Money Talks — AC/DC
There have been some rumblings about the declining inventory numbers and the slight uptick in sales in Irvine. Perhaps it is signaling a bottom in pricing? This doesn’t seem likely, particularly with the Alt-A and Prime ARMs due to reset over the coming few years. The fact remains that REOs continue to enter the market, and they continue to drive prices lower to find buyers. Until that stops occurring, prices will not stabilize much less appreciate. Today’s featured property is 35% off its 2005 purchase price, and the lender recently reduced the price drastically to find a buyer.
Asking Price: $339,900
Income Requirement: $67,980
Downpayment Needed: $84,975
Monthly Equity Burn: $2,832
Purchase Price: $520,000
Purchase Date: 12/23/2005
Address: 34 New Season, Irvine, CA 92602
| Beds: | 2 |
| Baths: | 2 |
| Sq. Ft.: | 1,190 |
| $/Sq. Ft.: | $286 |
| Lot Size: | – |
| Property Type: | Condominium |
| Style: | Traditional |
| Year Built: | 2006 |
| Stories: | Split-Level |
| Floor: | 2 |
| Area: | Northpark |
| County: | Orange |
| MLS#: | P648984 |
| Source: | SoCalMLS |
| Status: | Active |
| On Redfin: | 35 days |
Court, Parks, Pool, BBQ area. Property has Dual Master Suites, open
kitchen, attached 2 car garage. Close to new schools, shopping and
freeway; close to Beckman High School. Perfect for first time buyers.
Front patio perfect for entertaining ready for you to customize. A must
see!!
This property is even more of a loss for the various lenders than it appears. The property was purchased for $520,000, but the owner managed to refinance into a $456,000 first and a $114,000 second pulling out $50,000 before he quit making payments and walked away. Wells Fargo held the first mortgage debt, and they only bid $360,000 for the property securing their $456,000 mortgage. Obviously, the loss mitigation procedures have changed at these banks. Surprisingly, there were no buyers even at $360,000, so they ended up with the property. After a month in fantasy land trying to get back most of the $456,000 mortgage, they have lowered the price to move the property. At $339,000, this is approaching rental parity at $2,124 per month. If this property sells for its asking price, the total loss after a 6% commission will be $250,494 based on the refinance amount of $570,000.
.
Yeow! Tailored suits, chauffered cars
Fine hotels and big cigars
Up for grabs, up for a price
Where the red hot girls keep on dancing through the night
The claim is in you
The sights are on me
So what do you do
That’s guaranteed
Hey little girl, you want it all
The furs, the diamonds, the painting on the wall
Come on, come on, marry me for the money
Come on, come on, listen to the moneytalk
Come on, come on, marry me for the money
Come on, come on, listen to the moneytalk
A French maid, foreign chef
A big house with king size bed
You’ve had enough, you ship them out
The dollar’s up-down, you’d better buy the pound
[ Find more Lyrics at www.mp3lyrics.org/b6K ]
The claim is on you
The sights are on me
So what do you do
That’s guaranteed
Hey little girl, you broke the laws
You hustle, you deal, you steal from us all
Come on, come on, marry me for the money
Come on, come on. listen to the moneytalk
Come on, come on, marry me for the money
Come, come on, listen to the moneytalk
Moneytalks, yeah, yeah
Money talks, B.S. walks
Money talks, come on, come on
Money Talks — AC/DC
Who takes the stove when they move out?
Is $2124 rent a good deal in Irvine for a 1200 sq ft apartment/condo immediately downwind and adjacent to I-5? In any event if it sells at asking the comps are lowered, but I’d expect this place to ultimately sell for less than $300k.
“Who takes the stove when they move out?”
Bottom feeders. I wonder if they left the copper pipes.
This place not considering the $262 per month dues is close to rental parity, unfortunately the location sucks! Ultimately this place will be $250k.
Different markets will bottom at different times. I think the downtown Miami market has about bottomed (particularly for buildings built prior to 2004), due to the completion of most new product there. I’m putting my money where my opinion is and paying cash for a 2/2 highrise condo there. According to public records, it looks like I’m paying 40% of what the prior owner paid in 2005. (60% price drop.)
We’ll see how this works out — I’ve always wanted a place in Miami, but the prices were always on the high side. Now, it’s one of the lowest priced downtowns in the state.
I picked a great Labor Day weekend to get some work done … most of the state of Florida is overcast thanks to Gustav. I feel for the folks two states west of here that are experiencing a significantly worse long weekend.
Please, please, please, check and see whether the condo assn has enough money, and there aren’t too many foreclosures in the building.
Make sure that a reasonable amount is coming in, so you won’t be paying double or more assessments in the future.
Look at the books and records; talk to the prez of the assn and the management company
I’m moving to the Miami area around the new year, but I wouldn’t touch the condo market with a 10 ft pole just yet. In Coconut Grove, the rental and sale markets for townhomes include a lot of the same properties (based on shared images). But if you estimate sale price based on rental equivalence, these properties have a long way to go. And the rentals aren’t exactly disappearing. There’s a 3/2.5 br/ba with a pool and 2500 sq. ft listing for $2400/mo, or a ballpark price of 384k. It’s been listed for rent for weeks now. Similar homes in the sale market are mostly listed in the mid-high 400s, and those are the non-WTF prices.
Is that a loft? Is the second bedroom a loft?
I can’t be sure from the pics but shure looks like a loft.
Love the cracked toilet seat.
What a trashed property.
And in order to be listed as a bedroom, it must have a closet and four walls, I think. It seems this place has two beds plus a loft.
also need a window for fire egress.
Don’t think the toilet seat is cracked, it looks like the paper seals they use in hotels. Besides taking the stove, they also took the fridge. Forgot to take the microwave.
I’m not surprised there were no buyers at the auction for $360K. Who would want to risk losing $100K+ to own this apartment, when you could rent one for less cash per month? The HOA dues are high, and the income tax benefit from a low-end house isn’t as high as it seems — you only get the benefit that is in excess of the standard deduction, not from the whole amount of the mortgage interest per month.
Is this really considered part of Northpark? I had no idea Northpark extended that far.
Freeway-adjacent, great for the kids’ asthma!
It is not a loft. One bedroom with bath, kitchen, living room, and powder are upstairs. (Note the entry on the second level in the exterior shot). Another bedroom with bath is downstairs with the laundry and garage entry. The bedroom has a sliding glass exit onto the front patio (which was never finished).
I am familiar with this construction in another location (north of irvine blvd, west of jamboree).
I hate it when there are no previews! East of jamboree, not west.
The HOA dues seem high, but from reading this blog it seems like all the Irvine Condos have high HOA dues. What do the dues typically cover in Cal, besides the pool and the landscaping on a few bushes? Do the HOA dues cover repairs and maintenance on roofs, stucco, etc or does the homeowner get stuck with that?
Are your down payment and income requirement numbers transposed or is it me?
Ahhh, there’s that term I hate some much again – “rental parity”.
Can I tempt you to use “current rental parity” in the future instead???
OT – Bad weekend for Mille Fleur owners. Saw three moving trucks at three separate houses there this weekend, two of which were for sure moving people out, and I didn’t see any “SOLD” signs on those “For Sale” signs out front…
OT again – My lease is up at my IAC apartment in Woodbury next month and they’re not trying to raise my rent. Hmmmm…
Yeah, likewise. Just renewed my IAC apartment contract and got no rent increase for probably the first time since I started living here many years ago.
Love the “yard” outside the sliding-glass door.
Rents will drop. Building costs will drop. Incomes will drop. Prices will…anybody?
you know, condos used to be regarded as a kind of way station in ownership. you got whatever benefits ownership supposedly conferred, and for a monthly HOA, you were liberated from annoyances like roof and lawn maintenance.
but from what i hear, with so many derelict condos out there, the associations are coming up short every single month and can’t pay for repairs in many cases.
it is perplexing — or infuriating, rather — how every permutation of having shelter in the US is currently screwed. even renters find their landlords defaulting and are thrown out thru nothing they did.
IR or other people who understand this-
A procedural question about foreclosure auctions.
It’s my understanding that at a foreclosure auction a first mortgage holder will traditionally bid up to the amount of the first mortgage. I understand this logic as long as competitive bidding at the auction continues. This particular example is apparently non-traditional because they bid 360K on a house where the first mortgage debt was 456K. However, they won the auction so why would they “normally” be expected to bid more, why is it somewhat suprising they didn’t bid more? Is it some kind of sealed-bid auction?
Thanks for insight.
They used to do that, so they’d at least recover close to the amount of the first mortgage. You also have commission and the number of months the homedebtor was behind to consider, but that’s another story.
Nowadays, lenders are getting wise to the fact that there’s no way they’re going to recover anywhere near the “value” of the paper they hold. If they bid $360k in this case, and someone else bids $370k and wins, kapow, they’ve just recovered $370k of the first for less additional work. Now, even WITH their lowball bid, they STILL can’t ditch this property, plus they still have to take the time/cost of marketing/selling it.
Please correct me if I’m wrong about any of this. Thanks
The biggest thing going on with banks right now is when do the accounting “rules” force them to recognize the loss. If banks were required to recognize all the losses they currently should have on their books, they would probably all be out of business. A bank can underbid the first mortgage if they don’t have to recognize the loss immediately. If they do have to recognize the loss, they will probably try to hang on as long as possible. Banks will come up with any rationalization possible to keep the doors open another day, it does not have to pass a common sense test.
Liz,
Thank you for bringing this up. Do banks pay HOA fees on REO propeties? No!? Why?
How does one find out if the HOA is well funded?
Best
I just looked at a property in the same complex that is probably the same floorplan. It isn’t a loft, its a split level unit and what you’re looking at is the living/kitchen area. From the front door, you walk up the stairs to the living/kitchen area. very nice place for a roommate situation since both rooms are on seperate floors. the downstairs bedroom is very quiet and would be excellent for renting out.
I don’t see a crack on the toilet seat, it looks like a string or ribbon? Maybe it’s supposed to look like a hotel lol.
I do see at least one missing electrical cover outlet, maybe they former buyers returned it to Home Depot for $0.35.
Suckers are born everyday. I put in offers (up to what I’m comfortable bidding) on some of these properties, and this happened to be one I put an offer in on. By the second day since they lowered the price they had 18 offers come in way over the listed price! They countered with best and final. At this point I did not want the property but still countered back just to see how much some idiot was willing to cough up. My offer was for 380,000, 40% down, 25 day escrow and it was NOT ACCEPTED!!! 380,000 is 100,000+ overpriced at this point in my opinion and someone topped that. Hopefully, the buyer smartens up and escrow falls through or as the saying goes.. “another bites the dust!”