The belief in rapid home price appreciation is deeply held in California. Now with HELOCs to give access to this pot of gold, California Kool Aid has never tasted better.
Irvine Home Address … 108 TIMBERWOOD Irvine, CA 92620
Resale Home Price …… $399,000
Now you know it’s a meaningless question
To ask if those stories are right
‘Cause what matters most is the feeling
You get when you’re hypnotized
Seems like a dream
(They) got me hypnotized
Hypnotized — Fleetwood Mac
The belief in endless rapid appreciation took hold in the 1970s, and like a persistent disease of faith, it hypnotizes its victims with dreams of limitless wealth and spending power. Will the cycle ever end? Or will a few months of rising prices make kool aid as tasty again?
During the bubble, people borrowed their appreciation and spent it. The lenders and investors in mortgage-backed securities have absorbed most of these losses; therefore, we have a large population that was hugely rewarded when prices went up that has been spared the consequences of their stupidity. In my opinion, this moral hazard has made California Kool Aid more addicting. What incentive does our current system have in favor of prudence and responsibility?
Resale Home Price … $399,000
Income Requirement ……. $73,940
Downpayment Needed … $79,800
Home Purchase Price … $585,000
Home Purchase Date …. 2/14/2006
Net Gain (Loss) ………. $(209,940)
Percent Change ………. -31.8%
Annual Appreciation … -10.1%
Mortgage Interest Rate ………. 5.06%
Monthly Mortgage Payment … $1,725
Monthly Cash Outlays ………… $2,430
Monthly Cost of Ownership … $1,870
Baths 2 full 1 part baths
Size 1,442 sq ft
($277 / sq ft)
Lot Size n/a
Year Built 2001
Days on Market 4
Listing Updated 11/9/2009
MLS Number S595565
Property Type Condominium, Residential
According to the listing agent, this listing is a bank owned (foreclosed) property.
Corner unit 2 bedroom, 2.5 bath townhome across from award winning elementary and high schools. Direct two car garage access. Wrap around front patio. HOA includes two swimming poools, tennis courts, volleyball, built in BBQs and hiking trails.
What is a poool?
This REO was originally purchased for $585,000 on 2/14/2006. The owners used a $468,000 first mortgage. The information on any second mortgages has been wiped out. Late last year, they quit paying:
Recording Date: 07/09/2009
Document Type: Notice of Sale (aka Notice of Trustee’s Sale)
Recording Date: 04/02/2009
Document Type: Notice of Default
The property is for sale at 31.8% off its 2006 purchase price. Ready to restart the cycle?