What I want, I want now

I wanna jump, jump, jump, jump a mountain

I understand all destructive urges

I see, I see no evil

See No Evil — REM

Link to Music Video

What do you do when the property across the street destroys the comps? Ignore it. Pretend it never happened. See no evil…

Asking Price: $1,299,900

Income Requirement: $324,975

Downpayment Needed: $259,980

Bank Purchase Price: $1,149,500

Bank Purchase Date: 7/24/2007

FB Purchase Price: $1,400,000

FB Purchase Date: 6/15/2006

Address: 5 Roseleaf, Irvine, CA 92620

Beds: 5

Baths: 3.5

Sq. Ft.: 3,300

$/Sq. Ft.: $394

Lot Size: 7,200 sq. ft.

Type: Single Family Residence

Style: Mediterranean

Year Built: 1999

Stories: Two Levels

View(s): Hills, Trees/Woods

Area: Northwood

County: Orange

MLS#: S505342

Status: Active

On Redfin: 18 days

From Redfin, “Magnificent home in exclusive gated community of Sommerton. Beautiful valley and hills views!!! Big kitchen, high ceilings, open, spacious floorplan. Dramatic entry, wide stairway, upgraded flooring & moldings. Downstairs bedroom. New kitchen appliances will be installed this week. Great location! Quiet, peaceful, culdesac! Private access to hiking trail.”

The exclamation points are back!!!

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Check out the $250,000 loss someone (probably the bank) took on this property. Unfortunately, it looks as if our next seller used the previous, peak-purchase price as their comp to set their wishing price. It certainly looks like they are ignoring the REO as an aberration. Reality is the REO was reflective of the market. It might even be lower…

Asking Price: $1,550,000

Income Requirement: $387,500

Downpayment Needed: $310,000

Purchase Price: $1,263,500

Purchase Date: 12/30/2004

Address: 10 Roseleaf, Irvine, CA 92620

Beds: 5

Baths: 4

Sq. Ft.: 3,700

$/Sq. Ft.: $419

Lot Size: 8,000 sq. ft.

Type: Single Family Residence

Style: Mediterranean

Year Built: 1999

Stories: Two Levels

Area: Northwood

County: Orange

MLS#: P599657

Status: Active

On Redfin: 20 days

From Redfin, “Exclusive Standard Pacific Somerton Estate, 4BR+Huge Bonus Room, Main Floor BR with Bath Spacious Driveway, Pool Sized Lot, Marble and Hardwood Floor, Granite Counter Top, Plantation Shutters, Master BR with Jacuzzi Tub, Cast Iron Stairs Railing, Close to Hiking Trails and Award Winning Schools, Great Cul-de-Sec Location, Price to Sell-Recently Reduced”

Why Is This Written In Title Case?

Price to Sell-Recently Reduced? LOL

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The other day, I asked, “Is fear gripping the market?” This seller is not afraid and is clearly still in denial.

You have to sing along to this one…

Link to Music Video

U.G.L.Y you ain’t got no alibi you ugly eh! Hey! You ugly

U.G.L.Y you ain’t got no alibi you ugly eh! Hey! You ugly

I saw you walking down the street just the other day

I don’t mean to insult you

Oh wait! Yes i do.

Your teeth are yellow, they’re covered in mould

There ain’t no pill cos you ain’t ill

You’re ugly!

U.G.L.Y you ain’t got no alibi you ugly eh! Hey! You ugly

What you really need is to wear a mask

(so funny)

You got eyes like a pig and your nose is big

You ugly!

Daphne & Celeste – U.G.L.Y.

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When I saw this property, I couldn’t help but be reminded of the song above and the picture at the bottom. This listing is the least desirable single family detached home in Irvine. Everything about this property is a negative:

• It is 36 years old.
• There is no back yard.
• It only has 1 full bathroom.
• The front elevation has no windows. It looks like a 3 car garage next to a 2 car garage. Nice…
• The colors are awful. Check out the dark brown flooring and the blue cabinets and walls. The view of the block wall is a reminder of your prison sentence.
• The living room has three incompatible shades of ugly.
• The house itself is right on the 405 on ramp at Culver. A location guaranteed to have maximize noise and air pollution as people accelerate onto the freeway.
• If that wasn’t bad enough, it is adjacent to a huge power pole with enough electricity running through it to make your hair stand on end and give your children brain cancer. Perhaps the hum of the power lines drowns out the freeway noise. Who knows?

I would not live in this house.

Asking Price: $534,500

Income Requirement: $133,625

Downpayment Needed: $106,900

Bank Purchase Price: $594,915

Bank Purchase Date: 8/14/2007

FB Purchase Price: $520,000

FB Purchase Date: 8/10/2004

Address: 3922 Claremont ST, Irvine, CA 92614

Beds: 3

Baths: 1.75

Sq. Ft.: 1,222

$/Sq. Ft.: $437

Lot Size: 5,521 sq. ft.

Type: Single Family Residence

Style: Traditional

Year Built: 1971

Stories: One Level

Area: Westpark

County: Orange

MLS#: S503237

Status: Active

On Redfin: 19 days

From Redfin, “You’ll love this great home in a wonderful school district. The light and bright floorplan features neutral carpet, pergo flooring and cathedral ceilings. The large yard provides lots of space for entertaining & play. This home is located just steps to the community pool and park. Plus, there are no Mello Roos! This is a bank owned property. Bring us an offer!”

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This is an interesting property for many reasons:

First, this is another example of a HELOC implosion. Why would a bank foreclose at a number $75,000 over the original purchase price if this had not been refinanced to some peak value appraisal? I suspect this was purchased by the second mortgage holder hoping to avoid a complete loss. The first mortgage holder probably would not have bid this property up over 80% of the original purchase price ($416,000.) The FB doesn’t care because they took their money out already.

Second, this is the first example I have seen of a bank offering a property at a cut-rate price in order to move it quickly. From the REOs we have observed to date, the banks start off at an amount over their foreclosure bid price and lower it until it sells. This pricing is a departure from that pattern.

Third, This is the first single-family detached home I have seen in Westpark rolling back to 2004 pricing. Westpark has held up pretty well to date. This property will not help the neighborhood comps.

Finally, it is one of the least desirable SFDs I have seen in a while. During the rally, quality did not matter. Now that someone who buys this may have to live there for several years to wait out the market, desirability is becoming a concern. I think they will have to lower the price further to attract a buyer to this dog.

For the record, if the bank gets its asking price and pays a 6% commission, they stand to lose $92,485.

Ridin the storm out, waitin for the thaw out

Ive been thinking lately of what I’m missing in the city.

Ridin’ The Storm Out — REO Speedwagon

Link to Music Video

Have you been feeling like we on this blog are Ridin’ The Storm Out? I do. Does anyone remember the final scene in Terminator? Sarah Conner is told by a gas station attendant that a storm is coming. She responds, “I know” with a deep reflective look of someone who has seen the future Armageddon. Can you relate?

We have broken an important psychological level for pricing in Quail Hill. Today’s property is a bank REO that went for under $500,000 a few months ago. It is back on the market now, and the bank isn’t even trying to get above the $500,000 mark.

Asking Price: $499,000

Bank Purchase Price: $477,000

Bank Purchase Date: 6/8/2007

FB Purchase Price: $551,000

FB Purchase Date: 6/30/2005

Address: 212 Dewdrop, Irvine, CA 92603

Beds: 2

Baths: 2.5

Sq. Ft.: 1,200

$/Sq. Ft.: $417

Lot Size: –

Type: Condominium

Style: Contemporary

Year Built: 2004

Stories: Two Levels

Area: Quail Hill

County: Orange

MLS#: S502633

Status: Active

On Redfin: 7 days

From Redfin, “BANK OWNED !!! Stunning 2 story Townhome with lots of top notch upgrades. Quiet interior street, large living room, dining room, guest bath downstairs, courtyard patio entrance, 2 car attached garage. Walk to Park, Playground and Shopping. Resort living !!”

Is being BANK OWNED something to get excited about? I guess it is worth ALL CAPS and three exclamation points!!!

What are top-notch upgrades? Are there bottom-rung upgrades?

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Bear with me on this conjecture, but based on the REO purchase price, I am guessing this was an Option ARM that exploded. The primary mortgage should have been 80% of the original purchase price or $440,800. If the bank was willing to bid $477,000 at a foreclosure auction, this likely represents the outstanding balance on the first mortgage. Only an negative amortization loan with a low teaser rate would grow by $36,200 over two years.

Negative Amortization loans — great innovation… Not.

Judging by the description, there is a realtor involved in this transaction. If the bank gets their asking price, and if they pay a 6% commission, they stand to lose $81,940. Although when you think of the other costs involved with the foreclosure, the real loss was likely much higher.

BTW, Do you like our new REO symbol?