I would like to introduce a new category of property to the blog today: the Rollback.

You may have seen this graphic before on other posts. I copied it from Wal-Mart, so I hope they don’t sue me. I think it is very fitting because Wal-Mart is very proud of the price rollbacks and savings they bring to consumers. I have used it when I have found a property that wasn’t a flip — meaning bought and sold within a year — but properties that were selling below prices from more than one year ago. These properties were not common a few months ago, but now I am finding more and more of them. Since I expect to find even more, and since today’s Rollback is such a great find, I am formally introducing the category here.

Poppy Inside Poppy Kitchen

Asking Price: $589,000IrvineRenter

Purchase Price: $613,909

Purchase Date: 4/16/2003

Address: 34 Poppy #52, Irvine, CA 92618

Beds: 2

Baths: 2

Sq. Ft.: 1,344

Year Built: 2000

Stories: 2

Type: Condominium


View: Other

County: Orange

Neighborhood: Oak Creek

$/Sq. Ft.: $438

MLS#: S488155

Status: Active on market

On Redfin: 30 days

From Redfin, “Upgraded ‘Gula’ model w/ 2BR/2BA carriage unit (all on one level)+2-Car Direct Access Garage; G8 rm w/ upgraded sandstone fireplce & media niche; private balconies off formal dining & MBR; upgraded kitchen w/ dark maple cabinetry, corian countrtps, recessed liting; upgraded carpting, flring & custom paint. GE Profile range/oven/dishwasher recessed liting w/ dimmers in LR, MBR, & DR; Master BA w/ walk-in clst+ closet organizers; wide baseboards; dark maple stairway handrail+more!Resort-style amenities+GR8 schools”



Let that date sink in for a minute… This property is going to sell for a loss to a buyer from 2003. Assuming they get their price, after a 6% commission, this person is going to lose $60,249 after 4 years of ownership.

The bubble rally extends from 2001 to 2006. A transaction below 2003 prices wipes out half the bubble. Are we having fun yet? Have a good weekend…

14 thoughts on “Rollbacks

  1. Dave

    It also begs the question: was the price paid in 2003 considered high for the time?

    It’s a bit odd to see listings like this so early in the process: in the last real estate recession, the market stagnated after sales volume declined, and we didn’t see prices rolling back significantly until a year afterwards to keep up with the drop in sales volume (a typical phenomenon). On average, it took that long for sellers to accept that the market wasn’t just hibernating, but was in fact done, fini.

    Of course, the later in the process, the more likely we’d see price drops to catch up with the trend. However, this current bubble was SO profound, so dramatic, it’s perhaps NOT surprising to think that the pricing corrrection would be more severe, more accelerated than before. You cannot run up prices to 2.5-3x above trend, and NOT expect it to correct.

    Maybe these sellers are taking the good advice offered on sites like this, and deciding to sell ASAP with a dramatic price decrease just to save their souls, without hoping to keep the flipper’s booty? I think they’re smart to get while the goin’s good: no one can predict the future, but this property WILL in all likelihood be worth less than even this 2003 selling price, by 2009-2010….

    Nevertheless, the listing is a nice find….

  2. zovall

    It’s GR8!! 🙂

    Hmm.. I’m a bit surprised that the property sold for that much in 2003. I couldn’t find any purchase information on title. I don’t trust the Zillow information on this one.

    I like the Rollback category though!

  3. Darin

    Idiotic agents who use GR8 really grate on my nerves. =

    New times, new categories, good stuff.

  4. IrvineRenter

    I couldn’t verify the price for this unit either. I do have some nice rollbacks coming next week…

  5. EvaLSeraphim

    There must have been a HELOC somewhere along the line. First Am shows the purchase amount in 2003 as $330,682. That seems a bit more reasonable, as I bought my place (a 2/2 w/ more sq ft) a few months before for somewhat less.

  6. SoCalwatcher

    Hopefully that “GR8” agent did not attend said schools…

    That is still nuts price wise for a condo in a non-metro area, Irvine or not.

  7. Ultrabear

    Yes, prices on homes will continue dropping in increasing numbers. It always sprinkles before a downpour. I am amazed at how quickly the market is changing.

  8. ockurt

    I think you are on to something Eva…I bought my 2/2 in 2002 down the street w/about 1250 sq. ft. for $285k…

  9. No_Such_Reality

    Prices stagnated a little over a year ago. Now they’re headed down. Look at the current median report, it’s obvious. The median reports a 0.5% increase, yet each resale catagory shows a loss. Most importantly, the large-end which is what’s selling at the moment is showing a 20% drop in price. If IR or Zovall has the access, I think it would be interesting to see the MLS for some of the irvine zips matched up year over year to see what the housing mix is and more importantly, what a more like for like comparison shows on prices. I’m guessing -15%. And that wouldn’t include all the kickbacks and other give-mes the sellers are now putting in.

  10. lendingmaestro

    why don’t you just change your name to Nephalim , which is the evil counterpart to Seraphim.

  11. interloper

    The numbers do not add up on this property, It appears this property was originally purchased between the end of 2001 to beginning of 2002 for $110,000 range.

    You might want to retract this post until you can confirm this info, otherwise it is inaccurate and misleading.

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