Double Vision — Foreigner
Fill my eyes with that double vision
No disguise for that double vision
What is the premium for a detached product? There certainly is one. I would pay more for a similar product that does not have a shared wall, and so would most buyers. You have a greater sense of privacy with a detached unit, there is less noise, and there is something about being able to clearly identify a specific object as
“mine,” that you cannot obtain from an attached condo. Intellectually,
you might know there are property lines at the walls, but when you look
at an attached condo, you see one massive building you only own a part
of. It is not as emotionally satisfying. The question is how much is this premium?
Someone could probably do a study of the property records and come up with some aggregate estimate. I imagine it would be something like 10%-20%, but I have no data. An internet search brings up a number of studies in the UK housing market, but I found nothing referencing the United States. Whatever the actual number is, I suspect it is far less than 100%. Today we have two featured properties in Westpark. One is a 2/2 attached short sale being offered for $299,900, and the other is a 2/2 detached being offered for $599,999. Do you think the seller of this second property has any chance of selling it? I don’t.
Asking Price: $299,900
Income Requirement: $74,975
Downpayment Needed: $59,980
Monthly Equity Burn: $2,500
Purchase Price: $500,000
Purchase Date: 8/25/2006
Address: 61 Costero Aisle #242, Irvine, CA 92614
| Beds: | 2 |
| Baths: | 2 |
| Sq. Ft.: | 1,100 |
| $/Sq. Ft.: | $273 |
| Lot Size: | – |
| Property Type: | Condominium |
| Style: | Contemporary |
| Year Built: | 1987 |
| Stories: | 2 |
| Floor: | 1 |
| Area: | Westpark |
| County: | Orange |
| MLS#: | S557637 |
| Source: | SoCalMLS |
| Status: | Active |
| On Redfin: | 1 day |
 New Listing (24 hours)
|
|
Vaulted Ceilings, Distressed Like Hard Wood Flooring, Tile Kitchen
Counters, Stainles Steel Microwave & ishwasher, Full size Washer
And Dryer Included, Mirrored Wardrobes, Closet Organizers, Loft,
Fireplace in The Living Room, Main Floor Bedroom & Bathroom.
A quiet and private apartment? This is an apartment despite the fact you can own it.
Why Title Case?
Stainles? ishwasher?
There is nothing desirable about this unit, which is why the $500,000 purchase price in 2006 is so amazing. I would ask WTF the owner was thinking, but I think we all know. The owners used 100% financing, so they really didn’t care. This property was rather unique in that the first mortgage was an Option ARM for 100% of the purchase price. There is no second mortgage, and there is, of course, no downpayment.
If this property sells for its asking price, First Guaranty Financial Corporation stands to lose $218.094 after a 6% commission.
This property is being offered for 40% off its peak purchase price.
I have to imagine the owner of today’s second featured property is hoping this isn’t considered a comparable sale.
{book}
Asking Price: $599,999
Income Requirement: $150,000
Downpayment Needed: $120,000
Monthly Equity Burn: $5,000
Purchase Price: $279,000
Purchase Date: 3/19/1999
Address: 8 Andisssa, Irvine, CA 92614
| Beds: | 2 |
| Baths: | 2 |
| Sq. Ft.: | 1,360 |
| $/Sq. Ft.: | $441 |
| Lot Size: | – |
| Property Type: | Single Family Residence |
| Style: | Other |
| Year Built: | 1989 |
| Stories: | 1 |
| Area: | Westpark |
| County: | Orange |
| MLS#: | S557533 |
| Source: | SoCalMLS |
| Status: | Active |
| On Redfin: | 2 days |
This is the nicest sngle story house on the market. Huge Interior lot
location with a private yard and extensive use of hardscaping and lush
shrubs and large custom fountain. Tile floors in the living,dining, and
kitchen. Plush neutral carpet in the den. Gourmet kitchen. Vauleted
high ceilings. Motivated to sell this beautiful home!!!
high ceilings? First, I assume the realtor meant vaulted. Second, is there a vaulted low ceiling? I suppose beneath a staircase…
This property was purchased on $279,000 on 3/19/1999. The owner used a $251,000 first mortgage and a $28,000 downpayment. On 6/7/2002 she refinanced for $256,500, and on 1/5/2004 she opened a HELOC for $75,000. A relatively conservative borrower by Irvine standards.
If this property sells for its asking price, and if a 6% commission is paid, this owner stands to make $378,999. Good luck with that.
Is this second property worth double the first one?
{book}
Feeling down ‘n’ dirty, feeling kinda mean
I’ve been from one to another extreme
This time I had a good time, ain’t got time to wait
I wanna stick around till I can’t see straight
Fill my eyes with that double vision
No disguise for that double vision
Ooh, when it gets through to me, it’s always new to me
My double vision gets the best of me
Never do more than I, I really need
My mind is racing, but my body’s in the lead
Tonight’s the night, I’m gonna push it to the limit
I live all of my years in a single minute
Fill my eyes with that double vision
No disguise for that double vision
Ooh, when it gets through to me, it’s always new to me
My double vision always seems to get the best of me, the best of me, yeah-ah
Ooh, double vision, I need my double vision
Ooh, It takes me out of my head, takin’ me out of my head
Ooh, I get my double vision
Ooh, seeing double double, double vision
Ooh, oh my double vision
Ooh, double vision
Yeah-ah, I get double vision, ooh . . .
Double Vision — Foreigner
Gee what’s going on with all those computers? Stock trading, serious gamer, boiler room, porn ring or just plain geek?
the photo is into a mirror. there’s only 2 PCs
Your right, another stupid observation on my part. Here’s one, how about the mattress on the floor in the reflection, doesn’t look like the the beds in the bedroom photos.
Is it the fisheye effect?
The two center PCs are the same, the outer two are the same, with paired horse statues on the top, however, the plant is missing (or off the top) but the electrical conduit is also missing in the 3rd PC area.
I think there are four PCs. The mirror looks like a sliding closet door, however we’re only looking into one mirror.
I think the owner is a homesick submarine captain. If you’ve ever been in a diesel attack submarine, that row of consoles is what the control room looks like. Just needs a periscope to complete the decor.
I have this theory – that the bubble started in the prime areas in 2000, maybe as early as 1998 for the premier areas. Although my evidence is 100% anecdotal, I keep seeing things like the second property:
Apr 25, 2006 Sold $500,000 18.5%/yr
Jan 21, 2003 Sold $287,500 14.1%/yr
Oct 29, 1999 Sold $187,500 2.9%/yr
Jul 09, 1993 Sold $157,000 0.7%/yr
Sep 16, 1988 Sold $152,000 —
Theres just no reason for 14%/yr for 2.25yrs!
If history repeats itself, we’ll see a median income * 4.1 = median OC price again (1985, 1996). http://spreadsheets.google.com/pub?key=pGy0BQU1PZ9And2KJvInRJg
Very interesting spreadsheet. I’d be interested to see the numbers for 2007 and 2008 (once it comes to its merciful end).
Substantively, while I don’t know if I agree that we’ll see multiples of 4.1 again, I agree that they have to eventually fall back to levels that are close to that.
Properties like this just drive that point home. Why would a family making $150K/year want to live in a piece of junk like this place? The “gourmet” kitchen clearly has never been updated and it’s only 1,300 sq. ft. I just don’t get it.
unfortunately I got it from the local bull on the OC blog. I dont have any other data, and I dont know the source of that data, so I dont know where to go to update it (with the same source of data for consistency).
As for 4.1, I can actually see that happening. But it also depends on what the median income is reported to be. some say its 75k, others say 65k. thats a $40k+ swing in median.
There’s no way it’s $75K. Chances are it will show a decrease in 2008 and it will likely be relatively flat over the next couple of years. Times are just too tough to see a sizable increase in the near term.
I’ve seen may cases where there is over 100% financing or refinancing to have over 100% of the purchase price. If the latter say 1. $400,000 original sale price 2. Refinance for $700,000. 3. Spends $150000 on a MB AMG, 4. Then short sale or walk-away for $300,000 on the house. I see that as $300,000 gain for the owner (not $100,000 loss) and $400,000 loss for the bank with CA leanding laws. Am I missing something?
It looks like an reverse of the “Ant and Grasshopper” fable.
No, you are not missing anything. The people who abused their HELOCs the most are the ones suffering the least.
Looks like the hard working ants will continue to pay and pay, while the grasshopper played and plays. And with the US IRS taxes exempting income from debt forgiven, the profit is better than earned income. $300,000 profit and no taxes!
Much better than the stock market or working for wages.
Only in America.
Keep up the good work IR
Right, I’ll tell my wife that the kitchen in our 1986 leased house is “gourmet”. The 80’s are back!
It does remind me of a condo we looked at leasing where the lady owner had pumped $50,000 into a small kitchen upgrade. The property manager rolled his eyes telling us that one.
You can knock that much off this house and still be way overpriced.
Wow, that condo owner must have been watching too much HGTV. I get such a kick watching these shows. It seems like people are performing needless upgrades because they think it is the thing to do. Gotta have those stainless steel appliances! Gotta boost my equity!
That’s so true; and I don’t have a problem with the desire for the most updated functional kitchen, but at what cost? Should the median American household earning $50k or so really be spending $25k+ upgrading a kitchen (even if it is financed over 30 years)?
The HGTV show “House Hunters” didn’t initially disclose the prices of the homes, but after they did the ratings were much better. I’d like the finances of the families disclosed and then I’d really watch. Wouldn’t that be interesting?
“Jack & Jane earn $100k with $50k in student loans, $50k in auto loans, and two young children. They’re shopping for homes near $500k.”
Yes! I always wonder what these people do for a living. I doubt they are representative of the common American. It makes me wonder if shows like this may be partially responsible for the problems with the market/economy. People watch these shows and may try to emulate the seemingly “perfect” lives and homes of these folks. How do they do it? Perhaps with a HELOC?
I like HGTV myself, but I am smart enough to realize that I can’t have it all at once. It’s fine to do some upgrades to your home, but over time!
$441 / sq ft says it all.
It seems to me that most of middle properties profiled here have been asking in the low $300’s / sq ft. It’s only recent that we’ve seen properties such as the first go below $300/ sq ft.
Maybe it’s another divorce listing, listing high by the husband because the wife’s attorney is using the bubble profit to get more alimony.
Sitting in the tire shop this morning I saw this article. It appears couples are cutting back on spending… for divorces. They’re thinking twice about it because of the loss of “lifestyle”.
http://www.ocregister.com/articles/says-divorce-filings-2263361-hughes-deedee
This would be a good topic for IR.
A friend who practices divorce law told me this weekend that receivables are way down. Fewer people are divorcing and those who are, aren’t paying their legal bills. If this becomes a trend, the typical $10k retainer will balloon to $20k if you want representation in your divorce.
Zillow says it’s 1,405 sq ft.
I don’t know which one is the true square footage but if it’s 1,405 then that’s $427/sqft. Yes, still way over-priced but not as bad as $441.
Unfortunately the short-sale’s figures amount to nothing more than a teaser price. If that amount was bank-approved, my ears would perk up, though.
It took me a few weeks to realize why so many people hype the merits of condos, but I finally realized why they’re still so popular. With an actual apartment, nobody pays for that space unless they’re planning to use it: as a residence, as an office location, as a bordello or a boiler room headquarters. Nobody in their right mind pays for an apartment just to sit on it: the money’s just running down a rathole, right?
Suddenly, convert the apartment to a condo, and all bets are off. An actual apartment will only rent for what people are willing to pay for its use, and the property owners promptly adjust their prices or renovate as required. If an apartment owner wants to charge $2000 more than what the space will rent for per month, then it’ll be a drain on resources so long as it remains unoccupied. Sell it as a condo, and suddenly it’s an “investment opportunity”: not only is the new owner responsible for maintenance of a poorly constructed and often rotting infrastructure, but the owner has the option of being stuck with a horribly overpriced apartment when the music stops and the last sucker is caught without a chair. Everybody wins!
I think you are starting to really understand California real estate. Why rent when you can own for twice the price?
But it’s CALIFORNIA. Everyone wants to live in California, did you forget that? If you don’t pay the high price to buy a home, someone else will.
They’re not building any more land, so you better get a house while you still can.
IR,
I would like to thank you for this website. I was looking at places like 61 Costero Aisle back in 2006/2007 and its quite fortunate that I didn’t buy it back then. (otherwise I could have had my place “featured” on this site)
What are they smoking? And further more, why aren’t they sharing?
Hey, if you want to freebase Preparation H all day, be my guest.
Good stuff… though I prefer concrete cleaner.
When I look around Woodbury I see examples where the attached condos are better than the free standing SFR’s. I live in a Treo attached condo. Each unit is three homes in one. We have one shared wall with the middle condo where it wraps around over our garage. Yet it feels very private as we do not actually see the neighbors on that side. On the open side we have about 20 ft. to the next unit.
Conversely many of the detached SFR’s are built right on top of each other with only a few feet between neighboring exterior walls. The sides have windows but they look right into your neighbors windows. If both windows were open you could shake your neighbor’s hand. I imagine a game where everyone could open their windows and handoff a football from one end of the development to the other.
My point is that you need to be careful about the added value of the detached – especially since realtors do a good job of photographing the SFR to make is seem that it has space around it.
Comparing Condos with SFRs (that have decent separation from the adjacent home) has always struck me as an apples to oranges proposition.
In my opinion the standard that pricing should be based on is SFR and attached products should sell for a significant DISCOUNT over SFRs.
Of course these SFRs that are separated by 15″ have blurred the definition of SFR.
If hearing your neighbors through the walls, aside from maybe a really really loud party or loud barking dog, is a problem then it’s just shoddy construction. I live in a 100 year old brick row house and I never hear anything through the walls.
There are not a lot of brick homes in SoCal. Most shared walls are just drywall. You can punch your way through to get to your noisy neighbor.
That’s my point. Drywall shared walls is shoddy construction. It’s possible to have attached walls and not be aware of your neighbors.
When I was in college, the guys in the dorm room next to me played that “Dog boy” song everyday when they got home from class. Granted their speakers were pretty big and they played it pretty loud, but it was cinder block construction and I could still hear it. Trust me. I can hear the DVD player when the kids have it on in the basement. I think noise transfer is a bigger issuer than you think…
I don’t know if this image has made the rounds on this forum:
http://www.superpoop.com/121808/bridge-out.jpg
Not a bad price, you should be able to find a buyer quickly I would imagine.
Gerard Hagan – Edmonton Home
Yes, for someone freezing his butt off in the middle of nowhere up in canada, it sure is. Particularly at this time of the year, what is 600 grand for the priceless SoCal sunshine ?
Are those high voltage power lines on other side of the creek?