Beautiful

Weekends are a bit different at the Irvine Housing Blog. We don’t get as much traffic as during the week because everyone has a life, and hopefully, they are out living it on the weekend. We are. It is a good time to try out different things and see how people like it.

Today, you will probably think I am a realtor. Today’s property I am profiling simply because I think it is beautiful. It is ridiculously priced, and it has been on the market a long time, but it is a beautiful home. I will probably never be in a position to own something like it, but it is nice to dream…

7 Meryton Inside

Price: $2,449,900IrvineRenter

7 Meryton
Irvine, CA 92603

Beds: 5
Baths: 4.5
Sq. Ft.: 3,400
$/Sq. Ft.: $721
Lot Size: 0.41 acres
Type: Single Family Residence
Style: Traditional
Year Built: 1995
Stories: Two Levels
View(s): Hills, Panoramic, Trees/Woods, Has View
Area: Turtle Rock
County: Orange
MLS#: S491216
Status: Active
On Redfin: 151 days
Unsold in 90+ days
Opportunity knocks! This elegant estate offers the ultimate in privacy and resort-like grounds. Situated on a cul-de-sac & w/ only one neighbor, this spectacular home showcases incomparable detailing & sophistication thruout. Perfect for entertaining, it even includes putting greens w/ 6 holes! Granite countertops in kitchen, powder & thruout master, custom wall color, sculpted carpeting & more. It’s in a great location and is incredibly private. Move in for the holidays!

Opportunity knocks! An opportunity to overpay for real estate.

sophistication thruout — interesting oxymoron.

Move in for the holidays! Don’t you wish?

7 Meryton Kitchen

7 Meryton Den

7 Meryton Rear

7 Meryton Pool

7 Meryton Golf

Actually, this house has a good lesson about sales and marketing. This house is well presented and it has everything someone could want in a home, and yet it isn’t selling. THE PRICE IS TOO HIGH!!! It appears that all the marketing in the world cannot overcome a price tag that is simply too high.

Home Sales Data thru 10-29-2007

Median sale price

Sales volume

ZIP

code

Prev. 4 weeks

change

from ’06

Prev. 4 weeks

change

from ’06

92602

$709,000

-12.7%

15

-40.0%

92603

$1,620,000

94.7%

12

-50.0%

92604

$550,000

-16.3%

14

-56.3%

92606

$566,000

24.2%

11

-50.0%

92612

$500,000

-5.7%

22

120.0%

92614

$685,000

10.2%

18

-18.2%

92618

$610,000

17.3%

11

-15.4%

92620

$670,000

-8.8%

30

-34.8%

Blue Skies

Blue skies, smilin’ at me
Nothin’ but blues skies do I see
Bluebirds singin’ a song
Nothin’ but bluebirds all day long

Blue Skies — Frank Sinatra

Link to Music Video

Everyone on Grandview street in Turtle Ridge sees nothing but blue skies, hears nothing but birds singing, and thinks nothing but happy thoughts. Nothing is going to interrupt their rosy view of the housing market — not even reality. Apparently there is nothing that cannot be overcome by a positive attitude and large doses of kool aid.

Perhaps I pick on Turtle Ridge too much. It is certainly an easy target. Whenever I want to profile a WTF home, I need look no further than Turtle Ridge. There are so many to chose from, and the prices are so ridiculously high, that I have to stop myself from profiling every home for sale in this neighborhood. Perhaps it really is that valuable? Perhaps not.

Today I am going to look at two more properties on Grandview. The 25 Grandview property I skewered back in September has lowered the price by $500,000. He must be experiencing some severe kool aid withdrawals. The two neighbors are still on the sauce.

53 Grandview Front 53 Grandview Kitchen

Asking Price: $4,999,000IrvineRenter

Income Requirement: $1,249,750

Downpayment Needed: $999,800

Purchase Price: $3,397,500

Purchase Date: 7/31/2006

Address: 53 Grandview, Irvine, CA 92603

1st Loan $2,377,900
2nd Mtg. $509,624
Downpayment $509,976WTF

Beds: 5
Baths: 5.5
Sq. Ft.: 5,700
$/Sq. Ft.: $877
Lot Size: 0.3 acres
Type: Single Family Residence
Style: Mediterranean, Other

Kool Aid Man

Year Built: 2006
Stories: Two Levels
View(s): Catalina Island, City Lights, Coastline, Ocean, Panoramic
Area: Turtle Ridge
County: Orange
MLS#: S507242
Status: Active
On Redfin: 30 days

From Redfin, “Fabulous panoramic view of city lights, ocean & Catalina Island is this Luxury Estate built by Luxury Laing builder, featuring Dual master Suites(junior on main floor). 5 bedrooms suites with thier own baths. Huge upstair’s Bonusroom/balcony. Richly appointed Gourmet Kitchen/center island with top of the line granite slab counter top, complete with elegant cabinets. L. room, F. room, D. room open into gorgeous courtuyard /F. place creating an excellent flow for all your entertainments. Sparkling pool & spa”

top of the line granite slab counter top? Now we have to distinguish these granite tops from the run-of-the-mill granite tops everyone else has.

L. F. D. room? Is that where they do their kool aid?

Does anyone think this guy is going to get $5M for this place, particularly when you can buy the same house at 25 Grandview for $1,000 grand less?

Well, this owner is not the biggest dreamer on the block…

63 Grandview Front 63 Grandview Wine Cellar

Asking Price: $5,200,000IrvineRenter

Income Requirement: $1,300,000

Downpayment Needed: $1,040,000

Purchase Price: $3,857,500

Purchase Date: 10/16/2006

Address: 63 Grandview, Irvine, CA 92603

1st Loan $1,900,000
Downpayment $1,957,500

Beds: 5WTF
Baths: 5.5
Sq. Ft.: 5,900
$/Sq. Ft.: $881
Lot Size: 0.36 acres
Type: Single Family Residence
Style: Mediterranean

Kool Aid Man

Year Built: 2006
Stories: Two Levels
View(s): City Lights, Coastline, Ocean, Panoramic, Has View
Area: Turtle Ridge
County: Orange
MLS#: S500308
Status: Active
On Redfin: 83 days

From Redfin, “Incredible Panoramic Views from Ocean to City Lights. One of the Nicest Plan 2AX to come on to the Market. Extra Deep Backyard with a Spectacular Pool, Sunken Sit-Down Firepit and a Covered Outdoor Kitchen for Entertaining and Enjoying Spectacular Sunsets and Views. Large Expanded Jr Master Suite Downstairs with an Tranquil Expanded Loggia. Rare and Large Wine Rm. Upstairs the Main Master Suite with its Sitting Rm and Extra Long Deck, 3 Other Bedrms w/ Baths + Bonus Complete this Fabulous Home.”

This second kool aid drinker can probably hold out forever. He will need to in order to get this asking price, but with 50% down, he shouldn’t be facing near the financial distress of his neighbor above who borrowed 90% of $3.4M. How would you like to make that mortgage payment? Yikes!

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As a departure from my normal Friday sign off, I would like to leave you with the words of Frank Sinatra (and the link to the music video.) They express how I feel when writing for the Irvine Housing Blog.Irvine

Now this could only happen to a guy like me
And only happen in a town like this
So may I say to each of you most gratef’lly
As I throw each one of you a kiss

This is my kind of town

Summer Wind

The summer wind, came blowin’ in from across the sea
It lingered there to touch your hair and walk with me
All summer long we sang a song and then we strolled that golden sand
Two sweethearts and the summer wind

Like painted kites, those days and nights, they went flyin’ by
The world was new beneath a blue umbrella sky
Then softer than a piper man one day it called to you
I lost you, I lost you to the summer wind

The autumn wind and the winter winds, they have come and gone
And still the days, those lonely days, they go on and on
And guess who sighs his lullabies through nights that never end
My fickle friend, the summer wind

Summer Wind — Frank Sinatra

Link to Music Video

Today, I am coming out of the closet: I am a Frank Sinatra fan. I have been carrying this secret shame since high school. When everyone else was blasting some obnoxious noise from their car stereo for all to hear, sometimes I would roll up my windows and crank Frank Sinatra. I am so white.

Back to the song…

Isn’t the market like a fickle summer wind? Doesn’t everyone have fond memories of great summer selling seasons gone by? So what happened in 2007?

3 Pearleaf Front 3 Pearleaf Kitchen

Asking Price: $550,000IrvineRenter

Income Requirement: $137,500

Downpayment Needed: $110,000

Purchase Price: $622,000

Purchase Date: 7/6/2005

Address: 3 Pearleaf, Irvine, CA 92618

1st Loan $400,000
Downpayment $222,000

Rollback

Beds: 2
Baths: 2.5
Sq. Ft.: 1,508
$/Sq. Ft.: $365
Lot Size: –
Type: Condominium
Style: Mediterranean
Year Built: 2000
Stories: Three or More Levels
Area: Oak Creek
County: Orange
MLS#: S506892
Status: Active
On Redfin: 30 days

From Redfin, “Absolutely Pristine Detached 2 BDRM + LARGE LOFT w/ Elegant Upgrades in Gated Oak Creek! Enjoy the RICH HARDWOOD FLOORS * NEW CARPET * HUNTER DOUGLAS SILHOUETTES * PLANTATION SHUTTERS & CUSTOM PAINT! Fantastic Floor Plan has 1st Floor Bdrm/Bath * Spacious Family Room w/ Terrace * Dining Rm * Spacious Kitchen w/ Corian Counters & SS Appl * Main Floor Laundry Rm & Pituresque Backyard! Enjoy the Award Winning Schools & Resort Style Amenities!”

Todd Muradian is probably the best realtor in Irvine. When we did Irvine Realtor Ratings 7-8-2007, Todd had the largest number of sales in Irvine.

Even the best still have issues with their CAPS LOCK sticking INTERMITTENTLY.

What is Pituresque? Is this place a Pit?

A bit slash happy, and fond of asterisks, but only 2 exclamation points…

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If this seller gets their asking price, they stand to lose $105,000, assuming a 6% commission. Will they get it?

The selling season has past. Fall is here, Halloween is coming, and the winter doldrums are right around the corner. Buyers are hard to find. Good luck.

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Autumn LeavesThe falling leaves drift by the window,
the autumn leaves of red and gold,
I see your lips, the summer kisses,
the sunburned hands, I used to hold.
Since you went away, the days grow long,
and soon I’ll hear old winter’s song
But I miss you most of all, my darling,
when autumn leaves start to fall

Autumn Leaves — Frank Sinatra

Link to Music Video — must see if you miss fall color

Oh, it’s a long, long while from May to December
But the days grow short when you reach September
When the autumn weather turns the leaves to flame
One hasn’t got time for the waiting game

September Song — Frank Sinatra

Link to Music Video — Duet with John Denver

The Supply Side- Postponements and Pent Up Supply

As the busted 2007 summer selling (listing?) season has transitioned to a paralyzed fall market with persistently high new and resale inventory, the fact that Orange County real estate can decline in price is no longer deniable. The precipitous drop in sales creates a serious conundrum for most homebuilders: they have to balance the need for cash flow with the desire to maximize profits (or at least minimize losses) on their investments in land purchases and in-process construction. The homebuilders working with TIC have the significant added wrinkle of not fully controlling their own pricing.

Since the fear of being ‘priced out forever‘ has convincingly departed prospective homebuyers, many have accepted the proposition that remaining in a current home or renting might not be such a bad thing after all, at least until some more of the price excess is eliminated. The term “wait and see” is showing up in more and more mainstream media (MSM) real estate stories referring to the position of buyers in this standoff. Interestingly, I’ve heard with increasing frequency anecdotal suggestions that since transaction numbers are so low, perhaps so many buyers are now on the sidelines that once prices show any sign of stabilizing, everyone at once will come rushing in to purchase and it will be off to the races with happy days and increasing medians all over again. This is the “pent up demand” theory. Although it shouldn’t be a big surprise to hear realtors make this comment, some relatively rational colleagues and friends of mine have also wondered this out loud.

Well, my analysis of news in and around Irvine developments shows that this is almost certainly not going to happen. I would argue that any pent up demand is being countered with similar, or probably more, pent up supply. Many of these have been discussed on the forums, but here is my working summary of projects that are imminent and/or postponed. All will contribute to pent up supply in the months and years ahead:

Woodbury East– John Laing’s Celadon bravely opened on schedule this summer, but the originally-scheduled (late summer 2008) debut of California Pacific’s Sienna came and went, and William Lyon’s Ivy models look complete but are standing by, currently promised as January 2008.

Lyon Ivy

Above- William Lyon’s Ivy: “bold” attached product. Are the salespeople keeping themselves occupied watching satellite TV?

CalPac Sienna Sienna spacing

Above- California Pacific’s Sienna detached condos, models still under construction…laid out like Decada and its predecessors. Is it my imagination, or did they manage to place these even closer together?

In Woodbury, CalPac’s Andalucia single family homes appear delayed (“early 2008” the letter says), but I’m not sure of what their original opening date might have been.

Not now, later.

Orchard Hills- This entire development, originally slated to begin sales in late 2007, is officially postponed more than a year to 2009. Don’t be surprised if the opening is not early 2009 or the delay goes even longer. The Orchard Hills Apartments opened this summer, and do not appear to have incentives, so they may be leasing better than I predicted. The retail shops also opened on schedule, but how long will they be willing to pay TIC lease rates without progress building the community that was (presumably) supposed to be their primary market?

You can see more discussion on Orchard Hills here in the forum or here in a previous blog posting.

The Great Park (former El Toro MCAS)- Lennar has become rather quiet regarding progress and planning at the Great Park; apparently enough so to cause questions on behalf of the City of Irvine as to whether they are still committed to the original proposals. Keep in mind that Lennar won the bid for this property at the apparent peak of the market, in mid-2005.

LA Times Lennar Delay

“In Irvine, Lennar’s plans to build thousands of homes around the planned Orange County Great Park have been pushed back, and the city has not received an updated timeline from the developer since 2005.City officials said Lennar had projected that it would have 781 homes for sale by next year, though the developer said it vowed only to have that number of home sites ready for construction.A plan unveiled by Lennar last summer to nearly triple the number of homes from 3,625 to 9,500, while cutting back on commercial space and adding 400 acres to the park, hasn’t even been discussed with city officials.”

The Orange County Business Journal(registration required) quoted company officials as saying “I don’t think anyone has seen the bottom yet…[but] Lennar will be ready when the rebound comes” in reference to the housing market and their Orange County plans.

The new Village of Stonegate, north of Woodbury, has two signs from CalPac: Palmeras and Mirasol. I couldn’t find any details about either. One or both could even be apartments.

Palmeras Sign CalPac Mirasol

The grading and laying of utilities at Stonegate appears not too far behind similar work at Orchard Hills.

In the Villages of Columbus, William Lyon’s Mirabella luxury townhomes and Ainsley Park paired homes are “Coming soon.” From the brief description on the VOC website, it appears Mirabella is the Columbus Square successor to Kensington Court. Interestingly, they list a higher starting price point than Kensington Court (Columbus Grove, Irvine), which seems implausible given the change in the market and Tustin address.

For a good recap of Irvine project planning, see Zovall’s zoning map post.

A few interesting nuggets of industry rumor: Lennar is reportedly contemplating an end-of-year auction for at least some of their properties at the Villages of Columbus. Their end of fiscal is November, so this would likely occur in the next 30 days if true. Also, The Irvine Company is floating proposals for some kind of post-sale price guarantee to try to coax buyers off the fence. Details are very sketchy, and even if true, timing is unknown.

So the bottom line question should be: Will the buyers waiting for the market to get worse outlast the sellers waiting for the market to get better? For the sellers to win that battle, it assumes plausible the argument that the market is capable of postponing itself back to prosperity. Don’t bet on it.