Tonight is the night. We are scheduled to have an IHB Block Party on Monday, March 9,
2009, at J.T. Schmids at the District.
This is a special invitation to lurkers. I always enjoy meeting the silent majority who read the site but otherwise stay in the shadows. Please come out tonight.
In California, we are concerned about picking the bottom because prices are so volatile. In normal real estate markets, the bottom is not a price point; it is a condition of price stability.
Formerly million-dollar properties offered at a 35% discount are pretty rare in Woodbury. It is a sign of things to come.
Asking Price: $650,000
Address: 94 Rinaldi, Irvine, CA 92620
{book2}
Rock Bottom — Eminem
A-yo!
This song is dedicated to all the happy people
All the happy people who have real nice lives
And who have no idea whats it like to be broke as f@#$
I have written about the conditions and circumstances at the market bottom on other occasions including: The Market Bottom and Fundamentals at a Market Bottom. The obsession we have in California with picking market bottoms is an unusual but necessary function of the extreme volatility in our real estate market. Not long ago I wrote Timing Does Matter.
When prices are extremely volatile, as they are here in California,
proper timing of a real estate purchase is very important. However, if markets were to stabilize and remain stable, picking a bottom would be unimportant. Stable markets are always at the bottom.
A stable market, a market that is at the bottom, is a combination of psychological and technical factors. Psychologically, in a stable market, there is an absence of belief in appreciation. When people believe prices are going to rise significantly (faster than wages or other investments), markets become unstable because people buy to speculate on appreciation rather than to provide shelter for their families. This buying constitutes the self-fulfilling prophecy of irrational exuberance and kool aid intoxication. Technically, in a stable market, loan terms limit price increases to the level of wage growth. Affordability products destabilize markets by allowing prices to rise faster than wage growth.
Cause we see them dollar signs and let the cash blind us
Money will brainwash you and leave your ass mindless
Stable markets are always at the bottom. Nominal prices are going up, so it isn’t a bottom from a pure price-point perspective; however, real prices–prices adjusted for wage inflation–are not going up. When real prices do not go up, you are at the bottom, irrespective of the increase in nominal prices. In terms of the percentage of income people have to put toward housing to obtain the same quality of life, nothing changes.
For example, if you make $100,000 a year, with low interest rates and a sizable downpayment, you may be able to afford a $400,000 property (most stable markets actually trade at less than three-times income). Next year if you get a 3% cost-of-living adjustment raise, you would be making $103,000, and you would be able to afford a property that is 3% more expensive. You could finance a $412,000 property instead of a $400,000 one putting the same percentage of your income toward housing. This effect of increasing bids with increasing wages is why house prices rise with wage inflation in a stable bottoming market.
In California, our real estate markets are not stable. Prices often rise here in excess of wage inflation. This occurs because irrational exuberance takes over and people become convinced prices will rise forever. When this cultural pathology is enabled by lenders through affordability products, lowered lending standards, higher allowable DTIs, and other methods, our prices take flight.
As I mentioned in another post Affordability Mortgage Products Make Prices Unaffordable, Lenders enable people to bid up pricing. Increasing prices engage the cultural pathology of kool aid intoxication, and an unsustainable rally begins. Since affordability products result in high default rates and foreclosures, these products are withdrawn from the market, prices crash, and psychology turns bearish.
I feel like I’m walking a tight rope, without a circus net
I’m popping percocets, I’m a nervous wreck
I deserve respect; but I work a sweat for this worthless check
Bout to burst this tech, at somebody to reverse this debt
If we eliminate affordability products–something the financial markets are doing anyway–our real estate market will be stable. Of course, we still have to endure the price crash down to stable bottoming price levels; although, once we are there, if affordability products are not brought back again, houses will be affordable, and the market will always be at the bottom.
The real estate cycle is an interrelated series of changes in credit availability and market psychology. Affordability products are the root of the problem because they are inherently unstable. When financing is unstable, market pricing is unstable. Our recent experiment with affordability products was a failure. This isn’t our first attempt; we tried in the late 80s and, and we failed. I hope this most recent failure seals the fate of these loan programs. When you consider how painful the second strike against these products has been, if we take a third swing, there will be no joy in California–the mighty Homedebtor will strike out.
My life is full of empty promises
And broken dreams
I’m hoping things will look up
But there ain’t no job openings
Today’s featured property is a hugely discounted and relatively new home in Woodbury.
Asking Price: $650,000
Income Requirement: $162,500
Downpayment Needed: $130,000
Monthly Equity Burn: $5,416
Purchase Price: $1,010,000
Purchase Date: 8/27/2006
Address: 94 Rinaldi, Irvine, CA 92620
| Beds: | 4 |
| Baths: | 3 |
| Sq. Ft.: | 2,104 |
| $/Sq. Ft.: | $309 |
| Lot Size: | 3,000
Sq. Ft. |
| Property Type: | Single Family Residence |
| Style: | French Country |
| Year Built: | 2006 |
| Stories: | 2 |
| View: | Hills, Mountain |
| Area: | Woodbury |
| County: | Orange |
| MLS#: | S565927 |
| Source: | SoCalMLS |
| Status: | Active |
| On Redfin: | 3 days |
across from one of the beautiful parks in The Woodbury Commons. Not
only is the home loaded with builder upgrades it is also in one of the
best locations in Stone Tree Manor. This four-bedroom, three full bath
home has decorator hardwood floors throughout. The livingroom has a
great fireplace, large viewing windows and oversized french doors. The
designer kitchen has a wonderful office nich, breakfast bar,lots of
counter space and another two sets of french doors. There is a main
floor bedroom with custom built-ins and full bath. Upstairs there is a
nice sized laundry room, the spacious master bedroom has a private bath
and separate shower with a large walk-in closet complete with
organizers. Another full bath upstairs with two additional bedrooms,
one with a mountain view. This ‘never lived -in home’ is located in the
village of Woodbury, walking distance to schools,shopping and dining in
the Commons.
Never lived in? Unfortunately, I cannot locate the property records on this property. Is this the builder dumping it? It this a flipper bailing after two years of bleeding cash? I don’t know.
According to Redfin, the owner paid $1,010,000 on 8/27/2006–right at the peak. I do not know who owns it or what financing they have in place. Given the $360,000 discount of its purchase price, if there is financing, it is likely a short sale. If this sells for its asking price, and if a 6% commission is paid, the total loss will be $399,000; let’s call it $400,000. Ouch!
For as painful as this loss is going to be, the people who must really be freaking out are the comparable properties. If you look at the list at the bottom of the sales page on Redfin, you see all the similar properties in the neighborhood that are for sale. The asking prices range from $775,000 to $888,000 with an average cost per square foot of $396. Today’s featured property is undercutting them by over 15%, and the asking price is $309/SF. Those other sellers just witnessed their own doom. Any potential buyer is going to have great difficulty obtaining financing with this new low comparable in the area.
The crash of the high end is gaining momentum.
{book3}
A-yo!
This song is dedicated to all the happy people
All the happy people who have real nice lives
And who have no idea whats it like to be broke as f@#$
I feel like I’m walking a tight rope, without a circus net
I’m popping percocets, I’m a nervous wreck
I deserve respect; but I work a sweat for this worthless check
Bout to burst this tech, at somebody to reverse this debt
…
Cause we see them dollar signs and let the cash blind us
Money will brainwash you and leave your ass mindless
Snakes slither in the grass spineless
That’s Rock Bottom
When this life makes you mad enough to kill
That’s Rock Bottom
When you want something bad enough to steal
That’s Rock Bottom
When you feel you have had it up to here
Cause you mad enough to scream but you sad enough to tear
My life is full of empty promises
And broken dreams
I’m hoping things will look up
But there ain’t no job openings
Rock Bottom — Eminem
“Backup offers accepted”.
No doubt we will hear from the cheerleaders that the sales price will be considerably higher. Move along children, nothing to see here.
That reminds me – where’s Ipop been?
Don’t tell me you’ve gone all bearish, Playa. We need at least one delusional on this site.
hey dont be dissn playa, this is IRVINE afterall 😆
“Any potential buyer is
notgoing to have great difficulty obtaining financing with this new low comparable in the area.”now?
I think IR put an erroneous not in. Won’t potential buyers have difficulty getting loans for properties 15% more expensive than a comp?
I just noticed this “not” when I read the post fresh this morning. It was one of those sentences that was rewritten, and the stray word was left behind.
I still can’t believe we were actually selling courthouse homes for more than a million dollars in Irvine, CA. What an orgy of stupidity!
Laughable … Laughable I say!
I don’t know why, but this house struck me as totally boring. Ok, screw it – I totally hate this house even though I feel like I should be totally impressed with the sticker price.
I went through all the photos, trying to understand why two full-time slaves are needed to maintain the debt service on this very boring house; I couldn’t figure it out.
For 650K you get no backyard or private pool. The garage is 3 steps away from the street. The interior is drenched in pink. The kitchen contains an “office niche” which is a waste of space.
The place is also totally overstaged – they put so much junk in every room that it makes the place look all cramped.
And 230.00 a month in junk association fees.
I don’t get it. Maybe just bad photos and bad staging.
Very boring. Wouldn’t want to be a slave to this one.
Right David. Even if you put 20% down, you still need to make way above the average Irvine income in order to really afford this (courtyard) home, and have anything left over to enjoy life.
This Ponzi scheme has created financial albatrosses for every potential buyer in the desirable parts of Orange County.
It’s a shame.
Is “Courtyard” home the new euphemism for “Condo.” I guess so since, “Used” has gone to “pre-owned” and now “never lived in.”
Never lived-in Courtyard home sounds infinitely better than “Used condo.”
And please do not forget the Mello Roos which could be anywhere between $400 to $700 a month in Woodbury for the larger properties…
Did you see this one:
O.C. rents dive 6.8% in 6 months
“In its first report showing monthly rental rates, the Dallas-based research firm reports that Orange County’s “effective” rent averaged $1,558 a month in February, following six months of steady declines. The average “effective” rent — or asking rents less concessions such as a month’s free rent or free moving costs — fell 6.8% since August, when the average was $1,671 a month.”
This is not good for house prices as it lowers rental parity.
Lease renewal prices are also dropping. Your figures agree with a co-worker’s rent discount on his renewal.
With a rent income of $2200 (used) + $200 (new building premium), I give would consider it a $350,000.
Is there data on non-realtor involved rental cost? With a RE involved, the landlord needs to discount the net income.
First time I’ve heard of a rent discount. Who is your co-workers landlord? IAC? A private landlord?
This is why I have always had a problem with people calling the bottom based upon current rents like they are commanded by God to never go down.
Yes, this is almost like buying a stock based on its last year’s profit which we all know profits can drop as most did this year.
Here in Seattle, apartment renters got kicked out as their landlords converted their apartments into condos. Fewer apartments available for rent meant an increase in rental rates. Of course now we’re seeing a huge glut of unsold condos… there are even a few former apartments that the managers are converting back into apartments again!
My apartment is a tiny little thing near where I work and it’s freakin’ expensive. I want to move out of this overpriced city as soon as I can… maybe after the market finds bottom again I’d consider moving back. But with Seattle cost-of-living, my meager salary (I’ve got a PhD) isn’t enough to support a family.
Exact same thing happened all over Scottsdale, AZ. The apartment complex that I live in presently is a failed condo conversion. Made for a great bargain on rent when they were desperate to find renters after the crash.
Great data — thank you for the link.
Now I understand why this place has no history and why the rooms are so full of junk. It’s a model house. Technically, it hasn’t been lived in, but it’s like the family house in “Arrested Development”: it’s had legions of people tromping through to see if the house resembles the one in their dreams.
When a company sells off its model home, it’s either because the entire area is built up and the developer wants to move on to the next promised land, or the developer desperately needs the cash. The house is already paid for, and probably written off on taxes (I don’t know what California’s laws on the subject are like, but this may be a possibility), so selling this house for a discount may screw up the neighbors’ chances, but it may just be gravy for the developer.
Since this is a model, it is most likely that an employee of the builder is the owner.
nowwaat,
Did you read the article in the SDUT?
http://www3.signonsandiego.com/stories/2009/mar/08/1b8dean215448-bear-market-full-growl-and-end-isnt-/
It’s a different article about the DOW.
Yeah, unfortunately the article is not a surprise. the stock market dropped so much even before a ray of hope on the horizon, and Buffet saying the economy fell of the cliff. The only consoling factor now is that another 20% drop is a lot less $$-wise than the 50% from the peak we’ve had 🙂
IR,
3xincome = $300K, not $400. You used the DP to assume that someone would put down $100K? But @ $400K, with Congress raising FHA limits, anyone would be able to buy homes with only 3.5% down.
& we actually used to use 2.5x income as the barometer for affordability. I think the 3x income only came out after DP were brought down to 10%.
I used $400,000 because the bottom of the last two housing crashes in California was at 4 times income. As I mentioned in the post, this isn’t where other markets find stability, but it is where ours does.
“this isn’t where other markets find stability, but it is where ours does.”
“does” should be “has” as in has historically. However, that doesn’t mean that CA wouldn’t find a new bottom at 3x income this time.
That is true. Part of the reason ours bottoms at a higher price point, beyond kool aid intoxication, is that we have a subclass of low-income wage earners who are excluded from the housing market due to artificial shortages caused by regulatory constraints on supply. These people are factored into the wage data even though they are factored out of the housing market. This makes the price-to-income ratio higher than other areas.
It seems likely that prices are going to overshoot traditional measures to the downside this time around. It is already happening in fringe markets.
Is there a “Regulatory Constraints on Supply for Dummies as it Pertains to OC” post that I’ve missed? I’m curious as to the obstacles involved as well as the publicized and unpublicized rationale for it.
If I remember correctly when we looked at this home Woodbury had about $700 fee per month for HOA, Mella Roos, landscaping, etc. So, at this price even $160,000 income is a bit too low!
I actually do like this house – except for no backyard which is a real problem!
Does it have a driveway?
No. Garage is accessible via a shared alley behind the house. Major drawback IMO.
The CA Bar is formally warning attorneys about being involved in these loan mod outfits.
http://www.calbar.ca.gov/state/calbar/calbar_cbj.jsp?sCategoryPath=/Home/Attorney Resources/California Bar Journal/March2009&sCatHtmlPath=cbj/2009-03_TH_02_ethicsalert.html&sCatHtmlTitle=Top Headlines
Woodbury is toast.
First this house. 2100 sq feet on a 3000 sq foot lot. 4be/3ba. The “designer” kitchen looks straight from Home Depot. Look at those cabinets and door knobs (betcha their not even solid brass…).
Then it’s in Woodbury. A place way out in the sticks far from even the Santa Ana Fwy and miles and miles from Irvine City Hall.
Woodbury is literally in the middle of nowhere. Perhaps in 30 years it will somewhere (like TR, UP and Woodbridge were in the early 70s) but do you want to pay a premium and wait 30 years to get there?
IMHO, a place like Woodbury is worth no more than 250 per sq feet… and that’s generous. I drove by the place two weekends ago and it felt to me like a sea of apartments. Once I got home to TR, I was amazed at the feeling of “space” in my neighborhood. Incredible since our lots are around 5500 sq feet… but we don’t feel crowded.
And we have a real view from the hill….
Also, Woodbury feels like Credit Crash Central. It has huge areas filled with… nothing. Surrounded by those oh so “recession reminder” green fences. You know, EVERYDAY, that the economy is fuck#d…. At least in TR I can drive around and forget the economy since my place is built up and there are very few foreclosures.
Do you really want to buy a house in a place that reminds you of your 401K ( assuming the folks there have 401Ks)…
Bottom line, Woodbury will suffer the brunt more than Quail Hill and TRidge. The latter two are fully built out and have some geographical anchors. Woodbury -and Portola Hills- are Credit Crash Central and will suffer more than any other place in Irvine.
Designer kitchen indeed… Home Depot white cabinets. Yuck!
“…Surrounded by those oh so “recession reminder” green fences…”
Classic. I think those green fences will be up in my neighborhood for many years (Columbus Square). They don’t bother me too much, but I really want that Tustin Ranch Road built to get directly into The District!
Thank you for your local knowledge and comments as you experience it.
[quote]Bottom line, Woodbury will suffer the brunt more than Quail Hill and TRidge. The latter two are fully built out and have some geographical anchors. Woodbury -and Portola Hills- are Credit Crash Central and will suffer more than any other place in Irvine.[/quote]
I see your point, but you mis-spoke about ‘Portola Hills’. Portola Hills is located roughly between Foothill Ranch and Live Oak Canyon, to the south. It has been built out for about 10 years, and values have held up reasonably well so far.
The area that I believe you meant is Portola Springs, which is located near Sand Canyon and Portola, and is overlooked by the 133/241 toll roads.
You’re correct. Sorry about that.
However, there are five homes in Portola Springs.. the ones as the very top that got built in the last year.
The view is spectacular. You can see all the way to Catalina.
Unfortunately, the also look down on a big lot surrounded by the ubiquitous green fence.
Then it’s in Woodbury. A place way out in the sticks far from even the Santa Ana Fwy and miles and miles from Irvine City Hall.
Er, Woodbury is about 3 minutes from the 5 freeway, 4 minutes if you hit a traffic light. I know, I live there (I rent). Irvine City Hall is 10-15 minutes away if I ever wanted to go there, not sure why I would.
But I won’t disagree with you that Woodbury is toast.
It’s all a matter of perspective. To me, TR is way the hell out there, far from everything, and Woodbury and Portola Springs are very well located.
Neither one is Orchard Hills, of course. I’m beginning to think OH may NEVER get built.
OH? Ohio?
TR is next to Newport, Laguna, Corona del Mar, South Coast, Fashion Island, The Performing Arts Center, Irvine City Hall and The District.
OTOH, if you want to go to Corona, Riverside, Palmdale, Vegas, I suppose that those places out there are closer to the toll road. I have to take the 405 to Jamboree and then go in a bit before I hit the toll road.
Sorry, but you are not going to convince me that those places way east of the Santa Ana fwy are worth more than 250 bucks per square foot. Particularly on those 3500 sq foot lots.
I got this youtube video emailed to me:
the Government Housing Scam…
IR,
I am curious to hear your take on the recent government tax credits that have been approved for first time home buyers. $8,000 in federal and $10,000 in state when you purchase a new home directly from the builder in California.
I visited the new homes of Portola Springs this past weekend and learned that many new homes I was interested in were recently sold because of these new tax credits. Are these folks really getting a good deal or do you think the the value of these homes will eventually fall substantially? I have been interested in this area for a while, however with the high HOAs and the mello roos, I have hesitated. However, with the new tax credits, is it really worth it now?
I’d appreciate any input on this topic. Thanks!
People buy because they can. If this enables a few people to buy, they will. Prices are still going to drop like a stone, and these people will regret it, but they have this opportunity to get into a home, and they are taking it. This is in no way going to put a floor under pricing, but it will help the builders move some of their inventory.
The tax credits to buy a home in this market is a bear’s trap.
First off, the $9 tax credit is nice but it’s worth at most $14.5K… asuming a combined 50% (fed and state) tax rate -just below the $250 Rockefeller limit that the Obamafascistas are coming up with.
Second, it will create demand which will temporarily slow down or halt price declines… Meaning buyers will pay more.
From a buyer’s point of view, they’d be better letting prices drop and buying then.
The only thing you have to ask yourself is do you think a max of $18,000 in credits is going to make up for another $100,000+ drop in prices + the extra $$$$$$ you’re spending on ownership costs over renting.
WOW, ANGRY! This guy needs to relax a little.
Does the Irvine Housing Blog have a budget to pay a few under employed bullish realtors to post? I think it would really enhance the blog. You might even look at it as a capital investment as it could increase readership and ad revenues. The housing downturn will be lasting well into 2012 – 2015; it will get boring fast.
A very good friend of mine, start selling his stock last few days. He is very rich and he away considers this as long term investment. But suddenly he changes his mind. For sure this is not because he needs cash.
How you interpret this?
How do I interpret this? Better late than never. I predict as the S&P500; crashes down to the $450-$550 level…. gold will be sold off to purchase equities. I see gold headed down to the $600 level, but what do I know. The housing bubble happened so maybe gold will head to $2000 before it crashes.
This house only has $250k more to go for me to get out my checkbook.
I would still pass on this one however, too close to the main entrance/Asian freeway known as Groveland. I don’t need to hear Mercedes and Bimmers screeching up and down all night.
I am not going to debate the Woodbury vs. TR thing. Obviously TR is a much more established and picturesque area. Can’t get the wife there however as she likes newer style homes with high ceilings, modern stylings and the peace-of-mind of an in-home sprinkler system.
Woodbury is the place for me since I travel a lot and the wife is not a good driver. It is perfect for us in that the school, town center and all of the shops/restaurants etc are in easy walking distance.
I like the Cresta homes in Portola Springs as well. I tour them every so often. The on-site realtor hit me with the ‘now is the best time to buy’ line right between the eyes. Uhh- you still want $700k for 2,000 sq ft in a community that it is only 10% finished and may never be? How about now is the perfect time to overpay and get killed over the next few years. Of course I used my inside voice, I would never bother to argue real estate prices with a realtor.
Asian freeway? Is this a freeway that only Asians can use? Where do I sign up?
You ever notice how some drivers drive slow on the actual freeway but give them a wide open stretch of open residential street and they floor it? Even you have never seen or heard this phenomena then come over and hang out at my place for a few hours. The street I live on is a long divided street – looks like it was built for drag racing. There are a few Mercedes and BMW drivers in the neighborhood who just can’t resist the urge to open it up.
“the peace-of-mind of an in-home sprinkler system”?
Huh?
From my point of view, TR is much safer. Half of the county would have to burn before the fire gets to us.
Like last year… dude.. you folks out in Woodbury were pretty close to the fire, huh? To us it was an inconvenience and a spectacle but we had like half of Irvine between us and the fire.
Of course, we had the Laguna fire eons ago that reaached our end, but now we have TRidge and the 73 to hold off the fires.
Besides, a lot of homes in TR have vaulted ceilings. My own chateau has some 12 foot ceilings in many rooms.
And since we’ve rebuilt the house (many of our neighbors have done this) I can tell you that the quality of my construction dwarfs what went into those new homes built between ’97 and ’07.
Perhaps you should go and check out “older” parts of Irvine near the ocean. TR, that is. There are quite a few rebuilt homes around here.
Asian FWY? I thought that was around the 99 Market on Walnut and Jeffrey.
Besides, the restaurant options at Woodbury “town center” are sort of limited. I suppose if you like Pizza, standard american chinese and are a “foodie” that might be OK. We tend to be into food so we prefer being closer to the action.
Not to mention that we have a ten minute ride to Segestrom Concert Hall and my kids can walk to Uni.
Again, Woodbury is way out there. It just doesn’t feel part of Irvine. Irvine, to me, is TR, TRidge, UP, UCI, Woodbridge, Westpark, Walnut and Northwood. In essence, Culver and Harvard, from Bonita Canyon to Walnut. With the Santa Ana Fwy and Northwood as bulkwards from Moreno Valley.
Sorry if you feel offended, but that’s how it is. Irvine was founded with that geographical area, with UCI and Alton/Harvard as the geopolitical points of the whole city.
I conceded that TR is more established than Woodbury, why did you feel such a burning need to justify your address?
Why would I care what was in the traditional Irvine core?
Oh, a food snob, how entertaining. The Counter draws in burger aficonados from around the region, Niko Niko has good sushi.
It is hard to feel isolated when you have ramps to the 5 and the Toll Roads within a couple of minutes from your house.
Newsflash: wildfires are not the only cause of home fires.
I’m not justifying my address, I’m noting that the “Irvine core” is far more accessible and has a lot more entertaining and dining options.
Example, how far is the High School from Woodbury?
Point being that Woodbury is isolated from the rest of Irvine and you have to drive a long ways to get most anywhere.
Hence, it is likelier to suffer greater price declines.
Dude, you sound like a complete ass.
I throw my empty Grey Poupon bottle at both of you.
But, then I’ve lived in Irvine for quite a while.
You don’t like it my opinion? Fine then, everyone is entitled to their own opinion. Even if in your case it’s likely not worth the electrons required to display it on my monitor.
Saw this home over the weekend: not a very ‘family-friendly’ floor plan: living/family room was small, there is no yard to speak of, white tile counters, and one of the secondary bedrooms is too small for all but a young child or for use as an office.
I agree, I have always disliked the Stonetree models, ever since I first toured the three on Rinaldi accross from the park. They definitely do not use the space well. For whatever reason however they are very popular with the dominant demographic in this community. (hint think a pile of shores outside the front door and two Mercedes in the garage).
I cannot fathom that at some point these homes were actually transacted at $1MM. Absolute lunacy and a sure sign of things to come.
IR is spot on, there are a lot of StoneTree owners in Woodbury not loving this new comp today. Especially those that just overpaid to live in the new sardine can release accross from the school.
I also wanted to second an earlier comment about the depressing nature of seeing so many empty green-fenced areas within Woodbury. I have been writing the IC to have them at least take the fences down and grade the land. How long can the developers legally hold these lands “fallow”.
They can do whatever they want with the land. It can remain fallow as long as it serves their purposes. They do have to control the dust though.
The real issue for them is one of property taxes. They no longer get the preferential treatment accorded to them under the Williamson Act, so the Irvine Company is paying the full assessment value on this property. The carry costs on the improvements they have put in the ground plus the increased property taxes is going to compel them to meet the market and build out these properties.
I visited this model home last summer. It is a very nice home, but I hope the person who buys it is under 6ft tall, because when you walk down the stairs you smack your head on the I-beam in the kitchen. Take a look at the second photo and you’ll see what I’m talking about. A pretty silly design flaw. I would re-route the stair way if I lived there.
I have no idea why people are bashing Woodbury because it is flat and new. Sure it doesn’t have much character, but thats sort of the story of Irvine, including the new stucco developments in Turtle Ridge, which remind me of the blandness of the Newport coast master planned communities sans the multi-million dollar pacific view.
Mav, as for luring some un-employed realtors to the blog…the risk is that it will devolve into garbage like has happened over at Lansner’s blog. There’s no need for the dialogue to get personal and ugly like it is (at times) over there. I for one enjoy reading people’s takes when they are based on facts and even conjecture when it’s polite and isn’t “in your face,” and I sure wouldn’t want IR’s blog to get ruined by some disgruntled realtors with axes to grind and nothing but time on their hands. I like the IHB the way it is, and I hope that it stays informative and civil. Just a thought.
Chuck,
Everyone needs a little junk food in their fit life. Lansner’s blog is a waste, but a guilty pleasure none the less. The IHB is just fine the way it is, but a long L shaped housing period in Irvine will get very boring.
Mav, agreed. Who doesn’t like hearing about Tamra once in a while. We can’t read Us magazine all day, but there is a time and place for fluff. Maybe we can all try to think of things that would sustain us over the long haul, as I agree that reading bear-tribes all day isn’t the most scintillating (though as a total bear, I enjoy reading bear-tribes better than anything else – I too am tired of renting and am ready to get back into home ownership after moving here from back East 1.5 years ago, if and when it’s affordable!).
Chuck this is a pretty good post today:
http://globaleconomicanalysis.blogspot.com/2009/03/deflationary-depression-returns-to.html
the comments are always excellent
Small to no yards, little room to live–houses on top of each other this is the majority of Irvine unless you have 2 million.
We have land The Great Park but it will not be used so we can have quality of life. The empty pools and parks look nice but they need not to be so big surrounding our little homes on postage size lots.
terrible—for sunshine and back yard dreams–
Imagine a builder actually building a normal community with 10k lots–room for cars in the driveway–room for a pool–3k sized home–you might even have some privacy–
only in Sand Canyon—LOL
yes – imagine!!! I was so frustrated with the lack of back yards when we were looking at homes – I have just come to accept that Irvine is truly an urban city – it may ‘look’ like a suburb but IMO it is not. If I have to live in a city I think Irvine is great – but would much rather not have to live in a city at all.
Sort of interested in Tustin Ranch – is all of Tustin Ranch in Tustin school district or is some in Irvine?
Some of Irvine is in TUSD but not vice versa.
The problem is we do have Land in Irvine–the powers in Irvine who make nice money from our taxes deem our quality of life. Those city planners are the ones who have sold out Irvine’s soul for big bucks.
Lets just cram as many people as we can into Irvine and sell it as NY city!!!!!!LOL
This is an awfully nice house for $650K. Now, I know nothing of the area, but Irvine sounds like overall a prime area.
You’d have a hard time getting a SF house this nice in the city of Chicago in even a marginal neighborhood for this kind of money. You’d have to go to a distinctly sub-prime area to get it
When I see all the $1MM townhouses on this city’s shaggy “gentrified” west side back off to this price range, then I’ll know we are beginning to find a bottom, not until.
This house is out in fields of AG—LOL
not in a city—-
very over priced—
How are the new home builders reacting to drops like these? I believe there are still a few homes that are scheduled to be complete in 2009 and they start at $799k
Does anyone know how much the builders are willing to negotiate to get the new homes off their hands?
Hi,
I came across this and thought we all at the IHB can get a nice chuckle out of this. Enjoy.
The financial crisis explained in simple terms*
Heidi is the proprietor of a bar in Berlin. In order to increase sales,
she decides to allow her loyal customers – most of whom are unemployed
alcoholics – to drink now but pay later. She keeps track of the drinks
consumed on a ledger (thereby granting the customers loans).
Word gets around and as a result increasing numbers of customers flood
into Heidi’s bar. Taking advantage of her customers’ freedom from
immediate payment constraints, Heidi increases her prices for wine and
beer, the most-consumed beverages. Her sales volume increases massively.
Since she was buying more liquor, she got extended debt period from her
alcohol suppliers to bar.
A young and dynamic customer service consultant at the local bank
recognizes these customer debts as valuable future assets and increases
Heidi’s borrowing limit. He sees no reason for undue concern since he has
the debts of the alcoholics as collateral. At the bank’s corporate
headquarters, expert bankers transform these customer assets into bonds
like DRINKBONDS, ALKBONDS and PUKEBONDS. These securities are then traded
on markets worldwide. No one really understands what these abbreviations
mean and how the securities are guaranteed.
Nevertheless, as their prices continuously climb, the securities become
top-selling items. So no one was complaining, Customers getting drunk on
debt, Heidi’s getting drunk on credit from supplier and paying it with the
money she gets from the banker. Banker sold it off to market as bond and
these bonds were being purchased and sold among investment bankers among
themselves. One day, although the prices are still climbing, a risk
manager (the spoil sport) of the bank decides that the time has come to
demand payment of the debts incurred by the drinkers at Heidi’s bar.
However they cannot pay back the debts. Heidi cannot fulfill her loan
obligations and claims bankruptcy. DRINKBOND and ALKBOND drop in price
by 95%. PUKEBOND performs better, stabilizing in price after dropping by
80%. The suppliers of Heidi’s bar, having granted her generous payment
due dates and having invested in the securities are faced with a new
situation. Her wine supplier claims bankruptcy, her beer supplier is
taken over by a competitor. The bank is saved by the Government following
dramatic round-the-clock consultations by leaders from the governing
political parties. The funds required for this purpose are obtained by a
tax levied on the non-drinkers.
Cheers !!! Keep Drinking ! just Joking??????
That is great. Thank you.
Wait… if the bankers sliced and diced and sold the loans piecemeal Heidi then can ask to see the note.
That will buy her a year or so.
In the meantime, she can call on her Bundestag (sp?) representatives and offer them free beer if they pass laws preventing small bar establishments from going under by offering them big bailouts.
After all, someone has to keep das volk drunk during the depression.
Besides, the CDOs were all sold to Chinese and they have a vested interest on Heidi not going under because she gets most of her non booze supplies from them.
It’s a complicated world. Alan Greenspan loves it.
John Laing homes, owner of this property, filed for Chapter 11 as of Feb 19 so this is probably part of the liquidation process. Saw the home and can agree…not that impressive and DEFINITELY not worth the $800k the pushers were touting as the ‘entry’ price for the rest of the Stonetree Manor properties…haha.
The model homes of the development were sold to an investor at the start of the project. This is a common practice. The homebuilder will lease back the models for several years on a net basis and the homebuilder will market and sell the model homes at the close out of the project. By selling the homes upfront the homebuilder will free up credit and cash flow.
This deal was a disaster for the investor. They paid just over one million for the home in 2006 and thier tennent John Laing Homes went BK on them. I am sure they are owed six months of lease payments and the County of Orange property taxes have not been paid, these lease agreements are net of taxes the lessor pays the taxes.
Good party in Tustin guys.
I wouldn’t call a 2,000 sq. foot house on a 3,000 sq. foot lot with no back yard and no driveway and cheap white tile on the counter tops just like the numerous apartments in the neighborhood “the high end”, even if it was listed at a million dollars at some point.