I’m too sexy for my shirt too sexy for my shirt

So sexy it hurts

And I’m too sexy for Milan too sexy for Milan

New York and Japan

And I’m too sexy for your party

Too sexy for your party

No way I’m disco dancing

I’m too sexy for my car too sexy for my car

Too sexy by far

And I’m too sexy for my hat

Too sexy for my hat what do you think about that

I’m Too Sexy — Right Said Fred

Link to Video

During the bubble, weren’t we all so enamored with real estate that it was sexy? I imagine when the person who purchased today’s property felt pretty as a Peacock when they bought it. After all, they were about to become rich beyond anyone’s wildest dreams — or so they thought. Fast forward 18 months, and their property is in repossession. I doubt that was a turn on.

Asking Price: $619,000

Purchase Price: $497,768

Purchase Date: 3/9/2006

Address: 5 Peacock, Irvine, CA 92604

Sales History

Date Price

06/06/2007 $497,768

11/17/2005 $630,000

04/17/2003 $386,000

09/13/1993 $198,000

1st Loan $472,500

2nd Mtg. $157,500

Downpayment $0

Beds: 3

Baths: 2.5

Sq. Ft.: 1,665

$/Sq. Ft.: $372

Lot Size: 2,720 sq. ft.

Year Built: 1975

Stories: 2

Type: Single Family Residence

View: Park or Green Belt

County: Orange

Neighborhood: El Camino Real

MLS#: S499390

Status: Active

On Redfin: 22 days

From Redfin, “Great value on gorgeous remodel! Granite counters, matching stainless a ppliances, french doors, fireplace, new carpet, custom paint, cathedral ceilings, central air, private courtyard and attached 2 car garage. All located on quiet cul-de-sac near association pool and jacuzzi. Low asssociation with easy walk to shopping and schools. No mello roos.”

asssociation? Is that a ssstudder?

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In my opinion, this neighborhood is not very desirable. The properties themselves are spacious and the grounds are well maintained, but you have the high school on one side and a commercial center on the other. You could walk to Heritage Park, but you have to pass in front of the high school to do it. This neighborhood lacks the peacefulness and walkability of most Irvine villages.

Being a less desirable neighborhood, it would have been a prime target for flippers as properties could be picked up less expensively. It isn’t hard to imagine the thought process of the flipper: “Buy a cheap property for no money down, and hold it for a profit. If it doesn’t go up in value, who cares, just walk away.” Unfortunately, this will probably work.

So here we have another 100% financing deal gone bad. What a surprise.

These dreams go on when I close my eyes

Every second of the night, I live another life

These dreams that sleep when it’s cold outside

Every moment I’m awake, the further I’m away

These Dreams — Heart

Link to Video

Everyone has dreams. We would all like to have unlimited money with no effort on our part — kind of like buying a home was supposed to be during the bubble…

Today’s property is clearly dreaming about the next rally where someone will be foolish enough to pay this WTF price. Of course, the market is moving the other direction, and every moment they are awake, their dream gets farther away.

Asking Price: $1,119,500

Purchase Price: $405,000

Purchase Date: 7/18/1996

Address: 4 Holly, Irvine, CA 92612

Beds: 4

Baths: 2.5

Sq. Ft.: 2,850

$/Sq. Ft.: $393

Lot Size: 4,876 sq. ft.

Year Built: 1974

Stories: 2

Type: Single Family Residence

View: Pool

County: Orange

Neighborhood: University Park

MLS#: P575451

Status: Active

On Redfin: 110 days

Unsold in 90+ days

It seems that this listing has recently changed to ‘Hold Do Not Show’ status.  Here is the description from Redfin while it was up, “Beautifully upgraded Parkside home with pool and spa. Home has numerous upgrades including 18inch tile flooring, duel drawer dishwasher, granite countertops, custom cabinets in office, new stairway, new chandeliers, pool redone, new window to capture view of pool. Also, a built-in entertainment center, wet bar, french doors, lifetime warranted cement tile roof, surround sound, putting green, new mantel, new AC, furnace, ducts, & 2hot water heaters. And a master bath ‘to die for'”

Sometimes a realtors colloquial manner comes off more uncouth than cultured — And a master bath ‘to die for’

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This is the only property for sale in University Park for over $1,000,000. This home is large, and they are asking a high dollars per square foot price. In short, this price is ridiculous (and I am happy to ridicule it.)

Do you get the feeling some of these prices are set because people just really like their homes? These people obviously have no real desire to sell their home, or they would have priced it somewhere in the realm of sanity. It probably is worth over a million dollars — to them. The problem is that nobody else is going to agree.

Just in case you don’t think this price is too high, let’s see what you can get of similar size in University Park.

Price: $819,000

18 FOXGLOVE WAY

Irvine, CA 92612

Beds: 4

Baths: 2.5

Sq. Ft.: 2,682

$/Sq. Ft.: $305

Lot Size: 3,200 sq. ft.

Year Built: 1967

Stories: 2

Type: Condominium

County: Orange

Neighborhood: University Park

MLS#: U7002268

Status: Active

On Redfin: 83 days

Largest University Park Townhome: 2682 sq. ft. , 4 bedrooms and 2.5 baths. Pristine condition. Located on cul-de-sac. Vaulted ceiling. Light, bright, open floor plan. Walking distance to schools and stores.

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This property is almost as large, it is updated inside, and it is $300,000 less expensive. Hmmm…

Price: $719,900

30 OAK TREE LN

Irvine, CA 92612

Beds: 4

Baths: 2.5

Sq. Ft.: 2,700

$/Sq. Ft.: $267

Lot Size: 3,000 sq. ft.

Year Built: 1969

Stories: 2

Type: Single Family Residence

View: Park or Green Belt

County: Orange

Neighborhood: University Park

MLS#: S495329

Status: Active

On Redfin: 48 days

Great price for so much square footage. Seller is only the 2nd person to live here. Property needs updating, so bring your client who wants to make the changes for themselves and not live in somebody elses remodeling. Ceilings have recently been scraped, freshly painted and new carpeting installed. All termite work has been completed. Quiet location in University Park, backs to greenbelt, excellant association facilities and Uni High School.

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This property is almost as large, and it is $400,000 less expensive. It needs remodeling, but for $400,000, I bet you could do a fantastic job.

My conclusion: the price of 4 Holly is laughably silly. Therefore, we honor these sellers with our WTF Award!

Once upon a time you dressed so fine

You threw the bums a dime in your prime, didn’t you?

People’d call, say, “Beware doll, you’re bound to fall”

You thought they were all kiddin’ you

You used to laugh about

Everybody that was hangin’ out

Now you don’t talk so loud

Now you don’t seem so proud

About having to be scrounging for your next meal.

How does it feel

How does it feel

To be without a home

Like a complete unknown

Like a rolling stone?

Like a Rolling Stone — Bob Dylan

Link to Video

One of the strongest arguments for a dramatic decline in house prices is the influx of must-sell inventory on the market. The primary sources will be bank REOs and distressed homeowners on their way to becoming bank REOs. The primary group of people who will lose their houses to bank repossession will be overextended buyers who came in late to the rally. They simply bought too much house, and they will not be able to make the payments, particularly after their loan resets. Most of the REOs we have seen to date fall in this category.

(Mortgage Equity Withdrawal — From Calculated Risk)

However, there is another group of homeowners who will succumb that we have not seen much of yet: home equity line-of-credit abusers. Southern Californian’s spendthrift ways were chronicled in Southern California’s Cultural Pathology. We have speculated many homeowners who may have purchased years ago and should be sitting on mountains of equity are not. Many, many people took the equity out of their homes and spent it. This puts them in the same situation as those late buyers — too much mortgage and too little income. This is how mortgage equity withdrawals will make the foreclosure problem even worse than most imagine.

Todays property has been featured before: Where are the flippers when you need them?

It is a sad story in many ways. The family that used to own this home purchased in 1990, and they HELOCed themselves into oblivion. I am sure they had their reasons for borrowing so much money, but in the end, they are without a home.

Asking Price: $699,900

Purchase Price: $689,000

Purchase Date: 5/22/2007

Address: 4741 Lindstrom, Irvine, CA 92604

Beds: 4

Baths: 3

Sq. Ft.: 2,332

$/Sq. Ft.: $300

Lot Size: 5,550 sq. ft.

Year Built: 1971

Stories: 2

Type: Single Family Residence

View: Park or Green Belt

County: Orange

Neighborhood: El Camino Real

MLS#: P591615

Status: Active

On Redfin: 20 days

Fixer-upper

From Redfin, “Fixer in great Irvine location. Backs Presley Park; very private yard. Good 2-story floor plan with 1 BR/1 BA downstairs & huge bonus room upstairs. This property needs work, but is a great opportunity for a buyer to customize! It is being sold AS IS with no warranties.”

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This is definitely a fixer-upper. Remember this video? This place was scary.

This was for sale for $647,000 for months before the repossession, so I don’t hold out much hope for the bank getting $699,900.

The pieces are all fitting together as many bubble bloggers have theorized. When we first started making these predictions, many chided us at tin-foil hat wearing Chicken Littles. Well, the sky is indeed falling — as are home prices.

Address: 1428 Scholarship, Irvine, CA 92612

Plan: 2AL 1213 sq ft – 2+loft/2

MLS: P555577 DOM: 216

Sale History: none

Price Reduced: 04/16/2007 — $624,990 to $594,990

Current Price: $594,990

Although we’ve covered Avenue One before, I think this deserves another post. 1428 Scholarship is a brand new home (Plan 2AL) listed by K. Hovnanian (the builder). After a couple months on the market, the builder dropped the price by $30,000. Apparently, it wasn’t enough to get this place sold (even in the busy summer season). The property is still on the market 4 months after the price cut.

Before we get to who is undercutting the builder, let’s see who the builder is undercutting.

Address: 2475 Scholarship, Irvine, CA 92612

Plan: 2AL(?) 1253(?) sq ft – 2+loft/2

MLS: S497758 DOM: 30

Sale History: $687,469 (?) on 4/5/2006 (from Property Tax Records)

Current Price: $669,000

The builder is severely undercutting the investor that owns 2475 Scholarship. This investor (a RE agent) is currently renting out the unit. The price is significantly higher than what the builder is offering. But wait, it comes “Fully FURNISHED!!” It looks like it is the same floor plan as the unit above but I’m not 100% sure.

So the builder is making it hard for flippers and investors to make money. This is nothing new for Avenue One. Now, let’s look at a unit that is going to make it hard for the builder to move their product.

Address: 1442 Scholarship, Irvine, CA 92612

Plan: 2AL 1253 sq ft – 2+loft/2

MLS: P593507 DOM: 10

Sale History: $692,595 (?) on 7/26/2006 (from Property Tax Records)

Current Price: $539,900

This looks to be the same exact floorplan as the two properties above. The price is $130,000 less than the investor flip and $55,000 less than what the builder is asking!

How is this possible? How can someone sell a property for less than the builder? Meet the bank 🙂 This is a Bank Owned property but I don’t have the details on the foreclosure. If someone has access to the info, please post it.

Perhaps this unit is priced low to generate interest. If it does sell near this price, it’s going to hurt the comps in a big way considering that it looks to have been purchased for almost $700k last year.

Any guesses which property (Builder, Flipper, or Bank) will sell first? And when?