New Market
Theres a brand new day on the horizon
Everythings gonna be just fine
Theres a brand new day on the horizon
And the whole worlds gonna be mine
Im gonna tell old trouble,
hed better be moving on
Happiness is going to take his place
around here from now on
The old dark clouds are gonna roll away
The sun is gonna shine
And the whole worlds gonna be mine
Im gonna tell old heartaches,
pack his bags and go
Ive decided that I dont want him
hanging around no more
Dont you know I said everythings
gonna be just fine
cause the whole worlds gonna be mine
There's a Brand New Day on the Horizon -- Elvis Presley
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What a wonderful, upbeat song. A new day is dawning; a new market is coming; life is grand... Ahhh, isn't denial a wonderful thing?
Today's featured property would like to see a new market because the current market is taking all their equity. These are the listings that really grab me because these people are actually losing their own money rather than the lender's. Every penny of the first $200,000 lost on this property comes out of their pocket.
Asking Price: $550,000
Income Requirement: $137,500
Downpayment Needed: $110,000
Monthly Equity Burn: $4,583
Purchase Price: $580,000
Purchase Date: 10/7/2004
Address: 2 New Market, Irvine, CA 92602
| Beds: | 3 |
| Baths: | 3 |
| Sq. Ft.: | 1,500 |
| $/Sq. Ft.: | $367 |
| Lot Size: | - |
| Type: | Condominium |
| Style: | Contemporary |
| Year Built: | 2001 |
| Stories: | Two Levels |
| View(s): | Mountain, Park or Green Belt |
| Area: | West Irvine |
| County: | Orange |
| MLS#: | P618074 |
| Status: | Active |
| On Redfin: | 38 days |
Turnkey home!!! Highly desirable townhome by builder William Lyon. This is Andover's largest model, and shares only one wall as an end-unit! Immaculate 3bed/2.5bath/1500sqft. with a loft. Upgraded carpets, hardwood floors, appliances, central heat and A/C. Prewired with Cat-5 throughout the home and loft for a functional home office. Custom drapes, in-ceiling surround sound, and epoxy flooring in garage. Master bedroom has walk-in closet, and custom privacy door. Professionally landscaped patio. Steps to Pool-Spa-Tennis amenities. .. and of course the unparalleled West Irvine Schools: Myford Elementary, Pioneer Middle School, and Beckman High! A very SMART choice. Act now.
It only shares one wall? Now the degree of attachment is becoming a selling point?
unparalleled West Irvine Schools? You mean the ones in Tustin's school district? Perhaps a bit misleading? Perhaps intentional?
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If this seller gets their asking price, they will lose $63,000 after a 6% commission. It will be all their equity that is lost.
Think back to October 2004 when the rally was seeing some of its steepest price increases. Did anyone who bought then think there was even the slightest chance of losing money on the deal?
I don't care what the median shows, when you look at individual properties reselling in the market (like Case-Shiller does) we are clearly passing through 2004 prices. The bubble built on the bubble created by negative amortization loans and the complete breakdown of lending standards has been deflated. Now we are approaching the bubbly prices of 2004 when our 90s-type bubble would have popped. If the 90s are any guide, we are due for another 20%-25% decline from here over the next 5-7 years. Although, with the tsunami of foreclosures about to hit the market, I would not be surprised to see a 30%-35% further decline in 2-4 years. I really is different this time: it is much worse...
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CHRIS & FRANK in West Irvine is a scam! You can see their Open House signs everywhere, pointing to nothing! They contradict their directions and get people lost. We imagine they just want lost people to call their phone numbers! I got several complaints from a legit Open House, that we went to after New Market
Thanks for the info.
That’s a clear case where it’s not in the buyer’s interest to use the seller’s realtor.
That’s an interesting house because they agent told me that it was 2200 sq feet but since I have that model (or used to until I blew it out and rebuilt ) I know that house can be no more than 2000 sq feet with their additions. Per my calculations that home is no more than 1970 sq feet… (1786 base + 96 kitchen + 88 back bedrooms = 1970 total sq feet )which means that the price is off by almost $90K!!!
I wonder what will happen when they come to measure the house and realize they got ripped off....
Also, the work was nice but reduced the home to one big room ( not really a Great room) that has the kitchen/den/dining room and a smallish living room. The bedrooms are tight and then you got a white elephant home next door (on the south side ) with high windows that look into the atrium and kitchen.
I’ll ask Duffie. I’ve known him for over 20 years. He might know the details.
Aw tm, I like Chris too, he’s a good guy and a decent realtor. Frank moves houses pretty nicely as well… I suspect you’d get about the same performance out of any of them.
$580K is probably a little over-priced for the location and condition of that REO. Whatever lender that owns that hasn’t been very smart. They passed on offers above $600K previously and still the place sits unsold.
I think Sorenson/Deermont is only location in our development I know of where residents, of different homes, actually got into a public fist fight. A pretty rare sight in suburban Irvine… IPD used to make a regular practice of stopping by that area. The dogs that ran free, killed the poor little pooch by the park, and made the papers came from that corner too I think… Seems like it has improved recently though.
That REO is a decent deal in today’s world, if only the bank would be willing to play well with others!
The Sorenson and Deermont area is not bad at all. It’s better than living on an alley.
Back to my original comments. I would choose Chris Merritt anytime for the above listed reasons, and I find it interesting that a local realtor outs himself on a public blog, especially IHB. But I understand that you two are friends and I’ll take that into consideration.
See ya.
So what’s the deal tm? You scaring off people from that Plan 3 REO @ $580K?!
I think the would-be buyers must be figuring out that the intersection of Sorenson and Deermont is the part bad of Wisteria. That’s the Wisteria Hood…
I’ve been reading this blog pretty much since the beginning, and I have noticed a bit more ‘attitude’ from IR. I took his comment as a swipe against these schools. Honestly, I get kind of sick of the hero worship that has been seen here lately. I appreciate this blog, but I assume he puts on his pants on one leg at a time just like all of us.
Close but no cigar, I’m on Sorenson.
AZDP,
Congratulations on buying what is no doubt a very nice townhouse in Phoenix. I have to say, though, that I don’t understand your outrage. Are you outraged at people who take on mortgages to buy a house, or are you outraged at people who buy houses at a price that exceeds the “value” of the land and the structure? Moreover, what is a “dumbass amount” for a house, and is it a local phenomenon? While it may seem obvious to you in Phoenix that $300,000 for a townhouse is too much, you’d be hard-pressed to find a townhouse within 15 miles of Washington, DC, (my home) for that price. Here, at least, $300K would be a bargain for anything bigger than a one-room condo, especially if one wanted to live near their job (a reasonable desire). While I am also disturbed by the prospect of people living grossly outside their means (taking on a mortgage that constitutes...say...45% of their monthly income), I think there are definitely places in the United States where the price to income ratio is perenially high (i.e. New York, DC, San Francisco) and it’s unreasonable to expect the bottom 50-60% of the wage earners to forego home ownership.
Cheers!
Everett
POITG,
I’m not especially compassionate, I can merely empathize with the foreclosed-upon parties. I think you and I probably share a disdain for folks who bought houses on 100% credit with the plan of flipping and profiting. The problem is identifying who did that and who is a relative innocent suffering from the vicissitudes of having to sell a house in a tumbling housing market.
Cheers!
Everett
Agreed. Chris is an outstanding broker and I have a great deal of respect for his work. He’d be an excellent choice to sell your home on Deermont when it’s time, TM.
I would much rather use Chris Merritt for a sale/purchase in West Irvine. He’s a stand-up guy, honest, and knowledgeable. He also doesn’t prostitute himself on a blog.
Only $778 each month for taxes and HOA. What a bargain!
We are right on the 73. If you are outside, it’s noisy from 6am-10am, moderate during the day and evening. By 11pm, it’s very quiet. Since it’s a toll road, there are rarely any trucks.
Indoors, you don’t hear anything from the toll road.
We lived a block away from Jamboree and PCH in Newport Beach for 9 years, THAT was noisy. Plus the jets taking off from John Wayne all day! And the geezers yelling swear words when they missed a shot (which was always) on the 16th fairway of the Newport Beach CC. And the golfballs breaking windows. Those guys sure did hook them. I will NEVER live on a golf course AGAIN.
Tony,
Here’s that info for 18862 Saginaw: (List Date 1/31/2008 Date Added 2/3/2008 Tran Date 2/20/2008 DOM 2 LP/SqFt $449.55 Org Price $989,000 Prev Price $ Cur List Prc $989,000 CDOM 2 Off Market 2/5/2008)
Looks like listing agent is representing both buyer and seller in the transaction. You can call her and try to get the answer.
I have a question for you (or your wife). The meeting I was at was entirely about our oversubscribed public school and California’s “open enrollment’. One of the parents was complaining about a teacher at the school who illegitimately enrolled his own children in the school. (It rates 10 out of 10 deciles in California API)
I thought teachers should be able to enroll their children. If it isn’t a formal perk of attracting good teachers to a school, then it should be.
Is this a California-wide policy? Or district-by-district?
I was at a school meeting last night; one of the school district managers shocked me with a little anecdote… 1 out of 4 of the homeless students enrolled in the school system were in families that were former mortgage payers.
It’s kind of funny to see all the bulls in one thread.
I expect the fact that there’s no guest parking after 6:30pm to weight down in the final price.
Hey thanks IR for reporting this.
Frankly, I love Irvine. I had properties there before I moved to Sillycon Valley and sold those properties (luckily before the drop).
I’d love to buy a SFH in Irvine when the price is right. For me, $250/sf would be about the bottom, IMHO.
What ages were the baby boomers in the 80s? What do people typically do at that age?
What ages are the baby boomer now? What do paople typically do at that age?
In 10-20 years, what ages will the baby boomers be? What do people typically do at that age?
Figure that out - pretty much explains the whole economic pattern.
That’s definitely an option to consider although with his income and the positive cash flow on the Anaheim property I doubt he’d need the HELOC.
IR, your comments are much appreciated. Yes, those three exclamation points will have to stay now that they’ve been canonized here. I DID AVOID THE ALL CAPS for the most part, though, which has got to count for something.
I’m not sure if the Realtors have cleaned up their spelling/grammar due to your criticism. More likely I would reason the decrease in total #s of sales coupled with decreased prices has driven the part-timers and ill-prepared out of the industry. A culling of the herd, so to speak, which is also expected. Forces me to get better or my boys don’t get shoes or food.
I have a feeling more Realtors are among us, but are smart enough to not bring attention to that fact. You have a pretty savvy following. I’m naive enought to still think that accountability matters.
Personally, I had been a little disappointed that none of my listings hadn’t been profiled previously. I’m as full of B.S. and hyperbole as the next guy. Come on! Now I feel a bit more like I’ve arrived.
Regarding the property, you are exactly right. The courtyard is in the front of the home. No street frontage. Guest parking is on the street past the alley.
I use a professional photographer who is worth every penny I pay for his service. This home was professionally staged, as well. I am admittedly not good at either of these functions but recognize the value to my sellers based on the initial “perception” of the buyers. That’s why I outsource.
My focus is to get the home exposed to as many potential buyers as possible. That means hitting all marketing channels I know of, including open house, newspaper, direct mailers, MLS, Realtor.com, zillow.com, google base, trulia, even craigslist. I like Redfin’s site for its breadth of info, also. A very good choice of yours.
Any additional suggestions you’d make? If its the truth, better to hear it now than later.
Many thanks again. Now I’ll do my best to lay low, sip my koolaid, and peddle pergransteel to all who a) need help, b) want help, and c) are willing to let me help.
The only foreclosed owners I have sympathy for are those who bought within reason, on sensible 30-year mortgages, and lost their houses anyway because their areas were wiped out economically by job losses.
I also sympathize with people who go through other personal disasters such as business failure and catastrophic illness.
The denizens of Detroit and Cleveland are being foreclosed in record numbers because entire categories of jobs are disappearing quickly, and most likely forever. I feel for these people as they freeze up like deer in your headlamps, wondering should they flee for parts unknown in search of employment, leaving their family and community support systems, or should they stay and flounder about in search of whatever they can get.
These people are being ignored by our pandering pols, who won’t even extend unemployment in the most devastated areas, but are willing to destroy the rest of us financially to finance a bailout for perfectly well-set folks who just had to “act rich”, and merrily HELOCed themselves to death for cars and clothes and trips and electronics, and often, second homes.
And I’m absolutely sickened to see non-profits like ACORN, an organization that purports to advocate for housing for the poor and lower utility rates, instead partner with Countryside to help out middle-income borrowers who bought far over their heads in housing that goes way beyond being minimal shelter. ACORN is even accepting money from Chase Bank to hang fliers on the doors of defaulting borrowers who Chase can’t reach. One of the poor, hapless, exploited borrowers who is receiving assistance in working out her loan with Countryside is a Las Vegas casino analyst who bought a $392,000 house there, and who isn’t even delinquent on her $2400 a month payment yet. But she knows she will be when her payment adjusts to $4000 soon, so ACORN is helping work things out.
Somehow, I cannot feel compassion for a woman living in a house I couldn’t afford, who can ante up $2400 a month payments, plus taxes and utilities. I guess that makes me heartless, but I know too many people who make less than $40K a year and who still manage to stay solvent and well-housed, who will have to help people like this woman through their taxes, while being robbed of the opportunity ever to own.
I have seen previous years where school districts held off on offering contracts to first-year teachers until Summer before making offers. Don’t know if they stated no new contracts first, though.
$521
Not buying. Saving. Good time to be piling up $$$.
Or perhaps take a HELOC on the Anaheim property while still owner-occupied, rent out the Anaheim property and also rent in Carlsbad until the bottom is more in sight. When comfortable, buy in Carlsbad at an affordable price using the HELOC money. And with only $100K, plus the HELOC on the Anaheim property, he should have positive cash flow.
Pretty well written listing. I could actually read it without being distracted by misspelled words or hyperbole.
I agree, Condor. California missed an opportunity by not electing Tony Strickland State Controller last year. He was fond of pointing out that the LAUSD had enough non-teaching “administrators” that there weren’t enough seats in Dodger Stadium to hold them all, and vowed to go after them for their waste and abuse. Their administrative offices are like the Taj Mahal while inner city schools rot in disrepair. If every one of those incompetent bastards (again, not the teachers) lost their jobs, I’d say that was a net positive for California (and probably for the LAUSD students). Sadly, they will use the budget deficit to threaten us with deeper cuts in the classroom while they make sure to order new mahogany desks and leather chairs for their offices. Oh, did I mention that I don’t like public school administrators?
As all good residents behind the Orange Curtain knows, we live in the OC just so we don’t have to think about L.A. If the LAUSD fell off the end of the earth tomorrow you would only get a smattering of polite applause among your OC neighbors…
Second that.
I’ll go with $515,000.
You need to come out from your OC shell and start reading the LA Times…
http://www.latimes.com/news/printedition/california/la-me-schools21feb21,0,2045771.story
“The Los Angeles Unified School District, the state’s largest, could have a $560-million deficit next year”
that’s a 1/2 billion dollar deficit in one school district.
layoffs are comming… people are still behaving like deer in headlights
This has been the most entertaining day on the housing blog in a while! Hats off irvinerealtor and ipoplaya, althought I think you are one in the same!
My guess: 525K
A big slide from what I sold the same plan for not too long ago!
Kudos to irvinerealtor for coming in here and showing that a real estate professional can be professional, competent and not in complete denial about the market. Your efforts are appreciated and your contribution is valuable.
Congratulations!
So the answer is nothing.
My questions:
What percentage of potential buyers/sellers are well informed about the market, such that they understand issues related to subprime, affordability, property values, etc.
What percentage are clueless and just looking to buy at a monthly payment they can afford or sell for more than they bought it for?
I know the IHB community reflects one extreme, but I’m curious what the masses think/know about the current real estate market.
Just heard that all new (first year) teachers in IUSD are not being offered contracts for next year. Evidently they are going to re-assess the need for all new teachers and cut where they can…
Wonder if this is the case in all districts or even statewide?
Taking veiled swipes at the king huh?
Look out people, we’re in for a realtor war on the blog!
Nah Troop. I’m a regular ole non-realtor. One can tell because I don’t walk around with that annoying thing hanging around my neck.
irvinerealtor will be selling my house for me when we move-up though. He’s one of least BS-eey realtors I have come across in these parts…
irvinerealtor lives down the street from me ten. He has represented me in two past purchase attempts… I think we set a record on one - six counter offers I believe and still no cigar. We talk houses at night when the dogs are out pooping on the HOA grass.
He being the good realtor type he is always cleans up after his pooch… Whatever it takes to keep West Irvine’s values up!
The first is 33 Moonstone, which was 2 New Market’s initial best active comparable and toughest price competitor locally. Specs: (LP/SqFt $353.27 Orig Price $609,900 Prev Price $548,900 Cur List Price $529,900 DOM 249 Off Market 2/5/2008) The agent represents both buyer and seller. The reason you don’t know the address is the agent opted to hide this from advertising where possible in order to double-end it. If it closes, he finally did, at the seller’s cost.
The second is 65 Ardmore, a little larger, and in good condition. I believe this one backs directly to Jamboree, though. Specs: (LP/SqFt $337.73 Org Price $619,900 Prev Price $549,900 Cur List Prc $529,900 CDOM 125 Off Market 2/18/2008)
Ipop,
How on earth do you know what the sellers are looking for?
Don’t be pimpin’ your home, cheerleading those multiple offers.
Do irvinerealtor and ipoplaya share the same IP address ?
SOLD!
To the chump with no shirt behind door number 1!
Hurry up and starting throwing confetti and popping champagne bottles before he gets a chance to come to his senses!
Lower the mirrors into position!
Start the smoke machine!
BTW… my fury lies with the Irvine Company for naming the development “West Irvine”? The only worse moniker I could imagine would be “Beachside Irvine” for our Easternmost village (except the budding Orchard Hills and Portola), maybe that’s coming soon?
Put me on the board for a closing price of $495K
Click the $5 donation on IR’s tip jar.
I’m spending very little.
The savings account gets paid first every payday.
I did see an advertisement on television the other night that promises cash for mailed in jewelry. Apparantly, you send them your gold earings so they can melt them down and they send you some cash.
Maybe I should start investing in gold jewelry.
Congrats. I’ll take myself out of the running for the $5 since I already know what your sellers were looking for…
The uber bears always seem to forget that places get bought and sold all the way down. If they didn’t, the market would just inflate exponentially with inventory and crash to bottom in a few short months.
Generally you would not list a property as being in escrow if that were not he case. Most realtors will avoid showing properties listed as in escrow to their clients because they see it as a waste of time.
So what are you buying right now AZP?
Ok, i’m going to suprise you and say maybe you arn’t giving yourself enough credit if you bought a place for 80k, timed the market, and made a ton of money?
I’m not planning on buying anytime soon. I’ve never owned property and (fortunate or unfortunately) I wasn’t one of those guys who made tons of money off the boom.
I just don’t think its as black and white as you are making it. There are currently people bargain hunting, finding great deals, and renting it for a profit.
Could I do that? Hell no. I don’t know much about real estate at all. But that doesn’t mean its a ‘bad investment’ just because I don’t have the time/experience to be successful at it.
Yup.
Not to spin 25w100k+’s argument (dumb as it is) into a straw man or anything, but I suppose you could make the same argument that Vegas Black Jack is a good investment if you know someone who made some money playing one time.
He knew some guys who made some money during the boom. Most likely all the money they made is now evaporating in another distressed property somewhere.
Those of us who made money and able to remain intellectually honest can see it for what it was: luck. We got lucky and would not consider buying real-estate any time soon.
I have a former colleague who has taken a new role in the company that is requiring to relocate. He is selling his home in Anaheim and moving to Carlsbad. Needless to say I referred him to this blog among other resources so he could become better acquainted and equipped to deal with the current housing market.
He only owes around 100k on his home that’s worth probably 500-600k and my advice to him was twofold:
1 - Dump it. Get out as soon as possible. Price the home low and take what you can. Do not chase the market!
2 - Rent. Don’t be prideful after years of home ownership. Sit tight with your cash and analyze the local market to determine the right time to jump back in.
I sent him a few Redfin links to homes in the area he will be working that priced well below their original 2005 sale price. Hopefully this will illustrate how bubblicious the market has been and help him avoid making a major mistake.
Breaking news. On counter-offer #4 of the sixth offer, we have an agreement to terms. Escrow to open tomorrow, set to close in 30 days or sooner.
$5 goes to the closest guess in closing price.
Chris and Chuck… honesty pays dividends:
1.) Why would the statement that others have made offers rush a buyer?
2.) If a property is in “backup offers” status it deters further offers from coming in. Why would that be an effective sales tactic?
3.) Only work with someone you trust. I can’t control how others work, but I’d guess you’d never work with that agent who told you one thing and then did another. Sounds instead like a way to hamstring your career, to me.
That’s the spirit 25K: lets berate some knife catchers to make fools of themselves.
To provide greater clarity to those that are contemplating what will surely be a financially disastrous decision (purchasing in this market), what follows are some of the sagest comments I have seen regarding the ongoing implosion. In a nutshell, they may be summarized as saying the Fed is pushing on a string with their interest rate cuts. Note also the discussion about the great depression:
What the upcoming recession “will look like” has been the topic of a fierce debate on the Internet. Everyone seems to agree that this is not a typical economic downturn resulting from overproduction, under-consumption or malinvestment. Rather, it is the crashing of humongous equity bubbles that were generated by the Fed’s abusive expansion of credit and the unprecedented proliferation of opaque structured-debt instruments. Many believe that the unwinding of these bubbles will trigger a round of hyperinflation which is already evident in soaring food, energy and health care costs. These prices are bound to increase substantially as the Fed continues to cut rates and further undermine the dollar.
But the real issue (it seems to me) is the unfathomable loss of market capitalization, the growing insolvency of maxed-out consumers, and the inability of the banks to freely extend credit to responsible loan applicants. These three things are likely to drag down all asset-classes, slow business activity to a crawl, and compel consumers to hoard rather than spend. The dollar will strengthen in a deflationary environment (if that is any consolation?).
Paul L. Kasriel, Sr. V.P. and Director of Economic Research at The Northern Trust Company answers some typical questions about deflation in a recent interview with economic guru Mike Shedlock (Mish):
Mish: Would you say that consumer debt in the US as opposed to the lack of consumer debt in Japan increases the deflationary pressures on the US economy?
Kasriel: Yes, absolutely. The latest figures that I have show that banks’ exposure to the mortgage market is at 62% of their total earnings assets, an all time high. If a prolonged housing bust ensues, banks could be in big trouble.
Mish: What if Bernanke cuts interest rates to 1 percent?
Kasriel: In a sustained housing bust that causes banks to take a big hit to their capital it simply will not matter. This is essentially what happened recently in Japan and also in the US during the great depression.
Mish: Can you elaborate?
Kasriel: Most people are not aware of actions the Fed took during the great depression. Bernanke claims that the Fed did not act strong enough during the Great Depression. This is simply not true. The Fed slashed interest rates and injected huge sums of base money but it did no good. More recently, Japan did the same thing. It also did no good. If default rates get high enough, banks will simply be unwilling to lend which will severely limit money and credit creation.
Mish: How does inflation start and end?
Kasriel: Inflation starts with expansion of money and credit. Inflation ends when the central bank is no longer able or willing to extend credit and/or when consumers and businesses are no longer willing to borrow because further expansion and /or speculation no longer makes any economic sense.
Mish: So when does it all end?
Kasriel: That is extremely difficult to project. If the current housing recession were to turn into a housing depression, leading to massive mortgage defaults, it could end. Alternatively, if there were a run on the dollar in the foreign exchange market, price inflation could spike up and the Fed would have no choice but to raise interest rates aggressively. Given the record leverage in the U.S. economy, the rise in interest rates would prompt large scale bankruptcies. These are the two “checkmate” scenarios that come to mind. (read the whole interview here)
Summary: When banks don’t lend and consumers don’t borrow; the economy crashes. End of story. The whole system is predicated on the prudent use of credit. That system is now in terminal distress. Everyone to the bunkers.
Perhaps the whole “inflation-deflation” debate is academic. The real issue is the length and severity of the impending recession. That’s what we really want to know. And how many people will needlessly suffer.
The sad truth is, for the majority of people who play in the market, be it real estate or (and especially) stock, they lose. It’s a small group of people who make money. Most lose their stake. So, in general, “investing” in real estate or stocks is kind of dumb, for most people. Now, if you have enough cash to diversify and you take the time to actively and intelligently manage it, you might money, big money. But, like Vegas, the come on you hear is, “I know someone who made millions!”. They don’t show you the losers.
If you say anything less you’re at best not telling the whole story and most likely just dishonest.
I love it! Too funny.
Good post.
Sorry Tony -
Phoenix had no choice but to steal the idea of flame broiled cow meat from CA. The Gila Monsters could only feed so many of us!
And time will prove them to be fools for paying $500K for that.
Some people obviously feel like it’s time to buy. If they choose to buy and actually want to live in the place, why not? The place, at that price, fits their circumstances. But if they have crazy ideas about flipping cuz the price is cratering, then they’re smoking crack.
I sold my place my property at the height of the bubble.
I didn’t make 100K profit, but it was significant nonetheless.
Took the cash and joined the renters.
If all of those people that you know took their 100K profits and immediately re-"invested" them in another property that is now 100K under peak price then the game is over.
It’s like the people who love to tell you about the time they won 10,000$ in Vegas without telling you that they lost 20,000$ the day prior.
I’m guessing the 25 year old with his 100K real-estate profit has his bubble profit cash tied up in other real-estate and can’t admit to himself that it was a charade and will soon have to change his blog name to ‘25wDiddlySquat’
A lawyer friend of mine told me that the giant pink elephant on the living room couch you speak of was not wearing Cal Trans sanctioned visibility devices (yellow blinking lights, a reflective vest, and reflective ankle bands) and therefore it was not apparent to prospective homeowners that prices were entirely unaffordable and outrageous.
One can justifiably conclude that the blatant lack of responsibility exhibited by the government to provide proper working supplies to the state owned and operated Herd Of Pink Elephant taSkforce of America (HOPES) entitles all citizens who were not aware of the Great Housing Bubble to be bailed out using government tax dollars.
That sounded like a wise move, AZDavid. The wife and I are taking a similar tack right now. We lucked out in finding a home that had just foreclosed. Bank took possession, relisted, we made an offer, and it’s been accepted. We looked at a wide range of prices, but we lucked out with one that doesn’t exceed our annual gross. We’re in a sparsely populated county in TN, in case you’re wondering.
Are there homes here going for quite a bit more than we offered on this place? Sure. Could we afford one or those higher priced homes? If we stretched and didn’t mind cutting back on our savings. But we gained at someone else’s expense. In this case, somebody lost their job and could no longer afford their house. Do I feel bad for that family? A little, but the I look at how much they paid and think that they paid waaay too much. My price is a good one-third off of what they paid.
Irvinerealtor, your comments are welcome. And even though I rent in Tustin Ranch and my daughter went to Myford/Pioneer/and now Beckman I don’t take offense. There are similar good schools in Irvine.
I tried ordering broiled Gila Monster tenderloin and mesquite smoked cactus when I was in Phoenix recently, but all they had were very expensive aged steaks and California Nouveau Cuisine.
So, I gotta accept the fact that Phoenix has become a suburb of San Bernardino.
The steaks were excellent, at OC prices.
A house up the street just sold in less than a month… I think they wanted around 900K… they had done a very nice remodel… 2000 sq feet, 4bd, 2ba.... on Saginaw Dr… location was pretty poor though.
Is there any way to find out what the listing was? It was taken out from Redfin two weeks ago and the “sold” sign just popped up.
Everything is a excuse....
Everyone wants to be like the IUSD.
Why make do with an Oldsmobile when you want the Cadillac?
Uni......
What else can be said?
At the track and x-country meets, Uni may not be test best, but you can be sure their kids have the highest IQs.
;-DDDD
hahaha. wow, AZ is giving real estate advice. I know plenty of people who made hundreds of thousands of dollars off real estate. So its a lousy investment how?
Maybe stocks are a lousy investment too since a lot of people lose money on them. Or bonds. Or commodities. Hrm....
This is good advice. Our place is near a soccer field. The floods are so bright at night (even a quarter mile away) that it never truly gets dark at night. But you would never know if you only saw it during the day.
You have to evaluate your own financial situation. Figure out what is affordable to you in the big picture (not just the monthly payment). Keep renting and putting money into your savings account - in a few years you will have a nice chunk of change to put down when affordability returns.
Don’t assume that everyone else is just a lot wealthier than you are and therefore you need to overspend in order to keep your place on the social food chain.
If your family and friends are pressuring you to buy then tell them that you are thinking about moving to another state where real-estate is much more affordable. That should pretty much be the end of that.
The bottom line is that homes provide shelter. The “American Dream” of home owership implies a house that is paid for in full - not a house with a jumbo mortgage.
It’s going to take some time to re-educate the masses that real-estate is a lousy investment.
Chris,
www.ipoplaya.com
You think these all got into escrow without offers huh? There is actually a good bit of buying activity going on in Irvine, IMO based on the idea that jumbos are going to be much cheaper. Some people just ain’t smart enough not to buy…
Every listing is going to get 1-2 uber lowball offers. Fishers that come in 20% or maybe more below list to see if they can pick up somehow pick up something on the super cheap. Places priced properly, i.e. 15-20% less than peak, will get offers. There are so many WTF distressed list prices out there that listings which have embraced this decline get good attention.
Look at the Irvine inventory graph the is link to the IHB home page. Irvine inventory levels are falling. There are less homes on the market today than there were on January 31st. Why? It’s because things here are selling… Selling for 2004 prices, but selling nonetheless.
Very true. I wasn’t making an argument that you could not prepare for external events.
My point was more that bad luck is more to do with unforseen events.
The bubble popping was not an unforseen event; the bubble pop was the big pink elephant sitting on the living room couch from 2003 to 2006. Anyone who bothered to open their eyes could see it.
When I moved to Phoenix, I didn’t know anything about a housing bubble. I considered buying and had sticker shock when I started looking around. I googled house prices and only a couple hundred thousand blogs came up explaining what was going on.
Saved me from making a big mistake!
CK, I get you now:-)
That’s right CK. You TUSD lover! If you buy my condo your daughter can do to those wonderful schools…
Yeah, agents like to use this tactic to get you to move quickly. About a month ago we dropped by an open house for a place that has been on the market for almost a YEAR. The agent said right to my face that he expected at least 2 offers to come in by the end of the weekend at prices very close to the asking price. Then I noticed on the Tuesday morning after the weekend they dropped the price again (by a whopping $20,000). A month has passed and it is still on the market.
I appreciate your replies. I am a first time buyer, under a lot of pressure from friends, family, realtor etc to buy now because prices are falling. I do not plan to be a knife catcher. Just looking for an ‘affordable place’ to stay.
I have been visiting open houses for the last couple of weeks and it is strange to see that bad unkept houses are being sold at 2-3% below list price.
There is a house on fort sumter that one has to visit to see the condition (if you do, remember to open the kitchen and bathroon cabinets). i was told that the owner is in europe the house has 6-7 offers varing from 5-10% list price but he will not budge. As a first time buyer I would never bid on the house but i was amazed that there are 6 people waiting with offers on that house. There is another in wood bridge at silkleaf which has a fresh coat of paint and nothing else (too much designed to sell). There is another wierd one on woodbridge with 5 bdrms and 5 baths that one should visit just to see how not to renovate a house.
I would note your description is better than most I come across; although, you did slip in the three exclamation points…
I am curious if any realtors have cleaned up their sloppy writing due to the abuse I give them? Also, do realtors live in fear I will profile their property even though it is free press?
As for the property, is the little courtyard in the first photo the front of the unit? Does it have street frontage, or do guest park a distance away and walk up a sidewalk to the front door?
The property itself presents very well. Did you have it professionally staged and photographed?
Is it bad luck when you buy in wooded canyon that catches fire in 105 degree heat and santa ana wind-conditions and burns your house down?
How about New Orleans.. Is it bad luck when you buy a house below sea level in a flood zone, don’t buy flood insurance and get 8 feet of water when the levy breaks?
There are measures you can take to secure your house for earthquakes also, you don’t have to be demolished.
Luck is a matter of perspective.
Like when I lived in the midwest.. they had a saying.. there’s no such thing as bad wheather, just bad preparation.
6 offers my foot. I can say I’ve got 10 offers too if I were him.
I’d like to sell you a horse whip if I may.
Yup. It’s either that or all the first time buyers of today spend the next 20 years saving up the down payment for a 1500 square foot apartment....which seems pretty unrealistic.