The Roxbury

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Why spend just a Night at the Roxbury when you can live there? Look at this fantastic property. It comes complete with a hose on the roof, termite damage on the porch, broken concrete, a leaning sidewalk light, an empty milk bottle on the walk, and a pair of statues that looks like a man staring down a cow. At least the grass is green. You can’t beat this location. It is so close to the railroad tracks, the vibrations from the passing trains will shake the pictures off the wall, and the position at the end of a “T” intersection guarantees a strong flow of negative energy and enough flashing car lights to ensure you can’t sleep at night. As the realtor noted, it is “PERFECT FOR FIRST HOME BUYERS.” Yeah, perfect…

Asking Price: $545,000IrvineRenter

Income Requirement: $136,250

Downpayment Needed: $109,000

Purchase Price: $555,000

Purchase Date: 1/19/2005

Address: 4712 West Roxbury, Irvine, CA

Beds: 4
Baths: 2
Sq. Ft.: 1,156
$/Sq. Ft.: $471
Lot Size: 4,992 Sq. Ft.
Type: Single Family Residence
Style: Other
Year Built: 1971
Stories: One Level
Area: El Camino Real
County: Orange
MLS#: P619342
Status: Active
On Redfin: 58 days

BEAUTIFUL HOUSE IN A NICE AREA. PERFECT FOR FIRST HOME BUYERS.

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You can sense the enthusiasm the realtor has for this listing. I can’t blame her. How do you get too excited about an overpriced short sale that has almost no chance of earning a commission.

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The seller of this property put 5% down when it was purchased, but they refinanced in 2006 and took out an Option ARM with a 1.8% teaser rate for $548,000 and a simultaneous HELOC for $64,000. They are exercising their “put” option, and the lender is going to eat another one. If this property sells for its asking price — which seems very unlikely — the total loss to the lender will be $99,700 assuming they maxed out the HELOC and pay a 6% commission.

Anyone want to live here? It is Irvine, and It’s a beautiful life, oh oh ooo…

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You can do what you want just seize the day

What you’re doing tomorrow’s gonna come your way

Don’t you ever consider givin’ up, you will find, oooh

It’s a beautiful life, oh oh ooo

It’s a beautiful life, oh oh ooo

It’s a beautiful life, oh oh ooo

I just wanna be here beside you

stay until the break of dawn

Take a walk in the park when you feel down

There’s so many things there

that’s gonna lift you up

See the nature in bloom a laughing child

Such a dream, oooh

It’s a Beautiful Life — Ace of Base

87 thoughts on “The Roxbury

  1. FairEconomist

    I find it absolutely unbelievable that that place appraised for $529/sq. ft., even at the height of the bubble. And I thought Irvine wouldn’t let a property get to that state, either. Don’t they send in the Men in Black with mindwipe devices before things get that bad?
    —–

  2. ice weasel

    But, but, but Irvine is different.

    Please, ladies and gentleman, wipe that phrase from your mind. Irvine is different indeed. And so is every other community in the world. They’re all different.

    The one thing Irvine has in common with lots of places right now is this house. There are a lot of WTF priced older properties all over the place that banks are going to losing their collective asses on. And they should lose money on loans such as this. They deserve to.

  3. IrvineRenter

    Notice there are no pictures of the inside. If the images of the inside were burnt into our brains, we might all need a session with the Men in Black to maintain our illusions of Irvine as the perfect city.

  4. IrvineRenter

    The more properties we profile here, the more we see it is the lenders who are getting killed.

    I don’t set out to find lender losses, nor do I filter out the ones where the sellers are losing money. The fact that 80% or more of the properties we profile are lender losses says something about how widespread speculation with lender money was during the bubble. To me it also says something about the holding power of speculators with no money of their own in the transaction. As time goes on, I wouldn’t be surprised to start seeing more properties where the seller has money in the deal. Right now, those people are holding on, but as all the 100% finance deals go south, they are taking the prices with them and dashing the hopes of those with their own money in the deal.

  5. NoWow!way

    I am betting the inside is a shambles. The outside is so umkempt and neglected.

    This place should be listed under $200/sq foot. And this is a great example that banks are not good at property disposal.

    Just what is the level of experience of some bank dweeb figuring out how to unload real estate properties?

  6. George8

    What kind of rail service is it by the property, passenger, freight, or both? How frequently do the trains pass by, and any limit on speed and whistle?

    Lighter passenger train at 40 miles/hour will give long lasting ear ringing and headache, and the long heavy freight train at 40 miles/hour will, as you say it, shake a few things loose, and whistling in the night will wake up anyone who is not drugged.

  7. NoWow!way

    It is a starter home alright. But without a starter home price.

    Does it have an HOA there? I doubt it b/c the place needs new paint, the roof is terribly old and outdated. That crack in the walkway is a safety hazard (is this something that would even pass a house inspection?) and the step up eliminates anyone who was considering the home for an older couple or anyone who has a family member who needs a wheelchair or other ambulation equipment.

    The debris and the hose on the roof are ridiculous to include in an actual picture advertising the sale. The person in charge doesn’t even think the place is worth climbing up and taking a garden hose off the shingles or bending down to pick up trash in the front of the home.

    I get a shiver of dread thinking about what all is going on in the backyard.

    This place is OLD. You can trick a new family into buying something like this, but the smart folks are going to get a home inspector and find out that the plumbing is compromised, all of the fixtures are outdated, that there are some critical items that need replacement such as A/C, carpet, wood paneling, toilets, counter tops etc…..just to have a home that is barely livable and presentable.

    Plus you have to consider: If THIS home is able to get away looking as shabby and unloved as it is, what in the world are some of the other properties looking like? Who is minding the store to make sure the whole neighborhood doesn’t look like a slum full of ill-maintained homes?

    The price of this home represents substantial loan fraud. The appraiser should be hunted down and made to serve time.

  8. AZDavidPhx

    Oh yea, if you are renter, you are low class. Time to buy; you don’t want people thinking you are trashy now.

    I would like to know who among your more challenged blog voters actually appraised this steeming pile of S at 400K+? Are serious? Are you Fing kidding me? Get out of here.

  9. NoWow!way

    The rail service is both freight and passenger. Many more passenger trips than freight. There is no whistle past this particular property, as there is an overpass on Yale. Jeffrey is the next major street and it currently DOES have a whistle blow, BUT Jeffrey is getting an overpass/underpass right now and is under construction. I would estimate the work being complete by this time next year at the latest.

    Over at Harvard, we live up approximately 3 streets up from the rail line. The big freights will actually cause little tremors in the house. Someone told me once that our homes are on sand as a base, so it is kind of like the action of big waves when you are out on the sand at the beach…. that kind of trembly feeling. The horns vary from train to train. We get a horn blowing at Harvard and one of my friends backs right up to the rail line and we cannot have a conversation when the train is rolling by very well, and we absolutely cannot speak until the horn blowing is done.

    I like the sound of the train from my home. I find it comforting and quaint. My spouse hates it and wants them to either make Harvard a non-thru street or to make the expensive construction changes needed to make it an overpass/underpass situation (not going to happen).

  10. George8

    In your opinion, how much discount this featured property needs to bear relative to same property 3 street away from the railroad?

    My thinking is that the discount is smaller in a hot market, and it gets at least twice as much in a bad market like what we have now.

  11. George8

    From scientific points of view, I believe audible noise is reduced from the source at the rate proportional to the reverse of the square of distance.

    Hence, twice the distance, dba reading is reduced to 25%, four time the distance, dba reading becomes 6.25%.

  12. Hmmmm

    I didn’t think Irvine had any homes like this. This is the first I have seen.

    OT …schools. There is a lot of talk about the quality of schools in CA and the mania to live in certain districts. A lot of the CA blogs talk about their perception of low quality schools in CA overall. I mean the Bay Area blogs really seem to dump on the school system quite a bit. What is this based on? Are there national rankings or something ? I ask because in my east coast county of Fairfax, VA, the school board is obsessed with being the best in the country. They are always saying how great the schools are in Orange County and that we need to spend, spend, spend to keep up. School funding is $1 BILLION dollars and goes up every year rain or shine…just like our property taxes. Our school board seems to think the CA schools are the best in the country but I donโ€™t get the same impression from blogs like this. Is this accurate?

  13. 7

    There are some excellent public schools in Irvine and Tustin district, as well as Fullerton and other area. However, just like the schools in Fairfax/Falls Church area, the students quality vary within the school, and the schools vary within the district. (I went to schools in NW and NE of DC in the 80’s.)

    There are a lot of awards given to the schools in Tustin and Irvine distincts. Blue ribbons, Distinguished school, etc., and their standardized test score is relatively high (AP score?), in the 900’s or high 800’s.

    IMO, the good schools in Irvine/Tustin are good is not due to the state’s school spending, but rather the quality of the students, and more importantly, the involvement of the parents.

    (If you considered that a Irvine family gave more than $100k worth of gifts to their kid’s teachers, you see how motived some of the parents are.)

  14. IrvineRenter

    Overall the school system in California is not that great. I think we are 29th in the nation. When proposition 13 was enacted, school budgets were severely impacted, and the funding on a per-student basis has lagged the rest of the nation ever since. Now, California is very much a case of the haves and the have-nots. Some school systems in California are among the best in the nation, with Irvine’s being among them, but some are also among the worst in the nation. It is not uncommon to see a 10 rated school district adjacent to a 3 rated school district (Irvine and Santa Ana for instance.)

  15. mediaboyz

    IR, thanks for this great find. Talk about a “ghetto” Irvine house…and “A night at the Roxbury” video icing on the cake!

  16. Chuck Ponzi

    My wife is asian, and she has a very strong negative sentiment towards houses that end at a T intersection. Even the corner houses and houses surrounding it are off-limits. Ideally, single-loaded cul-de-sacs on the tippy-top of the hill overlooking everyone…

    I never thought about it much, and I figured it was a southeast asian thing. I’m now beginning to suspect that it’s not just my wife and her family. Is this very common?

    Chuck

  17. Jim Jones

    Apparently the bailout proponents think homes like this should continue to command 550k.

    This home is priced at over a half million dollars and the realtor didn’t even bother to clean up the mess. 550k is a lot of money. Of course I suppose it wasn’t a lot when the determinant of monthly cost was the 1.8% teaser rate. So now our fearless leaders think it fair to take my tax dollars and subsidize convertion these people’s option arms into 30 year fixed at no additional cost to them and in the process insure that if my salary ever rises to 140kyr this is the type of home I can look forward to being able to purchase.

  18. CK

    It is interesting that IUSD is something like the 2nd least funded school district in the entire state of California — due to its designation as a rural/agricultural area. Wonder when those guidelines were drafted? The success of the school district falls squarely on the highly motivated and generous parents supplementing the state funding. At the district Kindergarten orientation a couple of weeks ago there were several people who spoke up that the sole reason they moved to Irvine was the school district. Some of our BFE posters like ridicule Irvine with their smart ass comments about “Irvine is different” — but certainly with respect to school system Irvine is different, and for that reason will always command a premium over some of our less fortunate neighboring communities.

    That said — Irvine is not different enough for this POS posted today to get much more than about $250k when we are all said and done. Are you sure that is a hose on the roof? Or did that place get TP’d the night before the pictures?

  19. Chuck Ponzi

    We are 48th in turning out college bound high-school students:

    http://www.topix.com/forum/palo-alto/TBPQ5G59VBD2G3ST5

    Since there are no country-wide standardized tests, it’s difficult to rank schools in California, but suffice it to say, California is not even in the top 3 quartiles.

    there are a lot of reasons for this, prop 13, large immigrant population, and defacto large classroom sizes, but it’s not going to get any better with 10% across the board cuts.

    Simply said, below the university level, California education sucks balls. (can I say that?)

  20. soapboxpolitico

    How sad. Really. I am certainly not one to feel a great deal of sympathy towards the many, many McMansion homedebtors profiled in this blog headed to debtor prison. However, I find myself oddly sympathetic towards this particular short sale; mind you I’m not gonna save them nor should they be saved necessarily but I’d bet dollars to donuts these folks drank the koolaid and got suckered during this run-up.

    They were likely desperate to buy something, anything for fear of getting priced out and passed over and it’s near certain no one was there to advise otherwise. They probably sensed they were getting in over their heads and it was a risk but hey, the media, Greenspan, the President and the media were all saying this was a new paradigm and housing ALWAYS goes up, especially here in Southern California! Better buy now or else your dreams will be dashed. What now? I feel for them, I really do … they might well be cooked now for the rest of their lives. But hey … welcome to the renting class!!! ๐Ÿ˜€

    At less than 1200/sq.ft., and four beds, this place has got to feel claustrophobic as hell. I agree with a previous poster, the fact this place appraised at $529/sq.ft at some point ever fully illustrates how how of control this all was at it’s peak. It’s worth $190-200 per square foot tops. Sad. Very, very sad.

  21. soapboxpolitico

    IR- But doesn’t this condition almost guarantee Joe Taxpayer is gonna wind-up holding the bag or paying for this disaster somehow? (the old privatize profits, socialize risk thing)

    I wish I could be so sanguine and place my faith in the market forces to correct this trainwreck but I have this nagging sense us taxpayers are gonna to take this one in the shorts and I must say it ANGERS me to no end to think that might happen!
    I get really pissed off thinking about how sensible and responsible I’ve been over my life, working, sacrificing and saving toward my purchase while others rushed recklessly and irresponsibly into financial ruin and now somehow these people think I (we) owe them something?! Huh?

    Like we’ve discussed many times, it gets harder and harder to be principled and ethical in an increasingly irresponsible world. My 12 year old gets sick of hearing it from me but I work very hard to instill responsible behavior in her and insure she treats others with respect and dignity, even if they may not deserve it. But boy, does it ever get harder and harder. Am I alone here? I can’t imagine I am.

  22. Adam

    A domicile situated in this fashion is in violation of feng shui. In theory, life is challenging enough without inciting a head wind of bad energy. It is like asking for trouble against you and your family in all aspects of your life.

  23. NanoWest

    Why would a good young school teacher stay in California….the houses they can afford are not in the greatest areas. This summer I met a teacher in Irvine that purchase a $400,000 one bedroom condo with a $45,000 salary. After his mortgage payment, he had no money left for anything but food and gas………….

  24. 7

    What is BFE?

    I heard that there were 140 people on waiting list to get into a kindergarten class in TUSD with about 40 spots. No busing (big hassle), and there is a required volunteering (I love this oxymoron) requirement for the parents like a day every month. Consider that a lot of these parents will do above and beyond the minimium requirement, they certainly are motived parents who want their child to do well. These parents not only want the school to babysit the kid for a few hours everyday, but actually want to have the school educate their kid.

  25. ET

    Sort of like the iceberg that brought down the Titanic, it’s what you don’t see that will get you in the end.

  26. Ed Grimley

    The “hose” on the roof is tubular Christmas lighting, I’m pretty sure. Probably spells out “Buy Me”!

  27. Laura Louzader

    Feng Shui nothing.

    There’s a more tangible danger to living at the end of a T intersection, namely that you stand a fairly elevated chance of having a speeding auto end up in your bedroom.

    You’d have to pay me to live in this place, an amount sufficient to build a 12′ auto-proof barrier around the perimeter of the property, or at least around the front.

    I don’t know if Irvine would allow that.

  28. buster

    Nope, no HOA. Older neighborhood, some nice homes and some not. Lots of original or long-time owners renting them out.

  29. ET

    I live in DC, and the Washington Post just had a front page story this Saturday or Sunday about a Hispanic woman whose little English didn’t protect her from believing they hype and being taken in by borderline if not complete scams dressed up in reputable lender clothing. On top of that she really didn’t understand the market and very definitely overpaid for the house.

  30. camsavem

    What do you mean, “might happen”?

    The fed already raised the limit for convential loans to go through GSE’s to 729K, so the Countrywides of the world could dump their crap loans on them, and now they justed backed 30B (yes with a B) worth of bad mortgate debt from Bear Stearns so JPMC could get fat buying up their “Assets”.

    The bail out is fully underweigh, but it wont trickle down to the average Joe. The only gift these folks will get is the absense of a capital gain tax on the forgivness of debt if they can get the bank to take a short sale on a POS like the house posted in this thread.

  31. buster

    This is just one of many listed in “The Willows.” There is another one (bank owned) further down the street and one a few houses away on a CDS connecting to Roxbury (also bank owned).

    But one sold two months ago towards the end of the street for the low $500s. These places have potential because of the decent lot sizes (ok, maybe not the ones backing to the train tracks and, did anybody mention, the high voltage brain cancer causing power lines).

    There are three types of owners here: Long term owners who rent them out (places look old and worn but not completely junky), long term owners who live there (1 in 4 have had nice remodels) and shorter term home debtors.

    The area is great for starter SFHs. Small houses (1,200 – 1,500sf), good sized lots, no HOA and prices that aren’t in the ozone (high $400s to low $500s). They do have potential if you work the deal low enough, remodel nicely and have a long-term perspective.

  32. T. Luper

    Please don’t say he’s a math teacher, please don’t say he’s a math teacher, please don’t say he’s a math teacher…

  33. soapboxpolitico

    cam — True. Well aware of the B.S. bailout backed by the Fed and the conforming loan limit raised to $729K … and the many other attempts to save the crash. However, these plans have all mostly failed to have the intended effect, unless of course the effect is to save the investment banks and their profitability, which is well under way as you point out.

    I read an article this AM that suggests that the GSE conforming limit has had almost zero effect on mortgage activity and I don’t think the GSE’s have been buying Mozilo’s crap, or have they? Dunno. The Fed has merely guaranteed JPMorgan’s buyout, not necessarily financed it so we’ve not yet been stuck with the entire bag of $hit but I could be a complete polly-anna on that one. IMHO, whatever the Fed or Congress tries to patch together just isn’t gonna work. Let’s hope so, because the pain needs to be felt by the reckless and not absorbed by the responsible citizens who’ve not engaged in run-up.

  34. Mike in Irvine

    How do you respond to the following from OC Register – based on the article, this house should sell at list price…heck maybe more


    article from Steven Thomas –
    โ€œMarket Time Report: Demand Up 121% Since January 1st

    March 20, 2008
    Good Afternoon!

    Since the beginning of the year, the market has dramatically improved: demand is up, the active inventory is not growing uncontrollably and expected market time has dropped substantially. Letโ€™s dive right into the numbers for further explanation. At the beginning of the year, demand, a snapshot of the last 30 days of escrow activity, was at 944 escrows. Today, demand has increased by an additional 1,139 escrows to 2,083. The change in demand is like being stuck in bumper to bumper traffic and then suddenly, without explanation, everybody is moving at the speed limit. Demand is the real story here. Even with the liquidity issues, buyers are starting to pour back into the market, especially in the lower ranges where buyers are not affected by the financial crunch. It is still really challenging and more expensive to obtain a loan above the $417,000 conventional limit; BUT, that is changing right NOW. Lenders are scrambling in preparation for the new conventional and the FHA loan limits of $729,750, which are just beginning to hit the market. The new loan limits will have a profound impact on demand. At 10% down, the old $417,000 limit only covers 37% of the current active inventory. The new limits now encompass a staggering 75% of the inventory. And, for those consumers with some credit blemishes and/or a small down payment, the FHA allows 3% down, all of which can be a gift. It is important to clarify that the FHA is NOT subprime and has been around for years. The only reason it was not in vogue before is because the Federal Housing Administration refused to adjust the limit beyond its $367,000 level for high cost areas. At that level, only 23% of the current inventory could be purchased with an FHA loan. It took a crisis for everybody to see the light. A lot of this mess could have been avoided with higher FHA loan limits all along. Needless to say, there will be reverberations in the local housing market, which translates to increased demand.

    So, how do the numbers look right now? Demand increased by from 1,893 escrows just two weeks ago to 2,083 today. We have not seen demand like this since the beginning of April in 2007. The active inventory increased in two weeks by 205 to 15,617 homes. Expected market time improved from 8.14 months to 7.50 months. It is still a buyerโ€™s market, just not nearly as deep as the 15.60 month market at the beginning of the year. Current demand at 2,083 escrows is just 112 fewer compared to just one year ago. The inventory last year was at 13,373 homes and market time was at 6.09 months. But, the difference is that last year demand was dropping and both the inventory and market time were rapidly climbing due to the subprime meltdown. On the other hand, this year the market has been improving incrementally every day with increased demand and not as many homeowners placing their homes on the market for the first time. It will not be long before year over year comparisons in demand will be better this year. Bank owned foreclosures and short sales, homeowners that owe more on their home than the current value, now account for 33.4% of the active inventory. Lenders remain in the driverโ€™s seat with a 2.11 month market. For buyers looking for a โ€œdealโ€ in purchasing a foreclosure, be prepared to compete with other buyers. Many foreclosures are being sold for their full prices. I just heard from an associate who wrote two offers for one buyer this week and they lost out on both of them because the buyer was unwilling to pay the full asking price. Statistically, short sales have an expected market time of 12.05 months. HOWEVER, I must warn everybody that this figure is grossly understated. The standard practice for Realtorsยฎ out in the field is to keep a home on the market as an active listing even though they have an offer that has been accepted by the seller until they have formal lender approval of the deal. Because the lender must take less than what is owed, short sales are โ€œsubject to lender approval.โ€ So, when a buyer climbs into a car and finds a short sale home that they want to write an offer on, chances are that the home already has an accepted offer that is somewhere in the โ€œlender approvalโ€ process. This process can take anywhere from a couple of weeks to months. These homes are not placed into the Multiple Listing Service as a Pending Sale because the agent and seller are willing to take a look at additional offers that may be more acceptable to a lender, typically a higher offer price.

    Whatโ€™s the difference between the condominium market and the detached home market? The detached home market continues to fare better than the condominium market with a 7.23 month inventory. For condominiums, there is a 7.98 month inventory, the first time below the eight month mark since April of 2007. 31% of the detached home inventory and 38% of the condominium inventory is either a foreclosure or short sale. 67% of all detached homes below $500,000 are either a foreclosure or short sale. For condominiums, 47% below $250,000 are distressed and 43% between $250,000 and $500,000 are distressed.

    Buyers, what to do? According to a CNN Money article titled โ€œHousing: Best Time to Buy in Four Years,โ€ housing has nearly returned to โ€œlong-term normsโ€ and that by the end of 2008 โ€œhousing markets could be broadly undervalued.โ€ Slowly but surely, more and more headlines and articles are touching upon the fact that values have come down so rapidly that they are creating excellent buying opportunities not seen in years. Increasing demand in Orange County can definitely be attributed to value. The good news is conditions are perfect to purchase: motivated sellers, a lot of inventory, rates are low, new loan programs are available and there are great values out there right now. Buyers need to understand the local conditions and the price range that they are looking at prior to writing their first offer. In more and more areas, certain price ranges and individual homes can and will attract multiple offers and above asking price offers. Understanding the market conditions is fundamental to isolating a home. Everybody is so focused on price and value that changes in interest rates are almost completely ignored. Buyers rarely focus on a difference in interest rates. Buyers can ask for a seller to pay a point of their loan and their monthly mortgage payment drops for the life of the loan. Also, rates will inevitably increase to stave off inflation. Just as Bernanke and the Federal Reserve are doing everything in their power to increase liquidity in the financial markets, they will just as swiftly and methodically increase rates. Although we have all grown accustomed to rates staying so low, like gasoline, we will get used to rates increased to 7% or 8% or more when the time comes. In 2000, conventional rates were 8% and in 1990 they were at 10%. 71% of distressed properties are below $500,000 and 92% are below $750,000.

    Sellers, what to do? So far I am pleased that most homeowners have not been fooled into placing their homes on the market with the anticipation that it is the Spring market. Hereโ€™s a dose of perspective, given current demand, there are still 13,534 sellers who will not be successful in selling their homes over the course of the next month. With only 2,083 successes over the past month, that leaves the vast majority waiting another month or months. So, if you do not have to sell your home, DONโ€™T. Placing your home on the market takes a ton of patience, a lot of elbow grease, a very good price, and tip top condition. The more upgrades, the better condition and the better the location, the higher a sellerโ€™s chances of successfully selling. If a home does not have the upgrades or is in need of work or does not show well, it must be reflected in the price. With the market flooded with so many foreclosures and short sales, a homeowner can compete and achieve a better price by having the best home in the best condition with upgrades that show beautifully. Be prepared on day 90 with the lights on, music playing in the background and the faint smell of cinnamon cookies in the air. You never know when the buyer that falls in love with your home is going to walk through the door.โ€ ( end of report.)

  35. Laura Louzader

    Even an art major can figure out that $45k income for a $400K mortgage doesn’t work.

    That anyone who graduated from 8th grade can’t figure out that this is unworkable, speaks volumes for the quality of American education in even “excellent” schools.

    I mean, Jesus, all a person has to do is pay a few bucks for a little blue volume of amortization tables, that tells you exactly what your payment will be for a given amount lent at a given interest rate for a given period.

    Or, you can buy a financial calculator that does this for you. It will help you figure the yield on bonds, as well.

    Take your monthly payment, then add the monthly tax bill, to be derived by dividing the tax bill by 12. Then do the same with the yearly insurance, then add your monthly PMI.

    I mean, is this HARD?

    You might have to be slightly brighter to figure what your monthly utilities will be, or to extrapolate future tax increases, but you can figure this stuff will go nowhere but up, so figure 5% increase annually into your monthly bite. (Chicago property taxes have nearly doubled TWICE in the past ten years).

  36. IrvineRenter

    “the faint smell of cinnamon cookies in the air”

    It is the foul stench of BS that really captures my attention.

  37. Zardeenah

    It’s astonishing how much more the lenders are losing since late last year. When I first started reading your blog, it was a lot more break even or less than 50K loss — now I’m surprised when it’s much less than 100K.

  38. soapboxpolitico

    No kidding. I think we need our good friend “ipop” to help verify the escrow numbers. Seems completely out of line with what we’ve seen reported here.

    What also captures my attention is the seeming contradictory goals of the writer.
    Which is it? The market is rebounding and people are buying again so that means good times are here again? OR … Don’t sell your house now because you won’t get what you want and the inventory is so piled-up it likely won’t sell anyway?

    Who is this character?

  39. IrvineRenter

    From our forums:

    Smile through the crisis

    http://www.ft.com/cms/s/0/2380d622-f4db-11dc-a21b-000077b07658.html

    Subprime Rhapsody

    Is this the real price?
    Is this just fantasy?
    Financial landslide
    No escape from reality
    Open your eyes
    And look at your buys and see.
    Iโ€™m now a poor boy
    High-yielding casualty
    Because I bought it high, watched it blow, Rating high, value low,
    Any way the Fed goes
    Doesnโ€™t really matter to me,

    Mama – just killed my fund
    Quoted CDOโ€™s instead
    Pulled the trigger, now itโ€™s dead
    Mama – I had just begun
    These CDOโ€™s have blown it all away

  40. camsavem

    Raising the conforming limit is not going to increase mortgage activity, but it allows countywide and the likes to get the loans off of their books now that no one else would buy because the paper is crap. Now the GSE’s take them off their hands and free up liquidity to line the pockets of the CEO’s and shif the burden onto the tax payers.

    Banks are being bailed out, that 30B is trash. You have to remember these idiots levereged themselves 30-1 to own these CDO’s so were really only talking about 1B in sub-prime loans, thats only 1K million dollar homes……..

    Bear Stearns probably couldn’t even get .20 on the dollar for that crap, now we all own a part of it.

  41. c-ril

    I really enjoyed the ‘crisis handling’ flow-chart supposely from Societe General.
    The guy who put it together has to be a someone with very good understanding on both cultures.
    For those who’ll look carefully, the credit situation isn’t that bad in the US yet, as there is still no reason JPM buying BS for 2$ would make it a bigger news title than, let’s say Carla Bruni getting into any public event.
    Let’s wait for few more months to see what will have the priority !
    ๐Ÿ˜‰

  42. Adam

    The tangible danger described here is a small example of what can go wrong in the bigger picture of Feng Shui. Bottom line: Asians will not be moving into this house–the crux of Chuck’s question.

    Whatever the reasons people give for not wanting to live here, each could be related to a Feng Shui principle.

  43. ice weasel

    You math majors are missing the point. It isn’t that the teacher was dumb for buying a $400k home, it’s that what was available to the teacher. Yes, yes, said teacher could be renting or living in their car. But the point I read was that teachers, many of them, have a hard time in California making a decent living. Say what you want about throwing money at the educational system how many of you would work for a low wage, especially if you were good at what you do?

    I’m not make a blanket of teachers here. I have a more than a few issues with them. But that said, this is an address we’ve long addressed very poorly as a society.

    And do I even need to bring up prison spending?

  44. Workdrone

    Wow. Talking about a real dump of a house. Near railroad tracks and probably need major repairs to make it habitable. Definitely looks like a fix-upper from that one picture. If that roof is actually wooden shingles, it will probably need to be replaced to something like composite or cement tiles. Anyone wanna guess what’s a realistic market price for a place like this?

    A couple posters suggested $190/200 per sf (1156), which would come out to $219640 – 231200. While I’d love to see SFH going that low, I’m not sure if that is ever likely (and if it happens, it will be a few years down the road). I think current comparable comps in the area (assuming decent structure) is around $550,000 trending down. Since this house’s structure will probably need major remodeling if not outright demolishment, a significant discount needs to be factored in along with the noise factor from the railroad. Personally, I wouldn’t even consider this place due to the amount of hassle involved and the noise issue. However, just for fun, my feeling is the place is probably worth $400,000ish right now as a fix-upper, although that value might go down some more as the market tanks.

    What do you folks think?

  45. Priced_Out_IT_Guy

    Under $200/sq foot? LOL way under.

    I’m looking at beautiful 2000sq ft 5-10 year old properties in oceanside right now at $190/sq ft.

    BTW, that house is smaller than most 2 bedroom apartments.

  46. dilbert dogbert

    ET,
    Calculated Risk’s Tanta had a post on this Post story. Hop over and read her comments. Eye opening.

  47. Priced_Out_IT_Guy

    Seriously, you have to envy whoever made $205,000 for holding this property less than 2 years…

    Date Sale price Appreciation
    Feb 20, 2003 $350,000 11.6%/yr
    Jan 19, 2005 $555,000 27.2%/yr

  48. Priced_Out_IT_Guy

    And just think, the 2005 flipper didn’t even need to install pergraniteel or slap a coat of paint on the place.

    They probably just got a sweet 0-down 0-interest loan, waited 13 months, and pocketed their winnings. Quite a deal if you ask me. Not all flippers during the bubble were idiots.

  49. ipoplaya

    Actually, I agree with a good bit of the factual info that Mr. Tomas is providing. We are indeed having a bit of a bounce in the housing market. For sure in Irvine, and it appears on a county-wide basis as well. Sales activity and volume has been trending up from last year’s lows quite aggressively… Prices have continued to trend down though.

    So we have increasing volume with decreasing prices. The market will either need more inventory, via REOs or discretionary sellers, or less demand or prices will likely slow or stabilize after a quarter or two of this level of activity. With the pace of NODs and NTSs recently, I’d think the bank-owned inventory hitting the market later this year should quell this bounce… In part, that will depend on where conforming jumbo rates end up though.

  50. Priced_Out_IT_Guy

    “[b]The area is great for [i]starter[/i] SFHs[/b]. Small houses (1,200 – 1,500sf), good sized lots, no HOA and prices that arenโ€™t in the ozone (high $400s to low $500s). [b]They do have potential if you[/b] work the deal low enough, remodel nicely and [b]have a long-term perspective.[/b]”

    Uh, not exactly. People who buy [b]starter[/b] homes [b]do not have[/b] a long term perspective.

  51. IrvineRenter

    Unless of course they put all the money into an even more expensive home which has dropped in value and wiped out all that they made.

  52. TurtleRidgeRenter

    Oooooh! More pictures! I wanna see the inside of this house! I can almost smell it all the way to Turtle Ridge.

  53. TurtleRidgeRenter

    This guy says it’s a good time to sell, lots of escrows, lots of buyers in the market bidding up to full asking price. Then he concludes by saying it’s a bad time to sell, be prepared to bake cookies on day 90.

    Not sure what the author’s point is, but it’s an amusing article.

  54. IrvineRealtor

    I propose this four-letter solution:

    M—O—A—T.

    That could be sold as a water feature, as well, bringing the principle of prosperity AND protection from midnight party crashers.

    It’s probably just a $2500 outlay and we can bump the asking price to $600K.

    Problem solved.

  55. ReginaGeorge

    My dad would never buy a house sitting at the T intersection.. and yep.. u want to be higher up than others if not the same level, looking down on people…

    don’t think its a southeast asian thing.. i think its an asian thing…

  56. Laura Louzader

    I like the idea of a moat.

    It would be fun to watch drunken teens careen into it at 40MPH, and climb out of the vehicle soaking wet,trying to figure out how they landed in a swimming pool. The water would cushion the impact of the accident and reduce the motorist’s injuries, and the resident would be spared a car on his bed.

  57. buster

    Bounce up from what? Deceased?

    It’s like taking a troll to the prom. Hey, it’s a step up from your cousin that you took last time……

  58. skek

    How about a car barrier like they erect around our embassies and federal buildings? With a couple armed Marines standing guard?

    IR, once again you’ve posted an incomplete poll — there should have been an option for “There’s no amount of money that would convince me to touch this place.”

  59. shiny

    That is some serious negative energy to go with the festering termite damage/slum condition. Just sign on the dotted line for over a half million and it is all yours: proof positive that this market has so far to fall yet.

  60. IrvineRenter

    The place is falling apart, and they want over $400K for it. Amazing.

    I had to stare at the first picture for a bit to figure out what it was.

  61. Workdrone

    Wow. A cracked foundation probably means you need to build a brand new house. The value of the property in this case should be the value of the empty lot minus the costs of demolition. Somehow I can’t bring myself to believe that 400k is the fair market value in this market environment. Looks like another WTF sales ad. Anyone who knows more about the costs of demolition would hazard a guess as to how much it would cost to demolish that house? ๐Ÿ˜‰

  62. cosmo kramer

    Getting back to the Roxbury for a sec, onestly I wouldn’t worry too much about the noise from the trains. The sound will be drowned out completely by the F16s from the El Toro marine airfield just a few miles away ๐Ÿ™‚

  63. Kirk

    You say falling apart, I say well ventilated. You say over $400k, I say under $500k!!! I’m applying for a real estate license.

  64. GreenspanIsATraitor

    Is the insurance for a house at the T intersection more expensive relateive to the same type of house down the street ?

  65. Eeek

    El Toro is no longer a military base. It may someday be re-worked into a commercial airport but that is speculation at this stage and there are at least a few large and vocal groups lobbying against it. Other options being considered are parkland and probably (less so now) a 1.3 zillion home/condo development.

    http://www.eltoroairport.org/issues.html

  66. Eeek

    Hmmmm. after perusing the site I cited I am led to believe that I am way behind in keeping up with the El Toro news and a great deal of the old base will, in fact, become a parkland.

  67. Chris_Silicon_Valley

    Got news for you buddy. No mas F16s on that dead airfield. It’s going to turn into the Great Park or whatever f* they’re gonna call it.

  68. Chris_Silicon_Valley

    For those that don’t know much about Irvine housing prices, the price really didn’t shoot *way* up until after Irvine defeated the ballot proposal of converting El Toro to another airport in order to replace SNA back in 2003. Newport B**ch was adament about closing down SNA so that they can deal with serene quietness (hmm….adjective and noun with similar meaning) surrounding their multimillion dollar shacks. And to think that these people with eyes above their heads already got the only damn airport in probably the entire world (name me another one if you dare to challenge my claim) that the jets would actually HAVE TO TURN THE DAMN ENGINE OFF after takeoff for a minute or so in the air just so that the jet noise wouldn’t bother these higher up Crepe eating creeps (hmmm……Crepe eating creeps….that’s a new one).

    If that ballot had passed, trust me, Irvine housing price would not be at the current ridiculous level.

  69. zoiks

    Same old lying statistics. They keep using the sales numbers that don’t account for how many actually complete escrow. (Someone around here likes to pull the same trick…)

    Inventory time values should use completed, consummated sales, not completed plus failed sales. Otherwise it’s meaningless.

  70. zoiks

    Oh dear I’m gonna miss this housing bubble when it’s gone. It’s too much joy watching people getting slammered buying these shiteboxes for insane amounts of money. You’d think a household (or single person) with $140k salary and $100k cash laying around would deserve something better than this pile o junk for the years of debt slavery that will follow assuming the monster debt can even be shouldered for more than a year or two.

    The thing I like to tell my colleagues (those who’ll listen) is to witness how the herd psychology changes. None of us is really immune to it, but some can recognize it. It’s hard not to react when the realtors tell us of being “priced out forever” unless we “buy now”. Well, at least it was hard not to react a couple of year ago. Now it’s kind of a joke, but I digress.

    The point is if you could transport yourself 10 years back and examine how you were thinking, were you obsessed with housing prices? Did you have fears of being “priced out forever”? Was there an itch to make a quick killing by speculating on the price of houses? Did all your friends tell you “oh you just gotta buy, you gotta do it this second”?

    Chances are, the answer is no. The mass herd psychology was completely different 10 years ago. In fact, there was quite the storm brewing, of a different nature, and that was the stock market/dot com/telecom bubble. Were there *any* regular shows 10 years ago on cable dedicated to pricing your house, flipping, property ladders, first time buyer stories, etc? No. Were there lots of shows, commercials, media talk, etc., about all the money to be made in the stock market, in particular on tech stocks? Yes.

    What’s different now? Just the mass psychology, nothing else. In another 5-10 years, there will probably be some other “next big thing”, and no doubt many of us will get caught up in it. But here’s a smart thing to do: learn how to recognize these herd bubbles while they’re happening, even if you find yourself caught up in it. It will make you much better off. Be smart about stuff and you’ll much less frequently be burning your toes off.

  71. Vik

    Chris_Silicon_Valley,

    Being a pilot let me correct you .. engines aren’t turned off and are just powered down for “noise abatement” and almost every airport has “noise abatement” procedures big and small from London’s Heathrow to even a little airport like Corona or Chino.

    Anyway, I’m glad there isn’t going to be an airport at El Toro. Can you imagine the traffic problems from an airport that size?

  72. Lost Cause

    Poorly located, one door from busy street, but new Mc Mansions are in the tract. May be in flight path to Long Beach Airport. Backs to drainage ditch & trailer park. HB has expansive soil areas.

  73. Lost Cause

    I am writing the newspaper article right now about the future opening of the new airport in Irvine. Once the flight paths are carpeted with housing, there will be a sudden finacial crisis, and a need to raise tax revenue that only an airport can provide. I am trying decide if the date should say 2009 or 2011.

  74. Surfing in Newport

    The John Wayne expansion was rammed down the throats of Newport Beach, Santa Ana and Tustin (don’t forget that planes have to land) by the influx of south county NIMB’s. They created the demand, yet they refused to shoulder the responsibility. You talk about traffic when you get to the airport. Get a flight that lands at John Wayne in the 7-9pm time frame. You can spend 15 minutes on the taxi way as they shuffle planes around because there’s not enough space.

  75. Chris

    Thank you for correcting me on the fact that engines are powered down instead of turned off. My bad.

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