On the lake geneva shoreline
To make records with a mobile
We didnt have much time
Frank zappa and the mothers
Were at the best place around
But some stupid with a flare gun
Burned the place to the ground
Smoke on the water, fire in the sky
They burned down the gambling house
It died with an awful sound
Funky claude was running in and out
Pulling kids out the ground
When it all was over
We had to find another place
But swiss time was running out
It seemed that we would lose the race
Smoke on the water, fire in the sky
Smoke on the Water — Deep Purple
The smoke on the water will the smoldering ashes of the neighborhood comps when today’s property finally sells.
This is the Irvine Housing Blog, and I very rarely, if ever, profile properties outside of Irvine. However, since it is a weekend, and since this property was such a find, I thought I would make an exception today. I would like to thank Chuck for emailing me this link. BTW, the guitarist in the video is fantastic. It is worth watching.
.
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Asking Price: $1,300,000
Income Requirement: $260,000
Downpayment Needed: $325,000
Purchase Price: $2,500,000
Purchase Date: 1/23/2007
Address: 26 Stillwater, Newport Coast, CA 92657
Beds: 4
Baths: 3.5
Sq. Ft.: 2,000
$/Sq. Ft.: $650
Lot Size: –
Type: Single Family Residence
Style: Other
Year Built: 2005
Stories: Two Levels
View(s): Valley, Has View
Area: Newport Coast
County: Orange
MLS#: M107854
Status: Active
On Redfin: 128 days
Unsold in 90+ days
From Redfin, “Beautiful Newport home. Jack & Jill bed & bath detached Casita could be office or guest quarters. Short sale subject to bank approval.”
.
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I thought the high end was immune? This isn’t supposed to happen in Newport Coast. This is a 48% loss in less than one year! The 2007 transaction looks suspiciously like fraud, but it could just be a really stupid flipper. Based on available information, the purchase seems legitimate. In either case, this house is listed at nearly 1/2 off its sale price from just one year ago. Apparently it was listed for a time at $1.8M and wasn’t selling, so the price was dropped all the way to $1.3. Check out this listing where they were trying to get $2,112,308. If you think this is a one-off, check out this listing for 10 San Sovino with its $550,000 reduction. (Thank you, SOC.)
This will be a new record: the total loss assuming a 6% commission will be (drumroll please) $1,278,000. Some party is going to absorb a HUGE loss. Does that satisfy your schadenfreude fix for the day?
My first thought was: someone wants over a million bucks for that?
My second thought was: someone had the nerve to list that for over 2 million bucks?
What if you want to invite a guest to eat dinner produced in your gournet kitchen. Where do they park?
And only 2000 squares? I gather this is a neighborhood that is beyond desireable?
The second listing looks much more reasonable–but I was looking at it, and, and is that unit attached? My house has 200 square feet more, but without the fancy architecture. So is this house looking so much bigger because what I think is this house is actually the house next door?
Also, the color of granite clashes with the color of the cabinets. Actually, I think that color of granite would clash with nearly everything, and use of it for the entire backsplash seems very gaudy and nouveau riche looking. But I don’t like granite anyway.
—–
“Short sale subject to bank approval.”
The line of futility.
And nice picture of the garage. For $1.3M I’d like to think that the garage door was not the best part of this house (though it could be I suppose).
For something two miles from the beach I’d think it would be a tad more reasonable. Then again, in that neighborhood reasonable does not exist.
Mmm… Mustard color. Makes me hungry for hot dogs…
Hot dogs not allowed in a gormay kitchen. Unless made of tofu. (Tho I have been told tofu dogs taste ok.)
According to Redfin, that property is on Backup Offer Status.
So, it looks like another sucker has come along and paid too much for this strange looking 2000 sq ft house.
Backup offers accepted. It must be in escrow… 🙂
Can anybody tell the outstanding loan amounts? The big story isn’t the price reduction or the loss, it’s whether or not the bank will approve the sale.
At 1.3 Million, it could be a RE Agent trick, but it looks like buyers will materialize. At $1.3 on a million dollar short sale, the bank will shoot it down.
Oh My … this is getting real good! And to think, the dumb Permabulls said this would never happen in this neighborhood. LoL Fools
BTW regarding the guitar solo. I like it when great guitarist play famous riffs from other bands. I was at the Van Halen show 3 weeks ago, and the end of the song, Everybody Wants Some, Eddie played guitar riff from Smoke On The Water.
Yee-e-e-e-e-hah! Ride ’em cowboy! All the way down!
Even at the top of the bubble – even in Newport Coast – $1,250 per square foot for a tract home is hard to believe. Which no doubt has something to do with the size of the reduction. What are rents like there anyway?
In my experience, agents don’t usually flip to contingent until the bank has come back with an approval. They don’t want to lose marketing time while the bank is taking weeks to consider the offer, or more likely, while it’s sitting in a pile on someone’s desk for weeks.
How much would that house rent for?
I agree on the fraud angle. That bump after 2005 smells. Going from 1.5 million to 1.3 million is much more believable. Sounds like they got an appraiser to highball at the peak and maybe got some cash back. Or the new owners took the mattress stuffed with a million dollars with them when they got the NOD.
Speaking of smells, how far away is this house from the old dump?
ipoplaya, imaging 50% off in Newport, Do you think this will happen in Irvine?
Irvine is different
and my prediction is 50% more to go off current price. 😆
LawyerLiz, I have an off-topic question for you regarding forming an LLC with my home as the sole asset in case of liability. Would you be able to give me your $.02 worth of advice on whether this is worth following up with someone locally?
Thanks in advance! (And apologies to the rest of the board for the off-topicality)
Great find! It’s nice to see what is happening in Newport. Everyone there thought they couldn’t be touched and the damage would be limited to surrounding cities. Thanks for venturing out of Irvine!
FYI, the guitarist is Steve Morse. He used to play with the Dixie Dregs, one of the most amazing (and unknown) prog-rock/jazz-fusion bands of the late 70’s early 80’s. Not sure what they’ve been up to lately. Talk to any of the G3 shredders of the past decade and they will all mention Morse as a huge influence.
Last night TLC or some other cable channel had a show on, with the desperate title “Please buy my house!” Of the three families featured, one didn’t sell but instead rented it for $5,000 a month. That only covered half of their $10,000/month carrying cost… But they were happy (sort of) because it cut a chunk out of their costs.
$10,000 a month!
I have probably watched the video half a dozen times, and I am drawn in to his performance every time.
the number 10 sovino lists the property at $418/Sq. ft.
Contrast it to this beauty in SANTA ANA for $459/Sq.ft.
http://tinyurl.com/ysyvrb
Who in the world would pay that price in Santa Ana? Stabba Ana has a completely dysfunctional city government, huge infrastructure neglect, worst school system in the county (if not the entire state), huge crime, high taxes, poverty…. !
Looking at data on RealtyTrac, it reports the 1/23/007 transaction as a non-arms length, Intrafamily Transfer and Dissolution (perhaps transfering from one family member to another, or a divorce, etc.)- so this wasn’t an arms length sale. Still, someone would have had to appraise this at $2,500,000. Yikes.
This is my second had recollection.. don’t have the link handy…
Last week on one of the LA real-estate blogs there was a condo in Santa Monica listed at 50% off the peak also $900K – $450K. This got a lot of attention also.
The back story according to the blog was that the bagholder was a European Bank (I think it was Deuch). The bank was being very aggresive in pricing to unload CA real estate holdings beacuse they 1) wanted cash instead of a useless assest 2) they wanted these assests off their books because no bank wants to do business with a bank that may have a solvency problem because of unknown US real estate holdings and 3) they are very bearish about future prices… they figure take a 50% haircut now… sure, looks really bad but at least it’s over and what happens if they hold for 18 months, they may be facing an even higher haircut then.
Be interesting to find out who the bank is.
Also, this is just what happened in the last down turn. The high end tanked and that just hammered everything below.
To me there’s no choice, I’d take Newport Coast over Irvine in a second. Comps like this will have a huge effect on Irvine.
Nice looking house though.. Built 1937 so you know it’s solid.
Did you see the assessed value $37,000 property taxes $500/year
GO PROP 13
“Who in the world would pay that price in Santa Ana? ”
I almost would. For a while, I was interested in properties in the Floral Park neighborhood. This neighborhood is due east of FP (just across Main) and is quite nice. A block north and you’re in Orange. Of of Memory Lane a couple of hundred yards away they have a huge brand new high end condo development that sell for more than what they are asking for this house.
Not all of Staba-Ana is ghetto. This is one of the exceptions.
No_Vaseline,
If you are still interested in SA, then you might want to subscribe or at least read up on a couple of the local area blogs:
OrangeJuice! http://tinyurl.com/268cy6
SantiagoStreetLofts:http://tinyurl.com/263qjb
(make sure you scroll down to the map of the shootings/homicides that happened in SA this year)
Right now, there is a campaign to vote down an attempt to let the mayor run yet again. The guy’s been in office for a couple of decades and has neglected to get the majority of the city out of banana republic status:
http://tinyurl.com/24jllx
There are a few brigh spots, but for the most part, The place is a toilet. You had better be ready to cough up $$$$ for private school if you have children. On the orangejuiceblog go to the right hand menu and pick out the item “SAUSD posts” and there you will find 1.8k posts about the conditions of the schools, fraud, gross fiscal mismanagement, lack of leadership, sexual harassment lawsuits, theft and lately, how RiskManagement has a vendetta against the feral cat population that has been at the district site for a few decades and is spending money they don’t have, to exterminate the cats. Oh, and did I mention they had to make budgt cuts over $15 million. $6million lost was because the district tried to steal $$$ from the state by falsifying rosters showing class size reduction all the while boosting up numbers of students to teaching staff and filling in with phantom teachers or unqualified substitutes.
That’s quality for you.
Floral Park is lovely. But you just don’t have decent city representation. Safety is always going to be an issue. You have to drive around chronic pot holes. Donno…. give those sites a read and maybe there are a few things you didn’t consider when you were “considering” SA.
“Not all of Staba-Ana is ghetto.”
Not all of Pomona is ghetto either, but it still will always have a bad rep. Im not saying I agree with that, but thats just the way it is.
The only thing that realtors say that is accurate – “location, location, location”.
Be careful before buying that very nice house that is a bargain in a city with a bad rep.
Irvine – “smug, conformist and bland.”
I almost moved to Irvine a few years back just for that reason. I go there a couple of times a year and sometimes I wonder “Am I good enough to be a member of this club?”
Ok, Im kinda kidding here.
Also, the property tax assessed value doesn’t reflect the $2,500,000 either.
So this is a $1.5M purchase that is being sold for $1.3M, not a $2.5M that has dropped by 50%.
I thought everyone likes granite? Then, what do you like, and why?
What kind of liability are you thinking of? Slip and fall? Business liability of some kind? Divorce planning? Judgments?
You really need a California atty.
If you were in Fla, you’d be protected by homestead.
If somebody lives in the Floral Park neighborhood of Santa Ana, and soembody asks them where they live, they say “I live in Floral Park.” If you drive over there at 7pm and it’s not raining, you’ll find fifty or a hundred people on the street – walking dogs, jogging, chatting in the neighborhood park with one another. There is no grafiti in FP. None. Thats part of the reason 92706 holds up so well.
Floral Park might be in SA, but it’s pretty removed from the area around Harbor and Fifth. Go across 17th Street from Floral Park and it’s a different story. When I worked in that area, I called 17th the “DeMilitirized Zone”.
What a joke this listing is! Maybe, gold mine underneath this Santa Ana dirt?
test
Though I’m not doubting that there was money pulled out in a refinancing and that the bank is taking a big hit.
I tried to post here a couple of times, but was not able to do that. Is there a possible reason for that? The post was quite lengthy and I hate to re-do stuff. thanks for any suggestions
No_Vaseline,
If you are still interested in SA, then you might want to subscribe or at least read up on a couple of the local area blogs:
OrangeJuice! http://tinyurl.com/268cy6
SantiagoStreetLofts:http://tinyurl.com/263qjb
(make sure you scroll down to the map of the shootings/homicides that happened in SA this year)
Right now, there is a campaign to vote down an attempt to let the mayor run yet again. The guy’s been in office for a couple of decades and has neglected to get the majority of the city out of banana republic status:
http://tinyurl.com/24jllx
This home has a common driveway with its neighbors.
There are larger nicer homes near by listed for 1.8-1.9m. If this home had relisted for 1.5m, it would look reasonbly price compared to the other homes. At 1.3m it attracts attention.
I do not think that ($1250 sf) was real price unless the property was on or by the beach with direct ocean view.
Some mistake (or fraud) has been made somehow.
Compose in word. Cut and paste over. That way if you lose it due to a software bug………..you don’t lose it.
I had that problem too, but my solution was to stop posting manifestos.
I have a solid surface/corian knock-off countertop. I find granite cold and unfriendly looking.
no_vaseline,
My comments were to you and I had several links for you to view. Do you think there might be a limit on how many links per post?
If you are still interested in SA, then you might want to subscribe or at least read up on a couple of the local area blogs: OrangeJuice! http://tinyurl.com/268cy6
SantiagoStreetLofts:http://tinyurl.com/263qjb
(make sure you scroll down to the map of the shootings/homicides that happened in SA this year). This is a group of young professionals who were duped into buying expensive work/live lofts in SA. Sad tales of vandalism, homeless defecators, non response from police, ”scratchitti” of glass and metal buildings.
Right now, there is a campaign to vote down an attempt to let the mayor run yet again. The guy’s been in office for a couple of decades and has neglected to get the majority of the city out of banana republic status:
http://tinyurl.com/24jllx
I believe the mayor lives in floral park, so perhaps you’ll get decent police response in an emergency.
There are a few bright spots, but for the most part, The place is a toilet. You had better be ready to cough up $$$$ for private school if you have children. On the orangejuiceblog go to the right hand menu and pick out the item “SAUSD posts” and there you will find 1.8k posts about the conditions of the schools, fraud, gross fiscal mismanagement, lack of leadership, sexual harassment lawsuits, theft and lately, how RiskManagement has a vendetta against the feral cat population that has been at the district site for a few decades and is spending money they don’t have, to exterminate the cats. Oh, and did I mention they had to make budget cuts over $15 million. $6million lost was because the district tried to steal $$$ from the state by falsifying rosters showing class size reduction all the while boosting up numbers of students to teaching staff and filling in with phantom teachers or unqualified substitutes.
It’s not and Irvine or Newport or Santa Ana issue.
It’s NEW CONSTRUCTION vs OLD CONSTRUCTION
EVERY home built and sold since 2002 has been overpriced since day one.
EVERY one who bought a new home in OC since ’03 will lose money as those homes were overpriced since the get go.
The folks that bought in 01 or 02 might be OK since the market will eventually stabilize around those prices…. The way I figure, this part of Newport Coast and all of Turtle Ridge do not merit more than 500 per square foot. Take a shave on anything over 2500 sq feet and add a bit for a view. However, these homes in Newport Coast have no real view that I’m aware of.
I think our spam filter reacts to the tinyruls.
I think those of you who think newport is going to drift off 50% is way off the mark. There are plenty of people who actually made money in this market and on the fence waiting for a slight drop to go back in the market. Newport/Newport coast is one of the most highly desireable locations in s. cali. If there were a 10-20% drop, many wealthy individuals would pick up those properties.
Lemmings.
Anybody spending 1.5 million for a tract house that is lucky to have 10 feet between it and it’s neighbor is a fool.
Countrywide, America’s Wholesale Lender is determined to be the lender of choice for mortgage originators
Welcome to the land of Disney!
CK
I don’t know how you won’t see large price declines in Newport Beach. The 2000 census refleted this (source wiki)
http://en.wikipedia.org/wiki/Newport_Beach#Demographics
he median income for a household in the city (Newport) was $83,455, and the median income for a family was $111,166. Males had a median income of $73,425 versus $45,409 for females. The per capita income for the city was $63,015.
Let’s say it’s double that now (which is doubtful) there just isn’t wealth spread wide enough in Newport to absorb properties that drop by 10 or so %. There is incredible wealth in all of the beach communities. Unfortunately, it is concentrated among a small cohort of folks worth tens of millions. Clearly census data shows that the median is far short of that. Do people not believe that Newport and other premier locations (Laguna etc.) will also suffer (just maybe not as badly)?
It may be one of the most highly desireable locations in socal, but not for me and my family. We stayed in NB while we were looking for a place to rent and generally speaking, we found the folks who lived there to be unpleasant and unfriendly. We decided not to rent in NB and not to purchase there later on.
Beach properties have a history of not depreciating as much as inland property during resedential real estate corrections.
Beach properties yes… not as much… in fact, anything more desireable or unique tends to decline less but, these all will decline. There are just too many homes in Newport that aren’t on the water and have 7 figure asking prices and median incomes well less than what it takes to fundamentally support ownership.
The other major issue people need to consider is the basic law of large numbers when considering appreciation. When prices get into the multiple 7 figures for a home it simply can’t continue to grow at the same rate (especially a rate far above inflation). This is why GOOG and AAPL and other fast growing companies eventually ALL hit the wall. For instance, if AAPL or GOOG double in price 3 more times (as houses did from the mid 90s to now) they would each be worth more than a TRILLION dollars a piece! That’s more money than the US spends on healthcare in a year.
Food for thought….
When I see comments like this one I wonder if the person bothered to read the post. This post documents a price 47% off a recent sale, further, it provides a link to another property 30% off. Where are all the rich people, and why aren’t they buying these two properties? The San Sovino property has been on the market for 130 days. Have they not gotten around to buying it yet?
This area only starting dropping in price recently. I went looking for a home in this area 2 months ago – and more that one agent told me to bid at least 10% under list. And I was told to expect to have to put 30% down.
In the last downturn, the more expesive the house the greater % drop.
ex Tangelo – aside from whether you need an LLC to protect your home in California, there will be an issue with transferring title to the home into another entity if you have a loan on the home. Whether its a Deed of Trust in your state or a Mortgage (essentially the same thing but diff states have diff names for it) the standard loan document states that if you transfer ownership of the property this is a default on the loan and the lender can declare it due in full.
I understand your concern as in California only a portion of the equity in your home is an exempt asset whereas in states like Florida the amount of homestead equity which is exempt is unlimited.
The way to handle it is to get permission in advance from the home lender and they’ll insist that it be done by a title company which will be instructed to get a signature by the authorized agent of the LLC obligating the LLC for the loan. And you can bet your lender, if it agrees to the transfer of ownership to the LLC, will charge you a fee to do this type of thing because the lender’s attorney will have to create a document for the LLC rep to sign obligating the LLC on the note, and will have to draft a closing instruction letter to the title company giving it strict instructions on what it must do (i.e. the title company cannot record the transfer until the LLC rep has executed documents A, B and C and has paid $x in fees for the lener.)
Actually Santa Ana crime rates are lower than the nation in general: http://www.cityrating.com/citycrime.asp?city=Santa+Ana&state=CA
They are quite a bit worse than Irvine, true: http://www.cityrating.com/citycrime.asp?city=Irvine&state=CA
I’m not sure what infrastructure problems they have. I drive through and shop there and I don’t see anything out of the ordinary. Santa Ana doesn’t have “huge crime” or anything like that. It’s an average American city in terms of wealth, crime, infrastructure, etc. It’s bad by comparison with most of Orange County, which is very nice for the most part.
tonye,
sorry to burst your bubble — check today’s Register. New construction is preferred by over 73% of buyers.
Call it a fad if you want…
Really? Keep in mind that we have negative wealth effect going now. It will only get much worse.
Huge percentage of wealth in costal S. Cal. was inflated and tied into the real estate. Let us see how this plays out when house of cards start falling.
I wonder if you can provide some historical data to back this up?
This bubble was the biggest right on the beach. I mean, the listing prices on the beach properties were just out of this world.
I give up. Are there really more pictures than the one of the front, or are you all kidding?
My first thought was COMP KILLER! My second thought was… oh wait, I didn’t have one.
Awesome blog!
Best line:
“Unfortunately, the extra $60,000 spent to have a unit facing the street has yet to pay off, with the exception of a great view of people who constantly pick through the trashcans and the sidewalk’s never-ending stroller traffic.
“I drive through and shop there and I don’t see anything out of the ordinary.”
Aside from the fact that it’s overrun by illegal Mexicans?
Have you ventured outside the South Coast area?
“Actually Santa Ana crime rates are lower than the nation in general”
South of the border, the police are worse than the criminals. New arrivals tend not to report crimes.
Thanks! And thanks to LawyerLiz, too.
When you see brown-skinned people, do you automatically think “illegal”?
“I think those of you who think newport is going to drift off 50% is way off the mark.”
That’s considered heresy on this blog. If you want to make friends here you will need to predict at LEAST a 50% drop.
The bears all think they will be snatching up oceanfront properties for $200k and there won’t be anyone else out there with good credit and a down payment to get in their way.
What the buyers prefer is not the important issue that I’m discussing when noting the potential for price drops.
It’s the cost premium that was asked for it. Typically -as I remember- new homes went for 10% or so more over a well maintained home.
In the last few years new homes often got priced STARTING at 35 to 50% over well maintained nearby homes.
And, the construction of new homes declined tremendously as the rush to build took hold.
Furthermore, as those “new” homes become old homes and no new homes are being built…. well you get the drift.
I get that — I agree with your conclusion of price drops but for a different rationale. Those with a higher density of exotic lending will crash faster and harder. I posit that years 2004-2006 will be much more dramatic than, say, 1998 – 2001.
Do I hear Northpark Square? Woodbury? Ladera Ranch? Talega? Anyone? Bueller?
How about Coto de Caza? The trendy 90’s executive haven now Real housewives hellhole.
Can somebody with MLS access read the private remarks and tell us if the half million dollar reduction on this now million dollar home is a short sale or REO? The las purchase in 2005 makes it a good candidate for negAM casualty.
http://redfin.com/stingray/do/printable-listing?listing-id=1266361
Yet another over million dollar home showing a 34% reduction…
Newport Coast – nice coastal town and getting closer to San Onofre Nuclear Generating Station.
I wonder if the blog could address a bit on the locational impact by San Onofre Nuclear Generating Station on the near by coastal towns? What areas if any are considered high risk and thus not desirable because of it?
I was gonna click to a porn site.Never mind.Whatever I was gonna do there just happened here.;->NEWPORT FREAKING COAST!? LAND OF THE SHINY HAPPY PEOPLE WITH STRAIGHT TEETH & (formerly)PERFECT CREDIT!? Please GOD…pleeeeze…make me rich.I wanna go lo-ballin’.
I live in a certain California city. We have a strong neighborhood association (completely informal, no dues or anything) that does a lot of good things like picnics and flower planting. Our local public elementary school is rated 10th out of 10 deciles in California (meaning, top rated). My commute is low, between 20 minutes and 40 minutes. I can drive, take an express bus or a subway. Another interesting commute option is the “casual carpool”, where people just line up on the sidewalk at the usual spot and drivers — complete strangers — stop to pick you up. There are three community colleges within walking distance, and lots of churches – take your pick. There are lots of hiking and bicycling trails in the hills, some within walking distance of our house – and this city has the most extensive urban parks anywhere. Our air is very clean, the temperature is very moderate (we don’t have AC, and don’t need it).
The city we live in? Oakland. Crime stats to put Santa Ana to shame. Terrible reputation. Tell people you live here and they look at you with pity.
But the purpose of this post isn’t to laud Oakland, it’s to point out that some preconceived notions of Santa Ana can be completely unfair.
If we remember even one-half of your college economics it would be very difficult indeed to not adopt a “bearish” posture to what is happening here in So.Cal. Basic macro-economic analysis dictated that the appreciation growth was unsustainable.
Considering the rapid rise in prices at the high-end of the market, it is not unlikely that they too will suffer the violence of the market. IR and other posters have repeatedly stated here that when the move-up progression ceases, all segments are vulnerable. Newport Coast is touted as a desireable “move-up” community, presumably from Irvine, Lake Forest, MV, AV and other inland communities. However, if all these communities suffer depreciation then it must follow that NC & NB will also suffer. Yes, there are nice homes there but the views are not exactly exclusive nor are the neighborhoods particular different from any other upscale So.Cal community. The density of homes in those developments alone dictates the same kind of price drops as we will see here. Yes, there will likely remain a premium for the NB zip code but when housing markets tank, that alone is not enough to maintain price premiums. No buyers = no buyers, no matter where the house happens to be. Price will again return as the single most important purchase factor because what a qualified buyer can qualify for will determine when buyers return to the market. (Think jumbo and fed conforming loans). 50% off peak is not unthinkable.
Read the news, look at how all the “worst case” scenarios are starting to appear. Energy costs are rising, job market is weakening, consumer spending is slowing, the credit market is still all but frozen and there are signs corporate capital spending is slowing. Mega-Financial institutions are posting massive quarterly losses and now The Governator is announcing budget cuts and city after city is bracing for revenue shortfalls. We mortgaged our future (pun intended) for a fantasy wild-ride and now the bill comes due. California is in for a very bumpy ride and housing is the reason why.
No Such Reality, the private comments on MLS start off with “This is a short sale or short pay”…Looks like like at the time of the last purchase in 08/05, the total liens were 90% of the purchase price ($1,625M)…then a few months later (12/05), it looks like the 2nd DT was refinanced with additional $ out, resulting in total liens of about $1,662.5M, or almost 100% of purchase price.
Steve Morse! Ice Cakes!
Seen the DD in concert in 1980.
This made my day.
nicely put. some one above mentioned that people who cashed out are waiting to jump in with loads of cash, I call BS, when money gets harder to get by, people will be careful where to sink their cash.
If I had 1.5 sitting around 😆 I would be looking carefully at houses I’m buying. I dont care if the house has ocean view or is inside the ocean itself, once the SHTF, people will be very careful and picky when buying expensive homes.
ALL the very rich people with millions in the bank, I assume already own some nice mcOceanview houses on the beach.
Sounds like parts of Costa Mesa! Glad to see the clowns bidding up prices to ludicrous levels didn’t spare Santa Ana either.
“In the last downturn, the more expesive the house the greater % drop.”
I don’t think this is true. The fluctuation of prices has been wilder on lower-priced properties, in general. Obviously, the hero of this thread is an exception.
“nicely put. some one above mentioned that people who cashed out are waiting to jump in with loads of cash, I call BS, when money gets harder to get by, people will be careful where to sink their cash.”
Heh. Why would they have “cashed out” if they just wanted to jump back in again? Clearly they cashed out having seen the outrageous prices their homes fetched. In short, I agree.
I don’t know what radius people generally consider high risk, however we may take a look at the Chernobyl disaster. This involved a somewhat larger core than those at San Onofre, and was close to the worst possible case (actual releases of Xe, Kr, I, Cs, Sr, and a few others approached 100% of their maximum core inventory IIRC). Radiation fields which could be promptly lethal extended up to a few miles from the reactor immediately after the incident. Temporary evacuations involved a far larger area, and the innermost 19 miles were never reopened.
An evacuation of that magnitude would be a serious problem by itself (think traffic on Hwy 101 is bad now?), especially given recent US performance handling such.
Personally I would call under 10 miles “risky” – YMMV. How risky? I’m not sure; I found the Davis-Besse head corrosion incident quite disturbing, since I had had high confidence in the industry’s operational safety.
I should note that nuclear plants suffer disproportionately due to their high visibility; many innocuous-looking light industrial buildings handle large quantities of dangerous chemicals despite being adjacent to residential areas. See for instance the 2005 Praxair fire in St. Louis in which “Dozens of exploding cylinders were launched into the surrounding community … causing extensive damage and several small fires.”
There’s a big difference between that the Santiago property and the DMZ surrounded Floral Park. I live in Orange now, and formerly worked in the worse areas of SA.
My wife and I have settled on buying a home in the unincorporated area between Orange/Santa Ana/Tustin over Floral Park. The reason? All the stuff you mentioned as negatives. Plus, traffic is a nightmare to get INTO FP because they’ve made a bunch of streets “exit only”.
It frankly sucks. FP is a real neighborhood with real people living and intereacting with each other. I’d really like to live there. But when it comes to resale, I still gotta fade the whole perception that Santa Ana is a shithole. But I’m going to be gambling a little when I reenter the market, and I don’t think I can fade the SA stigma.
Owell.
I am laughing at those people and I doubt you’ll find anyone more bearish than me. Well, more bearish and not mentally ill.
Nah, I don’t have any proof or evidence. I grew up in Manhattan Beach and just remember that prices close to the water did not get hit quite as hard as the houses farther inland.
We are waiting and planning on waiting much longer. We are in no hurry and have no plans of “jumping in”.
Thanks, as I suspected, unapproved short sale. I’ll need to track it and see if it goes back to the bank or the bank actually approves a steep short sale.
According to Redfin there is a buyer (contingent). Don’t know the offer price. I hope things like this continue (dropping), I am looking to move back in 2012. Just drop baby.
BTW, Crystal Cove, land of the $2M+ subdivision (while under construction) is rather nice, just not $2M nice.
People who are looking for housing in IRVINE wouldn’t touch either of those dumps (Oakland or SA) with a ten-foot pole.
Now go back to your street corner, the drugs aren’t going to sell themselves.
I live in Harborview, the gotta live in family neighborhood in Newport Beach. People here belive they will see
a flat to 15% down correction. However, most of the fine people of Harborview work in real estate supported
industries and have drank the koolaid.
The current demographics of Harborview are a median household income of 149K. The top 20% of households
are at 200K house hold income and higher. To add weight that most of the wealth exists in few hands; the median house hold income
of the top 20% of households is $375K. It is apparent at least to me that BIG money in Harborview is an urban legend.
Who will afford these badly built 40 year old tract homes?
You have to remember Crystal Cove, Pelican Crest, Pacific Ridge, etc….are homes for “captains of industry” So with your normal 300k salary per year, you won’t be able to afford those homes, b/c when u are able to, there will be someone else making more money.
Would be interesting to find out the end result…
Also interesting – Countrywide shows as the lender for the 1st and 2nd mortgage recorded 08/05, and also as the lender who refi’d the 2nd DT to the larger amount only a few months later, resulting in borrower having ‘no equity’, even on paper. Crazy.
Home was purchased from the builder in 9/05 for 1.55mil, sold in 1/07 for 2.5mil, first loan amt of $2,000,000 second for $250,000.
That is not correct, the Intrafamily Transfer and Dissolution was the husband quit claiming to the wife, the vesting is a married women sole and separate property. The actual sale is recorded as a grant deed.
IR,
I have to agree that this particular article tethers on the edge of being a strawman argument. I mean as long as occurances like the one presented here are one-off, fraud-induced cases; can they really affect median home prices in this locality as a dominant factor?
Regards,
PH
This is the Belcara tract in Pacific Ridge. Belcara is the cheapest of the four builder communities in PR (Pienza is next, followed by Cypress and Costa Azul the nicest). Although detached SFRs, they share a common auto-court and are configured in such a way that you always feel like your neighbors are looking down into your yard and vice versa. It is a terrible design. Nevertheless, these properties sold in the $2 millions at one point, and I’ve seen two recently listed at $3 million even as the bubble was bursting. These homes are getting clobbered — the two $3 million listings declined to low $2s and one was taken off the market. (I think they were on Stonepath, but no time to check.) For one to sell at $1.3 is a staggering blow to Pacific Ridge, which had been hanging on to peak pricing at the expense of actually selling homes. I hope the other models follow the lead.
For you out of staters, Pacific Ridge is a great neighborhood, if you are into the master planned thing in Newport Coast. It has ocean views from many properties (although the Belcaras look out towards to the 73 and canyon areas) and is surrounded by Crystal Cove State Park. There are parks, hiking trails and the chance of seeing wildlife. Many streets are wide and single loaded. There’s a lot of open space, an unheard of amount of open space for Orange County — you feel like you are living in the country. If you are an outdoors person, it’s a great option. Unfortunately, prices spiralled way out of control — $2-4 million for what are essentially 2500-3500 sq ft architecturally interesting tract homes on larger than average lots is not sustainable. This neighborhood was meant for families, but families (even Newport Beach families) can’t afford it any longer. And with $1-2 million homes not selling in surrounding areas, the obvious “move-up” buyers are just not there. As result, nothing is selling in this neighborhood. On the other hand, sellers either have the equity or the cash flow to hold out, because major price reductions have been limited to the 1-2 obvious speculator homes. It’s a stalemate in Pacific Ridge, and this listing is the first crack that I’ve seen. Thanks for posting something from “Irvine-adjacent” Newport Beach.
I’m one of those that sold at the peak (due to luck more than brains), and my wife and I are happy to rent in Newport Coast waiting for prices to drop and drop so we can buy. We won’t be looking at the 7-figure range. We will be looking in the 500-600k range. I don’t see any reason for Newport to drop less than Irvine. All these rich people that were mentioned are not going to be wanting to buy a 1500-2000 sq. ft. place for $1million that site next to the 73. Wouldn’t they get one of the many newly-built places with an ocean view?
Currently, our 2-bedroom apartment rents for $2300/month. In Irvine, we could maybe get a 3-bedroom place for that. Expanding on that to home sales, if Irvine prices drop 30%, and Newport prices drop only 15%, buyers will be more likely to buy in Irvine since they will get so much more for their money than in Newport. (That is, even more than they do now.) That lesser demand will cause prices to drop more in Newport. Newport might always command an X% premium over Irvine, but that X isn’t going to magically go up to 2X.
I’ve got loads in the bank. Okay, it’s with Vanguard. But no way am I going to spend $1 million for a home anytime soon. Yes, I’m very picky. Very. And I’m not paying property tax on a $1 million home, either.
Off topic, Can anyone comment on the 99-year lease that Irvine dishes out on city land for homeowners instead of actually owning your land like in every other city? My family is considering purchasing a home in Irvine within the next 2-3 years. How would this affect our property in the long run?
The Irvine Co. has NOT offered leased land since 1970 so far as I know. Indeed, when Turtle Rock was FIRST developed, owners had the option to buy or lease. Most of them bought.
Ever since, so far as I know, the leases have all been converted into purchases.
There used to be a bunch of disgruntled leaseholders in Upper Newport Bay whose leases came up in the early 80s. I’m not sure if they purchased or what… but that was Newport Beach back in the early 80s.
Insofar as Irvine goes, and insofar as I know, you won’t run into any of that monkey business…. that’s an old urban myth by now. You buy your house and your land in Irvine just anywhere else in OC.
Ya, there was some BS going on, big time. They probably did that to attract some attention for a buyer. 2.5 mil down to 1.3 mil. must be a steal. Lets run out and by it! I almost bought a 2500 sq. foot place in Newport Coast for arount 650 K in 2002. But it had no view so I backed out.