Forget shorts still. They are a pain and require some serious patience. Ran into a realtor in my area this weekend that has a short listing. He has presented 10 offers to the bank, a couple of them within $15-20K of the price they said they would take, and they have refused every one. He’s given them all the comps, which to any local person, substantiate the offered prices. Unfortunately, they are back East, don’t know the area, and rely on whatever their in-house analysts appear to derive.
Just wait until the property goes back to the lender. It’ll be much easier to get them…
Posted by Hmmmm on 03/12/08 at 04:37 AM
Ir,
I don’t understand the numbers at all on this. If the purchase price was $529k how did you get a loss of $150k? The asking price is not even below purchase price yet? I know I have missed something but I can’t figure out where. ——-
The owner who was foreclosed on paid $529K, and “put” it to the bank for $645K in the refi. The bank then added another $50K in fees and lost interest bringing their basis up to $691K. It is the bank that stands to lose $150K on the final sale. The original owner made $116K by taking the refi money and walking away.
Posted by AZDavidPhx on 03/12/08 at 05:46 AM
Not a bad deal.
116K for doing nothing other than being a worthless trouser stain on society.
In other countries, people like this would be tossed in jail and the key thrown away.
In America, we praise these people as genius “opportunists” and give them the citizen of the year award.
Posted by Masterofdamoney on 03/12/08 at 05:50 AM
IR, have you used Steve Miller yet? Appropriate in this case.
BTW - The reason they made EXACTLY 2 payments before defaulting is to avoid a ‘first payment default’ which is a special category of mortgage fraud (that the bank and federal authorities would come down like a hammer on). Also, it indicates that the lending institution or broker was in on the scam perhaps… since they are the ones who get hammered hard on early payment defaults!
This heres a story about billy joe and bobbie sue
Two young lovers with nothin better to do
Than sit around the house, get high, and watch the tube
And here is what happened when they decided to cut loose
They headed down to, ooh, old el paso
Thats where they ran into a great big hassle
Billy joe shot a man while robbing his castle
Bobbie sue took the money and run
Go on take the money and run
Go on take the money and run
Go on take the money and run
Go on take the money and run
Billy mack is a detective down in texas
You know he knows just exactly what the facts is
He aint gonna let those two escape justice
He makes his livin off of the peoples taxes
Bobbie sue, whoa, whoa, she slipped away
Billy joe caught up to her the very next day
They got the money, hey
You know they got away
They headed down south and theyre still running today
Singin go on take the money and run
Go on take the money and run
Go on take the money and run
Go on take the money and run
Go on take the money and run
Go on take the money and run
Go on take the money and run
Go on take the money and run
Posted by George8 on 03/12/08 at 06:14 AM
In Florida’s water front McMansion, many home owners did just that, sold put to the lenders near the top, made two payments and stopped paying since. Guess what, many of these owners are still staying and enjoying the glorious residences for free because the lenders are afraid of taking back the properties…. court dates are many months in queue, more foreclosure will depress property value further, and no one would take care of the inside etc…...
These Florida owners who sold puts at the top to lenders are the ultimate winners.
Posted by zornundo on 03/12/08 at 06:22 AM
That is one ugly pos condo. And the HOA? Wowsers!! Mr Joe Blow refinancing dude at the lender probably made it ok. Why aren’t stockholders stringing up the management at these companies and shooting them?
Posted by Flyovercountry on 03/12/08 at 06:23 AM
The sad thing is that a lot of these people really will get away with the rip offs. Credit will be tough for a couple years, but there are going to be so many people with foreclosures and short sales on their credit records in a few years. Banks will see that pool of borrowers as an untapped market, and will start loaning to them again. Sure, the borrowers will pay a higher interest rate, but not $100k more. And after a few years of that credit record under their belt, they’ll be “prime” borrowers again.
Posted by CapitalismWorks on 03/12/08 at 06:34 AM
I can’t argue today. 100% financing virtually guarantees this type of scenario. All the incentives provided by a reasonable down payment are lost.
Posted by zoiks on 03/12/08 at 06:47 AM
Well, Irvine MLS inventory has crossed the 1,000 level. (1013 SFR + condo + multi-unit).
Who’s going to pass out the party favors? Someone should arrange the keg and the stripper.
Ipoop can wear the dunce cap that says “6 months of inventory”, with a little purple pompom stuck at the top.
Posted by AlphaM on 03/12/08 at 06:59 AM
$472 / Month HOA = $5665 / year in HOAs!? Jesus. Who’s going to jump on that hand grenade?
These kinds of legalized scams - urgh… shocking people would do such things in this day and age, in America. I mean, its just hundreds of thousands of dollars in free money with no repercussions in a society that rewards this kind of behavior. The nerve.
I must say, it beats trying to be the winner of Fear Factor…
Posted by Surfing in Newport on 03/12/08 at 07:18 AM
There’s been a lot of posting about how walking away from your mortgage will only hurt your credit score for a few years. Remember that the whole idea of credit scores is to predict future behavior based on past behavior. If it’s possible for a computer program to determine that this type of behavior was present, then they might be in for a little surprise. Let me see, default after only a couple of payments, but credit cards stay current…hmm, what’s the risk that this behavior will happen in the future? Just because this type of behavior doesn’t hurt your FICO score for very long now, doesn’t mean that it will stay that way. Think of this being the opposite reaction to seeing more bankruptcies caused by medical bills.
With respect to this particular property, it should be noted that 1800 sq. ft rents are about $3,000/mo and falling. That 2 bedroom rents (~1200 sq. ft) are now around $1,800/mo. The bank will be lucky to see the original purchase price on this property.
Posted by ipoplaya on 03/12/08 at 07:20 AM
“has crossed” the 1000 level? Crack-smokin’ zoiky…
Irvine inventory is the same as it was on January 29th, 2008, i.e. it hasn’t grown over the past month and a half during a time of year when it most usually grows…
Irvine inventory is also essentially the same as it was on March 18, 2007. Yup, 2007… Year-over-year and in spite of the impact of the credit crunch, Irvine has the same amount of inventory.
Hum, Lansner’s buddy thinks we have eight months of inventory county-wide. Zoiky thinks Irvine is worse than the rest of the county with 10 months:
Need more data, here’s a graph of months inventory for all of OC per the source that Lansner usually sites:
http://www.ipoplaya.com/thomasinv.htm
Notice the marked reduction in market time since the 1st of the year. We’re back at about Spring 2007 levels right now.
Posted by Kelly on 03/12/08 at 07:31 AM
I remember during the bubble hearing about people buying properties and putting them in LLCs. I am sure that many these LLCs will not take the losses - they owners let properties fall in foreclosure.
Question - Does the LLC protect the investor from any hit to their credit scores? At the worst, the average person will have their credit scores hit - what happens to the LLCs? Anything?
Thanks in advance.
Posted by Silly's Mom on 03/12/08 at 07:54 AM
Zoiks:
Eliot Spitzer should be the party chairman! He’s going to have some free time.
Posted by 7 on 03/12/08 at 08:09 AM
No expert, but my understanding is that the LLC will buffer the owner(s) from the responsibility.
Posted by Mike in Irvine on 03/12/08 at 08:11 AM
i see an uptick in the sales volume for Feb and March. Some houses were sold within a week. a couple were relisted and sold immediately after 3-5% reductions. I am interested in finding out the final sale price of some properties, can i email you on the email listed on your website?
Posted by ET on 03/12/08 at 08:17 AM
I have to wonder if she ever had any intention on making further payments. Considering she only made 2 payments, this seems more like theft to me.
Posted by ipoplaya on 03/12/08 at 08:28 AM
Sure Mike, I’ll see what I can do.
Posted by buster on 03/12/08 at 08:30 AM
This seller / defaulter / refinancer is a genius. Oh, put a foreclosure on my credit for $116,000 in tax free cash. So sorry. Where do I sign up for that gig?
Hey, the lender was stupid. And stupidity has a price, in this case $150,000 plus. Of course a borrower has an obligation to repay. But the lender has the greater obligation to make sure they get repaid. It’s their money, and if they failed to do their due diligence then they are the fool and deserve to get taken. “A fool and his money” as the saying goes.
Besides, the TRUE bagholder is probably some Chinese billionaire. Yeah, I feel sorry for them. This loss represents a couple hundred thousand toxic Chinese trinkets that won’t be able to make their way to the hands of US children—too bad.
Posted by Stilldoubtful on 03/12/08 at 08:32 AM
Are short sales a joke?
I have put offers on 2 homes, it has been about 45 days and I have not heard any feedback. The listing agent says they haven’t heard back anything. He said he has other properties where it has been 90 days and no answer from the bank.
I think it is better to buy a bank owned REO property. Atleast you know if you will be getting the house within 2-5 days.
I read on the blog a while back that lenders agree to short sales only to keep receiving payments from the home owners. Their ultimate goal is to drag it out as much as possible then it will go into foreclosure.
Any way to speed up a short sale?
Posted by CapitalismWorks on 03/12/08 at 08:41 AM
Where are good sources for rental rates?
Posted by American-Screamer on 03/12/08 at 08:48 AM
Isn’t it possible that with the recent Fed move to exchange bonds for MBS, that it will be the tax payers who will utimately lose that “$150K”?
Posted by 7 on 03/12/08 at 08:48 AM
We probably pay the price more than anyone. With higher tax, higher interest, and higher inflation.
Posted by Hmmmmm on 03/12/08 at 08:49 AM
Short sales are a joke. They exist to allow the bank to drag out the process and get more payments from the seller. They almost never come back in a timely manner and almost never approve the offer.
REO’s are faster b/c no one is paying the bank anymore and it’s time for them to move it on.
Posted by camsavem on 03/12/08 at 08:58 AM
I have looked a few short sales myself and havent even bothered to put in offers. The listing agents have no clue what is going on and neither do the banks. Everyone is still on the Kool-Aid and thinking the recovery is “just around the corner”.
Unfortunately they will chase the market down for the next few years…....
If the bank made the loan without a personal guarantee from the buyer, then the buyers credit score would not be effected; however, no lender would do this unless the LLC has a long history of being in business and it has its own credit rating.
Maybe I am showing my age here, since this townhome was built when I graduated highschool, but I really like it.
Two beds and plenty of sq footage plus attached garage and a park-like setting.
Only problem is the assoc dues, but maybe they include things like AC and Water Heater maintenance and earthquake insurance??
If this was walking distance to stores and a downtown area it would make a perfect retirement home.
I would easily pay 400k for it.
Posted by skek on 03/12/08 at 09:23 AM
Tomorrow’s poll should follow up on this one. For how much money would you sacrifice your credit?
Posted by George8 on 03/12/08 at 09:23 AM
While these mortgage put sellers walk away with profits, we, the tax payers, are likely picking up the tabs. Fed just did that in disguise yesterday - 200 billions at a time.
A Loan or a Giveaway?
Wednesday March 12, 12:25 pm ET
By Dirk van Dijk, CFA
I’ve heard the Irvine Co. is already loosening standards for renters with recent foreclosures. The population is just too big to ignore and not accept money from.
Posted by ice weasel on 03/12/08 at 10:06 AM
It’s all a game. Morality is for suckers. And while that attitude disgusts me personally believing anything else is living in an alternate reality. While you’re doing the “right” thing, 5,000 other people are screwing you to the ground doing the thing that’s not explicitly illegal…yet. The only losers in the game are the ones that are left standing when the music stops or the ones who get caught sitting down early. That’s the only rule, don’t get caught.
Capitalism works, as the saying goes, but it doesn’t encourage fair play or morality. If you believe anything else I would gently and as respectfully as possible suggest that you’re not paying attention.
LLCs are limited liability vehicles, meaning that the legal and financial liabilities they incur are generally confined to the entity, not its “owners” (called members). There are instances when you can “pierce the corporate” veil and go after the members, such as fraud. IR is right, though, most banks won’t lend to an LLC (or any other type of corporate entity) without a personal guarantee or substantial capitalization.
Posted by Irvinewanabe on 03/12/08 at 10:27 AM
IR,
Take a look at foreclosure.com. Put in the 92603 zip code and you will see 80 properties with various defaults (tax lien/pre-foreclosure/foreclosure). That zip code includes Turtle Rock, Turtle Ridge, Quail Hill, and Shady Canyon. I think is is merely the calm before the storm.
Posted by Genius on 03/12/08 at 10:29 AM
The seller is a genius in the same way that murderers and rapists are geniuses.
Posted by skek on 03/12/08 at 10:32 AM
I don’t disagree with you in practice, but I don’t think many people look to an economic system for guidance on morality. For many, morality is something that comes from within. An internal moral compass, if you will.
On the external side, when a society comes together with shared values, it attempts to memorialize those values in law and custom. Sadly, our society has been systematically removing morality from the public life—leading to some of the results you describe. Today, if something is not expressly illegal there is little social consequence to doing it, no matter how immoral it may be. Gaming the system is looked upon as a sign of cleverness, as a virtue.
By the way, there is a difference between religion and morality, so I’m not talking about legislating religious dogma. Although, as public virtues erode, religious and family virtues become more important. When all erode at the same time, watch out!
Posted by skek on 03/12/08 at 10:35 AM
I’d love to see an IHB post detailing the foreclosure situation at the high end—particularly Shady Canyon. I’ve never thought there was enough intrinsic value there to justify the peak prices. It would be informative to read about what’s happening now.
Posted by Surfing in Newport on 03/12/08 at 10:44 AM
You can search the MLS through the ReMax site. Use the advance search option. The other source that I use is craigslist. It looks as if the IAC is using craigslist more than the MLS right now. It could be because they think that they could quote the same apartment at two different prices. Higher price for those that walk in and a lower price for those that call based on the craiglist.
Posted by Surfing in Newport on 03/12/08 at 10:52 AM
On the other hand, the WTF neighborhood of Harbor View Homes has inventory approaching 30 months. During the past 2 weeks ~6 homes were listed. In the past 2-3 months only 2 have gone into escrow. How’s that saying go, “Doo-doo rolls downhill”. That hill is Turtle Ridge, and it’s just starting to roll.
Posted by jhill on 03/12/08 at 11:11 AM
Uh, 300K was roughly the 1988 price. Surely not even the most bearish poster thinks those days are coming back. I also thought this was a very nice condo, and if association fees bear any relationship to amenities and services of complex, probably very livable. I couldn’t afford it but half a mill wouldn’t surprise me.
Posted by buster on 03/12/08 at 11:13 AM
I’m not sure that getting some dumbass lender to give you $116,000 because you said, “yeah, yeah, I promise to pay you back” is quite the same as rape and murder. Are you sure your not a tad envious that they got away with it and you didn’t?
Posted by buster on 03/12/08 at 11:16 AM
If your credit’s already for shit, what’s difference. There’s an old saying, “You can’t kill yourself jumping out of a basement window.” Likewise, if your credit’s a mess, who really cares. It’s like one more booger on the bottom of an elementary school desk.
Posted by Surfing in Newport on 03/12/08 at 11:53 AM
I bought a 3 bedroom 2100 sq ft town home with a view of Catalina in Corona Del Mar around this time (maybe 1987) for $270K. If they paid 300K in 1988 for this, it wasn’t a very good deal.
Posted by zoiks on 03/12/08 at 11:57 AM
“I’m seeing an uptick…”
Where the heck do you people get this information? The clowns, ahem, I mean “nice folks” over at realtor.com claim February volume is down quite a bit from both January and December.
Fine, ipoopREshill, let me know where your numbers come from. You’re all hooked up and all with the MLS, so get the following numbers for me: 1) closed sales from MLS listings, for the month of February, for existing condos and SFRs. 2) Current inventory of existing condos and SFRs in the MLS (or the inventory at the end of Feb, if you like).
No guesses, just official stats. That will prevent the flying around of bogus numbers. Should be quit easy, what with all that newfangled high-tech pentiums and such and database technology.
Posted by Major Schadenfreude on 03/12/08 at 12:07 PM
“Besides, the TRUE bagholder is probably some Chinese billionaire”
Actually, the bagholders are probably factory workers who placed their newly and hard earned paychecks in a bank for safe keeping and future use. The bank official who is paid a lot less than his Amercan counterpart was easily bribed to buy the crappy MBS’s.
Posted by Hmmmm on 03/12/08 at 12:14 PM
I forgot this interesting link on Short Sales..
http://blog.franklyrealty.com/
Posted by zornundo on 03/12/08 at 12:19 PM
“There’s an old saying, “You can’t kill yourself jumping out of a basement window.” “
ROFL!! You made my day, thanks!
Posted by ipoplaya on 03/12/08 at 12:21 PM
I have no access to MLS zoiky… The inventory numbers for Irvine I mentioned are from the graph that the IHB is linked to. Look at the top left of the main blog page and check it out for yourself. I believe zovall said its from ziprealty.
The other references I made are from Lansner site and info from some RE/Max guy. Feel free to blast him for his data. I didn’t make it up, just repeated it here…
The DQ numbers for February will be out soon enough. I expect Irvine sales to be north of 150 units for February. Considering there are quite a few properties in escrow already, sales volume at that level and 1000 units in Irvine will be nowhere near your imaginary 10-month figure.
Notice how flat the inventory growth has been for the past month and a half. Seems to correspond well with the fact that list prices haven’t been coming down much either… It seems obvious that some increase in sales activity is occurring to me.
Maybe you can’t afford to buy at these prices, but it appears that some people can. They are probably seriously stupid for it, but they are doing it nonetheless.
Posted by 7 on 03/12/08 at 12:32 PM
Who is the lender here? I am confused by all these references to the Chinese bagholders.
The entire secondary mortgage market is a giant shell game, and it is often difficult to determine who is left with the bad debt. Foreign investors have a great deal of it, and the reference was to the enormous amount of American debt held by the Chinese.
Posted by CapitalismWorks on 03/12/08 at 01:14 PM
Sounds like you got as pretty good deal on thw townhome. I hope you kept it…
Posted by ipoplaya on 03/12/08 at 01:16 PM
Kept it? Nah, sold it in 2006 for peak bubble price and moved to a lux rental somewhere!
Posted by CapitalismWorks on 03/12/08 at 01:17 PM
judging by the write-downs on Wall Street I would surmise that a heck of a lot more of this stuff was kept on-shore. The theory that the losses be passed off to the hordes of overseas investors seem increasingly inaccurate.
Posted by ConsiderAgain on 03/12/08 at 01:29 PM
ice weasel
You appear to be pretty much spot-on. See yesterday’s surprising poll results. Where’s the book that teaches how not to play by the rules?
Posted by Genius on 03/12/08 at 01:47 PM
“They are probably seriously stupid for it”
QFT
Posted by Genius on 03/12/08 at 01:51 PM
Yeah, I’m envious that I’m not a criminal. Die in a fire please.
If you think the only party damaged here is the lender then you are sorely mistaken.
Posted by Genius on 03/12/08 at 01:52 PM
Thank you CW.
Posted by awgee on 03/12/08 at 02:02 PM
Just curious, how does one determine intrinsic value on an SFR?
Posted by Genius on 03/12/08 at 02:03 PM
And $270k was the 1994 price… which was a rip-off for the time if you ask me. $300k for 1988 sounds fishy.
Posted by 7 on 03/12/08 at 02:11 PM
I was under the impression that the foreign countries like China/Japan/Korea/Taiwan/Israel buy US T bills, and other government-back securities, and not these innovative security products.
Posted by awgee on 03/12/08 at 02:13 PM
It also depends on whether or not it is a single owner LLC.
Posted by skek on 03/12/08 at 02:19 PM
I’m probably using the wrong term so let me try to phrase it better. My view on Shady Canyon is that the location is unremarkable yet TIC decided to promote it as one of the most expensive neighborhoods in all of Orange County and far and away the most expensive neighborhood without ocean views. (Recall that the original plan for Shady was higher density housing and less open space.) Other than big lots and big houses, does it really justify a $4-10 million price tag? You don’t even get a membership to the golf club with your home there. Once the kool-aid dried up, what’s left for Shady Canyon? Why would a captain of industry, movie star, shiek or professional athlete buy there now when they could go to Crystal Cove, CdM, Newport Coast, etc. Just seems like the prices in Shady Canyon were 25% construction costs, 25% land value and 50% marketing hype and irrational exuberance.
I think the market bears this out. Look at “for sale” vs. sold in Shady. Lots of Villas and customs for sale. Not much selling. 3 Redbird finally sold for $3.1—it previously sold at the peak for $4.2. That’s a 25% decline in about a year. And the knife catchers in that niche are few and far between. Now prices on everything else have come down to that level, but still nothing moves.
Posted by lendingmaestro on 03/12/08 at 02:32 PM
Intrinsic value to me is the cost of construction. Anything above that is a premium.
Posted by lendingmaestro on 03/12/08 at 02:36 PM
This place is a dump.
Posted by confuzed on 03/12/08 at 03:07 PM
huh?
Posted by CapitalismWorks on 03/12/08 at 03:41 PM
Shady Canyon in a great development. And, for those of you who believe $1000/sq ft. in Shady is ludicrous, and those same people will move to the beach, take a look at the $3000+/sq.ft. prices in Emerald Bay and Irvine Cove.
Though Shady Canyon along with the high-end coastal developments compete for the Very High Net Worth crowd, they are two difference value propositions.
Shady does offer some advantages
1) Warmer weather/more sun. Believe it or not, there are people who don’t like the fog and overcast skies every morning on the coast.
2) Private Golf Course, with extremely limited membership (exclusivity)]
3) Closer proximity to airports, freeways, employment etc. Gettting anywhere from South Laguna (particularly in summer) can be a nightmare.
4) Bigger lots. There is something to be said for having land.
5) Beautiful asthetics. The beach is always beautiful, but the developers of Shady did an top-notch job. If you like desert landscape (and I do), I can’t think of a better development (perhaps Rancho Santa Fe)
Posted by fencewalker on 03/12/08 at 03:45 PM
I’ve peaked at this unit. The square footage and location are nice, but it comes at the cost of privacy. The back-end of the unit opens onto a shared lawn area, which is nice if you have kids. However, with the shared lawn area are shared views into the windows and sliders of neighboring units. Also, the front bedroom’s deck immediately fronts the street.
Yes, the HOA on this property is ridiculous!
A friend of mine rents an almost identical unit (but much more private) for $2550.
Posted by skek on 03/12/08 at 04:00 PM
I’m not saying it’s a ghetto, it is a very beautiful neighborhood and I love the open spaces. But it was and still is grossly over priced—probably more so than any other neighborhood.
In my opinion, Shady is coming down another 10-20%. It will decline 40-50% from peak, much more than anything in Newport Coast/Crystal Cove.
If you disagree, how do you explain the inventory pileup there? Nothing is moving in Shady. Potential Shady buyers aren’t subject to the same financing squeeze as entry level buyers. If they wanted to buy in Shady at those prices, they could today and they’ve got dozens of properties to choose from.
Emerald Bay and Irvine Cove are amazing. Unique in all of Orange County, those two neighborhoods seem to be immune to the price declines.
Posted by Eric U. on 03/12/08 at 04:18 PM
there is a Realtor with a blog that insists short sales are a scam by the bank to get the homeowner to keep making payments. This story seems to back that up
Posted by zoiks on 03/12/08 at 04:48 PM
“I have no access to MLS zoiky”
An RE shill with no MLS access? (scratches head) Weird.
Well, it would still be nice for you to tell us where your made up sales figures are coming from then. Oh that’s right, they’re made up, nevermind. If you happen to come across some non-made up numbers, let us know. Specifically, MLS listings that complete escrow in Feb.
Closest thing I can find is the “closed sales” given by the market reports from realtor.com. Charles Mansur gives 62 for February. Nicole Thome gives 65. Notably, Nicole Thome also says that “There were 180 homes in escrow in Irvine in Feb.” Wow, that sounds like the bogus numbers you’ve been giving on this board! How interesting!
Not only that, but Mansur reports that Feb closed sales were way down from Jan (and December). According to him, Jan and December closed sales in the 80’s.
Notably, Nicole spouts off obviously bogus stats like “Inventory in Irvine is at its lowest level in 12 months”. I’d ask how she arrives at that, but I already know the answer. She’s fudging.
So along comes ipoopREshill and makes claims like sales in February were UP from January, and crap like there’s 7.5 months, no scratch that, maybe it’s only 6 months of inventory in Irvine. Yeah, well why don’t you explain these stats, where they come from, and what they represent. It’s easy to just pick a shill buddy and borrow numbers from them that you don’t understand. You think if you quoted calculations from Gary Watts anyone would believe you? They wouldn’t.
And you can quit the “oh gee, zoiky, maybe you just can’t afford Irvine prices” shtick. It got old the last couple of times you did that. And if you were paying attention, you’d know that’s not an issue.
Pulling these shills out into the sunshine is nasty. They bite you know. I gotta wear gloves.
Posted by no_vaseline on 03/12/08 at 05:37 PM
IPO participates on the forum. He’s pretty far from a RE shill. He is a self proclaimed knife catcher in waiting. I disagree with his view of the current market conditions, but I find your words aimed at him to be, um, inapproprate.
In other words, you can stop being a douche to him anytime.
Posted by ipoplaya on 03/12/08 at 05:44 PM
So you are calling me an RE shill and then quoting realtors for your sales figure? Real compelling zoiky…
I am looking at DQ numbers, not the posts of Roger the Realtor.
Uh oh, 142 sales in Irvine zips for the 22 business day period ended 2/22. January had 135 total in 22 business days… Last time I checked, more sales over the same number of days would mean “more sales”...
Your rantings that everyone is lying and that all the data except what is in zoiky’s mind is false are getting old and less believable by the post. You ignore links to data, analysis, etc., cry about wanting hard numbers, and yet, never supply any of your own. Please tell me you have more than “Rick the Realtor said so”...
Posted by patientrenter on 03/12/08 at 06:00 PM
Capitalism does, in a way, encourage morality, in the sense that it encourages a fair match between payments and reward. Most of the historic inflation in home prices was caused by non-capitalist forces: Special tax deductions for home mortgage interest; tax exemption for the first $500K of home price gains; guaranteed repayment by taxpayers of money investors lend for home mortgages through Fannie Mae and Freddie Mac and FHA…..
You could argue that the whole deterioration in lending standards in the last few years was driven by the govt guarantees given to the GSEs. Those guarantees are very valuable, and the only way other lenders could gain market share against the GSEs was by creating a new market for people who didn’t qualify for the GSE loans.
Posted by Genius on 03/12/08 at 06:13 PM
Capitalism isn’t at fault for the current mess. It would, however, correct it if the gov’t and FED would quit interfering.
Posted by cyberpunk on 03/12/08 at 07:54 PM
In America, we praise these people as genius “opportunists” and give them the citizen of the year award.
No we elect them president.
Posted by rkp on 03/12/08 at 11:44 PM
Zoiks - sales are happening whether we like it or not. I don’t get what your beef is with IPO. If you check the forums, you can see he links to his sources.
I think we all share the general same view that prices are too high but there are people buying out there and no matter how much you disagree, the sales are happening. I would think that our goal should be to understand whats driving the market not and if it is sustainable or just a random pop.
Posted by Lost Cause on 03/13/08 at 12:52 AM
No we elect them president.
Bush was involved in oil well scams.
Posted by Lost Cause on 03/13/08 at 12:59 AM
If people need zero down to buy a property, the propery probably has no intrinsic value. If nobody is buying it, then there is no intrinsic value.
Posted by ice weasel on 03/13/08 at 06:15 AM
In this specific case Genius I would agree with you. Capitalism, unfettered by outside intervention would correct the market. But don’t ignore the elephant in the room which is that clearly it was a lack of regulation that help foster this bubble. In a regulated market we wouldn’t have had the gross fee taking with no eye to whether or not the loans were recoupable. Capitalism a double-edged sword and one that is very, very sharp.
Posted by ipoplaya on 03/12/08 at 09:21 AM
Forget shorts still. They are a pain and require some serious patience. Ran into a realtor in my area this weekend that has a short listing. He has presented 10 offers to the bank, a couple of them within $15-20K of the price they said they would take, and they have refused every one. He’s given them all the comps, which to any local person, substantiate the offered prices. Unfortunately, they are back East, don’t know the area, and rely on whatever their in-house analysts appear to derive.
Just wait until the property goes back to the lender. It’ll be much easier to get them…
Posted by Hmmmm on 03/12/08 at 04:37 AM
Ir,
I don’t understand the numbers at all on this. If the purchase price was $529k how did you get a loss of $150k? The asking price is not even below purchase price yet? I know I have missed something but I can’t figure out where.
——-
Posted by IrvineRenter on 03/12/08 at 05:23 AM
The owner who was foreclosed on paid $529K, and “put” it to the bank for $645K in the refi. The bank then added another $50K in fees and lost interest bringing their basis up to $691K. It is the bank that stands to lose $150K on the final sale. The original owner made $116K by taking the refi money and walking away.
Posted by AZDavidPhx on 03/12/08 at 05:46 AM
Not a bad deal.
116K for doing nothing other than being a worthless trouser stain on society.
In other countries, people like this would be tossed in jail and the key thrown away.
In America, we praise these people as genius “opportunists” and give them the citizen of the year award.
Posted by Masterofdamoney on 03/12/08 at 05:50 AM
IR, have you used Steve Miller yet? Appropriate in this case.
BTW - The reason they made EXACTLY 2 payments before defaulting is to avoid a ‘first payment default’ which is a special category of mortgage fraud (that the bank and federal authorities would come down like a hammer on). Also, it indicates that the lending institution or broker was in on the scam perhaps… since they are the ones who get hammered hard on early payment defaults!
This heres a story about billy joe and bobbie sue
Two young lovers with nothin better to do
Than sit around the house, get high, and watch the tube
And here is what happened when they decided to cut loose
They headed down to, ooh, old el paso
Thats where they ran into a great big hassle
Billy joe shot a man while robbing his castle
Bobbie sue took the money and run
Go on take the money and run
Go on take the money and run
Go on take the money and run
Go on take the money and run
Billy mack is a detective down in texas
You know he knows just exactly what the facts is
He aint gonna let those two escape justice
He makes his livin off of the peoples taxes
Bobbie sue, whoa, whoa, she slipped away
Billy joe caught up to her the very next day
They got the money, hey
You know they got away
They headed down south and theyre still running today
Singin go on take the money and run
Go on take the money and run
Go on take the money and run
Go on take the money and run
Go on take the money and run
Go on take the money and run
Go on take the money and run
Go on take the money and run
Posted by George8 on 03/12/08 at 06:14 AM
In Florida’s water front McMansion, many home owners did just that, sold put to the lenders near the top, made two payments and stopped paying since. Guess what, many of these owners are still staying and enjoying the glorious residences for free because the lenders are afraid of taking back the properties…. court dates are many months in queue, more foreclosure will depress property value further, and no one would take care of the inside etc…...
These Florida owners who sold puts at the top to lenders are the ultimate winners.
Posted by zornundo on 03/12/08 at 06:22 AM
That is one ugly pos condo. And the HOA? Wowsers!! Mr Joe Blow refinancing dude at the lender probably made it ok. Why aren’t stockholders stringing up the management at these companies and shooting them?
Posted by Flyovercountry on 03/12/08 at 06:23 AM
The sad thing is that a lot of these people really will get away with the rip offs. Credit will be tough for a couple years, but there are going to be so many people with foreclosures and short sales on their credit records in a few years. Banks will see that pool of borrowers as an untapped market, and will start loaning to them again. Sure, the borrowers will pay a higher interest rate, but not $100k more. And after a few years of that credit record under their belt, they’ll be “prime” borrowers again.
Posted by CapitalismWorks on 03/12/08 at 06:34 AM
I can’t argue today. 100% financing virtually guarantees this type of scenario. All the incentives provided by a reasonable down payment are lost.
Posted by zoiks on 03/12/08 at 06:47 AM
Well, Irvine MLS inventory has crossed the 1,000 level. (1013 SFR + condo + multi-unit).
Who’s going to pass out the party favors? Someone should arrange the keg and the stripper.
Ipoop can wear the dunce cap that says “6 months of inventory”, with a little purple pompom stuck at the top.
Posted by AlphaM on 03/12/08 at 06:59 AM
$472 / Month HOA = $5665 / year in HOAs!? Jesus. Who’s going to jump on that hand grenade?
These kinds of legalized scams - urgh… shocking people would do such things in this day and age, in America. I mean, its just hundreds of thousands of dollars in free money with no repercussions in a society that rewards this kind of behavior. The nerve.
I must say, it beats trying to be the winner of Fear Factor…
Posted by Surfing in Newport on 03/12/08 at 07:18 AM
There’s been a lot of posting about how walking away from your mortgage will only hurt your credit score for a few years. Remember that the whole idea of credit scores is to predict future behavior based on past behavior. If it’s possible for a computer program to determine that this type of behavior was present, then they might be in for a little surprise. Let me see, default after only a couple of payments, but credit cards stay current…hmm, what’s the risk that this behavior will happen in the future? Just because this type of behavior doesn’t hurt your FICO score for very long now, doesn’t mean that it will stay that way. Think of this being the opposite reaction to seeing more bankruptcies caused by medical bills.
With respect to this particular property, it should be noted that 1800 sq. ft rents are about $3,000/mo and falling. That 2 bedroom rents (~1200 sq. ft) are now around $1,800/mo. The bank will be lucky to see the original purchase price on this property.
Posted by ipoplaya on 03/12/08 at 07:20 AM
“has crossed” the 1000 level? Crack-smokin’ zoiky…
Irvine inventory is the same as it was on January 29th, 2008, i.e. it hasn’t grown over the past month and a half during a time of year when it most usually grows…
Irvine inventory is also essentially the same as it was on March 18, 2007. Yup, 2007… Year-over-year and in spite of the impact of the credit crunch, Irvine has the same amount of inventory.
Hum, Lansner’s buddy thinks we have eight months of inventory county-wide. Zoiky thinks Irvine is worse than the rest of the county with 10 months:
http://lansner.freedomblogging.com/category/selling-patterns/inventory/
Need more data, here’s a graph of months inventory for all of OC per the source that Lansner usually sites:
http://www.ipoplaya.com/thomasinv.htm
Notice the marked reduction in market time since the 1st of the year. We’re back at about Spring 2007 levels right now.
Posted by Kelly on 03/12/08 at 07:31 AM
I remember during the bubble hearing about people buying properties and putting them in LLCs. I am sure that many these LLCs will not take the losses - they owners let properties fall in foreclosure.
Question - Does the LLC protect the investor from any hit to their credit scores? At the worst, the average person will have their credit scores hit - what happens to the LLCs? Anything?
Thanks in advance.
Posted by Silly's Mom on 03/12/08 at 07:54 AM
Zoiks:
Eliot Spitzer should be the party chairman! He’s going to have some free time.
Posted by 7 on 03/12/08 at 08:09 AM
No expert, but my understanding is that the LLC will buffer the owner(s) from the responsibility.
Posted by Mike in Irvine on 03/12/08 at 08:11 AM
i see an uptick in the sales volume for Feb and March. Some houses were sold within a week. a couple were relisted and sold immediately after 3-5% reductions. I am interested in finding out the final sale price of some properties, can i email you on the email listed on your website?
Posted by ET on 03/12/08 at 08:17 AM
I have to wonder if she ever had any intention on making further payments. Considering she only made 2 payments, this seems more like theft to me.
Posted by ipoplaya on 03/12/08 at 08:28 AM
Sure Mike, I’ll see what I can do.
Posted by buster on 03/12/08 at 08:30 AM
This seller / defaulter / refinancer is a genius. Oh, put a foreclosure on my credit for $116,000 in tax free cash. So sorry. Where do I sign up for that gig?
Hey, the lender was stupid. And stupidity has a price, in this case $150,000 plus. Of course a borrower has an obligation to repay. But the lender has the greater obligation to make sure they get repaid. It’s their money, and if they failed to do their due diligence then they are the fool and deserve to get taken. “A fool and his money” as the saying goes.
Besides, the TRUE bagholder is probably some Chinese billionaire. Yeah, I feel sorry for them. This loss represents a couple hundred thousand toxic Chinese trinkets that won’t be able to make their way to the hands of US children—too bad.
Posted by Stilldoubtful on 03/12/08 at 08:32 AM
Are short sales a joke?
I have put offers on 2 homes, it has been about 45 days and I have not heard any feedback. The listing agent says they haven’t heard back anything. He said he has other properties where it has been 90 days and no answer from the bank.
I think it is better to buy a bank owned REO property. Atleast you know if you will be getting the house within 2-5 days.
I read on the blog a while back that lenders agree to short sales only to keep receiving payments from the home owners. Their ultimate goal is to drag it out as much as possible then it will go into foreclosure.
Any way to speed up a short sale?
Posted by CapitalismWorks on 03/12/08 at 08:41 AM
Where are good sources for rental rates?
Posted by American-Screamer on 03/12/08 at 08:48 AM
Isn’t it possible that with the recent Fed move to exchange bonds for MBS, that it will be the tax payers who will utimately lose that “$150K”?
Posted by 7 on 03/12/08 at 08:48 AM
We probably pay the price more than anyone. With higher tax, higher interest, and higher inflation.
Posted by Hmmmmm on 03/12/08 at 08:49 AM
Short sales are a joke. They exist to allow the bank to drag out the process and get more payments from the seller. They almost never come back in a timely manner and almost never approve the offer.
REO’s are faster b/c no one is paying the bank anymore and it’s time for them to move it on.
Posted by camsavem on 03/12/08 at 08:58 AM
I have looked a few short sales myself and havent even bothered to put in offers. The listing agents have no clue what is going on and neither do the banks. Everyone is still on the Kool-Aid and thinking the recovery is “just around the corner”.
Unfortunately they will chase the market down for the next few years…....
Posted by IrvineRenter on 03/12/08 at 09:05 AM
If the bank made the loan without a personal guarantee from the buyer, then the buyers credit score would not be effected; however, no lender would do this unless the LLC has a long history of being in business and it has its own credit rating.
Posted by Mr Vincent on 03/12/08 at 09:21 AM
Maybe I am showing my age here, since this townhome was built when I graduated highschool, but I really like it.
Two beds and plenty of sq footage plus attached garage and a park-like setting.
Only problem is the assoc dues, but maybe they include things like AC and Water Heater maintenance and earthquake insurance??
If this was walking distance to stores and a downtown area it would make a perfect retirement home.
I would easily pay 400k for it.
Posted by skek on 03/12/08 at 09:23 AM
Tomorrow’s poll should follow up on this one. For how much money would you sacrifice your credit?
Posted by George8 on 03/12/08 at 09:23 AM
While these mortgage put sellers walk away with profits, we, the tax payers, are likely picking up the tabs. Fed just did that in disguise yesterday - 200 billions at a time.
A Loan or a Giveaway?
Wednesday March 12, 12:25 pm ET
By Dirk van Dijk, CFA
http://investorshub.advfn.com/boards/read_msg.asp?message_id=27568326
Posted by mark on 03/12/08 at 09:59 AM
I’ve heard the Irvine Co. is already loosening standards for renters with recent foreclosures. The population is just too big to ignore and not accept money from.
Posted by ice weasel on 03/12/08 at 10:06 AM
It’s all a game. Morality is for suckers. And while that attitude disgusts me personally believing anything else is living in an alternate reality. While you’re doing the “right” thing, 5,000 other people are screwing you to the ground doing the thing that’s not explicitly illegal…yet. The only losers in the game are the ones that are left standing when the music stops or the ones who get caught sitting down early. That’s the only rule, don’t get caught.
Capitalism works, as the saying goes, but it doesn’t encourage fair play or morality. If you believe anything else I would gently and as respectfully as possible suggest that you’re not paying attention.
Posted by DeadBeatRenter on 03/12/08 at 10:14 AM
I was thinking the same thing, but about 300k…
Posted by skek on 03/12/08 at 10:22 AM
LLCs are limited liability vehicles, meaning that the legal and financial liabilities they incur are generally confined to the entity, not its “owners” (called members). There are instances when you can “pierce the corporate” veil and go after the members, such as fraud. IR is right, though, most banks won’t lend to an LLC (or any other type of corporate entity) without a personal guarantee or substantial capitalization.
Posted by Irvinewanabe on 03/12/08 at 10:27 AM
IR,
Take a look at foreclosure.com. Put in the 92603 zip code and you will see 80 properties with various defaults (tax lien/pre-foreclosure/foreclosure). That zip code includes Turtle Rock, Turtle Ridge, Quail Hill, and Shady Canyon. I think is is merely the calm before the storm.
Posted by Genius on 03/12/08 at 10:29 AM
The seller is a genius in the same way that murderers and rapists are geniuses.
Posted by skek on 03/12/08 at 10:32 AM
I don’t disagree with you in practice, but I don’t think many people look to an economic system for guidance on morality. For many, morality is something that comes from within. An internal moral compass, if you will.
On the external side, when a society comes together with shared values, it attempts to memorialize those values in law and custom. Sadly, our society has been systematically removing morality from the public life—leading to some of the results you describe. Today, if something is not expressly illegal there is little social consequence to doing it, no matter how immoral it may be. Gaming the system is looked upon as a sign of cleverness, as a virtue.
By the way, there is a difference between religion and morality, so I’m not talking about legislating religious dogma. Although, as public virtues erode, religious and family virtues become more important. When all erode at the same time, watch out!
Posted by skek on 03/12/08 at 10:35 AM
I’d love to see an IHB post detailing the foreclosure situation at the high end—particularly Shady Canyon. I’ve never thought there was enough intrinsic value there to justify the peak prices. It would be informative to read about what’s happening now.
Posted by Surfing in Newport on 03/12/08 at 10:44 AM
You can search the MLS through the ReMax site. Use the advance search option. The other source that I use is craigslist. It looks as if the IAC is using craigslist more than the MLS right now. It could be because they think that they could quote the same apartment at two different prices. Higher price for those that walk in and a lower price for those that call based on the craiglist.
Posted by Surfing in Newport on 03/12/08 at 10:52 AM
On the other hand, the WTF neighborhood of Harbor View Homes has inventory approaching 30 months. During the past 2 weeks ~6 homes were listed. In the past 2-3 months only 2 have gone into escrow. How’s that saying go, “Doo-doo rolls downhill”. That hill is Turtle Ridge, and it’s just starting to roll.
Posted by jhill on 03/12/08 at 11:11 AM
Uh, 300K was roughly the 1988 price. Surely not even the most bearish poster thinks those days are coming back. I also thought this was a very nice condo, and if association fees bear any relationship to amenities and services of complex, probably very livable. I couldn’t afford it but half a mill wouldn’t surprise me.
Posted by buster on 03/12/08 at 11:13 AM
I’m not sure that getting some dumbass lender to give you $116,000 because you said, “yeah, yeah, I promise to pay you back” is quite the same as rape and murder. Are you sure your not a tad envious that they got away with it and you didn’t?
Posted by buster on 03/12/08 at 11:16 AM
If your credit’s already for shit, what’s difference. There’s an old saying, “You can’t kill yourself jumping out of a basement window.” Likewise, if your credit’s a mess, who really cares. It’s like one more booger on the bottom of an elementary school desk.
Posted by Surfing in Newport on 03/12/08 at 11:53 AM
I bought a 3 bedroom 2100 sq ft town home with a view of Catalina in Corona Del Mar around this time (maybe 1987) for $270K. If they paid 300K in 1988 for this, it wasn’t a very good deal.
Posted by zoiks on 03/12/08 at 11:57 AM
“I’m seeing an uptick…”
Where the heck do you people get this information? The clowns, ahem, I mean “nice folks” over at realtor.com claim February volume is down quite a bit from both January and December.
Fine, ipoopREshill, let me know where your numbers come from. You’re all hooked up and all with the MLS, so get the following numbers for me: 1) closed sales from MLS listings, for the month of February, for existing condos and SFRs. 2) Current inventory of existing condos and SFRs in the MLS (or the inventory at the end of Feb, if you like).
No guesses, just official stats. That will prevent the flying around of bogus numbers. Should be quit easy, what with all that newfangled high-tech pentiums and such and database technology.
Posted by Major Schadenfreude on 03/12/08 at 12:07 PM
“Besides, the TRUE bagholder is probably some Chinese billionaire”
Actually, the bagholders are probably factory workers who placed their newly and hard earned paychecks in a bank for safe keeping and future use. The bank official who is paid a lot less than his Amercan counterpart was easily bribed to buy the crappy MBS’s.
Posted by Hmmmm on 03/12/08 at 12:14 PM
I forgot this interesting link on Short Sales..
http://blog.franklyrealty.com/
Posted by zornundo on 03/12/08 at 12:19 PM
“There’s an old saying, “You can’t kill yourself jumping out of a basement window.” “
ROFL!! You made my day, thanks!
Posted by ipoplaya on 03/12/08 at 12:21 PM
I have no access to MLS zoiky… The inventory numbers for Irvine I mentioned are from the graph that the IHB is linked to. Look at the top left of the main blog page and check it out for yourself. I believe zovall said its from ziprealty.
The other references I made are from Lansner site and info from some RE/Max guy. Feel free to blast him for his data. I didn’t make it up, just repeated it here…
The DQ numbers for February will be out soon enough. I expect Irvine sales to be north of 150 units for February. Considering there are quite a few properties in escrow already, sales volume at that level and 1000 units in Irvine will be nowhere near your imaginary 10-month figure.
You can look at this as well:
http://www.housingtracker.net/askingprices/California/LosAngeles-LongBeach-SantaAna/SantaAna-Anaheim-Irvine
Notice how flat the inventory growth has been for the past month and a half. Seems to correspond well with the fact that list prices haven’t been coming down much either… It seems obvious that some increase in sales activity is occurring to me.
Maybe you can’t afford to buy at these prices, but it appears that some people can. They are probably seriously stupid for it, but they are doing it nonetheless.
Posted by 7 on 03/12/08 at 12:32 PM
Who is the lender here? I am confused by all these references to the Chinese bagholders.
Posted by IrvineRenter on 03/12/08 at 12:50 PM
The entire secondary mortgage market is a giant shell game, and it is often difficult to determine who is left with the bad debt. Foreign investors have a great deal of it, and the reference was to the enormous amount of American debt held by the Chinese.
Posted by CapitalismWorks on 03/12/08 at 01:14 PM
Sounds like you got as pretty good deal on thw townhome. I hope you kept it…
Posted by ipoplaya on 03/12/08 at 01:16 PM
Kept it? Nah, sold it in 2006 for peak bubble price and moved to a lux rental somewhere!
Posted by CapitalismWorks on 03/12/08 at 01:17 PM
judging by the write-downs on Wall Street I would surmise that a heck of a lot more of this stuff was kept on-shore. The theory that the losses be passed off to the hordes of overseas investors seem increasingly inaccurate.
Posted by ConsiderAgain on 03/12/08 at 01:29 PM
ice weasel
You appear to be pretty much spot-on. See yesterday’s surprising poll results. Where’s the book that teaches how not to play by the rules?
Posted by Genius on 03/12/08 at 01:47 PM
“They are probably seriously stupid for it”
QFT
Posted by Genius on 03/12/08 at 01:51 PM
Yeah, I’m envious that I’m not a criminal. Die in a fire please.
If you think the only party damaged here is the lender then you are sorely mistaken.
Posted by Genius on 03/12/08 at 01:52 PM
Thank you CW.
Posted by awgee on 03/12/08 at 02:02 PM
Just curious, how does one determine intrinsic value on an SFR?
Posted by Genius on 03/12/08 at 02:03 PM
And $270k was the 1994 price… which was a rip-off for the time if you ask me. $300k for 1988 sounds fishy.
Posted by 7 on 03/12/08 at 02:11 PM
I was under the impression that the foreign countries like China/Japan/Korea/Taiwan/Israel buy US T bills, and other government-back securities, and not these innovative security products.
Posted by awgee on 03/12/08 at 02:13 PM
It also depends on whether or not it is a single owner LLC.
Posted by skek on 03/12/08 at 02:19 PM
I’m probably using the wrong term so let me try to phrase it better. My view on Shady Canyon is that the location is unremarkable yet TIC decided to promote it as one of the most expensive neighborhoods in all of Orange County and far and away the most expensive neighborhood without ocean views. (Recall that the original plan for Shady was higher density housing and less open space.) Other than big lots and big houses, does it really justify a $4-10 million price tag? You don’t even get a membership to the golf club with your home there. Once the kool-aid dried up, what’s left for Shady Canyon? Why would a captain of industry, movie star, shiek or professional athlete buy there now when they could go to Crystal Cove, CdM, Newport Coast, etc. Just seems like the prices in Shady Canyon were 25% construction costs, 25% land value and 50% marketing hype and irrational exuberance.
I think the market bears this out. Look at “for sale” vs. sold in Shady. Lots of Villas and customs for sale. Not much selling. 3 Redbird finally sold for $3.1—it previously sold at the peak for $4.2. That’s a 25% decline in about a year. And the knife catchers in that niche are few and far between. Now prices on everything else have come down to that level, but still nothing moves.
Posted by lendingmaestro on 03/12/08 at 02:32 PM
Intrinsic value to me is the cost of construction. Anything above that is a premium.
Posted by lendingmaestro on 03/12/08 at 02:36 PM
This place is a dump.
Posted by confuzed on 03/12/08 at 03:07 PM
huh?
Posted by CapitalismWorks on 03/12/08 at 03:41 PM
Shady Canyon in a great development. And, for those of you who believe $1000/sq ft. in Shady is ludicrous, and those same people will move to the beach, take a look at the $3000+/sq.ft. prices in Emerald Bay and Irvine Cove.
Though Shady Canyon along with the high-end coastal developments compete for the Very High Net Worth crowd, they are two difference value propositions.
Shady does offer some advantages
1) Warmer weather/more sun. Believe it or not, there are people who don’t like the fog and overcast skies every morning on the coast.
2) Private Golf Course, with extremely limited membership (exclusivity)]
3) Closer proximity to airports, freeways, employment etc. Gettting anywhere from South Laguna (particularly in summer) can be a nightmare.
4) Bigger lots. There is something to be said for having land.
5) Beautiful asthetics. The beach is always beautiful, but the developers of Shady did an top-notch job. If you like desert landscape (and I do), I can’t think of a better development (perhaps Rancho Santa Fe)
Posted by fencewalker on 03/12/08 at 03:45 PM
I’ve peaked at this unit. The square footage and location are nice, but it comes at the cost of privacy. The back-end of the unit opens onto a shared lawn area, which is nice if you have kids. However, with the shared lawn area are shared views into the windows and sliders of neighboring units. Also, the front bedroom’s deck immediately fronts the street.
Yes, the HOA on this property is ridiculous!
A friend of mine rents an almost identical unit (but much more private) for $2550.
Posted by skek on 03/12/08 at 04:00 PM
I’m not saying it’s a ghetto, it is a very beautiful neighborhood and I love the open spaces. But it was and still is grossly over priced—probably more so than any other neighborhood.
In my opinion, Shady is coming down another 10-20%. It will decline 40-50% from peak, much more than anything in Newport Coast/Crystal Cove.
If you disagree, how do you explain the inventory pileup there? Nothing is moving in Shady. Potential Shady buyers aren’t subject to the same financing squeeze as entry level buyers. If they wanted to buy in Shady at those prices, they could today and they’ve got dozens of properties to choose from.
Emerald Bay and Irvine Cove are amazing. Unique in all of Orange County, those two neighborhoods seem to be immune to the price declines.
Posted by Eric U. on 03/12/08 at 04:18 PM
there is a Realtor with a blog that insists short sales are a scam by the bank to get the homeowner to keep making payments. This story seems to back that up
Posted by zoiks on 03/12/08 at 04:48 PM
“I have no access to MLS zoiky”
An RE shill with no MLS access? (scratches head) Weird.
Well, it would still be nice for you to tell us where your made up sales figures are coming from then. Oh that’s right, they’re made up, nevermind. If you happen to come across some non-made up numbers, let us know. Specifically, MLS listings that complete escrow in Feb.
Closest thing I can find is the “closed sales” given by the market reports from realtor.com. Charles Mansur gives 62 for February. Nicole Thome gives 65. Notably, Nicole Thome also says that “There were 180 homes in escrow in Irvine in Feb.” Wow, that sounds like the bogus numbers you’ve been giving on this board! How interesting!
Not only that, but Mansur reports that Feb closed sales were way down from Jan (and December). According to him, Jan and December closed sales in the 80’s.
Notably, Nicole spouts off obviously bogus stats like “Inventory in Irvine is at its lowest level in 12 months”. I’d ask how she arrives at that, but I already know the answer. She’s fudging.
So along comes ipoopREshill and makes claims like sales in February were UP from January, and crap like there’s 7.5 months, no scratch that, maybe it’s only 6 months of inventory in Irvine. Yeah, well why don’t you explain these stats, where they come from, and what they represent. It’s easy to just pick a shill buddy and borrow numbers from them that you don’t understand. You think if you quoted calculations from Gary Watts anyone would believe you? They wouldn’t.
And you can quit the “oh gee, zoiky, maybe you just can’t afford Irvine prices” shtick. It got old the last couple of times you did that. And if you were paying attention, you’d know that’s not an issue.
Pulling these shills out into the sunshine is nasty. They bite you know. I gotta wear gloves.
Posted by no_vaseline on 03/12/08 at 05:37 PM
IPO participates on the forum. He’s pretty far from a RE shill. He is a self proclaimed knife catcher in waiting. I disagree with his view of the current market conditions, but I find your words aimed at him to be, um, inapproprate.
In other words, you can stop being a douche to him anytime.
Posted by ipoplaya on 03/12/08 at 05:44 PM
So you are calling me an RE shill and then quoting realtors for your sales figure? Real compelling zoiky…
I am looking at DQ numbers, not the posts of Roger the Realtor.
Have a gander:
http://www.ocregister.com/article/home-depreciation-sales-1994337-price-median
Uh oh, 142 sales in Irvine zips for the 22 business day period ended 2/22. January had 135 total in 22 business days… Last time I checked, more sales over the same number of days would mean “more sales”...
Your rantings that everyone is lying and that all the data except what is in zoiky’s mind is false are getting old and less believable by the post. You ignore links to data, analysis, etc., cry about wanting hard numbers, and yet, never supply any of your own. Please tell me you have more than “Rick the Realtor said so”...
Posted by patientrenter on 03/12/08 at 06:00 PM
Capitalism does, in a way, encourage morality, in the sense that it encourages a fair match between payments and reward. Most of the historic inflation in home prices was caused by non-capitalist forces: Special tax deductions for home mortgage interest; tax exemption for the first $500K of home price gains; guaranteed repayment by taxpayers of money investors lend for home mortgages through Fannie Mae and Freddie Mac and FHA…..
You could argue that the whole deterioration in lending standards in the last few years was driven by the govt guarantees given to the GSEs. Those guarantees are very valuable, and the only way other lenders could gain market share against the GSEs was by creating a new market for people who didn’t qualify for the GSE loans.
Posted by Genius on 03/12/08 at 06:13 PM
Capitalism isn’t at fault for the current mess. It would, however, correct it if the gov’t and FED would quit interfering.
Posted by cyberpunk on 03/12/08 at 07:54 PM
In America, we praise these people as genius “opportunists” and give them the citizen of the year award.
No we elect them president.
Posted by rkp on 03/12/08 at 11:44 PM
Zoiks - sales are happening whether we like it or not. I don’t get what your beef is with IPO. If you check the forums, you can see he links to his sources.
I think we all share the general same view that prices are too high but there are people buying out there and no matter how much you disagree, the sales are happening. I would think that our goal should be to understand whats driving the market not and if it is sustainable or just a random pop.
Posted by Lost Cause on 03/13/08 at 12:52 AM
No we elect them president.
Bush was involved in oil well scams.
Posted by Lost Cause on 03/13/08 at 12:59 AM
If people need zero down to buy a property, the propery probably has no intrinsic value. If nobody is buying it, then there is no intrinsic value.
Posted by ice weasel on 03/13/08 at 06:15 AM
In this specific case Genius I would agree with you. Capitalism, unfettered by outside intervention would correct the market. But don’t ignore the elephant in the room which is that clearly it was a lack of regulation that help foster this bubble. In a regulated market we wouldn’t have had the gross fee taking with no eye to whether or not the loans were recoupable. Capitalism a double-edged sword and one that is very, very sharp.