Curly Shuffle ** Update 1 **

This price was just lowered to $255,000. This is becoming a deep 2004 rollback. Ouch.

Well, me and my friends-we all love to see
Comedy classics on late night TV
Those knuckleheads always get in a scuffle
A push and a shove doin’ the Curly Shuffle

The Curly Shuffle – Jump In The Saddle

Link to Video of Curly Shuffle

Do you remember the Curly Shuffle, the sliding back-step predating the moonwalk? Isn’t that how our housing market works: Two steps forward and one step back?

We had our big rally, our two steps forward. Now it is time for the one step back (or two or three…)

Today’s featured property is another distressed low-end unit: a 2004 rollback.

508 Orange Blossom Front 508 Orange Blossom Inside

Asking Price: $265,000IrvineRenter

Purchase Price: $273,000

Purchase Date: 7/7/2004

Address: 508 Orange Blossom, Irvine, CA 92618

1st Loan $218,400
Downpayment $54,600

Beds: 1
Baths: 1
Sq. Ft.: 512
$/Sq. Ft.: $518
Lot Size: 512 sq. ft.
Year Built: 1977Rollback
Stories: 1
Type: Condominium
View: Water
County: Orange
Neighborhood: Orangetree
MLS#: S497083
Status: Active
On Redfin: 24 days

From Redfin, “Best priced condo in the Lake Condos! Beautiful End Unit with private Wood Deck overlooking Stream!Price includes Washer/Dryer and Refrigerator!Amenities include Assoc. Pool, Spa, Tennis Courts, Clubhouse with Workout Room and Barbecue poolside!Enjoy the absolute Best of OC with nearby shopping, entertainment, World Class Restaurants and Oak Creek Golf Course! The Irvine Spectrum is just minutes away with close access to freeway, hospital and college!Don’t miss out on this investment opportunity!!”

Notice this is being touted as an “investment opportunity.” I guess if flippers are the only ones buying, you need to appeal to them, right?

At over $100 a round, I doubt the resident here will be playing Oak Creek Golf Course very much.

.

.

If this seller gets their asking price, they stand to lose $23,900 on a mid 2004 purchase.

The bottom of the market is being destroyed. What more is there to say? Well, wait until you see tomorrows post…

When me and my friends go out on the town
We can’t sit still. We can’t sit down
We don’t like to fight and we don’t like to scuffle
Dancin’ all night doin’ the Curly Shuffle

Hey, Moe. Hey, Moe.
Well, a nyuk-nyuk-nyuk-nyuk.
La-le-li-li
woo-woo-woo-woo
Well, we never miss a chance
We get up and dance and do the Curly Shuffle

32 thoughts on “Curly Shuffle ** Update 1 **”

  1. Laura Louzader

    I’m comparing this place with another ‘entry-level’ place featured on your blog, the beautiful little 1050 sq ft “English Garden” new-urban style cottage.

    We all agreed that $280 sq ft was about right for that place, and it is BEAUTIFUL, and very stylish. It is also new, in move-in condition, and it is a free-standing home.

    This place you feature today is not quite beautiful, even though it is OK. It is an aging condo

    So, wouldn’t a reasonable price be more like about $175 sq ft or even $150?

    Or would that be too low?
    —–

  2. IrvineRenter

    I think $150/SF to $175/SF is probably to low here. The rents would justify a price closer to $250/SF to $300/SF.

    This place should bottom around $150,000 to $175,000 for an owner/occupant, lower for an investor. The rent on this place would be about $1000 a month, so it represents a savings on rent at a price near $160,000 depending on the prevailing financing rates at the time of purchase.

  3. Mr Vincent

    Pretty amazing that this place was worth about 75k in 1998.

    Wow, money actually had some value even during the internet boom when knowing some HTML got you 80k per year.

    This place is 512 sq ft! If this place overlooked Mission Bay I would still think twice before signing the papers at 265k.

    I agree that it will probably bottom at 150k although I would not touch a “condo with carport parking” under almost any circumstance.

  4. NanoWest

    I was just scanning some of the price reductions on Zip. There are some places with some nice 50K drops now. Anyone want to take a wager on when we start to see condos in the high 200’s per square foot ?

  5. Incredulous

    Interesting how the kitchen appliances and cupboards are a mishmash of colors. Also interesting how none of the pictures show the rest of the condo – just the exterior landscaping and amentities. I’m getting a pretty good idea of what the place looks like by NOT seeing it…!

    When you compare owning a place like this vs. renting anyplace else, renting wins hands down. Why buy if you have to live in a sty?

  6. Jonas

    Nice post and keep up the great work! I was surprised when I was reading another bubble blog I like and saw that they found an expensive place in south Orange county that was going to lose money (http://caliguy2699.blogspot.com/2007/08/bigger-they-come-harder-they-can-fall.html) cause i keep hearing bulls argue about how the top end of the market is still doing well.. If things are imploding on both the low and high ends of the market who knows where we will be in another year or two?!

  7. Mark

    Isn’t that the rub? “…depending on the prevailing financing rates at the time of purchase.” I think any reasonable comment about pricing in today’s environment should carry that caveat. Homes are financed with the monthly debt service being the primary consideration. Liquidity is evaporating right now and rates are rising to the current perceived risk.

    We should be seeing dramatic (15%+) depreciation in the median price in a very short period (1-3 months). But that may be nothing to celebrate because the monthly cost will be substantially similar had you been able to purchase at a cost 15% greater with much more favorable credit terms. Of course, you can always refi in a few years if/when rates go down, and then you’re in a better position than you would have otherwise been.

  8. No_Such_Reality

    Pretty amazing that this place was worth about 75k in 1998.

    In 1996-1999 you could buy townhomes and condos and your total PITI with 10% down would be less than rent before taxes. You’d add your HOA and your property, take your tax deduction and still pay slightly less than what rent would cost you.

    I suspect we will go back to that because ‘investors’ in that time period were squeezed with the banks really paying attention to owner occupancy.

  10. Romney

    FYI, your picture of the Three Stooges is from an anti-Mormon satire of the Mormons (and The Book of Mormon). Mormons insist the Book of Mormon took place 2,000 years ago somewhere in North or South America, and there is a constant stream of Mormon scholars claiming to have found the exact place where the book takes place.

    One of these books is called “An Ancient American Setting for the Book of Mormon”, and three prominent LDS scholars are Louis Midgely, Daniel Ludlow, and Richard Cracroft.

    Obviously, the creator of the picture (and most non-LDS archaeologists) believe the Mormons are delusional in this regard.

    Now back to your regularly scheduled discussion of Real Estate related matters….

  11. k.o.

    So, a few interesting articles I found this morning (my apologies if they have already been posted):

    60 Minutes

    A series of short 60 Minutes clips on Redfin and how they are trying to change the industry. Its quite interesting, but the best part are the segments when they interview a traditional RE Agent. Her responses are hilarious; just shows you how highly they think of themselves and their level of “service”.

    Particularly the RE Agent’s interview:
    “I want to make sure that they are a good match [with me]”
    (Methinks that fogging a mirror means you are a good match for a RE agent. If you have money, then they will take you.)

    “I’m not a discount broker”
    (which means you charge too much)

    “mmmm hmmmm”
    Wow, I would get annoyed with that RE agent. She sounds so dang condescending.

    “a lot of expenses have gone up”
    (postage? gas? are you kidding me? wow, that might bring you up an extra $100 to spend. It really cuts in on your $20K commission…)

    “staging professional”
    WTF is that?????

    2nd article

    Stocks drop on rising credit anxiety
    “This is a mini-panic,” he said. “All the things that had been denied up until this point are unraveling. On top of this, retail sales were mediocre, which shows that indeed, the housing collapse is affecting the consumer.”

  14. Sue

    Interesting article about how people make decisions. Makes some sense – if life is uncertain and circumstances change rapidly (like it was for most of human history), it might make sense to take what’s right in front of you. Only in periods of stability, when the world is more predictable, does it make sense to wait. Evolution is a slow process.

    The psychology of subprime mortgages
    http://scienceblogs.com/cortex/2007/08/the_psychology_of_subprime_mor.php

  16. lendingmaestro

    Mark,

    Price matters much more than rate. A 500k mortgage @ 6.5% gives you an IO payment of $2,708 a month. If you reduce the 500k by 15%, that drops the loan to 425k. Even if your rate jumped from 6.5% to 7.5%, your monthly payment would only be $2,656. You also will have a lower tax bill and a lower insurance premium.

    We are going to be seeing much greater price drops than 15%.

    If the price dropped 30% it would put our loan @350k. Even if your rate was 8.5% your monthly payment would only be 2,479 a month.

  17. CrashHappy

    LendingMaestro,

    Thank you for your input. I always wonder this question about price vs. rate but never really sat down and calculate.

  19. Sue

    Interesting … perhaps the wheels of govt turn slowly enough, there won’t be much of a bailout.

    Ohio Cuts $100 Million Refinancing Plan as Few Owners Seek Help
    http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a8A0EFiw6AFY

    ——————–

    U.S. Stocks Tumble on Credit Concerns; Banks, Brokers Retreat
    http://www.bloomberg.com/apps/news?pid=20601087&sid=aWb_q3eNZ9dA&refer=home

    Fannie Mae and Freddie Mac declined after President George W. Bush said the two largest mortgage finance companies must complete a “robust reform package” before the government will allow them to buy home loans beyond current federal limits.

    Bush’s comments came after Senate Banking Committee Chairman Christopher Dodd and other lawmakers asked regulators to ease restrictions on the mortgages and mortgage bonds that Fannie Mae and Freddie Mac can buy. Fannie Mae shares lost 82 cents to $65.93. Freddie Mac declined 97 cents to $61.67.

  20. Mark

    True, but credit availability must also be considered. As prices spiral downward we may see a complete return to “normal” mortgage lending that existed prior to a decade ago. Mortgages may only be available to prime borrowers with 20% to put down (further pushing prices downward). So you’ll need to have a lot of cash available to jump in if/when prices are down 30%.

  21. lendingmaestro

    I agree that some people may be precluded from buying, but you could argue that those people don’t belong buying anyways. If you do have some cash, it will equate to a larger percentage downpayment as prices fall.

    Simply put, falling prices are the best thing a would be first-time homebuyer could hope for.

  24. Sue

    FORECLOSURE ACTIVITY UP OVER 55 PERCENT IN FIRST HALF OF 2007
    http://www.realtytrac.com/ContentManagement/pressrelease.aspx?ChannelID=9&ItemID=2932&accnt=64847

    “With one foreclosure filing for every 69 households during the first half of 2007, California registered the nation’s third highest state foreclosure rate. The state reported a total of 189,560 foreclosure filings on 104,572 properties, up 122 percent from the previous six-month period and up 232 percent from the first half of 2006.”

  26. profette

    I have indeed enjoyed my week here at IHB. I can’t go a day without
    checking in. Thanks for your hard work!

  27. Larrygg

    I have seen condos in Coto that were selling for $850K last year now selling for $725K and $750K. Thery’re lined up in a row on one street and to tell you the thruth, If they were going for $550K I doubt anyome would be jumping on them. Real estate in the whole area is DOA!

  28. lg

    I agree with lendingmaestro. Home price should be the primary focus rather than rate. Too many people have been conditioned to become fixated on rate.

    And hopefully many of the truly qualified people that have been waiting to buy a home (and whose friends tried to push them into buying at the peak) will be able to find the gems that are out there when prices really drop.

  29. Albuquerque realtor

    I can honestly say that I don’t know of the Curly Shuffle (unless if you just made it up and then I’m going to look like a real dummy) because I am only 23!

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