Ebony and ivory live together in perfect harmony Side by side on my piano keyboard, oh lord, why dont we? We all know that people are the same where ever we go There is good and bad in evryone, We learn to live, we learn to give Each other what we need to survive together alive.
First Mortgage $672,000 HELOC $168,000 Total Debt $840,000
Beds: 4 Baths: 2.5 Sq. Ft.: 2,621 $/Sq. Ft.: $284 Lot Size: 5,564 sq. ft. Type: Single Family Residence Style: Contemporary Year Built: 1974 Stories: Two Levels Area: Walnut County: Orange MLS#: S499486 Status: Active On Redfin: 105 days Unsold in 90+ days
From Redfin, "BANK SAYS. .SUBMIT!! LARGEST MODEL W/ CUSTOM POOL, SPA, SWIM UP BAR, FIRE PIT, KID'S PLAY POOL, COVERED PATIO. CUSTOMIZED W/ CEASAR STONE COUNTERS, DESINGER TILE BACKSPLASH, CERAMIC GLASS COOKTOP, BUIT-IN FRIDGE & MORE IN KITCHEN. MASTER SUITE W/ CROWN MOLDING, TRAVERTINE COUNTERS & DUAL SINKS, OVERSIZED SPA TUB SURROUND. .. FAMILY ROOM W/ FIREPLACE. BONUS ROOM. .. BAMBOO FLOORS DOWNSTAIRS, 6' BASEBOARDS, DESIGNER PAINT, SCRAPED CEILINGS. SHORT SALE SUBJECT TO BANK APPROVAL."
Another ALL CAPS description... {Sigh}
BANK SAYS. .SUBMIT!! -- We are your masters. You must submit an offer. Save our Christmas bonuses...
.
.
So how much is the bank going to lose? If they get the asking price, and if there is a 6% commission, the total loss is $139,700.
I know we have stated this before, but it bears repeating (pun intended): 20% downpayments will become the standard again. What lender is going to be willing to loan the remaining 20% given all the losses we are seeing on second mortgages? The credit crunch is going to get much worse before it gets any better.
The main reason I believe we are in for a harder landing (prices dropping below the 160 gross rent multiplier breakeven for an owner occupant) is because nobody has saved the 20% downpayments, and no lenders are going to be willing to loan this 20% or any portion thereof.
Over the last 4 or 5 years, nobody needed to save for a downpayment because 100% financing was available. People respond to incentives, and they were incentivized not to save. Savings must come from income, not from a HELOC on another property.
Until prices drop low enough for entry level buyers to come up with a 20% downpayment, and until people actually start saving for this amount, we will not find a bottom. Without entry level buyers, the whole chain of move ups grinds to a halt. This is why sales are so dismal, and it is also why prices will continue to drop precipitously.
Food for thought on the weekend...
It appears there are houses in hell.
So ends another week at the Irvine Housing Blog. I hope you have had a good time with us. We will bring you more next week as we continue chronicling ‘the seventh circle of real estate hell.’ Have a great weekend.
This song goes out to my new blog helper, Brittany, who has been emailing me great properties to profile and providing me with mortgage data.
Thank you...
You see my problem is this I'm dreaming away Wishing that heroes, they truly exist I cry, watching the days Cant you see I'm a fool in so many ways But to lose all my senses That is just so typically me Baby, oh
Oops! I profiled another 2004 rollback -- an REO no less. I would make some comment on the line "Can't you see I'm a fool in so many ways," but I will just let it go...
First Mortgage $476,000 Second Mortgage $119,000 Dowmpayment $0
Beds: 3 Baths: 2.75 Sq. Ft.: 1,638 $/Sq. Ft.: $360 Lot Size: - Property Type: Townhouse, Attached Year Built: 1999 Stories: Two Levels Area: Out Of Area County: Orange MLS#: H07158310 Status: Active On Redfin: 12 days
From Redfin, "Model-like condition, Immaculate, End unit, two bedrooms upstairs-like suites, one bedroom & 3/4 bath downstairs, beautiful new wood floors, new interior paint, new carpet, tile entry, fire place in livingroom, formal dining room, indoor laundry, brand new stove, soaring high ceiling, fenced patio, two car attached garages-direct access, walk in closet, gated cummunity w/ giant community pool & spa, children's play ground, Sheridan Place at corner of portola & jamboree, make all & any offers!!"
cummunity -- I won't go there either...
.
.
So how much will the lender lose on this one? If they manage to get their asking price (doubtful) they will lose the commissions plus a few bucks. No big deal. The real story is the depth of this rollback. The REO price was 20% off a 2004 price. Let that sink in a moment...
Conventional wisdom is that we are 20% off the peak of Spring/Summer 2006. When we start seeing prices 20% off 2004, how low will we go?
I dreamed I had a good job and I got well paid. I blew it all at the penny arcade. A hundred dollars on a kewpie doll. No pretty chick is gonna make me crawl.
Get on a TWA to the promised land. Every woman, child and man Gets a Cadillac and a great big diamond ring. Don't you know you're riding with the king?
This song reminds me of all the people who took out liar loans to buy houses in Irvine. They dreamed they had a good job and they were well paid. They dreamed their house would take them to the promised land of Cadillacs and diamond rings, but, of course, they end up selling at a loss. A sad and repetitive story.
Beds: 3 Baths: 2 Sq. Ft.: 1,723 $/Sq. Ft.: $394 Lot Size: 6,300 sq. ft. Type: Single Family Residence Style: Ranch Year Built: 1969 Stories: One Level Area: El Camino Real County: Orange MLS#: S512070 Status: Active On Redfin: 4 days
From Redfin, "Nicely upgraded single story , detached home in The Ranch ! Remodeled kitchen w, maple cabinets and corian counters, Large sunny great room , scraped ceilings, dual pane windows, remodeled baths , newer roof. Check out the attic and see the potential!!!!! Storage galore or could be extra bedroom. "
potential!!!!! Five exclamation points worth. Ummm, if it is nicely upgraded, hasn't it reached its potential?
.
.
Another day, another 2004 rollback. Today's seller stands to lose $60,740 on their 2004 purchase after commissions. With all these 2004 rollbacks, what does it say about those hoping for a profit on their 2005 and 2006 purchases. They are out there trying. Good luck.
Recently, I went through many of the old posts on the blog to look for properties to update. I kept finding the same two things: 1. Properties with minor price reductions chasing the market down, and 2. Properties taken off the market without selling.
Think about what that says about the true market inventory. During the rally, everyone who put their house for sale ended up selling it. There were no sellers unable to get their asking prices. There was no "overhead supply." In today's market, the inventory numbers on the MLS do not represent the true number of potential sellers in the marketplace because there are so many sellers who have given up.
If there was even a small amount of sales activity or price appreciation, these sellers would relist their houses and add their stealth inventory to an already overbloated inventory number. So when you look at the dismal numbers for "months of inventory" on the market, consider that the numbers are much, much worse that the statistics show. If you don't believe me, go through the old posts on this blog and see for yourself. It is hard not to reach the same conclusion.
Hold it right there, your attention folks We came here - to fulfill your hopes But you better WATCH OUT, it might get ugly Cause you my friend are beginnin to bug me So here's a little smack, goin back to the grill again Hit you in the hat like Skipper did Gilligan So get back, before I snap like a Kit Kat And pop you in the mouth, quicker than a Tic Tac Bif bam BOOM like a Batman fight scene You defeatin U.D. that was a pipe dream Kickin you around like a hackeysack With the beats and the raps that be action packed I'm ready to go, I got my foot on the petrol And if you didn't know I steal the show like a klepto I grew up, with the love for rap But this is combat and you're about to get smacked
Today's seller got smacked by their property on Sumac. This isn't the first property we have profiled from this neighborhood. Anyone remember the Sumac Attac?
Beds: 3 Baths: 2 Sq. Ft.: 1,500 $/Sq. Ft.: $373 Lot Size: 5,000 sq. ft. Type: Single Family Residence Style: Contemporary Year Built: 1972 Stories: One Level Area: Walnut County: Orange MLS#: S511568 Status: Active On Redfin: 8 days
From Redfin, "BEAUTIFUL, LIGHT & BRIGHT SINGLELEVEL HOME ON A SINGLE LOADED ST. IN A VERY DESIRABLE AREA OF IR. W/ walking distance to schools, parks shopping & freways. This contemperary & cute house is what U R looking for. Lots of CUSTOM Touches Thur-out and a great backyard with fruit trees, large patio cover. Wonderful Association Aminities of College Park area W/ Clubhose+ pool & spa just at the end of the steert. Its a real doll house you can call it HOME. "
"cute house is what U R looking for" and a big loser is what I R looking for.
"Its a real doll house you can call it HOME." Can someone translate that for me? Beyond the poor grammar, is there some kind of secret realtor code when they mention doll houses? Perhaps that means it is a tiny POS?
.
.
Today's seller stands to lose $63,694 after a 6% commission. Actually, the bank will eat this one because of the Neg Am refi, but, this is a substantial loss on a 2004 purchase.
This is a typical HELOC implosion. Remember when the bulls were claiming everyone in Irvine is sitting on mountains of equity? Us bears claimed people took out their equity and spent it, and these people would end up in foreclosure. In one sense both camps were right. There are a lot of financially prudent Irvine residents; however, there are enough like today's sellers to smack down prices.
Since our theme today is smacked, and we are in the rap genre, I have another one for you...
I feel you creepin', I can see you from my shadow. Wanna jump up in my Lamborghini Gallardo. Maybe go to my place and just kick it, like Taebo. And possibly bend you over. Look back and watch me smack that, all on the floor, smack that, give me some more, smack that, 'till you get sore smack that, oooh. smack that, all on the floor, smack that, give me some more, smack that, 'till you get sore, smack that, oooh.
When you see the Southern Cross For the first time You understand now Why you came this way 'Cause the truth you might be runnin' from Is so small. But it's as big as the promise The promise of a comin' day. So I'm sailing for tomorrow My dreams are a dyin'.
We don't have many properties on water in Irvine. There are two man-made lakes in Woodbridge, and there are some units on these lakes. When I saw the pictures for this unit, it got me thinking...
Anybody want to go sailing?
it's not far down to paradise At least it's not for me And if the wind is right you can sail away And find tranquility The canvas can do miracles Just you wait and see Believe me
It's not far to never never land No reason to pretend And if the wind is right you can find the joy Of innocence again The canvas can do miracles Just you wait and see Believe me
Sailing Takes me away To where I've always heard it could be Just a dream and the wind to carry me And soon I will be free
Would you like to feed the ducks off your patio? I think it would be great.
I like this complex. It isn't very practical if you have small children, but it looks peaceful, and the close proximity to water is always desirable.
Price: $748,600
20 Southwind Irvine, CA 92614 Beds: 2 Baths: 2 Sq. Ft.: 1,930 $/Sq. Ft.: $388 Lot Size: - Type: Condominium Style: Contemporary/Modern Year Built: 1983 Stories: Split Level View(s): Lake, Has View, Water Area: Woodbridge County: Orange MLS#: S510180 Status: Active On Redfin: 18 days Completely updated architechural waterfront beauty!Features include maple wood flooring in living rm, den/office, kitchen and dining room. Matching wide-blade plantation shtrs. New white kitchen cabinets, black Eurostone countertops, stainless steel appliances, stainless steel sinks. Recessed lights. Cust. living rm fireplace. Totally remodeled bathrms w/ cust. cabinets, pedestal sinks, custom flrs. Designer carpeting. Huge master w/ retreat & double-sided fireplace. Water views from all major rms!!
OK, we have a street named Southwind, we have the song southern cross, the artist Christopher Cross, and finally Christopher Cross's song Ride Like the Wind. We have come full circle...
And every Saturday we work in the yard Pick up the dog do Hope that it's hard (whaf whaf) Take out the garbage and clean out the garage My friend's got a Chrysler I've got a Dodge We're just ordinary average guys Ordinary average guys
Today's featured property is extraordinary in its ordinariness. Another home in Irvine selling for a loss. This is no longer the exception, it is the rule.
Beds: 3 Baths: 2 Sq. Ft.: 1,440 $/Sq. Ft.: $431 Lot Size: 4,800 sq. ft. Type: Single Family Residence Style: Contemporary Year Built: 1977 Stories: One Level Area: Woodbridge County: Orange MLS#: P604325 Status: Active On Redfin: 29 days
From Redfin, "Beautiful 3 bedroom 2 full baths, 1440 Sq Ft, single story home in highly desireable Woodbridge area. Very Quiet, Inner loop location. Remodeled kitchen with newer appliances. Newer concrete tile roof. Very convenient location for shopping, entertainment and excellent schools. Very private back yard with a covered patio. Great woodbridge association ammenities with low HOA Dues ($69.00) and NO MELLO ROOS. PRICE REDUCED TO SELL! Not a short sale."
Can you find the misspelled word? No description on the MLS is complete without one.
.
.
Today's seller stands to lose $102,200 after a 6% commission, if they get their asking price. An ordinary house and an ordinary seller taking what has become an ordinary $100K+ loss.
Free eCourse Sign up for our free 16-part eCourse with the complete text of The Great Housing Bubble. There is no charge, and you can opt out at any time. Sign up now!
