And only $1000 a month association fees? What a deal! Plus no pictures of the actual condo, just photos of the common areas. The condo itself must be too beautiful to show online…

Almost every one of the descriptions you post has typos.  I’m just amazed that there’s so little interest in not looking like they dropped out of high school.  This one has an interesting one though:  UPGRADED LIGHTINING SYSTEM.  While “lightning” (the bolts in the sky) is one thing, and “lighting” (lamps, wall/ceiling lights, etc.) a very different thing, did they mean to say that they have an upgraded system for combating the hazards of lightning, or just some HoPo track lighting installed?

Thanks for keeping up the great posts IR - it is my daily “reality check.”  Being in coastal CA, everyone here says things are fine (given the continued WTF listings in my area).  Yesterday, though, I saw signs that the facade may be cracking.  At the edge of Fashion Island, just north of Macarthur and PCH (off Avocado), there is a shopping center with a Bristol Farms, Sur La Table, Peet’s, etc.  Lots of high end shops.  Well, two stores have FOR LEASE signs in their windows, and they are right next door to one another: Amadeus Spa and Salon, and Waterworks.  I guess the nouveau riche are having to tighten up a bit on the spa services and high end bath fixtures a bit, while trying to keep up the illusion that their houses are still worth what they paid and more, etc.  I tell you, the signs are there - the pain is coming to the high end very soon, whether they like it or not.

You were not in Irvine.  That shopping center you describe is the Corona Del Mar plaza in Newport Beach.

Never said I was in Irvine - Newport is right next door.  Never mentioned Irvine in fact!

I’m completely amazed people are willing to pay over a grand a month in HOA fees.  That’s more than my complete monthly costs (payment+insurance+taxes) on my house in Riverside.  A grand a month is like making a payment on a $200,000 loan.

This is listed as a short sale, chances the bank will approve are slim and none, REO coming.

In case you forgot, there is a serious problem with recasting ARMs, particularly Option ARMs:

Option ARMs: Paying $98 a month on a $350 Thousand Mortgage

Option ARMs Threaten U.S. Housing Rebound as 2011 Resets Peak

check out how many homes are for sale in newport beach on redfin - I did the same search I do for Irvine (3 bed, etc) in Newport and it was about double the number of homes for sale.  I think concern is starting to set in on the beach…

I wonder why the banks are not approving more short sales?  I wonder if it has something to do with the gov’t backstopping the banks?  Yes.

I wonder why the banks are allowing default owners to live in the property rent free for months without forcing a foreclosure?  I wonder if it has something to do with the gov’t backstopping the banks?  Yes.

I wonder why it takes so long from the time the bank takes possession of the REO, to list the property?  I wonder if it has something to do with the gov’t backstopping the banks?  Yes.

Under normal circumstances (without govt support), all three of these events would cause havoc on a banks balance sheet.

How much can a unit like this rent for a month?

Wow, renting the apartment out can barely pay for HoA…

The shopping center right next to us on Newport Coast Drive/San Joaquin Hills has a few vacant stores.  The restaurants seem to be doing OK (for now) but like you mentioned, I think specialty high-end stores are the ones suffering.

The rents in these places must be astronomical so unless you’re doing a lot of volume you ain’t gonna survive.

IR, what do you think this place is worth with the HOA’s and all?

$300k tops?

I see a very limited market for these high-rises.

Folks in NB are probably only concerned if they really have to sell…if they get their WTF price then fine, if not oh well…they’ll just wait it out.

IR, Since this post is using the school/education theme you should point out that this property combines Irvine prices with the Santa Ana school district!  Raise a new generation of kids who don’t learn to spell and then become realtors!

Looking forward to JT Schmids at the end of the month.

Yes, the valuations here will be similar to the North Korea towers down the street. With low interest rates (which seem to be fading) an owner-occupant breaks even at about $350K, but cashflow investors would look for about $250K. If interest rates keep rising, those numbers keep falling.

My starting bid $115, max at $150

C’mon now, it’s only 2BR.  Doesn’t matter how nice it is, it’s an apartment.

May U.S. foreclosures third highest on record

Just think ... you can leverage $350,000 with a monthly obligation of $98.  And the loan doesn’t recast until it reaches 145% ltv.  LoL WTF  What the hell kinda of a ponzi scheme, bullshit loan is this?

BTW, Freddie Mac says the avg 30-year fixed increased to 5.59% this week, from 5.29% last week.  Up 30 bps ... LoL

Isn’t that the same thing they said about Irvine?

Freddie Mac says mortgage rates at 7-month high.

LoL

Still a long, long line ou the door at Sprinkles though

Ahh, many people knew those condo buyers would end up like this. IIRC the total HOA on these places was upwards of 1000-1200/mo and more. Add in ~1000/mo in taxes, and you’d be lucky to cash flow even without any interest expenses! Why throw your money on rent when you can buy AND rent at the same time? LOL

IR, why don’t you profile one of the defaulted properties owned by the Real Housewhores of OC? I’m sure many will get a kick out of that. It’s Coto de Caza, not Irvine, but who’s counting?

BTW, thanks for quoting me last week in one of your posts - I’m glad people understood the point I was trying to make.

Newport is different.

It’s worse there.

Speaking of poor intelligence spelling, I saw this gem this morning. 

”...& a tantum 3-car garage.

I’m guessing that’s where the children are sent when their tempers run amok.

http://www.redfin.com/CA/Aliso-Viejo/26-Sunswept-Mesa-92656/home/5773484

Oh, one more thing, I seem to recall from my college days that this was once a toxic waste dump. Quick - buy now - they’re not making any more superfund sites! LOL

$2,000-$2,500. The Villa Siena apt complex is right across the street making comparison shopping easy:  http://www.rental-living.com/Communities/Villa-Siena/Prices-And-Floorplans/.

It’s interesting watching these towers built right around Villa Siena because we were renting there for three years during all of this development.  The premium you’d pay to “own” one of these units was really unbelievable as compared to what you could rent at Villa Siena.

If the BO plan did not allow for creative accounting to make the banks appear solvent (i.e., WTF pricing on the underwater assets) and CA’s FC delays, the FC rate would be much worse.  FC’ed houses would actually be on the market instead of the shadow inventory, and many more house will be foreclosured.  The govt’s plan is like having a treatable cancer but taking pain meds to treat or reduce the pain or symptoms instead of treating to cure the cancer.  Japan III here we come.

It’s good to hear from you. Thanks for stopping by. You comment was right on about lending; in fact, it really changed my perspective as to what solutions are realistically available to solve the debt problem.

High school girls buying cupcakes for end-of-year stuff isn’t going to support the economy, but they ARE good!

How on earth was this woman qualified for a $350,000 second mortgage?  How much was her income, and where was it coming from?  What assets did she put up as collateral?  If she had insufficient income (which definitely seems the case) and few or no assets, who was the idiot that approved this loan?

Yeesh.  Who wants to bet that she was shown a ton of paperwork, hurried through it, and assured everything would be fine?  And because she thought she was getting an unbelievable deal, she signed it?  Yet another excellent example of why we desperately need financial education included in schools.  Too many people have no clue, as IR stated above, how to do the math.

Irvine Renter:
Thanks for the link. An excellent article.
Question for you:
  A current article quantitating the mortgage problem states, “... there are still about half a trillion dollars’ worth of option ARMs, which allow borrowers to add unpaid interest to the principal they owe. There’s an even more alarming $2.5 trillion in “alt-A” loans…”
Option ARM is a type of loan; alt-A is a type of borrower. I see loads of articles quoting numbers in this manner. To me, the numbers are meaningless since the categories overlap, perhaps very significantly - am I correct or missing something?

IR,
You want the bank to deprive her of a $98 monthly payment on a $350,000 loan.  She’s 73 yo and is entitled to essentially a free ATM for life.  IR, you must be really heartless.  :}

Excellent questions. She owned the house for 45 years. The mortgage should have been paid long ago and she’d have been mortgage free for 15 years. My guess is she’s been refinancing for current consumption with no thought to repayment and hit the jackpot when the $350,000 option became available.

IR, I forgot the banks and underwriters are also entitled to large fees for each loan made.  No matter if the borrow can pay.  You don’t want to see their children and spouses suffer going without the latest fashions and newest cars?
We need MORE bailout for them and the banks.  :}

IMHO, this property with unlimited utilities cost by common metering is a time bomb.

You know, the upgraded lightning system makes this place worth 900,000.  You can play Zeus and throw lightning bolts at cars ont he 405.

LMAO!

“Raise a new generation of kids who don’t learn to spell and then become realtors!”

That should be the new slogan of the Santa Ana School District.

Wasn’t there 2 people who died of lightning strikes last week?

and now this seller wants to get rid of his apartment with the lightning system….coincidence? I don’t think so.

Anyone noticing more REO listings than usual?

I don’t understand the mindset either.

10 years ago, a friend and his wife bought a cramped townhome in Pasadena for about $330K.  I wandered through it and remarked, “For what you’re paying, you could rent a nicer unit just down the street.”

For my trouble, I got the never-ending lecture about how buying was better, even at what was then a WTF price.

In 2002—and I don’t know how this happened—they sold the townhome at a loss.  They moved to Phoenix, and bought a McMansion a few miles east of Lake Pleasant for $310K.  In 2008, when they divorced, the house next to theirs was sold for $245K.  Same floor plan, same square footage, slightly different elevation.  They didn’t even try to sell the house this time.  As for equity, they didn’t have enough to bother cashing it out.

There are people who are simply convinced that they must buy, no matter what the price, because renting is just for losers.  It really doesn’t matter if it’s a cheap block of stuccoed styrofoam, or a glorified apartment—if it has a price tag and can be financed for 30 years, they have to have it.

Amazing, isn’t it?  Hoocoodanode that imposing a 90-day moratorium on foreclosures would just create a backlog of defaults?

I have a feeling we may see that many would-be flippers/knife-catchers tried to grab up properties in that 90-day window, and are now desperately trying to unload them.

Exactly.  That’s a damned nice loan.  You give me $350,000, and I only have to pay you $98 a month?  And it takes forever to recast?  I’ll take a dozen, please.

Heck, the lady is 73.  She might die before it recasts.

So, half the monthly rent will go to pay the $1,036 monthly HOA.  ROTFLOL.

That makes the value of the property something like $200-250k.

Absolutely.

I track Redfin searches of the city of Riverside, houses only, exclude short sales, exclude under contract, <$175k.  The selection in this category is 95% REOs or so.  The low was 121 homes for sale on both 6/4 and 6/5.  Today the number is at 148.  I started tracking this dataset on 4/1, where the number was 336.  The high was 337 on 4/3, and, with brief exceptions, it has been falling every since, until the past couple days.

I don’t think the banks have started releasing more REOs recently-I think the cause for the rebound in supply is that higher interest rates have driven away buyers, so they aren’t getting snapped up immediately upon being released to the market any more.

No, you are correct; they do overlap. The media is just quoting numbers without really understanding them. The important point is that most of these loans are still outstanding. Some people have commented here and on other blogs that perhaps these loans have already made there way through the system and that there may not be many future foreclosures because of these loans. Those people are wrong, the second wave of foreclosures is still coming, and it is going to be huge.

Because IR’s buddy features homes in CDC.

http://www.cotohousingblog.com/

and find the post named “Woo Hoo”

She might die before it recasts.

It’s about the bank inheriting her home instead of children/grandchildren.

Wait until the construction lender forecloses on the unsold developer units…

The only thing “urban” about that place is the incessant traffic jam on Jamboree.

Well said Lee..
Not only do the Banks make $$ on the sales of homes..  Receive Backstopping $$$$  from the Gov’t..  they also get the asset back as well… what a deal.. Can’t lose..  Moral hazard anyone?? 
I guess the FED really does control our Country now…

The first thing a prospective buyer in this building should do, if he ‘s really serious about the place, is examine the building’s financial statements to see just how that $1000 HOA is allocated. I hope a good part of it goes toward a reserve fund for future repairs.

$1000 is excessive for a new unit, even one this size, even if it includes utilities. My basis for comparison are vintage (80 years old or more) condos and co-operative high rises here in Chicago, which are known to be maintenance nightmares. I am looking at a beautiful 1675 sq ft unit in a 1928-vintage highrise, which has a HOA fee of $690 a month including heat, and part of it is going to the building reserve, against future major repairs. This is an OLD building, and maintains a good reserve, yet the HOA isn’t nearly so high.

Remember that the building amenities like the pool, the large lobby, the concierge, the garage, have to be paid for every month, and those costs will rise, especially as the place ages and needs major repairs.