This property is still on the market, and they are still chasing the market down. The price now stands at $559,900. The losses now exceed $120,000…
First Update September 3, 2007
Originally published July 13, 2007.
The price has been reduced to $599,900. Assuming this seller gets their asking price, they stand to lose $86,094 after a 6% commission.
Today’s property is nothing unusual or unique, and that is what makes it so special. It is extraordinary in its ordinariness. This is a nice, Irvine property typical of many nice, Irvine properties, and it is selling for a loss. Do you get the sense this is becoming the rule rather than the exception?
Asking Price: $624,900
Purchase Price: $650,000
Purchase Date: 6/23/2005
Address: 8 Lilac, Irvine, CA 92618
Beds: 3
Baths: 2.75
Sq. Ft.: 1,525
$/Sq. Ft.: $410
Lot Size: –
Year Built: 2000
Stories: 2
Type: Condominium
View: Park or Green Belt, Peek-A-Boo
County: Orange
Neighborhood: Oak Creek
MLS#: S493537
Status: Active
On Redfin: 20 days
From Redfin, “Beautiful Oak Creek Townhome! New Plush Carpet! Popular Floorplan Features Gourmet Kitchen/Center Island! Dual Master Suites plus Mainfloor Bdrm/Den/Office w/ Bath! Quality Custom Upgrades inc/ Granite Counters/Maple Cabinets/20” Neutral Floor Tiles/Recessed Lighting/Plantation Shutters/Designer Paint/Media Entertainment Center/Etc! Convenient Indoor Laundry Room! Spacious Patio Backs to Greenbelt! Oversized Garage w/ Cabinets! Fabulous Resort-Style Recreation Complex! Award-Winning Schools!”
Did you see the realtor got excited about a “Bath!” What is the deal with all the slashes and Title Case? I can’t decide which is more annoying: Title Case or ALL CAPS? What/Do/You/Think?
.
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Assuming this seller gets their asking price, they stand to lose $62,594 after a 6% commission.
I can remember earlier this year when I first started blogging, it was hard to find a house with a loss. You could demonstrate a loss when you factor in commissions, and that is still a real loss, but it doesn’t have the same emotional impact as when you see a true equity crushing loser. Now finding real losses are like seeing implants at Fashion Island Mall: there is no novelty because they are so common.
I hope you have enjoyed Oak Creek week here at the Irvine Housing Blog. On Monday, I have a new analysis post ready — Land Value 101, and there are a number of rollbacks to show you.
All of this excites me. It’s the weekend, so let’s GET THE PARTY STARTED
.
Get this party started on a Saturday night
Everybody’s waiting for me to arrive
Sending out the message to all of my friends
We’ll be looking flashy in my Mercedes Benz
GET THE PARTY STARTED by: Pink
“being next to 405 feels like being close to ocean, you hear the same sound”, that’s what a realtor told me long ago.
—–
So many places bought in 2005/2006 that are now on the market. I smell resetting ARM loans.
This place is decent looking on the inside and I always like a two-car attached garage, but the complex has NO character. Mostly asphalt and buildings. I have seen apartment complexes that are more inviting than this.
They should have built just one area for guest parking and then surround the buildings with greeenbelts, trellis with vines, fountains…etc etc.
I would never buy this place.
I have not seen losses in my neighborhood yet but I am seeing listing prices getting reduced on a regular basis. In our very small block we now have two homes for sale with one just lowering it’s price in response to the new listing that was well below the first home’s price. So let the war begin on dueling sellers and then I do expect to see list prices below 05 and 04 levels in my neighborhood as well.
And the big change — my wife now agrees that we could see a market in which the house we sold up North returns to a price level well below what we got when we sold.
The Pink link to Let’s get this party started has been removed by user.
This one works…
http://youtube.com/watch?v=iYygf0Bilvk
Thanks, I updated the links.
“Now finding real losses are like seeing implants at Fashion Island Mall: there is no novelty because they are so common.”
LOL – HILARIOUS!!!
Major,
Implants are that common at fashion island?..hahaha…is it just me, but are the people from newport seem kind of snouty?
lol IrvineResident
Actually, the back windows of our rental open right onto the 405, and it’s more like a river sound. I don’t even notice it anymore.
Irvine Renter,
What is the best way to get in touch with you? I had an urgent question to ask you. Can I e-mail you somewhere? I will appreciate it if you can e-mail me at purplehaze_a@yahoo.com and respond.
Thank you.
Purple Haze
If something loses its novelty, we don’t necessarily grow tired of them.
I live in Newport and the (few) people I know are friendly.
However, the snooty attitude is certainly visible in the drivers. People driving their fancy cars, yapping away on their cell phones not really paying attention. ANNOYING!
Daily humor link: see “Watts concedes ‘decimal point error'” at http://blogs.ocregister.com/lansner/
I know I certainly don’t grow tired of breast augmentation. =)
One of my rentals backs to the noisy University Dr. but has a view of Mason Park. I’ve never had trouble renting it out. I also notice that the windows are actually not as dusty as my other house in Woodbridge lake area. My tenants also say that the noise is easy to get used to.
We bailed out of Woodbridge in 2004 and relocated out of state. Our house was just inside the loop at the south end of southlake, the second storey maseter bedroom faced the freeway. We too “got used to” the constant white noise of the 405. It sounded like a stream if you stretched your imagination.
Rainy nights made the freeway noise much louder and higher pitched. One rainy night we heard a crash though…a few loud thuds followed by a steady decrease in noise as it seemed everyone was slowing down in the aftermath…then sirens..VERY creepy.
Were I live now it is so quiet at night the only sounds I hear are the voices in my head
On the topic of real estate prices, I would like to add my humble opinon. People in general have a relationship with their home. It is hard for them to get off the river of denial and see the market for what it is. Now with that info in mind, realtors who do try to explain to homeowners about the current market cannot get past the front door. Homeowners do not want to hear that their home is not worth what their neighbors sold for say a year or two years ago. I think part of the problem can be placed on realtors, true (they need the $$) and also the homeowner who is so immeshed into their home that they cannot see the truth about home prices. They go up and they go down, that’s just how it is. As far as the speculators go, well they can go to you know where. They took a risk and lost, if you can’t take the heat get out of the kitchen!
beinformed
When something loses its novelty, it becomes the norm. So, as price resets become the norm, the buyer price expectations become less. If I were looking to make an offer on a house today, I would not ask for 2007 comps. I would say, “Let’s look at comps from 2003/2004 and deal from there.” To sellers who claim, “Yeah, but my neighbor sold his for $800,000 in 2006” I would reply, “Ok, another neighbor bought in 1997 for $360,000, so let’s start at that number.” Bottom line — the past is history, let’s look at what it’s worth today.
perfectly said
good points, but I think realtors are still largely drinking koolaid, as you might have heard, Gary Watts just came out with his upbeat forcast for 2007, alot of realtors listen to what he says.
If and when realtors get frustrated enough, they will either refuse WTF/LOL listings or they will become more convincing towards sellers.
there is still alot of happy talk from realtors outthere. give a few more months.
We may want to get ready for the OC running of the bulls. Lasner is reading out that June Median is looking up. Up as in record high up.
Funny when you look at the informal poll and see 33% saying no it isn’t a good time to buy and 35% saying the market is going to crash.
Well, at least for the bearish blog readers, Joe Public won’t read anything that isn’t positive on housing.
I actually just looked at the Redfin listing. Bleech, dark red wall, tiny kitchen table area (you can see the chair at the island in the picture of the able to see how small it is). Beautiful contrast between the staged looking master bedroom and child’s Ariel bedroom with the bleak “office” in the 3rd bedroom.
Also noticed, that this place looks to be carrying about $2300 of mellow-roos. It has an $8800 tax bill on a prior sale of $650K. And a $2400/year set of HOA fees.
Almost a $1000/month in taxes and fees before mortgage. A quick search of Craigslist with Irvine, max rent $2000 and 3Bd selected shows 20 places for rent. At $2400 max, 103…
I’m thinking taxes & fees alone are close to half of equivalent rent.
Well said. It looks like we’re comfortably below 2005 pricing now in a number of places, so we’ll see how much longer it takes to roll back to 2003 and 2004.
check this one up:
5 Ladypalm, Irvine, CA 92618
Sale History
06/20/2007: $603,500
04/20/2006: $719,000
04/28/2004: $625,000
we are in 2004 price territory folks.
http://www.redfin.com/stingray/do/printable-property?external_id=5887703
That is an ugly loss.
Re: who would do those kinds of loans? What a mess. Financial illiteracy bites both ways (for both those taking out the risky loans, and those who ultimately loan the money).
Mortgage Bets Trip Up Main Street Investors — And a Group of Nuns
http://online.wsj.com/article/SB118436942164166333.html?mod=mkts_main_news_hs_h
Was that a sale or a repo?
The 6/20/07 sale was the foreclosure when the bank took it back. IIRC that one was a victim of the Fraud Park gang.
https://www.irvinehousingblog.com/2007/03/19/the-plot-thickens-in-fraud-park/
If it didn’t sell at the auction for $619k then it isn’t worth $619k but I bet the bank will price it at $720k
PH – You can find what you need here https://www.irvinehousingblog.com/about/
It is days like this that makes me realize how truly insane Wall Street is, and how far removed it is from reflecting the health of our economy. The DOW is soaring in the face of a housing crash, $80 dollar barrels of oil, terror alerts, war, inflation, high fuel and transport costs, and a historically low dollar.
I’ll be stoked once prices come back to 2000/2001 values. I believe ALL gains accrued during the bubble period can be lost. A weightlifter can only get so big using dietary supplements…he/she must move on to steroids. Once they are injected you see monstrous growth, fast. We all know what happens when the steroids are removed; all that muscle mass that your body isn’t genetically designed to carry will wither away and you end up in worse shape then before you started using.
Rates are still low, and aggressive ARMS/neg am loans are still being underwritten. The housing steroid is slowly being withdrawn.
LM – My favorite this week was how credit card debt was double compared to last month and the monkeys at CNBC starting cheering that consumers were spending. Then today and yesterday the retail sales data was not pretty. Sorry monkeys they can’t spend MEW they no longer have to crap they don’t need so instead they use their credit card.
I checked the option arm MBS pools and right now they are performing pretty well. What I believe are the Countrywide OA MBS pools since the code is 2006-OA3 makes me beleive it is option arms are not performing as well. They are around a 4% deliquency rate compared to 2% or less for most. I think a year from now it should get worse though. Too bad World doesn’t sell their garbage otherwise it would be really fun to see how they are doing.
World isn’t public, is it? Talk about a shame.
Just a guess, but until the Japanese cb raises their interest rate and the yen appreciates against the dollar, the creation of liquidity can continue and and it has to find somewhere to go.
“Now finding real losses are like seeing implants at Fashion Island Mall: there is no novelty because they are so common.”
For those of us unfamiliar with OC, is this the place where I can get a lap dance???
What’s with the GOURMET kitchen? What exactly qualifies as a “GOURMET KITCHEN”?
I remember seeing some plain ass kitchen pictures up in Seattle last year and the ad copy call it “gourmet kitchen”.
I’m afraid of asking what a NON-GOURMENT kitchen is!
Of course, my kitchen is a GOURMAND kitchen, an EPICURIAN delight perfect for FOODIE explorations, but I live in TR, not the Irvine flats. ;-P
And I studied french, have a Viking gas range, a rice cooker and a membership card to Marukai.
“Designer paint” –what a load of crap. It’s PAINT!
We too moved out of state after living in a home that backed to Deerfield near Culver. Last night my wife and I heard a faint siren and laughed. Some people get used to the noise – we never did. I don’t miss it at all.
An colleague of mine used to go to Fashion Island on her lunch break in her fancy Mercedes. Two to three hours later she’d show back up at work. The running office joke was that she was stranded (shipwrecked) on Fashion Island and needed to be rescued from her three hour tour…
Just re-listed 4 days ago for 574,900! Owners have a first of $487k and a second of $89k = $576k ……ouch
I rather like the red kitchen. But I’m the one who hates beige.
If these people had started at that price, they would have had a shot at selling.
Is anything moving out there?
Yes, I would like to see some completed sales, just for the contrast.
My first home was on a busy street.
Anyone who says the noise and the dirt and the traffic doesn’t bother them is fooling themselves. A river? The ocean? Ha Ha Ha. Yeah right!
Living on a busy street or next to a freeway just plain sucks.
Never, ever, ever again would I buy a place on a busy street.
After living at that place for 5 years, I bought a house on the quietest street in the city. Nice that my kids can play out front without fear of getting run over and I can open my windows without hearing cars drive by.
You can’t get a lap dance here – at least not yet. It’s a fancy shopping mall (Bloomingdale’s, Neiman Marcus, and lots of other fancy stores). However, in, say, 12-18 months, when the economy is really down, I’ll bet you could flash some cash around this mall and find some OC Desperate Housewives who will do most anything for the cash.
I am NOT saying that all housewives in OC are like this, so don’t pile on, but there are a few women down there that live only for the almighty dollar and will do just about anything to get it.
Irvine Renter-
It would be interesting to start an on-line gaming site where people bet on when and for how much these houses would sell. No real money would be wagered, of course…just for laughs.
Also, I would like it if you would post your “best guesstimate” of where these houses will really sell. If a house is listed for $575,000 today…where will it really sell? Just curious.
There is no longer any doubt that the homes in my neighborhood are being priced at their fall-2003 to spring-2004 levels.
They are still not selling at that price.
There are two examples I watch closely within a block of me.
These are nice homes (sitting empty) that have been on the market for over 6 months now. One just dropped off the MLS – probably in foreclosure.
It looks like the bottom will be in the 2002/2003 range.
That means I think the houses people paid $800k for in 2006 will be selling for $500k before 2010. They are currently sitting on the market for about $650k.
No scientific analysis required. Simple observation suffices.
Best guess at bottom seems to be 150x rent,
$2200/month x 150 = $330,000 true value
Law_Student,
take it from older, wiser owner
2002 prices were still absurd
this is only 1500 sq ft apartment in irvine
your observation was not so simple
That sounds about right.
Break even on a mortgage to rental looks to be about 120x rent.
That place sold (probably new?) for $400k in fall of 2002, so I wouldn’t say that is an absurd price today. Perhaps a little high.
The prices for the “new” developments were absurd all along. In order to figure out what their natural price is you have to look at the older villages because those neighborhoods were never priced along “normal” prices. They were priced at WTF prices from Day One.
Hence, you can not even look at the ’02 price because that was a WTF price to begin with!!!
I remember looking at Oak Creek and noticing they wanted as much per square foot as my house in TR. I simply couldn’t believe it.
Same thing for the homes out by Walnut and the financial disasters in TRidge and Quail Hill.
What people need to understand is that ALL the new development in Irvine since ’02 was priced at or above Turtle Rock prices. That was insane but people bought in because of the crazy “appreciation”, 100%LTV and cheap money. I mean, there was absolutely no risk if you were lucky to win the shopper’s lottery and buy a house in the first two phases and planning to dump it in 18 months.
However, this was a Ponzi scheme and couldn’t last.
IMHO, the “natural” price for ALL new Irvine developments is BELOW the initial price for Phase One. Which is a very scary thought.
This also applies to great swaths of OC, including Newport Coast et al…
“IMHO, the “natural” price for ALL new Irvine developments is BELOW the initial price for Phase One. Which is a very scary thought.”
Tonye, I couldn’t agree more. In the end, I suspect new home buyers from 2001 on will feel pain. I remember reading about Phase 1 at Ladera Ranch. I remember reading about the “lottery” for the rights to buy. What year was that? 2001? 2000?
Here we are 5 months later, and everything is much worse and the stock mkt is only off a tad.
By the way, where is lending m? Come back lending m.
Oops, I responded below by mistake.
You can already do this. Curbed LA has a regular column where you guess the current listing price (without looking), or the sale price. http://la.curbed.com/
Lotteries…. whenever you see that you know the price is WTF.
Back in ’87 we were looking at buying a house. Westpark was brand new then, in Phase One. They had a lottery system too. The largest home in Westpark was selling for 203K.
We ended up buying an older home in TR for an even $200K.
Guess which home is worth a ton more today?
Of course, the Westpark homes were two stories and maxed out while our TR home was single story, with a bigger lot and we’ve been able to rebuilt it significantly with an addtional 800 sq feet of 2nd story that we have framed the for.
To see where the prices of the new developments will go you need to see the prices for the older villages. TRidge will fall in line with TR. Oakcreek and Quail Hill will fall in line with Woodbridge and everything on the other side of the Santa Ana Fwy will have to reflect Northwood.
Phase 1 of Ladera Ranch was in 1999. I went to one of the first lotteries for a 2,000 square foot tract home, and we “won” – yippee. The home cost $302,000, which we passed on.
The re sale price of that home peaked to $800,000. Not sure what it is worth now, only in idiot would buy it though. I expect it to drop to around $400,000 give or take a few.
That is a whole lot of pain for people who bought within the last few years.
Ladera Ranch was built during the bubble, so it will be hit especially hard.
Conspicuous consumer and proud of it! Gotta love OC.
It takes a very long time to get rid of a place on a busy street. Somehow that has to be factored in when evaluating these places for scorn.
I agree that the bubble began before 2002. 2002 prices were already very high, and have lots of room on the downside. Just compare to 1996. Whether we get down below 2002 depends on (a) a recession, and (b) ineffectiveness of all the concerted government and private price support actions.
My guess – and hope – is that prices will go below their 2002 level, but in order for that to happen, a lot of things have to happen a certain way. I think we just haven’t arrived at some of the forks in that road yet, so none of us can say for sure which way things will end up.
I don’t think that ALL the prices were very high in ’02. The going price for homes in my area of TR was about 250 per sq foot for a home that had been well maintained but not rebuilt nor heavily remodeled.
Our own home went over 300 per sq foot in late 03. It is pretty much brand new, actually better than “new” because it’s custom built.
As I said before, the “new” developments have a lot to fall. They were priced above the market when they were first developed. The new developments most likely will drop below their phase One. Possibly 20% below that. That’s how low they would have to go to come to parity to the price of the older villages in ’03.
My own area will most likely drop back to 275 to 325 per square foot. Homes in the Terrace and top of the hill will command a bit more because of their views. But that means that TRidge will have to drop like a rock in order to achieve parity.
I wonder if you’re right about that price per square foot target. It seems a little low, but all bets are off right now. TR Broadmoor was going for approx 350 per square foot in 03…. so I presume you expect 2001/2002 prices? A whole lot of people will have lost a whole lot of money if that comes to pass…. heck I might buy into TR Broadmoor again if the prices really go down that far.
One thing I noticed about the bubble was a really small differential between nicely updated and original homes in the Broadmoor… I think maybe everyone was expecting to remodel… I sold my updated house for 445 per square foot in 06 and an original shag-carpet wielding, wood paneled 70s monster on my street went for about the same per square foot in summer 05.
I have that mercedes.
NAMe OF CAR PLEASE!