This person just needed a little extra cash, us Irvine renters should proudly bail him out.

What were they thinking? You make it sound like you might be against a bailout for the lenders…

Forgive me but $2.6M for one third of an acre?  Yeah right.

And the listing says it’s off the market now.

Meh! The listing’s already gone off the market according to the redfin link.

But yeah, 2.45 million dollar option ARM. What on g-d’s green earth possessed anyone to think that was going to work out well?? Doesn’t matter who you’re making it to.

Notice the word tHE?

No, the ALL CAPS text was so damn hard to read that I gave up long before then.

Everyone has been excited about the Barron’s article stating we are near the bottom, Fitch ratings has a more bearish view:

http://calculatedrisk.blogspot.com/2008/07/fitch-projects-additional-25-percent.html

http://www.housingwire.com/2008/07/24/fitch-updates-ratings-model-projects-steep-price-declines/

I wonder if he rolled any of that money into other “investment” properties?

This still seems like an extraordinarily high-priced home.  What are the odds that the bank can actually get someone to pay asking?  I have seen quite a few homes go down to 2004 prices in OC… could this one shed another 200k or so before it gets sold?

I doubt it. Rich and famous life style of Shady Canyon could consiume one million bucks in a flash.

The guy who owned this house was one of my former clients.  He was just an average Latino kid from Santa Ana, who thought he hit it big when he started riding the housing bubble wave.  One day he was selling cars, the next day he’s walking into my office with a solid gold Rolex on is wrist.

He is the perfect example of how this bubble made it possible for people to live an unsustainable lifestyle that was far beyond their earning potential.

I probably should know this so please forgive but what is the “THE BANK OF NEW YORK, CWMBS INC CHL MORTGAGE PASS THROUGH TRUST”

Did anyone hear that news story today about those granite counter tops causing cancer ? (Exposing the sheep to radon gas ).

But then again, the sheep could care less, because they are paying big bucks to live within a mile of the Orange County land fill (Think Porto Potty Springs)

This loan was packaged into a CDO which now owns the property. The Bank of New York is the trustee administering the loan.

thanks a bunch IR - I was thinking maybe it was some sort of new housing bailout crazy set-up for the taxpayer purchasing it or something…

But at least for a little while, I bet that latino kid was having the time of his life. He probably nailed a differnt Shady Canyon housewife each night of the week.

Fun while it lasted…hehehehe

What $700k…that’s crazy.  The lowest amount it might go would be $1.5M.  In any case, this might sell in the low $2M.

I wonder if he has any of it left.

I wonder what percentage of the people who rode the bubble gravy train (newbie realtors and mortgage brokers, not just HELOC abusers) have any savings or investments to show for those years of stupid money. Not many, I bet. Most of them probably thought the gravy train would run on and on forever.

On a separate note, as a grammar and all-around English nazi I love how IR nails these realturds on their poor English and ALL CAPS and over-punctuation and general abuse of the language. Please don’t stop!

¡¡¡BUY NOW!!!! OR FOREVER BE PRICED OUT.  ONLY $2,600,000 TO LIVE IN EXCLUSIVE SHADY CANYON!!!!  THIS IS THE DEAL OF THE CENTURY.  HURRY, WITH A PRICE THIS LOW, IT WILL NOT LAST!!!!!

In this instance I think Zillow was valuing the property when it was a vacant lot. I doubt it will roll back under $1,500,000.

I’d say 2002 @ $1M.

I have an idea.

Maybe a request for IR and team.

Let’s start a email campaign to our elected officials.

Looks at today’s example, once again, in less than year, the banks are create HELOCs or refis for 30% more than the house was bought for and in excess of the original full purchase amount.

The daily posts of HELOC abuse would make wonderful, click to email your Congressional Reps automails.  How many can we generate daily from IHB saying No to bailouts, stop socializing the losses for individual poor decisions and investments.

The next two years is the time whent he skirts get lifted.  We’ll going to find out who is posing and who isn’t.

If enough are posing who knows what’ll happen to Shady.

But at 5200 SF, I’d have to agree that going below a million is unlikely.  I also have to guess that 5200 on a 1/3rd acre dominates the land.

Did you see this story in the ABA Journal email too?

I wonder how many of our elected officials tapped in for some extra cash? Life can be difficult on a public servants salary, and with their connections, think of the financial opportunities!

I don’t think so.  Areas like Shady and Turtle Ridge have been selling at 2005 prices on average recently.  Someone probably got this place for $2.3-2.4 and felt they got a great deal…

The house didn’t exist in 2002.  It was just a parcel of land…  The lowest price this place ever sees is probably $1.5M, more likely the higher $1M range.

Apparently, at least one California Congresswoman did a jingle mail ...

only if they’re dumb.  Oh wait, plenty of that to go around.  The smart ones set up a Leadership PAC which is basically legally used as their personal slush fund.

Who cares if it wasn’t around in 2002.  Doesn’t change the fact that the market could over correct itself to the prices we had in 2002.

You are correct, Renato. In my experience, not many saved.

My girlfriend worked as a Customer Service Rep for one of the large Irvine mortgage outfits from 2001-2004. During that time, she was paid profit sharing bonuses equal to 4 extra months salary per year.

You should have seen her face when I recommended that she double up on her car payments instead of joining her coworkers on a cruise to Mexico or trip to Vegas.

I was a heretic for suggesting that these payments are abnormal for a CSR and that they shouldn’t be expected to go on forever.

In the interest of full disclosure, I never refused a free drink from her co-workers on Friday Drink Night at the Irvine Spectrum.

Is it “overcorrection” if we’re still over 20% > equivalent rent at those prices?

“Debt is cheaper than equity.”

IR, I hope your book really drills down into the cultural history of this in our country, and the way that 50s corporate tax policies played a subtle but crucial part in laying the seeds for the debt orgy since mortgages first began to be securitized on a massive scale 25 years ago.

Hello IR,
Wouldn’t it be an eye-opening experience for our senators if we hand deliver your cumulative compilation of all the HELOC abuses to their offices?
And then just ask them to answer one question…Why are they condoning this type of irresponsible behavior by voting for the mortgage bailout plan?
Have we transformed ourselves into a nation of irresponsibles and immorals?

Actually, thats the name of the MBS.  BONY is likely the Trustee.

“Have we transformed ourselves into a nation of irresponsibles and immorals?”
  YUP!

I have no doubt we will be seeing many 2002 prices or even lower. My only point on this particular property is that it is misleading to compare values before and after improvements.

Nope, I heard it on KNX 1070 AM radio while driving through Irvine to work this morning.

Could just vote instead…

Take taxpayers off hook for rot at Fannie, Freddie
By John McCain, Special to the Times
In print: Thursday, July 24, 2008
http://www.tampabay.com/opinion/editorials/article735638.ece

See that link I posted above for why

http://www.tampabay.com/opinion/editorials/article735638.ece

“Fannie Mae and Freddie Mac. It’s a tribute to what these two institutions — which most Americans have never heard of — have bought with more than $170-million worth of lobbyists in the past decade.”

Is it time to roll out the guillotines yet?  Instead of saying “Let them eat cake,” our governators simply said, “Let them eat housing appreciation, while we farm out your jobs to China and India.”  Of course to get this “appreciation” they had to goose a few rules, and now that the house of cards is beginning to fall, it’s time to bail out those who really count - the big contributors to their PACs.  It’s the American Way!

Back to Shady Canyon.  This property will not go below $2 million.  The one service industry that hasn’t suffered wage deflation is professional sports, and plenty of athletes apparently prefer Manhattan Beach and Irvine (go figure).

on the MLS listing it indicates a 6.23.2008 sale for $2.7 MM.  Is that accurate?  Did that happen?

Thanks in advance

What is “equivalent rent” on 5200 sf?

At some point, I think we stretch the GRM concept when we start talking about hypothetical rent markets. Do that many people rent 5200 sf places?

I’ve railed about this point before, and I’ll do it again.

Congress isn’t bought and sold by Realtards and lenders. The root cause of Congress doing stupid stuff is…..stupid voters. Those same voters that drank the Kool-Aid (and are now wondering “what happened to my nice tasty drink?”). SOME members (sadly, not enough) get involved in the nitty-gritty of policymaking. But, in the end, if the American public wants to drive off a cliff, Congress will gas up the car for them.

Honestly, I think the IHB (and other blogs like this one) and IR’s eventual book (and others that will say similar things) are the real solution. The cure to voter stupidity is education (and, it’s really not a cure, so much as a minor palliative). Not that blogs or individual books will reach enough people, but the hope is that the spill-over effects DO reach some people.

In short, my solution for this crap not happening again is: KEEP UP THE GOOD WORK, IR!

Link to the NYTimes article. There is uranium and potassium and the like in some granites. Go figure.

<a >NY times granite counter tops story</a>

I should have known this one. When I worked as a radiation safety assistant at a biological lab, we used to like to take the pancake meter out to the granite steps where everyone waited for the shuttle bus everyday. Clicks like crazy. Good fun.

Just another reason (other than the tooth breaker if you fall on it) why I don’t want granite counter tops and get really annoyed that “everyone” kept putting them in with their HELOC money, and I’m just going to have to go and rip them out.

Of course, that model doesn’t generate much beyond noise when one is talking about the very high end of the market.

But since you ask…

http://losangeles.craigslist.org/search/apa?query=&minAsk=7000&maxAsk=max&bedrooms;=

Lee, it’s fascinating to get some of the background on a case like this. Without divulging anything that you shouldn’t, can you tell us more? After his stint selling cars, did he become a mortgage broker? What fuelled the initial surge in income that convinced him to live like a rock star?

Nice summary:

http://finance.yahoo.com/banking-budgeting/article/105452/The-Smartest-Advice-I-Ever-Got

I really like the one from Levitt !

Sure this milton Friedman’s approach has been taken by most of the guys in IR examples to an ultimate level. Of course, they were not ‘as good economists as he was’

I don’t agree.

I believe that as the bailouts proceed, people that were loaned money and lost will be the first ones lent to again.  And bailed out, again.

People like me are bad for business.  I don’t borrow money.  I am a “deadbeat.”  Why lend to me when they can make so much more lending to people with a proven track of borrowing?

Because it’s not about willingness to pay one’s debts.  It’s about willingness to become indebted.  And I am unwilling to become indebted.

With 1,2,3 million vacant homes, little “issues” like bankruptcy, walking away and overall bad behavior will be ignored in favor of moving product and making fees.

It will be this way until the system is fundamentally changed.  As far as I can understand, the bailouts simply allow “business as usual” to proceed.

Such is life.

Excellent catch on the CAPS LOCK thing, IrvineRenter.  And here I was trying to give realtors the benefit of the doubt, thinking they were maybe entering MLS data via ancient legacy systems that didn’t allow lower case. 

That’s the foreclosure—the price at which the bank took it back at auction.

Wow.

Actually, I do remember reading about residents in Malibu renting out their places in the summer to celebutrash. A number of these listings are pretty much for the same things closer to Hollywood (for clubs and actually doing work at a studio).

Sometimes, from my lowly position in the top 15% in family income, I forget how those in the top 1% live.

The hamptons have a similar trade.  I wouldn’t be shocked if the islands around SC, GA, and places like Jupiter, South Beach, etc, in FL have something similar.  Maybe North County San Diego too.  Of course, the ‘summer rental’ price would need to be adjusted significantly to represent a true year-round rental, I suppose.  Doing the same search in a couple of months would probably give you better data.

In any case, it is hard to get more than noise out of the very high end in terms of fundamental analysis.  Housingtracker does a nice job of splitting the medians into fourths. 

There’s an interesting point in there somewhere about the growing gap between average worker and CEO pay reinforcing a trend where the very high end has no connection to the bigger picture, but I’m not aware of much research on the subject.

But, back on topic, I would be leery of seeing general levels of 2002 as an ‘overcorrected’ state.  When the average income can afford the average median, we’ll be able to talk about a bottom.

Hey guys, enjoyed this blog for many months as a “lurker”.  What about the article below from OC Register - more signs of fraud/abuse to come?

Friday, July 25, 2008
$625,000 for this? On a street of plunging prices, a questionable sale
Prices are plunging on Santa Ana’s Camile St. But a few troubling exceptions are emerging.

http://www.ocregister.com/articles/camile-house-mortgage-2104411-fargo-wells

I posted about this guy/property earlier.

Bought my car from the dealership he works at.  Still there as a couple of months ago.  He sold his other house and rolled it into this one.

Was doing pretty well in sales.

That Barrons article was de-bunked by RBP.  The reporter has written half a dozen industry or company stories over the last year and has been dead wrong on every single one.  Incredibly wrong - I might add.  Very poor quality work…

$1.6M is the July 2002 equivalent of this $2.2M 2004 purchase rocket scientist. 

Your $1M would be a 1998 price…

This house would rent for around $8-$9K per month IMO…  Some slightly smaller Turtle Ridge houses have rented in the $7,000-7,500 range.

Six months ago, I would have said that it would be impossible for this house to roll back to less than $1.6MM, based on what I read here about Irvine house prices between 2000 and 2005.

However, there’s something that most of us here aren’t factoring in, that would have been unthinkable before, and that is the complete collapse of our banking system and the comprehensive bankruptcy of the U.S.

I expect WaMu, Corrus, and perhaps National City to end up going FDIC. I could be wrong. But not even the S&L;bust in the 80s was quite like this.

Somebody said that WaMu was putting 8-week holds on checks issued by IndyMac to its depositors when they went under FDIC protection last week. Is that true? Does WaMu even have 8 weeks?

I remember my profound unease when the Glass-Steagal Act was repealed in the 1990s. The very last brakes on the greed and thieving by our financial institutions were cut. But I consoled myself with the thought that “maybe we are more sophisticated now”, and I thought that maybe people were frightened enough by the S&L;debacle to exercise a little discipline.

So, things could… ah.. overcorrect substantially, just as they did in the 30s, because things are setting up exactly the way they did then.

Be prepared for 65% rollbacks, especially on upper-bracket properties. There were way too many upper-bracket homes built relative to the percentage of the population that belongs to the rarified demographic that can truly afford such homes.

And now there will be fewer people than ever to buy these houses.

Shady Canyon…like Disneyland, but with real money.

1) This a tract home—mass produced, almost identical to many others.

2) IndyMac Bank—only one bank—experienced a run on withdrawls of over $1 billion.

Laura hit it on the head. And if you really want to freak out go check out rgemonitor.com today. Nouriel’s latest post is his all time work. Get ready for double digit long term rates based on the agency holdings of the Chinese and Russian central banks and Treasury holding of the Japanese, Chinese and Russian central banks. I thought the comments he made about the Gulf states being allowed to make investments in preferred/convertibles of Financials that promptly dropped 50% but not in profitable investments like US Ports were telling for the geopolitical tensions around maintaining the dollar peg to their currencies let alone more of thier SWF money coming in to recapitalize the US banking system without equity and voting rights. Especially humorous was neophyte SWF CIC getting taken to the cleaners by Blackstone for half their initial $3B investment in less than 6 months. Chinese bloggers are outraged. Dark dark economic storm clouds are brewing. 30 year fixed rates will hit 10% by Q1’10. Anyone buying now is a lunatic unless one has cash to burn.

  why is everyone on here such a bunch of haters??? keep waiting for life to give u pocket aces donks.. i bought a house in 2006 and ive lost all equity!!! but it will come back it always does.. sounds to me like this guy had a great life for a couple of years while all u donks were in your litttle rentals.. real estae is the best bet in the long run.. my grandma bought her house in 1961 for 28,000$$$ in newport beach.. its worth 1.5million now.. im sure glad u donk werent around in the 1970’s to tell her to sell.. i wast gettting any younger and after renting for 17 years i decided to take the plunge.. i woould never go back to renting again.. just keep hoping for armagedon donks it will never come !!! u will die a non-homeowner !!!also i live in costa mesa , why anyone would live in nazi irvine is beyond me .. U all deserve each other!!!! a bunch of haters these site has turned out to be ..  im glad this guy lived his life that is what it is about !!!! BET ON YOURSELF !!!!!!!!!!! CHEERS ... COSTA MESA FOR LIF E !!!!!

I predict a $2.2MM+ sale.  I spoke with the agent after expressing an interest and she indicated that there was a lot of activity on the property and was calling me - and suddenly the calls stopped, so with that and the property being pulled from MLS I’m guessing that it was near enough of an offer to allow Countrywide/ BONY to agree to the price.

Amateurs.

Places like Shady Canyon are the
last to crash, they fall HARDER and
FARTHER than the overall market.

People forget the 80s and 90s when
Beverly Hills easily dropped 50%+

Of course, “it’s different” this time
around, it always is…

President Davis, how can I break this to you gently?  You have no equity, so you don’t own your home.  The bank owns more than 100% of it, and you own less than zero.  Renters don’t own their homes either, but at least they are aware of it.