Sky Starts Falling — Doves
Is the sky really falling? I guess it depends on whether or not you associate falling real estate prices with the end of the world. Real estate prices are falling, and they will continue to do so until prices are affordable again. With all of the talk about stabilizing the housing market, people overlook the benefits of affordable housing. If people can live in a property and only spend 28% of their income on it, they have money left over for other uses. The economy will benefit from lower prices as discretionary consumer spending will increase. Of course, if you believe in perpetual Ponzi Scheme financing, we can always fuel our economy on ever-increasing debt loads justified by inflated real estate values. However, we just tried that, and so far the results haven’t been too encouraging. We grossly misappropriated resources to non-productive uses, we overbuilt home improvement shopping centers, and we employed too many people in real estate related professions. The inevitable collapse of the Ponzi Scheme has left us deeply in debt, with an insolvent banking system, and with an economic recession. It will take many years for the California economy to readjust from the housing bubble just as it did in the early and mid 90s. The allocation of resources must change, and it will not be a pleasant process. I hope the California economy that emerges is rooted in something productive rather than another unsustainable Ponzi Scheme.
Today’s featured property is another loser in our real estate game of musical chairs. When the music stopped, today’s owner had taken out all the equity and left the lender is without a chair.
Income Requirement: $124,975
Downpayment Needed: $99,980
Monthly Equity Burn: $4,165
Purchase Price: $699,000
Purchase Date: 4/13/2006
Address: 10 Orangetip, Irvine, CA 92604
Beds: | 3 |
Baths: | 3 |
Sq. Ft.: | 1,785 |
$/Sq. Ft.: | $280 |
Lot Size: | 2,568
Sq. Ft. |
Property Type: | Single Family Residence |
Style: | Contemporary |
Year Built: | 2006 |
Stories: | 2 Levels |
Area: | El Camino Real |
County: | Orange |
MLS#: | P654243 |
Source: | SoCalMLS |
Status: | Active |
On Redfin: | 7 days |
home with wood floors, two toned paint, custom banisters, designer
carpet, granite, stone and shutters. Upstairs masters has a retreat and
oversized dressing room, walk-in closet and nicely appointed bath.
Backyard has a great patio perfect for entertaining. Neighborhood has
no mello roos, low tax rate and close to everything. In the much sought
after Irvine High School disrtict. Close to shopping, parks, and
freeways. Association includes pools, spa, and tennis courts.
Do you like the $499,900? Why not $499,999.99 and 9/10. If you are going to price like a used car dealership or a gas station, why not go all the way?
Highly upgraded? As opposed to lightly upgraded? Or just upgraded? Or perhaps downgraded? Maybe flippers will start tearing out the good stuff and putting in the junk you see in mobile homes…
How do you like the patio “perfect for entertaining?” I thought I was looking at the grounds of Versailles.
This property was purchased on 4/13/2006 fir $699,000. The owner used a $534,171 first mortgage, a $142,445 second, and a $22,304 downpayment. He refinanced on 5/1/2007 with a $588,000 first mortgage and a $110,100 HELOC effectively pulling out all but $900 of his downpayment. He is now offering it for sale at 29% less than his purchase price. Assuming this short sale is approved, a buyer is found at this price, and a 6% commission is paid, the total loss on the property will be $229,094. Taylor Bean & Witaker Mortgage Corporation will lose on the first mortgage, and Citibank will lose their HELOC money.
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Who am I supposed to be?
I can’t be sure that the next one will see me
And if the sky starts falling on the street outside
The only thing that satisfies
If the sky starts falling on the heads outside
The only thing that keeps me alive
If you see her again, be sure to say hello
Be sure to send my love
Did she seem like before
Could you seem above it all
Be sure to send my love
Wake up, waking up to see
It’s a sign
That what will be will be
And if the sky starts falling on the street outside
The only thing that satisfies
If the sky starts falling on the heads outside
The only thing that keeps me alive
Sky Starts Falling — Dove