000 - 49 (+92) DOM
• 103 Jadestone - Plan 5 - 1324 sq ft - $675,000 - 120 DOM
• 142 Coral Rose - Plan 7A - 1445 sq ft - $679,000 - 22 DOM
• 126 Coral Rose - Plan 7A - 1445 sq ft - $689,000 - 120 (+27) DOM
• 129 Jadestone - Plan 5 - 1500 sq ft - $729,000 - 25 DOM

Yes, there really are 18 properties on the market in this complex. I believe all the Plan information above is correct, although some of the square footage numbers are suspect.

The description for 129 Jadestone says: "Rarely on the market, largest floorplan with premium corner location. Highly upgraded with travertine flooring, crown mouldings, gourmet kitchen with stainless steel appliances, granite counters, back splash, custom paint and large master bedroom with gorgeous master bath. Enjoy the many amenities which include pool, spa, BBQ, hiking trails and parks. Model perfect!"

The Plan 5 is the only 3 bedroom and it is 1324 sq ft (not 1500) and it is not the largest. Hopefully the agent corrects this information soon.

Looking at the listings, I noticed that there are a few that continue to chase the market down. In this market, you really need to price aggressively if you want to sell quickly.

Dewey, Cheatem & Howe

Home Sales Data thru 7-25-2007

From today's OC Register: "For the 22 business days ending July 25, sales for all types of Orange County home sales decreased 18.9 percent. The median sales price increased 1.1 percent. The median is where half the homes sold for more and half for less. Types of homes selling, as well as home value changes, cause the median to change."

Source: DataQuick

Greystone Villas - Investment Gone Awry

Address: 963 Somerville, Irvine, CA 92620 (Northwood)
Plan: 1481 sq ft - 3/2.5
MLS: S482981 DOM: 124
Sale History: 1/12/2006: $628,000
10/3/2002: $360,000
9/19/2000: $283,000
4/29/1999: $232,000
Price Reduced: 07/05/07 — $645,000 to $599,980
Current Price: $599,980

This is our third post featuring the Greystone Villas tract (#1, #2). We'll provide updates to those homes but first let's take a look at this one. Here we've got a 3bd/2.5ba Plan B that was purchased for $628,000 ($565,200 loan at 7%) on 1/12/2006 . It was immediately rented out for $2,350/month on 1/20/2006. How negative do you suppose that cashflow is?

It looks like a refinance was done on 7/31/2006 through PMC Bancorp - $536,000 First Mortgage at 1% (teaser rate?) and a $67,000 HELOC. The property was eventually listed for sale on 4/9/2007 for $645,000. A price drop on 7/5/2007 brought the price down to $599,980. If sold at the asking price of $599,980, the investor stands to lose over $64,000 (assuming 6% in selling costs and not including negative cash flow).

Soo.. what's the latest with the 3 bedrooms in this tract? First let's update the older posts:

Update on Post #1: 129 Islington was taken off the market on 10/19/2006.

Update on Post #2: 301 Rathbourne is accepting backup offers and is showing a price of $599,900 (loss of $61,000 assuming 6% selling costs).

• 601 Newcastle sold for $615,000 on 4/12/2007 - 76 DOM (orig at $649,000).

• 135 Islington sold for $610,000 on 3/17/2007 - 202 DOM. (orig at $669,900)

• 161 Islington rented for $2,700 on 4/25/2007. (orig at $724,000)

Currently, these are the 3 bedrooms (same plan) on the market competing with our new feature, 963 Somerville:

• 39 Darlington - $655,000 (Purchased for $680,000 on 8/22/2006)

• 125 Islington - $619,000

• 141 Islington - $594,000 (Bank Owned!)

• 311 Rathbourne - $617,500

141 Islington is Bank Owned and 39 Darlington as well as 963 Somerville could be headed in that direction. The tract high price of $680k compared to the $599.9k sale in escrow represents an 11.7% drop in prices has already occurred.

Holy 2003!

Markets and the Sea