Originally posted: September 29, 2006

Address: 714 Timberwood, Irvine, CA 92620 (Northwood)
Plan: 1400 sq ft – 2/2.5
MLS: R65177 DOM: 129
Sale History: 06/18/2004: $575,000
11/01/2002: $365,000
Price Reduced: 05/26/06 — $575,000 to $567,000
Price Reduced: 06/02/06 — $567,000 to $555,000
Price Increased: 06/22/06 — $555,000 to $564,900
Price Reduced: 09/16/06 — $564,900 to $545,000
Price Reduced: 09/25/06 — $545,000 to $529,900
Current Price: $529,900

Wow! The owner here is going to be taking a HUGE hit. This property is well below it’s 2004 price. Perhaps there’s more to this than meets the eye. If this is legit, we’re talking about a $77,000 loss (includes 6% in commissions).

UPDATE #1 – October 5, 2006

After 132 DOM, apparently this listing expired a few days after we mentioned it here. I’m not sure why but the agent bumped the price up to $545,000 right before it expired. Did the owners change their mind about selling? NOPE, the property is now back with a FRESH new listing and a LOWER price!

MLS: R70292 DOM: 3
Current Price: $499,900

Let’s take a look at the price. The highest price that one of these Plan 4s sold for was $605,000 for 208 Timberwood on 4/27/2006. That buyer must be feeling pretty crappy right now. Our buddy here at 714 Timberwood is asking $105,000 less. That’s a decline of over 17% in about 5 months!!

If sold for the new listing price, the seller will be losing over $105,000!

UPDATE #2 – October 24, 2006

DOM: 22
Current Price: $530,000

Shortly after our last update, the property went into Pending status in MLS (typically meaning that it’s in Escrow) at a price of $530,000. Perhaps pricing it at $499k generated some interest/offers. Unfortunately, a few days ago the status went back to Active and the price is now $530k. I’m going to wait until this actually sells to estimate the loss. Regardless, it will be a big loser.

UPDATED #3 – December 4, 2006

Thanks to the latest comment by almostgotbitten, I’ve confirmed in MLS that this property closed on 11/27/2006 for $520,000. Assuming 6% in selling costs, the seller lost at least $86,200 in a couple years!

Right now there are 4 other 2/2.5 units (all about 1267 sq ft) that are priced between $545-$560k. You would think the closing price of 714 Timberwood would motivate some of these other units to lower their prices. We’ll see..

Garland Park is a tract built from 2004-2006 by William Lyon Homes in the village of Woodbury. These condos have a bit more privacy than the other William Lyon condos at Lombard Court. There are four models ranging from 1,355 – 1,971 sq ft:

• Residence 1: 1,355 sq ft – 2bd/2.5ba
• Residence 2: 1,737 sq ft – 3bd/2.5ba
• Residence 3: 1,878 sq ft – 3bd/3ba
• Residence 4: 1,971 sq ft – 3bd/2.5ba

In Garland Park, there are currently SIX plan 1’s listed for sale in MLS. 4 of them are listed by flippers:

Address: 199 Wild Lilac, Irvine, CA 92620 (Woodbury)

MLS: S463131 DOM: 39

Price Reduced: 11/24/06 — $579,900 to $565,000

Price Reduced: 11/25/06 — $565,000 to $554,900

Current Price: $554,900

Address: 126 Chantilly, Irvine, CA 92620 (Woodbury)

MLS: S464403 DOM: 28

Current Price: $559,000

Address: 124 Chantilly, Irvine, CA 92620 (Woodbury)

MLS: S464852 DOM: 30

Current Price: $579,500

Address: 181 Groveland, Irvine, CA 92620 (Woodbury)

MLS: S444308 DOM: 172

Price Reduced: 07/17/06 — $604,900 to $589,900

Current Price: $589,900

Adding to this inventory is the builder who is trying to unload 2 more of the same plan:

Address: 188 Guinevere, Irvine, CA 92620 (Woodbury)

MLS: S464397 DOM: 28

Prior Listing: $580,990 – 41 DOM

Current Price: $574,990

Address: 180 Guinevere, Irvine, CA 92620 (Woodbury)

MLS: S464399 DOM: 28

Prior Listing: $619,990 – 27 DOM

Current Price: $599,990

It looks like the flippers for the most part are lowering prices ahead of the builder. But the scenario could quickly change into one similar to that at Avenue One.

Address: 191 Streamwood, Irvine, CA 92620 (Northwood)

Plan: 854 sq ft – 2/1

MLS: S453757 DOM: 102

Sale History: 7/14/2005: $353,000

1/27/2000: $112,000

Price Reduced: 9/06/06 — $369,000 to $365,000

Price Reduced: 10/26/06 — $365,000 to $359,000

Current Price: $359,000

This Plan F? in the Irvine Springs tract in Northwood was purchased in July of 2005 and placed back on the market about 1 year later. The seller bought it with 10% down and listed it at $369k knowing that they would lose money on the deal after selling costs. A couple of small price reductions later, and this flip is going to be losing at least $15,000 (after 6% in selling costs).

There is also a similar model Pending Sale at $345,000 located at 112 Streamwood.

Address: 213 Lonetree, Irvine, CA 92603 (Turtle Ridge)

Plan: 1790 sq ft – 3/2

MLS: L20117 DOM: 203

Sale History: 9/13/2004: $750,000

9/11/2003: $502,000

Price Reduced: 06/01/06 — $939,000 to $929,000

Price Reduced: 07/13/06 — $929,000 to $879,000

Price Reduced: 08/15/06 — $879,000 to $849,000

Price Reduced: 11/01/06 — $849,000 to $810,000

Current Price: $799,000 – $810,000

This Plan 5 in the Whispering Glen tract built by Shea Homes in Turtle Ridge was purchased in September 2004 with 100% financing. I wish I could find out what the original purchase price for this property was in 2003. Thanks to our visitor, Westpark, we know the original owner probably purchased in phase 1 and made a nice profit. The current owners will not be so fortunate.

The current owners put the property back on the market about 18 months after they purchased it. They were hoping to make over $132,000 this past April with the initial asking price of $939,000. In June, they also tried to rent the place out for about $3000/month. I don’t think they were successful as the listing says this place is currently vacant.

If they had originally listed it at $799,000 they probably would have found a GF during the summer. If sold at the current asking price of $799,000 and assuming 6% in selling costs, the sellers stand to make a profit of about $1,000! But if the property has been vacant since June, there’s probably another $23k in mortgage expenses they’ve had to pay.

Here’s what else is available in the Whispering Glen tract:

• 211 Lonetree – Plan 1 – 1500 sq ft – $739,500 – 33 DOM
• 123 Roadrunner – Plan 1 – 1500 sq ft – $724,000 – 52 DOM (~148 DOM Before)
• 114 Roadrunner – Plan 3 – 1589 sq ft – $799,000 – 5 DOM
• 28 Gingerwood – Plan 3 – 1600 sq ft – $824,999 – 126 DOM
• 111 Roadrunner – Plan 3 – 1600 sq ft – $799,000 – 176 DOM
• 236 Lonetree – Plan 5 – 1800 sq ft – $925,000 – 45 DOM
• 124 Roadrunner – Plan 5 – 1800 sq ft – $957,000 – 33 DOM

It’s amazing how the other Plan 5s are listed for over $100k more. Our seller is motivated and will likely continue putting pressure on the this tract to lower their prices.