Monthly Archives: August 2007

Blaze of Glory ** Final Update **

We have word that this property sold for $750,000. The realtor/seller paid a 2.5% buyers commission plus 4 months of holding costs and closing expenses. It looks like they got out with a $10,000 to $20,000 loss. It could have been much worse. They are lucky they got out when they did.

.

Does anyone remember this knife-catcher? They bought in March and put the house back for sale for a quick profit. In May, they reduced the price to $769,000, and now they have reduced it again to $749,000. Rumor is that this is a realtor flip.

Glorieta Kitchen

IrvineRenterOld Asking Price: $829,000

New Asking Price: $749,900

Purchase Price: $740,000

Purchase Date: 3/12/2007

Address: 11 Glorieta West, Irvine, CA 92620

Beds: 3
Baths: 2
Sq. Ft.*: 1,707
Lot Sq. Ft.*: 6,600Knife Catcher Award
Year Built: 1979
Stories: 1
Type: Single Family Residence
Neighborhood: Northwood
$/Sq. Ft.*: $486
MLS: S480860
Status: Active on market
On Redfin: 6 days

Redfin, Zillow

In the forum the question was raised, “I’m dying to understand why there is so much hostility to “flipping homes.”” This is why. Those who are still drinking the kool-aid believe this temporary softness in the market will be short lived, and we will soon return to annual double digit appreciation. Housing bears believe these people are falling into a bull trap.

Bubbles and Manias Conceptual Graph

Let’s assume for a second the kool-aid crowd is right. If they are, potential homebuyers will not get any of the benefit of lower prices because flippers like this guy are going to come in and buy any property selling at a discount and pocket the difference. In other words, the savings that might have accrued to a homeowner is now going in to the pockets of a flipper. This behavior will continue until all the flippers get burned out of the market.

Blaze of Glory

So if the market crashes and these flippers go down in a blaze of glory, you will be the guy on the left being thanked by a desperate flipper for buying him out before he is consumed by the flames of his own greed.

**** UPDATE 1 ****

The price was just lowered, and our flipper wants out. Burn, baby, burn.

**** UPDATE 2 ****

Price reduced to $749,000.

.

I wake up in the morning
And I raise my weary head
I got an old coat for a pillow
And the earth was last nights bed

Bon Jovi, Blaze of Glory

Reunion Rollback

I was listening to the radio

I heard a song reminded me of long ago

Back then I thought that things were never gonna change

It used to be that I never had to feel the pain

I know that things will never be the same now

I wanna go back

And do it all over again

But I can’t go back I know

I Wanna Go Back — Eddie Money

Link to Music Video

With all the rollbacks we are seeing in the market, do you think some of these homeowners would like to go back and do it all over again — and perhaps make different choices? I imagine they are feeling the pain…

110 Reunion Front 110 Reunion Kitchen

Asking Price: $639,000IrvineRenter

Purchase Price: $622,500

Purchase Date: 11/23/2004

Address: 110 Reunion, Irvine, CA 92603

Beds: 3

Baths: 2.5

Sq. Ft.: 1,300

$/Sq. Ft.: $492

Lot Size: –

Year Built: 2005

Stories: 2Rollback

Type: Condominium

County: Orange

Neighborhood: Quail Hill

MLS#: S489036

Status: Active

On Redfin: 67 days

From Redfin, “Stylish ultra luxury detached residence in highly sought after Quail H ill development. Nestled in back of CDS – very safe & quiet! Loaded w/ model upgrades, this gorgeous residence will not stay on the market long! Great floorplan enhanced w/ hardwood flooring, recessed lighting + base & crown molding. Gourmet kitchen w/ granite countertops, splash & under cabinet lighting. Upstairs bedrooms & loft. Large master suite w/ walk-in closet & bath. Charming garden patio. Resort quality association.”

Wow! Ultra luxury. Not just ordinary luxury, but ultra luxury… It must be on par with Burj Al Arab.

It won’t stay on the market long — only 67 days so far…

And, of course, another gourmet kitchen…

.

.

This one is not technically a 2004 rollback, yet. The asking price is still above the purchase price, but with 67 days on the market, I highly suspect the final sales price (if there is one) will be under the purchase price. If they can get their asking price, they stand to lose $21,840 after a 6% commission.

86 Reunion Front 86 Reunion Kitchen

Asking Price: $679,900IrvineRenter

Purchase Price: $586,500

Purchase Date: 11/1/2004

Address: 86 Reunion, Irvine, CA 92603

Beds: 3

Baths: 2.5

Sq. Ft.: 1,300

$/Sq. Ft.: $523

Lot Size: –

Year Built: 2004

Stories: 2

Type: Condominium

County: Orange

Neighborhood: Quail Hill

MLS#: S483874

Status: Active

On Redfin: 10 days

From Redfin, “Quality upgraded home with granite counter Tops, ceiling fans in each room, upgraded carpeting, hardwood floors throughout fist floor with 9 ft ceilings. Wood blinds, natural slate courtyard, recessed lighting, and more. Ample parking, walking distance to pools, schools, and shopping. Bright home in a very quiet surrounding. Lowest priced Sage plan 3 California Pacific Home.”

fist floor?

umm… This isn’t the lowest priced Sage plan 3. The unit profiled above is…

.

.

This property is listed for a wishing price. 110 Reunion is an identical plan offered for $40,000 less. In short, they are at least $60,000 overpriced.

In a strong market, this seller might get their wishing price, but in a declining market, it is a race to the bottom. 110 Reunion is currently in the lead.