Trouble — Coldplay
Do rational people still deny there was a housing bubble? Today’s featured property is being offered 25% off its peak purchase price. It is one of many. There was a recent post over at South OC Tracker with a property 60% off in Aliso Viejo. Those kind of price drops are not a correction below value, they are the deflating of a bubble to value. Prices are not going to quickly rebound to peak values from an undervalued condition. They are going to drop to rental value and remain there until the toxic mortgages and overextended homeowners are purged from the market.
Today’s featured property is another 100% financing deal gone bad. One of many yet to be purged from the system.
Asking Price: $485,000
Income Requirement: $121,250
Downpayment Needed: $97,000
Monthly Equity Burn: $4,041
Purchase Price: $650,000
Purchase Date: 8/18/2006
Address: 24 Burlingame, Irvine, CA 92602
| Beds: | 2 |
| Baths: | 3 |
| Sq. Ft.: | 1,552 |
| $/Sq. Ft.: | $312 |
| Lot Size: | – |
| Property Type: | Condominium |
| Style: | Contemporary/Modern |
| Year Built: | 2000 |
| Stories: | 2 Levels |
| View: | Park or Green Belt |
| Area: | Northpark |
| County: | Orange |
| MLS#: | P641854 |
| Source: | SoCalMLS |
| Status: | Active |
| On Redfin: | 6 days |
Inside the stunning guarded gates of resort style Northpark, minutes
from Tustin Marketplace. This home features luxury living, the gourmet
island kitchen you have dreamed of, soaring vaulted ceilings. Dual
master suites with an attached 2 car garage. You do not want to pass up
this beautiful home.
Is it just me, or does anyone else see a face in the left side of the front elevation?
If this property sells for its asking price, WMC Mortgage is going to lose $194,100 after a 6% commission. The piggy-back mortgage is a total loss, and the first mortgage is going to feel some pain.
For entertainment value, I often go over to the OC Register blog and read the comments of the bulls. They are case study in market
denial. When people take a position in a financial market, they often
lose their objectivity in reviewing the flow of data. Every piece of
information is interpreted as reaffirming the correctness of their
original decision to take a position. It is comical to read the
comments of the bulls. Every piece of market data that is unequivocally
bearish is simply dismissed. Every piece of market data that is 90%
bearish and 10% bullish is taken as bullish. Lately, there has been no
other kind of market data. This denial takes an enormous amount of
emotional energy as the market will force what Mark Douglas calls “a painful forced awareness” on its participants. I suppose it is
a natural human reaction. Nobody likes to admit a mistake, particularly
after they have made arrogant, and completely incorrect, statements to
family, friends and coworkers. Rather than eat their words, they
maintain denial to the bitter end. After the fact, many will likely
blame unforeseen, outside factors rather than admit they had no idea
what they were doing, and they were completely wrong. We offer comfort
here by telling people it is all OK if they can afford the property. We
all know it really isn’t OK. There are still people holding stocks they
purchased at the peak of the stock market bubble. I doubt they feel it
is OK because they were buying for the long term. You don’t lose money
until you sell, right? Bull$hit.
.
O no, I see,
A spider web is tangled up with me,
And I lost my head,
The thought of all the stupid things I’d said.
O no, what’s this?
A spider web, and I’m caught in the middle,
So I turn to run,
The thought of all the stupid things I’ve done,
And I never meant to cause you trouble,
I never meant to do you wrong,
And I, well if I ever caused you trouble,
And oh no, I never meant to do you harm.
O no, I see,
A spider web and it’s me in the middle,
So I twist and turn,
Here am I in my little bubble,
Singing I, I never meant to cause you trouble,
And I, I never meant to do you wrong,
And I, if I ever caused you trouble,
Oh, no I never meant to do you harm.
They spun a web for me,
They spun a web for me,
They spun a web for me.
Trouble — Coldplay
It appears to me this property at this price is more OK than many that have been featured here.
I agree. An 8 y/o home in the low 300’s/per SF seems more reasonable than many other properties featured here in the past.
And it’s pretty!!! But it has a fundamental issue. It’s a 2 bedroom that cannot be remodeled to create a 3rd bedroom. Thus it has an extremely limited pool of buyers. I admit, I love the house, I’d be sorely tempted (if I lived out there) but there’s no way I could buy it at any price, because I’d like to start a family, and want in-laws to be able to visit for extended periods to help out. So while it’s beautiful, I think it still has a ways to go down in price due to the inherently limited market. It would be a steal for $300K though. In which case the in-laws can stay in Extended Stay America, on my dime, and it would still make sense.
I completely agree. My first thought when I looked at this property was, “oooh, that’s nice, and a good price!” Then I saw that it was only 2 bedrooms. Never mind. I have one child and working on another. I’d prefer 3 bedrooms.
Hang on to your limbs, chainsaw catchers. Why buy it today when you can wait another couple years and snap it up for low 300’s. Save yourself over 150K (a lot more than the principle you will pay off in 2 years from today if you buy now).
http://www.crackthecode.us/images/burlingame24.JPG
I agree. I can see this in the $300k (or maybe even below that). The sales price back in Y2K was less than 300 grand and so I definitely can see that pricing with inflation pressure on everyday needs and a stagnant wage.
Yes. A call of 300K though is assuming that the Irvine local economy maintains the status quo and the wage earners continue to earn 70K median incomes.
If the recession results in job losses or earnings decreases then the value of this puppy could fall even lower.
The recession’s effect on the economy is the wildcard.
Agreed. Owner rental parity with $2200 rent and GRM 160 is $352k. It probably will sell, if it does this season, for low $400s.
Roll back to or near 2001 price is possible in 2 years which was $267k.
It will sell near list and sell pretty quickly. There is very little inventory on the market in Irvine right now relatively speaking and there are buyers motivated by 25% off peak…
ipo:
Inventory is more meaningful when it is expressed in terms of month supply. Do you have the figure?
ipoop is dreaming. Here’s some data I gathered from Redfin on the weekend:
Zip List 3moSale 6moSale
92612 290 88 183
92602 149 90 173
92603 332 70 126
92604 79 53 89
92606 59 29 44
92614 49 38 71
Total 958 368 686
If you use the 3-month sales average it’s 7.8 months of inventory. If you use the 6-month average it’s 8.4 months. 3 months is reasonable since “sales have been soaring” since March apparently.
I don’t get his “very little inventory relatively speaking” spiel. Relative to what? Temecula?
I can’t speak for ipo but I imagine those months of supply numbers you calculated are lower than a few months ago. He said relatively speaking so I don’t think anyone is going to argue that 7-8 months supply is small but if we were around 10 months supply and good houses were moving, then its easy to see that a well priced house will be snapped up when the months of inventory drop.
Nope. I can tell you that months inventory has been declining though. Sales volumes have been moving up and inventory has been headed down. Well-priced properties are getting into escrow within 30 days it would appear. I’d consider this place fairly well-priced…
In 92602 there just isn’t that much inventory in the 1000-2000sf range at this point. I mean “relative” to last year at this time and/or relative to recent history. For example, there is not a single active status listing in my tract of 164 condos and I can’t remember the last time this was the case. Last year at this time, there were 4-5 at least. Around the corner from me in Summerplace, there is only a single active listing as well, about to hit escrow, and there is almost always something on the market there as well…
Yes, people are keeping their listings off the market so there has been no summer inventory bump. Unless they are forced to sell, people will not sell when they lose money, they will hang on, hunker down and pay the mortgage. The market is set now by REOs, not by private individuals.
Nice to see you still ignore data zoiky. All you need to do is look at the inventory graph linked to the this blog. What you will see is 30% less inventory year-over-year for Irvine. Sales are down year-over-year by about the same percentage so months inventory is roughly equivalent to this time last year…
The months inventory figure got much much higher in the Fall and Winter, coincidentally at the time when prices really started declining quickly. As the months inventory has gotten lower over the past few months, price declines have slowed or gasp, stopped all together.
I only opine with regards to Irvine though so please hold your rant about the county, the state, or the national RE picture. Since the featured property is in Irvine, I’m quite comfortable postulating that this will be under purchase contract within a few weeks and sell for close to list. I don’t see any way it sells for less than $450K…
You can justify it all you want, it’s just silly to say, and I quote, “There is very little inventory on the market in Irvine right now relatively speaking”. On top of that it’s a condo, and MOI for condos is substantially higher.
I’m not making a prediction on when this one sells or for how much, I’m just saying your statements are BS.
But isn’t inventory just declining because there are no buyers?
A year ago there were people who thought they still had a chance to sell their house for a reasonable price and get out.
Now, the new market is sinking in, and people aren’t even bothering to sell unless they have to.
Inventory may be down, but I agree with Chris that buyers are down even more.
I can tell you that at least in Costa Misery a lot of homes go through the whole default process to REO and are never MLS-listed during the entire process.
What’s more, there are plenty of REOs that aren’t even on the market yet.
Must be dark down there with your head in the sand…
That notion is a bit absurd. Inventory is down because people are electing to not list their homes and take a price that is 20-25% off peak.
Here are the median days on the market for close Irvine sales:
March: 101 days
April: 88.5 days
May: 67 days
See the trend? Does it look like houses are languishing due to no buyers? The days on the market for May closes were almost 40 days less than March closes! Go ahead and subscribe to teh zoiky newsletter, but despite what he thinks, the Irvine RE market has been accelerating not decelerating over the past few months.
Unless I misunderstand what DOM is, it would appear that places that closed in May were on the market for around 30 days or so before they got into escrow. If there are no buyers, how could this happen?
Nesting doesn’t seem to be working for me…
In terms of DOM of closed Irvine sales, Feb was 115 days so May’s DOM was 41% shorter/less/quicker than February’s.
Again, it would appear that more buyers have finally arrived vs. there being less buyers in the market.
OK my head’s in the sand. I’d tell you where *your* head was, but this is a family blog…
I think DOM is a result of sellers being more realistic about list pricing, especially the banks who still need to unload their REO. MOI is still in the 8 month range. Period.
So your “very little inventory” remark is still as absurd as when you first spoke it.
Keep shillin’ amigo!
The arguments about inventory ignore the important notion of inventory composition. It is like cholesterol. There is good cholesterol and bad cholesterol, and it is the composition of the components that matters. The rule-of-thumb where 6 months inventor measures a good or bad market assume a normal composition of inventory when very little of it is must-sell. The proportion of must-sell inventory is much higher than a normal market. In fact, the only real inventory number that matters is the must-sell inventory number. Discretionary sellers do not control the market right now. There could be a million discretionary sellers or zero in today’s market, and it would not make a difference. As long as the inventory of must-sell homes is high (and increasing) as it is now, prices will not appreciate, and most likely they will continue to fall.
Where in the world do you come up with eight months of inventory in Irvine?!
That’s foolish. In May, there were 170 sales per DQ data. IR2 has 150 on his list from MLS. You think there are 1200 listings out there? Man, you must have flunked remedial math…
At most, there is perhaps 6-6.5 months of inventory on the market in Irvine right now.
I’m not arguing that prices are going up, just simply that there is not a large quantity of selection of inventory available to knife catchers right now.
This must-sell inventory has been getting price aggressively of late and guess what, it is selling. Must-sell is getting sold… How many REOs to you see languishing on the market for 90 days? Many go pending sale within weeks of list.
This unit will sell around the listed price, assuming the bank approves it. If not, it’ll go back to the bank via auction and they’ll probably sell it for around this list price if they are quick about it…
“Man, you must have flunked remedial math…”
I think the insults are unnecessary.
We’ve been through this before. You keep using pending sales to calculate your numbers. The Redfin figures come from tax records of actual sales, not pending.
Sales that fail to close should not be considered, since a transaction never fully takes place in those cases.
I’m not using pending sales. IrvineRealtor has a a list of every Irvine sale since 1/1/08 posted on this site. How are those pending sales? MLS lists them as closed sales. Check the data yourself and show us all how there are 8+ months of inventory on the market in Irvine…
I suspect that you can’t and won’t do that though as you have no factual basis for your conclusion. 1000 units of inventory / 150 units selling per month = Approximately 6.5 months of inventory. June sales will be even higher, more like in the 170-175 range I’d guess, so according to your math, we should have around 1400 units of listed inventory. Do you see that someplace that the rest of us can’t?
Remember, this is all about resale homes, not new. You can’t try and play the “DQ includes new home sales and auctions and and…” card again. IR2’s numbers are from MLS, which for the most part excludes new homes, so they are a much cleaner comparative to listed MLS inventory.
For your research zoiky:
http://www.irvinerealtorsite.com/IrvineDowns.xls
How interesting.
I looked at the first 20 so-called “sales” for January in your realtor friend’s dataset. You’re right, they’re not “pending sales”, they just include “BOGUS sales”. Some details:
1 appears to be a new home
1 can’t be looked up due to lack of unit number
2 are transactions that show neither on zillow nor on redfin
6 are not included in Zillow’s “estimate” (meaning it’s not an “arms-length transaction”)
From my experience, those last 8 are either most or all trustee sales (bank buying property from itself). Sometimes trustee sales are recorded as sales, sometimes not. In any event it would be curious why your realtor friend wants to count them as sales for the purpose of calculating MOI, whereas Zillow doesn’t consider them arms-length transactions. Hmm…
Don’t take my word for it. Here are the addresses:
11 Sweet Rain [Transaction Not Included]
138 Streamwood [Transaction Not Included]
5 Ladypalm [Transaction Not Included]
4 Sunpeak [No Record]
23 Heathergreen #67 [Transaction Not Included]
2253 Martin #404 [Transaction Not Included]
25 Grandview [Transaction Not Included]
3141 Michelson #1401 [No Record]
So let’s wrap up: out of the first 20 transactions you are including as many as 8 trustee sales. That means your sales numbers are bogus. Is it my failing grade in remedial math this time or is it something else? Do tell.
More suspicious data in the *last* 20 transactions in your friend’s dataset:
27 Oroville [ Trustee sale ]
43 Blossom [ No record of sale ]
55 Night Bloom [ Transaction Not Included Trustee Sale? ]
371 Stanford [ This is an apartment ]
8 Galaxy [ Bought at 1.01M, for sale at 1.029M Trustee Sale? ]
9 Benavente [ Bought at 1.085M, for sale at 1.149M. Trustee Sale? ]
37 Night Bloom [ Bought at 575k, for sale at 700k. Trustee Sale? Flipper? ]
63 Streamwood [ Transaction Not Included ]
62 Chula Vis [ Transaction Not Included, Possible Trustee Sale ]
I think you should quit including trustee sales (and apartments belonging to IAC) in your sales data.
Funny thing is, even if your data weren’t bogus (which it is) 6-6.5 months couldn’t be considered “very little inventory on the market”. It means I would have 6 months or so on average to make a decision on a randomly chosen property before it got “snapped up”.
You evidently failed remedial Excel also zoiky… Look at the rest of the details on the spreadsheet. I’ll wait for you to catch up here…
See the LOANS taken out on the properties. See the DOWN PAYMENT amounts. You think banks need to take out a mortgage and make a down payment on their REOs huh? Boy, you are one smart cookie, NOT.
That spreadsheet was compiled based off sales listed in MLS, and no the banks don’t list properties in MLS before they take them back, and the title and loan history was checked on each sale to derive the down payment and mortgage information. A bank can’t list a property in MLS before they take it back because they don’t own it yet. I know, what a concept, but it’s actually a big no-no to offer up a property that IS NOT yours for sale.
In this world, banks don’t take out mortgages to take back properties. Maybe in your bizarro world they do, but that isn’t reality.
Which wild straw do you want to grasp at next? You haven’t brought forth any data so far, just lame attempts to discredit things that are apparently beyond your comprehension. If all you’ve got is DQ, MLS, and SiteX are all wrong because “its not included in Zillow’s estimate” I think you’re standing on some pretty shaky ground.
“371 Stanford [This is an apartment]
Boy, you are an astounding researcher…
Evidently you can’t even work Zillow correctly:
http://www.zillow.com/HomeDetails.htm?zprop=25760303
A recently sold 3/3 condo is what your preferred source for all data says. I see no mention of it being an apartment.
Let me explain something to you. Properties go back to the lenders. They become REOs. The lenders then have them listed via some REO hack realtor and sell them to someone. When the property is sold by the bank (seller) to the buyer, it becomes a closed sale in MLS.
Yes, 27 Oroville was a trustee sale once upon a time, which was then sold to some knife-catching buyer for $857K. That buyer put a 20% down payment and financed $686K. Please get your facts straight before you post such drivel. It doesn’t even seem like you understand how the RE market works…
LOL. Wow where to begin after that tirade…
Let’s start by explaining this one:
http://www.zillow.com/HomeDetails.htm?zprop=54972238
For Sale: $894,900
“Reo Bank Owned Foreclosure”
Last sale and tax info
Sold 05/21/2008:
$807,000 *
2007 Property Tax:
$14,917
Transaction Not Included in Zestimate
This transaction was not used in computing the Zestimate for this house due to anomalies we detected with this transaction. These anomalies can include unusual document or transaction types, sales between possibly related parties, unusually high or low transaction prices, or other data irregularities that might indicate the transaction is not a full-value, arms-length transaction.
* Transaction not included in Zestimate.
I’m sure you got a great explanation. And your friend the realtor where he got his 171k down payment on this puppy I have no idea. But it’s clearly gone REO from the sale on 5/21/08.
Hey I’m not stopping you or anything. Just look it up: it’s 27 Oroville, Irvine, CA.
Don’t just stand behind what your buddy allegedly did, look it up!
Lots of trustee sales end up shown on Zillow as prior sales. Look it up for yourself if you don’t believe me. LOOK IT UP!
OK I think I was wrong about the Stanford Court unit. I used to live right next to that one in Irvine, and I was in an apartment with a Leasing Office. I didn’t realize there were condos mixed in with the apartments. (Did they convert a bunch of these to condos from apartments?)
But I still say lots of trustee sales are included in your figures. Unless you can explain the oddities I mentioned before. I don’t see how you can explain the fact that 27 Oroville is currently advertised as a REO *and* its previous sale is considered non-arms-length transaction by Zillow.
Now it’s time to go to bed. Good luck with your bogus figuring, ipoop. LOL.
Dude, you just don’t get it. The most recent sale on Oroville for $857K has not yet been picked up by Zillow. Zillow lags. The sale is only a few weeks old. You think Zillow is real-time? I supposed you swear by their Zestimates too. Gonna have to start calling you Zillow-Shill…
Put yourself a little calendar remind to look it up in a few weeks and you will see the most recent sale on the Oroville property showing in MLS finally appearing on Zillow… I will do the same and make sure to post when it does. You can tell me how right I am then or just save the waiting and do it now if you’d prefer.
So you ignore the obvious questions and toss out more evidence of your lack of understanding of how things work. It’s kind of sad that you think things are “clear” when you are drawing the wrong conclusions. Forget that though, more importantly, why would a bank take out a mortgage on their own property to get it back at auction? How and why would a bank list a property in MLS for many days or months and then mark it as a closed sale when they foreclose on it? Why would you say a 1300sf condo on Stanford Ct is an IAC apartment? Were you in Special Ed?
No, the apartments at 400 Stanford Ct are still IAC units. Up Stanford a bit is where 371 Stanford is and it is a good-sized condo complex anchored by Princeton Park. These condos border University, Harvard, and a touch of Campus.
Ipop, I hate to say this but you cannot compare low inventory with the same type of low inventory status back in the bubble days.
Nowadays, you need to have a **much** lower inventory for sales to pick up since you now have **fewer** and **fewer** buyers (my God the asterisks). Furthermore, the only buyers now are probably lifers and knife catchers and both are not going to offer that house at the asking price.
BTW, there was a detached condo that’s a bit newer in the Oak Creek area, 2 bd as well with same sq footage, that was for sale at $450k. Guess what? It is now in Backup Offer Accepted stage.
So who would want this attached condo at $485k in Tustin school dist?
The TUSD schools that serve this neighborhood are
– Hicks Canyon Elem
– Pioneer Middle
– Beckman HS
Both Hicks (2008) and Pioneer (2007) are/were California Distinguished Schools.
http://www.cde.ca.gov/ta/sr/cs/ap/distingcounty.asp?county=30&submit1=Submit
Though, I will admit the jury is still out on Beckman…
I don’t think it will sell for $485K necessarily, but it will sell… My guess is $475K.
Personally, I’d pay a premium to live in Northpark with those TUSD schools vs. live in Oak Creek next to the freeway.
Listing agent invited to see today’s featured property?
Check!
This not a “home.”
This is a nice 2\br apartment.
This not a “home.”
Picky, Picky…..
However, I disagree. It was a home for someone. It will possibly be a home again for someone.
Their fantasies lead them to believe and find faith that the “market correction” is temporary. Sort of like the evil villain in their favorite mickey mouse movie who has the upper hand for a little while, but always loses in the end. House values have to return to peak prices JUST BECAUSE we demand happy outcomes.
They think that the only reason house prices are down is because of a temporary flutter in the economy. If they can just weather the storm, they will be partying when the economy turns around. They are unable to make the connection that the economy is in recession because of the housing prices and conclude that the correction is going to bring down prices permanently.
They don’t get it. Ostriches with heads stuck in the sand.
Just look at all the sellers who are “giving up” and pulling their houses off the market; continuing to drink the kool aid. Thinking that if they hold out a little longer then the market will magically turn around and they will get their outlandish asking prices and show all those douchebag low-ball bidders who their daddy is.
Another stunning resort style guarded community.
http://www.crackthecode.us/images/highlysought2.jpg
Using the same pic 3 times….you are getting lazy dave
Man, you are demanding. I like the mickey mouse guard.
I came back to review a second time and just saw the “face” comment. You are right!
I guess we could never buy this house, because my wife would not drive into this garage, feeling like she might be devoured. 🙂
I LOVE that poster about MISTAKES!!!!!!LOL!!!
I know sooo many people I could give this to! LOL!!
“It could be the only purpose of your life is Only to Serve as a Warning to Others”
LOL!LOL!
my stomach hurts now.
Good stuff.
;P
lotsa good ones:
http://www.despair.com/viewall.html
Even though it is a larger property (1400 sq ft), it’s still two bedrooms for the mid $400’s.
My husband and I are lurkers. We read the blog everyday and have done so for about a year now. We just closed escrow on Monday and sold our townhome. Now we have a nice chunk of change in the bank and a rental that we will be moving the kids into in a few weeks. We will enjoy watching the prices drop over the next few years from the sidelines. Thank you Irvine Renter for the in-depth analysis.
Thank you for sharing your story, and thank you for posting. I always like it when the lurkers come forward.
That cash will come in very handy in a few years. You will probably be able to buy a similar property without a mortgage, or move up to a nicer property and keep the same mortgage obligation.
These people represent a different type of seller which will accelerate the price correction.
Most sellers are “distressed”, yet some (like these) will just cash-in and bide the time for awhile.
Let’s see — a cool half million for a 2-bedroom apartment. Oh, let’s buy! What is this, the upper West Side of NYC? Or maybe downtown Paris? Or just off the tube line in London. Oops, no, it’s a tract condo in IRVINE.
I think I’ll save my cash and let some other sucker dive into this shallow pool.
“…When people take a position in a financial market, they often lose their objectivity in reviewing the flow of data…”
This is a knife that cuts both ways – most bears forget this, but then, they’re always right.
Anyone who is either bullish or bearish all the time is going to be wrong quite a bit. I will turn bullish when the prices reach affordability levels and the tsunami of foreclosures abates.
IR,
I have a story for you that is taking place right next door to me!
My neighbor has the most demanding, high maintenance wife in the world. They bought in 2006 and are hoping to sell their 4 (more like 3 + a closet) condo for $550k.
All becuase, she wants to move into a mcmansion. So before they could sell their condo (that they are already under H2O with), they bought a REO out in Murietta! (The 8th ring of hell)
If the don’t (which they won’t) sell their condo, they told me they will just walk. Nice neighbors!
Now they will be stuck out in Murietta, with high gas prices, inflation and a loss as soon as they move into their mcmansion.
“If they don’t (which they won’t) sell their condo, they told me they will just walk. Nice neighbors!”
You mean they should stay out of deference to you?
no,
I’m just saying they could try to lower their price as much as possible..at least to break even. Right now they are still trying to make some equity.
They haven’t lowered their price in 6 months.
[quote]My neighbor has the most demanding, high maintenance wife in the world.[/quote]
I have always wondered what makes these women so demanding?
In your neighbors case, do you know why she deserves a mansion or why she thinks she deserves a mansion?
Nearly 300 arrested in mortgage probe
http://news.yahoo.com/s/nm/20080619/ts_nm/subprime_arrests_dc_1;_ylt=Aku8gLt1qJKjcFr_fjhQA.ME1vAI
WASHINGTON (Reuters) – Nearly 300 people have been arrested in a 3-1/2 month national coordinated mortgage-fraud probe to be disclosed on Thursday, a U.S. Justice Department official said.
The official said 60 suspects were arrested in a sweep on Wednesday and more arrests were being made on Thursday. The Justice Department is set to discuss the probe at a news conference at 1:15 p.m. EDT.
(Reporting by Randall Mikkelsen)
Sounds like they are getting ready to blame this terrible economy on Loan Fraud.
Deserving scapegoat, imo. But still just a scapegoat for all the other problems that are underlying our economic status.
Blaming loan fraud is certainly a healthy start. Perhaps next, they will start rounding up the people who filled out liar loan applications for their houses. That would deal a healthy blow to the enthusiasm of the quiet vultures who are presently eyeing the market and looking to start snapping up properties toward the bottom.
I see the face. If I were the realtor, I would pull down the blinds on one of the “eyes.” What buyer would pass up a property that winks at him?
Thank you for mentioning the face. I thought I was crazy for seeing it.
I would like to add that I too find this blog to be very eye-opening and informative. With help of reading this blog and the Lansner Blog on OCR, I decided to list my house for sale in April (we were wanting to move anyway but knew if we were going to do it, it had to be then or wait several years.) We listed and am proud to say we found a knife-catcher immediately. We netted a nice little chunk of change and just moved into an apartment to watch this nasty game play out from the sidelines. Had it not been for bloggers like you, we might have bought another house right away (if we were even able to qualify, which I doubt.) I enjoy seeing my down payment go further each day that home values drop. It’s my new favorite sport. Thanks, Irvine Renter!
Wise move.
It is great to hear our message is getting out there. You will be very happy a few years from now.
Count me among those who like the house. NOT at that price, of course. But for those of us going for a starter home, this is pretty nice. 1550 sqft is pretty large for a childless couple.
Now, when it’s on the market for $300K, gimme a call.
I agree with those who think this is a great deal of money for a 1500 sq. ft., 2-bedroom place. This is a very attractive condo that would be great for a retired couple or a family who knew they would stop at one kid (still, that means no office or den). Part of the price is obviously the amenities of the community, and about that, I have a question: The HOA fee (totaling almost $300, which I assume has nowhere to go but up) is split into two parts. What does that mean? Also, since the redfin listing nowhere says “No Mello-Roos”, I assume there is one. Roughly what would the taxes, with Mello-Roos assessment, be on this place? Buyers would have to be very well off, and not mind the small space.
there are two hoa’s involved in the property. one for the individual tract, which covers roofing and groundwork and such. and another which covers the amenities inside the gate. three basketball parks, three children’s play areas, five salt water pools, extensive walking paths, and three tennis courts.
i live in the community. it’s nice. it’s very well kept. and i love the schools around here.
i notice many people on this blog starting to estimate 200 per sqft as reasonable (when nano and I used this number a few month ago, we were told to get out of town) 😆
My two bedroom rental apt is 1050sq. That is a small 2 bedroom imo. Everything has to fit a certain way. 1550 for a condo seem kinda small too.
Its okay as a starter home for people with no kids, if they plan on not having kids for another 5-7 years… once u have a baby, the baby toys etc is gonna take up all the space.
The condo looks really nice inside though, very bright and airy.
How does PMI play into these houses that were financed over 80% of value? Does this mean the insurance company is footing the bill for some of these short sales, instead of the mortgage company?
If you finance a first mortgage for 80% and a second mortgage for the rest, there is no MI. If you used a first mortgage only and financed above 80%, then you pay MI. I have no idea how MI protects the lender in the event of default. I am curious now so I will do some digging.
I agree with ipo that this will sell very quickly. I think it will also sell very quickly in 2 years, when the new owner drops the price to $350k.
By the time we’re through with this debacle nobody will want to set foot within 50 feet of a house. I sense an inevitable paradigm shift coming soon.
Exactly Genius. Just because it will sell quickly today doesn’t mean the market is anywhere near bottom… Now that the credit markets are functioning a little better, declines are likely to be more orderly and protracted vs. what happened October-March.
Yes, $475K is way too much for this place, but then again, $650K was too and someone paid that less than two years ago.
Has everyone forgotten that we still have to go through the Alt-A crisis? That is going to destroy home prices more.
“Has everyone forgotten that we still have to go through the Alt-A crisis? That is going to destroy home prices more.”
Do you the impending Alt-A crisis is going to keep some knife-catching buyer from unloading on this place? That’s inane. 90% of buyers probably have no idea what Alt-A even is and even if they do, they have no conception of what the volume of future resets will do to the market.
Alt-A resets will hopefully be the catalyst to the 25% further declines I think we’ll see… With market dynamics as they are today, with interest rates being relatively low, I think we need more push on prices via higher inventory to get the declines rolling big again.
For the non local folks- This tract (Brisbane) has some great features– unfortunately, the way that the homes are positioned in the tract leaves many of them feeling like your home faces an alley. See how close the house sits to the street in the photo? And, the interior streets seem narrower (though it could be an illusion). I would bet there is a premium for the homes on the outside perimeter.
It appears this property is scheduled for auction in early July with a min bid of $520K per realtytrac.com
Did it go back to the bank early or is it a short attempt?
This is a short attempt, if it is scheduled for auction the beggining of July, I doubt this will be a successful short sale.
It’s not the only distressed property on the street. 17 Burlingame is an REO. 75 Burlingame got its NOD in April.
Are you a stuck flipper? Flipping out because you’re upside down and bleeding cash? If so, the producers of a new cable TV show are looking for you. Seriously.
They sent me this e-mail: “A cable television series is searching for home owners in trouble to participate in a special episode about how to turn a losing investment into a moneymaker. If you’re in over your head and need expert financial and construction advice, please write to realestatenightmares@gmail.com.”
Ok, all you smart people. What is a good range right now for $$$ per square foot?
If you can buy a 3 BR, 3BA house in Irvine for $270 per square foot, would you do it?
Too broad a question. I own a 3/3 and at $270/sf, it would be a 4-5% return for an all cash investor. It would definitely be cheaper to buy it than rent it at current mortgage rents at that price per square foot.
So, if it’s decent investment choice for an all-cash investor and yields a savings of hundreds of dollars per month vs. renting, it would likely be a good buy choice as it would not likely fall much further even with an overshoot at bottom.
I think that only works in low to no mello roos areas though. Paying $270sf for a 3/3 and then tacking on $4K per year of MRs makes it much less desirable.
Price per sf at bottom will vary upon section of Irvine due to desirability of the area and other costs of living there such as HOA and MR.
For those of worry low inventory in Irvine, especially 92602, IMHO is totally no necessary.
The best way to check is to find out how many houses/condos had been sold in 92602, or more specially, for simplify reason, Northpark (and square area) during 2004 to 2007 period. Even I don’t count the number, but I believe there are more than half of condo change hand during that period (Amazing isn’t it).
Simple math, for condo, the price has go down more than 20%, and the rent v.s. own a condo save 50% (base on 2004-2007 prices).
How long do you think those condos owner (mostly first time buyer) will hold the bag?
I think at least another 30% of them will give up during next two years, ironically, which is smart decision. The longer try to hold the bag, the bigger the loser!
We can always get a good bargain in next two years.
Since when is the Tustin Marketplace some kind of oasis that it’s desirable to be close to?
A 2-bedroom condo in a quiet suburb? This place should be going for around $210K.
Save yer pennies: $149.9K in 2011.
So bump it up cause it’s got 3 baths, bump it down cause is a condo, but mostly bump it down cause it’s graceless, middle-aged (though built in 2000?) and will never be hip again. Ah yes, raise kids here, so bump it up.
Still worth only 150K in 2011.