I have seen a lot of properties on the high end priced like this.  Purchased within the last 2 years and asking a lot more than what they paid.  Especially in Newport Coast.  They must be growing and smoking something in the hills back there.

That being said, I’ve noticed some 10% drops in asking prices in Shady Canyon.  Reality setting in?
——-

It looks to me like we have another ‘discretionary’ seller, with pie in the sky dreams.  Evidentially, this sellers motive does not include a transaction.

Oh Well, it’s nice looking wallpaper for the MLS.

I am profiling some Shady Canyon rollbacks on Friday. All is not well in the land of the uber-rich.

For $4MM, you’d think the garage entry woud be located BEHIND the house, or, dare one dream, there would be a free standing garage way in back of the property, connected to the house by a covered walkway.

At what price point do people shake the tract-house mentality? Because that’s what this place is- a glorified tract house. It is a pretty house, but the architects just couldnt think out of the subdivision, could they?

So approved plans for a pool, and “prewired” for sound system. So basically it’s a “fixer-upper” for 4.5 mil.

Two things about this property stood out for me (besides the overwhelming price tag.)

1.  Looking at the overhead view, there doesn’t seem to be any, uh, how should I put this:  “yard.”  It all looks paved over.  The shot of the backyard firepit is all cement.  For this much money, it would be nice to occasionally feel grass under a bare foot.  It’s a concrete jungle.

2.  Wine Cellars are for iceholes, IMO.  And I appreciate wine, etc. No offense to anybody on this board who has one, but to devote space, lighting and cooling for wine is off-the-charts obnoxious and makes your basement look like a liquor store.  It’s just too show-offy, and such an obvious statement about who you think you are, and how much taste you think youhave.  It’s wine people. Just drink it and enjoy it. Don’t be such a pretentious prick that you display it like precious art.

The $4.5 mil asking price presents a marketing strategy I am unfamiliar with, but one which Mr. McMonigle must have thought through or used before.  The price may be a marketing tool to get folks who have a large net worth to look at this property as something special.  The problem, as I see it, is that this property is not all that special.  If I was a buyer of $4 mil properties, I would pissed if an agent wasted my time by showing me this property.  If I am a $2 mil buyer, the asking price will incur suspicion and distrust, and I would have a difficult time making any offer.
Pass

Yep, a 6,000 sq ft house on a 1/3 acre sounds like a “real” estate! Hey they should ask $6 Mil, it makes it sound more impressive.  These arrogant home owners will be groveling at any offer soon enough!

Not that I put a lot of stock in Zillow, but at least this time it seems it is closer to the future selling price than the listing agent is!

You’re dead-on with # 2.  It’s funny how popular mini wine fridges have become too.  The people I know who have ‘em, wouldn’t spend more than $20 on a bottle of wine, so what exactly are you trying to preserve? (not makin’ fun of paying just $20 for wine, ‘cause that’s right around my limit)

Agree with the wine cellar hypocrisy. I know a guy who has a well-stocked one, and he is a roaring drunk. All that money and snobbery to make a drinking problem look legit.

It is amazing to me how much money, time and energy people will spend trying to make themselves feel superior to others.

IR, did you see the latest reduction on Mark Maguire’s Old Place (3 Redbird)?

There is nothing wrong with a wine cellar.  I like wine, have a wine fridge, and enjoy collecting nice bottles to share with friends.  Wine goes hand in hand with entertaining and dining.  Storing bottles in the proper environment is important for proper aging and encourages improvement in the character and quality of wines.

Prior to purchasing a proper wine fridge, I was often dissappointed to find wines spoiled and/or corked after spending time in an open rack or in a box in the garage.

http://www.finewinereserve.com/basics_wine_storage.htm

Even “ready-to-drink” wines can be safely stored for up to 8-12 months without any loss of quality as long as it is kept in an area with the following minimum conditions:

• away from direct sunlight,
• temperatures between of 4ºC and 18ºC (40ºF and 65ºF),
• temperature does not fluctuate more than 2-3ºC (5ºF) once annually, and
• humidity levels are greater than 50%.

Store it outside of these limits, and all wine is subject to passing their prime or spoiling in just a few months. Although the first two conditions are easy, most people find it very difficult to provide the last two without some type of cellar or wine cabinet. So drink up folks, or better yet, call us!

How many people in Irvine are making SEVEN figures? Second, how many people making SEVEN figures, aren’t looking for property a little closer to the water, or a lot more private?

No private pool, no private spa, no private tennis court. This is NOT an estate!

5 beds, 6 baths, useless wine cellar and upstairs bonus room with 5900 sq ft is actually quite small. Based on my experience, upstairs bonus rooms are almost useless.

The overhead pic is confusing…i think the sat. photos are not recent enough, but 1/3 acre is small for that price.

300 bucks a month in assoc dues for what?

1.5 mill is what I think its worth.

Yes, Perhaps Zovall can do an update. I mention it in the post coming out Friday. This flipper is going to set the record for the biggest residential real estate loss to date: quite a dubious distinction.

3 Redbird

Days on Market 498

Original listing price: $4,195,000

3 Redbird

New listing price: $3,395,000

http://www.redfin.com/stingray/do/printable-listing?listing-id=461013

But if you buy bottles

...

RE; per what Irvine Renter said
The Most Expensive House in The OC California

http://la.curbed.com/archives/2006/05/the_most_expens_1.php

All of the above is true but I wonder….if this place is so great to deserve this price…then why are they trying to sell in the first place…hmm.

land of the uber-debt. 

lol

Housing Chill Grows Worse, Bites Consumers
http://online.wsj.com/article/SB119072589181638646.html?mod=hpp_us_whats_news

I believe this place is a product of the bood, megahuge tract houses with nothing special but their price.  in a couple of years this house will come down in price.

As money is becoming difficult to borrow, people are going to think twice about where to spend it.

and like many poster stated above, above 2 mil (if I could )—>I started having some expectations ie ocean view, pool etc.

come to think of it, anything above 1.5 ( after we reach bottom)

we need to shake these boom prices and come back down to reality.

New different looking mortgage reset graph

Reset pain postponed?

http://mortgage.freedomblogging.com/2007/09/26/reset-pain-postponed/

Video link is on the right

Shiller of Yale Sees `Years of Decline’ for U.S. Housing: Video

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aPZPu._CS_QI

Sept. 25 (Bloomberg)—Robert Shiller, chief economist at MacroMarkets LLC and a professor at Yale University, talks with Bloomberg’s Kathleen Hayes from New Haven, Connecticut, about the state of the U.S. housing market, the outlook for home prices and the likelihood of a recession. Home prices in 20 U.S. metropolitan areas fell the most on record in July, indicating the threat to consumer spending was rising even before credit markets seized up in August, according to the S&P/Case-Shiller home-price index. (Source: Bloomberg)

00:00 State of U.S. housing market; Boston, Denver
01:42 Outlook for “continued weakening” of market
02:49 Likelihood of recession: “half or more”
03:36 “Years of decline” before housing recovery
04:52 S&P/Case-Shiller home-price index
Running time 05:43

Realtors find 20.5% drop in Aug. O.C. sales

http://lansner.freedomblogging.com/2007/09/25/realtors-report-205-drop-in-house-sales-last-month/

IR,

The #‘s you are using for downpayments, income requirements, etc. are going to be quite different for homes in this price range… just FYI.

You are probably looking at closer to 30-40% down (not 20%), and the income requirements will be slightly different due to higher rates (though with more money down, this should balance the difference nicely).  A good rule is that on a $ amount over 1,000,000 (loan wise, that is), 70% is the new 80%.

I always have something to say…......sometimes I have to have a glass of wine to get me going…...but I always have something to say.

As I sit at my desk and I look at this property I have nothing to say…..my mind is blank. WTF are these people thinking?

Housing Likely to Continue to Flail

http://www.builderonline.com/industry-news.asp?sectionID=26&articleID=579987

Sales of existing homes fell last month to their lowest point in five years, the National Association of Realtors says. The NAR says it expects more dismal figures for September as the housing market reels from the crisis in the mortgage industry.

But the September figures might be much worse. Re/Max International, which analyzed existing-home sales in five major cities for USA TODAY, says September totals so far are down sharply from last year. In Baltimore, Tucson and Seattle, for example, sales in the first three weeks this month are off more than 40%.

“I’ve given up forecasting how low housing sales will go,” says Joel Naroff, president of Naroff Economic Advisors.

And Stuart Miller, CEO of Lennar, has given up forecasting the builder’s profits after reporting a record loss of $514 million in its third fiscal quarter, as it laid off 35% of its employees and wrote down the value of real estate.

Adjustable-rate mortgages: now it hurts

http://www.newsday.com/news/local/ny-bzarm0926,0,1479499.story?coll=ny_home_xpromo

Can we track this one?  Might be interseting to see how well the president of Century 21 does trying to sell his home in Tustin Ranch long distance…

Home sales take sharp tumble

http://www.latimes.com/business/la-fi-homes26sep26,0,4825476.story?coll=la-home-center

Thomas Kunz, president of national real estate brokerage Century 21, said now was a good time to be active in the real estate market. For buyers, he said, there’s a chance to negotiate a bargain price. For sellers, setting a price that is below market will generate a sale.

“This is a great time in a local market for the consumer to take a look at their situation,” he said.

Kunz, who is based in New Jersey, is taking his own advice. He has decided that it’s time to sell the house he’s owned in Tustin Ranch since 1998 and roll the proceeds into a newer, bigger house closer to the ocean in Carlsbad. He figures he can buy a better house for not much more than what he can get in a sale in the next few months.

“This is an exceptional time,” he said. “I know I’m probably the only one saying this, but these are the facts as I see them.”

That’s true. Since you can’t deduct the loan over a million, people often put in cash. That is also what astounds me about the plethora of million dollar plus homes for sale in Irvine. Many of these places under $2,000,000 do have 80% loans.

I put the income requirement and other data just to be consistent with the other posts.

Yeah, a “fixer-upper” with a 2006 property tax of $24,753!  I’ll pass…

long time reader of this great blog.
Home bulider got a break selling this house to a greater fool.
I was reading some article on new home buliders the other day. It made me wonder which home builder will go to BK first.

Good to see you again…

Can you please elaborate?  Do you mean you can’t deduct interest on your taxes if your loan is over 1 megabuck?  Or you can only deduct the interest up to one million?  Why do you need a bigger downpayment?  The requirements for LTV is more stringent? 

Carl

Damn right.  Who needs a wine cellar?

Everyone needs a cigar smoking room, though.  When we finally extend our house over the garage, I’m gonna install in that area a dedicated HAVC.  That way I’ll turn that mini suite into my own office, stereo room and stogie palace.

Of course, I’ll need a walk in humidor, where I many keep a few bottles of Bourdeaux and a some Two Buck Chuck.  Really, the proper ratio should be 1000 cigars per bottle of vino.

Hey, you never know, you only need 1 buyer who is crazier than the seller…

woah, I have to disagree with you folks here.  If I had enough discretionary income to blow on a multi million $ home, it damw well better have a wine cellar.  I love wine, love drinking it, love smelling it, and love collecting it.  Showing it off is that last thing I’d want to do.  I’m sure there are some folks out there that like to show-off there collections, but some people just really like wine.

BK…KB….BK….KB

Is there a little similarity there?? Ohh I think there is!!

They Cried Wolf. They Were Right.
http://www.nytimes.com/2007/09/23/weekinreview/23bajaj.html

Imagine the annual tax bill on this house.

You lose the deduction over $1,000,000. Without the tax benefit, many chose to put more down than pay the interest.

If you think that house is expensive - check out this house that is being offered in Irvine for 15 million dollars!

http://www.ocregister.com/news/million-home-canyon-1850020-price-asking

I wonder if I could get a stated income loan for this place?

Dano

Let’s all hope that $10 per cigar tax doesn’t go through.

http://www.sptimes.com/2007/07/17/Business/Cigarmakers_in_a_pani.shtml

carl - Yes, if the loan is over $1,100,000.  The mortgage interest deduction is limited to the interest on the first $1,100,000 of mortgage.  And in reality, it is much more limited than that by AMT and high income threshold amounts.  After asking aroung a bit, it appears there are very few total mortgage amounts that exceed $ 1.5 mil and amounts over $ 1.5 mil or so usually indicate financial distress.  I am speculating that is why we see so few foreclosures on $2 mil and greater worth properties.  There are huge amounts of equity.

“I know I’m probably the only one saying this, but these are the facts as I see them.”
The only one saying this?  I don’t think so.  Every realtor out there says the same exact thing.  How did “this is an exceptional time” or any of his other spouting become “facts”?

“How many people in Irvine are making SEVEN figures?”

There are a lot of masochistic people who live in Irvine and work in LA.  There are also a lot of executive/sales jobs in Orange County that easily pay $350,000 + bonuses and stock options. 

Usually people don’t live near the water because those houses are too small to store all of their unnecessary junk they have to buy in order to impress people. 

As for this particular house, I don’t understand how anyone would pay that amount of money for such a small lot and to be so close to neighbors.  for $4,000,000 I want at least an acre of land.

We don’t have good numbers on the breakdown over $200K, but there are 7,478 households that make more than $200K. Is that a lot?

http://www.irvinehousingblog.com/2007/09/09/irvine-income-data/

Am I the last to the party on this one?  Is everyone aware that the Chicago Merc is offering Futures on housing?  See below:

http://www.cme.com/files/housing_faq.pdf

They have been trying to get that off the ground for a while now. It doesn’t trade enough volume to be effective yet. By the time the next bubble rolls around the builders may be able to hedge themselves in the futures market to avoid some of the painful impairment charges they have been enduring. If this market gets off the ground, it will be a great thing for the building industry.

$200K is nowhere NEAR a cool million!  There are very VERY few people making that kind of money.

Don’t get me wrong, this is a wealthy area, and there are a ton of people making a ton of dough.  That said, the demand side of the market for $4MM homes is extremely thin, and very demanding.

I would expect, assuming this is a real sale, that we should see this home on the market well into 2009.

It doesn’t trade in enough volume because noone is going to take the long.

Still a couple of shorts on the Las Vegas market sounds mighty attractive.

I bet they don’t get more than $1.7 mil for it.

Look…there, did you see it? No, there…way over there…now see it? That’s the view.

Do you even have access to MLS?  The property is listed for $3,395,000.

Also, superjumbo loans such as this ON PURCHASES commonly CAP OUT at 70% MAX loan amount.  Sometimes 60-65% depending on the actual $ amount and other situations.

It’s not the same as buying a place for 1-2 million.

My take is that anybody purchasing a $4 mil property is using a down payment of at least $3 mil.

Are you saying that McMonigle did not advertise this property for sale at the $4,495,000 price?  If he advertised the price as $4,495,000 and listed the price in the MLS as $3,395,000, what should we discern?

Think about what you can get in Crystal Cove for this listing price, and contrast it to this house, and come on…is anyone that stupid to buy this over a Crystal Cove house?

I just noticed that 63 grandview is listed for $5,200,000.  Same sq.ft. and same wine cellar, but with a pool. It makes 25 Grandview look like a bargain

It turned out to be one buck per stick.

Yet more reason to use the Internet.

Crystal Cove is not in Irvine.

Late Payments Fall for Credit Cards, Rise on Home-Equity Lines of Credit

http://biz.yahoo.com/ap/070926/late_loans.html?.v=4

Regardless if I had the means to make the downpayment and ongoing monthly, would that really be the best thing I could be doing with my money?  Especially in this day and age?

Could you imagine the net worth I would have to have in order for this property to be an inflation hedge in my portfolio? Good grief!  Echoing others’ thoughts, if I had that sizeable of a portfolio, would I be buying a tract home in Irvine, CA?

One thing I’ve struggled with is the idea that if only the crème de la crème can afford this property, doesn’t that actually limit my potential re-sale market?  If I chose not to live here forever, how many other über wealthy folks would also want to plunk their money down here so I may free up my funds to put elsewhere?  Is that rarely an issue?

The American Dream gone nuts

http://seattletimes.nwsource.com/html/opinion/2003902575_fharrop26.html

Interesting outline on the short sale process

O.C. agents talk foreclosures

http://mortgage.freedomblogging.com/2007/09/26/oc-agents-talk-foreclosures/

Save the Day
http://www.nytimes.com/2007/09/25/opinion/25roach.html?_r=2&pagewanted=print&oref=slogin&oref=slogin

In large part, that’s because the American consumer is now at risk. Consumption expenditures currently account for a record 72 percent of the gross domestic product — a number unmatched in the annals of modern history for any nation.

This buying binge has been increasingly supported by housing and lending bubbles. Yet home prices are now headed lower — probably for years — and the fallout from the subprime crisis has seriously crimped home mortgage refinancing. With weaker employment growth also putting pressure on income, the days of open-ended American consumption are likely to finally come to an end. That will make it hard to avoid a recession.

can you avoid the tax buying online?

Status of O.C. high-rise projects
There are plans for more than 40 high-rise condos in Orange County. Here is where they stand as of September 25, 2007.

http://www.ocregister.com/ocregister/money/article_1852310.php

Not the federal tax.

But you can avoid California tax.

Plus, most online cigars stores operate very lean and you can get really good prices if you shop around.  Typically you’re looking at something in the order of 35% of what you’d pay here.

And then there buying overseas…. you still pay customs, but their local taxes can be like dirt cheap.

Damn, I think you stole IR’s thunder ! 

we have a 12 bottle wine refrigerator just to clear out space in the “real” refrigerator…. no pretension.

After browsing through RedFin, I find it outstanding how many people think that their property value suddenly deserves another 0 before the decimal. I saw several “estates” that were bought around 1-2 mill between 1990 and 1997 and are listed between 10-20 mill…...

Do people just list their homes to show off? Sort of like, “Look everybody, I have a cool house and enough money to waste on real estate listings just so that you get jealous of my awsomeness.“I mean they can’t really expect anyone to actually buy their homes, can they?

Part of the problem is the contracts are expensive and combine that with out a proven record it has been slow to take off. But the option volume is higher and again they make it difficult because they are floor traded only. That means you need to have a broker with a seat on the floor of the CME or have a working relationship with one. The block trades which involve other commodities trade at a much higher volume.

First American just came out with their pricing index and it looks like they would want to get it to trade too.

Another company went live with their trading http://www.radarlogic.com/index.html just this month. It seems the big boys think this will take off. If you shorted LA on this index when it came out you would be a happy person. I would imagine this will be the company that is first to have OC as a seperate MSA.

I don’t think that is a satellite photo, it looks like an artist’s rendering. Those cars look all wrong. Looks way different in Ask:
http://www.flashearth.com/?lat=33.621755&lon=-117.814772&z=20&r=0&src=aska

Sadly, Irvine didn’t make this list, maybe next year:
CA Tops List of Most Expensive Homes
http://thegreatloanblog.blogspot.com

From what I’m told by real estate agents, properties in this bracket are very hard to move, because only a tiny fraction of the population can afford them. Yet there are certain antique 20s vintage apartments on Chicago’s near north side that will sell for $2MM-$5MM without sitting on the market for too long, because they are perceived to be a very rare commodity.

What some folks will do with the $10MM limestone mansions they built on Howe St , when more hedgefunds go broke from a surfeit of bad mortgage paper and there are no more $100MM bonuses for their managers, no one knows.

Distance from neighbors is not a factor, since these neighborhoods are among the most densely populated in the nation. Your palace will be wall to wall with someone else’s on a very public street.

It’s not just the price of the place, it is also the tax load (figure a yearly tax bill of up to $200K on that $10MM mansion on Howe), and the maintenance and furnishings of a house with 25 rooms that requires at least 2 full time servants to care for properly, if not more.

You see a spree of mansion-building like what we have seen in the past 15 years perhaps once per century. Then, in more normal times, these palaces languish on the market, and end up deteriorating much more quickly than lesser properties that are easier to carry. St. Louis and Detroit are full of blighted neighborhoods stuffed with Belle Epoque palaces of incredible beauty and quality, and my guess is that when we inevitably fall on leaner times, many of the huge homes in Chicago and SoCal and other places will be split up into luxe apts, if they’re lucky, or turn into cult headquarters, or fall to an even more degraded use.

Thanks, Laura Louzader, for helping to validate my suspicions.

-A.

Nice place.