Wow.  Talk about over priced.  That home here in The Woodlands TX would sell for $180,000 or less.  Your market has a long way to go down.

Any indication they had a renter in place when it was foreclosed?  Perhaps even now?  That would be a good version of shadow inventory.  If banks didn’t toss out paying renters until the end of their leases, it would be less turmoil for everyone. 

I would even encourage banks to leave paying renters in place if they wanted to renew leases.  Where there are existing renters, the banks should be asking “is this cashflow positive vs the likely REO sales price?”  Either sell fast before prices drop more, or keep the renters in place.

hey, you’re from the Woodlands?  Same here.

I got a 3700sf “starter home” on a lake here for a whole lot less than this shack.

Unfortunately I’m moving back to So. Cal (went to school at UCI years ago) in 6months.  Hopefully the housing market will have better deals then.

I think banks are not allowed to be landlords.  Regulations and such.

Given the scope and scale of this problem, regulations about disposing of non-performing assets have been widely ignored, and there is no pressure to enforce right now. Perhaps as the crisis abates, there might be some pressure to get rid of these properties, but for now, lenders are sitting on mountains of bad paper and thousands of empty houses.

I was thinking about how we’re in a damned if we do, damned if we don’t scenario when it comes to interest rates. 

The only reason rates are staying down right now (besides large government intervention) is because people are worried about the economy.  The longer the recession lasts, the longer people will want a safe place for their money.  That means treasuries.  So as long as the economy sucks, we have the ability to keep interest rates low, which is the only thing still propping up house prices.  Kind of ironic that a bad economy is helping to keep interest rates down, helping to keep housing prices (somewhat) stable.

So the crappy scenario is this: no matter what happens, it’s going to be bad for housing for the near future.  Interest rates stay down?  Well, then the economy must not have recovered yet, and the housing market will remain a disaster.  Interest rates going up?  Now you gotta pay more interest to the bank, which means the median household can’t afford the median house price, and prices have to tank again.

Quite simplified, but a disasterous scenario if I’m accurate.  Thoughts?

If you check out the old post, it does look like the new owner cleaned up the yard.

This one is for lendingmaestro:

The ‘07 knife catchers are beginning to head for the exits right on schedule.  Doesn’t look like all those screaming deals of ‘07 were all that fantastic after all.

Somehow I doubt that the next buyer is going to be too concerned about this seller’s breakeven point. 

How much money is the next buyer going to lose?  50K looks like a papercut to me as I think this place could easily drop to 400K although I would not offer a penny over 350K personally.

IR (or anyone), can you think of a way to force banks to start unloading properties on their books, rather than delaying more and more? I keep reading stories of how banks just wont foreclose on someone.
I think they figure if they dont foreclose, they dont own the property and therefore dont have to pay taxes or anything.

Many people are trying to blame the foreclosure crisis on the bad economy and unemployment.

That logic is completely backwards.

It’s far more logical to see the bad economy and unemployment as an inexorable consequence of the housing bubble.

Don’t forget that when mortgage equity withdrawal peaked in Q4 2006, it represented 9% of consumer income nationally, and a much higher percentage in Orange County. The HELOC abusers you profile in Irvine are the data points in a national phenomenon that slowed in 2007 and then turned off abruptly in late 2008.

We lost jobs in the housing sector and the finance/real estate market but we lost far more jobs in the broader economy. People were buying RV’s with the money they took out at the housing ATM, and that industry has declined precipitously.
People were spending money at restaurants, going on vacation, starting new businesses, and of course paying for professional landscaping,granite, steel, travertine and plantations shutters.

People who treat this as a normal recession are idiots. We’ve permanently lost the 10% of California’s economy that was based on borrowing against houses, and that’s never coming back.

And the multiplier effect is a nasty, progressive downward spiral when we get into a massive economic contraction. If the California budget mess is resolved with another 24 billion in cuts, we’ll see another round of furloughs and layoffs at every level of government, as well as a massive hit to benefit payments and health care employment.

The stimulus package will slow this contraction in most states, but it’s far too small to make up for the missing money in the four real bubble states, California, Arizona, Nevada, and Florida.

I don’t see much difference between leaving the renters in place vs. renting REO. Realtors tell me the latter is anathema to banks - they don’t want to be landlords because showing can be difficult, etc. From a purely financial angle, renting makes much more sense. Unfortunately, it don’t work that way

Looking at Redfin’s comps, it looks like the current seller will get at least as much as he paid for it ($600k), possibly more.  Now, there’s transaction costs here, but there’s also the equilvalent rent they would have to pay during the time he owned the home.  All and all, a wash, IMHO.

As for the next buyer, who knows?

My personal opinion is that the Federal government should spend like crazy in the short term.  The stimulus package was too small, especially for places like California.

$600,000—baahhhhaaahhhhh.  Thanks for the joke - it really livened up my Friday.  Too funny. Trim about a third off of that and you might be close.

Aren’t they liabile for any back taxes once theyn foreclose?  That just delays the problem-those tax bills don’t just go away.

A loan mod makes a lot of sense to the bank, since they don’t usually lower the principal directly, just the interest rate (or they merely extend the loan).  It’s a lot cheaper than foreclosing on a property in terms of costs to the bank (they don’t have to pay realtor commisions/back taxes/back HOA dues/repairs/utilities/gardner/etc.), plus they will probably get more money if it sticks than if they foreclosed and sold the property.

Of course, many loan mods fail and become foreclosures anyways, but it’s in the bank’s interest to try.

Sigh.  It’s right there on the Redfin page:

Nearby Similar Sales
Closest homes similar to 14911 Sumac Ave, which sold within the past six months:

$590,000
14872 Yucca Ave
Sold on May 20, 2009 0.05 miles
4 bd / 2 ba
2,621 Sq. Ft. 
$550,000
3722 Blackthorn St
Sold on Mar 27, 2009 0.11 miles
4 bd / 2 ba
1,897 Sq. Ft. 
$567,900
3941 Banyan St
Sold on Feb 17, 2009 0.12 miles
4 bd / 2 ba
2,318 Sq. Ft. 
$625,000
3562 Myrtle St
Sold on Apr 29, 2009 0.25 miles
4 bd / 3 ba
2,277 Sq. Ft. 
$657,000
3932 Alamo St
Sold on Apr 24, 2009 0.3 miles
4 bd / 2 ba
1,897 Sq. Ft. 
$575,000
4032 Northpark Cir
Sold on Mar 12, 2009 0.42 miles
5 bd / 3 ba
2,089 Sq. Ft. 
$770,000
24 Deer Spg
Sold on Feb 26, 2009 0.52 miles
4 bd / 3 ba
2,597 Sq. Ft. 
$670,000
3942 Capri Ave
Sold on May 28, 2009 0.56 miles
4 bd / 2 ba
2,060 Sq. Ft. 
$139,000
9 Golden Star
Sold on Apr 30, 2009 0.62 miles
4 bd / 3 ba
2,592 Sq. Ft. 
$619,742
34 Blazing Star
Sold on Apr 01, 2009 0.69 miles
4 bd / 3 ba
2,591 Sq. Ft. 

Range: $139,000 - $770,000
Average: $257/Sq. Ft. 
This home at $257/Sq. Ft.: $604,114

This house will almost certainly sell for $600k or more, especially since there’s an error there-no way 9 Golden Star actually sold for $139k, although that’s what Redfin has it listed as selling for, and factored that lowball price into the $257/sq ft estimate.

The problem with stimulus is what happens when the money runs out. The mistake the feds made with the first stimulus is that it wasn’t an investment. Infrastructure is the best way to get the country moving again. 

The problem with California is the states pension plan, medicare cost, and prison system. Also, it’s very difficult for a business to succeed. People want a high wage because of the high living expenses regardless if they are worth that much or not. Remember we are competing with China and India. Business are hiring and moving there because they can do the work and it’s cheaper.

Talk about deflation most of the state workers minus “chp” are getting 3 or 4 furrows per month, the construction industry, real-estate, mortgage are in the dumps, almost all sales period are down, people are loosing job left and right, wages are falling fast. Hold on tight “this here is the wildest ride in the wilderness”

IR, Geotpf says:
“This house will almost certainly sell for $600k or more, especially since there’s an error there-no way 9 Golden Star actually sold for $139k, although that’s what Redfin has it listed as selling for, and factored that lowball price into the $257/sq ft estimate. “

What happened to 9 Golden Star?  Do you have more info?

Geotpf: Since the mtg payment on 600k is more than the rent one would have paid for this house, I doubt this is a wash.  This person certainly lost more than 55K.  At least 55K + (cost of ownership - equiv rent).

The mortgage in Japan dropped to 2% in early 2000’s but that did not stop their housing market from a straight 15-year decline. People desperately tried to pay off their mortgage loans even when rates were at historical low. In a deflationary environment any interest rate is too high – that is, in real terms. Low mortgage rates (thru massive MBS and treasury purchase by Fed) may provide a temporary floor for the housing market but it will not revert the general downward trend of RE price as the debt-destruction induced economic depression takes hold.

Property taxes are a lien against the property itself, regardless of who owns it or when they bought it.  Thus, a home could go to a property tax auction within days after someone buying it, if the prior owners were sufficiently delinquint.

Love the fluffy red toilet seat cover…

OC Progressive-

Thanks for the numbers about Mortgage Equity Withdrawal as a percentage of consumer spending.  I wonder what percentage of consumer spending in Orange County in, say, 2006 or 2007 was fueled by MEW.  It amazed me to see all the new cars every time I went to OC.  I know people were making a lot of money…but it seemed like every other car was a new BMW, Lexus, etc. Also, purchases at all the malls.

“It’s far more logical to see the bad economy and unemployment as an inexorable consequence of the housing bubble.”
It’s far more logical to see the bad economy and unemployment as an inexorable consequence of the “Credit” bubble. The housing bubble appears to be the logical culmination of a giant credit bubble expansion period that began in 80’s. You are right that people who treat this as a normal recession are idiots. There were only two other credit bubbles (and their cataclysmic burst) in the past century that came close to the scale of our current one – the Great Depression and Japan in 80/90’s. The former was eventually cured thru the bloodiest war of humankind, and the latter has not even ended after 2 decades. So I guess there is really no known cure for this – and all the big wigs in the Fed and Gov’t know it. Given all the Japan-esque fiscal and monetary policies that have been deployed so far we all know what’s coming next. And the couple of trillion $ pumped into the system is not nearly enough to counter the fast contraction of credit. The “green shoots” crowd already went in hiding with tails between their legs after June job report came out this week.  Let’s see how long this “confidence” charade will last.  People who hold off selling their houses in OC thinking there will be a quick recovery in a couple of years will come to a rude awakening by 2012. But by then it will be too late even for those who bought after 2000. It will be a death-by-a-thousand-cuts style decline all the way thru 2017 or 2020, when all the excesses are finally squeezed out of the system.

“Of course, many loan mods fail and become foreclosures anyways, but it’s in the bank’s interest to try.”

Per Calculated Risk

We are past the “extend and pretend” phase, so now we are into phase two, which is the “extend or “amend” phase. Then it is on to the “send” phase where everyone sends the keys.

Unfortunately, I doubt it.  This process will take a long, long time.  Too many losses to absorb all at once.

By my guess, upwards of 10% of retail spending in the OC between mid 2006 and mid 2007 was coming from the housing ATM.

You can watch the sales tax numbers as a proxy for retail spending, and they keep dropping.

The Woodlands TX what a crappy city

Just saw this on bloomberg.com:

Home Sellers in U.S. Cut Prices by $27 Billion, Trulia Says

http://www.bloomberg.com/apps/news?pid=20601087&sid=agq0NRuqLW38

“Properties listed for more than $1 million had the biggest cuts, with owners taking about 13 percent off the asking price.”

Sounds like a crack in the dam…

Blocked off doorway next to the fridge?

ROFFLMA $1000/sqft +  $500.00 /mo dues! ROFFLMA

For more in the LOL dept. check out the listing history on this one

OMG, the flooring is stained concrete through the majority of the house!  This price is ludicrous beyond comprehension.

No, I don’t have more info on 9 Golden Star, but some people here have access to non-public info that I don’t.  It would be interesting to see why a 2,592 sq ft detached house with 4 bedrooms and 3 baths in Irvine sold for 54 dollars a square foot.  It probably didn’t-there’s probably an error in the figures Redfin got from the county.

Well, infrastructure would be what I would like the Feds to spend said money on.

have you been to The Woodlands?  Its like Irvine, but nicer.  Bigger homes, more trees, more walking/biking paths, and possibly more regulations than Irvine.  Homes here are on bigger lots, few condos.  There’s multi-million dollars homes here if that’s what you’re into.  Any homes here under 3000sf is considered small.

10 months between NOS and knife catcher.  Looks as if the house is lived in.  Only $3500/month just for interest and taxes for a place with easy access to I-5.  Buy before your priced out of the market…Prices and interest rates will never be this low again ...baahaa.

Unsubstainable house loans and other inovatative RE loans are dragging the ecomony down.  They are the causes and not the victims.  The victims are the jobs and lack of liquidity in other sectors.  The cure is to dramatically lower the price of houses, clear up the bad loans and start over.  Too bad the PTB will want to be paid off first and then reinflate another bubble for another cycles of excessive fees and wealth transfer (to them).  The responsible or ilresponsible parties are the lenders, RE agent, GSE, Feds for pumping of the market for the greatest wealth transfer in history and also those that never had the ability to pay back the loans.

I don’t get it.  What would prompt someone to delist/relist EVERY DAY for a month?  Is there some plausible benefit (or any reason at all) that someone would do that?

That makes me wonder even more what was going on in April/May when the house was unlisted for a month?  A sale falling through or some new form of subterfuge to create demand?

Actually, right after I submitted that post I figured it was a software glitch.  I think that you can see when the for sale by owner site updates redfin and how.

I *THINK* this is the “pantry”:

Sorry, off topic, it’s not Irvine..But it’s close

Geotpf,

Remember that this price per sq ft price is BS that the Used House Salesmen (realtors) have the public believing in - means NOTHING.  The price of real property is the LAND + IMPROVEMENTS.  In California you are paying for the land.  2 x 4’s, windows and toilets start depreciating as soon as they are assembled on site.  The only thing that ever appreciates is the land.  In this cycle both the LAND and IMPROVEMENTS are depreciating and will go straight back to 3 to 3.5 times income with a lot of damaged knife catchers along the way.  I saw an agent that used to think they were hot shit selling makeup @ Macy’s the other day.  Nothing wrong with selling makeup, but plenty of schadenfreude for someone that put off an air of superiority now eating a humble sandwich. 

Cheers,

Socalappraiser

Don’t know about elsewhere, but in Miami-Dade County, if you don’t pay taxes for long enough the tax lien purchaser will apply for a deed, there will be an ad and a sale, and after notice to the lender, the lender’s rights will be eliminated.  There really is a time limit on this nonsense of about 3-4 years after taxes stop
being paid.  It could go out longer, but I think the vultures will be interested in a property with the mtges eliminated.

The outside looks ok to me.

This looks like 250k to me, in this mkt, but what do I know?

are there 3 baths, or 2 1/2?

What about safety nets? Not sure about Japan but here in US we got plenty of those.

AZ, you’ve changed. Few years ago you would’ve only offered $200k max for this.

At least it has a large yard for California?

Yeah, that’s all I got. How is that Twin Peaks-style stone fireplace “Mediterranean”?

I think there is a concern that the fed won’t be able to keep interest rates low over the long term even if the economy remains moribund.

A poor economy means continued federal fiscal deficits of $2 trillion per annum. The Chinese and other foreigners are not going to absorb this amount year after year after year at artificially low interest rates. The upshot is that interest rates will over time creep up regardless of the state of the economy.