Big price reduction from $630,000 to $560,000. Sellers are getting smart or scared, I suppose it depends on your point of view.
Come fly with me, let’s fly, let’s fly away
If you can use some exotic booze
Once I get you up there where the air is rarefied
We’ll just glide, starry-eyed
Come fly with me, let’s fly, let’s fly
Pack up, let’s fly away!!
Come Fly With Me — Frank Sinatra
Isn’t this song the ode to the relationship between every Californian and the housing market? Grab that exotic loan and let prices fly to where the air is rarefied. It certainly made everyone starry-eyed.
Asking Price: $630,000
Income Requirement: $157,500
Downpayment Needed: $126,000
Purchase Price: $670,000
Purchase Date: 8/1/2005
Address: 4392 Skylark St., Irvine, CA 92604
Beds: 3
Baths: 2
Sq. Ft.: 1,493
$/Sq. Ft.: $422
Lot Size: 5,669 sq. ft.
Type: Single Family Residence
Style: Ranch
Year Built: 1974
Stories: One Level
Area: El Camino Real
County: Orange
MLS#: S509371
Status: Active
On Redfin: 12 days
From Redfin, “Large corner lot with spacious front and backyards. Flowing floorplan with berber carpet, laminated wood floors, recessed lighting, Enjoy the living room with vaulted ceiling and a warm fireplace. Nice grass backyard with paved side yards with brick accents and patio cover. Master bedroom with nice garden atrium. Association pool and parks.”
.
.
Assuming a 6% commission, and assuming the seller gets their asking price, they stand to lose $77,800.
Since the theme of this post is flying, I thought I would share two more properties with you because of their names. These are actually in Tustin, but Tustin Fields is close to Irvine, and it is southeast of Jamboree. In fact, I didn’t realize this was Tustin until Redfin told me so. No matter…
Asking Price: $565,000
Income Requirement: $157,500
Downpayment Needed: $126,000
Purchase Price: $623,000
Purchase Date: 9/7/2005
Address: 319 Flyers Lane, Tustin, CA 92782
1st Loan $497,504
2nd Mtg. $62,188
Downpayment $63,308
Beds: 3
Baths: 2.5
Sq. Ft.: 1,488
$/Sq. Ft.: $380
Lot Size: –
Type: Condominium
Style: Modern
Year Built: 2005
Stories: Two Levels
Area: Tustin Field
County: Orange
MLS#: S508922
Status: Active
On Redfin: 16 days
From Redfin, “MOVE IN READY, upgraded to the nines, and in IRVINE SCHOOL DISTRICT! Private interior location, Granite countertops, 18×18 porcelain tiles, upgraded base and crown moldings, newer stainless steel appliances, and a tumbled edge travertine marble backsplash. Private patio area, fully landscaped, automatic sprinklers, and slate stone throughout. Custom interior paint throughout entire home, and lots of storage areas. Master suite complete with large walk-in closet and gorgeous master bath!!”
upgraded to the nines but selling in the fives.
This seller is looking at a $91,900 loss after a 6% commission. Actually, this seller is going to lose their entire $63,308 downpayment, and the bank is going to lose $28,592.
Asking Price: $550,000
Income Requirement: $137,500
Downpayment Needed: $110,000
Purchase Price: $600,000
Purchase Date: 11/4/2005
Address: 1 Aviator, Tustin, CA 92782
Beds: 3
Baths: 3.5
Sq. Ft.: 1,600
$/Sq. Ft.: $344
Lot Size: –
Type: Condominium
Style: Other
Year Built: 2005
Stories: Three or More Levels
Area: Tustin Field
County: Orange
MLS#: P593218
Status: Active
On Redfin: 82 days
From Redfin, “* * FORMER MODEL HOME * * SHORT PAY-OFF SALE * * REDUCED! * * HIGHLY UPGRADED * * IRVINE SCHOOL DISTRICT * * 3 BR 3.5 BA * * PLANTATION WOOD SHUTTERS * * GOURMET KITCHEN * * GREAT RM W FIREPLACE & BUILT-IN ENTERTAINMENT CABINET * * PARK VIEW FM GREAT RM & KITCHEN * * X’LNT CORNER LOCATION LOCATION “
*** CAPS LOCK AND ASTERISKS *** X’LNT!
Another ADHD listing with 3 word phrases.
Another gourmet kitchen. Must be the white tile that makes it so special.
What is the deal with the picture of the doll?
This seller is going to lose $83,000 after commissions.
What can you say about this string of $75K to 90K losses? Well, everyone should be a bit less starry-eyed.
.
.
Fly me to the moon
Let me play among the stars
Let me see what spring is like
On a-Jupiter and Mars
In other words, hold my hand
In other words, baby, kiss me
Fill my heart with song
And let me sing for ever more
You are all I long for
All I worship and adore
In other words, please be true
In other words, I love you
Fly Me to the Moon — Frank Sinatra
It sure is nice to know that I’m not the only guy in Orange County way under retirement age that likes Frank Sinatra too.
—–
It certainly looks like a lot (or all) of the people that purchased properties in 2005 are now underwater. I wonder if these “homeowners” will walk when they figure out that they stand to lose much more money than they ever imagined they could. The fact that they are not putting these units up for rentals suggests that they might be headed for the dreaded loan resets that double monthly payments.
It is certainly a sign of the times when IR can pick a theme and find three homes rolled back that match the theme.
IR, what will be your next challenge? To find three houses that are rolled back to 2003 prices? (wait, that’s too easy) 2002? 2001???
Roll backs are no longer slim pickin’s so we appreciate your special motifs and commentaries!
Strangers in the Night
Buying McMansions
Borrowing to the hilt
Hoping for passions
Making lots of moolah
out of nowhere…
Strangers in the night
Climbing the stair
Seems like
Everything’s up there
On the third floor
Always out of breath
….
Then the Realtor told me so
That they ain’t building more
So we better sell now
And hope that we don’t
get totatlly hosed
and my credit don’t get
too messed up
So we went off..
And..
Now are renting somwhere…
Strangers in the night…
Strangers in the Night
Buying McMansions
Borrowing to the hilt
Hoping for passions
Making lots of moolah
out of nowhere…
Strangers in the night
Climbing the stair
Seems like
Everything’s up there
On the third floor
Always out of breath
….
Then the Realtor told me so
That they ain’t building more
So we better sell now
And hope that we don’t
get totatlly hosed
and my credit don’t get
too messed up
So we went off..
And..
Now are renting somwhere…
Strangers in the night…
According to mls “McGwire Manor” is pending after 521 days of marketing time. Looks like a chunk of that $2.5 mil downpayment will disappear. Im sure the guy can afford it.
Its an expensive lesson, but the buyer should have known NOT to pay millions of dollars for something described as a “plan 2”. Its a tract home with a rooftop view.
Those are 3 of the ugliest homes I have seen yet.
The first one looks like a big mobile home
The second one looks like a block of cement.
The third one looks like something my 7 year old would build with his legos.
Hard to believe someone paid over $600k for each of those things.
I love “Fly Me To The Moon”, and was wondering when you would get to that song.
Thanks!
I know I’m always singing out-of-tune with this choir, but I think the third home (and all of the Tustin Fields homes) are attractive and unique. I guess it could be called a craftsman style.
Or do you like the older homes in Irvine on bigger lots that all look the same with their shades of grey stucco and orange S tile roofs? Yeah, those are beauts!
“Actually, this seller is going to lose their entire $63,308 downpayment, and the bank is going to lose $28,592.”
I know this has been discussed before, but i am not clear what happens in these cases. So if one realises that they owe more than what the home is worth, then instead of working towards paying off the loan, they should put it on market and pass the loss to the bank?
Is it very tough to get a bank to agree on this or is it possible by just throwing your hands up in the air?
If you want to see the mentality of denial, go read the comments over on Lansner’s blog on this thread.
Can 25% price cut get local housing off bottom?
http://lansner.freedomblogging.com/2007/10/30/can-25-price-cut-get-local-housing-off-bottom/
I was wondering where all the bulls went!
Prediction: 9 months from now, when the RE summer doldrums will be in full swing, they will be gone from that blog too.
To qualify as a bull now, you only have to say the price drop will be limited to a 10% or 15% decline. Amazing how times change.
That first home looks like it just “grew” out of the ground like a toadstool.
Does that make me a calf if I expect a 25% decline? 🙂
I just remember 2001-2005. Every month the Register posted median price increases, and for months, YEARS, I kept thinking this was not fundamentally sustainable, and I was always wrong.
Now, the fundamentals (median income, rents, etc.) make me believe the drop should be sharper than 25%, but what do I know.
I hate to say this, but I sort of chuckle when the bloggers on the OC register site lose their cookies and spew the nasties……….
Wow, are these people going to be in for a surprise. The same people who look in Irvine also look in other places, for instance Carlsbad — where you can by a real house of substantial size and lot for the same price, but close to the coast. The nearby market makes Irvine prices look more and more ridiculous. The beach areas are still high, but Irvine is nothing like the beach area. It is an uptight place where type A people enjoy stressful careerism.
Prediction: 9 months from now, none of the RE bulls will be able to afford internet access.
I have a question- What happens to the State of CA in all of this foreclosure mess? Who is liable for the property taxes due when the owners walk away? How does Countrywide deal with 3600+ CA properties that they owe the tax on? I would guess that they would seek a reassessment on them- but how quickly can that happen? Our current Gov. got alot of credit for “solving” the CA debt– but it was actually our exploding real estate market that really helped as property tax reset with each sale. Now what happens?
The borrower always owes the taxes. If a property is foreclosed on the taxes trump the lien holder(s). The IRS or state tax board can always put a judgement against you and they will garnish your wages.
This will still cause a cash flow nightmare for the California. Not good.
Thanks for the info – So, let’s say I foreclose on a property in April 2007 and the lender (ie. Countrywide) can’t sell the property until June 2009. I understand that I would owe the tax thru April 2007- would I also be responsible for the property while Countrywide “owns” the property?
In Florida, after foreclosure, the new owner is responsible for everything. While states may differ, I don’t see why the foreclosed former owner would owe taxes imposed AFTER he loses the property.
If the foreclosing lender wants to sue the borrower for taxes, they can do that in Florida, since we have judicial foreclosure; it would be part of a difficiency judgt. But in practice nobody does that, it would be a waste of time and effort; if the borrower had any money they would pay one more month of mtg payments before they gave up.
Also, in Florida, if the foreclosing lender doesn’t pay the taxes, the property can be put up for a tax sale, usually about 3 years after the yearly taxes aren’t paid. So, if Countrywide doesn’t pay its Florida County real estate taxes, they will lose the property. I fail to see why California should be different. And yes, there will be a property tax Armegeddon in a year or so. Any owner can challenge valuation, but the county is not set up to hear the number of challenges that are going to happen here (and probably everywhere) this time next year.
Countrywide et al. don’t have anywhere near the number of employees to effectively challenge the taxes, here at least it is done on a one-property-at-a-time basis.
During the depression, there were municipalities that went broke, but really not too many of them. When the Counties and cities don’t have the money to pay teachers and police, you will see (delayed) pay cuts. Much screaming will happen. But during the depression, there was deflation, so at least food etc, was cheaper, and it’s hard to see how there would be any deflation this time around.
My nearly out of business honest realtor/mtg broker buddies have advised people to cut their prices drastically when there was (or used to be) equity, and the people refuse and in some cases lose everything, rather than admit they’ve say, lost $100,000, and could realize $50,000 after accounting for the loss. Sometimes by the time the drasticness of the reduction sinks in, it is too late to sell.
no
Same feeling here … Actually I had been in the first one “big mobile home” last Saturday during its open house. You bet no offer from me, ’cause it’s tooooo ugly.
BTW, the 3rd one, must be the lego’s work done by my two years son, for your seven-year old son, he can definitely build something more beautiful with his aesthetic standards at that age. Don’t undervalue him! :-))
First the substance, then the music. Yes, they’re taking haircuts but they’re still on crack. The asking prices are way, way, way too high.
The music! Geez, you’re bringing me back to my youth in the Midwest in the ’60s and ’70s. My dad would burn some chicken on a barbecue and then settle down with a double Scotch on the rocks and play Frank Sinatra. If I had a buck for every time I heard Come Fly With Me, Summer Wind, That’s Life, and It Was A Very Good Year in the backyard, I’d be able to buy one of those overpriced hovels without breaking a sweat!
Thanks for the memories, Irvine Renter!
Mark – I think you give a good balance to these comments. I am glad you call out some of the BS.
And I agree, Tustin Fields has a lot more charm than other developments. I like VOC but it doesnt have the charm that Tustin Fields has.
That’s right, Economic Crisis, the prices all still way, way, way too high. So far, the Irvine decreases are pretty puny – less than 10%. In just the last few days, I am seeing (and posting on the San Diego Piggington site that I know Irvine Renter and others here frequent also) decreases of 30-40% in some south Orange County areas, for some types of home.
Okay, IHB, what’d you do with Sue?
Hopefully she’s just on vacation or something… Her services are missed.
Eww…. The first home is okay, but I think living in the others would be like dating Barbara Bush. Sure, you get a lot of hot sex, but can you get past the looks?
prices may drop if the dollar stays healthy, but when the US government is printing billions of dollars a day, money is just going to be worth less.
Its apparent that the only way out of the housing crisis is for the government to devalue the dollar even further to the point if the housing price drops 40% in 2007 dollars in 2012 it may hardly be noticed because of all the inflation thats brewing now.
So a 500k house in 2007 will still buy a 500k house in 2012, its just that the dollar’s value is going to drop so much that gas and milk is going to be like $10-15 a gallon.
Good analysis, law stud.
In fact you’re not above stoking the fire from time to time, are you? (Assuming there isn’t another NanoWest around.)
The bulls on Lansner’s blog do seem to be pawing the ground and snorting a bit lately. 🙂
For those wondering where I went – I am fine, working on stuff other than posting for now.