This one went back to the bank on 2/4/2008 for $616,250.
Our house, in the middle of our street
Our house, in the middle of our
Our house, was our castle and our keep
Our house, in the middle of our street
Our house, that was where we used to sleep
Our house, in the middle of our street
Our house, in the middle of our street
Our House — Madness
Link to Hilarious Spoof Video from the Housing Crash in Great Britain in the 1980s (must see)
Asking Price: $699,900
Income Requirement: $174,975
Downpayment Needed: $139,980
Purchase Price: $869,000
Purchase Date: 11/08/2005
Address: 13551 Espirit Way, Irvine, CA 92620
1st Loan $695,200
2nd Mtg. $173,800
Downpayment $0
Beds: 4
Baths: 3
Sq. Ft.: 2,344
$/Sq. Ft.: $299
Lot Size: 5,940 sq. ft.
Type: Single Family Residence
Style: Other
Year Built: 1972
Stories: Two Levels
Area: Northwood
County: Orange
MLS#: P595176
Status: Active
On Redfin: 37 days
From Redfin, “This house features 4 bedroom plus a bonus room, 3 full bath, remodeled kitchen with new appliances, granite countertop and travertine backsplash, dual panel windows and located close parks and tennis courts, schools, restaurants, shopping centers and easy access to I5 and most of all a motivated seller.”
.
.
You have to admit, this is an impressive rollback. The asking price is a full 20% under the purchase price, and this property was purchased before the 2006 peak. If the seller manages to get their full asking price, they still stand to lose $211,094.
Realistically, this one is headed to foreclosure. This was another 100% financing deal, so the seller is motivated to walk. The bank will foreclose before they take a hit on their first mortgage, so any loss in excess of $173,800 will not get approved. The second mortgage holder… well, that is probably going to be a total loss. These are big numbers. How many of these can the banks absorb?
BTW, all the “moderates” who think we are only due for a 10% to 15% correction should be rejoicing. This must mean we are at the bottom.
You know, it doesn’t look or feel like the bottom to me…
I went to the original radio call 2 weeks ago when the IDIOT hit the overpass at Hollywood Blvd on the 101. Sheared half the roof off !
I see the obligatory plant from the former New Century offices is standing proud in the kitchen.
A few buyers are getting a clue – across the street from me is a 3/1 SFR, ridiculously overpriced at $869K when it first came on the market four weeks ago, now it is $779K. Not a bad drop for four weeks of nary an offer.
Bought for $700K at the peak… one thing I love about this bust is all the transparency about sales prices thanks to the Internet. I’m sure some people see the numbers and won’t even consider certain houses because of sheer hubris of the seller’s asking prices compared to their purchase prices.
—–
CNBC’s is running foreclosure stories all day. They are repoting from Stockton.
They interviewed a knife catcher. He said he would buy this foreclosed house in Stockton and put it up the next day without a single improvemnet.
The property backs on to Culver and is only a house and a half from Bryan. Traffic noise, anyone?
The Loan That Keeps On Taking
suit filed RE loan fraud targeting hispanics in NoCal
http://www.nytimes.com/2007/09/25/business/25broker.html?_r=1&hp&oref=slogin
IR,
You got it right with Madness, but should have gone with the obvious on this: House of Fun
Good morning miss
Can I help you son?
Sixteen today
And up for fun
Im a big boy now
Or so they say
So if youll serve
Ill be on my way
Box of balloons
With the feather-light touch
Pack of party-poppers
That pop in the night
A toothbrush and hairspray
Plastic grin
Miss clay on all corners
Has just walked in
Welcome to the house of fun
Now Ive come of age
Welcome to the house of fun
Welcome to the lions den
Temptations on his way
Welcome to the house of
N-n-n-n-n-n-no no miss
You misunderstood
Sixteen big boy
Full pint in my manhood
Im up to date
And the dates today
So if youll serve
Ill be on my way
Welcome to the house of fun
Now Ive come of age
Welcome to the lions den
Temptations on his way
Welcome to the house of (fun)
Im sorry son
But we dont stock
Party gimmicks
In this shop
Try the house of fun
Its quicker if you run
This is a chemists
Not a joke shop!
Party hats
Simple enough clear
Comprehende savvy understand
Do you hear?
A pack of party hats
With the coloured tips
Too late!
Gorgon heard gossip
Well hello joe, hello miss clay
Many happy returns from the day
Welcome to the house of fun
Now Ive come of age
Welcome to the house of fun
Welcome to the lions den
Temptations on his way
Welcome to the house of fun
“and most of all a motivated seller.”
But not, aparently, motivated enough to water the lawn to even straighten up, much less stage the house before taking some incredibly cool images of this luxurious home.
Once again, someone paid almost $900k for this home? Why? Was $500k buried in the backyard?
The ’02 price of $365K looks a bit low. Perhaps the buyer in ’02 did improve the interior? I’ve been in a couple of these homes and they are nice, but in stock form they look like the:
“Brady Bunch Lived Here A Long Time Ago”
Other than that, I figure that this home is reaching a reasonable price. At $250 per square foot, assuming it has been remodeled as the pictures hints, the price is fair.
It does have a reasonable sized backyard…. which for Irvine is rare.
This one looks like a smokin’ deal. Seriously. That is a big house with a good sized lot. It definitely needs a little work, or perhaps just removing the garbage the current owner calls furniture.
Regardless of price, its one ugly looking front elevation. I would not buy even at $250/SF
Way back in the age of steam power, when I was in Driver’s Ed, they taught me about a phenomenon called being “velocitized”. It referred the affect of driving on the freeway for a long time and then exiting the freeway and driving on surface streets. You tended to feel as though you were going very slow even though you weren’t. In fact, you might be well over the surface street speed limit.
That’s what I liken this market to. Even many of the cynical bears I read here and other places still seem to place a value on some properties that I just cannot relate to.
Oh and Tonye, brilliant. You know the first that popped into my mind was “Brady Bunch” looking at those interior shots.
Finally, given the particulars as they are described in the listing, there’s no way I can see that home being worth more than $400. Just my personal, uninformed opinion and well worth the electrons it took to post it.
I guestimate this house would rent for $3000-$3200. If you believe the 160 gross rent multiplier is a good estimate of value, this place should go for $480,000 to $512,000.
That puts us about half way to the bottom…
Boy is this great! – Kent Dorfman
Unless of course you are the holder of that second mortgage…
lol. Fortunately, as my wife can attest, I have maintained rather strict lending standards for some time!
That is the standard elevation for a lot of those homes. As I said, I’ve been in a couple of them. Whether you like it or not, that up to you, but this is a standard tract home.
At least here in SoCal, I’ve noticed there are a lot of houses built with a similar style where the roof is long and steep in angle. I find this style to be extremely ugly and would never buy into it, but I’m not sure if that is just my personal preference or if most Midwesterners on this board agree. Maybe if I grew up here, I wouldn’t think anything of it.
Does anybody know what this 1970’s style is called? For future reference, I’d like to let my agent know I will not be interested in touring such a structure. Thanks.
Too bad it doesn’t snow here; you could use your house to practice for the Olympic ski jump.
I’ll never forget proudly showing our newly purchased, 1977 vintage home to coworkers some years ago. Quoth my boss, “that’s a *lot* of roof…”
Fare thee well, Placentia homestead!
I notice that a lot. $800k houses furnished with hand-me-downs and Wal-mart garbage. What does that say about their ability to afford the house?
S&P: US Home Price Decline Accelerates
U.S. Homes Post Steepest Price Drop in 16 Years
http://biz.yahoo.com/ap/070925/home_price_index.html?.v=4
and for those who want to see the graphs themselves
http://www.macromarkets.com/csi_housing/MSA/los_angeles.asp
“Even many of the cynical bears I read here and other places still seem to place a value on some properties that I just cannot relate to.”
I don’t understand this comment and the many others like it. Thanks for sharing, but as IR illustrates, this home has value. It’s definitely ugly, and I wouldn’t consider buying it, but it has a fundamental value. In addition to its fundamental value, it’s worth whatever just one person is willing and able to pay for it.
Greenspan Slams Ratings Agencies
http://blogs.wsj.com/economics/2007/09/23/greenspan-slams-ratings-agencies/
Greenspan predicts there’s likely to be a further sharp fall in U.S. house prices, which should dampen consumption: “As a consequence, that will affect consumer spending, because … a substantial part of consumer spending does not come directly out of income, but out of assets, finance by debt.”
…
Meanwhile, on NBC’s “Meet the Press,” Greenspan put the odds at less than half that the U.S. is headed for a recession. “We’re heading towards a slowdown. Whether that actually leads to a recession is dependent on things we can’t forecast at this moment. My own guess is the odds are less than 50-50 that we’re heading to a recession,” Greenspan told host Tim Russert
Here’s a WTF (who the f@*#), as in WTF would pay a realtor $42,000 to sell their home when said reator would take the MLS pics and not even bother moving the cleaner bottle off the pool table? Everyone needs to start demanding a 3% total commission. Even then, $21,000 is way too much to pay an agent when most people are doing their own research via the internet. When I sell again it will be with a discount service and 2% to the buyer agent. Fortunately I’m in a part of the country that is still stable and I’m actually growing equity. I can probably sell by word of mouth as I let a neighbor know I was moving soon and he brought a friend over to look.
I do plan on moving west but will rent when I do. My income is well above the median but I did the math and buying in California just doesn’t add up. I can’t believe that anything is selling in a declining market like Irvine, Sacto, Stockton, etc. Where do they find these suckers who are paying top dollar for rock bottom dwellings?
You guys are all wet; this style of architecture was way ahead of its time. In fact the designer of the roofline went on to work for Northrop on the B2.
I hope the links work!
NIce graphic from the New York Times summarizing the housing price rise and what was said when
http://www.nytimes.com/imagepages/2007/09/23/weekinreview/20070923_BAJAJ_GRAPHIC.html
Guess not:
Here: http://www.tinker-af.org/pics/bombers_b2_0004.jpg
“I guestimate this house would rent for $3000-$3200. ”
looking at current rents, I’d agree. Interesting to note though, to rent it at $3000-$3200, will require an income in the $110,000 range.
I don’t care if he/she was ahead of the times or behind the times. Designing a home so that you can crunch as many units as possible into a development doesn’t lend itself to curb appeal.
This house is hideous, zero curb appeal. I don’t want to live in a barn w/o windows.
U.S. Economy: Consumer Confidence Slumps, Home Sales Decline
http://www.bloomberg.com/apps/news?pid=20601087&sid=a80Yqs4hl.Gc&refer=home
The Conference Board’s index of consumer confidence fell more than forecast in September, to 99.8 from 105.6. The National Association of Realtors said August sales of previously owned houses dropped 4.3 percent and a separate index of home values fell the most in at least six years in July.
Like all bubbles, you’ll know this one is over when the mere mention of the word ‘real estate’ produces either instant snikers or blank stares. Even the negative news is just too boring to pay attention to.
That’s what the end of a bubble looks like and we’re nowhere close. Party on!
Lennar Reports Biggest Loss in Its 53-Year History (Update6)
http://www.bloomberg.com/apps/news?pid=20601087&sid=aAeJz9NgdaTA&refer=home
It says, once the local Crack market dries up it’s time to move on.
Humor. Photo caption contest on laland blog. Here’s my entry…
“This magnificent home, adjacent to a city green space, is far from any neighbouring homes. Customize to your own taste! Excellent future commericial potential as a drive though latte location.”
Photo Caption Contest: The 101 House
http://latimesblogs.latimes.com/laland/2007/09/photo-caption-c.html?cid=83999179#comments
A couple of gables might help?
Also, that roof will create a great deal of attic space you could build out for storage. Just a thought.
Lasner’s take on it
S&P finds worst LA/OC home-price dip since ‘94
http://lansner.freedomblogging.com/2007/09/25/sp-finds-worst-laoc-home-price-dip-since-94/
I thought the real test is when you say “I was thinking of buying a house” and everyone says “Are you crazy? That’s a terrible idea. Houses always go down” and then start in on the war stories of how much they’ve lost…
Rr maybe when most of the folks who are waiting to buy are not able to buy because the credit market is too tight and the potential buyer can not get a loan.
The buy signal for me will be when my neighbor’s wife, who became a realtor ‘on a whim,’ several months back after a grueling weekend-length course says the following statement.
“I just took a course and guess what: I”m a financial planner now ! ! ! 1”
that they’re renting it out?
it’s south-facing… maybe it was intended to shield from the sun? or for future solar panels?
aside from no street presence – really it’s no worse than anything else from the 70s-mid 80s.
No offense IR, but I visit your blog a lot just to see the great resources Sue provides. You are certainly entertaining though… I loved the “Buyers Market” bit about the personal letters! 🙂
This graphic is particularly telling and quite ironic with all the quotes. Amazing how hindsight is 20/20….
Again, love the great resource Sue. These graphs really shows you which markets are probably overvalued. Fortunately I left Irvine for one of those that doesn’t have the telltale spike.
Sorry Sue, but this doesn’t have the Real Estate (TM) flair – it needs some words in all CAPS and a lot more exclamation marks as IR frequently points out. 🙂
That was one of the first things I noticed when I started looking, long ago. Architecture seems to speak volumes about the age of a lot of neighborhoods.
OK… I just added my own bit to the fry:
“Relax in this charming one bedroom, one bath cottage. Enjoy life stress free on the slow lane. Excellent freeway access, close to beaches and mountains.
Plenty of space to add a second bedroom and move to the [car] POOL lane.”
hehehehe…..
With the price of oil lately, maybe you could get a positive cash flow by covering the roof in solar panels. It certainly couldn’t make the house any uglier.
That’s one home I would definitely kick out of bed.
With all due respect to Sue…
Very interesting article on Minyanville.com today about whether or not we are actually in a deflationary environment.
For me, the housing market is just a sideshow compared to the macroeconomic circus going on in center ring. There are a lot of differing opinions on what all these symptoms mean: eg. dollar falling, gold and oil rising, credit crunch, liquidity crisis, fed rate cuts, etc etc etc…
I don’t propose to know what the hell is going to happen but it’s pretty fascinating. These are the days of our lives…
OK I totally screwed up that link… let’s try this again:
http://www.minyanville.com/articles/C-MER-LEH-BSC-GS/index/a/14234
A perfect roof for a few solar Panels!. thats the up side.
bob
Im still trying to work out how the seller stands to lose 211k if they put no money down. To me it looks like they paid rent for two years, will walk away, and the bank loses it.
I’m a native socalian now living in the midwest and find this style fairly attractive, but then the larger homes in my childhood La Palma neighborhood were frequently like this. Personally I can’t stand the look of a split level, but I bet that would take you right back home.
It appears that the 2006 property taxes ($16k) have not been paid yet on this beast.
You are correct. The seller will just walk away.
Yeah, the possibility of deflation and recession or depression is on my mind too. I have no idea what’s going to happen, but I’ve been reading about that too to try and figure it out. Here are three interesting links (don’t usually post economic stuff here, try to keep it on housing).
Are we headed for an epic bear market?
The credit bubble is just starting to unwind, a credit-derivative insider says. And while U.S. borrowers are being blamed for the mess, they were really just pawns in a global game.
http://articles.moneycentral.msn.com/Investing/SuperModels/AreWeHeadedForAnEpicBearMarket.aspx
Greenspan quote which implies there’s not much power left for central banks (on the way up, and presumably also on the way down) “Nobody could do anything about it, neither us nor the European Central Bank. We were powerless,” he said.
http://www.msnbc.msn.com/id/20903136
Money, Gold, and the Great Depression
Remarks by Governor Ben S. Bernanke
http://www.federalreserve.gov/boarddocs/speeches/2004/200403022/default.htm
On the other hand though
Greenspan: US economy has ‘less than 50-50’ odds of recession
http://news.yahoo.com/s/afp/20070923/bs_afp/useconomybankgreenspan
How much would that house rent for? Let’s try $3,000 a month, which fro, the looks of things might be on the high side. Still, let’s be generous and say 3 grand. Well, at 155x monthly rent (a typical rational price), that works out to $465,000. And we know markets always overshoot in BOTH directions.
Conclusion: We ain’t seen nothin’ yet!
Sorry, good writing habits die hard. Spent too many years writing spec screenplays to unlearn my habits now :).
If anyone knows anyone in the market for a great screenplay, here is a link.
http://www.dun.org/brawlersinc.pdf
Logline: A happy-go-lucky recruiter and pessimistic lawyer brave misadventures in Iraq to find and recruit a Republican Guard brawler for their employer, Brawlers Inc., a US TV fighting show. But when they bring him back to the US to be defeated on TV, they find their misadventures have only just begun.
Not to be picky, but $869,000 to $699,900 is a 19%, not 20%, decline.
Overall, though, since I don’t own any OC real estate, I like the direction.
Are we about half way to a 40% drop in prices?
BTW, I would like to respond to the comment regarding moderates and a 10-15% decline (I am one of those moderates). I still believe in a moderate price decline accompanied by a long period of sideways movement, however these examples do indeed make that case a little tougher. That said this place is one example, and the question remains whether it is an outlier or the sign of things to come.
I don’t mind it…anything beats a stucco box. I used to like stucco a lot, until I moved here and saw it everywhere. It makes a bigger statement in Wisconsin, where few homes have stucco.
James, I hear you on the split levels…the interior is godawful also. Raised ranch, also popular in the Midwest, is another awful thing to look at.
Yes, if we are talking nationally, I think a 10% to 15% drop is about right. In our little corner of bubble world, the drop is going to be bigger because our rally was bigger, just as you pointed out.
CapitalismWorks,
I don’t know if you saw this post over at Calculated Risk, but when Tanta launched into a diatribe on the option arrangement between lenders and borrowers, you came to mind. She is a genius, and she explains what is going on far better than I could.
http://calculatedrisk.blogspot.com/2007/09/clockwork-mortgage.html
Real kind of geographic spread to those price trends-seems to start in the south and work its way north. Looks like it’s Seattle’s turn soon….
Agreed, raised ranches are just ugly ! They are everywhere in Connecticut.
WTF ?
No way.. they’re not making any more land in Irvine, you know?
Besides, we’re special. I think I saw a couple more lights in Shady Canyon on my drive home tonight.
I think the market has turned and it’s time to buy condos in a high rise.
If they’re smart, that’s what they’ll do.
C.A.R. Reports Sales Decrease 27.8 Percent in August, Entry-Level Median Home Price Falls 5.1 Percent
http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20070925006457&newsLang=en
Here we go! A potential knife catcher, guys… Catch it on the way down 🙁
I’ve seen comments several times that banks will take a price that costs them the 2nd mortgage, but not the 1st mortgage. Why? Why doesn’t the bank just say, ah what the hell, and take an amount for less than the amount of the first mortgage? A loss is a loss so what difference does it make? I’m just trying to understand why not agreeing to a short sale for less than the first mortgage is so important.
Thanks,
Terry
I’m not sure I see how this could be sold. At current asking price they are telling 2nd mortgage holder they’ll get nothing. I don’t think the second holder would ever approve that. It’s better for them to force foreclosure in the hopes that they get something. So what’s the point of listing it at a complete loss for the 2nd? They aren’t even offering the 2nd holder the luxury of a reacharound.
My tea leaves predict REO!
10 to 15% decline seems about right.
That doesn’t mean that we won’t see some idiots losing 30%.
I am not sure who is the bigger idiot, the bank or the buyer.
If the buyer had crap for credit and nothing else to lose with a 100% loan, he is a genius compared to the sucker lender left holding the bag.
Might as well short-sell it to his buddy and fly to Jamaica for the winter.
Has any one closed short sell deal here? what will be the acceptable price for bank in this deal?
Thank you very much!!
I grew up in this model. Back in 1971, my dad liked this tract for its heavy wood exteriors. Back then, the other tracts along Walnut looked cheaply made. From the top view, the roof has a cut-out in back. I think it was a cost saver for the builder, but in later tracts, he went ahead and put the whole roof on. When I think of all the single paned windows and sliding glass doors in our house, I am glad that I live in a more energy efficient home of the 80’s
My Mother still owns the house and rents it out. She is pretty skeptical about the prices dropping too far. They bought it in 1971 for $35,000, so any discussions are just purely for entertainment.
Thank you IrvineRenter and all of you that comment on this blog. Viewing this site is the most interesting part of my day.
I love all the talk about this house since I grew up in this model. My mom actually liked that there were no odvious windows to the street. Lots of privacy. I know this because I asked her “Why do we live in a house that you can not see the street”. The back of the house downstairs is almost all windows and sliders.
The bonus room in this house is right under that roof and over the garage. It is a step down from the rest of the second floor. My dad did build a storage area above the remaining garage area.
I guess this house did not seem so hideous in the 70’s when all my friends lived in the equivalant of it. It would not be my first choice today.