Pre-2004 prices.  I like it!

Out of curiosity, as I am not familiar with the rental market, for how much would these places rent?  And how easy would they be able to rent out in today’s market?
——-

I see these as either starter homes for someone just out of college, or for someone looking for a retirement home.

Thus the price should be at least half of what they are asking. Looking at the 1999-2001 price and then adjust for inflation - bingo!

Seller is desperate !!!!!!!!

I don’t think the seller is desperate at all. A desperate seller will reduce the price 5% every two weeks until the unit is sold. I think it is a desperate realtor that needs a comission to buy gas for the Mercedes that he/she bought when the going was good.

Nice, it looks like the drop is accelerating.  I wonder how bad it will be next year at this time.
-bix

Add this woodbridge home to your WTF file.  This home has been for sale since 04/03/2006 and it is a fixer.

1 CEDARGLEN #29, Irvine, CA 92604
Bedrooms:  3
Full Baths:  1
Partial Baths:  1
Square Feet:  1,123
List Price: $535,500

$400K for a one bedroom condo?  What madness is this?  You could buy a one bedroom condo in parts of New York City for that and their wages are much higher than ours are here in the OC.

Trouble appeared early in this tract once the music finally stopped last year.  These guys will probably end up falling the hardest, along with those dreary Lakepines units in Northwood.

Checking Craigslist and rentometer, asking price looks to run about $1500 for the 1/1.

the low 1/3rd of pricing runs about 1600-1800 on the 2/2.  Again, published asking price.

the 3/2, $2400 +/- $200.

It would seem that these would make decent rentals if they could be had in the $300k’s. 

Of course, at this point in time, you could get a better return elsewhere than putting equity here, but over the longer term for someone looking to diversify their assets maybe it wouldn’t be so bad?

Is my cursory math way off?

Maybe the song should be “Wish upon a falling knife”  hehe!

If that couch got any closer to the fire place it would be part of it.  My goodness I know fireplaces are desired but that location is just retarded.

http://latimesblogs.latimes.com/laland/

Congrats, ... I think…  hopefully we aren’t beset by trolls

The three bedroom might cashflow in the low 300’s, but I think the 1/1 and the 2/2 need to get to the low to mid 200’s to have positive cashflow.

Of course, as a diversification move, you might be willing to reach a little higher, but I still don’t think negative cashflow is ever a good idea as you still are betting on appreciation to make the investment work.

Cool, thank you for pointing this out.

I think the 3/2 starting at about $250K cashflows. That $245/month HOA fee kills the math, add another $250/month for insurance & maintenance/mgmt.  20% down, 8.5% non-owner occupied loan and you get about a 9% tax free return (depreciation creates a tax loss)...  10% down and it drops to 5%. 

The 2/2 and 1/1 are porportionately lower.

That assumes rents remain, or better yet, rents actually get their asking price and don’t start giving away free months to lure tenants, which we are already seeing.

For a live in owner, the 3/2, looks like rent breakeven is way up at $400K because of the low interest rates.

“And what is “emmaculate?” Is that like emasculate?“

LOL!!!

Why do RE agents believe they deserve their commissions when they can’t even spell?

Oh well, let the Summer of Rollbacks begin!

I just found your blog today, and will be a regular reader.  But I read an old article from 3 months ago and have a question about it that I already posted on the blog.  I’m not sure if you check old comments or not, so I will ask again here.  Sorry for going somewhat off topic.

How does the affect of rising rents affect the equation of what a house is worth? (My landlord just raised my rent by 11% on my new lease, and I had to take it because there is nothing cheaper available.)

As the price of homes has been going up, people buy them with the intent to rent them out. And with their large payments, they are asking for high rents. I am in Ventura County. 4 years ago, the rent for an average 3-bedroom house was going for about $1600-$1800/month, but now everything advertised is $2000-$2400/month.

Will the rise in rents help prevent a massive bottoming out of real estate, or will real estate continue to drop and bring down rent prices with it?

Richie,

Welcome to our blog. I read almost every comment, but occasionally one will slip past. Below is the response I posted on the other thread.

House prices will likely bottom out near the rental equivalent value. If the economy stays strong, and unemployment does not become a problem, rents will continue to rise which in turn will support house prices. I suspect the economy will suffer as house prices decline, so rents will probably also be depressed. That has been the historic pattern.

WOW! That seller must be desperate!!! He/she must be nestled too deep in their ARM quagmire to even think about their chefs kitchen w/Euro cabinets, great room and extensive amenities!!! They are trying squeeze every last drop of equity from that RE juicer!!! I should buy this or I wil be priced out forever!!!

“squeeze every last drop of equity from that RE juicer”

LOL. I like that one. I may use it someday.

BTW, nice use of exclamation points

Do you want to know how crazy this is?

In ‘02 we sold our rental house in TR Broadmoor for about 420K net.  It was a 3b/2ba home with new roof, tile, carpet, HVAC, bathrooms, kitchen, light fixtures, some windows, garage door.

Scraped the ceilings, added new halogen cans, etc, etc…. It had a two year old paint job, was tented, no dry rot, thousand dollar halogen range with matching two motor hood.

Materials were very good:  GE Monogram, Kohler fixtures, etc…. 

Etc…  that was a fixer upper that we fixed, rented and then sold.  It has a large, landscape atrium, two japanese maple trees and a large backyard.

$420K.

You could put this entire condo into the backyard of that house and the quality of the parts I put in simply make this apartment a joke.

This, ladies and gentlemen, is AN APARTMENT, NOT A CONDO.  Heck, I used to live in larger apartments eons ago. 

Price?  Hmmm… how about $200K tops?  Maybe lower… what would be the rental break even point?

The second condo has an agent who describes “charming curb appeal”.  No ding for not having a curb, but big ding for charming = green grass, wooden fence, and maybe some agapanthus (dare I say agapanthi?).

I don’t know ‘bout the rest of you, but charm to me is more than paying the association fees to the gardener and not putting anything on your porch per the HOA.

Woodbridge HOA is a bit high compared to nearby “old” tracts, but you get 2 lakes and some nice stuff.  If you’re buying a lake side home/condo with excellent lake view and a large patio, it’d be a nice place to sit and relax with your friends and family.

However as an income property, you have to consider the age of the building and termite related issues.  I had a massive headache dealing with one termite infested townhouse few years ago and do not wish to repeat.

On the plus side, it’s close enough to UC Irvine and IVC that you might be able to tap into college students as tenants.  Plus the 5 FWY and 405 FWY are both very close.

According to homeseekers.com, 43 Fallingstar is in escrow. I think prices may adjust to some degree over the next year and probably level off for the next 5-10 yrs.  What will actually happen is really anybody’s guess. As far as going down to year 2000 prices you’d be dreaming. If prices dropped that low, people would be buying 2-3 houses instead of just one. Prices would immediately jump back up again. As an Irvine homeowner not planning to move in the next 5-6 years, prices dropping would probably benefit me more than prices going up. Up is great as my home would appreciate but to move up would cost so much more. Down would benefit more as I could buy a second property or bigger home at a low price and rent my current home out. There are a lot of people in my situation. When I talk to older people who bought homes in the early 70s, they tell me that home ownership has always been challenging is So CAL but well worth it. Let’s see what happens.  All else is spec.

With VDC and VDC Norte, two new housing complexes on the UCI campus, students are less inclined to go further away and pay more. The buildings in VDC are new, decently priced, come with various amenities, and there are free shuttles to and from campus. So, in my estimation, other condos/apts for rent in the area aren’t as desirable as they were 2 years ago…