Cheap is relative. Compared to pricing at the peak, the prices of houses in Irvine right now are cheap. Of course, they will get cheaper, but today’s property caught my attention because I did not get an overwhelming feeling of revulsion at the high price. That is real progress. I am not sure what attracted me to this property. Perhaps it is like ZZ Top’s Cheap Sunglasses.
We are the Irvine Housing Blog, and I rarely profile properties outside of Irvine, but today’s property is in the Irvine school district, and although it is in Tustin, it is certainly Irvine adjacent.
Asking Price: $507,900
Income Requirement: $126,975
Downpayment Needed: $101,580
Lender Purchase Price: $503,477
Lender Purchase Date: 1/28/2008
FB Purchase Price: $598,000
FB Purchase Date: 9/2/2005
Address: 362 Flyers Lane, Tustin, CA 92782
| Beds: | 3 |
| Baths: | 4 |
| Sq. Ft.: | 1,938 |
| $/Sq. Ft.: | $262 |
| Lot Size: | – |
| Type: | Condominium |
| Style: | Contemporary |
| Year Built: | 2005 |
| Stories: | Three or More Levels |
| View(s): | City, Courtyard, Park or Green Belt, Tree Top, Trees/Woods |
| Area: | Tustin Field |
| County: | Orange |
| MLS#: | P634383 |
| Status: | Active |
| On Redfin: | 1 day |
 New Listing (24 hours)
|
|
FURTHER. .. It’s the Golden Opportunity to Steal a Home! Beautiful
Tustin Field Home is Priced to STEAL & the Seller Means Business!!!
This Home Surpasses Everything in this Price Range Offering Bedrooms w/
Private Bathrooms & Walk-In Closets in Desirable Open Floor Plan!
HIGHLY UPGRADED Just Bring Your Paint Brush & Create Your Custom
Home. The Cozy Kitchen Offers Granite Counters w/ Stainless Steel
Appliances & Opens to Generous Family Room with Large Fireplace
& Rich Hardwood Floors, Perfect for Entertaining. LIGHT &
BRIGHT throughout with Indoor Laundry, Powder Room. Enjoy Summer BBQ’s
in the Expansive Parks or Relax by the Pool. Located near major
shopping centers, parks, restaurants, theatres, and so much more ONLY
ONE at this Price – HURRY!
Do you get the Monty Hall reference? If any of you have ever watched the show, you might remember that contestants didn’t always like what they found behind the door.
This Home Surpasses Everything in this Price Range… Yes, it does. It is a real comp killer. Check out 247 Kitty Hawk and 237 Kitty Hawk. They must be hating life.
LIGHT &
BRIGHT
ONLY
ONE at this Price. No kidding. Was this written by a used car salesman?
.
.
The property is a typical foreclosure. The buyers bought in 2005 for
$580,000 putting 20% down and taking out a conventional mortgage for
$478,057. They stopped making payments and the lender bought the
property at auction for $503,477. The lender is going to lose some money, but fortunately for them, the people who lost this house also lost $119,943. That can’t be fun. Quite a high price for buying in to the fallacies of the housing bubble.
I would estimate this property would rent for $2,500 to $2,700 leaving
a value of between $400,000 and $432,000. This one will only fall
another 15% – 20% in price, IMO. That is still complete evaporation of
someone’s downpayment, but at least they won’t go underwater.
.
When you get up in the morning and the light is hurt your head
The first thing you do when you get up out of bed
Is hit that streets a-runnin and try to beat the masses
And go get yourself some cheap sunglasses
Oh yeah, oh yeah, oh yeah
Spied a little thing and I followed her all night
In a funky fine levis and her sweaters kind of tight
She had a west coast strut that was as sweet as molases
But what really knocked me out was her cheap sunglasses
Oh yeah, oh yeah, oh yeah
Cheap Sunglasses — ZZ Top
April 28 (Bloomberg) — Eli Broad, a philanthropist and co- founder of KB Home, the fifth-largest U.S. homebuilder by revenue, said he expects home prices to drop another 20 percent.
“I don’t think we’re anywhere near a bottom in housing,” Broad told Bloomberg TV at the Milken Institute Conference in Beverly Hills, California. “We’re going to have a big inventory of unsold, unoccupied homes that’s going to take three or four years to clear out.”
——————————————-
IR… You have wandered off-track a bit…
“…but today’s property is in the Irvine school district, and although it is in Tustin…”.
Yes “cheap” (or perhaps “good value”) but recall the 3-secrets-of-real-estate *location location location* and this is NOT in Irvine!
Also, we (the IHB participants) tend to overlook the downside of “condo living” (condo associations, population-density) in the cost/sq/ft equation. A condo is *not*… “almost a standalone home” but really a different animal altogether. Condo’s *should* be cheaper than homes (they are) but the cost-differential tends to be less ($/sq/ft) than the value-equation would seem to dictate.
Of course, the above paragraph is *opinion* (based on observation, but opinion nonetheless).
Hmmm… What am I doing, up at 5am?
PS>> As an aside/reply to NoWow/way… above, KB Homes is *literally* a never-ending stream of media negativity. Why? I don’t know. But this negativity attracted me to the stock KBH which carries/demands (depending on whether you are buyer/seller) an astounding 6%/month premium for its’ options.
Today KB Homes stock was *up* while the overall market was *down*. This is getting typical… Whenever KB Homes makes another self-crucifying statement, the market says “time to buy”…
KBH press-releases are near-legend as “contrarian indicators”
WOW! Only a half million and I get indoor laundry AND POWDER ROOM!
WHAT A STEAL!
Aside from the obligatory realtwhore jokes, are you serious that thing is somehow worth $400K? Seriously? Must be the pergraniteel mesmerizing you.
This is basically new construction (2005) going for $262/SF. I doubt new construction in Irvine is going to fall below $200/SF. Rents justify a $400K price.
I’d buy it at $400k to live in myself.
And yet you doubted prices could climb as high as they did . . . what makes you think you have any better guage on reality on the downstroke?
Wow!!! I never would have guessed we’d see the day when IrvineRenter was accused of being a bull!
Well done, Sensei IR. Well done.
People will really be freaking out in a couple of years when I am pointing out what good buys properties are when prices are at rental parity. By then everyone will be convinced prices will never recover and all real estate is bad.
You are a lot more optimistic than I am when it comes to people accepting that real-estate is bad.
The way I see it, the masses are just in a re-organization stage. Many are planning a buy around 2010 in speculation of another future bubble.
In 2040, there are going to be a bunch of 60 year olds who bought houses in 2010 and held onto them waiting for another house party to ignite.
This speculation won’t be as rampant as 2002 – 2006 because the credit will be harder to get. Nevertheless, my crystal ball is indicating big jump in second-home purchases near the bottom of the collapse.
You got that right!
I know I am. But I’m looking at Florida, oceanview. I plan on keeping it for 20 years minimum, so not a flipper. (As long as hurricans and rising waters don’t have other plans.)
It’s a great time to get in on the dip in prices, especially in FLA. I plan to buy with real savings and not from a refi or (god forbid) a HELOC.
I think I’ll wait for july and find some good REOs or bank owned deals that are back to 2002 prices. And if it doesn’t happen, I can walk away and wait.
I dunno about that
“Popularity is temporary. When a sector goes out of fashion, it stays out for many years.”
-Templeton
http://www.zpub.com/sf/arl/arl-temp.html
Whoa there. Just because I think it’s not worth $400k isn’t the same as me calling IR a bull. I think IR makes a solid point about the date of construction, something I had overlooked. Still, to me, that doesn’t smell like $400k.
Would I bet against IR’s intuition?
I tend to doubt it.
Would it surprise me if this property were worth $350k in 2010?
Nope.
I’m full of contradictions (amongst other things).
IR, I have a question?.
I agree with the rent you cited for this place, 2500. roughly speaking, you would be making about 160-170k to afford a 2500 rent, as you wont be getting any deductions from Uncle Sam(which would make this 2500 about 28% of your monthly take home) leaving about 7000 for cars, insurance, savings(what’s that), living expenses and any debt one may have(school debt, credit cards..etc)
Now with the oncoming freight train of a recession, with job losses, some in the higher categories (businesses, brokers, realtors, ..etc) do you really believe rent for this place would stay at 2500. in theory it would rent at 2500 but how about in reality?
If the recession is bad enough to significantly depress local rents, then this place will not be worth $400K. The recession will probably bottom this year, and rents should continue to soften until the recession is over. It will be interesting to see what drives our local economy in the coming years. Subprime is dead, so mortgage brokers will not be big earners. The housing ATM is turned off, so houses will not be big earners either.
This puppy is on its way back into the 350K, EASILY and even I would not pay that much for it. It would probably fetch 200K in AZ.
Condo prices are going to be smashed much harder than detached homes.
Plus, if you are going to use rent to justify a price – also figure that at the bottom, the cost to rent is higher than the cost to buy. We renters pay a premium for the flexibility to up and move whenever we feel like it.
If you catch this sucker at 400K, say goodbye to your down payment.
I doubt new construction in Irvine is going to fall below $200/SF
Why? What is so magical about the number 200?
I don’t care what the costs to the builder are. I care about what I can afford which is not dictated by the guy who builds the house who is only determining his “cost” based upon what he thinks the bank will loan me. If he wants to sell me a house then he will find a way to build it.
Maybe we will start viewing construction costs as the premium that the original buyers pay to live in a “brand new house”.
Similarly to how new car buyers pay the premium for the new car. Obviously houses/cars are totally different animals, but the “determination of value” is not 100% mutually exclusive between the two.
The reason we love to spend so much money on used houses is because we think that house values are commanded by God to only go up and it all starts at the original builder’s price. It never goes down from there JUST BECAUSE.
If rents drop significantly, new construction prices could drop below $200/SF, but I doubt it will get that bad. I try to be realistic about things. When I made my market predictions back in early 2007, I was being conservative (although many thought I was a crazy uber-bear.) I underestimated the ferocity of the drop. Condos could easily drop below rental parity if owner-occupants do not want to live in them. Some of the larger, newer units like this one will probably hold near rental parity. Some of the smaller, older units will probably see GRMs near 120 before they find buyers.
New? How “new” is new? It’s 2008 and this was probably constructed over three years ago, so I wouldn’t say it’s “new.”
And this is Tustin, right next to the following brilliant amenities:
Jamboree spewing diesel and car fumes 24/7.
The train tracks, with the noise and rumbling.
Not just one, but TWO beautiful flood control channels which smell like a cesspool when it warms up.
Skyrocketing HOA fees as underwater homedebtors quit paying and everyone else picks up the tab.
Yup — this is a delight for half a million.
IR,
You know I don’t comment here as much as I should, but I have to agree with your assessment.
When I started bubble blogging in ’05, there was no way to forsee the blowoff top, yet predictions thus far have been within a relative skip of reality. For both of us. Perhaps we are RE bulls who just couldn’t see where we are really headed. I like questioning my own thinking.
However, you can already see the groupthink forming on many of the housing bubble blogs around… housing is a bad investment. Unfortunately, this completely forgets what is happening in the rental market. Rental markets are always going to be a better predictor of future housing markets. Even I’d be a buyer at $450K… close to work, reasonable square footage, reasonable downpayment, taxes are a bear, but I could rent it out for $2500 – $2700 per month with no problem at all. After figuring in my monthly tax benefits, that’s worth it for a longer-term investment. When I tire of it, or an even better deal comes along, I can keep it as a rental if needed to cover costs or liquidate and put in a better investment.
The reality is in SoCal, $150K is the new $70K, and there’s a lot worse housing out there. And, I don’t see rents abating unless we get some good population outflow.
Chuck Ponzi
“Some of the smaller, older units will probably see GRMs near 120 before they find buyers.”
This is a done deal in a variety of lower-end condo developments in South OC – it is already happening. They are already at rental parity, but the problem is there are so many vacant units and units in some stage of foreclosure, I see supply driving prices down even further.
Where does this never ending supply of renters who can afford $2500+ rents come from? 25% of gross income means you need to have a household income of $120k to afford that rent. What percentage of households are earning that much?
Every DINK couple that has been out of college for more than 5 years makes that. $120K means $60K per year per person. Our office manager without a college degree makes around $45K and shares an $1800 2b/2b with a friend.
Patience,
I agree with what you are saying here….there is a good chance that the supply and demand dynamic will challenged by lots of higher end condos coming on the market, causing rent prices to fall dramatically.
Gee, if you made 120K per year – wouldn’t this be your dream house I mean dream condo I mean dream apartment?
Really makes you want to get out there and work hard doesn’t it!
These guys talking about a 400K bargain inhaled a little too much of the Kool Aid stench that their friends were all drinking in front of them.
I had the same thought.
Every DINK couple makes 120K, huh? Why don’t you look up the average income for families in the US.
ONLY THE TOP 10% OF ALL FAMILIES IN THE US MAKE 120K YOU IDIOT!!!!!
The median Orange County family brings in 75K a year. That is the whole county! I have a hard time believing that all of the 10% of our countries population who make 120K live in Irvine.
I know that the 5 south and the 405 south coming IN to Irvine are alot busier in the morning than the North bound lanes. Seems to me that people come work in Irvine, but live elswehere. All those high paying Irvine jobs don’t all live in Irvine.
Remember that wages have been stagnant for the past 5 years also. My wife and I are mid twenties. We make 90K combined. We feel like we are getting paid big time. But then we lose it to taxes and gas prices out here.
Wake up and realize that rents are high as well as housing prices. Both are coming down.
NewTo,
Actually rkp said “Every DINK couple that has been out of college for more than 5 years makes that ($120K)”.
The key is ‘out of college for 5+ years’.
My company hired a bunch of new college graduates in the last year. We pay them $55K-$65K/year.
I don’t agree with rkp but he probably isn’t too far off. Something like 1/3 of the population have a bachelor’s degree or higher. If people shacked up randomly you end up with ~10% of couples were both parties are educated (in actuality the percentage is almost certainly higher). I’m certain that the average DINK makes considerably more that the median family income.
Thanks for the name calling. I should have been more clear: every DINK couple *that I personally know*. I realize that its a very small population but I want to share my viewpoint. It is easy to think that the sky is falling and that no one can afford any properties profiled without doing something insane.
We are talking about $120K. Not some high end exec’s salary but something a dual income couple should be able to bring home. I am not saying this is something 1 person can easily bring home but saying that 2 young people with college degrees should be able to.
Its not easy finding salaries of graduating classes outside of MBAs and Law students. I did find one quickly from Cal Poly.
Cal Poly 2005 undergrad class: $45K
http://www.calpoly.edu/simplythebest/simplythebest.html
I will look for more but Cal Poly is a good example as it isnt the best nor the worst in CA. I would think that increasing their pay from $45K to $60K in 5 years is very easy. My wife is in the HR industry and her data shows that the first big pay jump is after 3-4 years when the candidates have some real experience under their belts and can get better jobs.
In any case, whether you like this condo or not, it is very affordable for a dual income couple at $400K.
patience, see my post above, actually, 2500 means you make more than 120k if you want to live comfortably. at that price range it becomes harder to find people making that much money. I think in general somewhere around 15% of earners make that kind of money IIRC.
Chuck Ponzi–>The reality is in SoCal, $150K is the new $70K, and there’s a lot worse housing out there.
I would argue the new reality once recession over is the new 150k will be 70k (with job losses) 🙂 standard of living will come down significantly. alot of people are concerned about their jobs right now…JMO
I, unfortunately, have to admit that I run in a small enough circle that I have become somewhat detached from the “median” that is so often quoted here. Noone I know that owns a home makes less than 120K, so I’ll have to admit I must be sheltered (which I didn’t up until now see).
I would love it if rents decrease. Makes it better for me, I can trade up. I have to be pessimistic about that, though. I can see them stay flat, but down? Maybe. We’ll see.
Chuck Ponzi
it is very affordable for a dual income couple
Precisely the problem! Thank you, rkp.
I think having both people working is going to become a standard practice. I dont see that as a problem. It is what it is. My older co-worker was saying that it was rare for him to see 50 hour weeks 15 years ago. Today, 50 is the minimum. Good or bad, its just what it is.
Again and again on this blog I see even the likes of IR throw out rental amounts of $2500 or higher as if we are talking peanuts. And again I tell you that paying a 3K a month rent is burdensome even at my income bracket. And so I know the reality: these rents are untenable and will not be supported in this recession.
There can be no denying what is unfolding: after years of spending beyond our means, we foolishly engage in overseas occupations at a cost of 14 billion per month, (over 5 years!) virtually all of it borrowed. Such massive spending beyond our means is directly tied to the debasement of our currency. So you have debt piled onto debt, both for our consumers and for our government. But such Ponzi schemes must end at some point whereupon there can be only one outcome: a sharp reduction in living standards such that both Uncle Sam and its consumers live within their means. This entails a deflationary spiral in housing that is devastating our economy. Oh, but no worries, this s**tbox will fetch $2500 like it was running water. No worries at all, ha ha.
Slaves to their houses. Sad. I can only hope that not everyone else worships the same values.
When 1,000 sq ft apts at The Village near Irvine Spectrum are renting for $2,000, yes, it’s very unlikely this 1,938 sq ft townhome will drop to $400k…
You are assuming that rent costs are fixed.
In reality, your rent costs are a joke and artificially inflated just like the costs of your houses (only to a lesser magnitude).
Look for substantial rent decreases in the future.
You’re a joke, you think we live in Phoenix, we dont.
AZ – your comment is only meanginful if you had rent data from the 90s to show that we have a rent bubble.
I have many friends that rented in Irvine back in the 90s and I don’t see a bubble. For example, my cousins rented a small non-upgraded 2b/2b without washer and driver in an IAC for $1200-1300 a month. That kind of property rents for $1600-1700 a month now. That doesn’t seem like a huge price increase in 12+ years.
I do think rent will fall but not to the point that a 2000 sq townhouse as the one profiled above will rent below $2000 per month. It most likely will drop to $2200 a month at the very bottom of the rents and thats not a huge loss if someone bought at $400K and plans on living there.
Actually, IAC started decreasing rents this year. They do it as ‘specials’ but I saw about 10% decreases as I was helping a friend get an apartment recently.
rkp –
How can you say that there was no rent bubble all this time when house prices ballooned?
Do you actually believe that rent prices are static and that a bubble in house prices does not have consequences on the rental market?
Your skyrocketing house prices caused an increased demand for rental units which translated into higher rent prices.
Common sense.
We don’t need to play games with smoke and mirrors statistics.
You are wrong AZ. There has been no rent bubble in Irvine…
I rented two different apartments from IAC in ’99 and 2000 and market rent for the very same units I lived in back then are now both up by a smidge more than the cumulative rate of inflation over that period.
Rents here have increased, but much more so as a result of inflation vs. skyrocketing housing prices. With regards to our fine city, this fact is indisputable. Rents may go down as a result of significant job loss, but that wasn’t the case during the Tech recession…
Sorry, Arizona. Totally no rent bubble in Irvine. In 2002, we signed a lease on a 1200 sq ft place for $2500/month.
In 2007, we signed a lease on a different, newer 1200 sq ft place (a block away from the old one) for $2700/month.
Renting wasn’t popular during 2000-2007. Everybody was buying houses.
Renting is getting popular now, though. The past 3 months have changed. Suddenly, even families with a couple of kids are moving into these 1200 sq ft townhouses. Perfect size for a couple, but pretty tight for a family.
AZ – thats actually totally wrong. Starting in 2002, a lot of apt complexes were sitting empty as would be renters suddenly became owners. If anything, 2002-2005 saw great bargains in the rental community. Hence, we never really had a rental bubble. Rental prices started picking up in 2006 when the floppers were coming back to rent but that increase in price was short lived. Rents are falling down again but not by much as they never really jumped up in the first place.
My wife and I picked up a 1000 sq ft 1 bedroom upgraded apt with WD in Mission Viejo for $1290 a month in 2004. That might seem expensive to you but it definitely was a deal. We were watching rental communities starting in 2003 and saw the drops and bargain offers. In 2007, after living there for 3 years with no real rent increases ($5 one time and $10 another time), the community asked to raise our rent to $1700. Of course we flew out of there but in their eyes, they were finally asking for market rent. A few months ago, we met some people who just moved into that community and they got that place for $1650.
Another example. My father-in-law owns a second house that he rents out in the hills above Irvine. In the late 90’s, he was getting $2200 and in 2001, he was able to find a renter for $2800. That was lucky and lasted for a few years. This year, he had to to find new renters and no one bit at $2800 but he had many calls at $2500 which is what the current tenants are paying. Can this fall back to $2200? Sure but not likely.
rkp, thank you for being the sane person in this comment board.
I have to agree that this price is not going to make the neighbors happy, but a buyer will be delighted.
Interesting to note that on the East Coast this type of unit is known as a townhome. Condo is a term used exclusivly for multi family dwellings.
HOA’s are not all bad. They keep the standards high and the riff raff from getting out of control.
In many towns in Bergen County NJ, townhouses actually sell at higher price per sf than SFH mainly because of the tightly controlled building permits on townhouse.
This home was bought with 100% and the 2nd was then refinanced to $216K, so the former owners walked away with some money.
What is up with that kitchen – it looks like it is a closet converted to a kitchen….
Personally if I have to pay even 400,000 to buy this then I will be out of here – this is a big country and Irvine (or Tustin, or LA or San Diego) for that matter aren’t worth that much money to get so little.
Adios moving. Enjoy the dirt and tumbleweeds of AZ…
$400K is probably as low as this place will ever get, maybe a smidge lower into the high $300s… $375K is what I see places like it bottoming at in general.
Wow, IPop is calling a lower bottom than IrvineRenter. Things really are getting weird around here.
I think it is interesting how close the estimates of pricing at the bottom are among the commenters on this blog. The general public is still pretty clueless, but given the knowledge and experience of many of the posters here, I find it comforting that we are of a similar mind.
Well, if Credit Suisse’s chart is still correct, the banks have probably written off most, if not all, of the subprime loans. However, there are still Alt-As to deal with.
I also heard that banks are now requiring more than 20% down payment (somewhere between 25-40%) in order to qualify for a loan. If the banks have overwritten the write-offs and are now starting to write up *conservative* loans, we may see positive earnings from that sector.
By then, the RE market should be at the bottom.
JMS (just my speculation).
“I find it comforting that we are of a similar mind. ”
That sounds dangerously close to describing groupthink . . .
Enjoy the dirt and tumbleweeds of AZ
Why would you go to AZ for that when there is plenty to enjoy in CA as well?
Unfortunatey they don’t build big cities in CA in the middle of the desert. Gotta go to AZ, or maybe Vegas, for that…
Interestingly, those two metro areas are getting smacked down worse than LA/OC in terms of home price declines. Maybe there is a lesson there?
This townhome is now in escrow after 2 days on the market, so it probably didn’t sell for too far off the asking price.
Tip your hat to buyer for sacrificing their hard-earned bubbly down-payment for the greater good of society.
I’ll chime in and agree with ipop that this could get below $400k. Despite the newness of construction that IR points out, the overall densities in that section of Tustin Field lead to a very congested feel with bad parking availability.
SCHB
Case Shiller LA Index:
Date/Index/MoM Change
01-07 268.68 -0.50%
02-07 266.63 -0.76%
03-07 264.58 -0.77%
04-07 263.36 -0.46%
05-07 263.19 -0.06%
06-07 262.12 -0.41%
07-07 260.84 -0.49%
08-07 258.07 -1.06%
09-07 254.79 -1.27%
10-07 249.50 -2.08%
11-07 240.43 -3.64%
12-07 233.03 -3.08%
01-08 224.41 -3.70%
02-08 214.83 -4.27%
Worst month over month decline yet with the latest February results.
Feels like a rollercoaster picking up speed on the downhill…
03-08 264.58 -3.97%
04-08 263.36 -3.36%
05-08 263.19 -3.06%
06-08 262.12 -2.81%
07-08 260.84 -2.49%
08-08 258.07 -1.96%
09-08 254.79 -2.27%
10-08 249.50 -2.08%
11-08 240.43 -2.64%
12-08 233.03 -1.88%
01-09 224.41 -1.70%
02-09 214.83 -1.27%
03-08 264.58 -1.07%
04-08 263.36 -0.96%
05-08 263.19 -1.06%
06-08 262.12 -1.01%
07-08 260.84 -0.79%
08-08 258.07 -0.56%
09-08 254.79 -0.27%
10-08 249.50 +0.08%
11-08 240.43 -0.64%
12-08 233.03 -0.08%
——————–
-30.02%
<title>preduction<</title> 03-08 264.58 -3.97% 04-08 263.36 -3.36% 05-08 263.19 -3.06% 06-08 262.12 -2.81% 07-08 260.84 -2.49% 08-08 258.07 -1.96% 09-08 254.79 -2.27% 10-08 249.50 -2.08% 11-08 240.43 -2.64% 12-08 233.03 -1.88% 01-09 224.41 -1.70% 02-09 214.83 -1.27% 03-09 264.58 -1.07% 04-09 263.36 -0.96% 05-09 263.19 -1.06% 06-09 262.12 -1.01% 07-09 260.84 -0.79% 08-09 258.07 -0.56% 09-09 254.79 -0.27% 10-09 249.50 +0.08% 11-09 240.43 -0.64% 12-09 233.03 -0.08% --------------------
-30.02%
SCHB is right on about the bad parking availability. We have friends who live just one building away from this one, and whenever we go over to visit, finding a parking spot is next to impossible.
A lovely home like this when all is said and done will fetch $380k-400k.
Works out to another 25% discount. I buy!!
Say at $400k. You put 20% down, get a 6.5% 30 yr fixed. The mortgage = $2,022 Plus HOA = $225 and Plus Tax = $417 …this will work out to a $2,664 monthly cost. Probably add another $200-300 for upkeep and insurance cost.
Just under $3,000 for a home like this. **probably a little less w/the tax credit**
A little less? The prop tax and the interest deduction basically cancel each other out for most folks. Also, as per wamu.com, a $320K loan and 20% down gives you a monthly payment of $1893 (5.99% with 0 points).
That puts this around $2125 a month before upkeep and insurance. This place is new and because its a condo, some of the insurance is taken care of by the HOA. I think even $200 is high but lets go with that. That puts the total per month at under $2400. If I bought this today and rents fell even to $2200, I wouldnt be bothered at all.
…and the Nasdaq is going to soar above 5000 real soon now.
Most of the commenter’s here did not live thru the last downturn…
Calling the bottom on condo’s based on some proposed floor number (i.e. $200/sq foot) may work in cities like Manhattan where there is high density and everyone lives in apartments but not in So Cal, where detached homes rule.
Condo prices got hammered in the last downturn, they will get hammered again. Just like saying there is no way Bear-Stearns stock will fall below $25/share. The impossible will happen.
Don’t kid yourselves.
What I don’t like about the arguments based on ratios of dollars per square foot is that they tend to generalize all houses as being the same without taking anying else into consideration like location, granite counter tops, gourmet kitchens, breakfast nooks, chrome garage door handles, pools that resemble Jesus, etc.
You cannot figure out what the cost/sqfoot is until the house has been sold. When a potential buyer walks into the house; they don’t say “I love the price per square foot – I’ll take it!”. No, they say “I have always wanted a pool that resembles Jesus! I’ll take it!”
Here is the real comp killer for condos, look at this SFR in Costa Mesa, seen of Flip this house, currently followed in forum thread. SFR offered at $635k by bank. What happens to condo’s when these go down to $450-$550. A 20% drop in SFRs puts this place down to $505 and another 20% is conservative estimate according to most experts. If you could live in a condo in Irvine or a detached SFR w upgrades in CM for nearly the same price, people will move to CM.
http://www.redfin.com/stingray/do/printable-listing?listing-id=1431511
It’s still a condo, not a SFR.
I don’t see it as a comp killer Alan. The Costa Mesa house is much older than the one profiled here and if both drop by 20%, the Costa Mesa house would be $100K more. What do you get for that $100K? You get a house vs. a townhouse but you get much worse schools, lot more traffic if your job is in Irvine, and an old house that can possibly need major repairs soon.
I love old SFRs (my parents own a house built in 1933 near Santa Monica) but my wife hates them and I know many people who would never look at the Costa Mesa house simply because of schools and age.
I would think that most folks would much prefer an SFR over a condo and would be willing to pay a premium for it. Personally I have little interest in owning my apartment.
I watched the episode of Property ladder in which this house was the subject. It was pretty nice when done.
Personally I would be willing to pay more or accept less square footage for an SFR over an Apt, oops I mean condo. I just have a really hard time imagining dealing with all the hassles\responsibilities and expense for anything other than an SFR.
JJ – I agree with you. But in this example, the age of the house and the location and schools make it a deal killer for couples like me.
I gotta back the bulls on this one — that Costa Mesa place is smack dab to gangs, roaches, and graffiti. And the schools are ghastly, big surprise. I would take the Tustin condo over that POS.
Back the bulls? I am by no means a bull. Still believe we have a ways to go and am patiently renting.
I agree AZ, I bought a house 6 years ago when I was 19, I didn’t know anything about housing economics, cycles, rental parity….etc. I had saved up some money and found a house that I liked and it was affordable and only a couple hundred more a month then my apt. When I was house shopping, it was simple, what can I afford and what do I like. I sold and rent again, but when houses get affordable, I will buy what I like and what I can afford, not when it meets rental parity.
Yup. Sounds like we are in the same boat.
I bought in early 2003 right as things were taking off (knowing nothing about housing bubbles etc).
Discovered what was going on in 2005. Sold the house and went back to renting. Best financial decision I ever made!
I’ll buy again when the prices come back to reality.
As you can see from some of the comments on here – we still have quite a way to go.
The Costa Mesa flip program was re-run on TV recently.
The floppers lost $130K including the remodel, carrying costs and the sales costs.
Presumably you are talking about Parkhill. Whoever bought that place from the floppers (an investor?) tried to flip it again at 675k, and now they are asking $635k, which I think was the previous purchase price.
RealtyTrac.com shows either they or one of their next door neighbors is in default for a 500k loan.
I must confess I love watching these speculators suffer. It’s kind of like watching gladiators cut themselves to bits. Good times.
“Where did all the Real Estate Agents Go!”
(taken from a recent News Wire Release)
With all the news of the Sub Prime Mess, Credit Crunch, Layoffs, a couple thousand here, more and more there, the Fed this, Dow Jones that, no one talks about a couple of Real Estate Agents who left this office, a couple more left that office. Why? Because it happens just like that, a couple here, a couple there. No big news. . . . a recent survey stated 60% of all R. E. Agents are gone. Only 5% are making any money. 35% are struggling and probably gone by the time this hits the news stands. If you add all them up, it makes GM, Citi and other layoffs look small. So . . . Where did all the Real Estate Agents Go! . . . they don’t get unemployment, they don’t get Welfare or Food Stamps. . . . So in order to survive Real Estate Agents have gone Global. They survive and they trive! They make it! They go Global. . . .
Check out . . . http://www.AgentsGoneGlobal.com and see for yourself Where the Real Estate Agents have Gone! . . .
(partial of a recent News Wire Release)
http://www.AgentsGoneGlobal.com
I think what we all tend to miss in discussing bottoming prices is where the economy in general could be headed. It’s entirely possible that there are some serious employment changes coming for the OC. That’s going to increase the affect of the housing market which is already plummeting.
Right now sharing a $2200 per month rent seems reasonable and rational. But you have to have the jobs to support that. I wonder if they will be there in 2010?
I don’t know so I’m not calling it either way. But overall, I’m a pessimist. I think we could be headed for some major changes the likes of which we’re only now seeing the very beginnings of.
California is an expensive place to do business these days with all the local residents running around snapping up 500K condos.
What is to happen when industry decides to go ahead and move to a different state where equally qualified people can do the same job for less?
:question: I live in Costa Mesa and work in Irvine near the Airport, financial, and banking centers. We’ve seen a slow down effect in recent months. A lot of the investment banks and financial centers off McArthur have laid off thousands since last year and I believe more is coming with the credit crunch not yet in full swing. We are seeing food, gas, rent, inflation not seen since the 70’s doesn’t look good. I’m looking to buy near the bottom as well and renting in CM for about $1650 for a 1 bedroom steep to me. Bottom line to all the bubble bloggers out there is it won’t matter how low price per sq. ft gets if we have a severe recession and hyperinflation we’ll all be screwed.
CALIFORNIA STATE BUDGET DEFICIT REACHES 20 BILLION DOLLARS
Talk about layoffs. I wonder how many people employed by the state are about to lose their jobs in the next six months.
What about all of the tax increases that are about to HAVE to be implemented. I would go out on a limb and say that people are about to demand cheaper homes due to increasing taxes, or there is going to be a mass exodus out of California and into more affordable states. (Texas, Georgia, Tennesee, New Mexico, North and South Carolina)
WOW….20 billion dollar deficit. Amazing. Who exactly have we been voting into state office?
http://origin.mercurynews.com/breakingnews/ci_9087545?nclick_check=1
Wow, they already took this off the market, I guess they are monitoring this site. We should all say hello to all the realtors checking on this site.
I saw that too.
I am amazed at the quality of rendered video amateurs can create. I usually don’t click on the videos, but that one captured the ZZ Top attitude. If the movement was more natural you would think it had real people modified in post production. Instead some nerd is designing his own hot chicks and making them move.
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Alex, are you a time traveler from 2005?
Yes, it seems that we are halfway to the bottom. Hump day? Well, then, this place has another $100,000 to drop. But it stills seems like too much to pay for a condo in Tustin. Send the brat to boarding school instead of paying extra taxes to keep those Irvine brats at home.
This is the RichDad way?
LIGHT & BRIGHT
As in Aqua Teen Hunger Force‘s guerilla marketing in Boston?
ONLY ONE at this Price. No kidding. Was this written by a used car salesman?
No, it was written by Master Shake himself.