While I do feel sorry for the children I know that they will not lack for a roof over there heads someone is always willing to help out people with children.  However pets are considered disposable by many people, it doesn’t matter to them if they wind up in the animal shelter and lose their life because they aren’t adopted.  Even worse are the idiots who leave them behind to fend for themselves in a locked house or dropped off outside to roam the streets.

I’m starting to work with an animal rescue group and I’m beginning to see more of this, even though more landlords are willing to rent to people with pets than they used to be, they recognized that pets are just as much part of a family as peoples children.
——-

Great music selection and tie-in!

Life is good if you are the 2005 seller!

CHA CHING!

$$$$$

Reality strikes hard and cold again at today’s feature listing. Even at 21% discount from 2005 sale, this property shows many faults at $789.9k - still way too high to demand this price.

How much does it take to fix this place up?

Maybe. But what if the 2005 seller traded up to something more luxurious - like $2 million of 3200 sf in TR and expecting it to become a $4 million in 2010?

No permits.  In Fla, the kiss of death.

Are those counters mica?  The kids could have doubled up in the bedrooms and then maybe the parents could have stayed.

Then - PFFF!

Don’t renters face the trauma of a forced move every year that their lease is up?  You have no guarantee the landlord will renew your lease.

That’s just foolishness.

I’ve never had a landlord not renew a lease.  My current landlord is stumbling all over himself trying to get me to stay past Feburary - of 2009!

BTW, Prince rocks.  I can’t think he had foreclosures in Irvine in mind when he wrote “When Doves Cry” but he’s kind of an odd guy.  Maybe he did.

Well, I know it happens as I have seen it.  Your inability to face reality is as foolish as the people screaming now is the time to buy. 

Your landlord can decide to not renew for any reason.  He may not like the fact you have two kids running around the house.  He may decide to sell for any number of reasons.  He may pass away and the estate decides to sell.  He may decide to raise your rent to a level you are not comfortable with.  Sure you have other options but it involves the emotional toll of moving and the ungodly trauma forced on the kids (sarcasm - I personally don’t think moving is that big of an issue for the kids.  I attended six different schools in five states and turned out o.k.)

Most rational landlords will work to keep a good tenant in a property because vacancy and collection loss is a killer. Landlords who have any brains do not arbitrarily and capriciously evict people or raise rents to levels that cause a tenant to move (although the Irvine Company does the latter on occasion.) Take a look at the foreclosure numbers and tell me which is a more stable form of property possession: long term rental or ownership? I have a difficult time imagining the number of landlords making tenants get out of a property is exceeding the number of “owners” being evicted through foreclosure.

Naw… the upmarket sellers didn’t spend 2MIL in TR… instead they went and got themselves a 2MIL mortgage in TRidge.  There weren’t that many homes in TR going for 2MIL to support the herd.

TRidge was the thing to do.  Or so I was told by my kids.  Their friends were moving “UP” to TRidge.  Some went to Shady Canyon even!

I expect that a number of my kids’ schoolmates will soon be moving. 

I wonder if there’s a waiting list for the TR Apartments at the end of Campus.

What Glenn said. I moved a lot as a kid because my dad was in the military. The kids will be just fine as long as the parents act like adults. As for the pets, thats also up to the adults. My husband and I recently moved with cats and there are many owners that will rent to people with pets, you just have to make the effort to look for them.  Coming from a foreclosure that may make you look irresponsible might take more elbow grease but it can be done.

IR - I agree at this time foreclosure is more likely.  My point is, long term if you are planning to stay somewhere and can afford to buy you will have a more stable environment for your family.  It may be foolish for a landlord to force you to move but that is always out there as a possibility.  Nobody can kick me out of my house unless I lose my job and stop making payments on my 30-yr fixed.

IR said, “Most rational landlords”

Oops.  Most humans aren’t all that rational.  Landlords don’t, as a class, escape that.  That’s not a blanket indictment merely a note to say that people do what they do for their own reasons and “rational” isn’t always, or even frequently, the basis for those actions.

I’d say that, over my lifetime, maybe half landlords were pretty decent, rational people.  The others, no more honest than most, no less dishonest than many and as driven by their emotions as by something else.

WTF?

“Permits unknown”?

How big is this house then?  2440 sq feet?  Larger smaller?

This is a real mess.  If this house were 4b/3ba in 2440 sq feet then it has some nice possibilities.

Large lot.
If you’re Chinese, next to 99 market.

However-

Unknown permits.. raises the flag of HOA and City issues.  And the Woodbridge HOA is not something to mess around.  They’re professional -unlike mine- and you MUST follow their rules. 

The square footage of those bedrooms becomes a NEGATIVE number.

Location, if you’re not Chinese, this location sucks.  It’s borderline Woodbridge and it’s next to two VERY busy, large streets.

Six bedrooms?  Huh?  Five bedrooms is a plus.  Anything above that better start getting big and with more bathrooms.  IMHO, 5b/3ba with an “office/extra den” is the ticket in Irvine.  Otherwise you’re looking at a rich Brady Bunch Home and families are not longer that large.

And, why did someone pay 1MIL for a 4b/3ba home in this location.  That’s the part that blows me away.

Can you explain, to those of us not intimately familiar with the property, why being “Chinese” has such an impact on how a person might view this home?

Catty-corner to this house across one of the busiest intersections in Irvine is Culver Plaza, a shopping center dominated by Asian restaurants and stores.

from the wsj today - picking up on two of the IHB themes, I post the text since the URL is a pay site:

Is it just us, or does the National Association of Realtors’  new public awareness campaign –- launched earlier this month – seem just a tad out of whack?

As home prices slide and some debt-straddled homeowners lose their homes to foreclosure, the trade group is pushing the concept that buying a house is nothing but a sure-fire, winning investment.

In a NAR television ad that is now running, the trade group maintains: “A home isn’t just a great place to raise a family, it’s also the key to building long-term wealth. On average, the value of a home nearly doubles every 10 years,” the ad says.

On NAR’s web site, the trade group compares placing a down payment on a home to investing in the stock market — and rates buying a house as the better investment:

  “Over the past 30 years, the median price of existing homes has increased an average of more than 6 percent every year, and home values nearly double every 10 years, according to historical data from NAR’s existing home-sales series. Thanks to the power of leverage, a homeowner’s return on investment is even more impressive over time.

  For example, over 10 years, a $10,000 investment in the stock market at a normal 10 percent market rate of return would yield $23,600. The same investment as a down payment on a $200,000 home at a normal appreciation rate of 5 percent would return nearly five times the stock market return, at $110,300.”

“Five times the stock market return?” We know that the trade group’s purpose is to boost home sales, but is this statement pushing things too far?

It’s a “very misleading statement,” said James R. Webb, director of the Center for Real Estate Brokerage and Markets at Cleveland State University and a professor of finance. Mr. Webb noted that housing-price appreciation rates vary across the U.S. and that “the rates for appreciation that we saw in the past few years were artificial due to the fact that we gave a zillion people mortgages who shouldn’t have gotten them. If we hadn’t given those people the mortgages, those rates of appreciation wouldn’t have happened.”

It’s best to view a house as a home – not as an investment he stressed, adding, “You shouldn’t buy a house if you don’t need a house. You should buy a house because you want to live in it, not because it’s a good investment. People have become seduced by the idea that a house is a good investment.”

We also phoned Chris Mayer, the director of the Milstein Center for Real Estate at Columbia Business School. About NAR’s down payment/stock market comparison, Mr. Mayer said, “That’s insane. If one of my students made that calculation, I would fail them.”

NAR’s calculation leaves out several important variables, such as closing costs, how much money goes into maintaining a property, brokers’ fees, property taxes and “the risk of using 95% leverage – in the example NAR puts forth, the buyer only puts down 5% of the home’s cost and borrows the rest, he explained.

Such a home buyer would risk foreclosing, Mr. Mayer said. “You don’t leave out leverage in making an investment,” he said, adding that home prices are on a downslide and that “from an investment perspective, the biggest return on your house is getting to live in it.”

When queried about NAR’s down payment/stock market comparison, Walter Molony, a NAR spokesperson, said that “if looking at strict equity gains, those are valid numbers.” He noted that 2007 was a strong year for existing-home sales, making it the “fifth highest year on record.”

But what about the buying a home/investing in the stock market comparison? “Housing is first and foremost shelter and it is a good long-term investment,” Mr. Molony said.

Readers do you agree that buying a house is a good long-term investment? Is it comparable to investing in the stock market? — Lauren Baier Kim

“dominated by Asian Restaurants and stores” is a bit of an overstatement IMO - certainly Culver plaza has the 99 store and some asian restrautants nearby- but you also have the pet store, yuppie coffee shop, McD, 31 flavors, KFC, CVS, Subway, 24hour fitness, Nice Nursery in the opposite corner, etc.  Nice shopping center to walk to from Deerfield or that part of Woodbridge or Westpark nearby. 

The problem with this particualry house that it backs onto the corner of Culver and Irvine Center drive - very busy streets.

They should just say “no permits” and that property would become very attractive to people like me. It would show that these people have a backbone and don’t let big government push them around. I would buy that place and put barbed wire and Punji sticks all throughout the property to hold the city inspectors at bay. Once the sheriffs are called in I would drop the honey and release the bears. By the time the Feds got there the whole neighborhood would be a smoldering mass of stucco in my war against terror and I would be a martyr to my people: The Republicans. That’s the American dream and I want my piece of it.

Yeah, the location to the 99 market.  However, it is more than a mile if you drive, and I don’t know any shortcut if you walk.  Besides, the fengshi may not be that attractive to an Asian buyer due to the shape of the lot, and the angle relative to the street.

Personally, I like the RGB scheme for the color of the wall.  Seller must be a graphic programmer like me…

Sam Woo baby!  Not that many places around here where you can see the roasted whole chickens hanging up in the window.  You’re right arm, not dominated, but heavily influenced.  Asian bank, chinese bakery, Sam Woo, etc.  Hey Panda is asian food too!

Regardless of Circumstances, anyone buying a home worth $1 Million must have strong financials to support such mortgage. If they got into interest only, we know they were speculating.

I feel bad, but not when it comes down to me being priced out of the market for past several years due to such buyers.

Dude, that’s classic.

What’s up with all the photos of the toilets?

LOL! I didn’t notice that. Did you see the one where the toilet is the focal point of the photo, and the cover is up so you can look right into the bowl? Nice…

It’s not as good of an investment; just read the excellent post from yesterday.

I could not find the “analysis” (I use the term advisedly) at the NAR website, but let’s run a few numbers, shall we?

First of all, to keep things simple, I am going to ignore taxes, and I am going to round to hundreds.

On the stock side, $10,000 at 10 years at 10% would equal $25,900, according to Excel.

A $200K house at 10 years at 5% would be worth $325,800. However, yesterday’s post shows the long term appreciation rate of housing to be inflation plus .7% (stocks typically are at inflation plus 7.0%). If we assume inflation at 3%, the expected increase in the value of the house is $287,600—or roughly $50,000 lower.

If you want to sell a house in 10 years, and given this is the Realtor making the argument, I guess one should assume a 6% commission on sale, should they not? On $287,600 that commission is $17,300, making the net proceeds $270,300.

But we’re not done yet. Using the 160 GRM multiplier, the rent on a $200,000 home would be $1,250 a month, or $15,000 a year. Assuming a 7% interest rate, the monthly payment would be $1,264 monthly, or $15,169 a year. So all things being equal, the rent payment and the mortgage payment would be virtually the same—and over the 10 years the principal would be reduced by $27,000.

However, as outlined in the “Rent Versus Own” post on 1/14/2008, there would be extra costs of owning. First would be mortgage insurance of .05% a month, because of less than the 20% downpayment. That’s $1,000 a year. You also have property taxes, estimated at 1% per year, or $2,000 a year. Homeowner’s insurance, .25% a year, or $500 per year. Plus, you have upkeep, because things wear out. In the “Rent versus Own” post, the number used was 1.5%, or $3,000 a year. These amounts total $6,500 a year in addition to the mortgage, and are the type of costs the NAR probably convienantly forgot; with interest at 5% over a 10 year period, the total cost is $81,800.

So let’s now do the math.

Proceeds, net of 6% commission   $270,400
Loan Balance                       (163,000)
Cash at sale                         107,400
Other carrying costs                 (81,800)

Net proceeds                         25,600

This assumes no other costs at purchase or closing, which is probably NOT a realistic assumption. But in the best case scenario, owning a home, on which you are 95% leveraged, is not better than a stock market investment—it is slightly less than breakeven. In the real world when you take in all the costs, the return is much less—in line with the inflation plus .7% cited in yesterday’s blog.

Dave

P.S. This blog has become a daily reading item for me; thanks very much

There is a walking path that connects the end of Morning Dove right out to the intersection of Culver and Irvine Center.  This makes all the shopping at Culver Plaza very convenient by foot.  I’d say the center is about 35% asian by square footage.  Ranch 99 is large, but so are 24 Hour Fitness, BevMo, Armstrong Nursery, etc. 

On the downside—the intersection of two 6-lane roads creates significant road noise.  Like most “bubble” properties, that sort of negative was ignored in the previous purchase price.  In a declining market, however, the few remaining buyers don’t ignore that type of non-fixable negative.

You could have seen this train wreck coming.  Look at the loan terms—virtually no money down.  When you treat houses like call options, expect a lot of people who don’t choose to exercise that option when the house is underwater.

Why don’t we face the trauma? Because we pay our rent on time and the owner (or real estate manager) doesn’t have to find a replacement tenant.

We sold our house in 1998, moved to Australia (three different rental places in 4 1/2 years) and back to the Midwest in 2003. We have been renting since, because we wanted to live in a particular school district and we didn’t find a house that we would like to buy (finances are not an issue). We’ve been renting for 4 1/2 years now, and have been on a month-to-month lease for the last 2 1/2 years, with the same rent all along. My kids—14 and 11—know we live in a rented house and they don’t care. My wife would like to have a place, but she is not very interested in looking for something to buy. It’s also nice that when something goes wrong we call the manager and someone comes over and fixes it.

As yesterday’s post show, a house historically appreciates at a rate similar to a cash investment, in large part because of ancilliary costs such as upkeep, insurance, and property taxes (not to mention transaction costs upon buying and selling). There is a psychic reward for owning a house, but at this point that’s not real important to my wife or myself.

So do we worry about having to move? Absolutely not.

Dave

We have had a tenant in a 1BR condo in South Coast Metro (Santa Ana, bought in 1979) for the last 15 years. We keep the rent at least 20% under market. It works well for both of us, we have no vacantcy days or repair requests and the tenant enjoys stable rent with small periodic inflation inflation increases.

That 2005 seller probably took his cash to Arizona, to contribute to the ruination of the utopian society those fine folks had built for themselves over there, before all that California cash came flooding in.

Well, 99 Ranch, Sam Woo, and the non-chain restaurants are the destination stores there so many of the smaller stores cater to asians too because that’s who’s walking around. Isn’t there a branch of a Chinese bank there too? I think the location is probably an asset - there are lots of immigrant Asians from places like Hong Kong who would probably consider that intersection “quaint” and “quiet” and would appreciate being walking distance to a busy shopping center that catered to them. OTOH, there’s not many places like that in OC. Supply and demand.

I believe the realtor was trying to convey that the house has been updated.  The cabinets at least appear to be Home Depot or Lowes specials.  Some cheap pre-fab counters recently installed as well it appears…

This particular realtor is an REO specialist.  Total hack.  She sold a place around the corner from me as well.  Pictures were horrible, they didn’t even clean up the trash in the unit before an open house, etc….  REO specialists are just in the game to make the quickest and easiest buck.  They have no interest in maintaining property values as they aren’t likely to get another home in the same neighborhood.  They’re in and out…

to stir the pot a bit….

I see a place like this bottoming at about $700K

maybe a few lucky people will snatch a place like this for $650K but I doubt lower

Do you think this place would rent for $4,062 per month, or do you think the GRM of 160 will not be reached?

I think it could be rented for $3,500, and the price will drop to $560,000.

Kate-  Military brats know that moving is part of the deal and are used to it.  There are huge support groups for the families and the kids tend to go to schools with plenty of their military brat “peers”.  Moving has absolutely no stigma and since everyone tends to live in military housing, the only “status” is tied to dad’s or mom’s rank.

Of course, I did date a Commander’s daughter and used to sail with a Lt. Commander’s son…  but that was me.  And by then we were all living in civilian housing

In that environment you learn to travel “light” and know how to pack.  Twice.  Once for the necessities and once more for the rest of the stuff.

Google “Radford High School”, for example.

It’s not fair to compare military families with civilians.

Of course for just another $200/mo, you can live in the best family neighborhood in Newport Beach….so I think $3,500 is a little high.

http://www.ochomereview.com/homewp/index.php?p=249120

This property has been on the MLS at $3900 for 2 months and was just recently reduced.

The problem with this house is the lack of permits.

That’s a huge potential downside because you have to deal with the Woodbridge HOA (ouch!) and the City of Irvine (ouch! ouch!).

If the house is sold “as is” then the next owner will be responsible for the fines and potential tear downs.  And the City might declare the house unlivable.  Good luck with a mortgage.

Potentially a nest of big legal and financial problems.

IMHO, this home is worth no more than 500K because of those issues.

I assume that the 2400 sq feet DO NOT take into account the additional square footage.

Figure, 2400 sq feet @ 250 per square feet = 600K
Subtract 100K for the possible rebuilding, fines and loss of livability certification from the City while the problems are remedied.

500K.

And don’t forget that the HOA will be very, VERY pissed off.

Try driving into that shopping center if you do not believe it is so dominated. 

As I indicated before, Ranch 99 has a large seafood selection but their fiznit is not that fresh:  I bought some red snappers there that cooked up real slimy and nasty.  From the oven to the garbage pail they went. 
And if you really want some food poisoning, try the bargain buffet at the front of the place.  Damn!  But it is worth the price of admission just to view the greasy garbage, a train wreck sort of thing.  I get a kick out of the place but the wifey won’t step foot in there, it does have a strong odor to it because of all the creepy-crawlies in the back.

I like that area.  Do you know what the sale price is?

You are probably right. At $3,200 rent the value drops to $512,000.

Right across Culver from this house you have the Chinese stores restaurant and the Chinese Bank (Cathai?) branch.  All congregated together.

The other stores, BevMo, etc. waaaay out on the other side.

So, if you were Chinese, this location is good because shopping is just a quick hop across the eight lanes of Culver.

Something else…. I’ll bet that from this location you can hear and feel the trains barreling down in that trench just north up on Culver.

Agreed.

If I want fish I go to Marukai in Costa Mesa.

The lowest priced home in Harbor View is 1.575M, same model, but only 4 bedrooms.

A Democrat would cry that his Civil Rights are being trampled and that the City needs to protect him.

Then the City of Irvine would create a new department:  “Dept of People’s Feelings”, headed by “The People’s Feelings Advocate”.. and they would feel you and cop a feel off you wife.

Eventually, the People’s advocate would get a 100 person department, budget for 54 Toyota Camry 4cyl LEs, and they would offer you a $200 per month stipend to participate in a new California program to get in touch with your feelings.

Meanwhile the HOA would have to update its CC&Rs to allow for Home Design Architectural Guidelines to respect People’s Feelings, a new Harmony Resolution Process and Procedures to foment Feeling Diversity in the Community.

Just don’t ever, EVER tell them you’re a Democrat.  Because then you’ll have to deal with Larry Agran.  He will issue you with a City Proclamation of A Diversity Feelings Day.  And he might cop a feel off your wife too.

Tose aren’t chickens my friend, those are ducks, whole ducks with the beak, eyes, feet and all just dripping in heat lamps, it’s the most discusting thing I have ever seen. That thought in my mind will haunt me forever. I’m not from that area but the first thing I thought of when I went to that shopping center was holy china!

Actually, it looks more like the photos are for showcasing the carpet, not the hosue.

Nationally, houses appreciate at the rate of inflation (or slightly above).  Locally houses have, and could very reasonably be expected to beat inflation over the long run.

Keep in mind that mixing national and local statistics is misleading and borders on outright disingenuous.

Some are chickens houseonlegs.  Where do you think they get the chicken feet from?  I’ve tried chicken feet before a few times at dim sum, but just can’t see the allure…

Do you think they might have some valuation issues there? $3,700 rent supporting a $1.6M price? A 432 GRM. Hmmm…

The duck feet are removed, BTW.  You just have to realize that ducks have head, beak and all, not just some slices of breast meat between two buns when it hatches from the egg.

The bottom line is that that shopping center and the one just down Culver at Walnut are English-as-second-language central.  Indeed, when I first looked for housing in Irvine, we looked at a place across from the Culver/Walnut center.  The (very ESL) agent looked at us warily: you want rent here, she says quizzically.  So we bailed on that place and rented in Westpark.  I was new to Irvine and had little knowledge of what the neighborhood was really like.  Come to find out that it quite different from Newport Beach in a very significant way.  Not only are Irvine neighborhoods overwhelmingly plastic (being designed in an Irvine Co. boardroom rather than evolved naturally ) but they are quite foreign as well.  I am sorry but it is just odd to see my neighbors wearing gloves and welding masks to go to the market.  I never saw that growing up in the Midwest.  And I note that the kids don’t play outdoors much either, evidently they are cooped up indoors so they can study.  My neighborhood has a ghost town feel to it even though no homes are empty.  It is just a little too different from my perspective.  Having said that, I love the ethnic shopping opportunities such a mix enables.  But I do feel a bit out of place in Westpark.

Good luck with a mortgage is right, banks usually don’t mess with un permitted additions. The ones that do are pretty strict and need a licensed inspector to say that it was done in a workman-like manner and conforms with the rest of the house/neigborhood. Even at that, the LTV they will offer you will probably be low.  But I bet lenders are even stricter on it these days. Good luck with homeowners insurance as well, they will not cover a lot of things with an unpermitted addition and the lender will have to agree to that as well.

Yeah, military brats are used to moving but that doesn’t change how much it sucks.  My dad got transferred when I was 2, again when I was 6, then again when I was 10.  While the military family community was great, and living on base was cool too, it was tough leaving all your friends, schools, etc. every few years.

A house that size with 5b/2ba should cost less than a 4b/2ba version because it must be crowded inside.

I figure that with a view, single story and if you can get away with it (HOA, view rights), in this environment, you could do a really nice job with a 300K remodel:  5b/3.5 ba @2800 sq feet.

IR,

I think you might have to use a GRM of 180 - 200 on a SFR in Irvine

Just my oppinion.

160 or less for condos

or 160 for an SFR, that is old in a less desirable area

Again just my oppinion

Am I the only one confused?

Why does $789K make any sense for this property—or even close?

I’m curious as to the permitted square footage, but even then I see dated floorplans with dated appliances in a budget kitchen.

Isn’t that Culver the property backs up to? I can’t imagine that to be a plus anywhere.

I actually not trying to be cynical, but how does this fit above $635 to $650?

JMTCW…....

You have forgotten to include taxes and fees on your investments.  If you are using an equity index funds (Vanguard), you should expect to pay ~ 15 basis points.  Then you have to pay taxes annually.  The most recent dividend yield was 1.87%, so you pay ordinary income on those distributions, and this does not include capital gains on transactions within the fund (in 2007 it was actually a capital loss in excess of 6%). 

This all assumes you are managing your own investments and holding an index fund.  If not, raise your costs again by 1.00%.  Additionally, there are custodial fees that should also be included to reduce investment returns.

Finally, as I have stated before, the long-term historical returns on equities are skewed relative to the current predicament.  The CPI +7% figure is no doubt a reference to the Ibbotson study, where the very long term return on the S&P500 (or some equivalent for older time periods), produces a nominal return of just over 11%.  There are many reasons to believe that this number is very unlikely to be reproduced ex-ante.  Why?

We can decompose the 11% into the three components of equity returns: (1) dividends, (2) growth in earnings, (3) changes in valuation.

During the period of the Ibbotson study the average dividend was 4.5%, growth in earnings accounted for ~3% with inflation filling up the remaining 4%,  P/Eaveraged roughly 14-16 times earnings that period. 

So let’s examine where we are today.  S&P500 dividends are ~1.5%, growth of earnings cannot outpace growth in the economy for any reasonable period, and are by all measures currently a larger percentage of GDP than normal, and P/Es at 16x earnings are unlikely to produce the substantial upward revaluations characteristic of bull-markets.  So you add it up we could be looking art 1.5% + 3% growth + 4% inflation = 8.5% nominal or 4.5% real.

I think it is safe to say that 7% real is pretty lofty (read unlikely) goal.

But often you ran into the same kids again.

My poor kids were screwed up at an early age when I bought take out from that Sam Woo takeout counter.  They chopped the entire duck, head included.

When I got home, we set up the table and I dumped the contents of the containers on trays, right then and there.

Lo and behold, my babies suddenly saw this fried head pop on top of their drumsticks to be.

Needless to say, it took them several years to get over it.

In my culture, Western Europe, a chicken thigh, duck breast, veal fillet, beef steak, all appear as single items to be coveted and eaten.  Never do we present any recognizable “animal” part with a “food” part.  If you must use stuff that’s recognizable, then make sausage out of it first.

The listed square footage, 2440 is per the assessor.  Since no permits were were taken out for the 2 added bedrooms the 2440 would be the pre-remodel square footage.

Given that the future buyers will be incurring the liability for possible certification and repair of the unpermitted additions, there is no way I see this beast moving in this market given the glut of inventory available.

If this is a foreclosure, why wouldn’t the lender sue the idiots who did the unpermitted remodel for damages?

In that case, I think I’d rather spend 1.5MIL on TR Terrace.  Those homes have 4b/2.5ba, 3 car garage, 2500 sq feet and a view all the way from the ocean ( Catalina some of them ) to Big Bear and out east.

It doesn’t for this property.  Read up.

Other properties… it’s all in the land and location, not the building.

I have been fascinated with this house since it first went on the market last year.  Sellers put it out at 1.1M then quickly dropped it down in $50K increments until it hit $850K.  Hear that the agent presented the bank an offer at $870K—but the bank had turned it over for auction hours before and said “no deal”-  Boy, those bankers are smart!  They thought they could get more.

The biggest problem for this home is it has really bad fung shui-  the lot is just terrible—so tough sell to many in our community.  That, plus a crazy remodel which chopped it up.

Guess the bank had to go this low, when the property that resides just behind this one went on the market for $895K last week.  It has a pool and “Rodger’s Garden” landscaping.  And it doesn’t back to Culver.

Well… somewhere in this world, RE is doing well…

Soaring prices. Precious few homes. Bidding wars. Sound like Southern California a few years back? Welcome to an unexpected bright spot in global housing: Baghdad.

In today’s LA Times.

In “western europe” don’t they eat whole roasted chicken” sure they cut off the head - but everythings else is” there.
Whole fish - is often served in “Western Europe”, so is Whole shrimp with the head on (France, Italy, Spain).  Whole roasted pig is common dish across many cultures (e..g., the southern USA). 

Kids now a days don’t know where food comes from.  It is just packages from the supermarket, boned, filleted if not pre-cooked.  That they are so surprised that steaks, boneless chicken breasts actually came from an animal that had a head, feet, and yes guts.  Let alone that people don’t know how to eat the whole animal anymore- e.g., using the bones for soup, livers, etc.

Mmmm… roast duck ... I haven’t had a chance to eat that in years .... stop making me hungry!  I’m on a diet!

Hey, Tonye, the Spanish issuers of evil mtg securities are trundling them off to the European central bank, in the guise of REPOs.

So they are doing worse (I think) than the Fed and doing it sneakily.

See the British Telegraph via Calculated Risk.

You-all, I’d think 2ce before investing in Euros.  It may be that the Europeans are worse than we are, just have more experience in covering things up.

What happens when the bank forecloses on your landlord.  Once again, you have no control over whether you stay in the house or not.  That is a simple fact.

Fine satire, Kirk.

At least someone other than this Blog agrees to huge upcoming drop in home prices:

Housing prices to free fall in 2008 - Merrill
According to a Merrill Lynch report, home prices will drop 15 percent this year, and declines will continue in 2009.
NEW YORK (CNNMoney.com)—The worst housing financial crisis in decades is only going to get worse, a Merrill Lynch report said Wednesday.
The investment bank forecasted a 15 percent drop in housing prices in 2008 and a further 10 percent drop in 2009, with even more depreciation likely in 2010.

Full story here http://money.cnn.com/2008/01/23/real_estate/merrill_forecast/index.htm?postversion=2008012317

Did you view the house?

Any idea what the sellars were thinking trying to peddle off unpermitted additions?

This house is kind of a gross-out!

...and another house that would sell for $250k or less in any other state.  I can’t believe someone payed a mil for it; was there mortgage fraud involved?

Over half a mil for houses like these… what a sham.  Wake me in a couple of years when people aren’t quite so delusional.

Pesos and Canadian dollars (loonies).

Ignoring taxes makes the analysis significantly incorrect.  The NAR “calculations” are pushing an agenda, but so are your “calculations”.  You want to debunk funny numbers, use real numbers, not different funny numbers.

Most Chinese I know prefer the 99 market and restaurants at Walnut and Jeffrey.  I don’t know how much of this has to do with the Culver and Irvine Center Drive 99 market being remodeled and relatively inaccessible for a long time a few years back.

Roasted chicken doesn’t have feathers.  Fish and shrimp don’t look human, besides my kids have been eating raw shrimp and fish at the sushi bar for eons.

Roast duck shouldn’t be for your diet, is it?  We has some left over duck from dinner in Chinatown over the weekend and I used it to make curry last night.

Something about housing prices is asymmetrical.

Homes prices PLUNGE 8%

Average homes rise 10% a year.

Huh?

“Permits unknown”

Am I the only one that believes a realtor should have a duty to disclose emphatically “unpermitted addition”.  The phrase “permits unknown” is a load of crap, they know they were unpermitted.  Just say so !  Otherwise, it looks like you are trying to pull a fast one on a FB. 

Same thing goes with square footage.  I always see the phrase “buyer to verify”.  If you are going to tout 2500 sq ft., can’t you at least verify it before you advertise ?

Great find ochomehunter.

Most *Taiwanese* prefer the one at Walnut and Jeffery.  It is smaller, but appears to be more clean.  I doubt that it as to do with the remodel.

I agree with the freshness of the 99 Ranch.  Winter melon should last for an entire winter without refridgration, and the batch I saw in there last week was all half rotten already.  I guess if you don’t have good turn over, and don’t want to trash the meat/produce when they are on borderline, the quality just go down and down.

buyer beware, and it is the buyer who need to pay due diligence, not the seller.  At least in the RE marketplace, this is true.

“Merrill Lynch’s figures are way too pessimistic, and they are unprecedented,” Lawrence Yun, the National Association of Realtors chief economist told CNNMoney.com. “There is so much variation in local housing markets, and we see stable price conditions for 2008.”
“

I wonder if Dr. Yun PhD can explain the unprecdented increase of the house price around 2006?

What a dump.

$1M for a standard tract shithole that backs up to a major intersection?

Someone was smoking some major crack.

That POS is worth $500k tops in that crap neighborhood.

I didn’t know the former owners and I have no idea if any of the changes/additions were permitted.  Some things done inside seem out of the norm… but I’m no expert on construction requirements, etc.

Tonye is right-  WVA (Woodbridge Village Assoc.) the neighbor HOA is very strict.  If there are any “violations” on the outside-  they can (and will) hold up escrow.  But, as you can see from the photos-  the front of the house is attractive enough— it’s the inside that has the real issues.

Here is a link to chart of the S&P over the last 53 years.  Notice any similarities to any other asset classes…

http://finance.yahoo.com/q/bc?s=^GSPC&t=my&l=off&z=m&q=l&c=

Both Mexico and Canada are to closely tied to the US economically to provide sufficient diversifcation away from the dollar.  Look around, you can find some better deals in currency.

Yeah, I get the whole caveat emptor business, but what about just doing the right thing.

I would think this would be on of those situations that would have to be disclosed by the seller because he/she was aware of it, no?

nice.  we need a wally george themed post.

my main stock holdings (like most americans) are in tax-sheltered retirement plans, which changes the math considerably.  but i do agree that the CPI is a complete crock and that anyone expecting >10% like clockwork out of the s&p is a bit misguided.

Brings to mind what a finance professor said a couple of years ago about currency speculating. He said something like if you wanted to speculate on foreign currencies, you’d be better off putting your money in a bag and leaving it on his desk, because that’s what you’re usually gonna end up with, ie losing money. Not for the faint of heart.

though i’d imagine, if one is the wrong sect, the HOA may take the whole ‘arm and a leg’ thing somewhat literally.

as opposed to leaving dollars in a CD, which is more like setting the bag on fire.

You still pay asset management fees, custodial fees, administrative fees etc. on 401ks/IRAs. There was a nice article on Bloomberg today regarding all the cloaked fees lurking in retirement plans.  Not too mention all target date funds, and most 401K allocations include investments in various fixed income investments which have traditionally just barely beat inflation.  I think the average investor should be considering retirement based on a 7% nominal return on his/her portfolio.

The seller may discloing the info among the pile of escrow document, and buyer may not read all the fine prints.  I am sure a lot of people sign document and notorize it without reading every single word on the page.

There are so many business and transaction where only dumb people “do the right thing.”  As long as it is not unlawful, don’t mention the e word.  (ethnical)  Sad.

A lot of things will be said or documented, but you don’t expect the seller or the agents to explains all the ramifications against their best interest.

1M was way to much for this property.  I agree - but, Law-student, it is not a “crap neighborhood” (It is probably one of the worst locations in Woodbridge).  Woodbridge is a nice place to live, good schools, good homes.  I have people from the east coast, mid west, and other parts of CA all comment on how nice Irvine and Woodbride is.  I have lived, seen “crap neighborhoods” - and Woodbridge isn’t one of them, the schools, parks, etc are too good to be ever considered “crap.” 

Overpriced - sure.  We are in the middle of a national housing bubble, Irvine and Woodbridge are NOT the only places with WTF prices over the past few years.  But, just because there is a bubble and prices are dropping 25% doesn’t turn neighborhoods into “crap.”

I bought into Woodbridge a while ago when I was an law firm associate and prices were reasonable.  Happy I did and now that I am a partner I am still here with a family and we and enjoy it.

This property is against Irvine Center rather than Culver. A minor distinction, but still a fairly major street. There is another property for sale two houses down on the other side of the walkway that opens pedestrian access to Culver/Irvine Center. That home is larger, but priced similar in $/sq.ft.

My question is who gave this RE agent photography lessons? It’s like the auto insurance appraiser taking pictures to solely document the existence of the item. I look at these photos of the house and say, “Yep. There’s a toilet… and another toilet… and another. That’s Three!” and then, “Here’s the blue room… the green room… and of course the red room.” Very bold.

I also saw the recent listing on the adjacent street, Meadowgrass,  with the Roger’ Gardens landscaping. I wonder, in a declining market, is that a selling feature worth paying $50k-$100K more?

Did anyone else notice that this house is in the Saddleback Valley Unified school district??