When a property is improved beyond what is needed and little value is added, it is called superadaquacy.
Address: 1 Whitney Irvine, CA 92620
Asking Price: $1,190,000
Nothing you can make that can’t be made.
No one you can save that can’t be saved.
Nothing you can do but you can learn how to be you in time.
All you need is love.
All you need is love.
All you need is love, love.
Love is all you need.
All You Need Is Love — The Beatles
All you need is love… and a 42″ flatscreen, a new Cadillac Escalade, Pergo wood floors, granite countertops, stainless steel appliances, weekends in Vegas, vacations in the Seychelles…
Do you remember the
Castle at Kron and Ecclestone Circle? Or perhaps the monstrosity at Angell and Michelson? Or the Joke on Karen Ann Lane? The trend in over-improvement during the bubble is most noticeable in the omnipresence of pergraniteel.
During the bubble, the more you spent, the more you made. People
actually believed that adding common improvements — something anyone
could do to their own taste — would add more value than the
improvement cost. Flippers made money because they were there; breathing was the only prerequisite to success. Skill
and financial acumen had nothing to do with it, as evidenced by the losses they took when they were left holding the bag.
Home improvement and flipping shows became so common, they developed
their own channel. Like moths to a flame, fools flocked to flip houses.
The infamous flops are profiled here.
Today’s featured property is another one where you have to ask yourself, why?
Why did someone take an ordinary house — overpay for it — then proceed to demolish it in favor of something that is vastly over-improved for the area. This makes no sense. If this made sense, we could drive our entire economy on building and rebuilding homes… wait, we tried that once, didn’t we?
Address: 1 Whitney Irvine, CA 92620
Asking Price: $1,190,000
Income Requirement: $219,023
Downpayment Needed: $238,000
Purchase Price: $1,317,658
Purchase Date: 6/3/2009
Net Gain (Loss): -$199,058
Percent Change: -9.7%
Annual Appreciation: -29.2%
Monthly Payment $6,165
Monthly Cash Outlays $7,653
Monthly Cost of Ownership $5,158
Redfin Property Details for 1 Whitney Irvine, CA 92620
Baths 4 full 1 part baths
Size 3,990 sq ft
($298 / sq ft)
Lot Size 7,020 sq ft
Year Built 1979
Days on Market 7
Listing Updated 9/25/2009
MLS Number P704661
Property Type Single Family, Residential
According to the listing agent, this listing is a bank owned (foreclosed) property.
RE-BUILT IN 2007. JUST UPGRADED. FRESH PAINT, NEW CARPET, NEW APPLIANCES. CUSTOM LIGHTING. MOVE-IN READY ! ! !
This owner buys the property for $640,000 on 4/7/2005. By the time he finished construction, he hit the peak of the housing market. Unfortunately, he did not find a mark(et) for his monster.
Washington Mutual loaned this guy $1,200,000 on 1/12/2007. I imagine there is a fair amount of mortgage equity withdrawal in that number. Then on 8/24/2007 he got a HELOC for $250,000. WTF was WAMU thinking? The builder made his profit.
The rest is history…
Recording Date: 10/10/2008
Document Type: Notice of Sale (aka Notice of Trustee’s Sale)
Document #: 2008000471693
Recording Date: 06/13/2008
Document Type: Notice of Default
Document #: 2008000285894
Interesting fact of the day: if you do a Google image search for pergraniteel. You get page after page of IHB images.
And so concludes another week at the Irvine Housing Blog, chronicling the Irvine home market since September of 2006.
Have a great weekend.
gotta love the pseuod-chateau in that picture near the top. Shame the plot size doesn’t appear big enough to allow for a moat.
The chateau – known by locals as the castle on Kron – has actually been an ongoing issue since long before the housing boom. The family moved in there in the late 70’s and I believe started the renovations sometime in the mid 80’s. It’s been a nightmare for the neighbors and code enforcement ever since. They were doing the renovations largely on their own, when money was available (at least the funding part is commendable). For a while, they had no plumbing or electricity. I think the Register made note in an article that the city came out to do an inspection and found buckets of human waste in the yard.
“All I need is love… and a 42″ flatscreen, a new Cadillac Escalade, Pergo wood floors, granite countertops, stainless steel appliances, weekends in Vegas, vacations in the Seychelles…”
In the “All I Need” vein, that is how I picture this owner on the way up, but now that he is down and out hopefully this property owner is now walking around Irvine in a dirty bathrobe a la Steve Martin in The Jerk muttering “And that’s all I need. The ashtray, the remote control, the paddle game, this magazine and the chair.”
And that’s all I need!
Dude, what’s with encasing the cooktop inside a chimney such that the workspace doesn’t flow and you get to scrap and bump the heck out of your arms trying to get stuff? Not to mention smack your head if you’re tall enough. (which I guess happens on all vents). This kitchen is not for cooking in. It’s for looking at only.
The kitchen is where the servants do the cooking. What does the master of the house care if it’s user-friendly?
I was reading about a home with a similar problem yesterday.
““With more than 44,000 vacant properties, and nearly 7,000 homes in foreclosure, the Detroit real estate market is not for wimps. Just ask Shanika Strickland. She says she’s put about $100,000 into her home. But now, four years after she bought it, she owes so much more than the house is worth, she’s considering the unimaginable. What does she think she can get from its sale? ”Right now, with the market, $3,000,” she said.” http://www.le-buzz-immobilier.com/2009/09/housing-crisis-upside-1-homes-0024330
Guess what? Even in Detroit, the lender will lose less on that house than this one in Irvine.
In good news, Detroit’s murder rate is down. I’m just waiting for the bumper stickers that say “Nothing left to lose, no one left to kill”
On a positive note, Detroit’s homicide rate dropped 14 percent last year. That prompted mayoral candidate Stanley Christmas to tell the Detroit News recently, “I don’t mean to be sarcastic, but there just isn’t anyone left to kill” . . .
John Mogk, a professor at Wayne State University Law School: “A thousand people are leaving the city every month and the city does not have the financial resources and the economic base to solve its own problems.”
This could become the fate of Coachella, Merced, Riverside, Stockton, or El Centro.
“…the city does not have the financial resources and the economic base to solve its own problems.”
AVRenter for Mayor! My platform is one bulldozer, one dump truck, and “get to work, boys”!
Even during the boom Detroit was a shite-hole. I was out there in ’05 and downtown looked like a 70’s post apocalypse movie. I’ve never seen a more deserted urban environment. All the skyscrapers were boarded up, no traffic, no people, no noise. Just the occasional vagrant scurrying about. The only life I could find was at the Coney Island hot dog joint.
The whole midwest is going to heck in a handbasket
Come down to Cleveland Today!
Come down to Cleveland again! (Still Cleveland!)
Haven’t you noticed that the TV shows still exist? The most irritating of all of them is one called “Bang For Your Buck”. I officially hate that phrase now. Every time I hear it, I am infuriated.
We watch idiot play-house-owners brag about these stupid little mundane over-improvements that they have done to their houses (almost always the kitchen) and then kick back and watch a couple of “real estate experts” walk through and cast their judgement upon which of their “upgrades” will net them the biggest return “on their investment”.
This show is amazing – you get to completely forget that you are living the middle of a recesson for one hour and time travel back to 2004 where money grows on trees and adding granite counter tops to a kitchen magically adds 4x their cost in “value”.
This television channel is still putting out the propaganda and trying to manipulate the public into house debtorship. Nothing has changd in the last couple years as far as they know; the giant elephant on the living room couch is conveniently ignored in every episode by everyone involved.
This is our new way of doing things: luxury. Everything has to be luxurious. All the money is made in luxury items. Why sell a regular widget for $10.00 to 10 people when you can sell a luxury widget to 1 sucker for 300.00? All the incentive is in making everything luxurious.
Tear down a neighborhood of practical homes and rebuild with McMansions for the non-debt averse.
Anyone remember when they used to sell cottages on lakes or beach? Neither do I. Head on over to your nearest spot and you will see all that old practical stuff now replaced with million dollar monsters.
We are a sick and self-centered society. It’s time for the high end that has been living off of subprime debtors to get theirs. We can all enjoy watching these wannabees get plucked from their luxurious abodes over the next couple of years as their ARMs blow up in their faces.
That show isn’t that bad.
First, they almost always came in with a return-on-investment percentage significantly less than 100%. That is, if somebody spent $75k on a kitchen, they would usually say it added $50k to the value of the house, something like that. If you really watched those shows, you would realize that such a remodel was a losing proposition in terms of flipping the house (as opposed to enjoying the upgraded whatever yourself).
Second, the homeowners would almost universally say something like, “Well, we like it. We did it for ourselves, not to make money off it.”
Don’t even bother, Geo. David is prone to exaggeration. He cares less about the truth, and more about being able to come up with inflammatory statements laced with hyperbole.
You could probably make a much more exciting show titled ‘bang for your buck’ if you put it on showtime after 10pm…
That is funny. LOL.
I hope the ‘I put $4k into my counters, my home value should go up by >= $4k’ myth has died with the bubble. There may be benefits to having the work already done, but I doubt they outweigh having the option to choose what you really want.
What can make those ‘upgrades’ valuable is how they are financed. Take two $200k homes. One gets $25k in upgrades, next owner buys for $225k, paying for the upgrades over 30 years (theoretically). Other buys for $200k and wants to put those upgrades in themself, have to pay out of pocket, or go back for a heloc after the work is done. Getting the payoff from the bank at the time of the next sale is where the magic was happening.
The photo you selected gives no sense of the scale of this house. You need to look at it on Google maps to get a profile of the side of the home. It is immense compared to the neighbouring homes:
Interesting. This must have been a total tear down or close to it. Even though the other houses on the street are also two stories, this house is significantly taller (higher ceilings).
You are so correct. Actually, you have to see this house in person to appreciate how ridiculous it looks in this neighborhood. I live in this tract, which dates to 1977. It’s perfectly nice and ordinary. No HOA, which is unfortunate in this case. These were some inconsiderate people to do this to their neighbors just because they could.
Pergo floors? Please, those are so yesterday. It’s bamboo floors now baby. Or wide planked, distressed, dark wood (real wood). Ha, ha.
From the first picture I thought this is a Turtle Ridge, Portola Springs, Woodbury house. Not this older neighborhood.
It’s very out of place in an older community.
An Umbrian penitentiary.
This idea that somehow more value is added by wearing down a house, rather than improving it, just defies logic. It’s like giving a Nobel Peace Prize to the person reading the teleprompter rather than the teleprompter itself. How does this make sense?
But, I guess this is the world we live in. Up is down and down is value. I put $25,000 worth of wood-like flooring in the RV and people thought I was crazy. Well, we’ll never know if that investment would have paid off since the damn thing is still sunk somewhere in the Gulf. But, I know in my soul it would have paid off back in sane times when improving the world mattered.
Another Big Mortgage Bust?
“Nothing is truer than the truth”
Vastly over-improved for the area?
c.a. 1970 $1 million plus house in Compton. Gold Faucets, no expense spared. Talk about overimprovements.
Irvine over-improves are nothing new and will continue as long as one compares himself to his neighbors and thinks possessions make the man.
“Mr. Fullenkamp used F.H.A. insurance to buy a house this spring for $179,000. The eager seller paid the closing costs and also gave Mr. Fullenkamp $2,500 in cash. He immediately applied for the $8,000 tax rebate. Even taking his down payment into account, he came out ahead.”
“I knew in my heart I could not really afford the house, but they gave it to me anyway,” said Mr. Fullenkamp, 22. “I thought, ‘Wow, I’m surprised I pulled that off.’ ”
OT: wow….what a surprise (snicker).
Come on Dems, raise more taxes. I can’t wait to see $300k asking on a 2000 sf, 4bd/2bth SFH in 92606.