Category Archives: Real Estate Owned

Down the Drain

This flipper rode the equity wave then left the bank holding the note as values went down the drain.

Irvine Home Address … 14492 GUAMA Ave Irvine, CA 92606
Resale Home Price …… $615,000


City penthouse
The kitchen living
A country home
It’s a kitch living

Photos waiting
Blood and glass
Three points of rain
Carpet lining
Seats reclining
Clever words on smooth tongue talking
Shove it brother
Just keep walking

Just Keep Walking — INXS

Today’s featured property was purchased by a flipper in 2006 for $555,000. The original financing information is gone, but he did manage to refinance for $564,000 with an Option ARM with a 1.25% teaser rate. Despite buying very near the peak, through consistent HELOC withdrawal, this flipper did manage to pull out $9,000 before walking away.

Foreclosure Record
Recording Date: 10/29/2009
Document Type: Notice of Sale (aka Notice of Trustee’s Sale)

Foreclosure Record
Recording Date: 07/24/2009
Document Type: Notice of Default

When pundits discuss the phenomenon of walking away from a mortgage debt, they assume that people really planned on paying back that money when they got it. This erroneous assumption fails to recognize that most Californians never plan to repay the loan out of their wage income. If they could incidentally pay it back when they sold the property, that was OK, but most borrowers never think they will actually pay back the large sums they are borrowing; repayment is the house’s responsibility.

I don’t think lenders fully understand there is a segment of the borrowing population that lives from one infusion of borrowed cash to the next (or maybe they do know and don’t care). These people will ride the next wave of appreciation and spend it until they implode again. When the lenders lose a few trillion next time, I won’t feel sorry for them.

Irvine Home Address … 14492 GUAMA Ave Irvine, CA 92606

Resale Home Price … $615,000

Income Requirement ……. $115,784
Downpayment Needed … $123,000

Home Purchase Price … $486,000
Home Purchase Date …. 5/29/2003

Net Gain (Loss) ………. $92,100
Percent Change ………. 26.5%
Annual Appreciation … 3.6%

Mortgage Interest Rate ………. 5.20%
Monthly Mortgage Payment … $2,702
Monthly Cash Outlays ………… $3,330
Monthly Cost of Ownership … $2,480

Property Details for 14492 GUAMA Ave Irvine, CA 92606

Beds 4
Baths 1 full 2 part baths
Size 1,897 sq ft
($324 / sq ft)
Lot Size 5,130 sq ft
Year Built 1971
Days on Market 3
Listing Updated 11/11/2009
MLS Number S595717
Property Type Single Family, Residential
Community Walnut
Tract Cp

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

Great Home in College Park! Located in cul-d-sac, steps away from award-winning elementary school. Scraped ceilings, upgraded kitchen, remodeled bathrooms, new windows throughout, hardwood flooring, etc.

Redfin shows the 2003 purchase but not the 2006 one. i have used the 2003 figures above to provide some context. Apparently, this property has managed to appreciate at 3.6% per year since 2003. Does that seem right to you?

Low-End Payment Affordability

The payment affordability at the low end the market is so good that a wage earner making $12.50 per hour can now afford to buy in Irvine.

275 STREAMWOOD Irvine, CA 92620 complex

Irvine Home Address … 275 STREAMWOOD Irvine, CA 92620
Resale Home Price …… $126,140


I’ve been sitting here ’bout half the night.
Oh, mama, fill my cup up.
Bottoms Up
Said I came to waste some time.
I think I’m gonna jump up.
I’m singin’, I’m dancin’ most every night.
And I want to do that with you babe.
Let’s do this bottle right.
Oh, oh, baby, bottoms up.

Bottoms Up — Van Halen

“PRICES HAVE BOTTOMED!!!” said Kool aid man in his new condo, “Are you ready to PARTY!!! BOTTOMS UP!!!” I’ll spare you the “bottoms up” photo… you can still see it, can’t you?

Is this a bottom in pricing? That depends on interest rates, but I feel confident that I can call the bottom on payment affordability. It will never be less expensive on a payment basis for a relatively low-income wage earner to buy property at market prices.

Over my years of working in the land development industry, I have worked on a number of low-income affordable projects. I worked on my first one in my mid 20s, and I felt noble about helping working families get good housing. Without going into a treatise on affordability programs, I will tell you they all rely on some form of market price controls to ensure properties stay affordable.

Low-income units are in high demand, and the demand often fails to meet the supply. It is very unusual in California when market priced homes compete with low-income subsidized housing. When it does, the activity is great for the community and for the low end of the housing market. Those who seemingly had been “priced out forever” can finally afford homes — assuming some flipper doesn’t crowd them out.

Payment Affordability

From today’s listing, “WHY RENT WHEN YOU CAN OWN?”

Income Requirement ……. $23,481
Mortgage Interest Rate ………. 5.10%
Monthly Mortgage Payment … $548
Monthly Cash Outlays ………… $900
Monthly Cost of Ownership … $720

It seems to me that we do not need to subsidize low-income housing when open-market condos go for prices that allow people to live there who make $24,000 a year ($12.50 per hour wage). Payment affordability is extraordinary at these interest rates. It is not surprising that anything below the $500,000 price level in Orange County gets snapped up by 20 eager bidders.

The myriad of government distortions to the market has created a shortage of supply in price ranges where the GSEs and the FHA underwrite, and almost nothing at other prices. Armageddon awaits the non-GSE supported markets; they do not enjoy government price support.

There is no guarantee the Government will continue price supports in the face of political or financial market forces. It is likely they will maintain some level of backstop support as long as necessary to prevent a national catastrophe — possibly worse than the current recession. Sometimes the Least Bad Scenario is the correct path to chose. Since this path is also bad, it will endlessly be second guessed.

Both the Government and the lenders are crossing their fingers and hoping they can absorb the upcoming foreclosures without causing the cascading defaults that really crush prices (think Las Vegas). We will almost certainly see pockets of this throughout Orange County, and the substitution effect will create ripples in price and volume that will create unusual (unsustainable) price spreads between neighborhoods.

Selling homes at the last market bottom

Back in September of 2007, an astute observer known as Bubblegum sent me some images of marketing materials produced in 1997 — the last market bottom time. I originally posted them in The Market Bottom:

Market Bottom 2

I followed that image with this line, “Since I began writing on this blog, I have stated I will buy when the
cost of ownership equals the cost of rental. An advertisement like this
— when it reflects reality — would motivate me to buy. How about you?” Well, as you can tell from my statement, I had no clue that the Federal Reserve and the GSEs would increase affordability artificially lowering interest rates.

The equation has changed for me. With payment affordability, I believe a window is open, but only if you really are going to be a long-term homeowner. Unfortunately, most people who buy plan on staying long term, but life intervenes, and sometimes they need to move. Statistics show home ownership lasts about 7 years. Between Government manipulation and the inflation that is likely to follow, it does not make sense on an inflation adjusted basis to buy today and have the same amount of a devalued currency later, but on a nominal basis, the numbers may look right.

Sometimes all the deflation and inflation talk does my head in, but they are important concepts, and they can have a big impact on your financial life.

BTW, today’s featured property is not a one-off: 338 STREAMWOOD Irvine, CA 92620.

275 STREAMWOOD Irvine, CA 92620 complex

Irvine Home Address … 275 STREAMWOOD Irvine, CA 92620

Resale Home Price … $126,140

Income Requirement ……. $23,481
Downpayment Needed … $25,228

Home Purchase Price … $61,000
Home Purchase Date …. 12/12/1994

Net Gain (Loss) ………. $57,572
Percent Change ………. 106.8%
Annual Appreciation … 5.0%

Mortgage Interest Rate ………. 5.10%
Monthly Mortgage Payment … $548
Monthly Cash Outlays ………… $900
Monthly Cost of Ownership … $720

Property Details for 275 STREAMWOOD Irvine, CA 92620

Beds n/a
Baths 1 bathCalifornia Home Foundations
Size 415 sq ft
($304 / sq ft)
Lot Size n/a
Year Built 1977
Days on Market 2
Listing Updated 11/11/2009
MLS Number U9004904
Property Type Condominium, Residential
Community Northwood
Tract Othr

According to the listing agent, this listing is a bank owned (foreclosed) property.


Just to illustrate the impact of interest rates on pricing, take a look at today’s property which as originally purchased in conditions very similar to ours in 1994; in fact, I would go as far as to say 2009 is most similar to 1994 as things play out. When this property was purchased in December of 1994, the contract mortgage interest rate was 9.2% — very near the 40-year average of 9%.

Let’s calculate the owners income based on a the affordable payment based on an 80% loan, a 9.2% interest rate and a 31% DTI… the payment is $400… HOAs were lower then, but the monthly out-of-pocket would still be $550… so, $550 / 0.31 = $1,775 monthly gross income or $21,300 per year. If you inflation adjust this number forward to allow for local income growth since 1994, you get $31,311 in today’s income dollars. Back in 1994, this was not as payment affordable as it is today.

The Government controlled housing markets enjoy payment affordability,
but price ranges outside the conforming loan limit are subject to
market forces, and price and supply pressures will build at higher price ranges, but as long as the interest rates stay low, prices will remain high relative to historic measures.

Agony of Defeat

Many smug speculators are suffering what Wide World of Sports aptly described as the “Agony of Defeat.”

9 TALL OAK Irvine, CA 92603 kitchen

Irvine Home Address … 9 TALL OAK Irvine, CA 92603
Resale Home Price …… $649,900

Block Party 11-9-2009


Scouring the internet to bring you the constant variety of properties
The thrill of schadenfreude
The agony of kool aid
The human drama of real estate markets
This is the Irvine Housing Blog

Wide World of Sports

I was a kid during the Wide World of Sports era. Before ESPN and other sports outlets came along, ABC’s Wide World of Sports was your only source for unusual or international sporting events. According to Wikipedia, “Wide World of Sports was the first program to air coverage of Wimbledon, The Indianapolis 500, the NCAA Men’s Basketball Championship, the Daytona 500, the U.S. Figure Skating Championships, the Little League World Series, Triple Crown, The Open Championship, the X-Games, the Grey Cup, and many other events.”

The great part of Wide World of Sports was not always the events they covered; in fact, they were often quite boring. The show had a unique way of getting you to tune in each week, and sometimes you would stay and watch the entire show.

The opening sequence featured many different images of winning and losing, but none are more famous than ski jumper Vinko Bogataj, whose tumbling faceplant of March 21, 1970 was featured from the early 1970s onward under the words “…and the agony of defeat.” Bogataj’s fail is featured in Rich Hall‘s book Sniglets as “agonosis,” which is defined as “The syndrome of tuning in on Wide World of Sports every weekend just to watch the skier rack himself.” It is an indelible image that captures the complete failure of individual performance.

Sports provide a great microcosm of the struggles of life. The agony of defeat is something we all experience when an investment goes bad or a business deal doesn’t work out. Most of us suffer in obscurity and silence. The only evidence of the pain is the vapor trails on the web showing asking and sales prices and debt going bad. Far from being obscure statistics, these are our neighbors — or were our neighbors. It is hard to say where they end up after foreclosure.

9 TALL OAK Irvine, CA 92603 kitchen

Irvine Home Address … 9 TALL OAK Irvine, CA 92603

Resale Home Price … $649,900

Income Requirement ……. $120,982
Downpayment Needed … $129,980

Home Purchase Price … $561,267
Home Purchase Date …. 8/26/2009

Net Gain (Loss) ………. $49,639
Percent Change ………. 15.8%
Annual Appreciation … 15.8%

Monthly Mortgage Payment … $2,823
Monthly Cash Outlays ………… $3,680
Monthly Cost of Ownership … $2,770

Redfin Property Details for 9 TALL OAK Irvine, CA 92603

Beds 3
Baths 3 baths
Size 1,800 sq ft
($361 / sq ft)
Lot Size n/a
Year Built 2004
Days on Market 3
Listing Updated 10/27/2009
MLS Number S594108
Property Type Condominium, Residential
Community Quail Hill
Tract Ivwr

According to the listing agent, this listing is a bank owned (foreclosed) property.

Beautiful 3BR/3BA detached home with views! Custom tile entry leads to open living, dining rooms. Living room has a large balcony and media niche. Nice upgraded kitchen with granite countertops and newer appliances. Each bedroom has it’s own private bath. There is a large master bedroom with ceiling fan. Lots of additional built in storage. Oversized 2 car attached garage with epoxy flooring.

This property was purchased on 6/23/2004 for $640,500. The bank just bought it at auction for $561,267, and now they are hoping to get their money back from the FED supported prices. When the property was originally purchased, the owner used a $519,272 first mortgage, a $97,363 second, and an $18,130 downpayment.

At some point, he knew he was in trouble, so he tried to sell it. He spend a year and a half listing, delisting and chasing the market down.

Date Event Price
Oct 27, 2009 Listed $649,900
Aug 26, 2009 Sold $561,267
Sep 16, 2008 Delisted *
Sep 13, 2008 Price Changed *
Sep 03, 2008 Price Changed *
Sep 03, 2008 Price Changed *
Aug 21, 2008 Price Changed *
Jun 15, 2008 Price Changed *
May 21, 2008 Price Changed *
Apr 12, 2008 Price Changed *
Feb 26, 2008 Price Changed *
Dec 19, 2007 Delisted *
Dec 06, 2007 Delisted *
Dec 06, 2007 Listed *
Oct 18, 2007 Price Changed *
Oct 18, 2007 Price Changed *
Sep 19, 2007 Listed *
Sep 19, 2007 Listed *
Aug 29, 2007 Delisted *
Aug 28, 2007 Price Changed *
Aug 23, 2007 Price Changed *
Jul 01, 2007 Price Changed *
Jun 30, 2007 Price Changed *
May 30, 2007 Listed *
May 20, 2007 Delisted *
May 16, 2007 Price Changed *
May 05, 2007 Price Changed *
Apr 10, 2007 Listed *

He finally gave up in late 2008 as evidenced by the final delisting and…

Foreclosure Record
Recording Date: 05/28/2009
Document Type: Notice of Sale (aka Notice of Trustee’s Sale)

Foreclosure Record
Recording Date: 02/26/2009
Document Type: Notice of Default

It looks to me like he defaulted as the moratorium was put in place and got a few extra months. Perhaps the banks were behind in processing? Perhaps he continued to make payments even after he delisted in late 2008?

The agony for this foreclosure statistic is apparent. He over-borrowed and over-bought, and the weight of payments was crushing, so he tried to get out from under the dead weight. The property is listed for sale, and the owner relinquishes his dreams of prosperity slowly as he chases the market down. When he finally realizes the piggy-bank is empty, he capitulates; Atlas lets the world fall.

Block Party 11-9-2009

Everyone is invited to our next IHB Block Party next Monday, November 9. 2009, at JT Schmids at the District.

UCLA Anderson Forecast Orange County

The UCLA Anderson Forecast has deteriorated to market cheerleading and bottom calling. This year’s incorrect bottom call will not help their credibility.

12 ORANGETIP Irvine, CA 92604 kitchen

Irvine Home Address … 12 Orangetip Irvine, CA 92604
Resale Home Price …… $494,900


I don’t mind the things that you say
I don’t even mind going out of my way
I try and do these things for you
Why should I do it
I’m always untrue
Well, I did you no wrong

Did you No Wrong — Sex Pistols

I attended the UCLA Anderson Forecast for Orange County last Thursday. The keynote speaker, Ramin Toloui an Executive Vice President for PIMCO, was very good. The speaker for the Orange County Outlook, Mark Schniepp the Director of the California Economic Forecast, was awful.

Commercial Real Estate Forecast

The forecast for commercial real estate was not very positive. The commercial real estate market is facing the same woes as residential, but with an 18-month lag. Rents are falling, vacancy is rising, financing is difficult to find, and most borrowers are over-leveraged. It will take many years for the commercial market to recover.

Ramin Toloui was an excellent speaker. He explained the solvency
problem of over-leveraged borrowers facing refinancing (he was speaking
about commercial, but the same applies to residential). A property
purchased in 2007 for $100M may have $80M worth of debt (it probably
has even more). This debt will need to be refinanced during the next 5
years. The value of the property has cut in half, and the new lender is
demanding 30% equity. When this property needs to be refinanced, the
borrower’s loan will be capped at 70% of $50M which is $36M; they need to roll over
$80M. The gap is too large to be overcome. If the spread were smaller,
creative financing may be able to bridge the divide, but as it stands,
we are going to see massive deflation in the commercial lending market.

The problem of insolvency Toloui described is the same facing ARM
reset debtors in the residential market. A property purchased in 2006
for $1,000,000 with little or no money down will be worth about
$800,000 when the ARM resets. A lender will look at comps and limit the
loan to 80% of 800,000. The borrower will need to come up with the cash
to finance the difference between $640,000 and whatever they owe. Not
many will have $300,000 sitting around, and many who do will not want
to waste it by dumping it into a depreciating asset. The FED is trying
to solve the problem of residential insolvency by lowering interest
rates. The commercial loan market will have no such luxury.

This presentation was the best part of the morning.

UCLA Anderson Forecast

According to the website of The UCLA Anderson Forecast,

“For fifty years, the UCLA Anderson Forecast has provided
forecasts for the economies of California and the United States. Founded by professor
Robert M. Williams in 1952, the national forecast has been recognized as one of the
most accurate, and has a reputation for being unbiased – a factor that the numerous
corporate and Wall Street forecasts cannot lay claim to. The UCLA Anderson Forecast
for California is the most widely followed and oft-cited in the state and was unique
in predicting both the seriousness of the early-1990s downturn, and the strength of
the state economy’s rebound since 1993.

I call bullshit.

What I saw on Thursday looked a bit like trained seals balancing a ball on its nose to get a feast of fish. Whatever objectivity and credibility they believe they have, it isn’t reflected in rigorous analysis leading to objective conclusions. Instead what is presented is a bit more like Gary Watts with a shotgun blast of statistics supporting a predetermined bullish(it) conclusion.

The main problem I have with forecasts like these is their lack of direct causation.

Direct Causation

I have written before about Telling Good Analysis from Bad.

Once you have accurate data, the analysis of this data must focus on cause and effect. There must be direct causation linking a specific set of conditions to the outcomes these conditions will produce. A good analysis demonstrates this direct causal link in a clear and unambiguous manner. When an analysis relies on indirect causation, it is weak; when an analysis relies on implied causation, it is worthless.

In The Anatomy of a Credit Bubble, I demonstrated a number of direct causal links which impact how much people pay for houses:

  • House prices are directly correlated with amounts borrowed.
  • Amounts borrowed are directly correlated with the interest rate offered.
  • Amounts borrowed are directly correlated with the borrowers debt-to-income ratio.
  • Artificially low interest rates (reset issue) and exotic financing cause foreclosures.
  • Foreclosures cause higher interest rates.
  • Foreclosures above a certain threshold cause house prices to decline.
  • Declining house prices causes more foreclosures. (note the causally related downward spiral)
  • Declining house prices and increasing foreclosures cause lenders to lower debt-to-income ratios and raise interest rates.
  • Lower debt-to-income ratios and rising interest rates cause amounts borrowed to decline.
  • Less amounts borrowed (in conjunction with foreclosures) causes house prices to decline.

Notice the focus is always on correlation and causation forming a
chain of events leading to an inevitable conclusion. A good analysis
centers the debate around the premises. If the premises are true and
accurate, the conclusions cannot be denied.

In contrast, a bad analysis states a conclusion and offers support
through indirect or implied causation. When you read through the Gary Watts Real Estate Outlook 2007 you find yourself asking, “How does that impact house prices?” It is a question that is never answered.

The UCLA Anderson Forecast for Orange County is full of statistics just like a Gary Watts support, but the lack of direct causation weakens it significantly.

Residential Real Estate

I knew the presentation was in trouble when the speaker tells the audience to feel secure in buying a house because prices are at the bottom. I felt like I was being sold a used car or listening to a briefing by Baghdad Bob. He even called out the commenters on the blogs of the OC Register as “doom and gloomers.” I felt the camaraderie of the bubble blog world being challenged; besides, we were right.

The presentation is a series of charts and graphs similar to my analysis posts. There were a number of slides on defaults and foreclosures that looked very much like mine in Shadow Inventory Orange County.

There was a moment when the presenter was commenting on how defaults keep rising, but due to moratoriums foreclosures dropped for a time. I was thinking, “yes, that is shadow inventory.” But with a wave of his hands, he stops and says, “don’t worry about it, foreclosures will go down.”


Did I hear him properly? How can you lead people right up to the problem, show it to them, and then deny that it is there? He offered no explanation as to what happens to this inventory. He did say if there is any future inventory problem that it will be absorbed by rising prices.

Yea, right?

What is supposed to lead us to believe that the UCLA Anderson Forecast is correct? Their say so? That plus a report full of fancy graphs and trivial statistics is all you get.

Other than perhaps agreeing with my conclusions or maybe John Burns (Webcast: US Housing – Recovery on Government Life Support?) who also says we have 15,000 units of shadow inventory in OC, what would have impressed me?

Timing the Bottom

Let’s say the UCLA boys had taken their wonderful data and applied some historic parallels and direct causation to call a bottom. That would have impressed me. The analysis might have looked like this (with some help from Calculated Risk):

  • The last housing recession began in 1991.
  • The recession ended in 1992.
  • Unemployment peaked in 1993.
  • Foreclosures peaked in 1996.
  • The market bottomed in 1997.

Let’s look at the direct causation between these events and speculate on whether or not it should happen differently this time around.

The recession in the early 90s was caused by a slowdown in housing and real estate just like this one. That recession also saw slowdowns in defense contracting and other industries that made problems even worse. The recession ended in 1992, but the effect lingered as people had to be retrained to work in other fields, so unemployment did not peak until 1993. The delay between the end of the recession and the peak in unemployment is well documented.

There were many reasons for the foreclosure crisis of the mid 90s, and we have all of those problems back with more force. The foreclosures caused by unemployment do not occur on the day a borrower loses their job. The delay caused by draining all sources of savings, maxing out credit lines and utilizing legal maneuvers can slow the process for two or three years — as we have seen with properties profiled here daily; therefore, it is reasonable to assume foreclosures will peak two or three years after a major unemployment crisis. In fact, I would argue it is unreasonable to assume that foreclosures have peaked for this cycle — as the UCLA Anderson Forecast does — considering unemployment has not peaked, and the newly unemployed will cause defaults.

Last time around house prices bottomed as foreclosures peaked. It is unclear if either one caused the other. For example, if house prices bottomed simply because prices were affordable and supply was low, then foreclosures may peak not because borrowers are not distressed, but because distressed borrowers can sell into the resale market rather than go through foreclosure. Remember, foreclosures are not a sign of distress as much as they are a sign of distress that cannot be masked by selling in the open market.

The more commonly accepted conclusion is that once the pressure of distressed inventory was removed from the market — foreclosures ran their course — then prices rose because there was not overhanging supply keeping prices down. This explanation sounds reasonable, but is doesn’t explain why there was not a lag time between the peak of foreclosures and prices rising to work off the inventory. This lack of lag leads me to believe rising prices were partially responsible for falling foreclosures — something the UCLA Anderson Forecast is counting on this time.

Neither explanation of the coincidence in timing between the peak of foreclosures and the bottom of the market give us any indication of whether or not this phenomenon will repeat. I suspect it will not because the foreclosure volume is so large that there will be a significant period of time to work off the inventory, and contrary to the primary conclusion of the forecast, I do not think it is reasonable to assume that rising prices will magically absorb our shadow inventory because it is too large.

We will see who is right and who is wrong.

Block Party 11-9-2009

When will the housing market bottom?

I originally figured we would bottom in 2011. I was most recently quoted as saying I believe the bottom has been pushed back to 2012. Based on the facts and direct causations assembled above, when will the market bottom?

Well, we can throw out 2009 or 2010 because prices cannot bottom before unemployment peaks and foreclosures peak. On this basis alone, I am confident the UCLA Anderson Forecast is wrong. If unemployment peaks in 2010, and if there is a two or three year delay between the peak in unemployment and the peak in foreclosures caused by various delay tactics, then foreclosures should not peak until 2012 or 2013. If this corresponds to the bottom again, then we will bottom in 2012 or 2013. If we have a significant lag between the peak in foreclosures and the bottom of the market due to a glut of inventory, then we may not bottom until 2015.

Don’t do out and buy a house because you believe we are at the bottom. We aren’t.

12 ORANGETIP Irvine, CA 92604 front 12 ORANGETIP Irvine, CA 92604 kitchen

Irvine Home Address … 12 Orangetip Irvine, CA 92604

Resale Home Price … $494,900

Income Requirement ……. $92,128
Downpayment Needed … $98,980

Home Purchase Price … $699,000
Home Purchase Date …. 4/17/2006

Net Gain (Loss) ………. $(233,794)
Percent Change ………. -29.2%
Annual Appreciation … -8.3%

Monthly Mortgage Payment … $2,150
Monthly Cash Outlays ………… $2,820
Monthly Cost of Ownership … $2,130

Redfin Property Details for 12 Orangetip Irvine, CA 92604

Beds 3
Baths 2 full 1 part baths
Size 1,689 sq ft
($293 / sq ft)
Lot Size 2,462 sq ft
Year Built 2005
Days on Market 8
Listing Updated 10/28/2009
MLS Number P708154
Property Type Single Family, Residential
Community Walnut
Tract Othr



These undesirable properties are getting pounded. This infill site is between the 5, a shopping center and an old condo development next to the high school. It has every combination of negative.

Break Free

California is the land of free money in real estate. Are we doomed to repeat the cycle? or is the free money gone for good?

Irvine Home Address … 52 Freeland Irvine, CA 92602
Resale Home Price …… $589,000

I want to break free
I want to break free
I want to break free from your lies
You’re so self-satisfied I don’t need you
I got to to break free
God knows, God knows I want to break free

I Want To Break Free — Queen

Are any of you getting away to Las Vegas this weekend? Perhaps you might want to speculate in their housing market. Others have done so well recently… not!

If there is any market in the country that is the textbook example of a bubble it is Las Vegas. Take a good look at the Case-Shiller price chart for Las Vegas and the graphic for the psychological stages of a bubble market, and you see reality matches the concept perfectly.

CityCenter Las Vegas Cuts Condo Prices 30% for Existing Buyers

There is a friend of my wife’s who is a lifelong Las Vegas resident. The condo she bought in 1994 has recently had comps in the same complex sell for 5% less than she paid in 1994.

That is an overshoot of fundamentals signalling market despair.

Psychological Stages of Bubble Market

I am turning bullish on Las Vegas….

Irvine Home Address … 52 Freeland Irvine, CA 92602

Resale Home Price … $589,000

Income Requirement ……. $108,407
Downpayment Needed … $117,800

Home Purchase Price … $487,500
Home Purchase Date …. 8/28/2009

Net Gain (Loss) ………. $66,160
Percent Change ………. 20.8%
Annual Appreciation … 181.1%

Monthly Mortgage Payment … $2,530
Monthly Cash Outlays ………… $3,310
Monthly Cost of Ownership … $2,480

Redfin Property Details for 52 Freeland Irvine, CA 92602

Beds 3
Baths 3 baths
Size 1,904 sq ft
($309 / sq ft)
Lot Size n/a
Year Built 2001
Days on Market 3
Listing Updated 10/7/2009
MLS Number P706106
Property Type Condominium, Residential
Community West Irvine
Tract Othr

According to the listing agent, this listing is a bank owned (foreclosed) property.

Beautiful open floor plan with plenty of upgrades including built in entertainment center. Granite countertops throughout, Jet spa tub, Large Master Bedroom with Master retreat large enough for office. Window shutters throughout. Great schoold district. Close to shopping, entertainment and freeways.

Today’s featured property was originally purchased for $679,000 on 12/3/2004. The owner used a $543,200 first mortgage and a $135,800 downpayment. On 10/28/2005 he opened a HELOC for $107,000, but it isn’t clear that he took it out and spent it. He probably wishes he did.

Foreclosure Record
Recording Date: 07/22/2009
Document Type: Notice of Sale (aka Notice of Trustee’s Sale)
Document #: 2009000391119

Foreclosure Record
Recording Date: 04/10/2009
Document Type: Notice of Default
Document #: 2009000177255

Downey Savings — or now the FDIC — owns the property. They are hoping to make a few bucks back on the flip. This poor guy has all the damage of a foreclosure, but he didn’t extract his equity and have any fun. Too bad.

The Great Housing Bubble

And so concludes another week at the Irvine Housing Blog, chronicling the Irvine home market since September of 2006.

Have a great weekend.