Does this song describe every homeowner's and speculator's relationship with the housing market? Everyone was so enamored with real estate during the bubble. However now the fickle real estate market has turned and speculators are losing money losing sleep and losing their love of real estate: tainted love.
Today. I am going to continue the great work done by Effenheimer (formerly OC Fliptrack) on the Brio Community. Nowhere is the silliness of the bubble more apparent than the pricing of 1 bedroom units in this development. Sorry if this post is a little long but it is worth reading. Carry on.
Address: Beds: 1 Baths: 1 Sq. Ft.: 800 $/Sq. Ft.: $399 Lot Size: - Type: Condominium Style: Mediterranean Year Built: 1994 Stories: One Level Area: Westpark County: Orange MLS#: Status: Active On Redfin: 52 days
From Redfin. "PRICE REDUCED TO SELL FAST!!!. Rare direct access to Garage. Newer Carpet. Central A/C. Ceiling Fan. Cozy Fireplace sandstone color paint. Lighting under Kitchen Cabinets and Water Purifier/Filter system. Very QUIET inside location peaceful neighborhood close to shopping. Association POOL and TENNIS courts for Brio only. Also access to two other Master association pools and 5 tennis courts. Will go Quickly!!!! Entertaining ALL reasonable offers."
There were several transactions on these units in 2006 for over $400,000 despite the fact that the rental value is about $150,000. Prices have held up reasonably well in Brio although the transaction volume has dropped off considerably.
Beds: 1 Baths: 1 Sq. Ft.: 784 $/Sq. Ft.: $451 Lot Size: - Type: Condominium Style: Contemporary Year Built: 1995 Stories: One Level Area: Westpark County: Orange MLS#: Status: Active On Redfin: 109 days Unsold in 90+ days Fixer-upper
From Redfin. "BEST VALUE IN ALL OF WESTPARK. GREAT LOCATION. SELLER MOTIVATED. HERE IS A GREAT OPPORTUNITY TO OWN IN WESTPARK. NEEDS SOME TLC BUT WORTH A LOOK. BRING INVESTORS OR FIRST TIME BUYERS. FIREPLACE. ATTACHED ONE CAR GARAGE. GOOD SIZE BEDROOM W/ WALK-IN CLOSET. DUAL SINKS."
It looks to me that our featured seller has seen the light. This REO was purchased for $319,850 which coincidentally is the asking price of our featured property. The seller knows the bank is going to reduce their price until this unit is sold and they know that $319,850 is where the market is at (actually if the bank bought it at auction the market is probably lower.) I think this is a smart move by our featured seller. If they can get in front of the bank they may get the only buyer in the market. They still have some equity left so if they move quickly they might actually see some of it.
There are a few other sellers in this neighborhood who will not be too happy because of the properties profiled above...
Beds: 1 Baths: 1 Sq. Ft.: 800 $/Sq. Ft.: $488 Lot Size: - Type: Condominium Style: Other Year Built: 1995 Stories: One Level Area: Westpark County: Orange MLS#: Status: Active On Redfin: 62 days
From Redfin. "* * * * HIGHLY desirable and upgraded ground level in exclusive neigborhood with direct access garage. White fireplace highligts cozy living room. Beatiful laminate flooring througout the house. Designer paint new crown moulding and baseboards. Association pool tennis courts and parks. Close to shopping movies restaurants parks. THIS IS A MUST SEE!!!
neigborhood highligts. Beatiful througout moulding: I count 5 misspelled words in that description. Doh! BTW what does this realtor have against the letter "h" after a "g"?
Do you like how they got the flower in the corner of the picture? Of course it throws off their exposure and makes for an awful photo but it has a flower in it.
This is going to be a rollback. The competition is already under their 2004 purchase price. This isn't good for them but others have it worse...
Beds: 1 Baths: 1 Sq. Ft.: 784 $/Sq. Ft.: $496 Lot Size: - Type: Condominium Style: Contemporary Year Built: 1995 Stories: One Level Area: Westpark County: Orange MLS#: Status: Active On Redfin: 48 days
From Redfin. "This unit in BRIO is exceptional. Recently refurbished and super clean. Well-designed floorplan offers super living space that is easy to maintain. Idyllic walkway offers a somewhat secluded home that is nevertheless walking distance from shops and eateries! Well managed complex offers great amenities without the sky-high fees (as in local highrises) Motivated seller can respond to offers quickly. Make it yours today!"
Think about their state of mind. They were in a state of apprehension and denial hoping to get out near breakeven. Their competition was priced in the same general range so they hoped they could convince a buyer that their place was "better" and somehow they would get out from under.
Then the REO happened but this was just one property so it shouldn't be a big problem they would just have to be patient while the bank got rid of the competition. Then suddenly the featured property drops their price 20%. Talk about a disaster. They just lost $80,000! Yikes!
Beds: 1 Baths: 1 Sq. Ft.: 800 $/Sq. Ft.: $506 Lot Size: - Type: Condominium Style: Contemporary Year Built: 1996 Stories: One Level Area: Westpark County: Orange MLS#: Status: Active On Redfin: 209 days Unsold in 90+ days
From Redfin. "BEAUTIFUL TURNKEY CONDO!! This condo has it all. Entrance has designer tile leading to beautiful laminate wood floors. Glass block divider between kitchen and living adds a distinctive touch. Modern track lighting in kitchen with new designer ceiling fan in dining room. Soft designer colors throughout. Bathroom has new cast iron tub & glass slider. Designer tile in bath/dressing area. New hot water heater. Direct entry to garage from kitchen. Beautiful home!!!"
What do you think of the glass block divider? I don't get it. Wouldn't you rather just have it be open? Glass block is great for letting exterior light into bathrooms but I am not so sure about its use as an interior dividing wall.
Can you see the disaster playing out? Today's series of properties illustrates exactly how a price collapse proceeds. We are witnessing the first leg down of price drops: 20% off the top and folks we aren't even half way there yet...
LM of course I’m not arguing about the fees and taxes themselves. I’m just pointing out that at least on the low end they can quickly double the cost of owning a given property. So while we look at mortgage payments they’re not the entire story by any means. Again that’s obvious but without seeing those numbers here it’s. I think taken for granted.
There is 3 Shady Canyon properties getting close to selling.. big ones. Same agent (JOHN MCMONIGLE) is lisitng each property that some serious commission... Any inside info out there???
Pending Sales: U7002075 P 51 Golden Eagle Irvine/ Turtle Rock 890F6 $5,995,000 no sq footage info must be big maybe 5 or 6k sq ft. $1 million in landscaping on a 33,000 sq ft lot. Bullbutter!
U6601263 P 3 Redbird Irvine/ Turtle Rock 890E5 $3,295,000 4 5 4240 (Mark McGwire place) note: Total Assessed Value: 4,004,256.00
Back-up offer: U7003406 B 31 Salt Bush Irvine/ Turtle Rock 890F3 $6,750,000 5 5.5 6600 These will tilt the numbers in the 92603 toward the agents camp.
What’s funny about the San Clemente propery @ $599k is that it took forever for the previous owner to sell the home @ $707k was on the market for a long time in the upper $700’s.
Along came the new FB and 6-months later there is huge losses. I could see this coming from a mile away as the new FB (I mean owner) had a brand new H2 Hummer repo’d just a few months after moving into the property. Now it’s a short sale… must have been one of the last 100% financed deals in the area.
The guy next door for $695k (also a short sale) is desperately searching for a new FB to bail them out… their Realtor held cheesy BBQs etc to attract First Time Buyers investors. & retirees. When has $695k been a starter home? 6-months ago this same house was listed for $795k. 4 years ago all of the homes on this street were within reach of First Time Buyers.
I doubt that either of these places will sell even for $550k. As a plus they are located on a golf course (if you want to even call it a golf course—Shorecliffs aka The Ditch) however the street they are on is extremely busy with lots of traffic going inland towards Forester Ranch & Talega… the traffic noise is horrendous.
Lennar was sued here after hurricane Andrew for the defects in its contruction. Lennar may be yuckky but Miami is weird and interesting.
My thoughts--the thought of living in one of these things--It’s like being in a college dorm all over again. Small room(s) tucked into anonymous building. Need a parking pass for visitors. Don’t talk too loud or you might disturb the neighbors above.
Everything is taken care of for you they even strategically locate generic national chain eateries and Starbucks that hire and train anonymous people within ‘walking distance’.
That isn’t a home to me. Get a place that you want to cook clean do some yardwork go out back and play with my dog and kids in our own space. I don’t unerstand why I would want my family all the time hanging out in the ‘ammenities’ that my $400 HOA would pay for.
Never would I buy one of these things--unless the price was so low that I could make money renting it to a student or something.
Jim although I share much of the emotion of what you wrote I can answer that in two ways but before I do. I have to set some preconditions. Those preconditions are that the prices of the aforementioned (errr. I have to say it) “apartment homes” let’s just call them condos have to bear some semblance to reasonable fundamental values. If they do I could be the owner of one as I would love to have a relatively trouble free place in California to spend time at that would be low cost and require no maintenance. I can see some single people or young couples possibly wanting to buy something like this if they too did not want deal with the larger responsibilities of home ownership but needed to invest in property for financial reasons.
Again with all that said half a million dollars for an apartment in Irvine isn’t reasonable (unless there’s a couple of hundred large tucked into one of the spacious closets).
There’s nothing intrinsically wrong with small places to live even places such as these. It’s just the money it costs to do so is way out of line with reality.
And then there’s this to contend with it’s not just the ridiculous sales prices of these small condos it’s the HOA fees and taxes. Even pretending the properties themselves sold a “reasonable” price the taxes and HOA fees are likely to double that monthly cost. Who will pay that? Well who aside from people with money to burn and people who aren’t getting “free” money from the bank are going to pay this money?
This is one the things I don’t understand about the bubble. Ok fundamentals were ignored. Loan money was essentially free as everyone could “make” money just by owning something. But didn’t they also look at the costs to actually own these properties? And while this probably applies more to mcmansions and SFRs than these condos it still has an impact.
My mortgage is $650 per month. My taxes are a little more than another $100 per month (and no. I’m not saying where I love is better because of this that’s not my point). Throughout California from what I’ve read that might cover taxes. Mello Roos and HOA fees on most places offered for sale. It’s like the interest only adjustable all over again.
At the part of San Diego I’m looking at relocating to (someday not soon) it’s possible probably likely that the prices could drop by 50%. Even with that taken into consideration the taxes and fees could double a prospective mortgage payment.
I just don’t understand why anyone would buy one of these “apartments” to live in. How did apartments that you would rent become “homes” that warranted owning and making a mortgage payment on? I guess I can understand how SFH’s would have been subject to the crazy runup during the bubble but how did “apartments” get included as well? The last time I mentioned this someone responded by saying that in their particular situation at a specific time they came out a few bucks ahead by owning their “apartment” verses renting. But owning entails a whole host of responsibilitiesthat renting does not. And of course the fact that you need to take a large portion of potential investment money and put it towards a purchase in the form of a down payment cannot be ignored. I’m at a loss trying to understand why people would feel compelled to make the financial committmentsacrfice neccessary to own and “apartment.”
although I am bearish on West Park as well the house for sale down the street from me there has been getting some nibbles from immigrants with all cash offers evidently there are still plenty of greater fools over there in Taiwan so I wouldn’t hold a funeral yet for West Park. The amount being offered surprised me—although significantly below asking price it was still bubbly IMHO.
Yup. I live in Quail Hill and it is getting blitzkrieg’d with for sale signs. I’ve noticed quite a bit of FSBO signs as well.
As for these 1 bd units it is unbelievable. Simply unbelievable. I can only shake my head in utter disbelief @ these prices. And by the way.. what is “newer carpet?” Is that interchangeable with “slightly stained?”
These sellers and their agents obviously have a mental illness. They are severely deluded creeping up on insanity and it’s just painful to witness their obliviousness to what’s happening to them (and what’s about to).
It’s kind of like the first few episodes of American Idol when the producers slip in someone who is CLEARLY mentally retarded or at least is a few fries short of a Happy Meal. You know that feeling when the judges laugh at their horrendous performance and you laugh at home along with them.. then you suddenly realize the singer has NO IDEA what everyone is laughing about. They truly believe they are talented and just gave a phenomenal bring-down-the-house performance. Then you start to feel guilty for laughing at a vulnerable tragic person and you don’t quite feel right for a few days afterward.
.. Lennar has decided to temporarily stop taking orders at one of its largest and highest-profile projects in southern California - Central Park West in Irvine. The Miami-based builder has also postponed construction of two high-rise projects in Anaheim known as A-Town Metro and A-Town Stadium.
Central Park West.. sprawling over four city blocks was supposed to start moving in its first buyers last month. But company officials concluded that too much of the village was still under construction for early buyers to be able to fully appreciate its amenities and living environment. ... The builder has refunded earnest money to buyers who had already purchased homes there. For the time being. Lennar is keeping open Central Park West’s sale office which is across the street from the massive construction site.
Just remembered this: Earlier this year. April or so a former neighbor called and asked me to help her move some furniture around. Reluctantly said ok. I get there and a couple of pieces are too heavy for just her and I so she goes to get another neighbor to assist. We exchange pleasantries and I mention I used to live near here but sold. Oddly enough we had never met but he said he and family have lived here for about 5 years. I mentioned I was biding my time waiting for prices to come down some so I could get back in. He shoots me this look like I had just kidnapped the Lindberg baby. Somehow my statement had offended him. “They won’t,” he said. End of conversation on that topic. He seemed so bent out of shape that I didn’t have the heart to tell him about the IHB but damn. I wish I did. My former neighbor (whose furniture I was moving) is another kool-aid drinker. She used to maintain that her place was worth a good $50k to $75k premium to mine no matter they had the same exact floorplan. Why? She put in some crown molding that I didn’t have and she has a two car garage whereas mine was just a one-car. Somehow I don’t think she’ll be getting that premium anymore…
Yea you can see all these bankers sitting around a table in NYC looking at the IHB on their computers saying...........
Holy sh** look at this you mean we own all these crappy little places in Irvine................ these place are only worth 1/3 of the mortgage value........ you mean our 100 billion dollar mortgage portfolio is really only worth 33 billion dollars...... damn ouch aaaaaaaaargh.
I used to live in this community. Bought a 1+1. 917 sq ft unit in 1999 and sold in May of ‘05 (How’s that for timing?) The place took two weeks to sell and profit was close to $300k. I actually had a case of sellers remorse for a while as prices continued to rise but now I have a smirk on my face. As I recall the person who bought my place put a whopping 5% down and is no doubt facing a rate reset. I enjoyed the community. The HOA was really good - very proactive. The stairs up to my unit were rebuilt buildings painted pools well maintained grass cut and hedges trimmed all for less than $200 per month. My unit was upstairs and received sunlight from sun up to sun down. The featured property here is downstairs gets absolutely zero sunlight and faces another building that is about 15 feet away so if you have your windows open you will hear other people’s tv stereo voices and bodily functions. I could not for the life of me imagine living in this place and paying through the nose to do so. If it sells for the current asking price I will be shocked. Some units in this community are pretty decent especially some of the larger units that are upstairs but these downstairs units featured here really blow. They have a lot further to fall. IMHO.
I agree. Also I would think that Northwood and Woodbridge will be OK too. The older parts of Irvine should weather this fine because there are many long term owners for whom this is a paper gain/loss.
Sure there will be a number of HELOC’d and late buyer catastrophes but because there will be small number of homes on sale you won’t see an avalanche of REOs on the market.
TR in particular should do fine because of the mess in TRidge. As the newer homes went on a ballistic price path. TR did not wholly partake on that path hence while TR at 500/600 sq foot was overpriced. TRidge at 800+ was sustained only by 100LTV. Neg Am intravenous injections.
Now that the easy money drug is being withdrawn. TR will slide down to more reasonable levels ( 350 -> 450 ) while TRidge will crater. In fact once TRidge homes hit the “used” market people will start to notice how tight they are and how small the lots are. At that point the much larger TR will suddenly look a lot more “exciting”.
Woodbridge and Northwood will be impacted somewhat by their lower prices and competition… However they have larger lots and the neighborhoods feel larger. I will caveat that Woodbridge has too many condos and small homes in the inner loops. Those won’t sustain prices above 350 sq/foot when this is done.
Just my impressions. However. I remember that I was astonished when our homes in the Broadmoor went over 300 bucks per square foot back in late 01.
Westpark may fight it out with Quail Ridge to be the biggest bloodbath in Irvine over the next few years. It has a nice location but it is soul-less (more so than a lot of Irvine). VERY dated (it could be a late ‘80s time capsule) and quite overpriced in the bubble.
I think Turtle Rock is in the best shape as many people there have unreal amounts of equity but with the magnitude of the false price spike. I think the term “best shape” is quite relative.
http://www ziprealty com/buy_a_home/logged_in/search/home_detail jsp?listing_num=S508849&page=1&property_type=SFR&mls=mls_so_cal&cKey=cbqv3f12&source=SOCALMLS
The next door neighbor is also a short sale. Only problem is their asking price is $695k for less home. Guess they are unaware their neighbor just cut out any hope for getting their price of $695!!
http://www ziprealty com/buy_a_home/logged_in/search/home_detail jsp?listing_num=S498001&page=1&property_type=SFR&mls=mls_so_cal&cKey=9lxvqk37&source=SOCALMLS
Let’s go back past the 80s eh? How about some Traffic? This is one of my all time favorite songs and I think it really is very apropos to IR’s current musical counterpoint.
Sometimes I feel so uninspiredSometimes I feel like giving upSometimes I feel so very tiredSometimes I feel like I’ve had enoughSometimes you feel like you’ve been hiredSometimes you feel like you’ve been boughtSometimes you feel like your room’s been wiredSometimes you feel like you’ve been caughtBut don’t let it get you downThere is no reason for not failingYou’ve got to smile and turn the other cheekSo today you might get upBut by tomorrow you’ll be sailingAnd you won’t even hear these words I speakSome people want to be so desiredSome people can’t stand the light of daySomebody’s laughing while someone is cryingBut for to want in the close of the dayBut sometimes I feel like my head is spinningI’m gonna cave with all I seeI don’t know who’s losing and I don’t care who’s winningHardship and trouble following me
I wonder if the banks and investment companies that can’t figure out what their mortgage holdings are worth are looking at this blog. I am sure that there is some real owner(bank) of these properties somewhere that is trying to figure out the value of their asset..... that is the real story here.
When I was a kid they used to sell the mystery box at the corner store. You paid 1 dollar but did not know what was in the box. It was alway exciting to buy the mystery box open it and see the surprise.
Well. I am sure that the owners of all the mortgages on these properties are sort of opening their boxes right now. I wonder if they are able to value what is in their box........ maybe that’s why the CEO’s of all the major investment houses are being outed.
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Related article:
http://www.irvinehousingblog.com/2007/11/07/tainted-market/
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