Old Asking Price: $539,000

New Asking Price: $525,000

Purchase Price: $560,000

Purchase Date: 8/17/2006

Address: 239 Dewdrop, Irvine, CA 92603-0650

Beds: 2

Baths: 2

Sq. Ft.*: 1,200

Year Built: 2003

Stories: 3

Type: Condominium

Neighborhood: Quail Hill

$/Sq. Ft.*: $450

MLS: S476844

Status: Active on market

On Redfin: 22 days

Redfin, Zillow

When the owner of this property bought near the peak in August of 2006, she probably had visions of the fortune she was going to make flipping condos. Perhaps she even had visions of watching live jazz at the Dew Drop Inn during Mardi Gras. Apparently, she changed her plans. Now, she just wants out. After sitting vacant for six months (and burning a big hole in her wallet), she is trying to sell for whatever she can get. Good luck. Assuming a 6% commission, if she gets her asking price, she is looking at a $53,340 loss. However, a neighbor of hers is trying to sell 318 Dewdrop for $519,900, and it has been languishing on the market for over 240 days. Are these two properties comparable? Zillow thinks 239 is worth $572,000 and 318 is worth $586,385. It looks like our flipper is going to take a big loss.

🙁

“Meet those fine gals,

Your buddies and your pals,

Down in New Orleans on a street they call LaSalle

Down at the Dew Drop Inn,

You meet all your fine friends.

Baby do drop in,

I’ll meet you at the Dew Drop Inn.”

“Dew Drop Inn“,

Richard Penniman / Esqrita-K. Winslow,

© Peyton Music BMI

**** UPDATE ****

Our desperate flipper is feeling the pressure. She just reduced the price to $525,000. Now, assuming a 6% commission, if she gets her asking price, she is looking at a $66,500 loss.

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Asking Price: $1,829,000

Purchase Price: $1,429,000

Purchase Date: 3/10/2006

Address: 34 Shepard, Irvine, CA 92620

Beds: 5

Baths: 5.5

Sq. Ft.*: 3,800

Lot Sq. Ft.*: 6,000

Year Built: 2005

Stories: 2

Type: Single Family Residence

Neighborhood: Woodbury

$/Sq. Ft.*: $481

MLS: S472326

Status: Active on market

On Redfin: 83 days

Redfin, Zillow

Here we have a shepard who needs a sheep to fleece. It seems many of the sheeple didn’t get the memo about continual double digit price appreciation in Irvine. They haven’t shown up for 83 days to buy our shepard’s home for $400,000 more than he paid for it one year earlier. If this isn’t an example of Southern California’s Cultural Pathology I don’t know what is? The mentality that believes you should make $400,000 a year for simply owning your home. Unbelievable!

From Redfin “Most popular elevation in this JB plan 1. Long Driveway, porte cochere leads to rear/attached 2 car garage. Hardwood flrs down, carpet/tile, many upgrades: intercom, surround sound, security syst. , ceiling fans custom window coverings, central vaccum, sound attenuation insulation. Superb home. Completely landscaped, BBQ, lampposts in rear, attention to detail and quality. Walking distance to parks, Woodbury’s Commons, Shopping center, new elementary school.”

Personally, I would not like the porte cochere driveway. Every day I would be worried that either me or my wife was going to smash into the house while backing out. Although, it does make for a nicer front elevation when the house isn’t rear loaded (most of Woodbury is).

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It would appear the price will need to fall before it will generate any buyer interest. Another 5 bedroom in the neighborhood at 11 Ingleside is asking $427 SF or $1,325,000. A nearby 3 bedroom at 105 Mission is asking $370 SF or $724,800, and it has been on the market for 85 days, so it is probably priced too high as well. If our flipper reduces the price to $370 SF, we are back to his purchase price. Will he do it? I guess it depends on whether or not he really wants to sell it.

Asking Price: $925,000

Purchase Price: $940,000

Purchase Date: 11/07/2005

Address: 4 Ticonderoga, Irvine, CA 92620

Beds: 5

Baths: 3

Sq. Ft.*: 3,029

Lot Sq. Ft.*: 5,300

Year Built: 1980

Stories: 2

Type: Single Family Residence

Neighborhood: Northwood

$/Sq. Ft.*: $305

MLS: P561270

Status: Active on market

On Redfin: 52 days

We have written a great deal about the coming foreclosure tsunami which will drive prices lower. This is just the beginning. This house is going to sell for less than its 2005 purchase price because the owner has to sell. Must-sell inventory lowers the comps in the entire neighborhood. Right now, these sales are more the exception than the rule, but the stress of mortgage resets has not hit the market yet, so more of these sales are coming.

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From Redfin: “SHORT SALE, PRE-FORECLOSURE, UNDERMARKET OPPORTUNITY. A bright home in desirable Northwood Village of Irvine. Walking distance to elementary & middle schools and community park. One bedroom and bath in main floor. Low maintenance backyard with fruit trees. Large 5th room may be used as library, gameroom or office. No association and No Mello Roos fees. House is sold AS-IS w/ no Warranties of any kind implied or not.”

Assuming a 6% commission, and assuming this wasn’t a negative amortization loan, this lender will lose $70,500 on this FB. What is worse is the impact on the neighborhood. If Zillow is any indication, this sale will reduce the property values in the entire neighborhood about 10%. So it begins…

Asking Price: $739,000

Purchase Price: $605,000

Purchase Date: 1/10/2005

Address: 20 Entrada E, Irvine, CA 92620

Beds: 3

Baths: 2

Sq. Ft.*: 1,561

Lot Sq. Ft.*: 4,275

Year Built: 1979

Stories: 1

Type: Single Family Residence

Neighborhood: Northwood

$/Sq. Ft.*: $473

MLS: S480099

Status: Active on market

On Redfin: 18 days

Craigslist, Redfin, Zillow

Since there is no agreed upon definition of a flip, I will profile this one anyway.

From Redfin “Lovely single level detached home at the end of cul-de-sac just steps from a park. Spacious and open floor plan with liv & fam upgraded with new pergo floors, new cabinets, new granite countertop, new sinks & faucets, new sliding doors & all new windows, new stove & microwave, new recess lights and new light fixtures. Quiet and green backyard with grass & lushes. 3-patio off of liv, kitchen and master BR. Superb amenties offered by HOA. No mello roos and low HOA fee. Great family neighborhood.”

I managed to find a picture of the backyard. There seems to be only one lush passed out back there, so the description may be incorrect.

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Perhaps this isn’t a flip. Perhaps they needed to sell for any of the reasons people have. Since this is Irvine, they must be entitled to a greater than 20% gain simply because they owned real estate. I appears this unit is empty, so I would not be surprised to see quick price reductions to find the market and stop the financial bleeding.

Maybe they will get it, or maybe they missed the peak, and they will wait a very long time before getting their price.

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Entrada, by Mary Rosenblum

A.K.A. the flipper before this house sells for asking price.