Two as One — First to Last
When your playing blackjack and the dealer has given you great cards, you have the option of taking one more card and doubling your initial bet. When the odds are in your favor, it is a smart play. Since the real estate market was a “sure thing,” and prices always go up, it makes sense that people would have doubled down in the real estate market. The more property you owned, the more money you made. Well, at least that was the idea after a few kool aids. If you made the mistake of drinking the kool aid in the summer of 2006 and buying two low-end properties right at the peak, your double-down bet was a short cut from first to last.
Asking Price: $359,000
Income Requirement: $89,750
Downpayment Needed: $71,800
Monthly Equity Burn: $2,991
Purchase Price: $500,000
Purchase Date: 8/30/2006
Address: 15 Bellevue #1, Irvine, CA 92602
| Beds: | 2 |
| Baths: | 2 |
| Sq. Ft.: | 1,280 |
| $/Sq. Ft.: | $280 |
| Lot Size: | – |
| Property Type: | Condominium |
| Style: | Other |
| Year Built: | 2001 |
| Stories: | 2 Levels |
| Area: | West Irvine |
| County: | Orange |
| MLS#: | S529184 |
| Source: | SoCalMLS |
| Status: | Backup Offers Accepted |
| On Redfin: | 27 days |
Great corner lot location, quite interior with view balcony. Locate ina gated community, direct access 2 car-attached garages. No one above
or below, plush carpet with custom paint, narrow tree line corridor
leads to the front door, a gem not to be missed. Kitchen is centrally
located with walk in pantry. New custom paint and new barber carpet.
It it just the photograph, or does the color of the “new barber carpet” clash with the “custom paint?”
Is that a St. Joseph Statue in the corner?
.
.
Property number 1 was purchased one day before property number 2. Do you suspect this was done so neither lender would know the other just loaned this guy a great deal of money? Do you think the second lender would have extended the loan knowing they guy had just taken on another huge mortgage? I suppose those questions are rhetorical because we all know the answer.
This first property was purchased with a $400,000 first and a $50,000 second, so he did put $50,000 into this first transaction. A year later, he took out a third mortgage with a private party for an additional $25,000, most likely to cover his debt service. The private-party lender has an Asian name. Lets hope he isn’t a member of the Boryokudan (Yakuza). They have interesting methods of collection.
If the seller gets his asking price, the total loss on the property after a 6% commission will be $162,540. The seller is out his remaining $25,000, the lender is out $112,540, and our Mafioso is out $25,000 — for now.
Asking Price: $359,000
Income Requirement: $89,750
Downpayment Needed: $71,800
Monthly Equity Burn: $2,991
Purchase Price: $585,000
Purchase Date: 8/31/2006
Address: 22 Daffodil, Irvine, CA 92618
| Beds: | 2 |
| Baths: | 2 |
| Sq. Ft.: | 1,344 |
| $/Sq. Ft.: | $267 |
| Lot Size: | – |
| Property Type: | Condominium |
| Style: | Mediterranean |
| Year Built: | 2001 |
| Stories: | 2 Levels |
| View: | Pool, Has View |
| Area: | Oak Creek |
| County: | Orange |
| MLS#: | S529178 |
| Source: | SoCalMLS |
| Status: | Backup Offers Accepted |
| On Redfin: | 27 days |
Beautiful home in Oak Creek. Home is situated in the desirable Montillatract. Enjoy the convinience of a carriage unit. Great model boasts no
one above or no one below. 2 large terraces are perfect for relaxing.
The open floor plan is very light & bright. Cozy fireplace in the
living room.
light & bright
convinience? Is that like connivance?
.
.
This seller must have felt $359,000 was a lucky number to price both properties that way. Everyone take notice of the purchase date being one day after the first property. Also, what do you think of the 39% drop in two years?
This property was purchased with a $468,000 first mortgage and a $58,500 second mortgage with $58,500 down. In February of 2007, he opened a HELOC for $108,500 and likely pulled out the $58,500 he put into this property and the $50,000 he put into property number 1. I imagine the $25,000 he borrowed from the mobster (I don’t know if he is a mobster, just go with it) was used to cover his debt service. So basically, he has taken all of his money out of these transactions, and he is letting the lenders hold the bag.
If the seller gets his asking price on this unit and pays a 6% commission, the total loss on the property will be $247,540; however, his total debt exceeded the purchase price by $50,000, so the lender is going to lose $297,540 on this one.
There you have it. Two properties, $410,080 in combined losses all absorbed by lenders. NBGI, Inc. Washington Mutual, Countrywide and our Mafioso all get to lick their wounds. Unless the private lender really is a Mafioso, then out boy has some explaining to do…
.
two as one, a slight addiction
are we stuck, in the routine of this
but still more nights they come and go
the world keeps spinning all i know, i know
its just you and me, two as one
for all the nights we missed
f**k if i wasn’t such a pessimist
this chapter could’ve played out differently
for all the nights we missed
f**k if i wasn’t such a pessimist
this chapter could’ve played out differently
this chapter could’ve played out differently
dig behind, the bones to get down to the core
and how do i get into such a tight locked door
how many times can i take that look
the best outcome that’s from the worst, the worst
of you and me
for all the nights we missed
f**k if i wasn’t such a pessimist
this chapter could’ve played out differently
for all the nights we missed
f**k if i wasn’t such a pessimist
this chapter could’ve played out differently
this chapter could’ve played out differently
two as one
a slight addiction
two as one
a slight addiction
for all the nights we missed
f**k if i wasn’t such a pessimist
this chapter could’ve played out differently
for all the nights we missed
f**k if i wasn’t such a pessimist
this chapter could’ve played out differently
Two as One — First to Last
What about non-astute observations?
Was at a hearing yesterday asking for an extension on a foreclosure (granted). Plaintiff’s atty didn’t show up. Waited a long time & talked to an atty who said he represented
developers.
He said he thought the Miami and Ft L towers would eventurally go for 10 cents on the dollar. Said the banks had stopped funding some.
Said he didn’t know where to park his money.
Then I went down to the law library to research stuff on a really interesting foreclosure, with lots of fraud & forgeries, and allegations the notary wasn’t there etc.
I think comparing 2 houses to a split in BJ would be more appropriate. People thought they had 2 Aces showing & spilt each, when it turns out they were holding 2 8s instead against a dealer BJ.
I wonder how much organized crime has been playing out in the real estate market here. I had read stories in the past about a group of russian mob members and some mobs from the middle east involved in fraud and theft in the real estate market.
There are still plenty of new “forclosures can make you rich!” campaigns on television, if you just flip through the channels.
How much rent can these two 2/2 get? $2000? If so, the asking price of $359k is not too unreasonable.
$2100-2200 probably. 2/2 1300sf units in my neighborhoood have rented as high at $2500, as low as $2100. Those are detached though.
Its going to be more like $1800-$1900. At least that would have been the case 6 months ago when I was in the rental market. For $2200 I got a 2br/2ba recently built in Quail Hill, 2 car garage, stainless steel appl, granite counters, 1700 sq ft, etc.
I was talking about 22 Daffodil a while back and here you are talking about it now, IR. $359k is the asking price but I think it’ll go higher. I asked my agent to bid it at $300k but she told me that there are 30 bid for this property (not sure if that is true or not…we’ll see).
It’ll rent out easily at $2k/mo since IAC is renting out 2b/2b apt nearby with special for, I believe (quote me if I’m wrong), $1900/mo. If you put all cash on this property, the $24k yearly rental income minus HOA and prop tax (around $7.5k) will net you around 5.5% return on $300k. That’s a pretty impressive return with upside potential come after 2012.
It probably doesn’t make a lot of sense for folks who reads this blog but Oak Creek is probably one of the most desirable location in Irvine (well, at least my wife and I liked it when we were there).
I’ll add these two properties to my escrow tracking and we’ll see where they close at. Looks like they got into escrow very shortly after list… Surprising with a short.
Thanks Ipop. Please keep us posted as I’d like to see the final agreed price on this so that I can gauge on the comp status of Oak Creek condos.
Of course, this may change come summer this year when all the final subprime resets are happening….we’ll see 🙂
The Redfin details page shows a “Pending Price” of $380k for 15 Bellevue and $366k for 22 Daffodil. Is this a new field for Redfin? I don’t remember seeing it previously. I assume that it refers to the price that has been accepted by the seller – yes? Or does it have a different meaning?
Daffodil closed on 7/1 for $366K. MLS just got updated for it…
I agree about Oak Creek. It is darn convenient and centrally located. Lots o’ parks and a great community feel. Kind of like Stepford~No, seriously we lived there when we first moved to OC and found ourselves going back again and again because of all the great things around there.
“It’ll rent out easily at $2k/mo since IAC is renting out 2b/2b apt nearby with special for, I believe (quote me if I’m wrong), $1900/mo.”
Agreed. Keep in mind, the IAC specials involve incentives that expire (first and/or last months’ rent free, 10% off market rate, etc.). i.e. The $1,900 rental rate should be treated just like a teaser rate on an ARM. The rental rate will jump significantly after the first year and continue to increase annually.
I have been reading the stories posted on this blog for several months now and I continue to be amazed.
In 2002 I sold my house in Sarasota, FL for $206K. The Sarasota house was a 3/2 w/2 car attached and caged pool. Bought my current residence in Jackson, TN for $192K. TN house is 4/2.5 w/3 car attached and 1 acre of land. 3000 SF, so I bought at $64/SF.
In the last six years that has gone up to maybe $75/SF. Maybe not because the market is slow right now. So I look at pricing like $300/SF and am just astounded.
Oh yeah, TN has no income tax, either.
It’s the Irvine Housing Blog. It’s about Irvine, California, where people who don’t want to live in Tennessee live.
Sorry, but I just have to say, your sentence is EXACTLY the attitude that makes people think 300 dollars a square foot is perfectly reasonable. It isn’t – no way, no how, not now, not before, not later, not ever. Sorry, but it’s true and the sooner you (and EVERYONE in Irvine) starts living with that mantra, the sooner prices will return to reasonable levels because no buyers means NO SALES UNTIL PRICES ARE REASONABLE FOR A PLACE TO LIVE. A house, in Irvine or anywhere, is JUST A PLACE TO PARK YOURSELF NOTHING MORE OR LESS THAN THAT. It is emotional attachments to places and things that cause this type of thinking, this irrational NEED to live here and only here as nowhere else could possibly be as good. I’ve been to Tennessee, I think it’s pretty there and the people seem warm and welcoming. Probably a good place to live (I just don’t choose it myself).
(Yes, I live in Irvine – no I’m not a bitter, angry renter – I’m just smart enough to recognize that four square walls and a roof aren’t worth 300 a square foot.)
The emotional attachment is why people are willing to pay a premium.
Some people like to live in a city, so they are willing to pay a premium to have an apartment in Manhattan.
Some people like the beach, so they are willing to pay a premium to live within walking distance of the beach.
Some people like warm, dry weather, so they are willing to pay a premium to live in Irvine over Tennessee.
you’ve never been to tennessee.
it’s actually cool most of the time, but very humid.
very green & great trees & lots of lakes.
Some people are also willing to pay a premium to make themselves believe the grass is greener in Irvine.
I was in Tennessee last year around the 4th of July, and while it wasn’t horrible, I think you’d have to pay me to live there. Which is in effect what is happening with the RE prices in TN. I would also not live in a place like Irvine, but only because I’m too frugal to pay those prices for housing.
Hey, caveat, watch what you’re saying, this is IRVINE, a very very special place where minimum wage is $100 per hour 😆
I too think that Irvine/OC is always overvalued, even in best of times… BUT there’s a reason they say “Location, location, location”.
I’m just smart enough to recognize that four square walls and a roof aren’t worth 300 a square foot.
So anyone who doesn’t eat off the value menu at McDonald’s is an idiot? After all, a hamburger is just two buns and a patty of meat, right? And anyone who doesn’t drive a Yaris is an idiot, after all it’s just four tires and an engine.
Take it easy Caveat. If you’re so emotional about Irvine with its current state, I think you may end up in the hospital with a heart attack if you’re in Silicon Valley like myself currently.
Want outrageous RE price? Come here and laugh yourself off.
Parts of rural Tennessee are stunning, and Nashville and Memphis are both great “small” cities. Plus, I loves me some BBQ. I’d live in Tennessee if my job could take me there. Chris, enjoy your acre for $75/SF. Sounds like you got it made.
Chattanooga’s gorgeous too, if you like small cities with rivers and mountains. Too bad it has a mini-bubble (way way too many recent building mcmansion projects). Still totally within reason if you’re used to East Coast overpaying.
agreed, chattanooga actually is a nice place.
My folks lived in Teleco, right outside of Knoxville, and had a nice view of the Little TN River. It is the best place I’ve ever water-skiid: smooth, glassy river with 80F water temperature. Very green country, but they had to run the AC all summer long – too humid.
When was the last time that Neville Mariner and The Academy of St. Martin on the Field visited Nashville?
How about Christoph von Dohnányi with the Philharmonia?
Do you have an L&L;Hawaiian BBQ in Tennessee?
Nashville is known as Music City. Really, it is world famous and quite civilized. But Chattanooga has a smog problems.
Tonye’s point is very valid. I have been to TN a lot and agree that it has wonderful things to offer but you just can’t compare pricing in another market.
Tonye is right. We are all hopeless provincials here in Irvine. Let’s all move to Manhattan or Paris.
As much as you will find hicks in Manhattan, Paris and Irvine as well as Tennessee…
The fact is that the number of people in LA/OC is way over the critical mass to present a viable market for world class orchestras.
So while the vast majoriy of hicks in OC will never subscribe to the OC Philharmonic, there are enough of us around to make it commercially viable for world class orchestras to travel to LA/OC and put two performances.
They may do this in NYC, perhaps Chicago, for sure Tokyo, Paris…. but unfortunately they can’s afford to go to SF, Dallas, etc… I think I have ddescribed this earlier.
Indeed, all of the places where such orchestras will play are very expensive places to live because a lot of people live there.
There is no OC Philharmonic — there is the Pacific Symphony (check their MySpace page), but all the best music on tour is in LA. Nobody bothers with OC, it is a redneck republican disneyland all the way. You might get a libertarian John Bircher rant or Ayn Rand Objectivist lecturer. Culture for most in OC consists of DVD rentals. You are living in a dream.
I agree with you LC.
It’s funny when people say there is culture in OC.
There is NO culture in OC. Sorry folks. Coach House for Jazz and Pac Symphony for classical are for old people.
The only relevant place musically is Detroit Bar in Costa Mesa, and even then, it’s full of douchebags that don’t even know the acts that are brought in. OC has its pluses, culture isn’t one of them.
There’s country music and then there’s listening to Beethoven’s Fifth by the Philharmonia from our mid hall seats in the new Segestrom Hall in Costa Mesa.
I lived in Manhattan and had all of its cultural attractions within easy reach. Unfortunately, the most affordable option was cable TV.
Then I moved to NC, although I am currently living in tidewater VA. Cable TV here is just as crappy as it was in the North. However, the opera is incredibly affordable. The other great red state amenity is that I can drive to the performance on uncongested roads and park there for free.
I still keep my apartment in Rockaway, Queens. Today’s NY Times has laid off Wall Streeters lamenting how they won’t be able to afford their summer rentals in the Hamptons. Too bad they never noticed that it’s the same ocean at the end of the A train as it is at the end of the Long Island Expressway.
My SIL lives in Fullerton. When we visit OC what’s strikes us most is how similar its strip mall is to everywhere else, yet the cost of housing is astronomical.
One of these “top ten” website articles placed moving to a cheaper area of the country as the number one best thing you could do to increase your wealth.
Thanks to all the posters here warning of California prices. I’m an engineer looking at the possibility of a heavy construction job maybe early next year. My Yankee salary works mighty fine in VA, but will probably be worth bubkis in CA.
My SIL loves OC, and finds Eastern cities shabby. Everyone has a right to their point of view.
Chris — towards the bottom of the housing market you should do better than a 5.5% cash on cash return. You also need to account for maintenance and management. Some banks will give you a 5% rate on a CD, still.
It is way off topic, but which bank stil pay 5% on CD?
IndyMac comes close. Funded a CD there last Saturday at 4.15%. Open on the internet, get a confirmation number, walk into branch and get your CD. For the best rates, check http://www.bankrate.com. Good for mortgages and credit cards, too.
maybe that should be rephrased to ‘which banks which haven’t had their deposit rating cut by Fitch in the past week and are currently worth more than a few hundred million bucks…’
Irvine Renter,
This is what I think of when I read this post
http://youtube.com/watch?v=kn481KcjvMo
You got to know when to hold em, know when to fold em,
Know when to walk away and know when to run.
You never count your money when youre sittin at the table.
There’ll be time enough for countin when the dealins done.
Well said, mav.
If you look at the Case-Shiller index and overlay inflation from 1994 (calculated risk blog had this graph), then the index should currently be the same as it was in 2000. Well, this unit sold in 2001 for 269K. At $1700 net rent after HOA, which is being optimistic in a time of floplords (1900 IAC rent – 200 HOA), the GRM works out to 160:1 based on the 2001 selling price.
Given that 1994 was not the bottom of the market in real terms, I think we will see prices below this before we are done.
Here’s the link:
http://calculatedrisk.blogspot.com/2008/05/orange-county-ca-prices-from-front-page.html
National City is offering 5% on 48m CDs over $10k. The company is on shaky ground, so I would not recommend putting more than the FDIC insurance limit of $100k into National City.
If you’re married, $200k is FDIC insured in joint accounts.
Actually, the insurance is $100,000 per joint owner, so add your kid, parents, etc. But it can be tricky because the total is $100,000 per person per institution (not per account). IRAs are counted separately. So don’t think you can just go around opening different types of accounts at the same institution and increase your FDIC insurance limit.
Linky here:
https://www.nationalcity.com/main/CD/pages/CD-Type4.asp?WT.mc_id=100651
Sounds like a good deal compare to other banks, but 48 months is too long of a commitment for me. I need the money in about 2 or 3 yrs, when I feel the RE should be bottom-out then, and my boys need a better middle school. Any other bank with shorter term?
National City, like WaMu, may not make it. Hence the high rates. Now you can say, “Hey, it’s insured!” Then think about what your life would be like waiting for your money while the bankruptcy winds through.
No thanks. Just because it’s insured, doesn’t mean that depositors don’t need to be thinking about counterparty risk.
My parents had money in Lincoln and it was super easy for them to get it via FDIC. I dont think its a big deal.
My stocks and 403(b) are doing well either.
Sounds like I probably want to use the money to pay off my mortgage when my CD at IndyMac matured instead of trying to get it roll over as another CD.
Or I will go to JCPenny’s and buy some 14K gold…. just kidding.
oops… meant to say *not* doing well.
I like the “quite” interior – something essential for every interior IMHO. The fact that the custom paint and carpet are deemed worthy of 2 mentions in such a short paragraph leads me to wonder just how short of features this place really is.
Wouldn’t it be better if there was no one above and no one below, rather than “or”? But for $360K I guess you can’t expect too much.
In addition to the quite interior I assume the barber carpet comes with some leavings from the haircut. And just for my information base how high is tree line in Irvine?
Is there some Realtor trick going on?
The first is listed as taking backups but is clearly a short sale. Why are they taking backups if the bank has the offer? If a backup comes in greater than the first, who wins? Where’s the good faith?
Also, compare this to what happened with 51 Momento where it went to auction and then was removed from the auction list (after auction) and appeared back in the MLS a week later as “taking backups”
A couple of things occur to me….Someone is approaching trustees and saying something like “I can’t bring cash to the auction but I will pay a premium” or These places are selling far below current list for other bank properties and there is a way to keep them out of the MLS for an extended period with this taking backups routine. Maybe something I haven’t thought of?
What ever it is, in this world you can’t trust anyone.
This row house is worth about $189.000.00
Allow me to illustrate how ridiculous your statement regarding “worth” is. A prime borrower could put 5% down ($10k +/-) and finance $179k at a likely blended rate of 7% creating a $1,190 monthly mtg payment. Assuming the cost of ins, taxes, & HOAs is balanced by the tax shift, and that this unit would rent for minimally $2,000, the buyer would save roughly $800 monthly be purchasing this unit as opposed to renting it.
But you’re probably right – it’s “worth” about $189k.
“Assuming the cost of ins, taxes, & HOAs is balanced by the tax shift,”
That’s quite an assumption. Remember that your “tax deduction” has to exceed the normal “standard deduction” for any benefit to begin kicking in. On a $179k loan 7% APR is only 12.53k so you’re only getting a little over 2k off your income, which even at 28% only nets you $670 per year, that’s not going to cover ins. taxes and HOA. Besides-which I don’t know about this whole 30year mortgage assumption on low-end properties that are going to deflate. If they really do get to fundamentals 15year mortgages are a significantly better deal (at the moment as much a 1% APR off, plus the whole not paying more interest than principle over the life of the loan)
(sorry about the fast and loose with my own numbers)
That’s a good point!
But if the buyer spends 2.5x his/her income on this place, that would put them near $75k in income. Because we live in a high tax state, an individual would pay roughly $5k and a couple nearly $3k in state income taxes. Add that amount to the mtg interest and your itemized deductions likely exceed the standard.
Lot’s of assumptions being made here; fair to say though, that whatever your tax situation, owning this unit @ $189k would be cheaper than renting it.
another good point.
I should remind myself that I’m already half way to the standard deduction with state taxes. So for this price a little over half the interest will be tax deductible (i.e. above the standard for a couple filing jointly)
(not going to think about the alternative minimum tax, just going to avoid that for now…)
I’d still prefer to rent then to own this very ‘average’ appearing apartment, for whatever that thought is worth.
I think this is one of the first properties profiled that is close to being affordable, that is the income requirement is now under $100k (assuming $79k down, which is still huge) which puts it into something that average irvine household could buy.
You don’t have to assume 20% down; the secondary market hasn’t begun to require that much… yet.
I’m with you. I’d rather rent this pile than own it.
I’ll horde my 80K down payment and wait for lower prices.
Sadly, this dump is in my price range as a first time buyer. If this is all I get for making in the top 90% of my age group, working my ass off, and committing to 30 years of slavery, well, I’ll probably end up as Chris’ neighbor in Tennessee!
Good call, Priced_Out_IT_Guy.
It really is time for many of us to move elsewhere. Quality of life can be much better elsewhere, both environmentally and financially.
My company can no longer hire engineers to move here from out of state, they take one look at home prices and bolt, even with salaries 50% higher than back home. Why live in a massive throng of humanity with hellish commutes and obscene home prices? Do we really need a beach sunset that much?
The time has come for virtual commuting. Then we could all make OC salaries while living on one acre lots near Chris in Tennessee.
There are still expenses to consider to virtual commuting such as flying in to your job site every month or two, hotel costs, etc. If you are a software engineer managing a team of people, virtual commuting is not an option.
I’m not trying to dismiss virtual commuting. But it still isn’t practical for a lot of jobs that require lots of social interaction, meetings and planning (what true IT nerd wants those anyway??)
I work from home 3-4 days per week and let me tell you, it rocks!
One thing to note is that once the internet evolves and virtual commuting becomes even better, those guys in Tennessee like Chris will be undercutting our salaries in OC, and we’ll have yet another force of economics telling us to abandon the beach!
Just think, there will be massive communities in the Mid West of pasty white nerds…
Nope…. what will happen is that those development jobs will move to China for real… then all the marketing and integration guys will live by the Coast.
There’ll be less of us anyhow. That’s the future.
someone at my work just took a new job and is going to do exactly that. He is going to live in Pennsylvania, and telecommute to LA. He said the pay is not enough to live in LA, but more than enough to telecommute. I did think that makes it an easy job to outsource, but he is an incredibly skilled programmer.
I was offered a job in Orange County last week and when the headhunter told me the salary, I about died laughing. No wonder they were “aggressively” seeking a candidate for the job. No sane person would take a job for 100,000 in that part of the country.
It’s all personal preferences. I’d sacrifice for Chicago but not for anything with a beach. I feel for the high tech employers out there who need people with a specialized skill set. It’s got to be hard to lure people to that real estate market!
Yeah, engineers of all people are capable of analyzing the financial suicide of moving to California for an extra twenty grand per year. Meanwhile your taxes increase and your quality of life plummets 75%.
It was and still is a no brainer for highly skilled professionals in IT, web design, software development, and other high tech industries to move out of California.
This mass exodus doesn’t just apply to current residents. Even other highly skilled professions, such as tax accountants (which good ones are in high demand), one of which I knew moved to California without analyzing the financial situation, soon found it impossible to get by and moved back to the mid west.
I myself am considering Oregon or Colorado. There are so many beautiful places in the United States to live with higher standards of living.
“There are so many beautiful places in the United States to live with higher standards of living.”
Exactly, and this is apparently lost in a lot of the arrogance that pops up around here…mostly by bulls who talk about OC as a “world-class destination” (it’s nice and all, but let’s be serious) and try to justify bubble prices. They don’t believe anyone would willingly leave OC to live anywhere else…I say if you’re a happy person, you will be happy just about anywhere.
At one of my previous employers we ran into this problem – we literally could not find anyone for a job we had posted. The supervisor told me flat out that he wasn’t surprised, because “nobody in their right mind” could take that job and live here for what they were able to pay (which in most other parts of the country wouldn’t be half bad).
I would argue that the arrogance is from the people from (name a town) come to IHB and pound their chest about how their corner of dirt is so superior to Irvine because it costs less. That is pointless. I don’t live in Irvine because of some back of the napkin calculation on how much house I could buy in BFE — I live here because of family, friends, career, and a culture and lifestyle which suit my family. So that’s all fine and dandy that somebody likes their $75 psf ranch in Tennessee. I could really care less how much it costs in Knoxville or any other “ville”. Now if your town ends with a “Viejo”, then lets talk….Because this is the IRVINE housing blog, and MV and AV are good comps.
Don’t we all like where we live, and think it is the best place on earth? If you live in Irvine and don’t think it is great, then why waste your time and money here — there are a lot of cheaper places out there.
There’s a lot of this thinking in Northern California, too. But what’s keeping Silicon Valley prices up is the sheer number of people in the industry — they have the critical mass and the knowledge to keep new startups coming online and the Venture Capital money is still there to fund it.
I’m not sure if Orange County can do the same. What is the main economic engine of OC now that the funny mortgage money sector is gone? LA has several sectors that need top talent, but how much of it is in OC as well?
By the way, I figure SV is 2-3 years behind you guys and we’ll have our crash too. At this point 2/3-3/4 of Santa Clara Valley zips are down from last year and I’m seeing prices in some places hitting 2004 levels. Certain cities are holding value, but how much longer can they stay up there?
Is Irvine comparable to something like Palo Alto or is it more like Sunnyvale?
Yeah well, you know, try telling certain folks that people are overpaying for the dream of living ‘the California lifestyle’ and you get flamed for being some poor dumbshit unsophisticated yokel from Phoenix or Tennessee or wherever.
More like Sunnyvale. The best comp to Irvine in the Bay Area I can think of is San Ramon.
No, renato. You get flamed for those comparisons because they are pointless. That’s great that its so cheap in Phoenix or Tennessee, I ain’t mad at ya. But if your life is not there, then why should we give a damn?
How far would it get me if I dropped an offer on 2,400 sq ft house in Westpark this weekend for $200k, and pulled out a list of recently sold comps in Biloxi, Mississippi to justify my price. What do you think the chances of me getting into escrow would be?
CK–>How far would it get me if I dropped an offer on 2,400 sq ft house in Westpark this weekend for $200k.
How about you offer 1800k so you are sure to get some where 😆 exagerations to both extremes wont get us any where. how about looking at incomes(not the fantasy ones :lol:), rents, other fundamentals etc. not some wishing fantasy and IRVINE is SPECIAL BS, Irvine was special prior to the bubble a few years back. 🙁
Actually, I compare Irvine with Palo Alto or Cupertino. I moved here from Sunnyvale in 2004, specifically because houses were significantly cheaper here than in Bay Area.
For us, the issue is the schools.
“…would argue that the arrogance is from the people from (name a town) … how much house I could buy in BFE — … that’s all fine and dandy that somebody likes their $75 psf ranch in Tennessee. I could really care less how much it costs in Knoxville or any other “ville”. Now if your town ends with a “Viejo”, then lets talk….”
seriously, take a moment to breathe.
Tony & Ck, thanks for your observations on comparing Irvine to Silicon Valley cities. Cupertino has almost every elementary school with APIs over 900, is Irvine comparable to that? I don’t know Palo Alto school scores but I assume they are comparable.
Both Cupertino and Palo Alto have a mix of residential and top-tier employment centers; Palo Alto has more. Sunnyvale also is home to many top employers, as is Mountain View.
What does Irvine have jobwise that compares? What sectors employ thousands of people making $125,000 a year? I’m not asking to be nasty, I am genuinely curious. The mortgage business was red hot when it lasted. Now that it’s gone, what else is there? I’ve never lived in Southern California so I really have no idea.
Irvine has comparable scores with Palo Alto and Cupertino.
Also, all three have significant percentage of Asians.
Job-wise, for an engineer, nothing beats Silicon Valley. However, Irvine does have some high tech:
* Broadcom
* Blizzard
* Conexant, Jazz, Mindspeed, Skyworks
* Google has an office down here
* a few start-ups
Otherwise, most other high tech jobs are within an hour commute.
thanks Tony, but again, how many tech jobs are you talking about. Broadcom is up here too, which is the headquarters, Irvine or Sunnyvale?
If Irvine’s schools are comparable to PA & Cup then they are indeed good (within the low standards we have in California thanks to tax-cutting me-firsters who came up with Prop 13 and then made it worse by making bonds have to pass a 2/3 vote which is almost impossible).
Funny, I was just looking at this property the other day. Relatively, it is a reasonable deal but still has a bit ways to go. How low will this property like this go for?
How long would it take an $89k household income to save up $72k?
Depends on how aggressive you are, and rather you have car payments, and other expense.
For my family of 7, I can survive on $89K and still save about $3-5k/yr and eat pizza and instant noodle everyday.
For a couple with only one kid, they can save up 72K in two or three years. Again, it depends a lot of lifestyle, etc.
I know that it is possible to save $30k/yr making $60k/yr.
Must be single, and live like a graduate student in his/her parent house to do that.
Naw….he’s making $60k. Taking home $45k. Putting $30k in the bank. Living on $15k. $24k of that $15k goes towards rent.
Isn’t that how everybody afforded these houses the past 4 years – fuzzy math?
$2.5k per month to live on is plenty, as long as I don’t have to make a house payment. I have a wife and two children. And no, I don’t live in Irvine. I live next to the beach, like an idiot.
I just do not believe that your gross wages are $60k/year AND you are saving $30k/year AND you are married with children AND you are making a mortgage/rent payment each month. (Unless you bought your home 15+ years ago.)
No, I am not making a house payment, which is why it is hard, but not impossible, to save that much. Not having any debt helps. Some months I fall behind with the savings, but I catch up later. There is just so much crap that you don’t really need. $1600 rent leaves $900 for insurance, food, gas and utilities. Anyone can live well on that. Taxes are not that high at this income. My rent is higher btw, but that is very typical rent.
I save so much because what is the sense giving away all of my money every month to faceless corporations? I am buying my freedom.
It will be interesting to see what these do sell at, put ’em on the board Ipo…..
I would buy either of these properties. If Daffodil falls out of escrow i’ll make an offer.
I think i’d make an offer for the west irvine one, but i’d have to see it first.
To live in or as an investment?
To live in for now.
and then i’d put in granite counter tops and flip it in six months for $$$
nicely baited hook reels in the fish – cunning.
Do people realize that you can get over 3000 sq/ft new houses over the hill in Corona for $359k? I am sorry, but Irvine is not that different from Corona. Eventually, people are going to realize the idiocy of paying too much. People who look at this kind of place do not have money to burn.
I would agree that it’s not too different, but are there not subtleties that make a big difference on where you want to live? How much of a premium you should pay is the question.
Irvine is the same as Corona? LOL!
I also hope Chris enjoys his location. Offer anyone living in Irvine even 50/sq.ft. to move to Tennessee and see if they’ll accept.
“Irvine is not that different from Corona”
Uh, you are kidding, right? Have you ever been to Corona or Irvine?
If you have been to both and the difference is not apparent, then perhaps you should consider one of those $359k gems over the hill. And hey, if you promise not to call the cops then maybe your next door neighbor will give you free Meth for life.
I was a little too timid to get into the many “cultural” differences. :zip:
Well said CK! What’s up with everyone comparing cities today. Nashville, Chattanooga, Corona…etc.
Every city is different and more importantly, its all about supply and demand. There are more people looking to live in this area than Corona, etc and hence prices will have a premium. Is the product inherently worth more? I don’t think so but if this is where you want to live due to family and work like in my case, then I have to accept that I will have competition at certain price points and I can’t keep thinking about how much house I can get in Chattanooga for the same $.
“Every city is different and more importantly, its all about supply and demand”.
This is the most astute observation I have seen all day. Thank you for that, rkp. There have been some wacko comparisons to Irvine on this board in the past, but Chattanooga has to take the cake.
Twits
You’ve obviously never been there. Signal Mountain, all the other mountains are gorgeous. My MIL just built a 4 bedroom 4 bathroom totally custom home with a huge lot backing up to a large church land holding (i.e. will not be built on anytime in the near future) for $325k. Yes, I understand this is not a comp. Fine. But (a) try to tell my MIL that and (b) try to live with a tiny 1970’s townhouse as the best we can do with the same money in D.C. I’m sorry, it is too relevant.
Chattanooga has minor smog problems but nothing on the scale of southern California, and I have never seen anything more similar to the mountains near Stanford than the area outside Chattanooga. Now the total lack of useful public education is indeed a serious drawback, and I’m sorry but the “no income tax” thing is a freakin scam, you pay out way way way more in sales taxes than I ever did in income tax in Massachusetts. But. Be serious, if you’ve never been there, never eaten the cuisine, never gone to River Bend or Bonneroo, then STFU.
Relax, Cara. I was not trying to say that TN is a bad place — just that comparing it to Irvine is rather pointless. Most people who live in California are well aware of how far their buck would go elsewhere, we don’t live in a complete vacuum. Yet, we choose to pay the price for any number of reasons. If somebody living here does not like it, by all means they should not let the door hit them in the ass…
C’mon guys, leave TN alone. The original post was just expressing some sticker shock:
“I have been reading the stories posted on this blog for several months now and I continue to be amazed….In the last six years that has gone up to maybe $75/SF….So I look at pricing like $300/SF and am just astounded.”
I haven’t seen anyone offering an argument that Irvine should cost X because Tennessee does. Now, one of our friends from Phoenix used to do that, not so much any more. But there’s nothing wrong with saying other parts of the country are nice — some of them are. So is Irvine. To each his own.
I once had a conversation with an exec at Wells Fargo during the bubble. He said the hardest part of managing his mortgage underwriting center was that it was located in the midwest. The underwriters, who all lived in the midwest, kept rejecting California loan applications because (1) they couldn’t fathom that the comps accurately reflected the market, and (2) they didn’t understand how a house on one side of a street could sell for twice the amount of the house on the other side of the street (view). In hindsight, maybe the underwriters were right, at least on (1). But I’m not surprised that folks from other parts of the country come here and are amazed at what we pay.
Let’s get some perspective here–this always seems to happen with you Irvinites. Irvine is not even close to being in the same class as Chicago, L.A., or Manhattan. In fact, Irvine is more comparable to Nashville than it is to Los Angeles. This is exactly why Irvine is so f*’ed up: you all have this imaginary sense of being different, when to us Angelenos you’re simply a concrete slab of boredom.
Exactly, Joseph, this is what I was asking above in trying to compare Irvine to somewhere in Silicon Valley. We are even more expensive than Irvine, if you can believe it, and what’s more, we are full of expensive crap houses. Our crap houses cost more than any other places bad houses. Go take a look at the website burbed.com, it featured a $1.1 million place in Cupertino that looked like an oversized garden shack.
But Silicon Valley is home to all that high tech that everyone wants, and thousands of engineers there earn six-figure incomes. What I want to know is what drives income levels in Irvine now that the funny money business has literally vanished?
Cara – I go to Chattanooga about 3-4 times a year and stay with a good friend who has a ranch and a bunch of acres. I love visiting there, enjoy the company, enjoy the food, etc and have been to Signal Mountain.
I never said anything bad about any other city. My point is simple, I don’t live there and I live here. I can try to convince everyone that they are fools and that housing is much cheaper elsewhere but someone will keep willing to move into this market at certain price points. Either I accept that or walk away from it but I can’t compare it and just feel bad about it.
I mention Corona, because a person who has the money to buy this starter unit certainly can afford a bigger place in Corona. This unit competes with those big houses out there.
But I am glad that we got to see exactly what is so special about Irvine: the drugs are different.
They are both corporate feed lots, if you haven’t noticed. The vast tracts of mass produced housing lead directly to the shopping malls. Mooo. Look at Woodbury. Lokk at Ladera Ranch. Look at South Corona. I defy you to point out the difference. All are 100 degrees most days.
Obviously you haven’t spent any time in Woodbury. You can not compare that Community to any other Community. I have friends in Corona and Ladera Ranch (Housing tracts for sure) Woodbury is special and unique with everything it has to offer. They don’t sell it as Resort living but that is truly what it is. I want to live in the Carlsbad area but I can’t bring myself to leave Woodbury because I have found nothing comparable.
Both properties are in decent neighborhoods. However there are some caveats.
If you plan to buy the first one in West Irvine, be warned that street parking is very tight. At night even the pool area is packed with cars. So if you live by yourself and intend to use the garage for parking, that’s fine. But if you want to have a party and invite friends over, parking sucks.
For the 2nd property, the Oak Creek community is very nice but that condo is priced lower because of its very close proximity to the 405 FWY. If you go across Alton to the other half of the community, comparable properties would cost more for the benefit of distance to the 405 FWY. I think there’s some power lines toward Sand Canyon Ave area, though they did leave lots of space for them.
As for Corona, I might consider buying investment properties there, but won’t live there. Currently I live within walking distance to work in Irvine. I used to work in downtown LA and spent 3 hours daily on the commute alone, will not repeat.
If my job allowed me to telecommute, I’d still maintain and residence in coastal area of CA, and live part time overseas in places like Boracay. I’d um… buy a plot of beach-front land, build a 2 story residence. Live on 2nd floor and use 1st floor to run an internet cafe, hire some cute girls as employees.
If you’d prefer to stay in the mid-west and live among single white male IT nerds, well, go ahead. You won’t find me there.
I was thinking maybe Bali.
Not entirely joking here.
I telecommute because most of the engineers I work with are in Shanghai. Anybody know of tax free havens (preferably with good surf) between here and there? When I was working with a group in Toronto, I was thinking of moving to a Caribbean island. Hawaii doesn’t work because the cost of living (housing, food, taxes, etc…) is just the same AND you have to pay for private schools.
Where in Irvine is work walking distance? Do you work at UCI? Or Ralphs? It is rather hard to find a place that is walking distance to work in Irvine.
I live in Oak Creek, and my workplace is on Sand Canyon down the street.
This BLOG is disintegrating into the abyss. Many of you need to take a breath and be a little less defensive. After all, there is too much to celebrate about all of America today. Irvine has always been thought of as being filled with wannabe Newporters, nothing more than James Irvine’s Ranch raped by profiteers that care only about maximizing profits and nothing about the county’s rich history. I was born here 50 years ago and have seen it all. Irvine is not the best place to live even in Orange County. Most all of the wonderfull things Orange County has to offer are in other cities.
Where are we going, take alook at this new home @ $113 a square…lookout below!
Price: $389,900
Beds: 3
Baths: 2.75
Sq. Ft.: 3,455
$/Sq. Ft.: $113
Lot Size: 0.39 Acres
Lot: 10,000-19,999 Sq. Ft.
Property Type Detached, Single Family Residence
Year Built: 2006
Stories: 2 Level
View: Hills
Area: Riverside
County: Riverside
MLS#: I08070643
Source: MRMLS
Status: Active
On Redfin: 2 days
BANK OWNED, LAKE HILLS AREA, LARGE HOME W/ VIEWS, GRANITE COUNTER TOPS, STAINLESS STEEL APPLIANCES, OFFICE COULD BE 4TH BEDROOM, FORMAL DINING AREA, BALCONY OFF MASTER BEDROOM, NEEDS MINOR COSMETIC TUNE-UP, SUBMIT OFFERS
http://www.redfin.com/CA/Riverside/16447-VILLAGE-Mdws-92503/home/12268413
Lake Mathews near that house is closed to public access. No fishing allowed. If you really want to live that far out, I’d suggest a house near Diamond Valley Lake.
http://www.dvlake.com/
Been lurking here a few months now. So funny to hear the OC Bulls squeal. Yeah, Im a bear. I got brains, you know. Ive lived in Minneapolis, Denver, Atlanta, San Diego, Ventura, Colorado Springs, and Germany. OK maybe a few others, but oh well. I like geography and know a little about it. Anyway, You hear these OC Boosters talk like its some World Class Destination. What a joke. If you want class, try Paris, London, Montreal, Amsterdam, Hong Kong, New York, Tokyo, Venice (Italy, of course), Monaco. Hey maybe even LA (gag me with a spoon!). However, OC is not on the list. Sorry. The only thing World Class about OC is the price, which is correcting as it should. So all you shell shocked OC Debt Dogs hang on ’cause its a white knuckle ride down! Apologies to the few “Good People” living in OC for one reason or another. I mean you no disrespect.
I just named 16 cities in that last post. 17 if you count Germany. That,s gotta be some kind of record. One correction also…Apologies to the MANY “Good People”…
opps, Monaco isnt a city. Still a record.
I was one of those engineers that took a job right out of college, having no idea what a high cost of living was like (and this was in the late 80’s.) I quickly figured out that the only places I could afford to buy a regular detached single family home were Hemet or Victorville.
I was from the Gulf Coast, so I didn’t think much about the mild winter. I did like the non-humid summer, and Balboa Beach was nice, but the best thing I liked about OC was the skiing in the San Bernadino Mountains. Obviously, if that was the raison d’etre for me being in OC, I should have taken a job in Denver.
BTW, I had a nice cheap 580 ft^2 apartment on Edinger for $520/mo, and I thought it was the steal of the century. I got fed up knowing that I would have to struggle to own my own home, so I only stayed around for a year, but probably would have been laid off in the early 90’s anyway. Interestingly, I never made it out to visit Irvine.
I now live in a 2800 ft^2. 1.7 acre home for $240K fully financed at 2.7% for 30 years.
Speaking of Tennessee, just don’t end up like this guy who bought a “brand new house” for – get this – $139K! And it’s all problems!
“I purchased a brand new home it is very defective. I’ve fought tooth and nail to get it fixed. Found out the builders aren’t licensed…”
http://helpmesue.com/post/647/ for the full details. Just goes to show that a low price in and of itself is *not* the only thing to look out for, you’ve got to look for quality. That’s one thing folks *everywhere* forgot in the Great Housing Bubble.