Address: 26 Perennial, Irvine, CA 92603 (Quail Hill)
Plan: 1174 sq ft – 2/2
MLS: R65314 DOM: 138
Sale History: 7/6/2005: $532,000
6/26/2003: $312,500
Price Reduced: 06/20/06 — $648,000 to $599,000
Price Reduced: 07/26/06 — $599,000 to $579,000
Price Reduced: 08/21/06 — $579,000 to $575,000
Price Reduced: 09/01/06 — $575,000 to $570,000
Price Reduced: 09/18/06 — $570,000 to $565,000
Price Reduced: 09/22/06 — $565,000 to $559,000
Current Price: $550,000
This Plan 3 in the Jasmine tract built by Shea Homes in 2003 is in the village of Quail Hill. In the spirit of saving money and being an efficient builder, this tract was reincarnated in Turtle Ridge as Ashton Green. This condo was purchased on 7/6/2005 and then put back on the market less than a year later on 5/26/2006. The greed is clearly evident when you realize that this flipper expected a $116,000 profit! They quickly wised up and started reducing the price. I think they may have reduced the price so many times that ZipRealty currently doesn’t even display the most recent price reduction.
If they obtain their current asking price and we assume 6% in selling costs, this seller will lose $15,000.
UPDATE #1 – October 19th, 2006
This greedy pig actually raised the price $50k yesterday as evidenced by ZipRealty:
Price Increased: 10/18/06 — $550,000 to $599,000
Current Price: $599,000
You’ve got to wonder what’s going through this seller’s mind as they keep messing with the price. LOL, Perhaps they were getting too much interest at a price of $550k? This hog will get slaughtered.
UPDATE #2 – November 4th, 2006
The last price increase lasted only two days and then the listing was taken Off Market on 10/20/2006. I’ll post another update when/if it gets listed again.
UPDATE #3 – April 21st, 2007
Well, this one is back on the market with MLS #: S474139
Price Reduced: 03/07/07 — $595,000 to $575,000
Price Reduced: 03/27/07 — $575,000 to $549,500
Current Price: $549,500
The $550k price didn’t work 6 months ago but since the market is hot now, I’m sure this home will just fly off the market now 😉
I doubt they will get 550k for it, any buyer will at least want 10% off in this market..that’s 55k off that price or 495k. So essentially this guy is headed for possible foreclosure.
—–
Cynic score: 4.1
Way too optimistic! I say they keep trying for another two months, then they rent it out with provisions for a “six month lease only” but they’ll actually write the lease as a month-to-month. In four months they’ll get sick of feeding their Turtle Ridge Alligator, boot-out the poor, bitter, priced-out renters (who didn’t examine the lease closely enough) and throw it back onto the market at a $40k loss. It still won’t sell, so THEN they foreclose or maybe the lender accepts a short sale. Final chapter: A fat 1099 to our flipper heros who are now poor, bitter, priced-out, indebted, creditless renters.
How’s that for style? 🙂 🙂
The flipper at 26 Perennial would like, methinks, Shagi Indud’s phone number right about now. Perhaps they can work out a rollback of a few price reductions before Shagi buys with a 100% loan from BNC or Encore.
past performances do not guarantee future earnings! Just because the condo appreciated $100,000 per year from 2003 to 2005 doesn’t mean it’ll keep at that $100,000/year pace forever. people don’t sit back and wonder why a stupid 1000 sqft condo would gain $200,000 in 2 years?
aston greens was always always crowded with cars parked on the street because of the high density, if these were the same exact models and layout this has to be the case here too.
Real Estate Gurus,your help needed!
I currently rent in Irvine.I have never owned a home and am considering buying if and when an opportunity presents.Am having trouble defining “opportunity”.
My questions for you are as follows based on your knowledge of local conditions:
1)Will the excess inventory show up as reduced prices?Why do you beleive so?
What counter arguments do you have for :
a)People taking their homes off market if they dont get a fancy price
b)What % of home owners might be forced to sell triggering a price decline,because they might be distressed
Remember jobs are holding fairly good for the economy as a whole,real estate woes notwithstanding.
2)Should real estate prices drop,how much would it drop.Any heuristics to back the reasoning?
3)Looks like prices ran up significantly after 2004.Could we see return to 2004 prices ?
Possibilities of prices being halved between 2004 and now (about 25% from current levels)
P.S : Blog owner,if you feel this question is not appropriate for this blog,please feel free to remove.
Just my opinions on your questions. Go to Ben’s blog to get a lot more info.
1) Prices are already down. I now strongly suspect some of the more recent sales that set new record comps are potentially fraudulent similar to the situation at 39 Modesto, which makes a weak market look stronger. Somebody is still buying, but you have to wonder now …
I continue to watch house listings in my old neigborhood. Prices are down from $650K to $600K on 3BR/2.5BA townehomes since the beginning of summer.
Search for the Business Week article on toxic loans for an estimate of the numbers of borrowers with these suicide loans. They will likely lose their homes. They shouldn’t have bought at these prices and those loans, and the market will force them to be renters the hard way. A conservative homeowner with a lot of equity doesn’t need to sell. Most aggressive loan borrowers aren’t going to be able to sell. The bank will sell it as a REO.
When is the buying opportunity right? Depends a lot on your particular situation, but consider how much it will cost to buy the place you are renting now. I bet it costs a lot more to rent than to buy.
2) Nobody really knows, but study history. The duration of the boom and the loose lending standards indicate that it will be worse than past downturns. I think 20-30% down is in the bag, and although I wouldn’t expect it to happen, the market may overcorrect to 50% down.
3) Prices have been up significantly since 2001. It took five phases before we decided to purchase our old home. We considered a bunch of other places all over Irvine and I was afraid of a correction back then. By the time we bought five phases later, the base price had increased by $50K. The $10K increment per phase days are long gone now.
Rational,
You should continue watching the $per square foot of homes in irvine…….catalist.com and ziprealty.com have that information. A year ago the prices were pushing $450 sq. ft. on listings. Now they are listed at about $400 sq ft. Homes that sell rapidly are listed in the $360 sq ft range. Personally, I believe the homes will be in the $260 sq. ft. by this time next year.
What’s interesting, is that once in a while you will see a home sell in the $500 sq. ft. range…….
“I currently rent in Irvine.”
Rational, be rational about it. Look at the prices and see if they make sense to you. Compare the costs of ownership of whatever you are looking at to the cost of renting the same property. Don’t use teaser rates to make the comparison, use 6.5%, which is the going rate for a 30/fixed assuming your credit is good. Include taxes (1.2-1.9%), insurance, HOAs, and maintenance, i.e. what you don’t pay when you rent.
If you can buy a home cash, compare against just stuffing the money in CDs or other investments and paying your rent with the interest.
When looking into the future, you can price in the possibility of price appreciation (not likely in the near term) and the (quite significant) risk of depreciation. Either way, a risk premium is in order.
I’ve done the math and am quite happy to be renting here in OC. Even if I rent for years. (Just don’t rent from a flipper.)
Like Judge Judy says: “If it doesn’t make sense, it’s not true.”
This is copied from a Chinese blog. The title is ” how to flip house in California?” The English translation is followed.
??1999?25??????2005????70????????50???????20?
DOWNPAY????80???????30??????
??????????1?50???1?10??????30?????
??PAY??7000?????????????2000???????2000?????
???3000??30????????10???
10???????????????????????????????????
????????10??????????BANK??CASH????????????
????????????10???
This is copied from a website. What do you think it will end? Is he super smart? The translation is below.
” I bought a house at 250K in 1999. Its market value shot up to 700k. I took out 500k cash in 2005 by refinancing. I bought another house in 2005 at 800k with downpayment of 200K. The remaining 300k was put in bank.
Therefore now I have 2 houses valued at 1.5 million in total. Loan 1.1 million. Morgtage is 7k per month. I Leased one house at 2k/month. 2k from my salary. 3k from my deposit in the bank. I can handle it for 10 years (I have 300k in the bank!!!!!!). I would not care if depreciation happen because I have enough cash for 10 years!!!!!!
Interesting…
In this case the percentage of equity to loan is high.We are talking of some one who has 400k in equity on homes valued at 1.5 million.
I dont know if this might be charecterestic of all the flippers.I have no way of coming to a conclusion.I suspect its unlikely that flippers as a group might have this much of equity.
As for this buyer,I wonder if real estate taxes and maintenence have been factored in.In any case,for sure it seems like for the picture potrayed a storm can be weathered.
Thanks for all the feed back folks!
I personally am in no hurry to buy a home.Am happy renting but sooner or later,Id like to buy a home I can happily live it without over leveraging myself.
Are we saying,prices have dropped by 10%?
Are we saying,they could drop another 35% from here ?
For this to play out,we would need many desperate sellers and no buyers waiting.Do you sense that happening?
let’s see how that Chinese guy could have worked it better.
sold last year for 700K for a total of 500K profit. 500K in a 5% CD earns at least $2000/month. rent a comparible house in irvine for $3000/month. $2000 the CD, and use only $1000 from wage, get to save an additional $1000/month, after 1 year = 12K.
wait for 5 years for the bust to hit rock bottom. 12K x 5 years = 60K. Now this guy has 560K in the bank.
put 50K in per property at the bottom of the market, keep 60K in the bank for emergencies. he can buy 10 properties and break even on each one.
sounds better than 2 properties and no savings in the bank?
Well, that Chinese fella seems pretty smart (not to mention far more prudent than his plasmaTV and Hummer-hungy American counterparts). Smarter than me at least: I would’ve had to pay taxes on the interest that $300K earns, not to mention property taxes, HOA fees and maintenance on TWO homes.
It’s pretty funny, but it’s also so obviously BS that it would be unsporting to call it. What an incredible coincidence that he made $500K on his first place and the capital gains exemption just happens to be… $500K.
Gotta hand it to the original poster, though, at least he can use a calculator to create a plausible scenario (to a first approximation). If the majority of FB’s in the last few years could do the same, we wouldn’t be in this mess…
WAIT A SEC… HOLD THE PHONE!!
I just re-read the original because something didn’t make sense. He doesn’t claim to have sold the first place, he took out a $500K HELOC?!?! Who the hell does that much! And isn’t the interest rate relatively high, like >10%? That would be ~50K/yr or ~4K/m in interest alone!
The is the fundamental fallacy, that anyone can turn a big profit on borrowed money.
With all the other costs that $300K nest egg will be reduced to shell fragments in about 4 years, probably less. At which time our “Donald” will be carrying ~$1M debt plus taxes/maint, and most likely negative equity… POP!!
guys, this is a typical Hail Mary move prior to the foreclosure process. what it is is as no greater fool arrive at the scene to help bail our flipper out, they raise their price to their true “hoped for price.’ They figure, if I’m not going to find the greater fool, I might as well put it out there with the price I REALLY want and hope for to catch the GREATEST FOOL.
going back to this post in regard to a San Marcos Realtor/Loan Broker who was in foreclosure. the home was listed in the $700K range without any interest. So as the auction date approaches, the price went up to $900K before they finally gave up and de-listed and quietly wait out their last remaining months prior to eviction by the bank.
I’ve been reading more news about mortgage fraud lately. One common scheme is to work with a corrupt agent and appraiser to inflate the price and use any extra $$$ gained as an incentive/kickback to the buyer after closing…all at the expense of a lender.
Hmm…the $50K increase looks suspicious
I’ve seen a few increases similar to this one followed one day later by a reduction. I think it might be to make these listing appear as freshly reduced.
Well, I precisely know the thought process that motivated this increase. The guy has realized it’s a buyers market and no buyer is going to pay list price. He wants $550k so by raising the price he has given himself 10% bargaining room.
the guy can raise or lower, ultimately the price he will get is what the market will bear.
My assigned Zip agent has been bugging me this week. I should have her submit a $300k offer on this prop. 🙂
Sold my Plan 3 to an investor in July, 2005 for $555K. Not sure how this will play out for them, but I’ve always been curious if anyone else made it out in better shape than I.
I could get my zip agent to submit an offer for $285,000, to help your offer.
The suspense is killing me regarding the final sales price (not asking price) for this property. But I think I’m gonna have to learn to live with disappointment because this place may never sell.
Just a little competition, ony 5- 2b/2Ba that size and that price or lower within 80 yards of the front door.
I want to defend the seller of 26 Perennial. I do not think it was greed at all. The home has only 2 bedrooms so the owner probably needed more room. This home is now vacant so I think they bought another home.
The peak price for this home was $590K last year. If you factor in 10 – 15% drop then you know what the market is bearing now.
Keep in mind there is 2 main reasons when something does not sell:
1. Price is too high
2. There are no buyers.
I think the later case applies per my own experience selling houses in Irvine. There are much less demand and much more supplies for 2-bedrooms’
i think the october raise of 50k was greed. they really should have just kept it at 550 for these past few months, it would have been sold.
now this listing is just a story of questionable price changes. there’s absolutely no credability in the seller.
i thought asians are suppose to be good in math (i can say that without getting into trouble because i am one, asian that is, not the good-in-math part). at any rate, how can 300k last 10 years when he is spending 3k/month to supplement the two mortgages. 3k x 12 = 36k x 3 = 96k…at best, the money will last 3 years.
oops, nevermind my previous comment. they are good in math! 🙂
nirvinerealtor,
when something doesn’t have a buyer at asking price, means price is so high that potential buyer doesn’t even bother to negotiate 10-15% price drop. even after that 10-15%, price still is out of reality.
drop the price and see if there is a demand. it’s simple as that. price is simply set by supply and demand. bubble was partly created by artificial demand, when it disappears price has to go down to catch up with affordability.
ocr,
My experience as a listing agent, when a home does not sell because of NO BUYER, it means NO BUYER, NOT PRICE. Time is what the seller need to get the home sold.
Investors will buy when the price is attractive enough for them! I use this tool, with approval from seller, when there is no REAL buyer for the home that I list. It always works as a charm.
I know affordability is an issue; however, for ONLY some! I have seen way too many times that parents/grandparents are footing the bulk of the cost.
nirvinerealtor,
There is a home for sale in Irvine that, if the price dropped from around 850k to around 500k, I would buy. Like, right now. Like hey, let’s put on our shoes and go buy that house! I have money in the bank for a downpayment (I earned it myself as opposed to it being from daddy’s account!) and I earn a good living. I would be a buyer if prices weren’t so totally stupid. And that house? It’s been sitting on the market for a LONG time. You could argue that it’s because there are no buyers, but I’m here to tell you, that’s a circular argument. More people just like me would be in the market right now if prices were only a little stupid as opposed to totally and completely stupid.
nirvinerealtor,
Your analysis makes no sense. Price is a function of supply and demand. Anyone who took college level economics understands this. If something isn’t selling, then the price is too high. Your argument would only hold weight if the house would not sell at any price, which is certainly not the case.
I agree w/ irvinesinglemom & melissa, obviously the problem here is the seller’s greed. This seller must think that some chump will walk in off the street and fork over how much s/he asks for the house, when anyone who’s going to pay that much for a home is going to do their homework and see that the price is ludicrous.
I heard a software company try to deploy a tool in city such as Irvine, San Jose to allow home buyers and sellers can go though there platform to determine and then negatiate the prices securely and transparently.
In five years, there is no such profession in Irvine is so called restate agent.
Bottom line, so many agents are trying to obfuscate the buyers and sellers to undertake profits from it.
Melissa,
You are correct that price is a function of demand and supply; that is the reason why we have a drop in price peak of 10-20% when there are surpluses. This is the situation we have now.
What will happen next?
* Builders stall on building to dry up supply.
* Investors start buying these surpluses at a discount price and accumulate for future demand at higher prices. Note: When people do not buy, they rent.
Investors are willing to take risk and reap rewards later.
Real buyers buy what they NEED and LOVE, not something that is CHEAP.
Lisa,
I think it would be so cool that someone can develop a software that can replaces real estate agents.
There are a least 150 functions that real estate agents do to close a deal. Negotiate price is only 1 function out of 150.
Mellisa,
You are absolutely correct that price is a function of supply and demand.
I see many would be buyers who do not buy anticipating a bigger price drop. This create a surplus of homes for sale. As a result, prices have drop 10-20%.
So, what is happening next?
1. Builders stall on building to dry up supply.
2. Investors buy at discount and accumulate for future demands.
3. Then buyers get panic and buy at higher prices.
You may disagree with me; however, that is a repeating cycle.
irvinesinglemom,
Do you even get excited about this $850K home at all?
If you are, why are you not trying your best to get it?
ASSUMPTIONS:
Price: 550k 20% down Loan amt: 440k
6.25% 10 year fixed IO loan. monthly payment = $2,291.67
Irvine tax rate 1.25%?? = $6,875 per year = $572.92 a month
HOA dues 150??
Your monthly payment would be over 3,000 a month AFTER putting down 110k of your hard earned after tax dollars, that could be chillin in the bank, earning a cool rate of over 5% That payment also includes no principal reduction.
NO THANK YOU.
I’ll rent the same place for 1,800 a month, keep the cash in the bank and live with much less stress and debt.