Open Thread 8-9-2008

Greed Is Good — Gordon Gecko

Sometimes you see a property where the asking price simply cannot be explained as anything other than greed. This weekend’s featured property falls in this category. It has been on the market for 580 days! Do you think they might have been able to lower the price and move it by now? These owners have been very conservative with their mortgage, they have paid it down, and there are no HELOCs. Their asking price gyrations have nothing to do with mortgage conditions or anything other than their desire to double their money in 5-6 years. Their inability to grasp the reality of the market has left them changing their asking price frequently and woefully missing the market. I hope they and their realtor are having a good time because they certainly haven’t done much to sell their house.

Listing Price History

Date Price
Feb 03, 2007 $939,900
Feb 12, 2007 $924,900
Mar 06, 2007 $919,900
May 02, 2007 $914,900
May 04, 2007 $912,000
Jul 21, 2007 $899,900
Jul 25, 2007 $912,000
Aug 18, 2007 $899,000
Jan 27, 2008 $849,900
Mar 03, 2008 $824,900
Mar 08, 2008 $799,900
Apr 30, 2008 $849,900
Jun 30, 2008 $824,900

Source: SoCalMLS

Their listing price activity reminds me of the Curly Shuffle — two steps forward and one step back.

11 Polllena Kitchen

Beds: 4
Baths: 3
Sq. Ft.: 2,478
$/Sq. Ft.: $333
Lot Size: 1

Sq. Ft.

Property Type: Single Family Residence
Style: Traditional
Year Built: 2002
Stories: 2 Levels
Area: West Irvine
County: Orange
MLS#: P554341
Source: SoCalMLS
Status: Active
On Redfin: 580 days

Unsold in 90+ days

Beautiful Fieldstone Barrington home located on a cul-de-sac. Nice size
yard w/patio cover/dramatic slate hardscape in back & front
yard/ceiling fans/built-in cabinets in garage/french doors/beautiful
tile floors/full splash in kitchen. Do not miss seeing this home!

36 thoughts on “Open Thread 8-9-2008

  1. Gindy

    What is with that last photograph in their slide show: the badly rigged florescent light in a bedroom? I am at a loss as to how that got into the listing.

    1. Soapboxpolitico

      Yep. I think the idea was to highlight the “built-in” storage units in the garage. As anyone who lives here knows … storage is ALWAYS a concern. (No basements)

  2. Freder Frederson

    I’m curious–Do they include the square footage of attached garages in square footage measurements in CA? Because this house sure doesn’t look like it is over 2400 sq ft unless they are counting the garage as part of the square footage.

  3. Aceman

    hi irvinerenter, thankyou for keeping this blog running without it I would have been tempted to buy into this real estate BS hype here in OC last year. I am currently renting with my fiance in turtleridge, managed to get a pretty good deal after getting the owner to lease his property at our terms and what we wanted to pay for the rent!! isnt it amazing when you can command your own rent terms and conditions πŸ™‚
    anyway everyone keeps telling me now is a good time to buy and blah blah..from your wise words I know that the time is not right and another year or so is when I will finally make my move. my question to you is, will Mello Roos fees ever go away? Will prices drop siginificantly in gated commnunities?

    1. Soapboxpolitico

      Aceman – yes, Mello Roos does eventually expire. It would all be documented in your final papers or you can simply ask the seller for the details on the MR fees. In some cases, there are more than one MR assessment and they can have different time lines.

      I can use Portola Springs as an example … If memory serves, there were three total MR assessments. Varying percentages and timelines, one expired in 10 years, another in 20 and yet a third that expired some 30 years down the road. The first one was for the parks and greenspaces to be built, the second was I think for the schools and the third was for sewage, power and other infrastructure. That is strictly from memory but what is important to note is that not all Mello Roos assessments are alike and there may not be two or three, only one. In addition to that, you may be buying into a neighborhood well down the timeline and it may only be a few more years before the MR expires. At one time there was Mello Roos in Woodbridge which has since expired.

      Hope that helps.

      1. Idea Man

        If I was buying today, I would ask that all future mellow roos be prepaid by the seller upfront! For instance, if the mellow roos come out to be $300/mo then your pre-paid mellow roos discount should be $300*12*30yrs = $108,000! BAM!

  4. Larrygg

    The various price adjustments are very strange. Dropping prices $2K and then $25K and then going back up. Obviously the realtor isn’t at the top of their game. This house will be lucky to fetch $600K in the next few years. The sellers are in no hurry to sell.

  5. beentheredonethat

    Maybe they like people walking through their house every weekend? (head scratch)

    I have seen several properties that have increased their asking price lately. Real estate in Irvine has been moving lately. It’s actually getting a little concerning.

    1. Larrygg

      I wouldn’t worry at this point. Look around at the volume of properties for sale. Then look at the prices and figure out how many people can really swing that kind of financial commitment. I live in HB and right accross the street there are at least 8 properties (patio homes) selling for $1.2 to $1.4 mil and none of them are selling. We also see several that are not listed for sale but are empty. Another game realtors are playing is this “sold” and “sale pending” game where they hang a sign on the for sale sign that looks like the property has sold only to see the sold sign removed a week later. It’s a mind game these people are playing and they still don’t get it. Joe Schmoe isn’t going to be able to go get a $500K or $700K mortgage to buy these overpriced properties. A year from now properties will be at least 10 to 15% less than today. There are a few people that can afford to buy no matter what the prices are at but the average working class people just can’t.

      1. Larrygg

        If you knew these people had the price set at $799K and had raised it to $850K and you made an offer would you even consider starting anywhere near the $850K price? No one would. They’d work their way down from the $799K price.Only fools would start at the sellers wishing price. Then again we all know these place is peppered with fools.

  6. jon

    It could be a case where they’re friends of a realtor just hoping to have lots of drop-by visits to drum up business. Or they hand out a lot of business cards and offers to Tupperwear or sextoy parties and direct-sale programs with NO MIDDLEMAN FEES and AMAZING DISCOUNTS!!!

    Or they’re just freaks.

  7. evening rose

    I’ve seen this house when it was priced at $799,000. It was a pretty nice house, but I thought it was still over priced. Shortly afterwards it got into escrow.
    After a couple of weeks, when it fell out of escrow, I thought perhaps now they will be more willing to lower the price, but to my surprise, they increased the price back to $849,000!
    My agent has called their agent and he (or she) let her know that they thought getting into escrow for $799,000 was a mistake and decided to go back to $849,000.
    This is indeed pure greediness. After being on the market for so long, you would think they would be anxious to sell the house, but I guess not πŸ˜›

    1. Larrygg

      Was it really in escrow or just a smoke screen? How can you really know. And if it really did fall out of escrow it just proves my earlier comments are valid. People can’t swing the financing. These lenders know this property could easily be worth $600K a year from now so they wont be quick to give some fool unlimited money on a whim. Those days are over.

      1. ipoplaya

        Yes it was really in escrow… The woman that owns the place is very unrealistic as I understand it. She’s been advised by many that her pricing was way out of line but she apparently hasn’t gotten the picture.

  8. Lee in Irvine

    Just a quick observation, before I take the kids to the beach.

    My prediction is, these people will likely continue to chase the price down further, as they wait for a “bottom” in values. The “bottom” is not even on the freakin’ horizon yet, and when the “bottom” does finally arrive, it’ll likely stick around for several years. Too bad these greedy people are still stuck in 2005.

    1. Larrygg

      Can you belive these idiots got a fish for $799K and then after the fish got away they figured they could get an even bigger fish and raised the the price. I agree, a year from now they will wish they had gotten the $799K. Shoot, they’ll wish they got $699K.

  9. Soapboxpolitico

    This property merely reinforces the notion that denial can be a very powerful emotion. Clearly we have delusional sellers whose foolish behavior is being enabled by their realtard. Obviously no one has done their homework nor is anyone in this circle of denial interested in reality … merely fantasies of untold riches and Trumpian mogul-hood.

    They’re lucky they can ride this thing down and probably still come out OK. They’ll likely be bitter about it when the house finally sells for $600K or so but maybe by then they’ll wise-up to the alternative which is foreclosure and/or bankruptcy.

    Oh, and my only explanation for their thinking, greed aside, would be a full dose of the “my house is unique and special and dammit people desire it” cocktail.

    1. Larrygg

      A friend of a freind up in the bay has had his house on the market for the past few years. They were asking a million plus and rejected an offer for $950K. That was over a year ago. Now they’ll be lucky to get $700K or $800K. Greed Greed Greed….

  10. Soapboxpolitico

    Some thoughts on greed.
    I often wonder why it is people continue to fall for any type of “get rich quick” scenarios. Warren Buffett is arguably one of the most successful investors in the history of the markets but even he will admit to a certain amount of luck. The simple fact is he does his homework and sets realistic and attainable goals. Not only does this strategy appear to work financially but it’s a formula for success in life. Very rarely does anyone get rich in a very short period of time, those people are notable by their exception.

    The successful investor identifies undervalued assets and sets reasonable expectations of gain. When those benchmarks are reached, they re-evaluate. Sell or get out, depends on conditions in the here and now … not some fantasy expectation of wealth. My Grandad had a folksy way of putting it, “you can’t get something for nothing unless someone, somewhere is getting nothing for something.”

    Profit is not a dirty word. Greed is. There is nothing wrong with profiting either from good luck or intelligent investment but flying in the face of reality in the hopes of hitting the home run is ridiculous.

  11. MalibuRenter

    This house sounds similar to the one we ended up leasing. It was for sale at $839k in 2007, and they had an offer for $799k. Something went wrong in escrow. Then they had an offer around $750 which they didn’t accept.

    Their sale price slowly dropped until the listing expired. Then we leased it.

    This house is one where it looks like Zillow is pretty accurate. $810 at the peak, $585 now and dropping fast. By trying to get a few extra dollars, the owners not only paid to keep a vacant house for 8 months after they moved, they also will lose $200k or more by not taking the offer for $750 that they said was “too low”.

    Soon this house will be worth less than they paid for it in 2004. They put 20% down, and it might bottom right at their loan value.

  12. sell house for cash

    This definitely sounds like false economy. It is crucial to price a house competitively in this property market, especially when the prices in a lot of the regions are still predicted to fall another 10%.

  13. ice weasel

    I’m sorry, why is this house worth almost a million dollars?

    And you can’t say “because it’s in Irvine”.

    I don’t know how I many times I can say this but I seriously question the judgment and intelligence of homeowners and realtors trying to sell an (almost) million dollar home with pictures that wouldn’t close a ten dollar ebay sale. Is it a complete lack of respect for the potential buyers, outright stupidity or just gross laziness? It’s got to be one of the three, what do you think?

    1. Forbear

      “Is it a complete lack of respect for the potential buyers, outright stupidity or just gross laziness? It’s got to be one of the three, what do you think?”

      All of the above.

    2. orangeman

      how did this house get to be worth 1mil?
      easy – at the peak you could not buy a home in Orange county for under $500. That is 800 sq ft. over 40 yeas old were selling for 500k minimum in Santa Ana at the peak. This house is much newer, larger and in a better area.
      Until the last few months you could not buy a 3000 sq ft home in Orange county for under a mil.

  14. h

    Some better photos would not hurt. Those that are displayed are very poor. For example, in the picture of the kitchen/family room, nearly half of the picture is a white ceiling. You would think they would try a little harder.

  15. lawyerliz

    I note that you update the house with the unfortunate young lawyer who did on the post below. Thanks IR. I was wondering if the house would ever sell.

  16. LC

    That house is about $650k in Huntington Beach. I realize that people like Irvine for various reason, just as people like HB for other reasons, but historically the two towns have been close in prices. There are places at this price a few blocks from the beach at this price.

    These people are chasing the market down, and they will continue to be two steps behind. It is the worst place to be: sort of like being behind a bus as you travel down a long, winding road.

  17. palomalove

    Hahha…I remember this house.

    These people already have their eyes and mind on a new house but dont want to buy the new house until they sell this. They were totally not willing to come down. We enquired about this house when the asking was 799000..and the lady said that she would not budge for anything less than 750000. And then I dont know what happened. Oh well..I got my place and will move on..chao!

  18. waiting in bay area

    I sold my place in Concord (east SF suburb) and waiting to buy in a better town with good schools. Prices are still overpriced in cities such as Walnut Creek and Danville. Lots of inventory and prices should be going down as the houses sit longer unsold. Sellers still asking crazy prices and even RAISING their prices after not being able to sell after several months. We buyers need to stick to our guns and wait out these stupid sellers, or give them low, low lowball offers!!! Actually, these are not lowball offers, rather REALISTIC offers!

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