Makes no difference who you are
Anything your heart desires
Will come to you
If your heart is in your dream
No request is too extreme
When you wish upon a star
As dreamers do
Like a bolt out of the blue
Fate steps in and sees you through
When you wish upon a star
Your dreams come true
When You Wish Upon a Star — Pinocchio
.
.
I feel sad for this child. This was some child’s private world lovingly painted with beautiful clouds, dancing characters and the sun peaking through the window. The room looks joyous and happy. When these parents wished upon a star, I wonder if it was for mortgage relief so they could keep their house and their child could keep their special place. Alas, it was not to be…
Asking Price: $709,900
Income Requirement: $177,475
Downpayment Needed: $141,980
Monthly Equity Burn: $5,915
Purchase Price: $899,000
Purchase Date: 5/15/2006
Address: 27 Kelsey, Irvine, CA 92618
| Beds: | 4 |
| Baths: | 3 |
| Sq. Ft.: | 2,085 |
| $/Sq. Ft.: | $340 |
| Lot Size: | – |
| Type: | Single Family Residence |
| Style: | Contemporary |
| Year Built: | 1999 |
| Stories: | Two Levels |
| Area: | Oak Creek |
| County: | Orange |
| MLS#: | P620617 |
| Status: | Active |
| On Redfin: | 30 days |
Beautiful family home located in Irvine, home features 4 bedrooms, 2.5 bathrooms, the master suite has a walk-in closets, kitchen features center island and eating area, the family room has a cozy fireplace, a spacious living room and eating area, inside laundry and a two car direct access garage, property shows like ‘NEW’
.
.
I would comment that the lender is not doing well on this one, but since New Century is already out of business, it is a moot point. The trustees managing the portfolio of bad loans written by New Century are going to lose a total of $231,694 after a 6% commission. Another day, another quarter million dollar loss in Irvine…
.
“Asking Price: $709,900
Income Requirement: $177,475
Downpayment Needed: $141,980
Monthly Equity Burn: $5,915”
Those figures that are posted on each house are really a wake up call. They are bound to sink in at some time. That’s a crazy big down payment – but it is what would be required to actually buy a home with the current price tag. Who has that kind of cash money readily available, really?
I like the cut/dry features of the “equity burn” as well as the “income requirement”. Those are pretty black and white. Either you can afford that and you make that or you don’t.
When our children were young enough to enjoy cute wall murals like that, we were packed into a condo and saving up for a move up home. We had to save for a downpayment, because in the olden days (15 years ago) you had to have that pesky 20% (plus some closing costs, as I remember) to qualify.
I was talking to a woman at work who has been renting for the past 5 years and who felt that she was a complete failure as her friends and neighbors were all taking those great vacations, buying luxury cars, designer clothes etc… She knew they all made the same amount of money but she felt that she must be stupid with her income or something, because she kept telling her kids “no” to all the stuff they wanted to have to keep up with their friends. Now that her neighbors have all virtually moved out b/c of foreclosure, does she realize what has happened and feels somewhat vindicated.
—–
On Redfin it shows a sale last October at $768K and the latest price is $694K. Is this another knifecatcher?
Probably REO at auction going back to bank at 1st balance.
I voted $226-$250 sf at bottom here. However, since this featured property is only 100 yards from 405, it will bottom out at $180-$200 sf.
899K and not even a trademark granite counter top or stainless steel gourmet kitchen?
I bet they made some flipper extremely happy!
This one has a very very long way to go even at the current asking price.
Someone should also explain to them that taking a photograph in front of a mirror makes your listing look amateur.
The orb of the guy’s head does provide some much needed comic relief though.
Four bedrooms in 2,000 sq ft of living space must make for some cramped quarters.
By the way, who bought all of the bad loans from the bankrupt mortgage companies?
In some cases nobody did. New Century had a line of credit known as a warehouse line. They would originate loans with this money, and when they had enough of them they would be packaged and sold. Toward the end, they had customers defaulting on loans held in their warehouse line. Lots of first payment defaults, fraudulent transactions, and very poor underwriting. Eventually, nobody wanted to buy their crap, so the financial intermediaries that extended the credit lines pulled the plug. There were many loans still in their warehouse line when they went under, and these are now being managed by a bankruptcy trustee.
The downpayment doesn’t stand out to me as out of the realm, it’s the $177K a year that jumps out at me. First of all you know that $177K is the bare minimum that you would need and would probably mean mac n’ cheese for dinner for the next five years. And face it how many family households pull in $177K a year?
BTW, what excatly does “equity burn” imply?
Todays featured house has nice curb appeal and the thing I like about it is that there is no house across the street, so you have a feeling of privacy.
It seems to me that the freeway might not be too much of a problem because it looks like the freeway is sunk relative to the house. Not sure about this. I would like to know if there was some equipment that could test the air at the house for pollution. Maybe all that stuff from the freeway is working its way right up to the house.
I cant find any info on the lot size, but it is tiny. You are basically getting a detached condo here. The inside sq footage is rather small considering the number of beds and baths. But it is acceptable.
If I were to buy it, I would pay the 2003 price for it.
480k
Since houses declined in value 10% last year, and since they will likely depreciate the same amount over the next 2 years, the equity burn is the monthly loss a buyer would experience each month for the foreseeable future. It serves as a reminder to buyers they are purchasing in a declining market, and we are nowhere near the bottom.
“This one has a very very long way to go even at the current asking price”.
This place will sell for over $650K and will be gone before the summer…
I don’t feel bad for this child. The child should of picked more responsible, thoughful, caring parents who should of done more research and less flavor-aid drinking.
Squatters be gone. Yes, I’m particularly snarky today.
I’ll hold you to that Ipop. I am sure that someone will think….”Wow! this place sold for 900k and now its only 650K!”
I don’t know what the wind patterns are in the area, but you’d very much want to be upwind of the I-405 most of the time given how close they are to the freeway. Otherwise in all likelihood there will be consistent air quality impacts at the house from the freeway traffic. There has been considerable work down in the LA area on how far away from freeways you need to be to get away from the near-field impacts. Of course it varies with time of day, season, traffic volume, types of vehicles, particular pollutant of interest and so on but a good rule of thumb is at least about 300 m. The California Air Resources Board issued an advisory a year or two ago about how close new schools should be to freeways. It’s probably not bad advice for private homes too.
I believe there are private companies that will make measurements for you but I have no idea how much they cost.
Looks like they already dropped the price on this one to $694k. They must have seen the IHB post, and decided they wanted to improve their downpayment and equity burn metrics.
I don’t know if it is right to blame the child when the Democrats discriminate against children through child labor laws. That said, while I would like to believe that this kid loved their parents and tried to get a job in a coal mine or something productive to help with the bills, the reality is that they probably used the laws as an excuse to get a free ride off taxpayers – their parents. Maybe I’m a bit off base, but if a law is wrong it should not be followed. Kids like this remind me of the German children who turned in Ann Frank simply because the “law” told them to.
I’m comfy with that Maestro. I figure $675K is a movable price on that house since that is 25% drop from peak, maybe more actually, and some crazy freeway-lovin’ fool will jump on it.
The realtor dropped the price yesterday, before the IHB post.
You give IR too much credit there.
A woman who works for CountryWide called in to the “Mark and Brian” show on KLOS this morning talking about the foreclosure situation. Now… I am going on pure memory here, but the following is a recap of what she said:
“We have 9 groups of 5 people that are doing nothing but working the escrows on foreclosures in California. Each of the 9 groups is currently working 350 foreclosures per month.”
Now, just for the record, that sounds awfully high. This would mean that Countrywide has 3,150 additional foreclosures per month. However, even if she meant 350 per month total, that is still very high.
What is more important is that she said that the rate of foreclosures was DEFINITELY accelerating.
(I am sure that this woman is going to find a pink slip on her desk when she shows up for work, which is sad, since I heard young children in the background.)
You may be right ipo, but anything > $400k seems suicidal to me. Place is not nice or special, is in a poor location, very bland.
I don’t see anyone with the actual means to afford this price for a home settling for this place.
My 2c.
Foreclosures hit all-time high
Over 900,000 borrowers are losing their homes, and a record number of home owners are behind on payments. Rescue efforts have not reversed the default trend.
http://tinyurl.com/227m8e
The question is – how much more pain is there. I say we are only in the 4th inning of this. This is a snowball running downhill. Its getting worse as time goes by.
At some point places like Irvine will join the “crash” party even more than it is now.
The fed has already tried to bail out the mortgage market and it failed. It actually has made things worse with inflation for everything except house prices.
Withing two years we will cruise right past the 2003 prices.
Best quote I heard so far:
“This is not a subprime problem, this is a stated income problem.”
“I say we are only in the 4th inning of this”
Based on the Japanese bubble crash, best guess is we don’t hit bottom until 2012. That puts us only in the 2nd or 3rd innings.
To quote Al Jolson “You ain’t seen nothing yet”
i think i agree with you, ipooplya. Even tho’ i want prices to come down to a saner level, i dont see it happening here. I have been looking for a couple of months now. The owners and agents are living in their own dream world.
I do have to admit that there are people waiting on the sidelines and we are bound to see a slight bump this summer.
I dont know if you have observed this but the mentality in irvine is that 600k is ok. We are so used to seeing high prices that half a million seems like chump change. Reality bites, where it hurts the most, when the monthly payments start.
As for me, i have finally decided to keep renting till i can really afford a house.
on top of market, 2005-2006 time frame, some buyers paid outragously over even the market price. those buyers will incur even more than 40-50% loss. just don’t be fooled by the last purchase price
“the mentality in irvine is that 600k is ok.”
Yep, for now, lenders are still willing to loan 5.5 times income, so people think if they can borrow the money, they must be able to afford it.
Actually, the equity burn should be higher as home values (SFR and condos) for Orange County declined 13.3% year over year from Jan 2007 to Jan 2008.
http://www.dqnews.com/ZIPOCR.shtm
38 Kelsey also a foreclosure
I have a friend who took his own life because he perceived himself as a failure in comparison to all of his money spending neighbors.
I’m sorry to hear that, Nano. That must have been really hard on you. I wish more people realized what really counts in life – and it’s not money.
It may sell for over 650K before the end of the summer, but that is not going to change the fact that the value has a long way to go before it bottoms out.
I appreciate the “equity burn” stat. It’s real and can leave a scar.
But maybe you should include a “rent burn” stat too? Estimate the home’s rental value to illustrate the burn rate of your cash to rent the place.
600K will be OK for plenty of people until the monthly equity burn starts taking its toll on 2003 prices and significant bubble equity has evaporated from the move-up crowd’s houses.
I like that idea. There are specuvestors out there right now buying properties and renting them out knowing they are going to lose money each month betting on the return of rapid appreciation.
I am in total agreement that by the time this is all said and done, that the total foreclosure number will approach 3 million.
However, the only reason I doubt her estimate of an additional 3,150 foreclosures per month is that, according to the “Countrywide Foreclosure Blog”, the current number of Countrywide REO’s in California is 1,527.
Of course, it is possible that Countrywide is aggressively disposing of their REO inventory through the many Real Estate Auctions that are popping up all over the place. It that were the case, it is possible to process an additional 3,150 foreclosures per month and maintain a REO inventory of 1,527.
The woman could also have been mistaken (although she sounded pretty sure of herself). Finally, Countrywide could simply be lying about their REO stock (heaven forbid!!!! Countrywide behaving unethically???? Impossible)
It will be curious to figure out which is correct.
Being a resident of Westpark just up the road from this place, I can tell you that the noise from the 405 is staggering. This Oak Creek place gets the full brunt of it, with the added bonus of all the diesel fume particulates (well known to be particularly dangerous and carcinogenic). The icing on the cake is you get to be within the radiation field of the high-tension power lines just on the other side of this place’s sound wall. Pick your poison with this dump. But don’t worry, ipop says it will sell for 675K! I pity the fool that would buy at such a price.
Ipop,
I got $50 donation to the blog wager that this doesn’t sell for over $650k this summer, or fall, or winter, or spring.. when it sells it’ll be
With regard to the wind patterns, note the standard onshore flow: for this reason, the normal takeoff pattern for John Wayne (just up the 405 from this place) is towards the beach. So unless you have Santa Ana conditions, this Oak Creek place gets the full impact of the diesel fumes. I always wonder what type of buyer lives in these homes, they should be torn down as health hazards.
great info shiny!
In all seriousness, diesel particulates are very dangerous: a good percentage are virus-sized, they are readily inhaled and readily enter your bloodstream. Those that are bigger are still very small and penetrate deeply into your lungs. Regardless of size, diesel particulates are laden with poly-aromatic organic compounds known to be carcinogenic and toxic.
So this home rather kills me: they obviously loved their child yet choose a location that exposed the poor kid to considerable harm.
Whenever the Santa Anal wind blows, the air quality is worse due to all the dust and particles.
What do I win if prices go, inflation adjusted of course, below $175/sqft? I don’t have a wife, and my gf trusts what I say, so can’t get the pleasure of an “I told you so.” Maybe an e-high-five?
Check out SKF and SRS today. Wow. I wonder how long it will take for people to come to the realization of what is happening. Even still, all I hear is denial. I dedicate this track to those people:
https://www.youtube.com/watch?v=MSYz9VPj2Es
I’m sure parents that care enough to do up the kid’s room as shown will be caring enough to find a nice apartment complex which also has lots of kids for him/her to play with. They should talk to the realtors of Ladera Ranch and find out where all those young families are moving to.
Indeed. I know someone who is doing just that.
They have a renter in there subsidizing the mortgage, but still not getting enough to cover the payment.
They are very optimistic that it’s all going to turn around in a couple years and the good days will return.
Don’t these diesel particulates get somewhat dispersed during their descent?
I know it’s not nearly as scientific as some of the other valuation methods, but I like the income required stat that IR includes because it makes for an easy reality check. Is this the type of house a couple making a combined $200k per year should have to stretch and save for?
My answer — no.
As the price goes up, we have a succession of greater fools; as it goes down, we seem to have a succession of lesser fools, but fools none the less.
If you’ve been looking for a year at 800K, then 700K seems like a miraculous low price, and you grab it. A year later all who are looking have been seeing
My agent actually took me to this house. I must agree with some of you that it is very, very noisy. The master bedroom faces the wall of the freeway. Even when the double pane (??) windows are completely shut, the freeway noise on a Sunday afternoon is undeniably loud. The front entrance also faces the freeway wall. Agent said depending on the direction of the wind, I might not be able to hear the noise. Whatever! I dumped her.
Come on people. Some of you are predicting that sq/ to equal $175 for this place…… Those are pipe dreams. Homes prices are coming down, but lets be realistic. That would make this house $364k. That what you would have paid for this house in 1998. 10 years of reverse price appreciation and 3 economic downturns later, this is still not going to happen. No Way in Hell. I feel sorry for individuals that got taken by this mess, but you’ll are pipe dreamers wishing for the worst. Take some Zanax or something.
“this is still not going to happen. No Way in Hell.”
That is what people used to tell us when we said prices were going to decline at all…
“some crazy…fool will jump on it.”
-ipop
I couldn’t have said it better myself.
Yes,
Now, Zillow denotes non 3rd party transactions or non arms-length transactions with an asterisk next to the price. This denotes it was not a normal sale.
It was going back to the bank at that price.
Chuck Ponzi
http://www.socalbubble.com
You beat me to it IR.
“No way” was said by a lot of people who now look pretty effin’ stupid. We all hav our own opinions about this but I try to stay from the absolutes. I have thoughts on what could happen but to say that such and such will not happen, no way, that’s risky at best.
NW,
We had the same thing happen here twice last year. A father (young kids) that hung himself over financial woes and a mother that took her life because she felt she put her family too deep in debt due to her spending habits.
Tragic indeed.
“Comment by ipoplaya
2008-03-06 07:57:31
“This one has a very very long way to go even at the current asking price”.
This place will sell for over $650K and will be gone before the summer…
”
Hopefully you’ll be the sucker to buy it, that way we wont have to hear your bs anymore.
“….diesel fume particulates (well known to be particularly dangerous and carcinogenic)…. ….full impact of the diesel fumes…. ….laden with poly-aromatic organic compounds….”
As a fan of the compression ignition engine’s superior performance and efficiency and overall cool sound, I find your comments to be highly offensive.
Please take your hydrocarbonist comments to some blog dedicated to that type of hate. What are you some bitter gasoline powered car driver?
Love you too HouseWifeLover… X O X O
this house sold for a little over $200/sf in mid 2001.
http://www.redfin.com/stingray/do/printable-listing?listing-id=1359474
It’s much further from the freeway, so I assume carried a premium. When I look at the overall price appreciation for housing in OC, I come to the conclusion that we would have been paying 2002 prices right now if we didn’t have a bubble. Things have not changed that much since 2002 demographic wise, so one of the methods I use to judge my target price is what homes sold for in the neighborhood during 2002. So yeah, I think we could see a price much lower than $200/sf next to the freeway.
Even you IR do not think prices will fall another 50% from today’s levels… I know you need to keep the uber bears happy, but if I recall your analysis correctly, you didn’t forecast a 60% decline from peak. Am I remembering wrong? Too lazy to look it up right now.
It’s great to see how happy it makes you to see a child lose his home…
what a creep…
So rent didn’t go up since 2002 in irvine? And salaries? doubt it…
Boo-fcking-hoo. Maybe the child wont be as stupid as their parents.
Click on the link I posted above and sing with me:
“Tried to give you warning but everyone ignores me,
Told you everything loud and clear,
But nobody’s listening.”
Irvine will see $175/sqft by the time all is said and done. It’s current home prices that aren’t realistic.
I’m not saying that. I’m saying that if houses appreciated at “normal” yearly rates. Like 3-4% per year, the housing prices right now would be the same as they were in 2002. Remember that by 2002 we were already seeing rapid price appreciation.
When I look at current rents in a neighborhood and then look at the historical prices for houses in that neighborhood, the GRM makes sense if the house was priced the same as they were in 2002.
Rents have gone up, faster than inflation. Believe me, I know because I rent. However, currently I see in the rental market some softening (at least in the MLS), so this is unlikely to continue. Income has stayed about the same as inflation. The question is whether or not the distribution of income between neighborhoods has changed in the past 6 years. If you believe that the distribution hasn’t changed, then my method of analysis is valid, if you believe there have been large changes in where different classes of people live, then it does not.
If the market over corrects, which it probably will, then we could be seeing prices lower than what they were in 2002. I’m not going to bet on an over correction, so that’s why I look at 2002 prices.
Maybe their rental will be nicer js?
I had an apartment manager show me a place that overlooked the 405 on the west side about 10 years ago. He told me that if I left any of the windows open the exhaust soot would cover everything in the apartment.
Needless to say I didn’t rent the place.
You Don’t Understand Mortgage Rates…
http://thegreatloanblog.blogspot.com
this place looks plain and is near bad location so I figure this one will go down to 2001 prices which is 500K, which makes it 250 sq/ft…That price seems very reasonable. $700K – NO….650K – NO….$600K – Maybe…$550K – Getting there…….It will take 2 years for it to get to 500-550K, imo. The govt keeps holding back the landslide but it is coming. If they did not keept the prices inflated and slowing the bubble from bursting completely, and allowed the interest rates to increase (to curb inflation), we would be at the 600K price tag by the end of this year….Houses are still overpriced, let’s face it. Only if you have a big down payment (300K), and made over $150K a year could you really afford this house.
LOL!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Thx for the info Shiny, but that close to the freeway, particularly if there really is a depression, you can get some micro-scale wind fields that are different than the general sea-breeze flow pattern. Of course, the turbulence generated by the vehicles also will have an impact. Absolutely right on the issues w/diesel particulate matter, although it is worth pointing out that gasoline vehicles generate particulate matter of size range and composition also likely to be associated for adverse health effects (open research question). It’s my understanding that it is somewhat easier to get diesel particulate matter, though and the exact mechanisms of what’s important health-wise are still not fully-established (we’re working on it).
Also, Major, while mixing/volatilization/so on will impact the dispersion of the particulate matter as you move away from the freeway, it should still be pretty bad that close in.
IMO there really ought to be some restrictions on how close it is possible to build housing next to freeways (or at least a health disclaimer).
I don’t think aggregate prices will decline that much, but the certitude of the comment was reminiscent of the attitude we used to get from bulls before prices started dropping.
When we toured those homes in ’02 we thought they were wildy overpriced to begin with.
Also I recall that this is “gated community”, so the HOA fees are on the high side.
Jeez….. radiation from the power lines…. did you flunk physics?
Whats up with this new format on the forums lately. Are they running out of actual homes to list? I’m over the youtube music links and the same old charts. Lets see more homes.
These homes were significantly overpriced when brand new.
I keep saying this but people don’t get it. All new construction in OC and LA was overpriced since 01.
To see where the new developments will bottom you have to look at the prices of comparable homes in existing villages near by. For this tract it will have to be Woodbridge along the 405.
What a warm and wonderful feeling. The little kids packing their little boxes before heading to the curb.
If it’s any comfort to the parents, the kid will be just as happy in a gaily painted room in a rental apt. It’s cheap to put up a cute paint job in a kid’s room, and kids LOVE cute, cheap things. Toddlers are very easy to please. They don’t know from spa baths and granite counter tops.
It’s the parents who will miss the space and luxury of the house. A toddler doesn’t know the difference.
Her own room, or even her own corner, her fave colors and toys and amusements, and lots of love and warmth and attention….. that’s what does it for the kid. She doesn’t care if it’s a rental..it’s the parents feeling the pain. If they muffle it and decide they’re going to be happy with the comedown, the kid will be, too.
I loved my room in the great rental my mother got a few years after her divorce much more than the room in the house we were foreclosed out of so long ago. The apt. was way nicer, and even larger,with better furnishings. My mother was in an OK financial situtation. The house, on the other hand, felt dismal because we were on our way out of it within a few years of moving in, and my extremely young parents were under terrible financial stress. The place always had the feel of a temporary abode.
But, according to my Irvine company map, that place backs to a wildlife corridor. Nothing but greenspace! Look, I think I saw Bambi!
You are aware that there are SFR places going for under $18,000 in the United States, aren’t you?
I’m not sure which blog you are talking about but this one shows 4,382 Countrywide foreclosures in CA, and over 15,000 nationwide.
http://countrywide-foreclosures.blogspot.com/
Many foreclosures will do disastrous things to home prices. 1998 levels will be possible.
Why must I be surrounded by idiots: you fool, I am referring to electromagnetic radiation. And yes, it is emitted in abundance from high-tension lines but the EPA will tell you don’t worry, just go ahead and be bathed in it.
i actually checked this property out this weekend. crappy location, very poor condition, everything needs to be redone inside and out.
agent was a cocky prick, “have an offer for $650k but nah, it’ll go higher…” bullshit still. if they have an offer for that price they need to take it ASAP and pray it goes through escrow.
in any case, the first word I noticed on the wall on the child’s room was “RITARD” – granted this is a musical term, but I felt it was rather appropriate in this circumstance.
I think $200/sf is generous in this case, the property really does not have much appeal other than the fact that it is not a condo and it is in Irvine.
For your information, I spent an entire year studying Maxwell’s equations. It was PH350 and PH351 as I recalled, part of the undergraduate program for a Bachelor of Science in Physics.
The Magnetic field generated by those lines is very low and there have been no scientific studies on their effect on humans.
If you wish to add the same type of scientific “rigor” to your claims that other “educated” people are using towards nuclear power then be my guest. But you might want to realize that in the scientific community that type of “rigor” is associated with a brain that went “mortis”.
Dinner!