Ridin the storm out, waitin for the thaw out
On a full moon night in the rocky mountain winter.
My wine bottles low, watching for the snow
Ive been thinking lately of what I’m missing in the city.
Ridin’ The Storm Out — REO Speedwagon
Have you been feeling like we on this blog are Ridin’ The Storm Out? I do. Does anyone remember the final scene in Terminator? Sarah Conner is told by a gas station attendant that a storm is coming. She responds, “I know” with a deep reflective look of someone who has seen the future Armageddon. Can you relate?
We have broken an important psychological level for pricing in Quail Hill. Today’s property is a bank REO that went for under $500,000 a few months ago. It is back on the market now, and the bank isn’t even trying to get above the $500,000 mark.
Asking Price: $499,000
Bank Purchase Price: $477,000
Bank Purchase Date: 6/8/2007
FB Purchase Price: $551,000
FB Purchase Date: 6/30/2005
Address: 212 Dewdrop, Irvine, CA 92603
Beds: 2
Baths: 2.5
Sq. Ft.: 1,200
$/Sq. Ft.: $417
Lot Size: –
Type: Condominium
Style: Contemporary
Year Built: 2004
Stories: Two Levels
Area: Quail Hill
County: Orange
MLS#: S502633
Status: Active
On Redfin: 7 days
From Redfin, “BANK OWNED !!! Stunning 2 story Townhome with lots of top notch upgrades. Quiet interior street, large living room, dining room, guest bath downstairs, courtyard patio entrance, 2 car attached garage. Walk to Park, Playground and Shopping. Resort living !!”
Is being BANK OWNED something to get excited about? I guess it is worth ALL CAPS and three exclamation points!!!
What are top-notch upgrades? Are there bottom-rung upgrades?
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Bear with me on this conjecture, but based on the REO purchase price, I am guessing this was an Option ARM that exploded. The primary mortgage should have been 80% of the original purchase price or $440,800. If the bank was willing to bid $477,000 at a foreclosure auction, this likely represents the outstanding balance on the first mortgage. Only an negative amortization loan with a low teaser rate would grow by $36,200 over two years.
Negative Amortization loans — great innovation… Not.
Judging by the description, there is a realtor involved in this transaction. If the bank gets their asking price, and if they pay a 6% commission, they stand to lose $81,940. Although when you think of the other costs involved with the foreclosure, the real loss was likely much higher.
BTW, Do you like our new REO symbol?
I enjoy the address of this place. “212 Dewdrop.” Yes, even in tony Jazz Hill, the prices do drop!
“BANK OWNED.” Ah, but aren’t they all…,
—–
As new construction comes to a standstill, the banks will be the new “construction companies”… sellling near new “pre owned” homes.
So, yes, Bank owned will soon be a prestige think. Some banks carry more prestige of course.
“BOA owned pre owned home in Newport Beach. Two years new! Comes with a BMW 545i in the garage. Full maintenance for three years ( the car that is).”
OTOH…
Countrywide Financial in Santa Ana and Moreno Vallye will be seen as the “cheaper” builders.
Actually, I’d argue that “Bank Owned” is something to highlight in a listing. It means that the property owner is (1) actually serious about selling the property, and (2) more likely to value the property based on recent comps and financial models than homespun memories of Jimmy’s first steps and Jenny’s prom night. Publicly traded banks also have to carry the asset on their books, which does nothing but tie up capital. I’d rather deal with a bank-owned situation than most others.
That’s funny Tonye! Countrywide will be the KIA of OC real estate. Chase and BofA will be Lexus and BMW.
I appreciate this blog and have come to read it regularly, but I am surprised by your hyperbole. Look at the info you posted on this property:
Asking Price: $499,000
Bank Purchase Price: $477,000
Bank Purchase Date: 6/8/2007
FB Purchase Price: $551,000
FB Purchase Date: 6/30/2005
Ok, so it was 551K a couple years ago, and now they might get, what, 450K? 425K? Sure, that’s lower, but it’s not that much lower. The stock market has had many dips more severe, and the price of commodities like oil varies much more than this.
I guess we’ve all been anticipating the bubble bursting for so long, that this just seems anticlimactic. I was thinking losses would be much greater. For a long time I believed that real estate investors were going to lose big bucks. Now I am starting to agree with the promoters (who I always thought were kind of dumb) that real estate really is a good investment.
Maybe if we start seeing significant price declines I will change my mind. So far this seems like a weak correction, especially considering that some properties were doubling in price every few years earlier this decade.
A 20% decrease in the price of a home recently bought is usually more than a 100% loss of equity. Is a 100% loss alot?
Mike,
I think the issue is that this house will sell at a loss after two years of holding costs, plus transaction costs, so it is a significant loss. Also, we are just getting this started. This is a slow motion train wreck and IrvineRenter is our tour guide.
I know it seems like a weak correction but these things take years to play out. It is like the subprime debacle. It takes time for it to become felt in the wider credit markets because people don’t all default at once and in a hurry… it’s a process. That is why all this garbage you heard about “we are not noticed subprime contagion” has now turned to “significant difficulties to the financial system” .
Think of it like a serious disease. Once you know you have it, you still might feel good for a while before it kicks in, but you would hardly say “I feel good after a couple of weeks, I must be fine”.
So far this seems like a weak correction…
Not when you figure this buyer, probably counting on at least a ‘modest’ 10% gain each year, was hoping the property would be worth about $670,000 by now – only to find its going to go in the mid-400s. When you figure the percentages based on the expected gains it becomes a much sadder story. To lose 20% in two years is pretty bad on its face; but when you were counting on gaining 20% its like doubling your losses.
Unlike the stock market, home buyers just never seem to buy into the idea that the value can go down. And when it comes to their home, they’re often not playing with their discretionary investment income.
One thing that you are forgetting is the effects of leverage. Most people’s stock and mutual fund investments are not leveraged. So a 10% loss on the stock value is a 10% loss.
Most houses are leveraged… bought with borrowed money. So if one were to put down 20% on a house, and it loses 20% of it’s value, that is a 100% loss of your investment. And if you only put down 10%, then you have lost 200% of your original investment.
Leveraged investments also magnify your upside, but only if the appreciation exceeds the cost of carrying the investment. That is why borrowing money to buy vacant property is generally not a good investment. The property needs to have an income stream to offset the interest, insurance, and taxes that you incur.
The “doubling every few years” is also a bit of an exageration.
Real estate can be a good investment, but not when the costs are driven out of whack by masses of greedy/uneducated “investors”.
“Now I am starting to agree with the promoters (who I always thought were kind of dumb) that real estate really is a good investment.”
Are you kidding? As awgee pointed out, this would be a 100% loss to a typical equity investor. Even you you bought this property with all cash, a 20% loss is pretty bad, and we are not even half way from the peak to the bottom.
“Maybe if we start seeing significant price declines I will change my mind. “
I don’t need to convince you. Go out an buy if you think it is a good investment. The market will convince you all on its own…
aren’t the median home prices just way too high, still? who are the people who qualify for and are buying these homes? may be I am naive, but I don’t get it. I can’t imagine some average Joe-Schmoe in CA having that kind of down payment and the income to back up these purchases. we have a 6-figure income and are still hesitant about jumping in with these prices.
It’s cause for concern, but if your monthly cost is near or below the rental value, it really matters little.
That is a true statement. Unfortunately, we are still well above the price level where rental equals the cost of ownership.
So it takes 2+ years to correct to a point where it meets an acceptable value metric (4 times median income or 160 times monthly rental value). After that long period of significant depreciation, do you think you’ll be comfortable at that point dropping 20% down with an above-historical-average rate on the loan, when it will likely still be cheaper to rent, and no appreciation expected for years?
a 20% loss on a commodity price would probably mean you are going lose your HOUSE, unless you fully collateralized the futures.
Mike Jenkins: Either you are a realtor or a bag holder. We dont need convincing here. We have already seen correction in the range of 20% and most of this has been in 2007. Its just the begining, wait until mid 2008 and you will notice these homes at 40% discount.
Go bears, get each of these banks, greedy realtors, and flippers burned and out of the market. Wait! Bush is coming for rescue…..oh, he needs someone to rescue himself on several counts.
Mike Jenkins,
Two thoughts come to mind: (1) In yesteryear, anybody who wanted to buy a house could and often did whether or not they could support the payments (as illustrated in the news and foreclosure stats) so there aren’t a lot of bottom feeders in the market left which leads me to my second thought: (2) A 2b/2ba condo like this was/is considered an entry level unit and maybe it still is, however, I do not know of too many folks in the “entry level” market who have the downpayments necessary considering today’s lending environment. What you are witnessing is truely the tip of the iceburg.
IR,
It seems like a faint memory, but a few weeks ago it seems you may be considering inserting a “Required Income” line which would provide some eye popping numbers based on certain requirements or assumptions revolving around the recent credit crunch. I believe this idea showed up in a recent post even so how about something ongoing for those like our friend Mike Jenkins?
With the constantly shifting standards during this time of credit termoil, it is difficult to be accurate. I like the idea if I can come up with a good general rule to go by.
Perhaps 4 times income for total price assuming a 20% downpayment? Any of our lenders want to give me a good, simple rule to use?
>Mike Jenkins: Either you are a realtor or a bag holder.
I’m certainly not a realtor. What do you mean by bag holder? Banker? No. Potential investor someday? Maybe. Certainly not now, as I am hoping prices drop further before I buy. I live in the middle of the country and prices here haven’t dropped at all. The recent hype has been a little disappointing.
This is the first near-median home IR’s profiled that actually interests me. This is a very nice area of Irvine and if it has an attached two car garage, it’s rental value would likely be $2,500-$3,000. So a fair value would arguably be $400k-$480k. I’m basing the rental value on rental townhomes in the area in larger apt complexes with attached garages. I know that’s a wide range, but there are a lot of variables to be considered.
Well, with the surge in home prices rentals have surged too, correct me if I am wrong IR, doesnt rentals come down as well as home values come down?
“Potential investor someday? Maybe”
I really doubt that you can find a house in OC with Renting Cost = Owning Cost, let alone “Positive Cash Flow”
You ought to be more patient than rent savers
Good luck
I don’t think you would be able to get this to positively cashflow until the price got closer to $300K as I doubt you would find a stable renter for over $2500 on this property. Some people are willing to by a negatively cashflowing property and bet on future rental increases or asset appreciation. IMO, that will be a losing investment strategy, particularly in a declining market.
Generally this is the case as a decline in home prices often corresponds with a decline in economic activity. Since this bubble popped in a strong economy, rents may increase for a time until the economic fallout from the collapse of real estate depresses incomes.
I would agree that the median is still too high. It’s not good that people making well above the median income (even Irvine’s median, which is much higher than the county one) still can’t afford very much. I’m hoping that will change sometime relatively soon so it’s possible to buy a house without spending the next 30 years wallowing in debt. And I don’t want to hear the “everyone wants to live here” argument – recent data is showing OC’s growth rate has been cut by two thirds, and 900,000 people left LA and OC since 2000.
In other craziness, there are still people trying to flip houses in OC!
BTW, nice new graphic IR – my guess is we’ll be seeing much more of that one in the coming months 🙂
I know of 3 houses in my area that sold recently. Zillow doesn’t have sale prices for them yet, but I am anxious to find out what they are. All 3 seemed to be priced very high, and I would really love to know why anybody would buy them now.
When you add in inflation the losses get even bigger – say, at 4% inflation per year, the 20% loss from 2005 prices to today’s prices is actually 28% plus. A third off the top is substantial – and that is not counting the sales cost, opportunity loss from having your money tied up, etc.
It’s really a miracle anybody buys anything these days!
IrvineRenter, you are a genius: the way you incorporate music and popular culture so brilliantly into your themes and points about the SoCal RE Market is nothing short of amazing, and really what makes the IrvineHousingBlog so much fun to read. That, and the fact that you are right on your economic and mathematic analysis so often.
Thanks again for the great service you provide.
Went to Pinot Provence last night. Been going there for anniversary dinners for some years now. Usually is bustling. Dead as a doornail last night. Being a bubbleblog fan, I knew the reason why but I asked the waitress if it was just slow because it was a Tuesday. No, the answer was, it has been real slow lately. Irvine is due for some reality checks.
and is it just me, or do others who travel a lot bemoan the quality of the restaurants here: we’re talking $200 w/out tip at Pinot and it wasn’t even that good: now they trying that crap with the foams and powders. but such cosmetics can’t hide a lack of flavor — go to San Francisco, competition makes for better fine dining by a mile. We’ve been everywhere in Orange County: all the Hushes, Bistangos, St. Regises, etc. and they always miss the mark compared to the big leagues.
and as for those who think housing bears are a bunch of bitter renters, you are g**dam right about enjoying some schadenfraude, at least in my case. take my sister-in-law: she was living in this POS condo few years back. it was shoddy as all hell, they even repo’d her car. I watched her take her real estate exam (she has no college education). Suddenly she is making nearly 300K, getting drunk and flapping her mouth about her sister, who did go to college, making far less. And i would meet her cronies, just like her they were high school grads, all driving Range Rover Sports, H2’s, etc. yet they were just kids who had no idea how much luck had to do with their success. but i was the fool (at least in their eyes) who foolishly refused to buy, buy, buy some property. it is my turn to laugh now.
i believe these bubble blogs have run their course, yes it was a bubble, and yes there is going to be a hard landing. I hope these blogs fade cuz i waste too much time reading ’em. but before these blogs go away, please profile the high rises again: the epitome of the bubble has to be that OC Register article about some snotnose kid who smugly talked about his investment in Marquee Park Place. a close second is the one of Gary Watts holding that crystal ball. real prognosticator!
take a look at “central park west” on Jamboree: lennar is building this massive housing development. meanwhile they lose millions a day, and are going to lose millions a plenty on that fiasco. all because a bunch of flippers bought out Marquee at the height of the bubble, so suddenly you’re a genius to build high-rise housing in Irvine of all places. insanity. pure insanity.
900,000 people may have left, but how many illegal immigrants moved in? I always hear the argument that immigrants moving into an area will keep prices strong since there will be continued demand for homes.
How many illegal immigrants do you know can afford anything ANYWHERE at current prices? (even the $300K real homes of genius in Compton are out of reach)
Heck, many legal immigrants aren’t making enough money to buy anything. The statement that immigration will keep prices strong is simply more RE marketing poop.
I raised the rental value solely to arrive at a fair/reasonable purchase price. e.g. If it would rent for $2,500, then we’re not near the bottom (at least for this property). However, if it would rent for $3,000, then we’re very close to a bottom (same caveat).
e.g.
$480k Purchase Price
$96k Down (20%)
$384 Financed @ 6.5% (conforming) fixed for 30 years
= $2,427.14 Mortgage Payment
Assuming your taxes, ins, and HOAs are offset by the tax “benefits” of homeownership, $2,427.14 sounds pretty good. Now the buyer would be taking the risk of further depreciation.
Question for the panel – How much of a discount in this specific scenario is that risk worth (assuming the buyer plans to live there at least 5 years)?
Hard time finding qualified buyers?
http://marketplace.publicradio.org/shows/2007/09/05/AM200709051.html
Mitch Ohlbaum is a mortgage broker in Los Angeles. He says if you want to get a decent interest rate now, you’d better have great credit and be prepared to put down a big chunk of change.
Mitch Ohlbaum: For now, the standard is really going to be 10 percent if you want to buy something. Which in the real world’s not so bad, it’s just a little bit more difficult where we live, where everything’s a million dollars.
Commercial Real Estate in U.S. Poised for Price Drop (Update2)
http://www.bloomberg.com/apps/news?pid=20601103&sid=aMRbCuvd7STQ
The nice thing about this property is with 20% down, you make it under the conforming limit. Today’s conforming prevailing rate looks to be in the 6.25% range with no points. (okay, according to the ads, but let’s roll with it.)
Assume 33% DTI on just the mortgage. Other debts will likely take DTI higher to the loan limits which are currently higher, but the old traditional 28/33 is slowly reasserting itself. More importantly, 33% is the guideline “living wage” proponents use for determining necessary wages based on rent/housing expense.
The payment on $399,000 at 6.25% is $2456.71. At 33% DTI, the income is only $89,000 a year.
Of course, the HOA adds $259 a month. Property tax basic levee is 1.037% with an additional $1758 of special fees and mello roos.
So assuming they’ll be in the 25% marginal fed rate and the 9.3% state rate, after tax, their housing outflow is:
After tax Mortgage Interest……… $16,305.40
Mortgage Principal……………………. $4,662.59
HOA……………………………………….. $3,108.00
After tax property tax……………….. $1,155.01
after tax mello-roos & fees………… $3,398.66
After tax Total out of pocket…….. $28,629.65
A/T Total expense out of pocket.. $23,967.06
Total Out of Pocket/Income……… 32%
Total expense / Income ………….. 27%
Before tax out of pocket ………… $39,159.54
Before tax out of pocket/income .. 44%
Not too bad, but definitely requiring so withholding adjustments to make it work. It’s interesting to note that a simple $500/month car payment pushes the after tax DTI to 40% and before tax DTI to 51%.
Now we just have to take someone making $89,000 year, have them save $100,000 dollars and then of course, have them want to own a 2 bedroom starter “condo”. Oh, are there a lot of people with a $100,000 saved looking for a starter home?
Winning comment.
Inflation does a good job of masking the damage. I have a feeling that Ben will slowly inflate our way out of this, acting only when the markets start to tumble. Whether this happens or not, the simple fact is that homes will not retain their value. Using a currency that varies so much as a metric isn’t ideal. I’m not sure how else I would measure value though.
I wonder what an accurate inflation estimate is; it seems that one side has it way too low and the other side has it at over 10% which really doesn’t seem realistic.
Please kill me if I ever pay $480k for a townhome.
Thanks for all of the good links Sue 🙂 Do you have an archive of them anywhere so I can go back and read the ones I missed?
If you want good food try The Hobbit and/or Basilic. My two favorites in OC by far.
What does that mean? If you live in Irvine near Quail Hill, in a newer construction 1,200 sq ft townhome with an attached 2 car garage, your monthly housing cost is likely $2,500+, regardless of whether you rent or own.
So maybe what you’re saying is, “Please kill me if I ever choose to live in an area where it costs $2,500 to rent such a place”?
Quail Meadow and Quail Ridge are two IAC properties that are 300 yards from 212 Dewdrop. 2/2 are going for under $2100. One has a special offer for the direct attached garage at $2115.
Turtle Ridge IAC property has a special on their 2/2 at $1990…
“All 3 seemed to be priced very high, and I would really love to know why anybody would buy them now.”
Because there will always be people out there who are looking to buy a home to live in. Of course they would love to pay less, but the bottom line is that they are in the market and are going to buy what they perceive to be the best value given their individual needs and the current market conditions. Period.
Mike Jenkins – you are correct, there is a lot of hyperbole (call it Chicken Little syndrome) on this board. It’s literally the exact opposite of two to three years ago when bulls were arrogant about the bull market.
Someone made a comment about Bernanke inflating us out of this… wouldn’t that be a kick in the pants for those on the sidelines waiting for the perfect moment to buy.
The new REO symbol is pretty cool.
I checked Turtle Ridge, and their website lists higher prices:
Townhomes:
Residence G 2/2 1,164 $2,655 – $2,720
Residence H 2/2 1,226 $2,750 – $2,775
http://www.rental-living.com/Communities/Turtle-Ridge/Prices-And-Floorplans/
And I can’t tell from the site whether this includes an attached 2 car garage. They may be offering “move-in” specials, but your cost will jump to “market rate” after one year of renting (and every year thereafter).
Exactly. When nobody thinks it is a good time to buy because the conditions are as you describe, we will be near the bottom. I will buy then. I am not buying for appreciation. I want to save money on my rent, have a long-term hedge against inflation, and control my housing situation. Making money doesn’t enter into the equation.
I know earlier this year, you could get a 3/3 in Quail hill for $2500. There were 2/2s in that range as well. If I were looking to buy this property for an investment, I would probably estimate a $2400 rent to give me some cushion to discount for a good renter. If you want to grind, and you are willing to deal with vacancy loss, you might rent of of these for $2700.
“It’s literally the exact opposite of two to three years ago when bulls were arrogant about the bull market.”
That is by design. Once acceptance sets into the market, I wouldn’t be surprised if you see a shift in tone.
Myself and others often copy the links in our forums on the headlines thread.
http://forums.irvinehousingblog.com/discussion/128/13/headlines/#Item_16
OT, but Yahoo said:
“Credit is the economy’s life blood. It enables people to finance big-ticket purchases such as homes and cars and can help businesses bankroll expansions and other things that can boost hiring. If it becomes more difficult to obtain, people and companies might spend and invest less, slowing overall economic activity.”
Why does it make me so angry every time I read something like this?
Awesome. Thanks!
I looked again, and the $2,750 – $2,775 range is for a unit with an attached 2 car garage. I think your figures are spot-on for a rental investment IR. This townhome probably has high-end appliances, countertops, flooring, etc., and you’ll probably want a “qualified” renter so that you’re not eating the deposit times 4.
If the OC economy isn’t too adversly impacted by this real estate correction, and lending standards are loosened slightly (5-10% down payments on 5/1 ARMs widely available) over the next few months, then I could see this townhome settling in the high $400s.
I don’t want to compare Irvine with Chicago, but here people were paying $480K for townhomes in “gentrifying” neighbhorhoods.
They were, and sometimes still are, paying these prices for ugly, barracks-like townhomes in neighborhoods with elevated crime profiles and cruddy schools.
Click on my name and scroll down to An Atrocity Exhibition to see what $500K got you here last year just before the bust, and that people still want well over $400K for.
I only make the comparison to show how overpriced every single metro area in this country still is. There are no good deals. I hear Memphis prices are in line with median incomes, and they’d better have something to offer in a deteriorated, shrinking city with sky-high crime and unemployment.
I wouldn’t pay $480K for the place featured on this post but still less would I pay that much for the crappy townhouses in this city that I wrote about on my blog
“and lending standards are loosened slightly (5-10% down payments on 5/1 ARMs widely available”
I speculate this will not happen. Investors will not be buying this product any time soon because the fallout from their previous misadventures is still unknown — other that it is really bad.
For credit to loosen, the risk must first be accurately evaluated. This is going to take years because of all the liar loans, NIJA loans, etc. that are polluting the system.
Confidence will need to be restored in the loan origination system, then some period of time will need to pass before investors will be able to evaluate the effects of fixes to the system.
Once there is some confidence that borrowers can pay their loans, credit may expand. I don’t see this happening in the next 5 years, perhaps longer. There are too many bad loans, and the system is just too broken.
We will revert back to full-doc, 28% DTI, and 20% down for an extended period of time before we get back on the merry-go-round.
“Someone made a comment about Bernanke inflating us out of this… wouldn’t that be a kick in the pants for those on the sidelines waiting for the perfect moment to buy.”
Yes it would. Unfortunately it would be a kick in everyone else’s pants too. Personally I suspect that inflation will be the course of action taken, although it will be quite a tightrope, given the 5.1 T dollars that are sloshing around in soverign states. At what point will they decide that “hitting the exits first” is the best course of action?
In the interest of disclosure I (almost) own my home and am invested in export-oriented companies so declines in the American dollar work in my favor. Regardless, I will be VERY happy if the US can avoid this. Poor Ben… I have no doubt he’s trying to help Main Street and not bail out Wall Street but I think the Bankers/Hedge Funds/etc are going to be too clever and make sure the rest of us feel THEIR pain. Good luck, Ben !
The Sage restaurants in Newport Beach are also VERY GOOD!
The owner has a rapport with regional farmers and builds his menus around what is in season at their farms.
Will it be a possibility that the decrease in home prices will max out at 15% – 25% and stabilize for years to come?
Will it be a possibility that renters who refuse to buy at these prices will continue to rent and homeowners who can afford the drop stay homeowners?
Can you guys give me your thoughts on this? If the above questions indeed become reality.
lmao! Great stuff, No_Such_Reality. Thanks for helping to prove the point. I found it entertaining.
Will Bernanke inflate his way out of a credit crunch? Maybe. I dunno. But, consider the following. Who is holding all that mortgage paper that could be paid with inflated fiat currency? Federal Reserve member banks? Pension funds? Insurance companies? Foreign banks? And who bought all of the agency paper that would be worth so much less if Bernanke inflates his way out? The member banks and staid financial institutions. Is Bernanke really going to cause the paper that the owners of the Federal Reserve are holding to become worthless? Well, maybe, but I doubt it.
I tend to agree with IR that this would be a good buy in the 300s somewhere. Irvine or not, like NSR presented above, you have to be making 90k and have more than that saved. I would tend to think at that income with that much savings, unless that town home is inside the ocean itself, I would at least expect a detached home with more rooms.
5 Years ago, one of my friends who makes 2.5 times that income bought in the 500s( 20% down, 2500 sf with huge yard in Irvine, brand new) , while he could afford the payments he still complained that he was stretched.
I personally think that people got used to these numbers in the OC with money losing its value. HALF A MILLION IS ALOT OF MONEY to spend on a 2/2 no matter where it is based on incomes in the OC. just my 2 cents.
Mark, look at the other units, the one story 2/2s, are significantly cheaper. Then look at the floor plan, you’ll see the master bedroom is 1 foot wider. Not, the living room, dining are different configuration but same size. As is the kitchen. The bathrooms are different configuration which makes them slightly bigger, but the other ‘extra’ square footage is stairwell dead space.
The one story (above/below detractor) is $2035-$2135. http://www.rental-living.com/Communities/Turtle-Ridge/Prices-And-Floorplans/Floorplan/Residence-E-/
It has the special for $1990. http://www.rental-living.com/Communities/Turtle-Ridge/Prices-And-Floorplans/Floorplan/Residence-E-/SpecialOffer/
Quail Meadow, is also a 2/2 condo (one story). Same issue with floorplan, no dead space so the Master Bedroom is one foot shorter but also one foot wider than the Townhome in Quail Ridge and all other rooms are comparable. Price is $1955-$1975. http://www.rental-living.com/Communities/Quail-Meadow/Prices-And-Floorplans/Floorplan/Plan-F—The-Tearose/
The plan F, above, $250 off move in (no biggy, but it means they are bargaining). The plan E, (Same as Quail Ridge plan E) is $1905-$2010. All Quail Meadow units come with garage although not direct access.
The Quail Ridge 2/2 with single direct car garage is $2180.
http://www.rental-living.com/Communities/Quail-Ridge/Prices-And-Floorplans/Floorplan/Plan-F—The-Radiance/
it also is on special… for $2050. http://www.rental-living.com/Communities/Quail-Ridge/Prices-And-Floorplans/Floorplan/Plan-F—The-Radiance/SpecialOffer/
The Plan-I lacks direct garage, (Quail ridge comes with garages) but also lacks deadspace and has nice large bedrooms. Basically a dual master set-up. http://www.rental-living.com/Communities/Quail-Ridge/Prices-And-Floorplans/Floorplan/Plan-I—The-Splendor/
On Special, $1945. http://www.rental-living.com/Communities/Quail-Ridge/Prices-And-Floorplans/Floorplan/Plan-I—The-Splendor/SpecialOffer/
Maintaining a 20% price premium will be very difficult. Also, keep in mind, the Quail Ridge property (not Turtle Ridge) and Quail Meadow property are quite literally, across the street from Dewdrop. The quail ridge property is also new and upgraded throughout with granite slab, berber & hardwood style floors etc.
1.) Sure, but that would come with a lot of inflation.
2.) Yes, if you mean what I think you mean. Even a 70% drop wouldn’t make homes affordable for everyone. There are also other reasons people choose to rent; easier maintunance, easier to pick up and move, etc. Not everyone who rents does so because they are forced to.
This exact same floor plan in Turtle Ridge is listed in the MLS for rent at $2200 per month. It initially was listed at $2300 but it’s been coming down slowly but surely. I think that over the past few months, the Quail Hill and Turtle Ridge condos have disappeared from the MLS after they hit the $2100-2200 mark.
The scenario you describe is what happened from 1990-1996. There is one important difference this time: foreclosures. The preponderance of exotic financing in this bubble was unique. The foreclosure numbers are going to be astronomical.
The “homeowners who can afford the drop” are going to be fewer in number. Basically, anyone who bought from 2003 to 2007 using ARMs is in trouble. Earlier than that, with a little help from inflation, homeowners might survive by holding their breath for a few years underwater. We will also see who HELOCed themselves into oblivion.
we did Sage at least twice: it is in Pinot’s league, not that that’s a bad league, it just isn’t the big leagues. ask any food snob — I volunteer!
Try http://blacksheepbistro.com/ in Tustin. Rick started out at the Hobbit and opened up this place a long time ago. This comes from a food snob who lived and ate in the bay area. A good friend of mine who graduated from the culinary institute in Hyde Park likes this place and she is tough to impress.
One thing the illegals do is house multiple families in a single home. The rental next door to me had about 6 or 7 adults living in it for a year. When 7 adults are willing to share a house, I think they help drive up the rent.
If a house is available for rent at $1800, a normal family might just be able to afford it. But if pickings are slim a group of 7 adults might be willing to offer an additional $200 to the landlord to get the rental unit.
Same probably applies to purchasing a house.
Price cuts run double for O.C.’s cheaper homes
http://lansner.freedomblogging.com/2007/09/05/price-cuts-run-double-for-ocs-cheaper-homes/
Metro housing slide keeps repo man busy
‘Snowball effect’ from mortgage woes, easy credit keeps lot overflowing
http://www.ajc.com/business/content/business/stories/2007/09/03/repo_0904.html
Grosvenor said strolling through the three-acre gravel lot at Speedy Recovery, a Lithonia business he started 14 years ago. He points to a plumber’s black 2007 Corvette. Behind it is a Bobcat. A few yards away under a tree is a white Dodge Ram 3500 pickup voluntarily turned in by the owner of a construction company.
…
“It’s nothing for me to pull up in the driveway of a half-million-dollar home now,” said Grosvenor. “Maybe it’s the financing and these ARMs … that’s killing people.”
…
But what really gets to him are the people who show up at his business in “a nicer, newer car” to retrieve their belongings from a repossessed vehicle.
Thanks Graphix. Can’t wait to try it.
I Live in Quail Meadow. I have a 2 bedroom w/one car garage for 1785 with a 50 premium for a dog. There are townhouses here that rent for less than 2300 a month.
Assumptions:
480k purchase price
20% dwn pmt (96k)
closing costs on zero point loan roughly 4k. No concessions on bank owned property.
Total 100k worth of cash invested.
The monthly PI payment on 384K would be 2,395.66 @6.375%. Only the interest payment is tax deductible ($2,040)
Taxes will be at least 6k a year or 500 a month. What’s HOA? At least 250 a month? This puts the PITI @ $3,145.66 of actual after tax dollars you must pay every month.
Let’s assume a generous tax rate of 32%. This puts the yearly tax savings on a years interest ($24,480) @$7,833.60. This equates to a monthly avergage tax benefit of $652.80
This puts our net of tax monthly nut at $2,492.86. Remember you still have to pay over 3k a month though.
Compare to rent of comparable units for 2300 a month. We must take into account the opportunity cost of not earning interest on our 100k! This is very important. A 5.5% CD will yield $5500 a year in interest or $458.33 a month This brings our net monthly rental payment all the way down to $1,841.67 a month. You also have no mortgage debt or the risk of holding a depreciating item.
Let’s sayyou are willing to pay a premium of net of tax payments because you want to own vs rent. Let’s assume your net of tax payments were only 2000 a month instead of 2,493 a month. The Purchase price would need to be $375,000! Yes 375k. This would put the PITI payments @ 2,511 with a 510 a month tax savings.
This represents a 105k price reduction from 480k or a 22% decrease in the list price.
?
My paella at Casa de Saginaw is much better.
Then you got my skills with corder amb allioli (please note the correct spelling) and pa amb tomaquet with a bit of jamon serrano and chorizo de Soria You could not do better in Barcelona…. Indeed, there’s no Catalan or Spanish cuisine in Southern California… except for Charcuteria La Espanoyla in Long Beach.
Besides, being true foodies we gave up on most restaurants. We go to Goro’s sushi on Alton. I just don’t really enjoy paying for food when we can make a much better dinner at home.
I guess our Viking equipped “gourmand” kitchen has paid for itself by now. No granite… quartz!
And you can not beat HR Hawaiian BBQ’s plate lunches.
So… mostly, when we go out for dinnah we go cultural.
The indian restaurant next to Goro’s is pretty good. We found great steaks in Las Vegas, fine bison meats in the Grand Canyon and excellent mexican in Palm Springs.
The IPA and Golden Ale at Pacific Brewery are excellent.
Eons ago we used to do Le Midi and Le Biarritz in NB… but we closed them. 😛
And don’t forget Felix in the Orange Square. That’s the best (only?) Cuban food in OC.
We definitely don’t fit the Irvine yuppie foodie mold.
It appears my previous post disappeared, but this property needs to sell for 375k for the net of tax payments to be relative to a 2300 a month rental. I had all the calculations typed out, so if you need to explain in greater detail I can. Here’s the jist:
A@ 480k sales price the monthly nut is $3,146 (PITI) The monthly tax benefit is 653 assuming 32% tax bracket. This puts the net of tax mortgage pmt @ 2,493 a month.
If rent is 2,300 and you earn 5.5% on a 100k CD that’s $458 a month in interest. The monthly net rental nut drops to 1,842.
I’d be willing to pay a net of tax mortgage payment of 2,000. This would equate to a purchase price of 375k and a loan amount of 300k
Heaviest Job Cuts in Months.
http://thegreatloanblog.blogspot.com
What’s the trickle down from these job cuts? Many of these have occured in the hottest job areas. Have you heard any stories or any anecdotial evidence of this affecting your local economy?
That 375k price tag is a 22% price reduction from 480k and it still would yield a $312.50 /sq ft. That is still on the very high end of the range IMO for a 2 bd starter condo.
Isn’t this what IR and many others have been preaching for a long time? Good article.
$2500 for a 2/2 condo with a garage is too much money. Are people really paying these rental prices in Irvine? If so, then maybe the WTF prices aren’t that far off.
I earn a decent living, well more than the average for Irvine, however I wouldn’t even think about spending more than $1500 a month for rent. Hell, back in ’01 I shared 2BR in Aliso Viejo with a friend and it was only $1200. Did things really go up that much?
I think for certain homes/neighborhoods where everyone wants to live, 25% price reduction would probably get buyers. I agree that for less desirable areas, you would see more than 40% declines before somebody takes notice. But there are always exceptions…
6.25% with no points on a 30 year fixed is correct based on current rates. However at the $89,000 annual income, there would be little room for additional monthly expenses such as auto, student and revolving debts. For most in the OC, you should expect an additional $500-1000 monthly expense that must be factored into the DTI (and this is conservative).
True, true.
Credit IS Money. When credit contracts, money contracts. This means either spending or savings or both will decrease. It is truly amazing how much our economy, and civilzation for that matter, is built off phantom money.
Many of these jobs in RE are 1099 employees and cannot collect unemployment. This also means that they are not considered as part of the labor force when calculating the unemployment rate.
Many people in the industry are highly skilled and educated like myself ( I humbly divulge) and even I realize that I would take a pay cut if I switched jobs/industries. What the hell is going to happen to all these “should be car detailer” loan officers; or the “housewife with a name tag” realtors; or the “MAC make-up counter” title reps? What else could they do for work?
That it is. I am reading “A Monetary History of the United States, 1867-1960” (the book Bernake mentioned in his Money, Gold and The Great Depression speech) and it says in 1867, there were $1.20 deposits for each collar of currency. Five years after that, there was $2 deposits for each dollar of currency. In 1929 there were $12 of deposits for each dollar of currency. But then the ratio fell so that in 1960, it was $6 deposits for each dollar of currency. Wonder what it’s at now?
A 20% price reduction IS a big deal. It’s a starting point.
Hmmm… Initially, I didn’t like the pic, but it grew on me.
I was wondering if you could put it on a lawn sign? =)
don’t forget to try some of the smaller japanese places around bristol and paularino. inexpensive, tasty and quick.
Quail Hill (along with other communities) are taking a hit. When TIC opens Laguna Crossing on the other side of the 133, I am assuming that the builders will set a price point that will move homes. This will make it even more difficult to unload homes in Quail Hill when a buyer can pick-up a brand new home right next door… for probably less.
The apartment in both QH and TR will always rent at a discount to the townhomes. However, the rents should correlate.
Yes, I afraid tell you but things have gotten more expensive over the last 7 years.
Laguna Crossing has been postponed (along with Orchard Hills) at least into 2009. TIC will provide ample time for the R/E market to stabalize before they start selling again.
You were doing great until the last paragraph.
Remember the interest income on the CD is taxes as ordinary income, so whack that down by 32% (more or less depending).
I would actually think the original net of tax payments would be attrative enough to induce ownership over renting. The PV of a $2,493 payments at 6.375% is ~$400K Even. Plus the $100K down the price is right at $500K. Using a rental rate of $2300 less 311.44 (the at tax interest income on the down $458 *. 68 = ) Ithe differential beteen the AT debt service and all in rent even adding back interest earned on the down is roughly $500.
As I have mentioned before, INFLATION, not disinflation is the real fear for individual investors. Again there is an insurance premium built into home ownership owing to the hedge against upside surprises in inflation that makes owning a home more attractive than renting AT ALL TIMES. Regardless if you have a view on the direction of HPA, inflation is still a risk. By choosing to own you are explicitly hedging inflation in your cost of housing.
As has been pointed out many times, the easiest solution to end this current mortgage crisis is to inflate away the problem. If the government takes action, and it seems likely some heavy handed effort will be undertaken, I would guess that the results would be inflationary.
Housing prices do not have to their equal rental equivalents in order to be fairly valued. The intrinsic value of a house is greater than the price implied by equivalent rent owing to the value of the inflation hedge.
Another source of value is the tax free gain on housing capital gains. There is no other asset that receives such favorable treatment from the government. Of course, that begs the question, why does the government want you to own a house. The answer is, owning a house forces you to pay debts because you own an interest in a real asset against which claims can be made (you can’t hide a house in Bermuda).
To summarize, using the numbers lendingmaestro provided a case can be made that this unit is price at or near fair value already.
“To summarize, using the numbers lendingmaestro provided a case can be made that this unit is price at or near fair value already.”
Someone may make that case to themselves and buy this place. Of course, they will then proceed to go about 30% underwater when the price drops down to about $300K.
Maybe re is fairly valued. Maybe not. I don’t really know what fair is, but I think I will keep waiting before I buy. But then again, maybe I better not wait much longer, or I might get priced out of the market.
Yes, you might get priced out. They aren’t making any more land, you know.
If TIC is not a privately-held firm then won’t they have some probelm getting stakeholders to go along with the delay?
hahahaahha… good one.. Oh My God… was awgee serious ??? I hope not
An option for today’s home sellers:Lease-Options
http://thegreatloanblog.blogspot.com
And real estate always goes up, you know.
Felix is great; there’s a more ‘upscale’ Cuban place called Habana in The Lab Anti Mall in Costa Mesa. More trendy, but still good food.
A $500,000 townhouse? I’m telling you, people are on drugs. What’s the replacement value? Seems to me that the unit in the picture might be worth $200,000 to $300,000. People have to start getting real, and that includes banks. If they were stupid enough to make loans, who says they’re smart when it comes to their asking prices?
You know what these asking prices remind me of? Remember 2000, when the Internet bubble had peaked but hadn’t really crashed? People were being told to “buy more” of stock like Enron and MCI and all the little tech companies. “Buy more! It’s a bargain!” Folks, the real estate “correction” (love that word) hasn’t even started.
I’m sitting on about $650,000 in cash, wanting to buy a second home somewhere on the coast of CA or OR. I’m waiting for at least another year or two until everyone’s drugs wear off.
Dew Drop? More like a Piano Fall!
Crescent city, Ca is kind of cool, and its RE market is absolutely falling apart. The only employer is the prison.
Maybe it’s just me, but what is so great about Irvine? Maybe it use to have good schools, but the demographics are changing. Some parts of it are really changing! And when you add that almost anything you buy in Irvine will have association fees, mello roos and high taxes, not to mention high car insurance (because you live in irvine) There are many other cities surrounding irvine that seem to be just as good a place to buy as Irvine.
It’s got lots of jobs… For example, one could live in RSM, AV, or Anaheim Hills for cheaper, all three areas are nice, but you’d most likely then pay for gas and tolls to get to work. Multiply that times 2 for double-income families and it pays off to pay a little more probably to live here in Irvine. My commute to work is 8 miles round-trip, no freeways, no tolls, etc. The wife’s is around 10 miles round-trip.
Did a quick calc and if we lived in RSM, it would cost approximately $2,500 more in gas per year to get to work for my wife and I, and around $1,500 per year in tolls. Considering that $4K is after-tax, it means that paying an extra $500 per month in mortgage interest to live in Irvine would be break-even with buying in RSM. That is $90K in mortgage value @ 7%. That does not account for additional wear-and-tear on vehicles and the value attributable to extra commute time.
Based on that, I’d be willing to pay $125-150K more to live in Irvine vs. RSM assuming all other things being equal.
Well… It seems quite interesting that this blog exists because I am looking at buying this home. Background on me… Recent college graduate/ tax accountant. I will agree with everyone that the market currently reflects prices that are still inflated and unreachable for many. Here is my take:
– I feel that a “starter condo” like this is perfect for someone like my fiance and myself who are both professional types who don’t want to have kids until our 30s… 1200 sw foot condo too small for raising a family?? I think so.
-Is this particular listing a “deal” relative to other sellers/comps?? Yes, absolutely. Uncertainty in the market has caused people to become fearful, money has become harder to borrow, and people AREN’T MOVING ON ANYTHING. I chatted it up with a seller (agent owned) and a realtor selling a property in Quail Hill for his sister. What I realized is that, again, nothing is selling. Yes others can argue that they have comps from june blaa blaa blaa, I frankly dont care if you give a comp from 2005. If there is any investors in here that have made some REAL MONEY they will be the first to tell you that past performance is no guarentee of what can be expected in the future.
-I will say, however, that there are still plenty of ways to get into a home even though a lot of people feel that lending requirements are too stringent. I am 22, yes 22, out of college for half a year WITH STUDENT LOAN DEBT, I have saved my pennies and got approved for a $995 closing cost loan through ETRADE bank (my brokerage firm) for $500,000 with great credit to the point where I only need to give them 1 paystub. YES 1 PAYSTUB!!! This is still using the old 80/10/10 trick. Go figure!! If I can get approved… than a lot of “subprime” loans deserved to tank, there was to much risk taken on in the first place with DTI of like 65%. Anyone with experience looking at riverside county can tell you that one, BOB who works at jiffy lube for $20 an hour gets a 3200 sq foot in Temecula… give me a break.
-My comments on the housing market, areas like Irvine and other in Orange county have predominatly well educated people. This demographic usually consists your 30 somethings who, chances are, both work. WIll the real estate market “adjustment” cause them to give away their homes??? I think not. Areas like riverside, temecula, murrieta, menife, san jacinto, newer parts of victorville, fontana, etc. will be the hardest hit.
-Irvine jobs are strong in the professional service industry as well as many other avenues for career minded people. My mortgage broker buddy who is about to get his Bentley repo’d is probably taking back his statements about my income, even though he knows mine will likely increase annually. His thought was I made $300,000 this year! wow! I barely graduated high school God BLess America!!
My response…If there are no barriers to entry in what you do others will see your bentley and think… I can do that too!!! They get their license and wouldn’t you know it… 30% of office space is now occupied by idiots paying over market per square foot on their offices and leased bentleys and s550s everywhere. MB of Laguna Niguel better think twice about plans for expansion. LEss SL55s and more C230 will be likely.
Moral of the story… I predict that we may… and as an estimate… have a 35% chance that the Fed will drop interest rates by a 1/4 point, will that cause the housing bubble to inflate yet again… maybe but not to the level of 2001 to 2006. I would estimate that people will be still concerned that they can lose money if they dont have a lot of it. I would expect housing prices to decline through June of 2008 and slowly pick up to barely outpace inflation at 4% to 4.5% per year.
-I rent in QUail Meadow with a garage for $1750. 2/2… NICE PLACE $400 cheaper than quail ridge, quail ridge had the hardwood and granite… people are renting who gives a flying shit, hey friends look at me a piss away a car payment so I can use my granite counters 2 a month when I make top ramen. Premium properties for rent will be very vacant, the guys with the quick cash and the big 1099s are long gone for the next 5+ years.
Renting sucks, however, it is nice to have 2 really nice luxury cars paid for as well as the abilitiy at 22 to pack away almost $3000 a month after my terrible eating out at every nice restaurant in orange county habit.
-Your buyers that can buy right now are smart and will not buy into the idea that yeah…. you have to buy in the market now or you never will be able to… doomed to a life of forever renting.
-IN contrast… sitting by the sidelines forever will not work either, you want to comeout ahead, you have to take risk. If there was no risk and you KNEW you would do well by buying now, than that would be already reflected in the pricing of whatever homw you are looking at.
The truth is… NO ONE KNOWS WHAT IS GOING TO HAPPEN TO THE HOUSING MARKET! it is all speculation and educated guesses. Hovnanian didnt know they would have to carry their crappy high rises on Jamboree and that central park west wouldnt have any buyers who are 24 making $275,000 a year!
SFR are always a good bet because a small family will stretch to provide the american dream to their kids. QUail hill single or married couples and your asian demographic who has a different view on what is acceptable square footage and living conditions to raise children. IF you think my comment is unfounded look at the demograpics of the 92603 school district vs the demographics of homeowners/residents of 92603. University High School and the other Irvine shcools are great, even though some cant afford a $1,500,000 SFR in quail hill, they can still have their kids go to school with people in SHady Canyon paying $5,000,000 and people in turtle rock at $1250000. Why not be the poorest family in a spectacular school district, fo you suspect it would be better to buy a SFR in anaheim and pay for your kids to go to private school while you commute to irvine…. um no…. again a personal preference with the assumption of a link to a different culture.
Solution for those who have rented to long and are bitter… dont buy if you dont want to but figure if you dont at the right price someone else will.
-buyers in todays market – when a good deal arises buy it. buying is a better investment than buying a mercedez or BMW (trust me even my M3 is expensive to maintain even under warranty and every month i drive it it loses $600 in value).
No time is the right or perfect time for anything, that is not judgement or intuition, that is pure luck. Lottos are luck, buying RIMM at $3 a share is luck. Right place and right time, I take a big risk I stand to either gain a lot or lose a shit load. Little risk , likely smaller gain. (investors dont give me the mutual fund lower risk higher return argument just accept my words for argument’s sake).
So with all of this being said… what is 212 dewdrop worth??? (and my philosophy is something is only worth as much as someone is willing to pay for it).
HOW MUCH IS 212 DEWDROP WORTH???
So here is the scoop on dewdrop. It will likely stay on the market until it sells for $490000 or so. Offers of $475 to $485 have bene turned down by the bank. This property was picked up at foreclosure via auction from Orange County in March. Factually the buyer of this place will need to take on a DTI of like 60%! assuming about $50000 to 55000 down. 80/10/10 have vanished over the last month! now more conservative at 80/9/11. The problem here is that this place will likely be worth no more than $450,000 by june. Builders are giving awesome incentives in the portola springs area for appx asking price of $495000. I am sure there is room in that as well, similar HOA, I would say quail hill is better but similar. Laguna Crossing will likely be a good bet for those who hold out until mid 2009. Market should adjust itself again and buyer should be able to pick up a property like this one for about a 3 to 4% appreciation rate relative to what this property ends up selling for. Say this one sells for $485,000 at 1200 sq ft. that is $404 sw foot is what a premium unit is worth in QH in todays dollars, assume even 4% appreciation just to break even over renting net of selling costs after 2 years. Laguna Crossing at a base price for 1200 sq foot comp will likely be $436 in mid 09 for similar condo putting the asking price around $525,000.
Try Carl’s Jr in downtown Anaheim-great “Six Dollar Burger”
🙂
This just in! Irvine Company in conjunction with Standard Pacific Homes and William Lyon Homes reported to me by a source at Standard Pacific that continued projects in Portola Springs as well as Laguna Crossing are cancelled until 2009 and more like a 2010 projection. OOPS!! Plan is to cut supply as much as possible on the Irvine Ranch and drive prices up in the 09-2010 mark. The market has not even begun to make its adjustment! June to August of next year expect to buy whatever home you are looking at even this one at about 25% of current prices. Some have even speculated 33%. Banks are finally not lending to stupid idiots who buy well over what they can afford with the intention of supporting it long enough so it will go up in value. Still amazing that in 2002, yes 5 years ago, the house you are looking at buying is 5 years older and now 3 times as much??? hmmm??? Buy now lose big with the suckers. Good luck.. hope you have an extra $100,000 laying around to lose! With interest rate cuts, fixed 30 yr rates are going on for 1st mortgages! Down comes the housing market. Still if you bought in 2002 for 350,000 and now your home was 950 in 2007 then $712,500 in 2008, you still made a killing so good for you. Hopefully you didn’t take the apreciation in your home and buy a Ferrari of a Boat.
Buyers.. Let’s hold out for the right time, don’t give away everything you have and create false fluctuations in the market, let it fall.
this place is available for rent for $2100 and coincidentally I am looking for a rental unit for myself. is 2100 is good rent for this place? thank you.
$2,100 looks like a reasonable rental rate. Be careful who you are renting from. If it is sold or goes into foreclosure, they can kick you out, and they will probably keep your deposit.
Did the bank sell this? They typically do not rent their REOs.
will find out more details (a realtor is showing me this place), thanks for the warning.
$2,100 is a pretty good rate but I thought that they were asking $2300 to $2400 for this lease? I believe the property did sell for appx $485,000 to $490,000. Last time I spoke to the realtor a month ago they were in negotiations with countrywide. Take a look at quail ridge and quail meadows… can likely get a good deal. Ask them for new appliances.. the old ones smelled when the property was listed for sale. Otherwise pretty nice property… 2 car side by side garage versus tandem on some models in that tract. $2100 is a good price… $2400 is too high for what you get.