Address: 1428 Scholarship, Irvine, CA 92612

Plan: 2AL 1213 sq ft – 2+loft/2

MLS: P555577 DOM: 216

Sale History: none

Price Reduced: 04/16/2007 — $624,990 to $594,990

Current Price: $594,990

Although we’ve covered Avenue One before, I think this deserves another post. 1428 Scholarship is a brand new home (Plan 2AL) listed by K. Hovnanian (the builder). After a couple months on the market, the builder dropped the price by $30,000. Apparently, it wasn’t enough to get this place sold (even in the busy summer season). The property is still on the market 4 months after the price cut.

Before we get to who is undercutting the builder, let’s see who the builder is undercutting.

Address: 2475 Scholarship, Irvine, CA 92612

Plan: 2AL(?) 1253(?) sq ft – 2+loft/2

MLS: S497758 DOM: 30

Sale History: $687,469 (?) on 4/5/2006 (from Property Tax Records)

Current Price: $669,000

The builder is severely undercutting the investor that owns 2475 Scholarship. This investor (a RE agent) is currently renting out the unit. The price is significantly higher than what the builder is offering. But wait, it comes “Fully FURNISHED!!” It looks like it is the same floor plan as the unit above but I’m not 100% sure.

So the builder is making it hard for flippers and investors to make money. This is nothing new for Avenue One. Now, let’s look at a unit that is going to make it hard for the builder to move their product.

Address: 1442 Scholarship, Irvine, CA 92612

Plan: 2AL 1253 sq ft – 2+loft/2

MLS: P593507 DOM: 10

Sale History: $692,595 (?) on 7/26/2006 (from Property Tax Records)

Current Price: $539,900

This looks to be the same exact floorplan as the two properties above. The price is $130,000 less than the investor flip and $55,000 less than what the builder is asking!

How is this possible? How can someone sell a property for less than the builder? Meet the bank 🙂 This is a Bank Owned property but I don’t have the details on the foreclosure. If someone has access to the info, please post it.

Perhaps this unit is priced low to generate interest. If it does sell near this price, it’s going to hurt the comps in a big way considering that it looks to have been purchased for almost $700k last year.

Any guesses which property (Builder, Flipper, or Bank) will sell first? And when?

Have you seen the well-to-do up and down Park Avenue

On that famous thoroughfare with their noses in the air

High hats and Arrow collars, white spats and lots of dollars

Spending every dime for a wonderful time

Putting on the Ritz — Irvine Berlin

Video of Fred Astaire

Aren’t all houses in Irvine on par with the Ritz-Carlton? Judging by the prices, one would think so.

Asking Price: $747,900

Purchase Price: $678,868

Purchase Date: 5/17/2007

Address: 14 Carlton, Irvine, CA 92620

Sales History

Date Price

05/17/2007 $678,868

06/01/2006 $825,000

Beds: 4

Baths: 2.5

Sq. Ft.: 2,193

$/Sq. Ft.: $341

Lot Size: 5,005 sq. ft.

Year Built: 1979

Stories: 2

Type: Single Family Residence

County: Orange

Neighborhood: Northwood

MLS#: S497260

Status: Active

On Redfin: 31 days

From Redfin, “Corner lot with good curb appeal. Ceramic tile kitchen counter tops and wainscoting in bathroom. This home is located near great shopping centers and schools.”

Note the lack of normal realtor BS.

.

.

The owner of the property is listed as Citigroup Global Markets Realty, so I assume this is an REO. It appears as if their loss mitigation procedure is to try to get half of their first second (thanks ocbear!) mortgage back. The asking price is 10% under the original purchase price which was likely the amount of their 80/20 loan. It will be interesting to see how much they actually lose before they sell it.

If they got it at auction for $678,868, then the property is probably not worth much more than that. Of course, at an auction you need to be ready with a cashiers check on the courthouse steps, so that does preclude many buyers, but it doesn’t mean they will get an additional $69,032 either.

Mine eyes have seen the glory of the coming of the Lord;

He is trampling out the vintage where the grapes of wrath are stored;

He hath loosed the fateful lightning of His terrible swift sword;

His truth is marching on.

Glory! Glory! Hallelujah! Glory! Glory! Hallelujah!

Glory! Glory! Hallelujah! His truth is marching on.

Battle Hymn of the Republic — Julia W. Howe

Link to modern rock video version

During the civil war, Major General William Tecumseh Sherman of the Union Army took the city of Atlanta and proceeded to march to the city of Savannah destroying everything in his path (Sherman’s March to the Sea.) He ordered his troops to burn crops, kill livestock, consume supplies, and destroy civilian infrastructure along their path. This ancient warfare technique is know as scorched earth. This policy is often also referred to as total war.

There is a class of warrior operating in our housing market: flippers. I say they are warriors because they are at war with regular families, coming in to buy any property perceived to be of value. They will be glad to sell the property to a regular family — after a significant markup. The market has ways of dealing with flippers: its own scorched earth policy. It is called a bear market.

We have been profiling many flips recently. Some are REOs where the intention is not profit but loss mitigation, but many have been flips purchased by speculators. One of the memes floating around the MSM is that speculators have left the market. We have plenty of evidence to the contrary.

Actually, I rather like it. If I were going to pick two categories of property owners I would most like to see end up as bagholders for the decline over the next few years, it would be flippers and lenders.

Asking Price: $729,000

Purchase Price: $611,000

Purchase Date: 3/28/2007

Address: 24 Atlanta, Irvine, CA 92620

Beds: 4

Baths: 2.5

Sq. Ft.: 2,011

$/Sq. Ft.: $363

Lot Size: 3,870 sq. ft.

Year Built: 1978

Stories: 2

Type: Single Family Residence

County: Orange

Neighborhood: Northwood

MLS#: S488429

Status: Active

On Redfin: 90 days

From Redfin, “BLOWOUT PRICE!Great double CDS location withing walking distance to al l Northwood facilities. Open, spacious 4 br floorplan w/ new remodeled kitchen and baths. Right out of Metropolitan magazine. .. !Impressive trio of schools, convenient central Irvine location ! GREAT VALUE!!Reduced. .. .BEST price home in Northwood.”

BLOWOUT PRICE! — BS.

GREAT VALUE!! — BS.

Right out of Metropolitan magazine. — LOL!

.

.

At almost 90 days on the market, I don’t think this flip is working out as planned. They still have room to lower their price and get out before this becomes a loser. They are going to need it.

.

They call him Flipper, Flipper, faster than lightning,

No-one you see, is smarter than he,

And we know Flipper, lives in a world full of wonder,

Flying there-under, under the sea!

Video of opening theme song