O say, can you see, by the dawn’s early light,
What so proudly we hailed at the twilight's last gleaming,
Whose broad stripes and bright stars, through the perilous fight
O’er the ramparts we watched, were so gallantly streaming?
And the rockets’ red glare, the bombs bursting in air
Gave proof through the night that our flag was still there;
O say, does that star-spangled banner yet wave
O’er the land of the free and the home of the brave
Star-Spangled Banner -- Francis Scott Key
Great Video (warning, you will cry)
Remember yesterday's WTF homes where the owners paid about $1M but thought they were worth $2M? Well, today's property is another Northwood beauty, but this seller actually wants to sell his house. After 125 days on the market, he is going to be a rollback.
Asking Price: $1,350,000
Purchase Price: $1,381,500
Purchase Date: 12/29/2005
Address: 31 Early Light, Irvine, CA 92620
Beds: 5
Baths: 4.5
Sq. Ft.: 3,640
$/Sq. Ft.: $371
Lot Size: 7,000 sq. ft.
Type: Single Family Residence
Style: Mediterranean
Year Built: 2005
Stories: Two Levels
Area: Northwood
County: Orange
MLS#: P574241
Status: Active
On Redfin: 125 days
Unsold in 90+ days
From Redfin, "Model perfect designer home that includes a Home Theatre plus a separate Casita with full bath! Highly upgraded with dark Mohagany wood floors, Extensive use of granite throughout, Top of the line stainless steel appliances, large great room off kitchen with built-ins, Expansive Master Suite with Jacuzzi and 2 Large walk-in closets. Professionallly landscaped including buit-in BBQ and fantastic Spa with waterfall!! Show & sell today!!"
This realtor is showing some restraint by only using two exclamation points. He still missed a few typos though...
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If today's seller gets their asking price, they stand to lose $112,500 after a 6% commission.
I can't help but be struck by the difference in pricing between someone who wants to sell their home and someone who doesn't. If you look at the times and purchase prices of yesterday's homes and today's, you see the steady progression of prices typical of bubble appreciation. These are all comparables. Now you look at today's home which isn't selling as a rollback as compared to yesterday's properties which were offered for sale at double the purchase price. The contrast is remarkable.
Another home falls by the wayside
A few old cushions stuffed with pride
A hand is shaking from the rubble
This spirit is still alive
A servant bares his occupation
Breaks his back just growing old
Never mind his views were taken
Just saw by the rules of old
Less Cities More Moving People -- The Fixx
Link to Music Video
Happiness and self-esteem are bi-products of self-discipline and the formation of character; character is forged from habits; habits develop through conscious repetition; conscious repetition only happens through self-discipline; self-discipline emanates from motivation and commitment; motivation and commitment comes from an understanding and appreciation of the benefits of character: happiness and self-esteem. The formula for happiness -- life's virtuous circle -- is not difficult to understand, it is just difficult to implement.
Previous generations had a formula for a "normal," happy life. You used to save your money until you had a 20% downpayment, then you bought a house, and if you had increases in income, you could move up to a nicer place. Home ownership was a symbol of success. It proved you could save to reach a goal; it proved you were responsible; it made you happy. It was also a ticket to financial security as your home equity would become a savings account you could use to fund your retirement when you downsized to smaller accommodations. These were the rules of old.
The lending industry changed all of that. They eliminated all measures of responsibility including honesty with "liar loans," integrity with low FICO scores, and accountability with 100% financing. When homes can be purchased by people who lie, cheat and steal, the prestige of home ownership is diminished -- no make that eliminated. Home ownership no longer symbolizes sacrifice and success, instead it now is synonymous with greed and gambling in the commodities market. Welcome to our Brave New World.
Enough of my sermonizing...
Today's properties are all from the Brio community in Westpark. The village of Westpark has held up better than some of the other neighborhoods in Irvine. We have not featured many distressed properties there; however, with the continued deterioration of the low end of the market, even Westpark is showing signs of distress.
Asking Price: $469,900
Purchase Price: $473,500
Purchase Date: 2/22/2005
Address: 2204 Ladrillo Aisle #72, Irvine, CA 92606
1st Loan $378,640
2nd Mtg. $47,330
Downpayment $47,530
Beds: 2
Baths: 2
Sq. Ft.: 1,200
$/Sq. Ft.: $392
Lot Size: -
Year Built: 1994
Stories: 2
Type: Condominium
County: Orange
Neighborhood: Westpark
MLS#: S498744
Status: Active
On Redfin: 16 days
From Redfin, "Quiet & Private Corner Location. Centrally Located. Upstairs Unit. Gre at Room Open Floorplan. Highly Upgraded with Designer Wall-to Wall Carpet, Tile Kitchen Counters, White Cabinets & White Appliances, Microwave, Dishwasher & Oven Included, Wood Window Blinds, Mirrored Wardrobes, Ceiling Fans, Central Air Conditioning, Custom Interior Paint, Vaulted Ceilings, Recessed Lighting, Fireplace in the Living Room, Cozy Balcony, Rollup Garage Door and Central Fire Sprinklers."
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This is the only seller with any skin in the game. If they get their asking price, they will lose $31,994 after a 6% commission. In all likelihood, they will lose their entire downpayment, and this might even become a short sale.
Asking Price: $386,900
Purchase Price: $319,850
Purchase Date: 7/13/2007
Address: 2301 Ladrillo Aisle #54, Irvine, CA 92606
Beds: 1
Baths: 1
Sq. Ft.: 784
$/Sq. Ft.: $493
Lot Size: -
Year Built: 1995
Stories: 1
Type: Condominium
County: Orange
Neighborhood: Westpark
MLS#: P589581
Status: Active
On Redfin: 33 days
Fixer-upper
From redfin, "HERE IS A GREAT OPPORTUNITY TO OWN IN WESTPARK, NEEDS SOME TLC BUT WORTH A LOOK, BRING INVESTORS OR FIRST TIME BUYERS, FIREPLACE, ATTACHED ONE CAR GARAGE, GOOD SIZE BEDROOM W/ WALK-IN CLOSET, DUAL SINKS."
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This is an interesting property. The previous owner bought in 2001 for $207,500 and HELOCed himself into oblivion. On the way out the door, the previous owner trashed the place. Based on the $/SF, I would estimate Wells Fargo will be lucky to get their foreclosure price. We will see.
These next two properties were recently pulled from the market, but here is the old data...
Asking Price: $470,000
Purchase Price: $515,000
Purchase Date: 1/19/2006
Address: 2401 Ladrillo Aisle, Irvine, CA 92606
1st Loan $412,000
2nd Mtg. $103,000
Downpayment $0
Beds: 2
Baths: 2
Sq. Ft.: 1,186
$/Sq. Ft.: $396
Lot Size: -
Year Built: 1996
Stories: 1
Type: Condominium
View: Trees/Woods
County: Orange
Neighborhood: Westpark
MLS#: S483934
Status: Active
On Redfin: 115 days
Unsold in 90+ days
From Redfin, "Immaculate move in condition property located in the heart of Irvine. Spacious living room with vaulted ceilings. Granite kitchen counter with new stainless steel appliances. Private location with a two car direct access garage. Great association with pools, spa and tennis. Formal dining and living room with a cozy fireplace. Just a short walk to the Plaza vista elementary school and shopping and entertainment."
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At over 100 days on the market, this property is clearly overpriced, but if this seller manages to get their asking price, minus a 6% commission, they (or the bank) stand to lose $73,200. In reality, they will lose closer to $100,000. Do you think they will just walk away? I do.
Asking Price: $399,999
Purchase Price: $390,000
Purchase Date: 7/30/2004
Address: 1504 Solvay Aisle, Irvine, CA 92606
1st Loan $400,000
Downpayment $-10,000
Beds: 1
Baths: 1
Sq. Ft.: 800
$/Sq. Ft.: $500
Lot Size: -
Year Built: 1995
Stories: 1
Type: Condominium
County: Orange
Neighborhood: Westpark
MLS#: S498790
Status: Active
On Redfin: 16 days
From Redfin, "Motivated Seller-Great location for UCI Student or Executive. Very cle an and ready for you to move in. Large Kitchen over looking the Dining and Living Rooms. Enjoy this great floor plan with it's large Master Bedroom with a walkin closet and Private Bath. All on one level Plus Attached Garage Directly into your home."
With the deterioration in the financing picture, I imagine this seller is even more motivated...
I have to laugh at these asking prices with $999. I guess the seller still wants to squeeze every last dollar out of this sale. Maybe we will have houses priced like gasoline soon with the 9/10 of a cent added on.
Not technically a rollback, but we are looking at a summer 2004 price, and after a 6% commission, this seller still stands to lose $14,000.94. The property records show a $400,000 first mortgage. I don't know how this came to be as generally a 100% financing deal is an 80/20. Perhaps it reflects the outstanding value on their negative amortization loan, or perhaps they financed through a private party. If they actually got $10,000 back at closing, I don't see them hanging on and weathering the storm. As Steve Miller would say, "Take the Money and Run."
The low end of the market is being decimated. Everywhere we look we see rollback after rollback. Some neighborhoods hold out longer than others, but all are showing signs of stress. With the further tightening of credit, look for this deterioration to continue, and most likely get much, much worse.
So if you think your life is complete confusion
Because your neighbors got it made
Just remember that it's a Grand illusion
And deep inside we're all the same.
We're all the same...
The Grand Illusion -- Styx
Link to Music Video
I find pretense very distasteful. There is a large subculture in Southern California that expends a great deal of money and energy trying to make other people think they are happy and successful. It is an illusion they cultivate within themselves.
Status is an internal perception about what people believe other people think about them. It has nothing to do with what other people actually do think about them (as if that mattered anyway).
For instance, I think the women on the Real Housewives of Orange County are soulless, gold-digging slags. My derision is only eclipsed by my disrespect for the way they live, what they believe, and what they represent. However, they think I, and everyone else who knows them through the show, believes they are something special, something to envy as if they really have it "going on." They have status. Not because people regard them highly, but because they think people do. But I digress...
For people who don't have the internal strength to base their self worth on what they believe about themselves, they end up basing their self worth on their perceptions of what other people think about them. Once they have given their power away to others in this manner, people will expend tremendous amounts of time, energy and money in a vain attempt to influence other people -- hence we have fancy cars, opulent houses, designer clothing, and all the other trappings of conspicuous consumption. In my opinion, this is a sickness (their mind control fails on me.) It is a consuming disease which fed on the borrowed money made available during the housing/credit bubble.
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Southern California's prosperity over the last 7 years has been The Grand Illusion. Our entire economy has been built on borrowed money; our collective self worth has been built on borrowed money. As the credit crunch takes hold and our economy contracts, it will not just be difficult on people financially, it will also be difficult on them emotionally because many people will be forced to abandon their illusions of wealth, prosperity and happiness. One day with their vanity stripped from them, some of the most pretentious will look in the mirror and see how pathetic and insecure they really are.
Asking Price: $624,900
Purchase Price: $572,040
Purchase Date: 5/29/2007
Address: 14222 Matisse Avenue, Irvine, CA 92606
Sales History
Date Price
05/29/2007 $572,040
03/11/2004 $535,000
04/18/2003 $410,500
06/07/1990 $231,000
Beds: 3
Baths: 2
Sq. Ft.: 1,381
$/Sq. Ft.: $452
Lot Size: 5,000 sq. ft.
Year Built: 1974
Stories: 1
Type: Single Family Residence
County: Orange
Neighborhood: Walnut
MLS#: U7003278
Status: Active
On Redfin: 39 days
From Redfin, "THREE BEDROOM TWO BATH HOME IN THE SOUGHT TRACT OF 'THE COLONY' THIS HOME IS IN ONE OF THE VERY BEST CITIES IN ORANGE COUNTY, IRVINE!! GREAT SCHOOLS, PARKS, CLOSE TO ENTERTAINMENT, TRANSPORTATION AND ALL THE GOOD STUFF. ASSOCIATION POOL AND MORE. THIS HOME IS BEING SOLD 'AS-IS' AND 'WHERE-IS' WITHOUT WARRANTY. COME HOME TO IRVINE TODAY AND START LIVING THE 'O. C. ' LIFESTYLE TODAY!"
Even the banks seem to have a CAPS LOCK problem.
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As you have probably noticed, we are starting to see an increased activity among banks to liquidate their REOs. Unfortunately, they are getting them faster than they are selling them. This is a trend that will likely continue.
Think back to the mass delusion that was the bubble: it was the Grand Illusion. People accepted the absurd as unquestioned truth. Does it seem reasonable that banks would continually offer negative amortization loans with 1% teaser rates; that it would be possible to refinance from one to another as each teaser rate period expired? Is it logical to think serial refinancing could go on forever? I had people tell me this was the new paradigm.
Is it logical to think that real estate can only go up in value? Do you remember the thought experiment in this post: How Sub-Prime Lending Created the Housing Bubble? Does it make sense that you could live off the appreciation of your house; that none of us would actually have to produce anything; that all we would have to do is own real estate to make a living? How can such silly beliefs make it into our collective consciousness? Are we so enamored with our fantasies of wealth that common sense can be ignored?
I don't have any answers for you. I never did drink the kool aid, so I cannot fully empathize with this system of belief. Each of you that suffered from these delusions, even for a brief time, will have to answer those questions for yourself.
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You will have to pardon my ranting and sermonizing today. Sometimes the insanity of it all builds up inside of me until it finds an outlet -- generally on this blog. Remember, I still have my Reservoir of Schadenfreude I am trying to empty.
This concludes another week at the Irvine Housing Blog. My motivation is strong, and my energy level is high, so I will keep on keeping on. I hope you come back next week as we continue to Chronicle ‘the seventh circle of real estate hell.’ Have a great weekend.
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The artwork was by Henri Mattise as a reference to the street name. I don't know who designed the cover of the Styx album, but the similarities in styles was an interesting coincidence.
The Texas-raised "Lonestar J.R." (Johnny Rutherford) is one of eight drivers to win the prestigious Indianapolis 500 mile race at least three times: in 1974, 1976, and 1980. He was one of the best of his era.
There is another Rutherford involved in a race. This time it is a property on Rutherford Street in Irvine, and the race is to the bottom...
Asking Price: $999,000
Purchase Price: $1,135,000
Purchase Date: 9/28/2005
Address: 9 Rutherford, Irvine, CA 92602
1st Loan $851,250
2nd Mtg. $56,750
Downpayment $227,000
Beds: 3
Baths: 2.5
Sq. Ft.: 2,200
$/Sq. Ft.: $454
Lot Size: -
Year Built: 2003
Stories: 1
Type: Single Family Residence
County: Orange
Neighborhood: Northpark
MLS#: S497994
Status: Active
On Redfin: 26 days
From Redfin, "Desirable single-level in a cul-de-sac location has large kitchen with granite counters and SS appliances and separate breakfast area. House has custom built-ins, crown molding and HW flooring in the living areas. Master suite has a generous bathroom and French doors leading to professionally landscaped garden. Two additional bedrooms (one could be office) complete this lovely home. The private back yard has a large patio cover, BBQ and Malibu lights. The community offers pool, spa and gym."
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You must admit, this is an eye-popping rollback. If they get their selling price, and they pay a 6% commission, these sellers stand to lose $195,940. I admire that these people have accepted the reality of the market and have decided to get out before this becomes a short sale.
The race to the bottom continues...
Here he comes
Here comes Speed Racer
He's a demon on wheels
He's a demon and he's gonna be chasin' after someone.
Video to Cartoon Trailer
The love of money is the root of all evil.
The Bible -- Timothy 6:10
Money, its a crime.
Share it fairly but dont take a slice of my pie.
Money, so they say
Is the root of all evil today.
But if you ask for a raise its no surprise that theyre
Giving none away.
Money -- Pink Floyd
Link to Music Video
Have you heard about the new realty in town offering to help sellers move property in a declining market? Their name is Dewey, Cheatem & Howe.
OK, it is an old lawyer's joke, but it was the first thing that came to mind when I saw this WTF price on Dewey Street in Irvine...
Asking Price: $940,000
Purchase Price: $527,000
Purchase Date: 7/11/2003
Address: 27 Dewey, Irvine, CA 92620
Beds: 4
Baths: 2.5
Sq. Ft.: 2,500
$/Sq. Ft.: $376
Lot Size: 5,500 sq. ft.
Year Built: 1978
Stories: 2
Type: Single Family Residence
View: Pool
County: Orange
Neighborhood: Northwood
MLS#: P586668
Status: Active
On Redfin: 41 days
From Redfin, "Completely remodeled home from inside & out. Enjoy approx. $200k in u pgrades including: travertine floors, custom paint, crown molding, granite, newer windows, & a resort style custom swimming pool. Main floor master bed w/ blt in vanity & private bath. Gourmet kitchen with granite, pantry, & upgraded fixtures & appliances. Open formal living room w/ vaulted ceilings & fireplace. Lg. secondary bedrooms. Gorgeous resort style swimming pool w/ waterfall. Attend award winning Northwood Sch's."
Another listing looking to justify an asking price by telling us how much they spent on upgrades. Who cares? Did you add any value with all that money you spent? Maybe the buyer will need to spend $200,000 to fix the mess. Who knows?
Oh, he added a gourmet kitchen. That explains it.
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So despite the rollbacks happening all around him, this seller believes his property has doubled in value since 2003. This is ridiculous. According to the property records, there is no mortgage on the property, so this seller can cling to his WTF asking price for all eternity -- which is how long it might take for valuations to justify this price.
For drinking way too much kool aid, bestow our WTF award on 27 Dewey!
Money, get away.
Get a good job with good pay and youre okay.
Money, its a gas.
Grab that cash with both hands and make a stash.
New car, caviar, four star daydream,
Think Ill buy me a football team.
Money, get back.
Im all right jack keep your hands off of my stack.
Money, its a hit.
Dont give me that do goody good bullshit.
Im in the high-fidelity first class traveling set
And I think I need a lear jet.
Money -- Pink Floyd
