IHB News 10-31-2009

Happy Halloween from the IHB.

12 Stonewood Irvine, CA 92604 kitchen

Irvine Home Address … 12 Stonewood Irvine, CA 92604
Resale Home Price …… $525,000


It’s so dreamy, oh fantasy free me
So you can’t see me, no not at all
In another dimension, with voyeuristic intention
Well-secluded, I see all
With a bit of a mind flip
You’re there in the time slip
And nothing can ever be the same
You’re spaced out on sensation, like you’re under sedation
Let’s do the Time Warp again!

The Time WarpRocky Horror Picture Show

For those of you looking for something interesting to do for Halloween, I suggest you attend the Rocky Horror Picture Show. There is a midnight showing on Halloween.

I went to see this movie in the mid 1980s. I remember taking a bag of supplies including newspapers, squirt guns, toasted bread, really unusual items that would be needed at different times during the show. It was true audience participation, and you don’t see that often anymore, particularly at the movies.

People who have seen the movie dozens or hundreds of times shout questions that are answered — out of context — by the character on the screen. Some of the comedic quips are really funny.

It is one of those experiences you do once (maybe twice) because it is fun and unique, but the movie is really bad, and depending on the theater where you see it, you may get wet, peppered with ice and toast, and be overwhelmed by the mob. Some theaters really make it a loosely controlled scrum. It reminds me of the OC Mud Run. I would have hated to have cleaned up the mess in the theater where I watched this movie….

Yes, that is Susan Sarandon, and no, that is neither Freddie Mercury nor Bill Gates.

IHB News

Block Party 11-9-2009

I added functionality to the calculator. I added a section for loan qualification based on current market DTIs. If some lender would post or email me an more accurate and current standards are, I can update the calculator. I have also added a new spreadsheet below the original calculator that calculates the Time To Payoff.

The IHB did a report on a property in Redlands. IHB Fundamental Value Report Redlands Property.pdf Whenever we do these reports locally, properties almost always are selling for more than the IHB Fundamental Value. This property in Redlands is typical of what you find in Riverside County: poperties trading for 30% less than they should be — or to be more accurate, they are trading at their bottoming price even at natural interest rates. In markets like Las Vegas and Riverside County, prices have overshot fundamentals. The ruinous supply will take its toll in these markets, but with affordability being so good, people will step up to buy these properties.

Housing Bubble News

Government Price Supports Create Mini-Bubble

Monthly ReviewDean Baker‎Oct 29, 2009‎

If there are no changes in behavior among these actors now, when the wreckage of the housing bubble is everywhere, then it is a safe bet that the market is

Democrats and Republicans Agree To Keep Juicing The Housing Market

The Business Insider‎Oct 29, 2009‎

Nevada has been hard-hit by the bursting of the housing bubble. The chamber’s top Republican, Senator Mitch mcconnell, also said most senators support the

Admin. backs housing tax credit

msnbc.comMark Murray‎Oct 29, 2009‎

It creates another housing bubble by providing a crutch to the market, which in turn again over-inflates the values of houses, which will lead to another

US home prices appear to have bottomed out

Los Angeles TimesAlejandro Lazo‎Oct 27, 2009‎

Christopher Thornberg, a Los Angeles economist who was an early predictor of the housing bubble, disagreed. “I can’t emphasize enough how this rally in the

Housing Prices Are Rebounding Seeking Alpha (blog)

Did Anyone Hear About the Housing Bubble and the Economic Collapse?

TPMCafé (blog)Dean Baker‎Oct 28, 2009‎

Alan Greenspan would have insisted that the housing market is just fine and that there is no risk of a nationwide fall in house prices.

The Amnesia in Financial Markets

ForbesBernard Condon‎3 hours ago‎

The last time the monetary spigot was wide open it led to a credit bubble, a stock bubble, a private equity bubble and a housing bubble–and we all know how

Experts say economy crushing Las Vegas real estate market

Las Vegas SunBrian Wargo‎9 hours ago‎

People were overleveraged and thought the bubble would never burst, and now they must get used to what the term “normal” means, he said.

Uncertain Commercial Lending Losses Could Make 2010 a Scary Year for Wells

American Banking News‎4 hours ago‎

into the teeth of down cycle in commercial real estate — where the bulk of bubble-era loans are due to be repaid or refinanced between 2010 and 2012.

12 Stonewood Irvine, CA 92604 kitchen

Irvine Home Address … 12 Stonewood Irvine, CA 92604

Resale Home Price … $525,000

Income Requirement ……. $97,731
Downpayment Needed … $105,000

Home Purchase Price … $634,000
Home Purchase Date …. 3/15/2006

Net Gain (Loss) ………. $(140,500)
Percent Change ………. -17.2%
Annual Appreciation … -4.6%

Monthly Mortgage Payment … $2,280
Monthly Cash Outlays ………… $2,990
Monthly Cost of Ownership … $2,250

Redfin Property Details for 12 Stonewood Irvine, CA 92604

Beds 3
Baths 2 full 1 part baths
Size 1,681 sq ft
($312 / sq ft)
Lot Size 2,459 sq ft
Year Built 1978
Days on Market 87
Listing Updated 9/28/2009
MLS Number P697141
Property Type Condominium, Residential
Community Woodbridge
Tract Othr

According to the listing agent, this listing may be a pre-foreclosure or short sale.

Woodbridge is a very desirable area in Orange County. This house has a great floorplan, high ceilings, lots of light coming through. Kitchen has granite tile countertop. Spacious master. Enjoy all the amenities that the Lake has to offer: pool, spa, tennis and sports court, club house and the the beautiful Lake.

and the the beautiful Lake. Is the listing agent stuttering?

This property was purchased at the peak for $634,000. The owner used a $475,500 first mortgage, a $158,500 second mortgage, and a $0 dowmpayment. On 2/13/2007, she refinanced with a $636,500 Option ARM with a 1.87% teaser rate, so she did manage to extract $2,500 plus reduce her payment to where she was saving hundreds over renting with the minimum loan payment.

Now that owners like this one are faced with the prospect of actually having to pay back the large sums they borrowed, they are walking away.

10 thoughts on “IHB News 10-31-2009

  1. alan


    Looked at your report for the Riverside property. This is an old home, built in 1912. Maintenance on a home that old is a lot different from maintenance on a newer home. (old wiring issues, old windows, insulation or lack of insulation, roof, possible settling of the foundation, old earthquake damage, etc) Anybody looking to get a historic home should be appaised of this and you allowance for maintenace should be increased for “historic” properties.

    1. newbie2008

      What would be the rent/lease on the riverside house? What is the maintenance on a historical house? If it on the historical register, the cost will be more than your normal old house of the same vintage. Even with a new house of 1600 sf, the cash flow investor (non-owner occupied) would be hard pressed to pay $400,000 unless it’s in a very desirable neighborhood.

      As for 12 Stonewood with the teaser rate of 1.87% on with zero down, it will serve the bank right to take the loss. But as we all know, the taxpayer will be left holding the bag.

      ~$18,000 per year with taxes for about a year or two, then maybe free rent for half a year to two years. Why rent? Only in America.

      1. norcal

        And don’t forget, she got a tax break on the mortgage interest that she DID pay for those 2 years. Really, aside from closing costs and refinancing fees, she has had no housing expenditure at all since 2006.

  2. freedomCM

    Isn’t Redlands in San Bernadino county?

    The rental comps are problematic, it seems to me. While this is a very nice house, it is a 2 bedroom, and so the $1500 comp seems most appropriate. And you exclude most families from the renter pool.

    The other problem is the huge unemployment problem in the IE. Just how many renters (or buyers) are there for this property? Particularly if you can buy a nearly new 3000sf property in the area in the $200k-s?

    Too many houses, not enough jobs

    1. IrvineRenter

      The risks are why opportunities exist to purchase homes with large positive cashflow. This is an instance where I argue for the long term. If you are buying a cashflow property in a market likely to see full employment in 3 to 5 years, then temporarily reduced rents are the discount. When employment picks up and wages increase, rents will go up, and your investment will have increased value via its increased cashflow.

      I am more bullish on Redlands than I am on Beaumont.

  3. Laura Louzader

    Will SOMEBODY go over to that house right this minute and clean all the trash off the kitchen counters and get the cheap cloth off the coffee table and take down those god-awful window hangings?

    This house would pick up another $20K in resale value just by being staged properly. I’d clear out the whole living room, paint it a pale beige, and get some attractive rental furniture in there.

    And if the owners had to get new granite counters, could they also have gotten new cabinet fronts?

    1. Sue in Irvine

      Those cabinets look like they laquered them, all shiny looking. Ick.
      I think the granite is fitted over the old countertops.
      You’re right Laura. Too much stuff everywhere.

    2. BeachRenter

      Time Warp is right! (great video by the way). If I hadn’t been told that house was last purchased in 2006 I would have thought is was 1979. I have never seen that many regular televisions (one actually using Rabbit Ears!) in a house for at least 8 years. We know she didn’t waste her money on new Plasma’s so maybe that is to be commended. I mean, seriously, did she really decorate this house like that only 3 years ago? The kitchen banquet should be a big selling point as well. Anyway, you can tell this is just a BS listing trying to either get a loan mod or just further stall the foreclosure process for more FREE RENT. When the owner or agent puts up photos and a ridiculous price like that, they have no intention of selling.

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