Purchase Price: $760,000
Purchase Date: 6/23/2006
Address: 131 Talmadge, Irvine, CA 92602
Sq. Ft.: 1,752
Year Built: 2003
$/Sq. Ft.: $342
Status: Active on market
On Redfin: 4 days
From Redfin, “OUTSTANDING ASSOCIATION WITH A GUARD GATED COMMUNITY! IN THE HEART OF NORTH PARK IN THE MOST SOUGHT AFTER CITY OF IRVINE. THIS HOME FEATURES THREE BEDROOMS AND TWO BATHROOMS, ASSOCIATION POOL AND SPA. OUTSTANDING SCHOOLS AND PARKS. CLOSE TO TRANSPORTATION, SHOPPING, ENTERTAINMENT. .. THIS HOME IS IN THE TUSTIN UNIFIED SCHOOL DILSTRICT. HOME IS BEING SOLD ‘AS-IS’ AND ‘WHERE-IS’ WITHOUT WARRANTY. “
You have to love properties like this one. A flipper who timed the market top perfectly walked away from this nightmare and left the bank holding the bag.
In our analysis posts, we discussed the theoretical possibility (probability) of foreclosures leading to lower prices. We haven’t seen much of it to date to demonstrate how it works. Here it is.
In the past, a property like this one would have sold in a day at above asking price. There would have been no negative impact to the neighborhood comps. Right now in the markets, there are few buyers, and those who are buying are putting in cautious bids. There will probably be no bidding war for this property. This transaction will be very telling of where the market is today, and where it is heading.
It still takes some form of exotic financing to buy this property. I doubt many families with a $171,000 annual income with an $85,000 downpayment are rushing out to buy this place. Somebody making $85,000 a year utilizing a huge DTI ratio will take out a 10 year I/O, buy this place, and spend the next 10 years underwater eating Ramen Noodles.
However it goes down, this will be a comp killer. All those sellers holding on to a breakeven wishing price just got clobbered. As each distressed homeowner succumbs to the terms of their exotic mortgage, they become another foreclosure. Each foreclosure reinforces the previous low comp and drives a dagger into the hopes of other neighborhood sellers.
This is how it happens: one foreclosure at a time.
I would like to say a special thank you to Purplehaze for tipping me off to this property.