Crying — Aerosmith
I was cryin’ when I met you
Now I’m tryin’ to forget you
Your love is sweet misery
For all our wisdom and collective experience, none of us knows what the markets will do next. Like an ocean current or a raging river, a financial market charts its own course. It is fickle and feckless and flows without regard to our hopes and dreams. The ebbs and flows of financial markets are meaningful to us, but in reality they are just movements in price; nothing more. Price rallies make homeowners blissful and renters bitter, while price declines make homeowners gloomy and renters gleeful. These feelings and emotions are independent of movements in price. The market just moves, that is all it does. It is benign, yet dangerous; it is indifferent, yet demonstrative; the market is a paradox which we must simply accept.
I was cryin’ just to get you
Now I’m dyin’ ’cause I let you
When today’s featured property was purchased in 2005, the owner undoubtedly thought they made the purchase of a lifetime. This property was certain to appreciate at 15% a year. It would be worth $2,000,000 soon enough. Now the owner is trying to forget this place. They listed the property at a short-sale price, they have proceeded to knock almost 20% off the asking price and still no takers.
Listing Price History
| Date | Price |
| Aug 26, 2008 | $535,000 |
| Sep 05, 2008 | $525,000 |
| Sep 17, 2008 | $515,000 |
| Sep 25, 2008 | $505,000 |
| Sep 29, 2008 | $495,000 |
| Oct 07, 2008 | $485,000 |
| Oct 15, 2008 | $465,000 |
| Oct 20, 2008 | $445,000 |
| Oct 21, 2008 | $435,000 |
| Oct 27, 2008 | $425,000 |
Of course, they are not alone. We have profiled another property nearby lately: 65 Weepingwood #97, Irvine, CA 92614. This nearly identical property was an REO, and the lender let it go for $385,000. Do you think today’s seller will get 10% more? I doubt it.
Asking Price: $425,000
Income Requirement: $106,250
Downpayment Needed: $85,000
Monthly Equity Burn: $3,499
Purchase Price: $565,500
Purchase Date: 10/28/2005
Address: 97 Weepingwood, Irvine, CA 92614
| Beds: | 3 |
| Baths: | 3 |
| Sq. Ft.: | 1,582 |
| $/Sq. Ft.: | $269 |
| Lot Size: | – |
| Property Type: | Condominium |
| Style: | Other |
| Year Built: | 1983 |
| Stories: | 2 Levels |
| Floor: | 1 |
| Area: | Woodbridge |
| County: | Orange |
| MLS#: | S545417 |
| Source: | SoCalMLS |
| Status: | Active |
| On Redfin: | 63 days |
No wasted words in that description.
This property was purchased for $565,500 on 10/28/2005, the same day as the comparable property. The owner used a $452,400 first mortgage, two HELOCs for $56,550, and a $0 downpayment. There are two more HELOCs opened later for $17,000 and $116,500 respectively. It appears as if the total debt on the property is the total of the first mortgage and the final HELOC: $568,900, although it could be $17,000 higher.
If this sells for its asking price, and if a 6% commission is paid, the total loss to Wells Fargo will be $169,400. And I thought they were a conservative lender…
{book}
Get a Grip
There was a time
When I was so broken hearted
Love wasn’t much of a friend of mine
The tables have turned, yeah
‘Cause me and them ways have parted
That kind of love was the killin’ kind
Listen, all I want is someone I can’t resist
I know all I need to know by the way that I got kissed
I was cryin’ when I met you
Now I’m tryin’ to forget you
Love it sweet misery
I was cryin’ just to get you
Now I’m dyin’ ’cause I let you
Do what you do down on me
Now there’s not even breathin’ room
Between pleasure and pain
Yeah you cry when we’re makin’ love
Must be one and the same
It’s down on me
Yeah I got to tell you one thing
It’s been on my mind
Girl, I gotta say
We’re partners in crime
You got that certain something
What you give to me
Takes my breath away
Now the word out on the street
Is the devil’s in your kiss
If our love goes up in flames
It’s a fire I can’t resist
I was cryin’ when I met you
Now I’m tryin’ to forget you
Your love is sweet misery
I was cryin’ just to get you
Now I’m dyin’ ’cause I let you
Crying — Aerosmith
I called a John Mc Cain campaign center and let them know that he lost my vote by continuing to promote his idea of buying up foreclosed homes with taxpayer dollars. He specifically stated that he would do it to prop up home prices. We all know that a large fraction of this practice would be right here in Southern California if this were to happen. He needs to know that Joe the plumber or Jane the schoolteacher cannot afford a home here!
PS – Hey Kurtyboy, let mi no if i spel a wurd ron ok?
Not sure if Kurtyboy are up yet or not, but duh,
you spelt “mi” wrong, and “spel” are missing another “l”; wait, “wurd” should being spelt with an “o”, and “ron” are completely spelt incorrectly.
I are great speller, but not so well on Grammer…
Good for you.
That is why the ‘Maverick’ is going to lose the election.
He has deviated so far from what the average person would consider ‘conservative values’ that he has made himself look like a pandering fool.
They go popping off about ‘socialism this, socialism that’ while pushing wooden-arrow bailout bills, free money for irresponsible borrowers, etc, but by god willing to fight tooth and nail to prevent those sinning homos from having equal domestic privileges as the godly straights.
I used to have a lot of respect for McCain, but it has been all but lost in watching him flip and back-peddle over and over again throughout his campaign.
Apparantly I am not the only one as I read yesterday that Arizona has gone from ‘Strong McCain’ to now just ‘Leaning McCain’. Obviously the intellectually honest Republicans here refusing to carry the water for a loser of a platform.
Ron Paul was their man. Whoops!
am sure you meant ‘back-pedal’
You are so right. Well done, Billy.
Someone fetch this boy a chocolate chip cookie.
http://www.crackthecode.us/images/SPAward.jpg
Well said AZ.
I’m still trying to figure out how this happened. Mc(Iwasawarhero)Cain had a 7% approval rating among Republicans prior to the primaries. It’s like a K1 tournament where the top contenders injure themselves so badly in prelim fights, that they cannot continue and some benchwarmer gets the trophy by default.
Yes, I respect his military service and the fact that he shed blood for our nation, but that just isn’t enough to get my vote.
Pandering old fool is right. It’s disgusting.
I’m still an undecided voter. I’m vacilating between Bob Barr and writing in Ron Paul.
(this blog entry was proofread for perfection by kurtyboy)
You know you want to write in Ron Paul !
Ron Paul is for conservatives/libertarians that can’t yet come to terms with the fact that their whole ideology is rotten. Instead of admitting that their view of how the world works is wrong, they simply blame their candidate for not implementing the “pure” form of their ideology. Sure, that’s the problem here.
At least libertarians are half right in that, while they support the same rotten economic principles as conservatives, they don’t support writing bigotry into law. Kudos on that.
Getting test, are we?
Prop 8 got you down?
Ron Paul and Paris Hilton!
The Dream Team!
Don’t waste your write-in!
Waste ? How do you figure ?
Ron Paul is the greatest American to ever walk the face of this planet or any other planet. I take offense to how you smear him with the taint of libertarianism. Ron Paul would never advocate teaching sodomy to our children. A libertarian would. Libertarians simply try to reap the economic benefits of conservatism while casting away any moral obligations. You can’t be half right. You are either right or wrong. The idea of a middle ground is the devil’s influence.
Yup.
The primary voters fell in love with his “War Hero” image and the GOP figured that they could manipulate enough voters with the “patriotism” propaganda rather than spend time examining solutions to the actual problems being faced by the country.
It is clearly obvious that the GOP strategy is to win now and figure the rest out later. Just what the country does not need.
I won’t vote for Obama because of his aye-wooden-arrow vote so I do not have a candidate to vote for.
I am going to vote on the AZ propositions so I may just write in Ron Paul on the ballot even though it is meaningless.
Ron Paul ! Ron Paul ! Ron Paul !!! 🙂
Or the theory is the GOP saw the failed policies and actions over the last 8 years by Dubya and his cronies were most likely going to lead to an Obama victory; And with the financial markets imploding with the economy in a recession, the Republicans threw in the towel with selecting Palin. Now, they will let Obama and the Democrats struggle through the quagmire the next 3-4 years will be. Then, they expect to be able to come in to win back the White House and the Senate Majority.
At least Obama is better with respect to this. McCain thought he could buy a few more votes with this ridiculous proposal. Yes, I’m wondering also where is the John McCain I used to respect.
I don’t think it was him. It was just a string of bad advice he’s been fed, from a bunch of losers.
That’s what happens when you surround yourself with losers!
They deserve to lose in this election. And I know we’re not going to be better off with Obama either.
Sad, Sad, when we don’t have a “None Of The Above” choice.
I wish this whole thing could just be a video game. Let’s reset and start things over! 🙁
I don’t think that McCain has something ideologically contrary to what most people on this blog think consitute a moral hazard. I just think that he does not know what he is doing, with no apparant ability to consider the consequences of his policies.
You are 100% correct. John McCain should have worried about the 94% of those that aren’t losing their homes and about those that have been forced to rent because they refused to take exotic irresponsible mortgages. If McCain would have though about those and created tax breaks that would create income tax deductions for money put towards down payments, he may have had a chance.
I’m honestly not surprised at the lack of wasted words in the description. At this point, the realtor’s probably resigned himself/herself to innumerable nagging calls from the seller, crying “Why won’t my house sell?”, and the only available answer is the one that will make the seller throw a tantrum. “Drop the price further? But I paid more than that!”
Just wait until the 2000 rollbacks are complete and this place and the others are selling in the 200K range. There are going to be some very unhappy knife catchers in this neighborhood.
Someone should start an ad to play on the television over there that says “Would you like to lose 200K in 2 years while working from home? Buy my guide to real-estate and we’ll show you properties like this condo that are destined for your financial ruin! Act now before all the falling knives are caught!”
If you have a video camera, make a fake commercial like that and put it on youtube. Post the link in a few places and I’ll bet you get tons of viewers.
Most certainly !
You could have a cartoon of some gleefully optimistic buyer running through a hail of knives falling out of the sky rabidly catching as many as he can.
Or a cartoon of a guy in one of those money-machines where the dollar bills are blowing all over the place while the participant tries to grab as many as he can within a 1 minute period. You could have a bunch of knives, swords, grenades, etc blowing around inside of the machine with a guy inside happily grabbing at whatever he can. And there could be a long line optimistic zombie-ish people in line for their turn.
I see potential here. I wish that I had drawing talent.
2000 rollbacks… What a dream.
Closing prices for Irvine in October are 1% HIGHER than September. Irvine’s been stuck at mid 2004 prices for seven months now.
When oh when, great sage AZ, to do you expect Irvine with begin this steep downward progression in prices? Will we have 2003 prices by next Spring?
Californians have been using financial voodoo to qualify for loans for the last 8+ years.
Interest rates will go up sooner or later.
Without the creative financial wizardry that lenders have been conjuring up over the last 8+ years, it is going to be hard to finance these half million dollar condos.
But how about the way our political leaders are determined to prop up the housing market? And with all of their bailout $$ in hand, I think the only lesson the banks learned was how to cry wolf loudly.
Absolutely right.
Just ask the Japanese how the government intervention worked out for them. Of course we all know that America is super-special and immune from things like that so it need not pay attention.
(http://en.wikipedia.org/wiki/Japanese_asset_price_bubble)
Stop, you’re depressing me. :down:
I believe most of the higher cost properties were purchased with ALT-A mortgages that have not reset yet. These folks are still on their teaser rates and can make the payments and are doing their best to defer the carnage until thier bailout ship comes in.
There are many people buried under soot from Mt. St. Helens who had heard for years that the mountain was gonna blow……Just because it has not happened yet does not mean that it wont.
Exactly fifty-seven (57) people were ‘buried’ under soot from Mt. St. Helens when it erupted. Hundreds of other people evacuated in time before the eruption happened.
Source:
http://www.kgw.com/news/pdf/helens_deathlist.pdf
I am curious about the owner’s (or bank’s) strategy here. I guess they are hoping a prospective buyer finally sees what they believe to be a fair price and makes an offer. I’ve seen many other homes where prices are dropping by $30-50k a month, but not in $10k increments at weekly intervals.
There was a listing two months ago near me for a large place with a view. Bit of an odd layout and yard. The bank put it up for sale at $216 per sq ft. Pretty reasonable price. Sold in less than 2 weeks.
The seller is purely trying to salvage as much of their FICO as can be tenable in their situation.
They are trying to find the lowest possible number that the bank will accept which is why you keep seeing the piddly little decrements.
The bank will go ahead and give the seller some false hope in the meantime, figuring that they might as well get a few more payments out of these people before they eventually default and another foreclosure to deal with. In the meantime, the sellers will keep making their mortgage payment, thinking that the bank is working with them.
At this point, it is in the bank’s best interest to keep sellers like these strung along and stalled while the payments are still showing up and the other foreclosures work their way through the system.
I would say to today’s seller:
Quit stressing yourself out. Put the keys in the mail and go find yourself a nice rental somewhere. Take your FICO licks, suck it up, and move on. The bank is just playing you with all this short sale stuff.
I saw a place pop up in my redfin emails almost every day for a month or so. They were changing the price every day by a few bucks (up or down) so that it would appear in a search as an “updated” listing.
Clearly, these people are chasing the market down, but I think that the strategy of doing it weekly might make some sense to try to generate new people walking through the place every weekend.
However, after 3-5 of these weekly cuts, if I were in the market, I’d show up and offer them 30-40K below whatever they were asking, telling them “would you rather get this now or in a month?” So, I think the strategy can quickly become counterproductive.
Woodbridge is a nice neighborhood but the HOA fees there just help to kill property values. Actually, considering properties in other neighborhoods that have been featured here, it seems to me that this is happening in most parts of Irvine. Okay, maybe they’d still be knife catchers, but I bet there are potential buyers for properties like this if they wouldn’t have to pay an extra $300 or so in HOA fees.
I’d love to see an analysis of how these fees depress values. I wonder if there are any angry sellers yelling about the fees to their HOA.
Depends how you look at it. $300/month HOAs are reasonable considering you have access to pools, the Woodbridge beach area, and other amenities.
Great if you have kids and you don’t have to worry about having a pool in your backyard.
You should check out some of the condos in Turtle Rock that have $500 month HOAs…now that’ll leave a mark.
P.S. I like the description on this place how it says it’s close to the 405 freeway…no shit…you’re practically living on it! Location…location…location…
Is it really a nice neighboorhood? All of Irvine can seem like a creepy potemkin village, but the part of it north of the 405 is possibly the creepiest.
IMO, Woodbridge is one of the nicer parts of Irvine but this tract is on the lower-end. When you get around the lakes it gets pricey.
Yeah, once you get north of the 405 it can feel very tract home-ish. Irvine can seem a bit sterile at first but it grows on you. I moved here six years ago and thought I’d only be here for two but I’m still here…lol
It is nice if you have kids. What is a potemkin village?
http://en.wikipedia.org/wiki/Potemkin_village
with the irvine company in the role of the god-like supreme czar, of course
A real estate investor friend of mine lives in Sacramento. He bought his home at the peak for 1.2 million. He had no bids when he put the home on the market for 600K. After 6 months he pulled the home off the market. According to him, most homes in the Sacramento area offered for 50% of the peak price are not moving.Right now, he thinks you need to price at 30-35% to close a sale. So do I think Irvine prices are headed to 50% off the 2005-2006 price? Oh yeah…..
Just a matter of time. Certain areas of the country leave the denial phase of the mania slower than others.
Wow…that’s hardcore. Not as bad as a 75% drop from the peak in Palmdale though.
50% drop from the peak in Irvine? Maybe, maybe not but Irvine is no Sacramento…people actually want to live here.
Here is a clear example of a unit that should be compared to its rental income potential. I cannot see why somebody would want to buy this, instead of rent. There are much nicer apartments in Irvine for much less monthly expense. Even with the tax savings, you are still catching a falling knife. It actually takes more than a year before you can actually see a savings on your witholding.
Why does it cost $350/month to have access to a pool and a beach at a lake?
Why doesn’t Irvine have a public pool in a public park?
Why can’t you drive 10 minutes down to the real beach?
Isn’t $350 HOA fine equivalent to $80,000 purchase price bump
I’m not trying to defend these high HOA fees – they are high – but its important to note that these fees do include your homeowners/fire insurance in addition to the maintenance of the parks, pools, etc. And in my opinion the Woodbridge associations do a good job of maintaining the properties. In my neighborhood in the last 5 years they have replaced the fences, put in new roofs, painted the exterior of the house, and they do a good job on the regular gardening on the exterior of the house. But I agree that these HOA fees essentially amount to increased costs of ownership that must be factored in when you are consdiering buying a property!
Actually, the Woodbridge HOA is $73/mo. and is by far the best value in Irvine (given that you are getting 20 pools, 40 tennis courts, etc.). Compare to Northpark or Quail Hill which are more $$/mo. and provide fewer (though newer) facilities. In places like Quail Hill, you pay a lot of HOA to maintain slopes and greenbelts on hills which are more costly than flatter areas like Woodbridge.
The bulk of the HOA associated with this unit is not for Woodbridge, but rather the local condo association and covers the usual condo upkeep (exterior, paint, roof, insurance, trash, landscape, …).
Second, Irvine is full of public parks. Some of the larger parks in Woodbridge are actually public Irvine parks as designated by the “City of Irvine” words under the signs.
No, it’s my understanding that the HOA for Woodbridge is $27-something. Condos get their own special assessment, which seems to be around $79 I think. So a condo in Woodbridge is $27x + $79. The SFR’s only pay the $27x.
I think you may be right. Our condo tract in Westpark is about $250/month for HOAs. My parent’s SFR down the street is only like $30/month. I know their HOA doesn’t cover external maintenance like ours but you have access to the pools and tennis courts.
IMO, convenience. And many HOA dues include common area/external maintenance on properties. Our place is getting painted right now.
I think Irvine goes with the local pools in order to keep the crowds down and maybe lawsuits as well. If you had just a few large public pools it might attract folks from surrounding communities thus making it less private. Ever been to an LA County public pool?
What’s nice about Irvine is you can drive 10 minutes to the beach but it’s also nice not to have to get in your car and walk down the street to the pool. I don’t like to drink and drive.
The HOAs do lessen the amount you can borrow but all depends what your needs are…different strokes for different folks I guess.
What bothers me is how HOAs can be so different. Pool maintenance costs the same no matter what neighborhood of Irvine you’re in. Same thing with landscaping. Why is there such a difference between neighborhoods?
Because they can ?
This is what I have observed. In the 70’s, some tracts had pools and then had small HOA. Condos were not common. Slopes where deeded to the county or city and they would accept them and maintain them. Then the county/city realized that there was a cost to maintaining these slopes. This was probably after prop 13. They would not accept the open space or the slopes so associations were being formed.
If the slopes or common areas are not maintained through a HOA, they may still be paid for as a special assessment on the property tax bill.
It seems that every few years, they come up with a new way (scam) to get these cost paid. Beware of the hidden costs.
When it comes to Mello Roos, I would read the fine print and assume the worst before I signed. Some of the original Mello Roos allowed for special assesments in the thousands when the developer walked away from the projects in the bad times. In the 80’s the Mello Roos would last for less than 20 years. I was told Woodbury has some 30 and 40 year assessments.
Today’s post was rather suspenseful – for Halloween I’ll bet!
First we read that these nice folks unfortunately bought at the top and then we learn that they proceeded to knock off 20% from the short sale price. So, we’re left thinking “Oh no! I’ll bet they lost their downpayment!” However, then near the very end of the write-up we find out that the downpayment on this over HALF MILLION dollar purchase was ZERO dollars! In other words, they didn’t have any money at the time to make the purchase, but they were confident they would somehow scrounge up over a half mil in the future.
Just another loss, albeit small one, for the bank/taxpayer.
Let’s see, what again is the reason we can’t reveal identities of people who are sticking us with their bills?
So let’s see…Your reasoned response IS:
That your favored candidate is turning out to be more socialist than your purist heart can bear so now you’re gonna see to the election of THE MOST SOCIALIST PRESIDENTIAL CANDIDATE EVER.
That makes sense how? In other words that gets you what you want HOW?
I’ve outlined a number of times how I think that although imperfect and certainly not how I’d LIKE it to be I believe Mc Cain’s compromise is probably the best we can do at the moment.
DUH with a 40% decrease in property values we could foresee a 40% decrease in municipal services (based on property taxes) IN ONE YEAR- do you REALLY want to go there and are you fool enough to think that those cuts are gonna be in the programs YOU would choose seeing as you just handed the Dems full reins to the Congress AND Presidency? Clue: we’ll still be paying for education, healthcare and welfare for illegals but the police and fire and infrastructure and funds for YOUR childrens’ education will get cut back.
If you can’t see that i don’t know how to make you understand. I’ll try later when I’m not so pissed by the stupidity of throwing a tantrum at Mc Cain that gives such a place he has no business being in to the MOST SOCIALIST candidate ever, Obama. You express your dislike of socialism by enthroning the biggest socialist there is. Nice…and rational.
Let’s see; Mr. Republican Bush has done so well with the last eight years. The entire country is circling the drain; you REALLY want another Republican in office? Especially such an even tempered guy like whack job McPain?? Perhaps you’d rather Caribou (boob) Palin? She’s about smart as a box of rocks; but I’ll give her this, she’s a pushy bitch; West Hollywood got it right.
Maybe our country needs some shaking up; maybe it’s time for someone besides “right of eminent domain” white men to give this country a wake up call. (If you’re wondering I am white and sick of the status quo.) It’s always been about rich white men in this country; this, I might add, included our founding fathers who decided we were really too stupid to elect our own president, hence the electoral college.
Maybe YOU need to wake up!
Might I add that I believe that the last time we had a Dem as president there was a budget surplus when he left office…it was the Republican who came after who managed to spend it all.
“40% decrease in property values we could foresee a 40% decrease in municipal services (based on property taxes) IN ONE YEAR- do you REALLY want to go there”
Let’s see, a 40% decline from peak puts us at 2002 prices or so? I don’t recall municipal services lacking in 2002, so I don’t mind if they do fall to that level.
In fact, I think municipal services were even better in 1997, so let’s let values drop to there!
First, I sincerely doubt that Obama is “the most socialist candidate ever.” In fact, I don’t remember anyone tossing around that term about him at all before his comment to Joe the Plumber. I’m not saying I’m sure he’s not, but one wonders if Humphrey was more so.
Second, so what? The US has one of the most liberal (in the classic sense of the word, meaning favoring less government intervention in the economy, what we here in the US call “fiscally conservative”) governments of all western democracies. If the US were to elect a more “socialist” person, it’s in the context of the US’s overall liberalism. Even if Obama is the “most socialist candidate ever”, we’ll move a step closer to Canada. We’d still be at the far end of the scale.
Finally, voting for Obama because you think McCain’s plans are too “socialist” might actually make a ton of sense for a lot of people. You’re assuming that a voter is a single-issue voter. Take a fiscally conservative, socially liberal voter, for example. Ordinarily, maybe that voter might be torn. But, if McCain is proposing policies that are similar to Obama’s on the fiscal dimension (not the same, but the difference is more slight), then perhaps you consider both candidates bad on the issue, but you like McCain slightly more. But you might like Obama a lot more on other issues. Decreased differences in policies on one dimension increase the weight given to differences on other dimensions.
Both turkeys Obama and McCain voted for the bail-out shit. When I lose money in one investment I lose my money, but when the elitists lose money on investment, it is the tax payers that lose not the investors. Since I pay a lot of taxes every year, I am very bitter about this. Adding insults to injury, I did not participate in the housing bubble at all because I and most of you knew it was a bubble, and when the bubble bursts, it is the ones responsible for this bubble that reaps the benefit through government bail-outs shit. In the meantime, I might lose my job and thus my liveliness due to this economic crisis. This shit is not fair, and this anger is building inside me every day.
Since Obama is going to carry the state of California anyway by a landslide, we need to get together and send the message across to the nation that there is another choice besides the turkeys both the Republican and the Democratic parties have to offer. That is by voting for a 3rd party candidate. Let it be Ron Paul or Chuck Baldwin. We need to unite on this one. Even if Ron Paul is not running, and you all want to write his name on the ballot, I will do so. This time around, we might get a few percent of the votes, but the next time when the nation sees the value in the 3rd party candidate, they might chip in more, and eventually we can win this one.