New Mountain High

Now his life is full of wonder but his heart still knows some fear

Of a simple thing he cannot comprehend

Why they try to tear the mountains down to bring in a couple more

More people, more scars upon the land

John Denver — Rocky Mountain High

Link to YouTube Video

I found a listing with an American Flag to celebrate our nation’s birthday:

Sierra Nuevo Kitchen

IrvineRenterAsking Price: $1,435,000

Purchase Price: $620,000

Purchase Date: 3/15/2002

Address: 19502 Sierra Nuevo Road, Irvine, CA 92603

Beds: 4

Baths: 2.5

Sq. Ft.: 2,011

Lot Sq. Ft.: 12,000

Year Built: 1971

Stories: 1

Type: Single Family ResidenceWTF

View: Park or Green Belt

County: Orange

Neighborhood: Turtle Rock

$/Sq. Ft.: $714

MLS#: P585457

Status: Active on market

On Redfin: 1 day

New Listing (24 hours)

From Redfin, “WOW, magnificant dream setting with one of a kind lot. Over 1/4 acre of land in Turtle Rock. Accross from HOA park and pool. All new appliances, beautifully remodeled throughout. New windows and doors. Walk to award winning schools. This kind of house and lot are rarely available. “

Did you see that enormous lot? It was over 1/4 of an acre! WOW! That’s an estate, isn’t it. magnificant!



Kool Aid Man

Are you kidding me? We have area comps going for less than 2004 and 2005 prices, but somehow this house has appreciated 131% since 2002. Even by Turtle Rock standards, $714 / SF is ridiculous.

For drinking way too much kool aid, for getting high on greed, and for having the nerve to list at an obscene price, the sellers at 19502 Sierra Nuevo Road win our WTF Award.

41 thoughts on “New Mountain High

  1. lee in irvine

    Let’s see: 1.4 million gets you a flat roof that was popular before the disco era and my birth, a range-oven combo, and an aluminum patio cover.

    Out of all the great investigation work by I.R., this one, without a doubt, takes the cake.

    I’m going to make a prediction here, assuming these sellers do find the dumbest people in America to buy this vintage home at this price. I don’t think they could get an appraisal anywhere near 1.4 million dollars. Which would ultimately lead to problems with funding the deal.

  2. Jwm in SD

    $100 says this is and the other WTF house from a day or two ago are CASH BACK FRAUD BAIT.

    There is no other explanation for this non-sense. At this point in the market witht the MSM picking up on whats going on, how could they not know this isn’t going to sell.

    Mark my words, if this POS sells in the near future, it will be a cash back deal.

  3. Mr Vincent

    I bet the inside needs some serious work. Note that almost all the pics are of the outside.

    The wood fence property border outside needs to be replaced. It is probably termite infested along with the house.

    The house is too small for the price. Needs major remodel and expansion to get to that value.

    This place is a money pit.

  4. JoonB

    For $1.4 million, I don’t want to be backed up to Shady Canyon Drive, but also, I’d like to see some outdoor lighting that doesn’t involve wires hanging across the yard. It looks like a house in some unincorporated area, not TR.

  5. Dean

    Look, a lot that size in TR is worth something. However, the house itself is a borderline tear-down. You are really paying lot value. That is hard for an amateur to value, but I know it isn’t anywhere close to 1.4

  6. tonye

    That’s exactly what I was thinking.

    This is a tear down property. A plan 3. The house is in so so shape but they have one of the largest lots in all of TR.

    So, the house is worth like a negative number since you pretty much have to do a tear down to a single stud wall.

    The lots is worth moolah, but NOT 1.4 mil.

    Offer these clowns 900K. The comps will show that the house is in disrepair.

  7. tonye

    Treating the house as a tear down, I figure the structure and lot might fetch an honest 350 per square foot (it’s the lot). So you’d be looking at north of 700K.

    Unfortunately the owners probably think they’ve done a wonderful upgrade by putting a new range and spending $1500 on new light fixtures, so they may figure that a MIL is their bottom line.

    It all depends I guess on how good the lot is. They claim around 11K sq ft, which is far larger than the standard 7500/8000 sq ft lot for a Plan 3.

    On that lot size you could really build a very nice 5bd home with a three car garage, have room for a pool and still have a nice lawn left.

    They’re also across the community park which is a nice thing.

  8. tonye

    Hmm.. I wonder if they want to do a house swap?

    I’d give them my house for theirs and 200K. They should be able to sell my house with it’s so so lot but 5b.3ba and fully renovated easier than their dump.

    I wouldn’t mind rebuiding anew. The 200K would go a long ways to pay for the rebuild.

    Particularly next year when the custom builders go broke and start begging for work. Today they want 400 per sq ft, next year it will back to 200.

  9. fumbling

    that lot size looks ridiculously small…1/4 acre is only 11,000 sf and the house is in the middle of two other houses.

  10. tonye

    Where do you live? The typical lot size in OC and LA is pretty small. In Irvine and Corona del Mar the typical lot size used to be 5500 sq. feet.

    An 11000 sq foot lot is huge on the West side of the 405. Just go to Manhattan Beach and check that place out.

  11. ochomehunter

    Assuming 40% price drop or back to 2002 prices, the house will probably go back to its original purchase price of $600K or so. Then you look at it as teardown, that will further boring the value down, probably in the $450K range. When value falls, lot value falls as well.

  12. No_Such_Reality

    Checking zillow, it looks like it’s the odd-shaped corner lot. Looking at the pictures, I see the steep embankment behind it with mature trees. Rebuilding on this lot is going to suck. In Irvine, getting mature trees removed that border drive lines is near impossible. Like many of the big lots in TR, the lot size is encroached heavily.

    If it is only zone R1, the value of the lot is limited. Main negatives for a tear down are HOA interference, if there is a view, neighbors will fight if you tree to go two stories, odd lot shape, embankment, mature trees with tree removal permiting process required.

    All in all, I’d expect the lot price to accomodate what a rebuilt 2500/3000 sf house would be worth on it. Each month, that amount is less.

  13. MMG

    agree, thats why I would offer 400k, like I said above and work from there depending on other factors. the problem is a lot of denial to work through, but my offer may would put the fear of god into them and get them on the right track of pricing….LOL

  14. lendingmaestro

    I’m from the midwest, ohio and minnesota, so 11,000 sq ft lots don’t excite me at all. That may be a big lot for out here, but it’s nothing worth writing home to mom about.

    It’s amazing when you live in other places and compare it to southern california.

  15. tonye

    Take a coast to coast flight on a clear day.

    You will soon see why the price of land near the coast is so high.

    In the midwest, the land is crisscrossed by North to South, East to West roads spaced a mile apart. Thousands of miles like that… or there’s like vast expanses of open land.

    If a developer wants to build, he just goes out and buys a couple of square miles of land, zones it to 2 acre lots and builds a bunch of homes.

    You can’t do that in the coast. There’s only so much coast (really) and if some areas, like SoCal, the balming effects of the ocean only extend like 30 miles inland at most.

    Funny you mentioned Ohio. My wife has coworkers there. They showed her pictures of their homes, their 4WD trucks to go to work in the winter, the snow….. hmmm…. meanwhile we BBQ during the winter. Their mortgages are cheap, but the weather sucks… either too hot and sticky or too cold.

    Never underestimate the worth of warm winter weather.

  16. WaWaWeeWah

    Exactly…and the fact that so many complainers on this blog are from elsewhere serves to support the notion that price is a function of supply and demand.

  17. Jwm in SD

    “Exactly…and the fact that so many complainers on this blog are from elsewhere serves to support the notion that price is a function of supply and demand.”

    Yes, price is a function of supply and demand…and that’s why it is 10 plus times median income in SoCal…bwhahahahahah. Yeah, that’s sustainable…idiots.

  18. owen

    Agreed, this house is way out of whack, but . . .TR houses are moving consistently at $500+ sq/foot. Particularly the less expensive houses (1800 to 2100 sq. feet). Also, I am not aware of a single instance of TR house going down in price in the past few years. Maybe I’m wrong. If so, I’d like to hear about it.

  19. patientrenter

    JWM, You make some good points. But you may not realize that your posts lose some depth and attractiveness for me and probably a few others when they include intentional ad hominems (“…idiots”).

    Not looking for a debate on this, and I will not be posting any more on this subject. I too have been hopelessly priced out of this market for a long time (20 years), so I understand the source of your frustration. Good luck in your own search for an affordable and attractive local place to own and live in.

  20. WaWaWeeWah

    Nope, that sounds about right, although there are a few isolated instances where TR homes will sell for less, the majority sell for upwards of $500/sq. ft.

    Jwm in SD must have the SD blinders on…there’s a heck of a lot more undeveloped land down there than up here. And despite having a smaller population than OC, SD has 1,500 more homes listed on the MLS.

  21. WaWaWeeWah

    Thank you patientrenter…IrvineRenter doesn’t believe that being priced out of the market is possible but 20 years is an awfully long time.

  22. patientrenter

    WWWW, OC is doing better than SD now, and may ultimately not be hit as hard, but I do think it will be hit. I don’t think it’s a good time to buy now. The tinder that’s getting lit now is poorly underwritten loans made in the last few years. It burns the low end first, but the fallout will put pressure on middle and even higher end areas. Huge efforts will be made to limit the price drops, but it’s hard to overcome the downward momentum backed by lots of bank-owned properties for sale. None of us has a crystal ball, but my personal current best guess is price drops of 20-30% off peak, less in some areas and properties and more in others.

    Does this mean OC real estate is doomed? Of course not. Otherwise half the country and world could afford to buy here and move in. After this next bust, there will be another boom… and another bust…. It was ever thus.

  23. tonye

    (1) You can rebuild easily within the current slab. The 3 car garage plus home is on a 2700 sq lot, single lot. So you an easily put a 4000 sq foot home with cathedral ceilings on the common downstairs rooms.

    (2) The HOAs in the Broadmoor and Sierra are easy to deal with second stories. Indeed, there are many 2nd story additions by now. This is not like the rest of TR where the homes pretty much are built up or where the HOA is a pain (TR Terrace). The neighbors tend to be mellow but if they’re not the HOA Board can still override them.

    (3) There are no view lots on the Broadmoor and Sierra. I know, some people think they have them, but there are no view rights on their deeds anywhere on the Broadmoor and Sierra.

    (4) The lot size is unusual and commands a higher price. Period. There are no tree removal permits necessary. I took mine out four years ago and didn’t need a permit.

    Look I should know these things, I’ve lived here fro more than 20 years and I built a second story years ago.

  24. carl

    my house sold for $445/sq. ft. in the broadmoor in Nov. 2006. It wasn’t original, but it also wasn’t totally updated. It sat on the market for 6 months before I dropped the price 100k. That said, most other houses on the market with me in the broadmoor and sierra streets expired their listings and never sold. The ones that did sell were finish and beautiful inside, or they cut the price like me.

    I think closer to $350/sq ft is where this will end for the Broadmoor… 2003 prices.

  25. carl

    My favorite permanent listing, 55 Bethany in the Broadmoor, isn’t showing up on Redfin anymore. Does anyone have info on if it sold or was withdrawn? I never saw it listed as in escrow.

    55 Bethany Drive
    Irvine, CA 92603

  26. nirvinerealtor


    55 Bethany has not been sold. It is listed as “Exclusive Agency” “MLS Entry only”, meaning the seller is not paying broker(s). All question to go directly to seller. It is currently listed at $829K. Current loan amount is $805K. Home is sold “as-is”.

  27. tonye

    Your guys in SD are on the wrong side of the “La Migra” Checkpoints.

    We in OC and LA don’t care if you guys get overrun with illegals and other undocumented visitors. SD is the Border DMZ.

    But just make sure to bring your passport and visas if you want to come to OC, LA or Riverside.

    That’s why the property values of SD have more in common with Tijuana than with Santa Ana. 😉

  28. tonye

    I drove by that house yesterday. It’s on an outside corner lot with two streets meet and end… you know, the street makes a 90 degree turn?

    Bonita Canyon Rd is right behind it too and some of those homes on TRidge look over it. Yuck.

    The house really is nowhere worth what they’re asking for. Not even if you were a perma bull would you pay that much.

    Insofar as prices… yes… A significant number of rebuilt homes in the Broadmoor have finally come to market and some of the owners of older homes think they can use them as comps.

    This home is a typical example.

    What these boneheads don’t understand is that there’s a two tiered “comp” structure now. Rebuilt homes sell for a lot more than the non-rebuilt homes. At one point, when no rebuilt homes had yet hit the market, the comps allowed for a $65K bump because the appraisers were very, VERY cautious. But now, seven years after my post construction refinance, you’re seeing premiums of 15 to 25% for the rebuilt homes.

    Note that I’m saying “rebuilt” not “remodeled”. The difference is huge.

    I still think that most Broadmoor homes will end at around 300. The rebuilt ones will end up at 350 or perhaps a bit more.

  29. awgee

    It seems like so many who debate the probability or unlikelyhood of long term and drastic drops in re prices keep on talking about supply and demand housing and abundance or dearth of either. Supply and demand of housing has not been the main catalyst for the latest rise of housing prices in So Cal. There has always been supply and there has always been demand for housing in So Cal. The main catalyst for this re cycle and the six previous re cycles in the So Cal re market has been the supply and demand of and for credit. This has been mainly a credit bubble and only minorly an re bubble.
    I think that once you understand historical credit cycles, the debate dissappears and the inevitable becomes, well, inevitable. Once credit stops expanding in a fractional reserve banking system, credit will contract, and it will contract to the extreme in which it expanded.
    Unless, it’s different this time.

  30. Jwm in SD

    I sure hope that you are being facetious. If not, you are completely clueless as to what really drove the housing market in in SoCal over the past 5 years. It was a credit/liquidity bubble, not really a housing bubble.

    You also must not know much about San Diego either apparently. Somehow, I don’t think the Million dollar estates in Del Mar, La Jolla, Rancho Bernardo and Poway are priced like TJ. In fact, I’ve had the luxury of driving east down La Palma into Anaheim (Anaslime) and pity anyone who doesn’t speak spanish and has car trouble in that area. Last I checked a map of OC, there were more cities than just Irvine, Costa Mesa, and NewPort Beach there. Places like Anaheim, Garden Grove, etc are way overpriced and look a lot more like TJ than most places in SD county I’m afraid.

  31. Jwm in SD

    Awgee, you are wasting your time explaining that to a lot of the people who post here. Whether they are permabulls or not. There is a lot of myopia and ignorance about what drives the economy here in SoCal at the moment (RE). The credit contraction will become abundantly obvious to all as the RE jobs continue to dry up in OC and SoCal in general. That process started with the implosion of New Century and will continue as more investors in MBSs, CDOs, CDSs begin to realize that they are bagholders and no longer want to fund the liquidity that got us into this mess.

  32. tonye

    Notice the smiley?

    But! In East LA we have the richer undocumented types…. they were able to get around La Migra…..

    I always found it weird that the checkpoints are North of SD. I mean, it’s like we’re saying:

    “Look, it’s OK to cross into San Diego, but don’t you dare come to OC or Riverside”!!!!

    Yeah, I’m pretty familiar with SD. And some areas were really, REALLY overblown.. like Scripps Ranch, Rancho Bernardo and that whole I15 corridor. Back in 94 when I was consulting in Poway, you could buy brand new 2800 sq foot homes for under 300K. I almost moved my family to Carmel Mntn.

  33. tonye

    At some point though, CMOs make make sense again. As I noted earlier in a different thread, if the face value of an 8% C or D tranche issue drops by half, then you got a 16% yield on your money.

    That would in essence become a junk bond and the risk would be commensurate with the yield.

    So I believe that there’s a floor after all.

  34. Jwm in SD

    Yeah, but the debt has to be serviced and that might be a really BIG assumption to make at that point no matter how much they slice and dice the tranches.

  35. awgee

    Or it could be a 0% yield on your money. If folks don’t make payments, there is no yield.
    It isn’t the actual CMOs that are the problem. It is derivatives of the CMOs, the leverage, and the unrealistic packaging of the risk. When folks discover they are hold a sows ear and not a silk purse, they will be reasonably hesitant to purchase anything to do with mortgages for awhile. It turns out the bids were from 5 cents to 30 cents on the dollar for the equity tranches at the Merrill Lynch auction.

  36. graphrix

    There is a major difference between CMOs and CDOs. CMOs are a good thing and in fact a great thing. Without them the low interest rates we have enjoyed including when we were at 8% would never have existed. There was a discussion on Padilla’s blog about how the confusion of the two mislead a story about Brookstreet when they went bust. However the investors in Brookstreet were invested in the highest level of risk of a CMO in a rising rate enviroment.

    CDOs are a whole different animal that has been sliced, diced and no one knows how they are priced. I have access to a website where I can see the MBS/CMO pools performance but unless I am an investor in the CDO pool I can’t get access to see how it is performing. The only reason why CDOs haven’t gone completely toxic is for some reason people are paying their credit cards. As soon as that stops they will go nuclear. Whether it is a lower tranche or upper tranche it will all become toxic waste.

    P.S. I know a lot of mortgage schleps who can’t trade in their Range Rovers and SLs. What tranche are they in when payments are missing?

  37. tonye

    I guess I understand. CDOs may include CMOs in their portfolio, and a lot of other credit stuff.

    Yet another multi derived product huh?

    So, are all CDOs equal? How do you know the quality of a CDO?

    Yep… The auto sales went down last month. I noticed that while Acura was up, more expensive brands took a hit. I wonder how soon before the local OC market gets flooded with cheap luxury cars?

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