Want to see how to really destroy the neighborhood comps? How about lowering an asking price nearly 20%…
Address: 1714 Timberwood Drive, Irvine, CA 92620
Old Asking Price: $499,000
New Asking Price: $429,000
What Goes Around… Comes Around — Justin Timberlake
What goes up must go down, and what goes around comes around. Markets move in cycles, and although they can trend for significant periods of time, all price trends eventually reverse. Real estate markets usually trend for very long periods, and we are only 2 years into what is likely to be a 6-8 year decline. We are nowhere near the bottom. I imagine most people with toxic financing who need to refinance really don’t want to think about it. It is probably making them sick, and they can’t believe it is ending this way. They are shocked it is going down. As Justin Timberlake points out, “What Goes Around… Comes Around.”
Today’s property is part of the ongoing carnage in the Collage complex in Northwood. We have profiled this neighborhood before. It is one neighborhood in Northwood showing serious distress. The featured property is a toxic financing victim (and we even have a new graphic to go with it.) The owner purchased in early 2006 with an 80% first mortgage which was a 1% Option ARM. There is a 10% HELOC, which was probably used as purchase money, and a 10% downpayment. Two years on, and the payments are rising, the values are dropping, and the owner is walking. What a surprise…
Asking Price: $499,000
Income Requirement: $124,750
Downpayment Needed: $98,800
Monthly Equity Burn: $4,158
Purchase Price: $596,000
Purchase Date: 2/22/2006
Address: 1714 Timberwood Drive, Irvine, CA 92620
| Beds: | 2 |
| Baths: | 3 |
| Sq. Ft.: | 1,442 |
| $/Sq. Ft.: | $346 |
| Lot Size: | – |
| Type: | Condominium |
| Style: | Contemporary |
| Year Built: | 2000 |
| Stories: | Two Levels |
| Area: | Northwood |
| County: | Orange |
| MLS#: | P629713 |
| Status: | Active |
| On Redfin: | 17 days |
levels w/ spacious living and dining rooms, fireplace in living room.
Large Kitchen and master bedroom. Very private setting nestled among
the trees. 1 block to top rated northwood High School and Canyon View
Elementary
Is that the kitchen in the background or a closet?
.
.
If this seller gets their asking price and pays a 6% commission, the total loss on the property will be $126,940. The owner will have lost their $59,600 downpayment, the second mortgage holder would lose their $59,600, and the first mortgage holder would lose $7,740. Of course, since this was a neg am loan with a 1% teaser rate, the loss on the first mortgage will likely be much higher. Gotta love that toxic financing…
This neighborhood is a mess. The unit at 1520 Timberwood is a bank REO, and it is dragging down the comps. It is currently offered at $303/SF which is significanly less than the other properties for sale nearby, including this one. The REO is going to make it impossible for the other sellers because their buyers will not be able to get a large loan (Does anyone remember this oldie? Your Buyer’s Loan Terms) In short, the other sellers are pwned. 1512 Timberwood was purchased last August about a week before the credit crunch hit (if this was a flip, it was a really stupid one.) The buyer paid $520,000, and now they are hoping to get out at $470,000. Then there is the truly delusional seller at 800 Timberwood hoping to get $400K for a 1 bedroom condo. WTF? Are there any buyers out there who are that stupid? I hope not.
.
Don’t want to think about it
Don’t want to talk about it
I’m just so sick about it
Can’t believe it’s ending this way
Just so confused about it
Feeling the blues about it
I just can’t do without ya
Tell me is this fair?
Is this the way it’s really going down?
Is this how we say goodbye?
Should’ve known better when you came around
That you were gonna make me cry
It’s breaking my heart to watch you run around
‘Cause I know that you’re living a lie
That’s okay baby ’cause in time you will find…
What goes around, goes around, goes around
Comes all the way back around
What goes around, goes around, goes around
Comes all the way back around
What goes around, goes around, goes around
Comes all the way back around
What goes around, goes around, goes around
Comes all the way back around
What Goes Around… Comes Around — Justin Timberlake
When a picture of the kitchen is missing in the current market, I immeditely wonder if there are any large appliances left or if the thing has been stripped to the wall by angry occupants who have been forced out.
:question: seculded? This blog is a wonderful resource, very well written and informative. One thing I don’t understand is the obsession with countertop materials and other minor details in the comments. Very few note privacy issues or architecture problems. Garage doors in a front elevation is a sure sign of a tacky house so why get snarky about minor stuff? Thank you irvine renter for a timely and informative blog.
eastman
I don’t think people are getting hung up on these little details, it’s just a running joke that flippers would replace the countertops, carpets, and appliances and then sell for twice what they paid (for the house).
That behavior is kind of a downside for me. Our kids are getting older, but I hate to think what our family would do to wood floors (or whatever they replaced the carpet with). Maybe I’m a ’70s guy but I always found carpet to be comfy. Anyway, I’m outa luck because in the race to get rich flippers have re-modeled just about every property from here to Barstow.
1714 Timberwood can rent for $2300/month. 160 GRM makes it $368k. Any potential knife catcher should keep this in mind.
Realizing that they barely made it out of the burning building in time, you know that the people who sold 1512 Timberwood in 2006 to the failed flipper did a huge “HOLY S THAT WAS CLOSE!” when the credit machine stalled a week later.
SUCKER!
We sold our one bedroom there for $260k…thinking no one would ever pay more than this for a one bedroom apartment. $100k profit in two years was too good to pass up, but they went on to go for $420k….we had no idea people would get so irrational about real estate.
Could you take a look up in North County at the new condos going up in Anaheim, both downtown (Harbor & Lincoln) and around Anaheim Stadium?
The ones at Harbor & Lincoln are zero-bedroom, 2-3 bath “Lofts” originally in the $400+K range. Building is four stories and looks like a Thirties Euro-Bauhaus industrial building, minus the “Joe the Worker” statue on top and Leon Trotsky impersonator haranguing the masses from atop a soapbox before the main entrance.
I ran across the REA for the complex, who told me the “loft units” are intended for young singles and couples fresh out of college. My experience with housing costs tells me the cost of each zero-bedroom, granite-countered “loft” (mortgage, property taxes, & HOA squeeze) comes out to over $3000/month, minimum. How many “young singles and couples fresh out of college” can afford $3000/month?
The last I saw, the starting price on them was in the $380K range, down from over $400K. When I asked, I was told that the Starting Price Was Always $380K, the Starting Price Was NEVER $400+K, Oceania had always been at peace with Eurasia, and the Chocolate Ration had always been ten grams.
Die.
Yuppie.
Scum.
How many “young singles and couples fresh out of college” can afford $3000/month?
Well, it suppose to be purchased by the college grad’s parent, as a graduation or wedding gift. Doesn’t everybody’s parents buy them a house and pay for their college 100%? 😉
Seriously, I do know a few people who actually can afford to buy such a gift for their kids. I am not, BTW.
Us gays just LOVE Justin but for this condo, I wouldn’t give them what it went for new (257.000.00) Does this place remind you of your fist cool apartment? Does me!
As Kathy Griffin would say, Justin is an honorary gay. A place of high Honor in American Culture.
There are IAC units that look icer inside than this place. $225/sq ft is where this is headed, or $325k
Timberlake / Timberwood –UUuurrrggg, get it!
If you read the lyrics close, you can’t tell if he’s singing about a girl or a guy or a house…HHHhhmmm, interesting isn’t it?
“The owner purchased in early 2006 with an 80% first mortgage which was a 1% Option ARM. There is a 10% HELOC, which was probably used as purchase money, and a 10% downpayment.”
If you aren’t a flipper who was planning to get out in a year or two, anyone who bought a house with a 1% teaser rate signed their death warrant along with their closing papers. I don’t know if these folks thought they’d move or refi, or maybe they assumed wages would eventually make the payments manageable, but they gambled with their home and credit, and now they are paying the price. Good profile, IR. There’s a lesson to be learned here.
They didn’t “think” that’s the problem. I absolutely refused to ever write a purchase with an option arm loan. It’s utter stupidity. By deferring interest they are INSTANTLY losing their downpayment money.
What is with that kitchen table and chairs? Looks like one I had in 1978.
Hey! I HAVE that kitchen table and chairs! At least they didn’t blow it all on buying new furnishings they didn’t need. My butt still fits just fine in my 20 year old chairs.
Bought em about the same time I bought the house. Cost $78 a square foot, I paid too much but you had to buy before you got priced out, you know.
Nice IR! Bringing out some JT… 🙂
IR, how can you call the folks at 800 Timberwood delusional? They’ve reduced the asking price by $500. 😆
“No similar recent past sales could be found. ”
This looks like another cookie cutter condo, yet nothing close has sold recently?
I was expecting a bit of a bounce in prices and sales already, as those who had been looking for awhile saw these lower prices as “cheap”.
I suppose if banks now require down payments, then none of the first time buyers have them, or will have for years. So maybe no bounce.
A lot of the new housing being built in Anahiem was planned to be condo’s but now they are converting them to apartments. I don’t know what they are going to do with the lofts, those would be difficult to lease as apartments too b/c the layout is not room mate friendly.
Drop the price?
I would *love* a place “not roommate friendly”. Everywhere I look at apartments, they are “jammed” far-above rated-capacity. Car-traffic (& parking) horrid.
Condo’s not-much-better as people use their garage as an attic, put their cars in the street.
When I was looking (via the web) at Anaheim apartments, it all seemed traffiky and I couldn’t find a 2-car direct-access garage place that was “upscale”. Likely I didn’t look hard enough.
The “loft” approach really intrigues me. I’d like to try it!
Note I’m not inclined to rent “somebody’s condo” as this means buying a w/d/fridge and that’s too “homey” for me. The Gypsy lifestyle rocks! Lets me do things like extended-trips e.g. (from my website)…
Amazing Americana! (Part 1)
Amazing Americana! Driggs ID, Park City UT, ‘Vegas! (Part 2)
…which as a homeowner (for me) was out-of-the-question.
I’ve said this before: America has no “professional renter class” (as does Europe). Too bad.
If it doesn’t sell in america – try germany!
http://immobilienusa.wordpress.com/
(still laughing)
In doing my rent/own calculations (which I do for a different reason than most of you; I do it to keep-convincing myself to “stay rented”)… I use $500/month as the HOA (“condo-fee”) cost.
Am I ballpark here? What’s the “range” of HOA fee’s?
Thanks y’all…
PS>> I cashed-out of OC housing right at the peak of the bubble, started a business (going strong!). This was *not* skill… In the Navy we used to say “I’d rather be lucky than good” 🙂
What I miss a little bit in your posts is an opinion about what you think a current fair market value of the property would be…. and what it might be a year from now 😉
Califax…
After Spain, the Germans invaded Brazil. No “deals” down there as the Germans have driven prices orbital (by our standards anyway). This info I get from my airline-pilot buddies who do the Rio routes.
In Huntington Beach (gated community, tres-upscale, $1.6M+) prices are holding (down, not-by-much) and in the past month *3* houses have sold, all to Asians (none of whom speak English). Yeah if *just 1* goes to REO, it’s all over 🙁
Ok, getting serious, I can’t imagine how stupid one has to be to buy an american house from germany right now.
Yes, the euro is high, dollar is low, but betting on future money exchange rates AND an early soft landing for american house prices is a bit too much balls for a sound brain.
It’s too much a gamble even for greencard winners. If I was to move to the USA I’d go for renting a home for the first risky years.
Is that the kitchen in the background or a closet?
Closet with granite flipper countertops and whatever big-bucks brand of appliances was TREN-DY last year.
What sticks out to me is not the current price or the outrageous purchase price in 2006…
It’s the purchase price of 257k on May 18th 2001.