Asking Price: $675,000

Purchase Price: $624,500

Purchase Date: 8/19/2005

Address: 75 Chantilly, Irvine, CA 92620

Beds: 2

Baths: 2.5

Sq. Ft.*: 1,824

Year Built: 2005

Stories: 2

Type: Condominium

Neighborhood: Woodbury

$/Sq. Ft.*: $370

MLS: P525538

Status: Active on market

On Redfin: 265 days

The word “Chantilly” brings up many historical and artistic references ranging from a picturesque region in France, to orchids, fine lace, and classic music from the Big Bopper. There is a certain “feel good” quality with Chantilly. However, I don’t think our homedebtors are feeling particularly good about the dead weight they have been carrying for most of the last year: 265 days on the market. Wow!

I know this isn’t rocket science, so what advice would you give someone who has been trying to sell their house for almost a year? Lower the price, perhaps?

Therein lies the problem: They are a flipper, so they have no equity. If they sell for their asking price of $675,000 assuming a 6% commission, they will make exactly $10,000. Of course, they may not be paying a 6% commission. Do you think their relative/realtor will kick back some of the commission?

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From Redfin: “REDUCED, REDUCED. OWNER IS MOTIVATED WILL CONSIDER ALL OFFERS!!!!!!!Just like new. 1 year old Charming 2bd + office downstairs or possible 3rd bedroom, 2 bath condo. New paint throughout, stainless steel appliances. Spacious bedroom and master suite. Spacious floor plan with great room appeal. French doors go out from kitchen/eating area to balcony. Cozy courtyard. Best priced home in the area. Agent related to the seller. [emphasis mine] OWNER IS MOTIVATED TO SELL.”

Do realtors realize how lame it is when they write in ALL CAPS and put in 7 exclamation points for emphasis? They are ANNOYING!!!!!!! OBNOXIOUS!!!!!!! IRRITATING!!!!!!! AGGRAVATING!!!!!!! Pardon my rant… It needed to be said…

This seller must be motivated. They are willing to sell real estate without making a huge profit. It has only taken them 265 days to give up their profit. How MOTIVATED!!!!!!!

Just think, for $675,000 you can live in a two bedroom condo with a great view of your neighbor’s bedroom. You better hurry, at only 265 days on the market, this one is going FAST!!!!!!!

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Chantilly lace and a pretty face

And a pony tail hanging down

That wiggle in the walk and giggle in the talk

Makes the world go round

Chantilly Lace (YouTube): by The Big Bopper (Wiki)

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Road at Chantilly (Web Museum): by Paul Cézanne (Wiki)

Asking Price: $655,800

Purchase Price: $625,000

Purchase Date: 9/1/2006

Address: 206 Garden Gate Lane, Irvine, CA 92620

Beds: 2

Baths: 2.5

Sq. Ft.*: 1,200

Year Built: 1998

Stories: 2

Type: Single Family Residence

Neighborhood: Northwood

$/Sq. Ft.*: $546

MLS: S469456

Status: Active on market

On Redfin: 98 days

Asking Price: $595,000

Purchase Price: $575,000

Purchase Date: 1/30/2006

Address: 54 Paisley Place, Irvine, CA 92620

Beds: 2

Baths: 2

Sq. Ft.*: 1,050

Year Built: 1999

Stories: 2

Type: Single Family Residence

View: Hills

Neighborhood: Northwood

$/Sq. Ft.*: $567

MLS: S476148

Status: Active on market

On Redfin: 42 days

In my opinion one of the most notable features of this bubble has been the increase in price of entry level housing product. I suspect this is a result of sub-prime lending and/or exotic financing terms. Back when you could not afford to finance more than 3 or 4 times earnings, entry level housing was priced at $200,000 or less. During the rally when 10 to 12 times earnings could be easily borrowed, $200,000 properties where bid up to $550,000. Nobody was actually making any more money, they were just borrowing a lot more. Once the limit of borrowing was reached last year, the rally fizzled. Now that credit is tightening, those who bought at the top are having difficulty finding buyers. The result of all this borrowing is properties like the two I am featuring today.

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First, I want to say this is one of my favorite neighborhoods in Irvine. It features architecture reminiscent of a small English village with quaint cottages. There are few visible garages, the sidewalks are detached from the street, and the trees make for a great street scene. It is very close to Canyon View Elementary in Northwood. If prices were not ridiculous, I would buy in this neighborhood.

These two flips are showing signs of stress. They are overpriced and hoping a greater fool comes along to save them. 206 Garden Gate Lane has been on the market nearly 100 days. If they get their asking price of $655,800 assuming a 6% commission, they will lose $8,548.

The flipper at 54 Paisley Place gets their asking price of $595,000 assuming a 6% commission, they will lose $15,700. Does anyone want to go up there and pay well over $500 per square foot for some 8 year old properties when you could buy 75 Chantilly, a nearly new, much larger 2 bedroom over in Woodbury for $370 per square foot? I think I will pass.

Asking Price: $918,000

Purchase Price: $678,000

Purchase Date: 6/9/2005

Address: 43 Rising Sun, Irvine, CA 92620

Beds: 3

Baths: 2.5

Sq. Ft.*: 1,708

Year Built: 2005

Stories: 2

Type: Single Family Residence

View: Mountain

Neighborhood: Woodbury

$/Sq. Ft.*: $537

MLS: S479901

Status: Active on market

On Redfin: 11 days

Craigslist, Redfin, Zillow

$918000 SELLER NEEDS TO GET OUT !!!

This according to the ad on Craigslist. I call BS on this one. This flipper is so desperate, they only want to make $184,920 in profit (after 6% commission) in less than 2 years? If this flipper is successful, their house will have made them more than the median income in Irvine over the last two years ($83,891 * 2 = $167,782). That is one hard working house!

This seller is not the only one cracking the whip on their house. The neighbors at 32 Rising Sun want $1,139,000 for the Former Woodbury Model Home they bought for $940,500 on 6/29/2006. They are working their house even harder. After a 6% commission, they stand to make a profit of $130,160 after only 9 months.

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When a prop’ty comes along

You must flip it

Before the home sits out too long

You must flip it

When somethings going wrong

You must flip it

.

Now flip it

Into shape

Shape it up

Get straight

Go forward

Move ahead

Try to detect it

Its not too late

To flip it

Flip it good

Asking Price: $879,500

Purchase Price: $869,000

Purchase Date: unknown

Address: 39 Bamboo, Irvine, CA 92620

Beds: 4

Baths: 4

Sq. Ft.*: 2,492

Year Built: 2004

Stories: 2

Type: Condominium

Neighborhood: Northwood

$/Sq. Ft.*: $353

MLS: S477978

Status: Active on market

On Redfin: 23 days

Redfin, Zillow

Do you get the feeling flippers are getting nervous? There are 46 addresses on Bamboo Street in the Northwood neighborhood adjacent to Woodbury; 7 of them are for sale. 41 Bamboo just sold on 2/13/2007 for $820,000, so there is activity in the area. There are 7 other homedebtors looking for the greater fool to save them. The owners at 39 Bamboo just got nervous and decided to sell even if it is at a loss. Zillow thinks the property is worth over a million dollars. Apparently the market does not agree.

Real estate always goes up, or so buyers are bamboozled into believing by realtors. It only takes a few nervous neighbors to drive down property values in an entire neighborhood. Comps are set at the fringes where the transactions take place. I’m sure the owner at 57 Bamboo would like to make his $211,106, but it is more likely that 39 Bamboo is going to lose his $42,740 first.