Wonder Walls

Today is gonna be the day
That they’re gonna throw it back to you
By now you should’ve somehow
Realized what you gotta do
I don’t believe that anybody
Feels the way I do about you now

Wonderwall — Oasis

Link to Music Video

Do the lyrics of that song speak about going through short sales and foreclosures? One thing is certain about housing right now: nobody feels the same way they did about it 2 years ago…

Asking Price: $550,000

Income Requirement: $137,500

Downpayment Needed: $110,000

Purchase Price: $665,000

Purchase Date: 9/12/2005

Address: 43 Ardmore, Irvine, CA 92620

1st Loan $532,000
2nd Mtg. $66,500
Downpayment $66,500

Beds: 3
Baths: 3
Sq. Ft.: –
Lot Size: –
Property Type: Condo/Co-op
Area: Out of Area
County: Orange
MLS#: 07-229191
Status: Active
On Redfin: 2 days

From Redfin, “Short Sale! Seller must sell. Bring all offers. High ceiling. Olympic size community swimming pool. Close to shopping mall. “

High ceiling? Is this the only positive feature the realtor could mention? Does it make you suspect it is a complete dump?

This is perhaps the smallest kitchen I have ever seen.

Yet another deep, deep rollback. If the property sells for its asking price assuming a 6% commission, the total loss is $148,000: the seller stands to lose their $66,500 downpayment, and the 2nd mortgage holder stands to lose their $66,500, and the primary mortgage holder stands to lose $15,000. Ordinarily, the primary mortgage holder would foreclose rather than take a loss, but for $15,000, they should take the deal and count their blessings. It will be more expensive for them if they foreclose. Alas, since the system is broken, the loan servicer will foreclose and collect their fee, and the mortgage holder will absorb an even greater loss.

Hmmm… Maybe there were reasons we had banks hold their own mortgages in the past…

Home Sales Data thru 10-15-2007

Median sale price

Sales volume

ZIP

code

Prev. 4 weeks

change

from ’06

Prev. 4 weeks

% change

from ’06

92602

$630,000

-25.0%

-29.6%

92603

$1,179,000

29.6%

-45.5%

92604

$555,000

-14.9%

-40.6%

92606

$610,000

-15.6%

16.7%

92612

$485,000

-27.5%

6.3%

92614

$610,000

10.9%

-14.8%

92618

$525,000

-12.5%

300.0%

92620

$745,000

-14.5%

-60.3%

Four data points between -12.5% and -14.9% with two above and two below. Looks like we are down between 12.5% and 15% YOY, although with such low volume figures, who knows where we really are?

Balcony View Update 1

19 Fresco has found some motivation to sell. The asking price just dropped $300,000.

Meeting you, with a view to a kill
Face to face in secret places, feel the chill.

But can we dance into the fire
That fatal kiss is all we need
Dance into the fire
To fatal sounds of broken dreams
Dance into the fire
That fatal kiss is all we need
Dance into the fire
When all we see.. is the view to a kill

A View to a Kill — Duran Duran

Link to Music Video

The properties on the top of Quail Hill offer tremendous views. All week we have been documenting the sounds of broken dreams. The properties we are featuring today all have great views of the carnage on display below.

Is the high end of the market immune? Not likely, but they aren’t showing the stress to the degree the lower priced units are. Today we have a distressed property hoping to get out at breakeven, a wishing price, and a true WTF candidate. Enjoy.

New Asking Price: $1,950,000

Old Asking Price: $2,249,000

Purchase Price: $2,206,500

Purchase Date: 6/15/2006

Address: 19 Fresco, Irvine, CA 92603

1st Loan $1,544,232
2nd Mtg. $220,600
Downpayment $441,668

Beds: 4
Baths: 3.5
Sq. Ft.: 4,150
$/Sq. Ft.: $542
Lot Size: 7,500 sq. ft.
Year Built: 2006
Stories: 2
Type: Single Family Residence
View: City Lights, Mountain, Panoramic, Other
County: Orange
Neighborhood: Quail Hill
MLS#: S489248
Status: Active
On Redfin: 68 days

From Redfin, “TOP SINGLE-LOAD ST W/ PANORAMIC VWS OF CITY LITES, SUNSTS & MNTAINS! EVERY BLDER UPGRADE IMAGINABLE!GATED ENTRYW/ SEC. SYS; HARDWD & SLATE FLRING; CUSTM STAIRWY W/ WROUGHT IRON; FORMAL LR+GR8 RW/ CUSTOM F. P. & BLT INS; FORMAL DR W/ BLT-INS + WINE HUTCH; WD BEAMED CEILINGS; SURROUND SND; CROWN MOLDING; MANY FR DRS; 3 BALCONIES!SUPER GR8 RM!CHEF’S KITCH W/ SUB-ZERO FRIDGE, WINE COOLER, CUSTM CABINETS; GRANITE ISLND/B-FAST BAR; WOLFE RANGE; OPULENT MBR W/ RETREAT, EXERCISE RM, JACUZZI TUB+WALK-IN SHOWER; 3 WALK-IN CLSTS+MORE!”

Somebody turn off the CAPS LOCK.

This realtor must have an issue with vowels. Why remove them? You don’t save that much space.

First, I would like to say all three of these properties are beautiful. There are some outstanding Irvine tract homes. Second, I would like to say that anyone who pays over $2,000,000 for an Irvine tract home is crazy.

It looks as if our seller is trying to get out somewhere near breakeven from the price they paid about a year ago. As we all know, last June when this seller made their purchase was the peak of the market. What chance do you see of them getting out at breakeven? At 68 days on the market, their chances don’t look promising. If they do manage to get their asking price, they stand to lose $92,440 after a 6% commission. I bet they could have rented the place for less than the $7,703 per month they will lose, and that isn’t counting the payments they made. Ouch!

Asking Price: $2,249,000

Purchase Price: $1,814,000

Purchase Date: 3/28/2006

Address: 29 Balcony, Irvine, CA 92603

1st Mtg $1,451,013
Downpayment $362,987

Beds: 4
Baths: 3.5
Sq. Ft.: 4,150
$/Sq. Ft.: $539
Lot Size: –
Year Built: 2006
Stories: 2
Type: Single Family Residence
View: City Lights, Hills, Mountain, Panoramic, Other
County: Orange
Neighborhood: Quail Hill
MLS#: S493331
Status: Active
On Redfin: 39 days

From Redfin, “A TRUE MASTERPIECE Highly Upgraded Inside & Out with extensive use of Natural Flagstone Hardscape, Blt-In BBQ, Outdoor Fireplace & 3 Water Features! The Interior features Stone & Distressed Hardwood Flooring * Two Grand Fireplaces * Beamed Ceilings * Multiple Custom Blt-Ins * Wine Storage * Wrought Iron Stair Railings & Much More! A Truly Gourmet Kitchen w/ SS Appliances * Large Center Island * Dual Convection Ovens * Six Burner Cooktop & Designer Backsplash! Large Mst. Suite w/ Exercise Rm. & Panoramic Views!”

Is there something wrong with periods? I always thought a period ended a sentence and not an asterisk or an exclamation point. Perhaps realtors have their own grammar?

This is a classic “wishing price.” This seller also bought at the peak, but somehow this property has appreciated 20% over the last year. Go figure. If someone where going to spend this kind of money, they would be better off going up the hill to 19 Fresco and paying less money.

Asking Price: $2,999,000

Purchase Price: $2,698,500

Purchase Date: 10/18/2006

Address: 15 Balcony, Irvine, CA 92603

1st Loan $1,888,880
2nd Mtg. $269,840
Downpayment $539,780

Beds: 4
Baths: 3.5
Sq. Ft.: 4,800
$/Sq. Ft.: $625
Lot Size: 10,000 sq. ft.
Year Built: 2006
Stories: 2
Type: Single Family Residence
View: City Lights, Panoramic, Park or Green Belt
County: Orange
Neighborhood: Quail Hill
MLS#: P576305
Status: Active
On Redfin: 83 days

From Redfin, “BEST IN QUAIL HILL * FORMER MODEL HM * BREATHTAKING VIEWS * LUXURY FUR NISHED ESTATE * X’LNT SINGLE LOADED ST * THE UTMOST ATTENTION TO DETAIL, UNIQUE MATERIAL & FINEST WORKMANSHIP * 4 BR 3.5 BA + LIBRARY + WINE RM + UPSTAIR BONUS RM * DBL STAIRCASE * PRIVATE WROUGHT IRON GATE LEAD TO COURT YARD * CROWN MOLDING, CUSTOME BUILT-IN’S * STONE WALL & WROUGHT IRON DBL DOORS * GRANITE, HIGHLY UPGRADED BATH RMS * EXQYUSUTEKY LANDSCAPING * . .. TOO MANY ITEMS TO LIST * GREAT VALUE * DON’T MISS THIS OUT *”

This CAPS LOCK think is really annoying…

What is EXQYUSUTEKY? After 83 days do you think the realtor might have caught that misspelling?

And for our weekly denouement we have this knife-catching, kool-aid-drinking dreamer. When this seller paid almost $2.7 million for this property at the end of last year, I have to wonder what they were thinking. Could this property possibly be that much better than these two neighboring properties we just featured? This is the most expensive property listed in Quail Hill, and there are others which are bigger, nicer, and farther up the hill selling for less money. To be quite honest, even some of these other properties have silly asking prices. WTF?

37 FRESCO, Irvine, CA 92603

38 W SILHOUETTE CMN, Irvine, CA 92603

51 MOMENTO, Irvine, CA 92603

I can’t figure out how this seller thinks they can get this price. I can’t figure out how they justify what they even paid for it. And with my confusion comes confirmation that this is indeed a WTF award winner.

I hope you all have enjoyed Quail Hill Week at the Irvine Housing Blog. Come back next week as we continue to document the slow motion train wreck that is our housing market. Have a great weekend!

The King

When I was 17,
I dreamed of being king.
And having everything I wanted.
But that was long ago
and my dreams did not unfold,
so I’m still the King of Nothing.

King of Nothing — Seals & Crofts

Link to Music Video

Link to Metalica King Nothing

An Englishman’s home is his castle, or so the saying goes. Today’s seller is going to take a loss, so that makes him the King of Nothing.

Asking Price: $861,000

Income Requirement: $215,250

Downpayment Needed: $172,200

Purchase Price: $875,000

Purchase Date: 2/27/2006

Address: 10 Mineral King, Irvine, CA 92602

Beds: 4
Baths: 2.5
Sq. Ft.: 2,477
$/Sq. Ft.: $348
Lot Size: –
Type: Single Family Residence
Style: Contemporary
Year Built: 2000
Stories: Two Levels
View(s): Park or Green Belt
Area: Northpark
County: Orange
MLS#: S509200
Status: Active
On Redfin: 4 days

From Redfin, “MODEL PERFECT HOME IN PRESTIGIOUS GUARD GATED NORTHPARK W/ BEAUTIFUL POOLS, TENNIS & TREE LINED PARKS. FABULOUS PLAN OFFERS FORMAL LR & DR WHILE CAPTURING ‘GREAT ROOM FEELING’ FOR ENTERTAINING IN THE FAMILY RM. GOURMET KITCHEN W/ GRANITE, STAINLESS/BLK APPLIANCES. BONUS/4TH BR HAS WALK-IN CLOSET (NOW USED AS A STUDY NICHE). SUMPTUOUS MASTER W/ RETREAT & LUXURIOUS BATH W/ SHOWER, SOAKING TUB & WALK-IN CLOSET. UPGRADED THRUOUT W/ EXTENSIVE TILE FLOORING, SHUTTERS, CUSTOM DRAPES & VALENCES. MUST SEE!”

I AM GETTING REALLY TIRED OF THE CAPS LOCK.

CAPTURING ‘GREAT ROOM FEELING’? — You’ve lost the loving feeling…

Today’s seller stands to lose $65,660 assuming a 6% commission. Does anyone think they will get the asking price? I don’t.

Not a big loss in the grand scheme of things. When I profile a property with a loss of less than $100,000, it doesn’t seem quite as interesting, does it? I have to imagine, the $65,660 loss will be a big deal to the seller. At this point, the seller is just trying to salvage what’s left of their $150,000 downpayment. Good luck with that.

I hope you have enjoyed your visits to the Irvine Housing Blog this week. It was our pleasure to bring it to you. Please come back next week as we continue chronicling ‘the seventh circle of real estate hell.’ Have a great weekend.

🙂

Here may we reign secure, and in my choice To reign is worth ambition, though in Hell. Better to reign in hell than serve in heaven.

Paradise Lost — John Milton
.

Retirement

Old days
Good times I remember
Fun days
Filled with simple pleasures
Drive-in movies
Comic books and blue jeans
Howdy doody
Baseball cards and birthdays
Take me back
To a world gone away
Memories
Seem like yesterday

Old days
Good times I remember
Gold days
Days Ill always treasure
Funny faces
Full of love and laughter
Funny places
Summer nights and streetcars
Take me back
To a world gone away
Boyhood memories
Seem like yesterday

Old Days — Chicago

Link to Music Video

I wrote this in Brio New World “Previous generations had a formula for a “normal,” happy life. You used to save your money until you had a 20% downpayment, then you bought a house, and if you had increases in income, you could move up to a nicer place. Home ownership was a symbol of success. It proved you could save to reach a goal; it proved you were responsible; it made you happy. It was also a ticket to financial security as your home equity would become a savings account you could use to fund your retirement when you downsized to smaller accommodations. These were the rules of old.”

Today’s property is an example of someone living by the old formula.

Asking Price: $799,000

Income Requirement: $199,750

Downpayment Needed: $159,800

Purchase Price: $112,500

Purchase Date: 8/23/1979

Address: 9 Williams, Irvine, CA 92620

Beds: 4
Baths: 2.5
Sq. Ft.: 2,101
$/Sq. Ft.: $380
Lot Size: 6,030 sq. ft.
Type: Single Family Residence
Style: Contemporary
Year Built: 1979
Stories: Two Levels
Area: Northwood
County: Orange
MLS#: S457142
Status: Active
On Redfin: 407 days
Unsold in 90+ days

From Redfin, “HUGE CULDESAC LOT! Northwood charmer! Spacious home, well located, in quiet neighborhood. Downstairs den can easily be converted to 4th bedroom. Cathedral ceilings! New Appliances. Tons of storage space. Two fireplaces (Living Room & Master Bedroom). Walk-in closets in Master & guest rooms. Ceiling fans throughout. Over-size living area! Balcony off Master bedroom! Huge back and side yards with Gazebo style Jacuzzi! Close to shopping, schools, and freeways. NO MELLO ROOS AND NO ASSOCIATION FEES!!”

INTERMITTENT caps LOCK!

Exciting EXCLAMATIONS!!!

Tons of storage space? Mixing measures, weight and volume?

This is the quintessential example of an owner who does not need to sell. The house was purchased in 1979 for $112,500. There is a first mortgage for $62,400 that is probably nearly paid off. The owners have a mailing address in Grants Pass, Oregon which is likely where they are living in their retirement.

They have two choices:

They could rent this place for an easy $3,000 a month, or

They could sell the place and put the proceeds in the bank at 5%.

Surprisingly enough, either choice nets about the same income depending on the amount of capital gains taxes. It does make me wonder if they have a renter in the house now. You would think that if they decided to sell the place, they would lower the price to sell it immediately or take it off the market and get a renter in there. Sitting empty, this house makes them nothing.

If this were your retirement nest egg, what would you do?