From all of us at the Irvine Housing Blog, we want to wish all of you happy holidays.
So this is Christmas And what have you done Another year over And a new one just begun Ans so this is Christmas I hope you have fun The near and the dear one The old and the young
A very merry Christmas And a happy New Year Let's hope it's a good one Without any fear And so this is Christmas For weak and for strong For rich and the poor ones The world is so wrong And so happy Christmas For black and for white For yellow and red ones Let's stop all the fight A very merry Christmas And a happy New Year Let's hope it's a good one Without any fear
For those of you taking a break from your Christmas activities to surf the web, I thought I would share with you a listing with a few strange listing photos.
One of the best plan 2 in Centennial Tract by California Pacific Homes
to come on the market. A True Turnkey 4 Bedroom charmer! Relocation
forces this Pride of Ownership to come on the market. Located in one of
the premium inside street on an oversized lot. Entertainer's delight
backyard w/extensive stamped concrete & matured tropical trees.
This desirable and popular floorplan features: Formal Living &
Dining Room, a separate Family Room w/cozy stone fireplace adjacent to
family kitchen. Hardwood Floors throughout downstairs, designer custom
paint, custom baseboards, upgraded recessed lightings, extra storage
under the stair case & ceiling fans in all bedrooms. Private Gated
Community with own private central park, Sport Court, Jr. Olympic Pool
& Tot Lot & Family Oriented activities. Centrally located in
the #1 Safest City of Irvine, close to Fwys, award winning schools
& awesome shops. Don't miss this one!
How many times must a man look up Before he can see the sky?
How many days must a property be on the market before an owner realizes he has priced it too high? Usually after 60-90 days a realtor will sit down with an owner and have the "your property is overpriced" discussion. What discussion do you have after 180 days? or 1 year? And what discussion do you have after 1000 days?
I have never seen a property stay on the market for over 1000 days. It is pretty rare to see one on the market for over a year. Are there people out there who just list their house for a vanity price and keep it perpetually for sale? I suppose you see some of that on Zillow with the "make me move" listings, but it isn't common on the MLS. Is there a limit to how long a property can be for sale?
How many years can a mountain exist Before its washed to the sea?
Today's featured property has been profiled before. Back on May 25, 2007, this property had already been on the market for 437 days. I would see it now and again when scanning for properties on Redfin, and I was always amazed that it was still on the market.
Fill my eyes with that double vision No disguise for that double vision
What is the premium for a detached product? There certainly is one. I would pay more for a similar product that does not have a shared wall, and so would most buyers. You have a greater sense of privacy with a detached unit, there is less noise, and there is something about being able to clearly identify a specific object as
"mine," that you cannot obtain from an attached condo. Intellectually,
you might know there are property lines at the walls, but when you look
at an attached condo, you see one massive building you only own a part
of. It is not as emotionally satisfying. The question is how much is this premium?
Someone could probably do a study of the property records and come up with some aggregate estimate. I imagine it would be something like 10%-20%, but I have no data. An internet search brings up a number of studies in the UK housing market, but I found nothing referencing the United States. Whatever the actual number is, I suspect it is far less than 100%. Today we have two featured properties in Westpark. One is a 2/2 attached short sale being offered for $299,900, and the other is a 2/2 detached being offered for $599,999. Do you think the seller of this second property has any chance of selling it? I don't.
Today is Mrs. Irvine Renter's birthday. Since I manage to forget to get a card for her every year, I thought I would wish her a very public happy birthday.
Hopefully, this Valentine's Day I will remember a card so I won't have to write another poem.
I suppose you have to wonder about a guy who would drive around with this license plate:
It is rather entertaining to see the reactions of people in my rear-view mirror...
I want to let everyone know that I will not be as active in the comments over the next week. I have family coming to town to visit for the holidays. I suspect I will have enough downtime to see what is going on, but if you ask me a question in the comments, it may not receive a response.
So what do you think now that money is free? We joke about the free money during the bubble, but with interest rates a 0%, the FED really is giving away free money to any bank wanting to borrow it.
Is someone getting the best, the best, the best, the best of you?
The conventional wisdom in real estate is to buy the most desirable properties in the most desirable neighborhoods because those properties cannot decline in value. When you look at real estate prices in some of the beach communities, you see this idea was taken to its extreme. For as overvalued as Irvine was at the peak relative to rents, Newport Beach, Corona Del Mar, and other beach communities were even more overvalued.
Buying the best of the best is supposed to be an insurance against loss. However, when people truly believe real estate cannot go down in value, there is no price that is too high. It doesn't matter how much you pay if you cannot lose money in the deal. All you have to do is wait and sell it to someone else who also believes it cannot go down at a higher price. High-end neighborhoods were particularly prone to buying based on this erroneous belief, and the degree of detachment from fundamentals is truly extraordinary.
Today's featured property was purchased at a ridiculous price in 2004. It was bought new in 2002 for $768,000, and it was sold to the current owner in 2004 for $1,365,000. A 77% increase in price in just two years. That 2002 owner made some serious money. The 2004 owner is not so lucky.
When you evaluate this property, it certainly appears to be the best in the neighborhood. It is at the end of a cul du sac, it is across from the main park, it is large, and it has a large yard. If there is a better property in this neighborhood, I can't find it.
There's somethin' wrong with the world today The light bulb's gettin' dim There's meltdown in the sky
Fringe markets are those regions where properties are less desirable due to proximity to large employment centers. These markets develop as people are priced-out of the more desirable markets closer to work. Eventually, employment centers also migrate to these fringe market areas, and development pushes even further into the wilds.
When Irvine was first developed, it was a fringe market. The primary employment centers were in the LA basin, and those who bought in Irvine commuted to these far-away employment centers. As Orange County continued to develop, it became a strong employment center of its own.
There are still fringe markets even in Orange County. San Clemente and Rancho Santa Margarita are examples. There is limited employment in these sub-markets, and people commute to employment centers.
Fringe markets have characteristically volatile house prices. People only live in fringe markets because they are priced-out of more desirable areas, so when prices drop in the better areas, people leave fringe markets, and prices really plummet.
Proximity to employment is not the only defining characteristic of a fringe market. Even within primary markets like Irvine, we have fringe neighborhoods that experience greater price volatility because they are undesirable for other reasons. One such neighborhood in Irvine is Columbus Grove.
Columbus Grove was developed at the peak of the housing bubble, and it was overpriced from the beginning. The continuing activity of the builders coupled with the ubiquitous toxic financing has resulted in many home sales of the must-sell variety. This created a nasty downward spiral in prices.
Columbus Grove also suffers from its proximity to powerlines, underground toxic waste, a nearby cement factory, and other elements which make it less desirable. The combination of inflated prices, huge numbers of must-sell homes, and low desirability has caused prices to absolutely crater.
Every single homeowner there has a property worth less than the paid for it, and the vast majority are hopelessly underwater on their mortgages.
Tell me what you think about your sit-u-a-tion Complication - aggravation Is getting to you
Actually, conditions like these make for ideal places for vultures to be active. When we do reach the bottom, the best deals will be in neighborhoods like this one. Unfortunately for the flipper who owns today's featured property, we are not at the bottom.
If chicken little tells you that the sky is fallin' Even if it wasn't would you still come crawlin' Back again? I bet you would my friend Again & again & again & again & again
So this is Christmas
