Crimson and Clover

Now I don’t hardly know her

But I think I could love her

Crimson and clover

Crimson and clover, over and over

Crimson and clover, over and over

Crimson and clover, over and over

Crimson and Clover — Tommy James and the Shondells

Link to Video

Joan Jett’s Version

If your a bear, and you have been waiting for the sign of the apocalypse, this is it. Get ready because I suspect we will see this over and over…

30 Crimson Front 30 Crimson Kitchen

Original Purchase Price: $1,722,000IrvineRenter

Original Purchase Date: 12/23/2005

Auction Sale Price: $1,400,000

Auction Sale Date: 8/1/2007

Address: 30 Crimson, Irvine, CA 92603

Beds: 4

Baths: 4.5

Sq. Ft.: 3,403

$/Sq. Ft.: $558

Lot Size: –

Year Built: 2005

Stories: 2

Type: Single Family Residence

County: Orange

Neighborhood: Turtle Ridge

MLS#: S451259

Status: Active

On Redfin: 378 days

Unsold in 90+ days


I guess the big price reduction and the ALL CAPS didn’t inspire many buyers…

I bet that 89′ TV is cool (I suspect that is inches and not feet though.)



If this were just a listing I was writing about, I would be wishing it a happy birthday. A full year on the market.

For any of you who don’t want to break out your calculators, this is a sales price at $411 / SF in Turtle Ridge. This doesn’t bode well for the argument that the high end is immune.Mushroom Cloud

This is a scenario we are going to see a lot of over the next few years: Homedebtors unable to sell because they are above the market, and unable to lower their price because they don’t have the cash to buy their way out. They put the property on the market at breakeven and hope they get lucky. In the meantime, the carry costs destroy them, they stop making payments, they go into foreclosure, and in the end, their whole financial empire is obliterated in a crimson mushroom cloud.

Evict the Squatters

Someone asked me recently if we should feel sorry for people like this, as if they were victims of circumstance. No we shouldn’t.

These people were victims of their own greed and ignorance. The circumstances which lead to this debacle were visible to those willing to see. Greed blinds people to the truth just like denial is blinding them now. There is an element of Shakespearian Tragedy to all of this, but at the root of every morality play is the idea that people are responsible for their own choices in life. These people are no less responsible for theirs.

The sad part, if there is one, is that these people were led to believe they could have this home in the first place. Obviously, they could not afford it, or they would still be there. A great many people in this market have set up a circumstance where they rent from the bank on temporary terms. Now, they are surprised when the bank evicts them. It was “their” house in their own minds. It was all one great illusion they set up for themselves (with some enabling from a lender.) It is a dream which has since turned into a nightmare.Squatter

In essence these people are all squatters. They are in possession of real estate they don’t really own, and they are crowding out those of us who really could own. Real ownership requires an understanding of what you can and cannot afford. It requires financing terms which provide stability and security (Financially Conservative Home Financing.) Most homebuyers during the rally overlooked this simple fact. When someone is making less money than you are, and they take possession of property that is of superior quality to what you can obtain, they are crowding you out. They are squatting in your house. Would you feel bad evicting a squatter from your property? I don’t think so.

Do I feel sad for these people? Sure. It is very sad when someone’s dream evaporates into the ethers, but that is part of life. You deal with it, and you move on. I feel compassion for their plight, but it is tempered by the knowledge that they created their own circumstances, and in life, you have to accept the consequences of what you do whether you want to or not.

Squatters Cartoon

I would like to thank GavriloPrincip for providing the auction sales information in our forum.

82 thoughts on “Crimson and Clover

  1. awgee

    The following is anecdotal to be sure, but it could be an example of the non-immunity of the upper end of the housing market in Irvine to the depreciation of re.

    37 Golden Eagle, MLS # U05493144, in Shady Canyon, has been listed for 651 days. The asking price has gone from $6 mil to $5 mil and the agent sitting on the open house will tell you that the owners are making payments on two homes and are desperate for offers.

    I was told there are a total of approx. 300 homes built or in the process of being built in Shady Canyon and 28 of those homes are listed as for sale. That is just a little less than 10% which are for sale. There sure are alot of empty lots in Shady Canyon. I wonder if the money spent for improvements and grading in Shady Canyon has any effect on IRC’s earnings.

  2. IrvineRenter

    I think the Irvine Company is mostly out of Shady Canyon financially. I think almost all of the lots have been sold. The proud new owners are the bagholders.

  3. lee in irvine

    More excellent work Irvine Renter.

    You must be doing something right, because the permabulls (aka bullshitters), are attacking you and your analysis more often on Lansner’s blog. I guess you’re shaking the tree.

    I want to make a couple of points regarding the issue above.

    1) It is foolish to think that certain areas in the county are excluded from their inevitable beating. If anything, these areas may be impacted more severely because volume (sales) is much lower.

    2) I’m torn on how I feel about the naive, dumb-dumbs, that bid up this market, and now face the auction bloc. I catch myself grimacing at the computer screen when I read stories like this one.

    3) I prefer the Joan Jett Version.

  4. MalibuRenter

    It’s not just Orange County. I have some favorites from Malibu, where it’s alleged to be immune from the rest of the housing market. Yes, it looks like the second ad is for a $7.8 million REO.


    “5700 SEAVIEW DR
    MALIBU CA 90265

    Bedrms 6
    Baths 12.00
    Price: $13,000,000

    This home is larger than can be built under the current Malibu city code. This six bedroom home w/huge underground parking area with wine cellar, gym, two elevators, two living rooms, office, family room, Hobby room, pool, cabana and much more is currently under construction. Just reduced by $4.5 million!!

    Broad Beach
    MALIBU CA 90265

    Bedrms 5
    Baths 4.00
    Price: $7,800,000

    Great beach front location on private,scenic cove in prestigious Broad Beach area. End of cul-de-sac location on private, gated street. Large, sunny 5 bedroom Cape Cod style home exploding w/charm, hardwood floors, vaulted ceilings, garden courtyard entry & 3 oceanfront decks including large beach level deck w/spa. Spectacular ocean views from almost every vantage point. Lender owned foreclosure. Reduced over $2,000,000 from last listed price due to recent foreclosure sale. “

  5. Live And Work In Irvine

    I like the squatter reference, it really is true. I think a lot of these people should walk away, cut their losses and start to rebuild instead of slowly bleed to death.

    I hope (and don’t see how) there is no government bailout, but Congress could change the law about deficiency judgements and bankruptcy to alleviate some of the future problems.

  6. Darin

    Greater cartoons and Joan Jett video.

    I find that cartoons are often the best commentary on what’s going on. Jon Stewart and Steven Colbert are popular because there is so much ridiculousness in politics over and above the typical. Same for the Three Little Pigs, we laugh because we can relate.

  7. Mark

    It’s anecdotal and it wasn’t sold for “fair market value” if it was sold by a party who had to sell (i.e. was not in a position to take the home of the market). However, I certainly think it’s indicitive of the direction of the market.

  8. IrvineRenter

    I would contend that “fair market value” is whatever it sells for. The number of buyers is limited at an auction because not many people can get cashier’s checks for $1.4 million dollars, but it is still a transaction in the market between parties with an arms-length relationship.

  9. Gavrilo Princip

    It didn’t go back to the bank at the foreclosure sale. Someone bought it for $1.4m (the opening bid/1st trust deed amount was around $1.07m).

    It will be very interesting to see what happens if the buyer puts 30 Crimson Rose back on the market. There are now five other houses for sale on Crimson Rose:

    28 Crimson Rose is vacant and for sale.

    35 Crimson Rose is vacant and was open for viewing this weekend, but the broker wasn’t there. He was showing another house in Turtle Rock and just left the doors open and a note on the counter!

    37 Crimson Rose is vacant and was being shown by the seller’s sister on Saturday, while the seller was showing another house he is trying to sell.

    43 Crimson Rose is for sale.

    46 Crimson Rose is for sale.

    There are only about 15-18 houses on this street. 5 are for sale, and one was just sold at foreclosure.

    Any flippers getting burned here?

  10. Gavrilo Princip

    Irvine Renter,

    Great post as always.

    You noted: “This is a scenario we are going to see a lot of over the next few years: Homedebtors unable to sell because they are above the market, and unable to lower their price because they don’t have the cash to buy their way out. They put the property on the market at breakeven and hope they get lucky. In the meantime, the carry costs destroy them, they stop making payments, they go into foreclosure…”

    Apparently this is exactly what happened at 30 Crimson Rose. A broker told me that they brought a written offer on the house several months ago, but the seller rejected the offer. Instead of a short sale, the seller made the entirely rational decision to stop making payments and stay in the house until foreclosure. Even at $10k/month in carrying costs, the seller was at least $60,000 better off by doing this. Seller’s actual costs were probably even higher, so he saved even more.

  11. patience2007

    It blows me away how many people don’t know the difference between ‘feet and “inches.

    I guess they never saw This Is Spinal Tap.

  12. patience2007

    2) I’m torn on how I feel about the naive, dumb-dumbs, that bid up this market, and now face the auction bloc. I catch myself grimacing at the computer screen when I read stories like this one.

    Aren’t these people roughly equivalent to the people who run up $20k on their credit cards, and then can’t afford the minimum payments any longer and eventually file bankruptcy?

    3) I prefer the Joan Jett Version.

    Me too. I got that album when I was about 9 or 10 years old. I listened to it a lot.

  13. Jim Jones

    People “buying” houses that they could not afford. I really don’t have a lot of sympathy for these folks either. I think that there was some sort of shift on thinking on the part of homebuyers on the topic of affordability. Before the question was given my finances what is the maximium mortage payment can I afford on a 30 year fixed. Then it changed to what is the maximum amount of money a bank will give me. This, in my opinion was completely wreckless behavior. I suspect that there are a heck of a lot of folks out there living in timebombs that they could not afford when purchased and cannot afford now.

  14. Adam

    Maybe it is because my reservoir of schadenfreude runs too deep on this one, but I can not feel sorry for the folks in this situation. In this case (and others similar) we are talking about million dollar houses.

    It is not like people who work at a McDonald’s drive-thru were “suckered” into these homes. These homes were bid up and purchased by people who are competent enough to earn the type of money which qualifies them for such a mortgage–however toxic it may be. In my book, these people knowingly chose to walk hand in hand with greed thus there’s nothing to feel sorry for.

    Yes, I too, feel it is unfortunate to hear of others’ dreams crushed and lives ruined however we all make decisions and live with the consequences–good and bad.

  15. Fake Wealth Created

    If you think 1.4 Mil. is the bottom for this property, think again. I feel market value on this house will be around 1.1 Mil once the smoke clears, and we have seen true market capitulation. Which IMHO is still a massive rip off for a 3400 sq. foot tract home.

  16. No_Such_Reality

    “It is not like people who work at a McDonald’s drive-thru were “suckered” into these homes. These homes were bid up and purchased by people who are competent enough to earn the type of money which qualifies them for such a mortgage–however toxic it may be.”

    I take this moment to remind you of the strawberry picker in NorCal that qualified for the $800,000 home…

  17. Jip

    I really like your blog. Heard about it from a collegue of mine.

    There is a simple reason why the bank is allowing the people who defaulted on the loan to stay in the house. It’s better to have squatters living there who actually try to take care of the place than squatters that will just trash it out.

  18. Iblis

    A “bailout” could come in the form of a lowered rate from the Fed. Lets people do another round on the refi treadmill and lets the banks take a larger margin on their good loans so they can continue to absorb losses from the bad ones.

    Congress just got done changing the bankruptcy laws to force most people into Chapter 13. And Chapter 13 is basically only there to save your house. God, it’s so ironic. Anyway, no one to my knowledge is talking about undoing that change.

  19. biscuitninja

    While I completely agree with you, I just HATE the idea that people are allowed to have something for free when the rest of the hard working society don’t get that “benefit” extended to them.

    I know that last 60k they put in their pocket will go to just get another house, possibly another place they can’t afford.
    Oh well.

  20. lee in irvine

    Another one of our local, respectful, real estate related corporations is rumored to go bankrupt soon … Standard Pacific (SPF). Errrr The stock is just getting hammered today, and the investors (bag holders) are takin’ a swift blow right in the grill. Ouch!

    Does anyone believe they made overcommitments? LoL

  21. Jip

    You can blame the bank for that. In order to get people who can actually to buy the place, the price MUST be reasonable (read MUCH lower). Sadly, that is like telling the John Birch Society that Communism is not really that bad….

  22. Mark

    If the seller must sell (for whatever reason), the sale price cannot be considered fair market value. That’s one reason sales volume has dropped; because willing sellers aren’t “willing” when the prospective sale price their property could fetch isn’t acceptable (again, for whatever reason).

    In this environment, when only forced sellers are selling, you would expect sale prices to drop much more dramatically than they have. Just another weird factor in this aberrant real estate market.

  23. Mr Vincent

    Great info Gav.

    I suppose the 1.4mil will show up in the comps? That would hurt considering these houses were valued around 2mil.

    The lots look pretty small to me, although I cant find any info on the lot size.

  24. Major Schadenfreude

    “There is an element of Shakespearian Tragedy to all of this…”

    “Comedy” may be the better word.

  25. Pete

    Not sad at all. They gambled and they lost. If they had won, they would laugh you out all the way to the bank and look down at you “poor renting bast*ard”. As for me, just paid my rent and had a great feeling all weekend!

  26. NanoWest

    I would put the price for this property at about $850,00 …..that is about $250 per square foot. Of course we will have to watch the market play out a little while longer before we see this price.

    Remember, in 2001 the price for a home in Irvine was a little less than $200 per square foot. To my knowledge salaries have not gone up 100 % in the past six years.

  27. IrvineRenter

    I fail to see how a seller’s motivation has any bearing on whether or not a transaction can be considered “market value.” Further, I cannot see how or why any arms-length transaction which occurs is not market value. If two unrelated parties agree to a sale, it is market value. How can it be otherwise?

    I certainly agree that sales volume has dropped because sellers are unwilling to lower their prices. Basically, they are hoping for prices which are above market value, and they aren’t transacting. Market value is where the transactions occur, not where many sellers wish it to be.

    I also agree that in a market environment like we have now where only those who are forced to sell are selling that prices will move lower. The pace of the decline will quicken when more and more forced sales occur. Right now the pace of foreclosure and liquidation is slow, but it is steadily increasing, and if the default rate is a sign of what is to come, the rate of forced sales will dramatically increase later this year.

  28. Gavrilo_Princip

    There is one possible argument that this was not “fair market value,” but it has nothing to do with the seller’s motivation. Because this sale took place at a Trustee’s Sale, where any buyer would have to show over $1 million in cashier’s checks just to bid, the sales price was not subject to a “market check” like a normal listing open to all buyers who can secure financing. Because of this, we don’t know if there are other buyers out there who would pay more than $1.4 million for this house in a “normal” transaction.

    The real market test would be to put it up for sale at this price. [Keep in mind that the former owner, having paid $1.7m, did not have the option of putting it on the market for $1.4m.]

  29. Mark

    The sale price is “market value,” it’s just not “fair market value.” I know we’re splitting hairs, but we’re all trying to interpret this daily data as accurately as possible, and I think this is an important distinction to make.

    This definition is similar to the one I’m familiar with from Black’s Law Disctionary – “The price that an interested but not desperate buyer would be willing to pay and an interested but not desperate seller would be willing to accept on the open market assuming a reasonable period of time for an agreement to arise.”

    If either party is “forced” into the sale, the price will be adversly affected to the detriment of the forced buyer/seller.

  30. Iblis

    The “owner” is certainly under duress, but it’s the bank forcing the sale. If the bank is considered the seller, then this does fit the definition of fair market value (willing seller, willing buyer, arms length transaction).

    Also worth noting that if this is not a willing seller, that can only move prices down. A seller under duress doesn’t get a higher price. Since there was a buyer at $1.4m you are left with only two options: $1.4 is FMV or FMV is actually higher.

  31. Mark in Pa

    Well I don’t feel sorry for these people at all if they bought beyond their means. They were complete fools. There are those who lose a home to unforeseen illness or other circumstances who deserve our sympathy but I’ll shed no tears for those so stupid they bought into homes well beyond their means. As was said those of us with decent incomes are the ones truly squeezed here. Even those with moderate incomes are losers when a “starter home” cost half a million dollars.

    I blame the lenders for creating the situation that allowed ignorant buyers to inflate house prices well beyond reach of those who would never resort to teaser rates or exotic financing. However, buyers were just as culpable as the lenders. They’ll walk away and the rest of us will now be stuck bailing them out through higher intersest rates. Let’s not feel sorry for those who are robbing us.

  32. ElricSeven

    You can make an argument also that this price is higher than it would get on the market with no deep pockets folks interested in the place. Competitive bidding from a bunch of deep pocket investors can sometimes result in overpricing.

    What we do know is that the place did not sell for a LONG time at the listed price. Surely a $300K discount on a 1.7 million house that sat on the market is not that unrealistic. Not like it sold for $500K.

  33. Gavrilo_Princip

    A $300k discount on a $1.7m house (actually, I think they were trying to sell it for $1.8-1.9m) would not have been unrealistic at all. The problem is, the seller could not discount to $1.4m because it would have been a short sale. He was far better off letting it go into foreclosure than face a taxable $300k discharge of indebtedness in a short sale.

    Thus 30 Crimson Rose is an example of something we will see a lot of in the next couple of years: an underwater seller who can’t sell and can’t make payments. These people will be rational to live rent-free in their properties for six months while they go into foreclosure. Their credit is screwed anyway, and they’re going to lose the house anyway, so they are actually better off living for several months at the bank’s expense.

  34. tonye

    My amp goes to “11” and Boston isn’t a college town and the Stonehedge slabs were supposed to be 12 feet and I got stuck inside of one of the pods until the song was over.

    This Is Spinal Tap?

    No. Never seen it.

    Ooopps, there went another drummer!

  35. tonye

    400 bucks per square foot is actually a pretty good price for these homes.

    You folks are just permabears. The price per square foot you quote takes into account whole swaths of neighborhoods by the 99 markets.

    Get real.

  36. FamilyGuy

    $1.8M to $1.9M – ‘Who knows, maybe someone will pay it?’ price

    $1.72M – Inflated bubble pricing

    $1.4M – FMV

    $1.0M – I’ll buy the house myself price

    $0.85M – Another ridiculous prediction from NanoWest to further erode their credibility

  37. NanoWest


    Its people like you that see $400 per foot and think…..”oh gosh what a great investment”……then when it hits $300 per square foot you are shocked. The fact is these places are just tract homes on a hill….nothing special.

    I am not a permabear….fact is I’ve made over 1 million dollars in real estate in the past 10 years(well my ex wife got half). I am out of real estate now and watching one of the greatest ponzi shemes in the history of “investing” fall apart.

    In the late 80’s I participated in the last chapter of the great California real estate game and lost a bundle…..not this time though…….its the young pups that are naive and believe that it can’t happen that are going to get the lesson I got 17 year ago.

  38. EvaLSeraphim

    Ok, I’ve got two versions of Black’s here and here is what they say:

    (edited by Bryan Garner, 1996) “fair market value. The price at which a seller is ready and willing to sell and a buyer is ready and willing to buy on the open market and in an arm’s-length transaction; the point at which supply and demand intersect.”

    Black’s Deluxe (6th ed. 1990) “Fair market value. The amount at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of the relevant facts. By fair market value is meant the price in cash, or its equivalent, that the property would have brought at the time of taking, considering its highest and most profitable use, if then offered for sale in the open market, in competition with other similar properties at or near the location of the property taken, with a reasonable time allowed to find a purchaser.”

    All that said, I think the hair splitting is irrelevant. Had the person living in the house been the seller, I could see FMV possibly being an incorrect term. Because the bank foreclosed, however, and the bank sold it at an amount (notably) higher than the opening bid, this would appear to be a sale at FMV.

  39. NanoWest

    In 1990 I had the bank of america appraise my house for a refinance……value $750,000. I ended up selling it for $480,000 and had to take back a $50,000 second. It took over 2 years to sell. Of course, I had put $200K in upgrades into the house………..

    I remember thinking, this can’t be happening, real estate only goes up…..I was a young 34 YO pup with a new family when this happened to me.

    I can happen again, and it will…..and it is.

  40. PT

    I feel really bad for these folks. Your comments?

    County Med. price med. prior price implied profit
    LA $548,000 $315,000 $233,000
    Orange Cty $658,000 $370,000 $288,000
    Riverside $390,000 $277,000 $113,000
    S. Bern. $365,000 $192,000 $173,000

    Percentage of sales in which sales price was less than prior sales price:
    LA 8.2%
    OC 9.9%
    Riverside 19.4%
    S. Bern. 11.1%

    More: Median months between sales:
    LA 52 months
    OC 60 months
    Riverside 42 months
    S. Bern. 47 months

  41. IrvineRenter

    I can see what Mark is saying about the price being perhaps lower than a sale price which might occur if other buyers who did not have to produce a $1.4 million cashiers check had been able to bid on the property. I imagine the buyer of this property is betting on that fact and is going to flip this place ASAP. We will see what happens.

  42. MMG

    I say 700k when all is said and done, based on all the news with lending tightening, if a bank has to go thru a buyer’s finances, not many people can afford a 700k home, unless you have a massive downpayment. things are going to get ugly.

  43. lendingmaestro


    I have to say, I love the pictures. My favorite so far has been the picture of the demonic Ronald McDonald. “It’s time for a Big Mac Attack!”

    Everytime I see that picture I start laughing uncontrollably, and I forget that there is a monstrous housing crash during my brief moment of levity. Is there a way you can incorporate Mr. Big Mac Attack as a main stay. I think he derves a permanent spot on the blog!!

  44. TangerineSpeedo

    I’m as big a bear as anyone on here (maybe not – I believe in ’03 comps), but this Crimson Rose property going for $1.4M at the Trustee Sale is not indicative of FMV.

    The first on the property was $1M and second was approx. $850K.

    Initial bid was $1.086M to cover first and costs.

    The $1.4M bid went to the auctioneer bidding on behalf of the beneficiary, i.e., the second cured the first and had zero cash out after $1.086. My guess is the guy had approval to go to $1.6M, but again just a guess. I do think they’ll market with the second taking a significant loss, but I bet $500K or so is safe, meaning they’ll find a buyer at or just below $1.6M.

  45. Jip

    While I do agree that both are totally horrible, I blame the lenders and the Realtors (TM) even more for the simple fact that it’s their job to make sure that the “ignorant buyer” is not placed into a foreclosure situation. Sadly, these vile characters sacrificed their customers on the altar of greed and “Profits Uber Alles” (AKA the 6%)

  46. Gavrilo_Princip

    Interesting. Were you at the auction? If I’m reading your post correctly, the 2nd trust deed holder purchased the proprety.

    So we can expect it to come back on the market. 28 Crimson Rose next door, approxmately the same size and number of bedrooms, is for sale for $1.899 million.

    Here comes the comp killer!

  47. tonye

    A “second” for $850K.

    Dios Mio… that’s more than my first by a loooong way.

    I always figured a second might be a line of credit for maybe 20K or 30K, but maybe I’ve missed the boat the last few years.

  48. tonye

    Well… I made more than you… but whatever.

    I figure on 400 because I figure that TR will run just a bit less.

    My own chateau was around $275 back in ’00. I have no idea what it was at the peak, but I think I should have sold then and there and moved to Gilligan’s Island and bought the Professor’s hut.

    Anyhow, those figures are supported by the median income of the people living here. Typical SFH incomes in TR are 200K++ or more, so that you can see that a home at 800K is doable.. This comes down to about 300 per square foot and up.

    Being that TRidge is newer and some of those homes are indeed very nice and have killer views, a markup is reasonable.

    Now then, for the largest homes, those over 3000 sq feet, you might see a lower value.

    Again, just because we may agree that homes in Northwood, Walnut, Woodbridge, University Park, Westpark -not to mention those newfangled yuppie mcMansion’ed villages- are 200 per sq foot (which I doubt over all), doesn’t mean that TR TRidge are going to drop that much lower.

    The prices I figure on are a 50% drop for TRidge and 30% for TR from the highs of 05.

  49. IrvineRenter

    Does anybody know what a place like this rents for? That might give us some basis for estimating the bottom (rent * 160.)

  50. awgee

    “Typical SFH incomes in TR are 200K++ or more”

    Wow, that seems like alot. Where did you get this from?

  51. bigmoneysalsa

    Bigger SFR in Turtle Ridge for rent on the MLS seem to be asking for around 2$/sf/month. At rent * 160 that would put us at $1,088,960.

    Nearby 26 Canyon Ter is the same size and asking $6200. Rent * 160 there would put us at $992000.

  52. NanoWest

    My two “bear” cents…….

    There is a big diference between what a lot of “homeowners” are asking for rent and what they will actually get. Right now may of the “invesotrs” in OC decided they will wait out the market “platau” and rent their properties…………we shall see if the rental market is any kinder to them.

  53. IrvineRenter


    Those valuations seem reasonable to me. At $2/SF/Month, these properties would bottom out at around $320 / SF.

  54. n cty

    People, esp. OC tend to live way beyond their means. When I first moved here, I thought ‘wow everyone must be a millionaire’. Then you see behind the scenes…hence an $850k second.


  55. TangerineSpeedo

    Yes, I was at the auction as a curiosity. Turns out nothing was actually bid on that day other than Crimson Rose with 4 third parties looking to “steal” it up to approximately $1.3M.

  56. lee in irvine

    I personally think they’ll overshoot the fundamental support points. That includes the price to rent ratio and the income multiple.

  57. IrvineRenter

    Those statistics provide irrefutable proof that house prices rose over the last 5 years. Big news. I am sure most posters here will be shocked.

  58. graphrix

    Wow we had nearly as many losers as SB on a percentage basis and our homes were owned longer. So OC had 231 losers compared to the 204 losers in SB. I don’t know if I would be going around bragging about that stat and in fact I’m rather embarrassed.

  59. tonye

    I live in OC. I don’t have such a mortgage.

    Please don’t generalize. Just because 2% of the population acted like idiots it doesn’t mean the rest of us are idiots too.

    And, btw, OC was NOT the only place where idiots went nuts with exotic mortgages. Heck, in some places it was as bad or worse, eh?

  60. patientrenter

    Another thoroughly enjoyable post, IR. Thanks.

    BTW, if you know how to get access to the monthly median price per sq foot by zip in Irvine for prior months, I’d volunteer for creating a chart. I can only get the last month’s data from DataQuick, and I didn’t build a database before May. Probably wouldn’t be of much interest unless it covered back to Jan 2007, and preferably Jan 2006.

  61. TN

    “Someone asked me recently if we should feel sorry for people like this, as if they were victims of circumstance. No we shouldn’t.

    These people were victims of their own greed and ignorance. The circumstances which lead to this debacle were visible to those willing to see. Greed blinds people to the truth just like denial is blinding them now. There is an element of Shakespearian Tragedy to all of this, but at the root of every morality play is the idea that people are responsible for their own choices in life. These people are no less responsible for theirs.

    The sad part, if there is one, is that these people were led to believe they could have this home in the first place. Obviously, they could not afford it, or they would still be there.”

    Sometimes, brokers are constantly telling them they cannot afford it & not to buy.

    & people just don’t feel like listening.

    10 different people replying. 8 of whom are trying to tell her not to buy even if she could get qualified. 5 of whom are, admittedly in their sig, either mortgage brokers or loan officers.

  62. Major Schadenfreude

    That woman is a good example of the people that were allowed to buy homes during this boom, but had no business doing so. Consequently, they were crowding the market and prices went up.

    I knew back in ’04 when a realtor told me (and chuckled while she said it) that “nobody puts 20% down on a house anymore” that I was competing with these types for homes. People who have no savings, do not plan for the future, and think they deserve everything that they perceive everone else has – despite their economic limitations.

    It’s okay to be poor. It’s not okay to act like you have a lot of money when you really don’t.

  63. patience2007

    It’s amazing that there is even a chance of getting a loan of any kind weeks or months after a bk. Lenders deserve to be left holding the bag when they do that.

  64. tonye

    Come on… so let’s say that 30% of all people buying homes in the last two, OK three, years were clowns.

    That leaves the 70% who did not, plus the vast majority of people who did not buy homes during this period either because they already have homes (and did not hock them) or because they were renting (or like my friend, who sold his house in 05 and is currently renting).

    So, yeah, the squeaky wheels make a lot of noise, but don’t go around telling that OC is a morass of incompetent people

    Just think, Mr. IrvineRenter himself lives in OC too. Did he go beyond his means?

    Hence. Your point is not true.


  65. Sue

    Sounds like nesting instinct competing with logic.

    Having had 4 kids myself, I totally understand that nesting urge. It’s very primal and hard to ignore (ie. I need to find & build a safe haven before the baby arrives) and probably worked well back in the Stone Ages.

    Logic, though, as usual, has to have the upper hand.

    Finances aside, it’s way less time consuming to rent. Who needs to mow grass and do more chores and have more stuff to maintain when you’re going to be sleep deprived and tied up with baby care?

  66. awgee

    For those who think the high end home market will be immune to price reductions; got an email from Hovanian regarding the price reductions for their Skye Isle model homes in Ladera Ranch. The first is reduced from $2,879,900 to $2,149,990 , a percentage reduction of 25% and they are willing to pay a broker coop of 6%. The second is from $2,599,900 to $1,999,990, a reduction of 23%, plus the same coop offer.

  67. Sue

    Wow, that’s facinating. If you look at the $1,999,990 one (, it’s huge. If you can discount the 6% (as if you went to talk to the builder w/o a real estate agent/broker buyers agent), that takes it down to $1,879,990 for a 5695 square foot, 6 bedroom, 5 ½ bath, 4 garage space home in a gated community in Ladera Ranch.

    Out of curiousity, looked at Quail Hill properties in this price range on RedFin, this is what I find. Seem overpriced compared to what you can get for the same money in your Ladera Ranch examples. The sheer number of properties for sale in Quail Hill alone between $1,750,000 and $2,000,000 was surprising in itself.

    20 Silhouette, $1,999,900 4 bed, 3.5 ba, 4171 sq. ft, 8 days on market
    51 Momento $1,999,000 5 bed/4.5 ba, 40000 sq.ft. 104 days on market
    113 Tearose, $,1,998,000 5 bed, 4.5 bath, 3625 sq. ft., 64 days on market
    113 Ambiance, $1,798,800 5 bed, 3 ba, 3876 sq. Ft., 337 days on market
    120 Retreat, $1,874,000, 4 bed, 2.5 ba, 3600 sq. ft., 170 days on market
    102 Retreat, $1,849,000 4 bed, 3.5 ba, 3600 sq. ft, 143 days on market
    12 Dreamlight, $1,799,000, 5 bed, 4.5 ba, 3700 sq. ft, 93 days on market
    114 Symphony, $1,759,000 4 bed, 3.5 ba, 3400 sq. ft., 104 days on market

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