Irvine Housing Blog

My “creative” solution involves a price drop.  I guess that disqualifies me from winning…. 

This thing has been languishing for over 278 days, so it has not been priced well.  I would think that if they offered it for slightly less than $200/SF - Say $199/sf - they might possibly attract a “value” investor.  It would make the property stand out - more like Santa Ana prices, than Irvine prices.

Oh, and this is not actually IN the new part of “Westpark”.  This is located in the previously-named “Culverdale” which is OLD.  The photo says OLD.

It’s a fairly large home on a fairly large lot.  This would be attractive for a fairly large family.  However if said lot and home need massive makeovers in landscaping and carpet/paint - the size and scope of those projects become unattractive real quick.

As far as who all bought this property back in 2005 - probably a “group” of “investors” who were going to fix the place up and sell when it doubled.  They were planning on replacing the carpet and repainting and doing a flip - that’s why it is mentioned in the MLS description.  That’s my guess.

Pray every night an airplane crashes into it and turns it into an inferno.  Oh yea, make sure your not at home.

Back in the last big downturn here on the east coast you saw alot of houses like these picked up out of foreclosure by contractors.  You aren’t seeing alot of people these days doing additions to their home so you have alot of contractors looking for work.  Owner occupiers that can afford $500k-ish for a home can do better than this, and this is where the contractors come in.  I don’t think prices are low enough to make the economics work but we know they will get there at some opint, and i think that is a type of buyer you will find for this type of property.

They could at least repaint inside.  You can do several rooms if you do it yourself for less than $100, and that might help a little.

One thing many Orange County home sellers are gonna have to reason with, homes in the “desirable” areas are gonna be the ones the take the next big hit in this market.  Especially on a dollar basis.  The fact of the matter is the typical Santa Ana or Corona SFH has already been killed, in some cases REOs are selling for .30 cents on the dollar vs. the peak sell price.  Unlike Irvine an other “desirable” areas, people can actually get financing in the less expensive communities.

This is very simple ... the best, most desirable bedroom communities in Orange County are gonna go straight to hell, without passing go.

The agent didn’t bother to list the house’s two biggest selling points:  this neighborhood is assigned to University High, and the homeowner association dues are about the lowest in Irvine.  Other than that, yup, it’s overpriced.

“So let me get this straight: This house is a trashed and needs to be completely done over inside and out. Before I can even begin, I have to spend $600,000. I will need a $120,000 downpayment, plus cash reserves, plus another $100,000 to fix the place up. When I am done, I will be out-of-pocket over $220,000 cash, I will have a $480,000 mortgage, and I will have a 40-year old property in Irvine that will be worth less than my mortgage in two years.”

But it’s Irvine, when you say that to people that aren’t from here they look at you like your crazy, anytime a property has no pictures of the inside, BEWARE

Per the Realtor, “very nice neighborhood”... I think not. Me thinks this is the 3rd worst neighborhood in Irvine.

1) Worst is the few blocks of houses wedged between Irvine HS and Culver Plaza next I-5 freeway.

2) Followed by Orange Tree… non-descript homes in a non-descript neighborhood shadowed by IVC with very few local amenities.

3) Westpark (wink, wink) south of San Leandro, squeezed in by the 405 and Culver. Not really Westpark, these 40 year old homes next to the freeway suffer for the delusion of higher home values due to the proximity of the newer and nicer actual village of Westpark.

San Clemente seems to be another OC area where prices on desirable units over 500k have yet to budge significantly on both sfh and condos. Price per sq/ft is about $350-450 and varies without logic up to $750 or more. One 35 y/o 2br ocean view condo is listed at $495k ($415 sq/ft) down from $675k in Aug, 2006, that would have sold for about $145k in 2000. It is being rented now for $1700/mo unfurnished. Assuming a rent/income ratio of 180, price would be $306000, still well above the $215K that traditional annual increases of 4.5% would reach from 2000-2009. I think prices in the $500K-1.5M range in south OC have a lot further to ultimately fall than 20-25% - more like 40-50% from current levels.

Creative Solution

1. Stop paying mortgage. Save up mortgage payment for at least a year bc free living in the house.

2. Once house sells at auction, get free extra money from lender’s REA to move out before 60 days is up.

3. Wait 2 yrs for FHA loan (FHA loans not score driven, only need 12 months on-time payments) or 3 yrs for conventional financing with major $$$ down from a year of no mortgage/rent.

Easy.

5,100 Sq. Ft is considered a large lot?

Yeah, I have a solution for the owner.  Have a friend “accidentally” drive a truck through the house, and declare it a total loss.  He did pay his insurance on time, right?

Seriously, I have a sneaking suspicion that the lot is the reason why the owner bought this dump in the first place.  The original plan wasn’t to do anything to the original house:  the plan was to sell it to an even bigger sucker, who’d demolish it within hours and build some zero-lotline American Godawful on the remains. 

I’ve been watching this happen in Dallas, over and over, with great amusement.  I used to be angry at how these schlubs would tear down older houses with incredible charm in order to build some soulless McMansion, but now I laugh.  The reason is because the schlubs bought the houses at exorbitant rates, demolished them in preparation to rebuild, and then either have the resale fall through or run out of money to build them themselves.  Ergo, they get stuck paying an obscene mortgage on a weed-strewn vacant lot, paying for someone to mow the weeds every week before they get fined by the city for creating an eyesore, and they don’t even have the benefit of renting out the property to cover property taxes.  I mean, a couple of these would make good garden spaces, but why go to that kind of trouble for a spot that’s probably going to be foreclosed upon in another six weeks?

Hey, it IS a big house by Irvine standards—why not rent out each of the 5 bedrooms to families that have been foreclosed on and lost their homes?  Since Irvine rent is so high, they may even be able to cover their mortgage payments.

The yard has room for a few tents, too—rent out campground spaces.

People expect an older home to be improved over the years doing nothing does not deserve the increase in price.
Not painting or fixing it up is simple maintenance that so many do not seem to do here. I painted my last house with a 12 year paint and that is what sold it besides it being in perfect near new condition at ten years old.
It was worth the price simple as that.

The bubble mentality is going to take a long time to change in people’s minds. You are no longer calling the shots—get over yourself Irvine owners and price your homes with some kind of reality. Think would you buy it yourself?

“Don’t worry”, I’d say to the owner.
Heck! You’ll have your loan reduced.
‘bama and Barney (Frank) are coming with a big bailout check.
You’ll live free and clear!
Courtesy of The “Socialist United States of America” - SUSA

To Scott’s point, here on the East Coast, I know several small contractors that are actively looking for and buying properties like this one (but definitely lower $/sq ft). They have little to no work but do have some cash along with cheap labor. So they target the distressed properties because of lower prices and these properties typically scare away families looking to move in and live life, which also opens the door to price negotiation. Each one I have talked to has plans to rehab and then rent it out and keep it for sale during the rental period. In their view, it’s a way to keep their small crews working and building wealth via asset acquisition for that next big payday bubble.

just testing something in an old thread:
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