Irvine Housing Blog

What is the total ‘loss’ going to be on these buildings?  Say total #units X avg price X ~50% avg loss?

A new development in FL, most units completed in late ‘06 or ‘07, has almost 300 properties that sold new for around $1M each.  They’re now down 50% off those new prices for a rough $150M total loss to the first wave of buyers.  Developer is now bankrupt.

Lots were speculators as there are 2 or 3 homes on a block owned by the same person.  At 1/2 price there may be buyers, but there just weren’t enough people in that area to support that number of million dollar homes.  That new construction has almost zero demand, and I think the price curve looks ugly at zero demand.

Looks like the price is back up to 399,000. Maybe too many interested buyers

Doubtful.

And who in their right mind would pay a $1,150 monthly HOA? Thats half the mortgage payment.

This is going downhill fast.

Are there any lenders out there who have tried to get financing on units in these towers? I would like to hear from you. Can you still get financing through the GSEs on these units? Are banks holding loans in their own portfolios on these units? I suspect financing is tough here.

“The ultimate in sophisticated urban living”??  I’m not from Orange County; I live in NorCal, but doesn’t urban living generally connote 1. not living in the “airport area” neighborhood and 2. living near other things like grocery stores, banks, shops, etc.?  It looks to me like this place is near a freeway and that’s it?

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A question for IR.

I recall hearing from a somewhat reliable source that one of the major markets for buildings like this was foreign cash buyers - rich entrepreneurs from Taipei, Singapore, Hong Kong, Seoul, and Shanghai who really liked buildings like this, but left them vacant much of the time.

Do the ownership records reflect this?

IR – I thought you might find this interesting – my husband and I just found out that the house we were renting last year recently sold for $465K –  the previous owners purchased the home for $820K.  We moved out last June when they told us they were going to let it foreclose.  The home is an area where prices remained strong – or so we thought – Fountain Valley.  This home is on an enormous lot which is why we were so shocked it went so low.  We were always told that this area would hold its value due to the high number of Asian buyers with large down payments.  I wonder what this will do to the comps in the neighborhood.  The house next door sold for around 700K last year on a much smaller lot.  Ouch.  Let me know if you want the address to check it out.

Why don’t we see the other high rise condos doing the same thing. Whats the deal with the new one at central park west.

How did you come up with 44% estimated ownership costs?

IrvineRenter,
I love your blog and can’t thank you enough for the free community service that you offer.  Before this blog i always assumed i was poor and couldn’t imagine all the great jobs that i obviously wasn’t qualified for that were paying 250-300K to afford to own in Irvine.

However, as a personal favor can you not use $hit.  We all know what you mean so what do you gain by not going full bore?  I doubt many children are reading up on home ownership (though they should be, and they all cuss like sailors anyway)  And if anyone over the age of 12 is offended by shit and not offended by $hit… i have a teaser rate i’d love to give them on the North Korea towers @ 10% of peak.

I still recall way back when we coined the name “North Korea Towers” to the Marquee.
Think Morkaos or myself fist used the phrase in the Forums.
Still looks good as a Rental. They are down to around $ 2000.00 a month now for the smaller units. The poor landlord gets to make the HOA Payment. Yes the Theatre is LONG GONE. So are a few of the restaurants. IE Jack Shrimp.
We need to post some of the propoganda from when these units first sold to get a real feeling of the complete failure of this project.

If you consider the association fee is $1000+, does it mean the bottom price should be 100K?

Loss of condo fees are absolutely killing some of these associations.  I remember going back to Gainesville, FL for a football game and it seemed like every apartment complex had gone condo.  Only a matter to time till they revert back to apartments again.  From what I heard, it happened a lot in the college towns of the country.

What are the odds of that happening in a place like your NK Towers?

Location, Location, Location. 
Next to the I-405 and the airport.
I don’t know of any parks in walking distance, not much shops nearby.  No quiet footpath.
HOA >$1000 per month (not tax deductible)
The HOA is like an extra $130000 loan that’s never paid off.  It keeps on taking and taking.

For a cash flow investor:  Rent $1900-2700 for tower living less HOA 1100.  Cash in hand $800-1400.  $120,000 to $200,000 not including vacancies and declining rents.  This is the third floor unit (open the windows if you can and get some I405 noise and exhaust, not the 8th floor or above. Likely not much of a view.
IMHO

As a renter, there is no way in hell I would pay $2800 for this. I can get a 2 bedroom unit in Corona Del Mar for less than that.

You haven’t seen crazy until you drive by Cenral Park West condo development across the street from these towers. What is it with the crazy rooflines? It is “The Flintstones” meets Douchbag Central.