I especially like the brick wall of the neighbors “estate” out your living room window, that’s a nice touch. That kind of thing just screams 3 Million Dollars!

If I were a Realtor, I would only represent property for motivated sellers.

This stupid real estate bubble has brainwashed homeowners.

You are spot-on with the “no price is too high” remark. 

As long as banks enable idiots to charge it up, they will bid up a house like it is a Jesus-shaped cheese sandwich on Ebay.

Classic Kool-Aid, groupthink.

Real estate profits are mine by right of purchase and I will NOT be denied! Who’s got my check?

Does it not cost the listing agent something to list and market a property?  How long can this listing agent stay in biz with such stupid marketing?

to their credit, the builder price in the bubble probably did not include landscaping, and I bet they dumped about $100-$200K digging a pool and putting in the fireplace etc. Not to mention all the built-ins for the TV and closets. They did add value to the house, but not a cool million.

BTW, outdoor HDTV? come on we get enough TV indoors.

You may be in the “no price is too low” camp.  The Kool-Aid may be a different color, but it’s still Kool-Aid.  We’ll know this is true, if/when prices fall below 4x income in Irvine, and you’re still saying featured homes are 50% overpriced.

Is that a television above the outdoor fireplace? 

All the pictures of televisions reminds me of a listing I’ve been watching locally.  It’s a house that listed in August 07 for $589K.  It’s dropped down to $520K since then and somewhere along the line the realtor added “tv’s may stay!!!” to the listing.  The brilliant realtor didn’t include any pictures of the marvelous tv’s that “may stay!!!” I should send him a link to this listing so he can see how savvy realtors showcase televisions in upscale listings.

FWIW, hotpads.com is showing a preforeclosure (Notice of Foreclosure Sale) on a 5 bed / 4 bath property on Woods Trail.  It must be a 2nd, because the sale amount is “only” $295K.

$783 per square foot?!?!  ROFL-LMAO!

This is a “must have” beautiful home in Turtle Ridge Irvine for people who inherit from parents or steal from some foreign government, or sign a multi-million contract…

US $ is so cheap, many Europeans with bubbly RE should do a swap… Let’s not give it away after all our hard work and sweat…

These were the logic that went through the owner and agent’s mind.

I am speechless.

“Why would you completely remodel and upgrade a 2007 home?”

Duh...like HGTV says, any improvements you make will get you 150% of your money in return!!!!!

I think IR will turn appropriately bullish when he begins to see legitimate good deals - he is bearish now because of the fundamentals, not emotion. When the numbers do pencil out, there is no arguing with the truth.

Not following your logic, Mark.

I have used Irvine incomes to qualify my prediction for bottom house prices on numerous occassions. 

I have never made a claim that the median house price should be 2x the median income which is what you are accusing me of.

Your comment: when prices fall below 4x income in Irvine, and you’re still saying featured homes are 50% overpriced

is a straw man.  Nice try.

wow. I really don’t know what to say to that other than...WTF. my $3,000,000 dream home is going to be a lot nicer, let me tell you. I do wonder what the agent is thinking? it must be a family member or something, right? how can the agent imagine he’ll make any money when it will never move at anything remotely near this price?

Mark,

You will have to get used to the new paradigm of free houses. It’s already happening in less desirable areas like India.

The idea is simple: Put down a large deposit on the home so that the landlord can invest it for a large rate of return. At the end of the lease, the landlord returns your deposit, but keeps his returns. It’s only a matter of time before lessees demand a portion of the investment return.

By 2016 everyone will be paid to live in a home. Just because you lack the vision to see where the future is going doesn’t mean that it is not coming.

So what’s the mindset of somebody listing a house at this price?

a) They are oblivious to the changing real estate market.
b) They think their house is extra special and worth the price.
c) They are offering their house based on the Housing Bubble economics in hopes that there is somebody willing to pay the price.
d) ???

Likewise, why would a real estate agent bother representing this property at this price?

Excuse me for missing the obvious, but can someone explain this to me:

1) It was purchased in July 2006.

2) Redfin lists it as constructed in 2007.

3) The realtor lists it as “completely remodeled and upgraded” in 2008.

...so… did somebody really throw two million at a McMansion six months before occupancy… stuff four plasmas in it… and then expect a 50% return?  This place looks like an episode of “Cribs” gone bad…

Speechless about sums it up. Wow.
Nearly $800 bucks a square foot.  What in the H-E-Double hockey sticks is in that KoolAid?!

I give up. If this is what making three quarters of a million a year (with another 3/4 million in cash) buys you ... I gotta bounce.  It’s a nice pad, no doubt ... but I was raised to believe people making that kind of coin live on 15 acres with winding, tree-lined drives and have people named Jeeves working for them.  Silly me, I guess I’d better get used to looking at my neighbors laundry in the “back yard” until I’m making a cool $2MM/yr.

Maybe I can start a TV ministry or something ....

there are a handful of smart realtors in my area who do exactly that - they are either ethical enough (I hear you laughing!) or not-interested-in-wasting-everyone’s-time-enough, such that before they agree to take on a listing, they have a serious chat with the seller about the asking price and the state of the market. If the seller doesn’t get it, they politely decline to list the property.

These are very experienced realtors, too. This only makes sense, especially in a market where it’s hard enough to find a qualified buyer and close the sale. I suppose in a bullish market, this strategy doesn’t make as much sense when everyone is buying.

By the way, I think the realtard forgot to mention:

1) Lite and brite!
2) Start livin’ the OC lifestyle today!
3) Hurry, going fast!

Did I miss anything?

On Redfin 204 days and counting, you would think that might suggest something to the seller regarding their asking price…

As I suspected, the seller is also the listing agent.

Question ... can someone with access to the loan records tell us if this was a 100% or close to it finance deal?

Just curious if they’ve got any skin in this game at all?
The information would also serve to validate or invalidate a little pet theory of mine that a statistical majority of these $1.0MM to $2MM dollar pads were sold at the height to pretenders to the wealth.

if IAC rents out at 2k pm then one would need a deposit of 24k to lease. Why would someone rent out an appartment to see a piddling 2-3% rate of return. Donald would have to pay out of his pocket to pay the staff and maintain the community.

Hell, why not price it at 4 million?  If you are going to be stupid, at least be good at it.

For $3MM I’d rather pickup something like this. It’s smaller but you get Newport Coast and a rockin view.

http://www.redfin.com/CA/Newport-Coast/9-Wayside-92657/home/5928292

When it gets to 1.2M I will buy.  I like Turtle Ridge at $300/Sq ft.

I am with you, it is much better buy. However, even this one will have to take a big cut to move - perhaps around $2-$2.25 m.

In 2010, it will be around $1.5m.

Look at the listing history on this Newport Coast house....pretty funny that each month they have lowered the price by only $1,000 each month!  I guess I just have to wait another 2 thousand months for it to be in me price range!

I’m seeing this strategy in a lot of listings—someone bought a house, whether new or existing, at the height of the bubble.  Maybe they did a little work, maybe not.  But they take a 2005-2007 purchase price, tack on 25-50% and claim that the house is a “total remodel” or “nearly rebuilt.” It’s a transparent lie on the part of the realtors, but it might trick a buyer who is not familiar with the house or neighborhood.

In one case, I was looking again at a house in CDM that I previously looked at when it was on the market a year ago in early 2007.  Someone paid a bubbly price for it then and is now trying to flip the house and get out.  I asked the agent how she justified a price that was 20% higher than an early 2007 price.  She said “oh, this house has been totally remodeled.” I told her “no it hasn’t, I looked at this house in 2007 and it is exactly the same.” She responded with some line about how the remodel was “infrastructure—things like wiring and air conditioning.” Yeeeah, right.

Stainless steel.
Granite counter-tops.
Travertine floors.

28 Woods Trail, I dub thee “travergraniteel”

:o)

What would make this listing even better is if they got a picture of David Lereah in front of the house with the caption “Now remember folks… property values can only go up”

That’s the funny thing—this isn’t a house for those kind of uber-wealthy people.  This is a house that should be comfortably affordable to a successful small business owner, a partner at a consulting, law or accounting firm, a C-level officer at a mid-sized company, or a household with two professionals earning very good money.  Wealthy, yes.  But you shouldn’t need deposed third world dictator kind of money to buy it.  It’s still a tract home on an 8000 sq ft lot.  That is not an estate.

As a result, I think the Turtle Ridge houses (excluding La Cima) need to get well under $2 million.  Depending on lot size, location, upgrades, floorplans, I’d say these homes need to sell for $1.5 million, give or take.  That means someone needs to bring a few hundred grand to the table and have a household income north of $400k.  Even that may be a stretch for this place.

My guess is that by putting it out there at $3 million and trying to keep a straight face, some uninformed buyer who negotiates them down to $2.4 million is going to think he got a deal and the sellers will still make out like bandits.  Sadly, it won’t happen for all the WTF listings, but it will happen for a few.

ray, I’ve got good news for you—9 Wayside will not sell for $3 million either.  This is a Pienza, which is the third tier of home in Newport Coast.  Pienzas are facing downward pressure from Cypress (second tier) homes that are languishing on the market at the $3 million mark.  9 Wayside may find a knife catcher in the mid $2’s because it is one of the nicer Pienzas out there, but this model and view will be available for a hair less than $2 million by the time we’re done.

In fact, this home will be less than $3 million by the time we’re done.  I suspect you could get it for $3 million even today:

http://www.redfin.com/CA/Newport-Coast/7-Atlantis-Cv-92657/home/5811477

Now tell me how Mr. Turtle Ridge seller is going to get his?

Purchased July 2006 $1,410,000 1st and $282,000 2nd.  Refinanced October 2006 $1,758,750 1st and $469,000 2nd.  Those have got to be some pretty hefty payments and that’s not to mention the $24,000 annual property tax bill.

Sorry—meant “third tier home in Pacific Ridge” not Newport Coast.

Mike,

I can see the error of your thinking and will point you to the path of enlightenment. There is a book called “The Secret”. Read it. Live it. Or, if you’re like me and detest reading, then go see the movie “What the @#$% do we know?” Watch it. Live it. I’d write more, but I grow weary of the printed word.

1 lakh = 100,000 (its a unit of measure)
Rs 5 lakh = 500,000 Rs
Rs 1 = 0.024 cents USD (rounded)
Rs 500,000 = $12000 USD

They say standard rents around mumbai seem to be anywhere from Rs 2000 to Rs 4000, so by averging Rs 3000—yearly rents would normally be around Rs 36000, or $864.

This smells of a pyramid scheme, but at least the pyramid dwellers get a home during their participation.  Seems like a good deal for the tenants, but i’ll bet people end up getting screwed in the end when the ‘investments’ cycle.

Thank you!

So if I read that correctly and tap out some numbers on the trusty calculator, they had about $200K of skin in the game until the refi. At that time they extracted the equity effectively making this a 100% financed home.

A single example does not a proper sample make but this does help bolster my pet theory that upwards if 60 to 70% of these homes sold at the bubble were bought by wannabe’s on a “put option”.  They could never hope to afford these homes without never ending double digit appreciation. 

As the Oracle of Omaha has famously said, “it is only when the tide goes out that we find out who’s been swimming naked.”

You have repeatedly commented that average homes posted here are worth $__ with no additional commentary as to median income. 

I would prefer, that if commenters want to throw a price at a listed property, they preface the price with: “I wouldn’t pay more than...” or “This is an average house in Irvine, so I’d expect its value to be very near 4x Irvine’s median income.” However, your comments are typically stated as matters of fact, “This house is not worth $__!”

“As I suspected, the seller is also the listing agent. “

Really?  I love it!  I absolutely love hearing about RE agents buying at the bubble!

At least she put her money where her mouth was - a screening requirement when I select my RE agent in the future.

I am laughing so hard Kirk… truly a classic post.

skek, agreed. the problem I see is most people you mentioned already own nice homes, not enough poeple starting businesses(in this economy) or partners to justify most of these prices. also at that price range, Irvine becomes irrelevant(even with good schools)as people in that income range can afford any place(newport, CDM, Laguna Beach, L Hills...etc)and can usually afford private schools where ever they go.

Also I wonder how the bubble borrowed from the future in regards to these borrowers and whether they are stuck in a mcPOS somewhere. I know a few people in that situation. so they dont even have the down payment to liberate from their current mcPOS. so that even decreases the number of qualified buyers to people who bought many years ago and are dying to move to TRidge as opposed to anywhere else. using Irvineresident’s number you are talking about the top 5% of earners in Irvine:

IRVINE ESTIMATED HOUSEHOLDS BY HOUSEHOLD INCOME
Income Less Than 15K 8.12%
Income between 15K and 25K 5.04%
Income between 25K and 35K 5.21%
Income between 35K and 50K 9.43%
Income between 50K and 75K 16.85%
Income between 75K and 100K 15.02%
Income between 100K and 150K 20.80%
Income between 150K and 250K 14.15%
Income between 250K and 500K 3.78%
Income greater than 500K 1.60%

the top 5% is going to get slammed like every one(slowing business, stuck in expensive houses, layoffs...etc), unless you are very wealthy and in that case dont apply to the discussion. 

Yeah, the rich foreigners myth…

IPOP: Is anything selling at this price range over there?  Looks crazy from here!

The overhead photo is funny to me.  It’s obviously during construction, but my first thought was “What are all those cars on the street?”

The price is just crazy.  For $3 mil, you ought to see the ocean, or have your yard measured in acres, not square feet.

maybe i am to dumb to understand the dynamics or the article points to a scam. if someone has that much to put down as a deposit, why dont they buy the property. Maybe the GRM for that place is in the low thousands.

All those cars on the street belong to all the construction workers…

You have repeatedly commented that average homes posted here are worth $__ with no additional commentary as to median income.

Where do you think “$__” comes from? A crystal ball?

I would prefer, that if commenters want to throw a price at a listed property, they preface the price with: “I wouldn’t pay more than...” or “This is an average

And I would prefer commenters preface all of their comments “AZDavidPhx is THA MAN”.  Life isn’t fair, I suppose.

However, your comments are typically stated as matters of fact, “This house is not worth $__!”

So you are not questioning whether I am wrong or not, it is just “how I state it”.

talk about over-doing it with the wet cement look for the photos.  the pic of the sideyard looks like the house got flooded!

Hmmm...maybe the agent/owner doesn’t actually intend to sell.  He listed the house he lives in with a ridiculous price, knowing full well the price is ridiculous.  If some sucker comes along and offers anything close to the insane price he’s asking for, he’ll take the money and run.  If not, meh, whatever, no big deal.  Of course, the fact that he bought at the peak is mildly amusing in itself.

It is amazing how corrupt our “representatives” have become…

http://news.yahoo.com/s/nm/20080508/pl_nm/usa_housing_congress_dc_6

Heeheeheeheehahahaha

The dog ate it.

off the topic:
did anybody notice that WTF logo on this IR’s post in linked to this WTF property:

http://www.redfin.com/CA/IRVINE/45-CANOPY-92603/home/5944601/mrmls-K07103117

BrioRenter,

Just as second hand smoke infects the lungs of the innocent the negativity emanating from your words infects the souls of unsullied.

There is no “pyramid scheme”. This is quite simply a sound triangular investment platform.

Call me contrarian, but if there is one thing I learned from this housing crisis it is that human beings can be counted on to live up to their agreements.

Things aren’t so good in Phoenix, either:

http://ktar.com/?nid=6&sid=830839

Agreed.  Gamblers had a Kool-Aid field day in Maricopa.

excellent points, mmg.  We will likely see depressed demand for quite some time due to the folks who might have afforded these houses, but (1) can’t sell or are underwater in their current home, (2) are established and quite content in their current home, or (3) become traumatized about real estate values and afraid to make a move up.  Add to that the disproportionate number of folks who made big bucks in the real estate biz and no longer cashing those kind of paychecks, and you are definitely running short on qualified buyers for $1.5 million + homes.

And now you know why the average Costco customer has an income in the 50K to 75K range.

So the seller is the listing agent?  Maybe he/she is just trying to juice the comps in their neighborhood.

Hello, Kirk, in May 2007, Slate carried an article about The Secret:

http://www.slate.com/id/2166211/pagenum/all/

You’re entitled to your religious perspective, but I don’t think this is the right forum for it.

Kirk is having us on, John.

It’s OK; I thought at first he might be serious.

I think “MaricopaHousingBlog” would be a swell idea… you know Eloy, don’t you David? I don’t know if it has changed since the last time I was there to try a static line jump, but at that time it looked like a developer’s ghost town. That’s Maricopa’s future for at least the next 20 years.

Exactly how do you spend a million dollars remodeling a brand new house? I see no justification for asking this much. And it still looks pretty crappy—the pictures were almost all outside. You can’t buy good taste.

Are you allowed to line-dry in Irvine?

Redfin sas 2006 Property Tax: $5,603. Hummm…