Sale Price: $655,000
** SALE UPDATE **
This house sold on 6/1/2007 for $655,000. This was one of our first identified rollbacks, and the sale price proves it. If the seller paid a 6% commission, they lost a total of $59,300.
As I had speculated below, the other property at 3 Del Mar has reduced the asking price significantly. This property likely will become a rollback as well.
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Asking Price: $690,000
Purchase Price: $675,000
Purchase Date: 9/23/2004
Address: 8 Del Mar #4, Irvine, CA 92602
Beds: 3
Baths: 2.5
Sq. Ft.*: 1,601
Year Built: 2002
Stories: 2
Type: Condominium
Neighborhood: Northpark
$/Sq. Ft.*: $431
MLS: S479457
Status: Active on market
On Redfin: 43 days
2006, gone! 2005, gone! We are looking at a buyer from 2004 who will be selling at a loss in Northpark. If our seller gets their asking price (unlikely) assuming a 6% commission, they will lose $26,400.
From Redfin: “Move right in to this charming 3 bedroom 2 1/2 bath detached home. The gourmet kitchen has granite countertop and backsplash, cherrywood cabinets, built-in wine cooler and stainless steel appliances. There’s a fireplace and built-in media niche in the livingroom. The master bedroom has a walk-in closet and a jacuzzi bathtub. Relax and enjoy a cool drink in the comfortable low maintenance side yard. Convenient upstairs laundry. Stainless steel refrigerator and washer/dryer are included.”
This is a nice, updated property. It is still pretty expensive at $431 / SF, but it is a value relative to the pricing in Northpark. Compare it to this property:
Old Asking Price: $870,000
New Asking Price: $769,000
Purchase Price: $750,000
Purchase Date: 4/27/2005
Address: 3 Del Mar, Irvine, CA 92602
Beds: 3
Baths: 2.5
Sq. Ft.*: 1,813
Year Built: 2002
Stories: 2
$/Sq. Ft.*: $480
MLS: I703772
Status: Active on market
On Redfin: 55 days
This seller / flipper wants $180,000 more for a house that isn’t updated. Since this house is empty, and the comps are about to flatten him, I suspect this seller will find the motivation for some significant asking price reductions. Also, look out for it being offered as a rental — a sign of deep denial.
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{adsense}
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Ahhhh … What’s that? — gravity. LoL
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These are “condos” because they share a drive right? Something that traditional would be called a PUD (planned urban development). Otherwise, they’re basically and SFR, no shared walls, nobody above and below, correct?
Am I old fashioned, using the following definitions that realtors don’t seem to use anymore:
Condo: multi-unit, shares walls and/or people above/below.
Townhome: multi-unit, shares walls.
PUD: multi-unit SFRs (no common walls/floors/ceilings) that share a common area, driveway, architectural embellishment.
SFR: single home and individual lot.
That aside, I suspect if the seller cannot get their price above their purchase price, they will sit it out unless they are forced out by other circumstances. While the return to 2004 prices is nice, that leaves huge swaths of homes bought in 2005/2006 upside down that the owners now likely cannot afford to sell.
These people probably watch “My House is Worth What?” on HGTV. I wondered when those epsisodes were filmed, because the appraisals given on the show are just ridiculous. Moreover, the people react to the appraisals as if they have the money in the bank. I believe IrvineRenter’ post “Southern California Cultural’s Pathology” nailed it on the head because these people really do believe that their appreciation is income…I guess if they were to find somebody to buy their homes at the crazed appraisal prices, then they would be rich…
No_Such_Reality, there is a lot of confusion regarding those terms. As a style of construction, I’ve used Condo and Townhome as you’ve described it whether that’s correct or not.
As a form of ownership, even detached units can be condos. I believe even the Stonetree homes in Woodbury are technically condos because of their small lot size.
Can anyone in the biz shed some more light on this? Especially in regards to Irvine and Orange County?
Condo vs. fee simple is a matter of how it is represented on a map recorded at the county. You could put a condo map on a subdivision if you wanted to, but there wouldn’t be much point. Fee simple is generally used when your property shares nothing with its neighbors: Your house shares no walls, and your driveway leads privately to a public street. If you have any kind of shared ownership or use rights, you could go fee simple with easements, or you could draw up a condo map. Condo maps become necessary when you cannot draw ownership property lines to the sky. For example, townhomes do not necessarily have to be condos because you could draw property lines to the sky; however, practically they are condos because the shared walls and maintenance. Once you have stacked flats, you must go condo.
On the title of a property, there is 2 fields: County Use Code and Univeral Land Use. The value is either Condo or SFS. It is more of a definition than physical.
In general but not always, if properties are sharing something such as a wall, a walk way, or a driveway, then it is defined as Condo.
Take the home of 3 Del Mar in Northpark Square 92602: it is a Condo and Condo
Physical: Detached, Alley parking. The alley parking (land) is undividedly owned by everyone.
Take the home of 55 Bamboo in Northwood 92620: it is a SFS and SFS.
Physical: Detached, Alley parking. The alley parking (land) is owned by the city, not the owners.
Take 12 Mineral King in Northpark 92602: it is a SFS and SFS
Physical: Attached, Alley Parking. The alley parking and the shared walk ways are owned by the city, the owner owns the land that the house sit on dividedly.
So, you just have to look at the title from the county recorder or ask someone like an agent to look up for you.
Back Nov, 2001, you walk into builder’s sell offices, all plans are available to move in in one-two months. the prices for plan one is $340, plan two $350 and plan 3 is $370.
Now we are in 2007, sum-primes is gone, alt-A will follow, landing standard will back to normal, and AG/Bush election dilemma gone. Be patient, the house prices should fall to 2001-2002 levels.
See also, S484653 @ $739,000 (former model).
These are detached condos because of their density, they share a drive, and instead of a fence marking your property line in the side yard, your side yard abuts the side wall of your neighbor’s house. See the side yard pics for S484653.
One clarification: the neighborhood is Northpark Square – the one that isn’t guard gated.
Zovall, I understand. Part of it comes from the new developments in Irvine. Even the SFRs are condos because of the community structure and the HOA CCRs. In some, you don’t technically own the land. Technically, townhome doens’t exist. It’s either SFR or Condo on the property roll.
My rant isn’t at you guys, it’s frustration with looking at the ads, the papers and literally checking out one too many beautiful single family residences that share walls or have someone above/below.
My other rant for the realtors is if the best thing you can show me online is the community pool…
BTW, where’ you guys see that 3 Del Mar wants to rent? I don’t see it on craigslist or zip.
LL, see bubble market inventory traking’s take on one episode of “My house is worth what?”
http://bubbletracking.blogspot.com/2007/04/part-i-my-house-is-worth-what.html
These reductions bring up a question for me. The median price the CAR quotes is always rising or perhaps moving only 1.5% down. Yet the price reduction of homes that are actually selling is dramatic. When will we see the declines in median price? Is the reduction is sales volume all at the low end thus keeping the median up? Or, as I fear, the numbers being manipulated. Realtors are always complaining that sellers aren’t realistic in their pricing, yet the numbers they present make it appear that there’s no problem. You can’t have it both ways.
EvaLSeraphim, you wrote:
and instead of a fence marking your property line in the side yard, your side yard abuts the side wall of your neighbor’s house. See the side yard pics for S484653.
That describes a zero-lot line and does not mean it is a condo. A lot of SFRs in Irvine, particularly in Turtle Rock and Northpark are zero-lots. They are actually kind of nice because it gives your yard more privacy.
Well put Irvine Renter. I like to elaborate on your definitions.
Detached home is Fee Simple on a lot with defined property lines as boundary and homeowner is responsible for the landscape maintanance of front, rear and both sideyards. Driveway or drive apron from a public street to the garage is private. Home has a private path to the street.
Zero Lot Detached Home is also Fee Simple with a granted easement on a lot with defined property lines as boundary and homeowner is reponsible for the landscape maintanance of front, rear and ONE sideyard. One of the sideyards is granted for the use by the adjacent neighbor. The home often has no windows or some obscured glass on the “zero edge” side. The homeowner still has the right to paint and repair the “zero edge”wall via the neighbor’s sideyard. All these homes have very little backyard. Driveway or drive apron from a public street to the garage is private. Home has a private path to the street.
Townhouse is when the homes has a roof and concrete foundation and share one or 2 common walls. front and rear of the home always have windows for light and ventilation. The property lines are at the middle of the shared wall. The most desireable are the”end unit” homes having front, back, and one sideyard. Almost all townhouses have an association. Variation includes Duplex, Triplex and “sausage train”. Duplex homeowners have control over frontyard landscape while some triplex and all “sausage train” homeowners have no frontyard control. Parking could be in attached, detached or assigned parkings on lot. Homes have a private path accessd from the street.
Condo mapping is required when ANY ONE of the aforementioned rule is compromised. Some condos have no privacy and everything is compromised and yet other condos could live like a detached home. When the property lines are not easily defined is one element among the many that could triggered the condo definition. On the other hand even when the property lines are well defined and just because the homes do not have a private path and utilize a shared path accessed from the street these homes automatically fall under the condo jurisdiction. Cortille and Bowen Court in Woodbury both are detached condos that have some detached home qualities. Watermarke and the residential towers along Jamboree are on other extreme end of the condo spectrum. Shared wall, shared ceiling and floor, shared plumbings and waste line, some may shared air conditioner condensor and water, shared remote parkings, share path to frontdoor, share recreation area and shared trash dumpster. Most of these are lower price driven for the first time buyer while a few are higher pricetag trophies for status driven homeowners. Some likes the social mingles in these higher density housing solutions.
Bkshopr,
Your explanation shows more ambition than mine. Thank you.
ocbear,
I think the median is skewed right now because of the near elimination of sales at the low end. Tightening credit standards eliminated most buyers of properties with less than 3 bedrooms. Even nirvinerealtor will admit there are no buyers for these products. The median only shows what was paid, not what you got for the money, so move-up buyers prop up the median. Personally, I think the median is going to fall of a cliff this fall, but let’s wait and see.
No_Such_Reality,
You can find 3 Del Mar in this blog link below. The house is in pre-foreclosure as of 2-21-07. There is very small chance it has a new owner through short sale.
https://www.irvinehousingblog.com/2007/03/19/the-plot-thickens-in-fraud-park/#comments
Be very careful if you do not want to end up like Sirvinerenter.
See, a realtor can be useful. Right?
Could someone in title verify if 3 Del Mar has a new owner, or is it still with the defaulted owner?
oc bear,
I was just thinking about this today. Here are 10 hypothetical sales:
$1,050,000
$1,000,000
$950,000
$925,000
$650,000
$625,000
$600,000
$575,000
$550,000
$500,000
The median here is $637,500, with an average of $742,500 for 10 sales.
Now, next month, suppose the market is drying up, and 30% fewer (identical) homes have sold, all from the low end. And, to make things worse, the remaining (identical) houses sell for 30% less. Using the top seven values from this example, and reducing their price by 30% (and eliminating the sale of the bottom three houses).
The house sale prices are now (same houses with 30% drop, no low end sales):
$735,000
$700,000
$665,000
$647,500
$455,000
$437,500
$420,000
The median here is $647,500, with an average price of $580,000.
The median is up 1.6%, so all is well, right? The NAR is more than happy to report the median. In fact, I suspect that the median may be more insensitive to downside movement than upside. If all 10 houses still sold at a 10% price increase, the median would move up 10%. However, if prices are falling as volume is falling, the median may remain stationary.
New2OC,
Your analysis is right on!
Yes, recent credit tightening efforts will probably NOT be reflected in upcoming sales stats, as it’s expected to effect the lower-end entry-level homes, NOT the move-up buyers (people who already own a home and need to move for job purposes, etc; they probably will NOT need to finance 100%, use neg-am loans, etc).
As a result, don’t be surprised if the median DOESN’T drop for upcoming reports from the NAR/CAR. You need to look below the surface (total volume, or even the raw data) to see what’s REALLY going on….
IR
you’re finally changing your outlook to this fall, I agree with you. I’m starting to feel some frustration among friends who bought in the last few years, also realtors are having a hard time saying the market is fine with a straight face.
no one knows for sure, but all I can tell is the psychology is starting to change a bit.
If I may ask, what does everyone (or those in the business)think about lending standards, how far and fast will they tighten?
The 8 del Mar sales price is incorrect!
How do I know this? Because Gary Watts wrote:
“2. Labor analysts forecasted our job growth at 1%, but it ended the year at 2% with a total of 29,100 new jobs created.
3. This has helped prices (for the most part) to remain neutral.”
A $59,300 loss from a 2004 sales price is NOT neutral. And Gary is never wrong because, as you may not know, he predicted the last housing downturn when no one else did!
Depending on whether or not they had cash back when they bought in 2004, to actually sell at $20,000 less than they paid in 2004 is an accomplishment.
Even with a 1% ARM, mortgage & tax payments add another $40,000 burned up. Still, depending on financing, it’s possible they just broke even with renting over the last three years. Sans sweat and sleepless nights in March, April and May…
8 Del Mar was purchased at $421 per sq. ft. in 2004. It was sold again at $409 per sq. ft. this month. It has declined by 2.85% since 2004 before adjusting for inflation. Painful to be sure – just not tragic (expect when it’s you).
The fact that there are transaction costs is completely irrelevent. Expecting to overcome transaction costs when you only hold a home for a couple of years is not reasonable.
Sorry – “except” when it’s you.
Confused,
Any rollback to a 2004 price is amazing considering where we were in July of 2006. This may be only fractionally off its purchase price, but it is way off the peak, and it clearly puts everyone in this neighborhood that bought in 2005 and 2006 underwater.
Interesting that you note that overcoming transaction costs after only a few years of ownership is not reasonable. I totally agree with you on this point; however, not long ago people expected to overcome transaction costs and make a healthy profit after less than one year of ownership. Times have changed.
I don’t live in the OC, but live in a market that peaked about a year before you did (July 2005). I can cherry pick sales disasters, too, but here is what is going on with actual closed sales over the last 2 months:
– Desptite the “sub-prime implosion”, the low, below or near median segment of the market is what is moving fastest of all market catagories.
– Resales from the peak are all over the board. Maybe 30% at a decent loss from peak prices, 40% about breakeven, and 30% actaully showing an increase.
– 6-7% of our market seems to be REOs. The major lenders like Countrywide are not being very agressive. The small players are undercutting the market by about 10%.
– Property “value” is continuing to be set by the financial hurt level of the owners.
I think you might be seeing some of these trends out there. I’m as big a bear as there is, but I was surprised to see schitzo market.
In Robert Case’ words, “White swans and ugly ducklings sell on the way up, but only swans sell on the way down.” This is was in a response as to why the (his) housing index seemed to lag the apparent median house decline.
Please note that S484653 (former Tiburon model) originally priced at $739,000 seems to have fallen out of escrow. It is now priced at $710,000. Apparently, the sellers are not serious about selling. 😉
Shark,
Your comments are surprising. We’re all nodding sagely in agreement with each other that sales and prices, especially sales, at the low end have dropped because of sub-prime credit tightening. And we’re anecdotally picking a few mid- or high-end sales to imply that the smarter money is valuing them lower too.
What you’re saying is that we’re full of it. Maybe you’re right. I don’t have enough hard data to really know. Would you mind sharing some of the data and insights you’ve collected? Please bear with the inevitable handful of people who may get upset at exploring this side of the crystal ball. I just want to know the objective facts as best as I can, and so do most other readers here. (BTW, is your market San Diego?)
Thanks IrvineRenter for all your great work.
Kev,
I think the prices were maybe 240 in 2001. I purchased a 3000 sq ft SFR in Northpark for 600K in 2001. That was only 200 sq ft. The realtor told us we were crazy for paying that much…
Maybe it was 140 sq ft. for condos then.
You need a gard gate like you need another hole in your head. The gates make middle class people feel rich. Ever wonder who works for minimum wage to sit is a little house for eight hours?
patient,
My market is Reno. My gross sales data come from our local RE blog, http://dianecohn.blogs.com. Diane and Guy upate sales and median data monthly. Its a fun blog.
All Recorder’s info is on line here, so it really easy to check prior sales, loan amounts, HELOCs. Somersett is a high end development, invester city. I checked the data of closed sales for the last 2 months to get the quoated estimates. I also checked Woodland Village, which is sort of a Sam’s Club version of Somersett. It had fewer big gains or losses, but things were nowhere as down as I expected.
Our median is down at least 15%, and the assumption was that translated to a corresponding drop in sales price. That’s what I was expecting to prove.
There are 2 types of sellers (and Realtors!) in the market currently:
1. Sellers/Realtors who are still pricing at 2006 peak levels, who price way above and beyond what the market dictates so boldly it’s like a big “FUCK YOU” to the market. Gotta love em.
2. Sellers that are in trouble, they know it, and they price low to actually sell their home this year… and piss off everyone in group 1 above.
It’s repubs vs democrats part DUEX!
Certain lending standards will tighten while others will ease. Remember if banks only tighten lending standards, they will make less profit, unless their volume increases. Banks that service their loans, like my bank, will begin to scrutinize loans more in underwriting and scrutinize the appraisal. We actually increased our max loan amount for 100% purchase from 417k to 750k. One loan with no MI.
Credit requirements, and asset requires have increased, but DTI has also been allowed to increase due to lagging real wage growth and high prices.
Regardless if it is a retail bank originated loan, correspondent lender, or mortgage broker, the bulk get sold off in pieces to wall street. As long as they have an appetite for MBS then we’ll continue to write loans. Profit margins are shrinking I can tell you that. banks can now sell the same loan today as they did last year but for less money. This means a Bank can make less money or charge more fees/higher rate to the borrower.
This is why I think rates will only rise. Even if the treasury yields and bond markets continue to rally and push the rates below 5% banks will need to raise rates to keep their profits up.
The one HGTV show that sort of pisses me off is the one where they all go buying a second home.
Show offs.
Two nights ago they had the woman who just bought a vacation townhouse by Diamond Head in Oahu. She got a “great” price and the condo was appreciating like crazy.
I have no idea when that show was taped, because according to my sources the real estate in Oahu has been flat and dropping for a while.
Aloha.
You said:
“Zero Lot Detached Home…. All these homes have very little backyard.”
Not necessarily true.
The backyards can be as large as your “normal” detached home so long as the lots are as wide as a “normal” lot. By sliding the house to one of the lot lines you get is a useful side yard as opposed to two narrow “outdoor hallways” on either side of the yard.
Our side yard, facing south, is 12 feet as its narrowest. That’s good enough to plant tomatoes and cucumbers. Particularly as the house just south of is a single story home.
And we do have a 12 by 22 outdoor atrium in the center of the house to allow for the missing windows on the zero lot line wall.
Thanks, shark. I wonder if the areas you looked at are dominated by better-off investors who aren’t desperate and have some skin in the game? I’m thinking comfortable San Francisco people who wouldn’t be caught dead in a Temecula loan-fraud scheme.
>>See also, S484653 @ $739,000 (former model).
This (54 Rosenblum) fell out of escrow and now has a new listing agent. See MLS # P592103. The price has dropped to $699,000. It is owned by an original owner who appears to have room to cut their price.
The next door neighbor (52 Rosenblum) put his / her place up for sale, too, at $729,000. See MLS # S498252. I don’t know how well that will work, since that was the original price for 54 Rosenblum. Worse for them, they bought in December 2004, with roughly 10% down. They are going for a profit, but have some room to move down.
There was another one on Del Mar, and I think it went back to the bank recently. It might have been 3 Del Mar, but I’m not sure.
ELS,
Yes it was 3 Del Mar that went back to the bank. It was one of fraudpark victims.
https://www.irvinehousingblog.com/2007/03/19/the-plot-thickens-in-fraud-park/
Also in that neighborhood 15 Pacific Crest was sold at the auction for $791k and 15 Bolinas went back to the bank for $587k.