We now have a closed sale 56% off the peak in the North Korea towers. Armageddon is upon us…
Current Asking Price: $499,900
Old Sale Price: $442,000
Address: 3141 Michelson Dr #608 Irvine, CA 92612
Flip, flop and fly
I don’t care if I die
Flip, flop and fly
I don’t care if I die
Don’t ever leave me
Don’t ever say goodbye
Flip, Flop, Fly — Blues Brothers
Fools who speculated in our housing market had no idea the risks they were taking on. To them, you simply bought property and resold it later for easy profits, or better yet, you set up an ATM machine HELOC on the property and live off the unlimited spending money. 
The measure of a market’s speculative folly is the drop in prices required to restore sanity; how much lower is the market clearing price than the peak? Well, for these units, I believe we will see 75%-80% off the peak.
The remaining owners in this building have to feel like they are in free fall and they have no choice but to accept the fate that awaits them. I suspect they will not like their results…
Current Asking Price: $499,900
Old Sale Price: $442,000
Income Requirement: $83,683
Downpayment Needed: $88,400
Purchase Price: $1,000,000
Purchase Date: 4/17/2006
Net Gain (Loss): -$584,520
Percent Change: -55.8%
Annual Appreciation: -16.2%
Address: 3141 Michelson Dr #608 Irvine, CA 92612
Beds: 2
Baths: 2
Sq. Ft.: 1,520
$/Sq. Ft.: $329
Lot Size: –
Property Type: Condominium
Style: Modern/Hi-Tech
Stories: 1
Floor: 6
View: City Lights
Year Built: 2006
Community: Airport Area
County: Orange
MLS#: P704475
Source: SoCalMLS
Status: Active
On Redfin: 1 day
Sixth floor of the Marquee Park Place High-rise. Granite counters,upgraded counters, high end wood floors, stainless appliance. Refrigerator included. 24 hour guarded service. Entertainers delight. Outdoor covered patio with views of pool and Laguna Mountains. Stackable Washer/dryer included. Special doors, windows & closet doors are solid wood! Check last sale on this one! This won’t last!
I cannot locate the loan information on this property to determine how the $584,520 loss was apportioned. Does it matter? This entire complex is full of $500,000+ losers.
For any of you who might enjoy hearing a lengthy radio interview with me, click here for an MP3 download, or check out the California Commerce website.
The HOA is $1,200/month. Pretty steep for a $442k condo … like rent.
And #404 is listed at $374k for almost exactly the same square footage, HOA $1,125/month. Comped!
And yet, if I’m using Ideal Home Broker’s tool right, there’s one penthouse still listed at $1.1 million. (I’m not finding the cheaper ones…)
That is the problem with these-the huge HOA. I’m curious as to what these actually rent for. You know some of them are being rented out. I’ll bet they rent for less than twice the HOA. Factor in insurance, taxes, and maintenance, and these things are almost completely worthless.
I am paying $1,800 a month rent for a beautiful two bedroom Tustin Ranch townhome. I didn’t understand the $1,200 HOA then and I don’t understand it now.
The only explanation is somewhere along the line the buyers of these condos completely lost touch with reality in a period of absolute mania.
Maybe this is one of those listings which is supposed to ignite a bidding war.
The front lines of this battle have already moved to lower price points. There are some units in these towers priced below $400,000.
Redfin showed a recent sale at 300k. We’re getting close to your 200k prediction.
Ms. Marquee, please open your case…
http://www.crackthecode.us/images/DealOrNoDealLoL.jpg
A MILLION DOLLARS!!!!!!!!!! FOR THAT?!?
You are freakin’ kidding me. What drugs were those people on. I know this isn’t a more thoughtful post but SHIT!
Well, there is a refrigerator included with that!
There’s also a very nice, prefabricated fireplace included.
…bet it’s one of those “Amish” fireplaces that have an order limit of (2).
Does your “income requirement” (above) factor-in the HOA? I think the PITI + HOA would put someone at that income level well over 50% DTI!
No, the income requirement I calculate takes the current interest rate and plugs it into a formula and uses a 28% DTI to come up with an income requirement. It does not consider the other costs that might increase the DTI beyond the payment.
I have seen rentals on Craigslist for as low as $ 2200.00. Right now they are advertised at $2400.00
in the North Korea Towers. I drive by them almost every evening and it appears they are getting even “Darker” than before. I wonder what the true
occupancy rate is presently. Can you imagine renting one of them and 50% of the rent you collected goes to the HOA Fees? Thats gotta hurt. I dont think we will see any new High Rise projects in the OC for many many years to come. Lesson learned. I wonder how good old Tom Testa is doing these days. He is still the HOA President. He would be a great interview for IR.
The future at Marquee Park Place is bright! So says El Presidente Tom Testa!
http://www.marqueeparkplace.org/ActionWeb/Documents/Document.ashx?d=903
Tom Testa…real state agent?
http://10aberdeenstreet.com/
(btw- I hate using a domain name like that…)
I wonder how many of those 40 high rise developments are moving forward…
http://articles.latimes.com/2007/feb/16/local/me-vertical16
Oh man
http://www.marqueeparkplace.org/
They are cutting off the heater in the for the duration of the winter in order to save money.
Now, I don’t know about you, but I pay like 600 bucks a year to our Park and Rec HOA and the pool is heated year round.
If I were paying 1000 bucks a month, that damn pool would have to be not only toasty hot in those cold December nights but there should be fresh towels around.
Not only that, but if you look through their HOA meetings you will note that on September 2009 “The Board authorized the filing of liens and foreclosure liens per the Association’s Collection Policy”
Things are no rosy as good old Tom was saying, huh?
How did the nickname “North Korea Towers” come about?
When you night time photos of the earth from space, there are very few lights on in North Korea. The other surrounding countries are lit up pretty well.
When driving by these towers at night…there are almost no lights on due to low occupancy. These towers are a symbol of everything that went wrong during the bubble.
Check out the picture at the top of this post:
https://www.irvinehousingblog.com/blog/comments/michelson-towers-airport-area-irvine/
It will answer your question.
There was also a giant pyramid looking hotel that was built in NK…I don’t think it was ever finished, it’s this gigantic unlit building.
Anyone have that forum/website handy where the residents were complaining about their HOA?
[img]http://upload.wikimedia.org/wikipedia/commons/7/7c/Pyongyang-feb-2009-crop-Ryugyong_Hotel.jpg[/img]
[url]http://en.wikipedia.org/wiki/Ryugyong_Hotel[/url]
I donno what people were smoking when they got into bidding war for these condos and in general on the southern california.
I was at a fullerton open house last weekend and the listing agent listed the house for 495K OBO. People bit upto 800K for the house…
One of those rooms looks quite shabby, unless it is just crappy carpet protecting the “high end wood floor”. And the view from the balcony is uninspiring, unless a gorgeous nudist moves into the tower opposite.
Not so much for your $500k. Even ignoring the huge HOA (paid by how many units out of the total possible?), I agree this has a good way farther to drop before it becomes attractive to someone.
I wonder if there is room for the HOA to eventually be forced down?
The HOA fee can only go down if the board stops paying for services or creating a reserve fund for future maintenance. So they can stop paying for their 24-hour concierge, pool maintenance, insurance, heat and electricity for the common areas. And/or they can stop saving for repairs in the future.
Having run an HOA, I can tell you that the board’s duty of fiduciary responsibility trumps people’s complaints about sales prices. Owners signed on to the HOA fee when they purchased; they have a legal duty to pay it, and can get foreclosed on if they consistently don’t. In that case, the HOA is behind the other lien holders in order of collection of unpaid fees.
So this place may soon offer many less amenities, or have a heavily indebted corporation in charge. Look for prices of about $250K after a major upheaval, in about 5 years’ time.
Special doors, windows & closet doors are solid wood!
What good is a 6th floor view if the windows are solid wood?
Are the Tower price/haircuts a sign of the times or just an abervation? Were the Towers just vastly overpriced in 2005? Will the reduction be this dramatic on SFU in Irvine?
Investing in a condo seems like a good idea when real estate prices are going up, especially for younger, single professionals who can’t afford the overpriced detached homes. The only problem is that once the bubble pops and prices start falling, no one wants to buy the condo from you because they can just rent one for less, without getting stuck in a falling equity situation.
Detached homes don’t fall as quickly (or as far) because the buyers are different. They are somewhat more immune to price swings because they are more likely to want to live there long term. Detached home buyers are also more likely to be dual-income couples, who can support relatively higher prices when loan standards inevitably tighten in the downturn.
That’s a fireplace in the top right photo.
I have a problem here: where’s the flue?
I live in this tower on the upper level. That fireplace is a fake. There’s a light switch that makes it glow. It looks stupid to me since it partially blocks my view of the Prudential building next door.
And yes, I’m quite happy living here. The $1,200 HOA pays for upkeep and friendly concierge/staff. It’s definately is a clean building. If you need a bachelor pad, this is definately a good building.
You do want to live on the upper level though…a lower level unit just doesn’t say sexy.
Now, you guys are probably thinking: is it worth it? My answer: Yes, if you’re renting. 😉
Haha, this looks like it’d be a great place to rent a bachelor pad. All of the little niceties, none of the mortgage/HOA.
So is it pretty deserted? Or decently occupied in your opinion? I heard concierge/staff are a bunch of bitches, but this was last year on that complaint forum.
When you think about the subsidy an owner is providing a renter in this place, I would enjoy it just knowing someone else was paying the freight…
What are the rents like in that place?
A quick poke around craigslist shows rents in the $2400-3000 range.
What a joy it would be to live on the sixth floor of any building in earthquake land! Add in the fact that you get to pay a fortune to do so. I’ll pass. Give me a normal house, where someone else doesn’t land on me in the next 7.5 quake.
Here is the text of an email offer I received. It makes me sick:
New Short Sell & Buy
financing is now available!!!
Get your short sale sellers into another home and double end your short sale listings!
Example:
The Garcias bought their condo in 2005 for $400,000 with 5% down. It’s now worth $200,000+, but they still owe $390,000. We negotiated the short sale for $225,000. During the short sale process we got them approved for a new maximum loan of $376,000. Upon closing their short sale home, they closed on their new nicer, bigger home for $375,000 and didn’t have to move into a rental apartment for years.
Call me at 858-405-0381
& double end your short sales!
Download a free Realtor Marketing Flyer at:
http://calzerodown.com/images/Realtor_Flyer_-_ShortSellAndBuy_-_Sept_22_2009.pdf
Loan Guidelines:
#1-Payment History on short pay loan
The short payoff loan must be current and have no 30+ day lates in the last 12 months. A short payoff is considered derogatory credit, but no specific time period is required to get a new home loan after the short payoff is concluded. Now you can go to your old short sale database, even if they had lates over a year ago, and get them into a home today!
#2-New Home Purchase Price
The move up home purchase price cannot exceed the original short sale loan balance. In the example above, the new home purchase price cannot not exceed $390,000, the original loan balance price in 2005. The new home purchase price cannot exceed the FHA county limit.
https://entp.hud.gov/idapp/html/hicostlook.cfm
#3-New Home Down Payment
The minimum down payment is 3.5%. This may be from the borrowers own funds or a gift from a relative.
#4-Borrower minimum credit score
A 640 minumum middle score is required. We have a credit repair program that can significantly improve credit scores in 60-180 days, and legally eliminate derogatory credit such as foreclosures and bankruptcies to get more buyers into homes.
This is your chance to go to your current and past short sellers and get them into another home.
Call Roger Now
858-405-0381
http://www.shortsellandbuy.com
Other Hot Programs:
Stated VOE Program, 20% down, no paystubs or W-2 ware-earners
Low FICO Program, 3.5% down with FICOs as low as 500
1/2% Down FHA purchase
Find out more at:
http://www.calzerodown.com
Kaiser Financial Services, Inc has been funding these and more loan programs since 1998. We look forward to helping you get more business and buyers into homes using these program with our expertise in these areas.
Let’s get started, have your buyer complete a secure on line application at http://www.rogerchandler.net.
or give Roger a call at 858-405-0381.
We look forward to helping with your success!
We are a retail mortgage broker, licensed by the CA dept of Real estate #01216803, FL dept of Financial Institutions, TN Dept of Banking, WA Dept of Finance. Due to RESPA section 8 limitations http://www.hud.gov/offices/hsg/sfh/res/respamor.cfm#HT we are unable to provide referral fees for loans, however
we can get you the financing your borrowers need to purchase a home with little or no money down, with credit scores as low as 560 (with no 30 day late payments on any accounts in the last 12 months) , and FHA-203K home improvement loans for home not otherwise available for financing.
Got more down? Ask about our stated (VOE only) program for loans up to $417,000 with 20% down, 620+ FICO.
Find out how to increase your sign calls by 183% and double end more listings when you call Roger at 858-405-0381
So they get to get out from under their debt and get back in debt immediately. All supported by your nice tax payer. Where are the protests? Where is the outrage?
That frosts me…
Let’s just relive the mess we got ourselves into.
This e-mail is exactly why I hate most mortgage brokers. I really hope there is a law against this. They are playing a high stakes game with someone else’s savings.
Despicable! I guess without flipping realtors the mortgage brokers would have to get paid for doing something productive.
Isn’t Jerry Brown trying to rein these mortgage jerks in? Or are mortgage brokers immune to the prosecution against mortgage-“fixing” con men?
This is breathtaking.
Spite is not the way to live your life, but I think I’ll just continue to save until I can write a check for my next house. The thought of paying money to mortgage brokers and interest to banks makes my flesh crawl.
I probably won’t carry out my spiteful plan, but reading this makes it look like the right thing to do.
(For those of you mortgage brokers reading this: it isn’t personal. Hell, it isn’t even rational. This whole business just makes me sick.)
IR,
Why where is your compassion?
It looks as if the nice realtor is arranging an alternative loan modification (recourse loan) in which a HELOC abuser or ATM house abuser can short sell and thus retire the resourse loan and moved into a new house with a non-recourse loan. Hopefully with essentially nothing down. Later, they can stop paying on the non-recourse loan, they will get free rent for a half to two years. You understand that the loan will likely go through a GSE, so the taxpayers will need to cough up some change in the future.
Remember, you don’t pay enough taxes. The USA has lower tax rates than Europe. We need more taxes to support these programs. Where do I sign up.
Sign,
Foolish Renter,
Paying rent while I could be getting a stimulus package.
This is disgusting and should be against the law. These people incurred no penalty for their poor financial decisions. The tax payer foots the bill for the bank’s loss and these people get to move into their bigger, nicer house.
The new America is really starting to piss me off. Playing be the rules gets you nowhere.
I can’t believe you didn’t save this to use as an entire post of its own!!
I’m speechless…. Stated (verbal verification of employment), with only 20% down??? And f*cking the lender (and taxpayer) on the short-sale whilst moving right into a more expensive home with 3.5% down???
In-f-ing-credible.
Thank your gov/t for keeping Roger employed with your money. “Alright boys, dig them holes and tomorrow fill em up. Payday’s friday.” Roger is due for a factory job.
If Roger makes $100K-200K this year (but should be working in a factory or waiting tables making $30K), is this not a way for the oh-so-elusive inflation to make it’s way to the street?
IR, if you could forward that email to the LA Times, the OC Register, The CA DRE, and every politician you can find, I would be grateful. This real estate ‘professional’ shouldn’t mind the extra publicity, right ?
this is truly BS for sure… but wouldn’t this option make a ton of sense for the those who had/have their finances in solid order and with money saved, to partake in this scenario?
in the example above, say the homeowner was having no trouble making his/her mortgage payments on the current home – the original $400k ($380k after the 5% down payment). now she wakes up to find her house is worth $225k in a short sale. well f*ck it, if sir douchewad Roger can get the original lender to eat it and agree to a $225k short sale, doesn’t the prudent homeowner come out ahead? if she could make the original mortgage payments without fanfare, then the mortgage on a $375k place looks even better to her (plus most likely the interest rate that she’d get would be lower than her original in the past 3-4 years on a 30yr fixed). what is her incentive not to hit Roger up on his offer?
yes, the system is f’ed up. but in the hypothetical example, the homeowner bought the $400k home conservatively, and did not get to live in her dream home. if she chooses to stay in that current home, it will most likely be many years before she can upgrade. in a sense, she got screwed the first time around years ago, by being prudent, taking a 30yr fixed, budgeting within her means, and right now will get screwed again by being principled.
of course, the current market could double-dip, but if the homeowner could service the monthly mortgage payment easily, what does that matter? at least she would have upgraded to a bigger house. so the question is becomes, how difficult is it to get the lender to agree to a short sale that is favorable for a prudent homeowner that has never missed a payment? obviously, there are people in this scenario getting wise, as strategic defaults are starting to grow.
and if there is systemic collapse, we are all screwed anyway.
what am i missing? would love to hear you all… and no, the hypothetical situation presented above is not me. i have equity, which means i’m even more screwed by all that is going on.
Fannie Mae Serious Delinquency Rate increases Sharply
Fannie Mae reported that the serious delinquency rate for conventional loans in its single-family guarantee business increased to 4.17 percent in July, up from 3.94 percent in June – and up from 1.45% in July 2008.
“Includes seriously delinquent conventional single-family loans as a percent of the total number of conventional single-family loans. These rates are based on conventional single-family mortgage loans and exclude reverse mortgages and non-Fannie Mae mortgage securities held in our portfolio.”
Just more evidence of some shadow inventory and the next wave of foreclosures.
IR,
Why would Fannie Mae be holding “non-Fannie Mae mortgage securities held in our portfolio”? Is Fannie just taking bad loans off the bankers’ hands and sticking it to the taxpayer?
Where do I sign-up to be a HELOC abuser and short sell and pocket the cash? I’ll also want to sign-up for a nothing down house and get purchase loan with my new stimulus package. Free rent for a few years?
NorCal, House prices can go up with nothing down, tax credit and low interest rates. With no skin in the game, the pseudo house buyer will be either turn a profit or just a walk away from the non-recourse purchase loan. The latter will result in bad credit, but free rent.
C.A.R. reporting the prices are jumpng up in socal? but 29% in San Juan capistrano and 11% in Placentia? REALLY?
http://www.delmartimes.net/news/261147-san-diego-home-sales-up-in-august
The cities with the greatest median home price increases in August compared with the same period a year ago were:
– San Juan Capistrano, 28.8 percent
– Laguna Hills, 17.6 percent
– Placentia, 10.9 percent
– San Rafael, 10.1 percent
– Fullerton, 7.2 percent
– Benicia, 5.6 percent
– Arcadia, 5 percent
– Alhambra, 3.5 percent
– Costa Mesa, 3.1 percent
– Walnut 2.9 percent
The great question is, where is the money coming from, if this is true?
Norcal, haven’t you heard? The banks just are not lending! Astute Observation indeed.
Bring back the Redfin link. BOOOoo..
You should post the IHB link as well as a redfin link.