Real Homes of Genius — Dr. Housing Bubble
Dr. Housing Bubble has done a great series on ridiculously overpriced properties that are so awful that one has to wonder WTF the buyers were thinking. He titled these posts Real Homes of Genius. It is a great series because the images and the prices hit you on a guttural level. Intuitively, you just know something is wrong. It doesn’t require any intellectual analysis of comparative rents or anything else to immediately realize these properties are ridiculously overpriced. If there was ever an undeniable proof of the housing bubble, it was properties like these.
{book}
We don’t have many Real Homes of Genius in Irvine, although today’s featured property is about as close as we get. Someone has managed to fit 4 bedrooms into 1,230 SF adjacent to I-5. There is nothing desirable about this property, and the huge price reductions are showing this truth.
Asking Price: $300,200
Income Requirement: $75,050
Downpayment Needed: $60,040
Monthly Equity Burn: $2,501
Purchase Price: $385,000
Purchase Date: 9/17/2004
Address: 1 Raleigh, Irvine, CA 92604
| Beds: | 4 |
| Baths: | 2 |
| Sq. Ft.: | 1,230 |
| $/Sq. Ft.: | $244 |
| Lot Size: | – |
| Property Type: | Condominium |
| Style: | Other |
| Year Built: | 1977 |
| Stories: | 2 |
| Floor: | 1 |
| View: | Greenbelt |
| Area: | El Camino Real |
| County: | Orange |
| MLS#: | P665028 |
| Source: | SoCalMLS |
| Status: | Active |
| On Redfin: | 40 days |
living space, inside laundry, light, bright, & open floor plan, and
a large back patio perfect for entertaining. You are within walking
distance to all shops, schools, and parks. This would be great for a
first time buyer, family, or even and investor. A must see!
This one really is approaching investor levels. For an owner-occupant, this property is below rental parity. A rent of $1900-$2100 would give this property positive cashflow. Surely a 4 bedroom can rent for that much…
This property was purchased for $385,000 on 9/17/2004. The owner used a $308,000 first mortgage, a $57,750 second mortgage, and a $19,250 downpayment. On 11/8/2004, he opened a HELOC for $94,000, and likely extracted his downpayment plus some spending money. In all likelihood, the second mortgage is paid off with the HELOC. The total debt on the property is $402,000, and the total mortgage equity withdrawal is $36,250. I bet he wishes he had taken out more…
If this property sells for its asking price, the total loss to the lender will be $119,812 after a 6% commission.
{book}
Relative to those featured on Dr. Housing Bubble’s Real Home of Genius, this Irvine 4/2 is indeed a deal and steal only from heaven.
And… it is located in the very heart (I5) of Irvine.
“And… it is located in the very heart (I5) of Irvine.”
Where else could you have the opportunity to get hit by a car while sleeping in your bed.
To be fair, when this place was built, I-5 was only 3+3 lanes which would have made it about 100 feet further away. I’m thinking with the noise wall it’s an even trade noise-wise although the CO and NOx and SO2 emissions are WAY up.
No pictures of the interior, just the messy patio which the realtor couldn’t be bothered to clean up. This kind of laziness on the part of listing agents makes me sick. I am making notes on all the crummy listing descriptions and photos so that when it’s time to sell my house I don’t use one of these people.
>>No pictures of the interior, just the messy patio which the realtor couldn’t be bothered to clean up..<< Ha, since the seller is giving away a 4/2, so it is being listed as is - what you see is what you get.
Don’t you think it’s about time brokers were not used at all. All the info is readily available on line if you are a buyer, and the sale documents are standard issue. I’d rather hire someone at $20.00 hour to mangae my open house as a seller thereby saving time, a lot of money and the bulls…the brokers dish up !!
Clearly technology has made this brokerage industry obsolete
>>Clearly technology has made this brokerage industry obsolete..<< You may be right about this. However, it is politically incorrect at this difficult time to even suggest anything that eliminates job:-) Our goverments in the name of saving all of us is becoming the employeer for all... We used to buy and sell property to each other with funny money... Now we are becoming an employee of the government one way or the other, with even funnier money....
You may be right about this. However, it is politically incorrect at this difficult time to even suggest anything that eliminates job:-)
It’s like the Big 3. They will be out of business at some point so they might as well do it now and move on. This way the new product will be desired and used by the market. It’s the same for the brokers. Their “reason for being” is less and less with each passing day. They might as well develop a new “skill” ( I use this term lightly) and move onto a more sustainable business.
Realtors would make great dog walkers. It’s part time, busy on the weekends, and their clients will definately nod with approval at any and all their suggestions. Using the poop scoop will be a new skill, but I am confident they can aquire this, over time.
Using a pooper scooper is easy. Just remember, its all in the wrist…
I thought they already used those for writing listings. 😉
There probably aren’t any pictures of the interior because, at 4/2 in 1200 sqft, all the rooms probably look like closets…
Either that, or it’s like some of the off-campus housing near me, where a house that has 5 rooms that aren’t the kitchen or bathroom is billed as a “5 bedroom”.
Reminds me of when I was looking for housing at UCI. Students were converting living rooms into “private” bedrooms by hanging bedsheets from the ceilings. The only way you could pay under $550/mo near campus was to live in a 2 bedroom apartment shared with 5 people–2 in each bedroom and 1 in the living room.
Unless this amount has been bank-approved, why are we paying any attention to the teaser-pricings of a short sale?? I don’t understand.
Based on the exterior photos I think it safe to assume that the interior of this property is most likely extremely unappealing. Do you really think someone would be willing to pay $1900 a month to rent that place? I can’t imagine wanting to live in that unit at any price. I would much rather live in a nice 2 bedroom Irv Co. apt than this dump. I don’t think I would even want to own it as a rental as I would feel horible charging rent from someone found who found it neccessary to live in a place like this. Yuck.
I think IR’s prediction of $2k/month is way over the top. A family making $80k wants to live here, next to the 5, rather than in a house in ok areas of Tustin or Orange or CM or even the better parts of SA?
More likely $350/room or so, so ~1400, less $250 HOA, times 100 for an investor (since it will be a pain to manage and there could easily be big HOA special assessments for this old condo), gives me a sale price to an investor of about $150k.
It will drop to $150,000 by 2012. Don’t catch this knife.
SoCal78, my guess is the $300,200 is probably pretty close to what they’ll actually close for. Keep in mind the 4th bedroom is not permitted, so one doesn’t know the true condition of the upgrade.
(Most of the units in this tract don’t have central heat or air: they have in-wall heaters and are not ducted for AC. The description says they have central air, but I highly doubt it. Might make it over to see the unit in the next week so will update this post if it actually does have central AC.)
I would love to hear about what you find, so please report!
It’s a little close to the freeway for comfort.
What a dump and a stye this wretched little condo is.
This looks like 70s vintage rental housing, built to last a short depreciation schedule.
They probably didn’t post interior photos because the place is just too shabby. If the exterior photos provided are anything to judge by,the interior must be an absolute fright.
I note that the square footage is not posted on the listing sheet, so I’ll assume 1000 sq ft at the most, judging from the width. Is this little dump worth $300 a sq ft?
This is a deeply sub-median dwelling for Irvine. For the median Irvine income of $84K, I would expect to live quite a deal better- at least in a new condo with decent architecture and quality construction, even if small.
This place should go for $150 a sq ft at the outside. It will take tens of thousands in work to make this place livable. I’d take a 20s vintage place that hasn’t been touched since it was built, any time. $150K max for this little crapbox.
Pardon, please… I didn’t at first see the sq footage.
So it’s 1200 sq ft. OK, so $180K.
Honestly I was tempted by the price. Then I saw the proximity to the freeway.
I’m betting there is some extra-safe aluminum wiring in there too.
Huh, I wasn’t familiar with that particular hazard, but read up on it at http://www.inspect-ny.com/aluminum/aluminum.htm. Now I know moar — thanks!
I live in a 1970’s townhome that fortunately does *not* have aluminum wiring (aluminum is a fire hazard, especially wherever it connects to a piece of copper). Having kids and all, I just had to know, and checked myself.
During my researches, I found that it’s been banned in many locales, and for good reason. I mean why even bother saving a few pennies at the risk of sending your family to a fiery grave? (In case you can’t tell, I’m the kind of person who puts 6 smoke alarms in the house, fire extinguishers, and other implements of safety.)
Creeping down to $140/sf I see.
This one’s not worth $100/sf.
I’m one of the despised here – a Realtor – and find this an immensely informative blog. With that disclosure, I so hope to not have too many curses thrown my way!
Most of the units in the Deerfield and Heritage Park townhomes have aluminum wiring (original construction was with aluminum wiring). This has not been a problem during any inspection as my understanding is that it comes down to proper termination of the connection. I haven’t heard of anyone at any of the above areas having any serious issues with the wiring, but that’s not to say that a few years down the road, there won’t be a systemic problem due to using aluminum.
Welcome George. Any Realtor that has the fortitude to stop by and give informative posts is always a welcome read.
~just saying
what noway said!
really happy to have someone with your perspective as a commenter.
Hope to see more of your comments!
1960’s vintage University Park has aluminum wiring too.
It will drop to $150,000 by 2012. Don’t catch this knife.
You are making the serious mistake of assuming constant $. I think US $ is the sharpest knife at this moment. Look for at least 50% loss in value by purchasing power by 2012. Helicopter Ben will prove himself to be more than honest.
hi, marry xmas, can you tell me the link where i can find houses for rent in Irvine? the cheap ons will do fine, im thinking i will list or house for sale…
how much is a fair rent for 3 bedrooms?
Woody, here’s a link to a public version of the SoCal MLS: http://www.socalmls.com/.
The patio just needs a bit of tidying. Remove the propane tank, and the one tree, add a tarp and voila – off street covered parking.
I know for a fact that anything next to the sound wall off I-5 or I-405 is horribly noisy. During slow hours, it sounds like living near a raging river 24/7, punctuated by loud rambling sound of large buses and trucks.