Mariposa

Oct 23rd, 2009  
by IrvineRenter  in Uncategorized

Today we will take a closer look at the community of Deerfield.

Irvine Home Address ... 13 Mariposa Irvine, CA 92604
Resale Home Price ...... $709,000

Reincarnation, is a dead refrain
So this what it's like to be a butterfly
Reborn
Dead.

Is this the gift of fire?
Or the making of a perfect diamond
Digital climber plummets
In a canceled dive.


Reincarnation -- Discordance Axis

Much of Irvine has been around since the 1970s. The older neighborhoods have seen three real estate cycles including The Great Housing Bubble. Each one becomes more volatile than the last. House prices skyrocket, then they fall to earth with a thud. The neighborhood values values begin to come back in time (it will be a very long time in this cycle), and the God's of Kool-Aid reincarnate. The cycle repeats anew.

Deerfield

I have said it before, but I really like Deerfield. From the community profile:

In the heart of Irvine there are a number of small neighborhoods that are less well known than Woodbridge or Turtle Rock or some of the other larger or newer communities. These neighborhoods are no less interesting or well planned than their more famous brethren. One of these hidden gems is the community of Deerfield.

Deerfield is north of Woodbridge bounded by Irvine Center Drive, Culver Drive, Yale Avenue and the rail line which bisects Irvine. Deerfield Avenue is the main collector street moving traffic throughout the community. There is an apartment complex at the corner of Irvine Center and Culver, and there is other high-density housing north of Deerfield Avenue near the railroad tracks. The remaining housing is a mixture of one and two story dwellings. Deerfield was one of the earlier communities developed. It's buildout was complete in 1976.

(Mariposa is butterfly)

Life in Deerfield revolves around the large community park. This park together with an elementary and middle school comprise a large central greenspace. There are a series of pathways linking three satellite parks to the community park. This is a great master plan which allows children to walk or bike to school or the park without crossing busy streets.

This is one of those abstract land planning ideas that comes together really well on the ground. The planners envisioned this community would be as livable and as charming as it is. It is a far superior land plan to the grids of nearby El Camino Real or the Ranch. FWIW, I would buy in this neighborhood.

Some weekend afternoon if you are looking for something to do, go to the Deerfield community park at the entrance off Irvine Center Drive. According to the city of Irvine website:

Deerfield Community Park

55 Deerwood West


Located between Culver and Yale along Irvine Center Drive.
Click here to get directions.

Park Hours:
Monday-Friday 9:00am-9:00pm
Saturday 9:00am to 10:00 pm
Sunday 12:00pm-6:00pm

Phone: 949-724-6725
Facility Reservations: 949-724-6620

Reservation Information:

Deerfield Community Park has a multi-purpose room,
craft room & picnic area available for reservation.
For a list of rate categories, capacities and hourly
fees click here.
*Note: Additional fees may apply. Review the
complete policy for additional fees.

*Bounce houses allowed with reservation only.

Approximately 10.1 acres in size.

 

Park amenities:

  • 1 multi-use building
  • 1 restroom
  • 5 drinking fountains
  • 2 child play areas
  • 1 open play area
  • 1 concession stand
  • 4 lighted tennis courts
  • 2 lighted volleyball Courts
  • 2 racquetball courts
  • 1 disc golf course
  • 1 fitness par course
  • bicycle trail access
  • 4 barbecues
  • 1 outdoor sink
  • 1 group picnic area
  • 11 picnic tables
  • electrical outlets

 

 

Irvine Home Address ... 13 Mariposa Irvine, CA 92604

Resale Home Price ... $709,000

Income Requirement ....... $130,494
Downpayment Needed ... $141,800

Home Purchase Price ... $140,000
Home Purchase Date .... 1/1/1980

Net Gain (Loss) .......... $526,460
Percent Change .......... 406.4%
Annual Appreciation ... 5.6%

Monthly Mortgage Payment ... $3,045
Monthly Cash Outlays ............ $3,970
Monthly Cost of Ownership ... $2,970

Redfin Property Details for 13 Mariposa Irvine, CA 92604

Beds 4
Baths 3 baths
Size 2,700 sq ft
($263 / sq ft)
Lot Size 5,400 sq ft
Year Built 1975
Days on Market 14
Listing Updated 10/9/2009
MLS Number S591308
Property Type Single Family, Residential
Community El Camino Real
Tract Dc

Will be painting soon...choose your colors... RARE 4 BEDROOMS + OFFICE/DEN!!! - MASTER BEDROOM + ONE BEDROOM + OFICE/DEN + 2 BATHROOMS DOWN - 2 BEDROOMS + BATHROOM UP - EXPANDED,UPGRADED,UPDATED - BEST LOCATION, On a quiet,inside street, away from traffic-Steps to pool,spa and park-KIDS CAN WALK TO SCHOOL WITHOUT CROSSING A SINGLE STREET -Faces the morning sun-GREAT CURB APPEAL,Brick and Stucco, Manicured Landscaping--Vaulted ceilings-Wood Floors in Entry, Hall, Dining Room, Family Room-Plantation shutters throughout-Custom recessed lighting,Updated Kitchen, warm-tone Oak Cabinets,Ceramic tile, Smooth-top range, Double oven - BATHROOMS have beed updated-HUGE Family Room features...Dramatic,used brick fireplace- Inside Laundry Room-Very private back yard-Newer concrete shake roof- SELLERS SAY SELL...Will work with offers.

When you look at this house in this neighborhood, you can see someone making $130,000 a year living there. The affordability as measured by payment and income qualifications is good, but look at the price; isn't that just wrong?

It is difficult to get your mind around prices at very low interest rates. If you change interest rates to 8% and kept the other numbers the same, the resale home price would drop over $200,000 due to the reduced loan size. At $509,000, the numbers all make sense for a rational world where the FED doesn't engineer interest rates. How long will the FED keep this up?

At least over the weekend....

Thank you for reading the Irvine Housing Blog: astutely observing the Irvine home market and combating California Kool-Aid since September 2006.

Have a great weekend,

Irvine Renter


Astute Observations

Astute Observation by Freetrader
2009-10-23 04:47 AM

I’m going to probably get hammered for saying this, but while I agree with your comments generally speaking, when I look at this house there is one statistic that looks about right.  Purchase price in 1980 was apparently $140,000—pretty pricy for that day.  Current asking price is $709,000, which makes it, I guess, average to low for an Irvine four bedroom house.  The interesting nummber to me, though, is the annualized appreciation: 5.6% a year since 1980.  It may just be coincidence, but considering inflation and general price and population increases since 1980, an average appreciation of 5.6% seems about right.  Could it be that the pricing is not so bad after all?  The alternatives would be either that i.)the initial purchase price of $140,000 is somehow wrong, or ii.) 5.6% is an unreasonably high rate of appreciation over a 30-year period (note that this is a crude compounding rate that doesn’t take inflation into account).  Am I way off base here?

Astute Observation by Chris
2009-10-23 07:26 AM

Let’s let the market decide.

Of course, the market is now tainted with Fed funny money wink

Astute Observation by Geotpf
2009-10-23 07:27 AM

For where the Irvine market is right now, this seems like a very good deal, IMHO, especially if you have small children who can take advantage of the safe walk to the elementary and middle schools.  The price ain’t bad either (again, for where the market is right now).

Astute Observation by wheresthebeef
2009-10-23 08:36 AM

This may be a good deal where the market is right now.  Like IR mentioned, higher interest rates will sink prices quickly.  I hope all the current crop of buyers are thinking about that…who knows, maybe they have faith in the Fed keeping rates low for years and years.

If I were buying today, I would definitely factor future interest rate hikes into an offer.

Astute Observation by Eat that!
2009-10-23 09:52 AM

Okay, everybody with small children with a family income of $130K and $142K down payment plus 6 months savings, and using a conservative 38% of adjusted income for debt services.  See that’s the problem, how many are doing this sort of purchase where they aren’t more than 50% of their take home to service just the mortgage on the home?

Astute Observation by Eat that!
2009-10-23 09:53 AM

Edit:  everybody raise your hand…

Astute Observation by what about 4.6% appreciation
2009-10-23 10:50 AM

If you use 4.6% appreciation, then you end up with $515,000 after 29 years which is closer to IR’s hoped-for number. Like Chris said, let the market decide…

Astute Observation by Eat that!
2009-10-23 11:47 AM

That would be fine if the market wasn’t using my (our) money.  Let the market decide without bailouts, handout and tax breaks.

Astute Observation by NickelDime
2009-10-23 02:23 PM

Sounds like reverse-justification of a number.

Value shouldn’t be determined based on a purchase at a point in time (how about 4.6% per year since 2006?!) but by a comparison to renting a similarly sized and situated home.

I’m just a loanowner, but I think GRM along with demographic data is the way to divine value.

Astute Observation by Freetrader
2009-10-23 09:39 PM

That is an excellent point:  the cumulative effect of a relatively small difference in the rate of return (1% as you note) can be massive.  I don’t know whether 5.6% or 4.6% appreciation is more ‘realistic’.

Astute Observation by norcal
2009-10-23 06:03 PM

That’s what I thought, too, until I remembered that $140,000 in 1980s money was a HUGE amount.  And a 5.6% annual return is probably excessive when you consider the recessions of the 1980s and 1990s.  In terms of income and affordability, a 3.5% annual return is probably more reasonable.  But as another commentator says, the market will decide the price.

$700K for a 40-year-old house is still obscene outside of California.

Astute Observation by Freetrader
2009-10-24 06:30 AM

I think your observations are mostly valid, but I am not sure if the recessions really dampen the return—after all over time you have an inflation rate that varies but is probably 3%-4% on average, with economic growth nominally 5% or 6% or so, so your home prices should appreciate at some similar rate, all else being equal. As far as the age of the house is concerned, it is actually only in California that the age of the house is considered much of a factor—that’s because of the huge population growth over the past 40 years.  As population growth slows down (and as California gets built out) most houses on the market are going to be pretty old, and they will still be expensive.

Astute Observation by Chris
2009-10-23 07:30 AM

Personally, I like Oak Creek and Westwood.

But to each his own, I guess.

Astute Observation by Marc
2009-10-23 09:29 AM

This house is really ugly. Can we please tear it down and build a new one. There is so much old crap like this one in Irvine. And then instead of discounting it for the ugliness factor they want $700k. Hahaha.

Astute Observation by gman
2009-10-23 09:35 AM

I wonder if you could buy at the low interest rate and then arbitrage your risk of rising interest rates with a short of t-bills, like through TBT?

Can anyone see a flaw in that logic?

Astute Observation by snagel
2009-10-23 12:23 PM

It is a good idea in theory, but in practice, TBT is very inefficent over the long term becasue it’s price is calculated daily and it moves double the index.  E.g. if the bond index goes up 10% from 100 to 110, TBT goes up to 120.  If the index then falls 10%, index is at 99 (110 -11)and TBT is at 96 (120-24).  Therefore, TBT vastly underperforms the index over time.

Astute Observation by gman
2009-10-23 04:03 PM

My concern would be more for the short term.  You don’t want the place to crater in two years and strand you there (if you need to move) because of high interest rates.  Over the longer term, I think it’s safer to think that appreciation will take over and dig you out of any hole.

Astute Observation by mike23w
2009-10-23 09:48 AM

What’s with the high robbery index in this zipcode?

http://tiny.cc/5kJg0

It’s 3.7 times! the national average.

Bad neighborhood to walk in, late at night.

Astute Observation by Lee in Irvine
2009-10-23 11:12 AM

That’s an anomaly.

Astute Observation by ockurt
2009-10-23 11:40 AM

Lansner: O.C. home price gains holding, early numbers show

http://tinyurl.com/2hbtro

Astute Observation by mwwatcher
2009-10-23 11:41 AM

math.. folks:

$400k w/ 4%
$200k w/ 8%

Which one you go?

Good weekend

Astute Observation by thrifty
2009-10-23 11:45 AM

“At $509,000, the numbers all make sense for a rational world where the FED doesn’t engineer interest rates. How long will the FED keep this up?”
That would be $189/sq ft. imho, a not unrealistic estimate for the housing bottom. Generally, prices still seem about 33% too high in coastal areas. Much of that due to kool-aid pricing by equity owners still living in 2006 or REO wishing it was.

Astute Observation by lowrydr310
2009-10-23 11:48 AM

The picture of that home looks eerily familiar to one that I used to live in (minus the second story) then I realized it’s about 1/4 mile away.

I used to live in The Ranch, and it was an awesome neighborhood. The house was by no means a McMansion, but perfectly sized for a family of four or five. By today’s standards and compared to all the new construction it’s small, however I like that. Smaller homes are easier to clean and cheaper to heat/cool.

The neighbors were an elderly couple who haven’t made any upgrades since they bought it new in the 1970s. I don’t see how something like that could fetch anything close to a $700K price tag. Heck, even if the whole place was upgraded I can’t see it coming close to that price.

The market will sort things out - just wait and see when all the props are removed and all the problems that IR mentioned (shadow inventory, ARM resets, tax credits, artifically low interest rates) come to fruition.

Astute Observation by lowrydr310
2009-10-23 02:06 PM

If property tax is based on the value of the home, then choice becomes very clear. I’ll take the lower price at the higher rate any day, despite the fact that it means more $$$ going towards evil banks.

Astute Observation by tonye
2009-10-24 10:48 AM

WARNING! 

Land Lease Type = Fee!

If I’m correct, that means this house doesn’t own the land but pays a lease to the Irvine Co.

It used to be somewhat common in the late 60s and early 70s.  In my own area of TR, they offered an option to buy or lease the property.

If this home sits on leased land, then it can not compared price-wise with other homes that sit on deed land.

Astute Observation by thrifty
2009-10-24 11:45 AM

Fee is short for “fee simple” meaning land purchased, not leased, with the structure.

Astute Observation by tonye
2009-10-24 05:20 PM

Aw

Nevermind.  wink

Then this is the perfect Brady Bunch house.

But, where do you put Alice?

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