Asking Price: $547,500
Purchase Price: $542,239
Purchase Date: 12/5/2006
Address: 8 Mozzoni Aisle, Irvine, CA 92606
Beds: 3
Baths: 2.5
Sq. Ft.*: 1,676
Lot Sq. Ft.*: 1,623
Year Built: 1990
Stories: 3
Type: Condominium
Neighborhood: Westpark
$/Sq. Ft.*: $327
MLS: S469169
Status: Active on market
On Redfin: 124 days
Categories: Unsold in 90+ days
Sales History:
Date ————– Price ———- Apprec
12/05/2006 — $542,239 — -10.8%/yr
08/11/2005 — $630,000 — 15.5%/yr
09/24/1999 — $270,500 — 0.8%/yr
04/04/1991 — $252,000
When I was looking for my most recent rental, I viewed one of the units in this community. The whole place is just too dense (a 1,623 SF lot, WTF?). When your in there, the claustrophobia is inescapable. The unit I viewed was completely updated. This one doesn’t look like it has been touched since 1991.
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{adsense}
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Some properties just have bad karma. This one was purchased at the peak of the last bubble for $252,000. The original homedebtor sold 8 1/2 years later and made a whopping $2,270 after a 6% sales commission. When adjusted for inflation and accounting for the stress of being underwater for 8 1/2 years, I consider this one a loss. The second buyer did well doubling their money in 6 years. 
The third buyer… well, they lost about $120,000 after commissions in just over a year — a 20% loss. Here is where it gets strange; the fourth buyer appears to have put the unit up for sale almost immediately after purchase as it has been on the market for over 120 days, and the last sale was almost that long ago. If this fourth buyer sells at the current asking price, assuming a 6% commission, they will lose $27,589 in just 4 months. I would add in some carrying costs as the unit is empty, but does anyone think this flipper is actually making any payments? I doubt it.
This property has had 4 owners; 3 of them are going to lose money on it. Who says real estate always goes up?
Off Subject.
As reported in the OC Register this morning. Many “bitter renters” are going to laugh when they read this story.
http://www.ocregister.com/ocregister/homepage/abox/article_1663939.php
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IrvineRenter,
I think there is more to this story than we know. The December purchase and then it comes right back onto the market… it doesn’t make sense. There must be some tragedy, or fraud, or base stupidity, or SOMETHING. It just doesn’t make any sense.
On the other hand, I liked walking along the San Diego Creek that ran through Westpark along Harvard Dr. Have you taken the kids there? My wife and I have seen probably 20 species of birds along there. When my oldest dog was a puppy, and I was working in Newport Beach, I would meet my wife and dog at San Marco park and have lunch, then a short walk along the trail next to the Creek channel. Good times. This unit is up closer to Col. Barber though… I liked the condos near San Marco much better. On the other hand, walking to Target would be fun…
ripcord,
I live in the Santa Rosa apartments, and it IS fun to walk to Target. And Diedrich’s. I do it a lot!
irvinesinglemom!
I have friends in that apt complex!! When my wife and I first moved to OC, we lived in Rancho Santa Fe in Tustin. We walked to the marketplace all the time! But not many good places for puppy in Tustin.
Now we’re in the North Carolina woods… and the dogs LOVE the forest!!
PS Is that Diedrich’s becoming a Starbucks? Last time I was in OC, my fave Diedrich’s across the street from the mission in SJC was closed!
Sorry about all the exclamation points. I promise I’m not a Realtor(tm). Just typing too fast (I’m at work).
ripcord
There must be some tragedy, or fraud, or base stupidity, or SOMETHING.
Maybe they’re a realtor that believe Lereah saying we were at bottom and thought they’d make a quick 10% on the bounce. I think that covers all of them above.
“Maybe they’re a realtor that believe Lereah saying we were at bottom and thought they’d make a quick 10% on the bounce. ”
That was my thought as well.
did a check of the map on Redfin, granted, the neighbors are a little bigger, but this unit is a solid $125K below everybody else on the block. There’s two other 3/2.5s one listed at 2000 sf and $668K another at 1500 sq ft and $668K.
Looks like denial central, if this place sold last year at this price.
Can we say “Rents always go up”?
Is it not “Rent” is in the classification of “Real Estate”?
I personally am seeing strong bottoming of real estate prices; I know you guys strongly disagree with my observation.
Amazing how resilent the housing market is once it reaches a break even selling point. This stalemate psyhcology will break by Q3 because eventually reality will dictate actual housing prices. And this condo, like many other condos on the market, will be the first to fall and fall hard. It is always the case in any real estate downturn that condos take a large hit; given that Southern California is condo crazy I’m sure we’ll see an interesting dynamic in this market.
Many condos were converted from apartment buildings and bought for mere appreciation. Now all you have a is an overpriced apartment with a 30 year lease. I mean what benefits from homeownership do you get from this? No appreciation. Maybe a small tax break. But this is all a wash because of the monthly nut between renting and buying.
This seller will be in housing wonderland for a few more months. They’ll do the housing cha-cha where they reduce prices on a weekly basis by $500. Somehow these token gestures are infuriating housing bears because it is only prolonging the inevitable downturn.
I think it’s a REO. I caught it last month: Link. It was $570k at the time.
Comp buster. Yum!
Can we say “Rents always go up”?
Yep, rents are just like Real Estate.
They don’t always go up either. At the moment, rents are going down courtesy of falling occupancy.
Agreed the moment. Once construction for apartment stops, occupancy will catch up, then we know what will happen to rent rates.
NIR, when in OC history have rental rates exploded upwards? I’d like to know.
April 6: OC HOME PRICES VS SALES VOLUME
Price Vs. ’06 Sales Vs. ’06
House $700,000 +0.7% 1,743 -19.5%
Condo $460,000 -2.1% 788 -22.4%
New* $623,250 +0.7% 373 -35.8%
All $634,000 +1.4% 2,904 -22.8%
Notice a Trend? The sales volume always drops before the sales price. Demand drives the volume of sales. Everyday more and more buyers are deciding to hold off. Right now many OC sellers can afford to balk at low-ball offers and are staying put.
Let’s see what happens by year’s end after ARMs adjust, neg ams, recast, and foreclosures increase.
Say bye bye to the 624k median price. A 500k median value would still only represent a 20% price drop, and we saw close to 50% price drop in OC when the bubble burst in 90-91.
OC,
Exploded upwards is a subjective measure. I can say since 2000 in Irvine. People balks at rental rate increases in Irvine area; but is willing to pay because of good schools and safe (think as if you have kids). I am talking about Irvine because we are on Irvine Housing Blog.
Hmm…it’s like a soap opera! Sorry, this is the first time I’ve come across your blog and I’m definitely enjoying it here. Can’t wait to see what happens next!
LoL, it’s just interesting to compare Cali prices to those over here in PA on the east coast – how do Californians survive? I can’t imagine paying SO much for such a small place.
Right now I’m glad I’m a renter, I won’t even lie. I’ll be lying in wait for when interest rates are at an all time low and hopefully sales prices are too.
FYI, anyone interested in RE investment or flipping houses – if you don’t have an appraiser, or you just don’t know how to get an accurate value on the home you’re looking at, I would definitely suggest taking advantage of those sites that offer home value reports – like GetMyHomesValue or HouseValues – yeah, okay, they try and see you up with a RE agent, but you don’t HAVE to use them – just use them for the information they can get you to make your life easier and then tell them to leave you alone!
Irvine Renter,
I was going through the property info for this unit and the purchase date for December of last year was actually the day the lender took back the property once it was put in auction and there were no bitters. As it is, this is a bank owned property, the lender who originated the loan was Encore with 100% financing. The investor who was left holding the bag is Deutsche Bk Trust Co. So actually this was not a sale per say. With the current asking price Deutsche is trying to at least come out ahead of what the balance of the original loan was, $504,000. The investor who had the second loan was wipped out during the foreclosure.
I’ve been looking for a graph of the last housing boom/bust mid-80’s to 2000 for housing prices in orange county and I can’t find one on the internet. Does anyone know of a URL where I can find one, so I can see for myself the trend that occured last time (in numbers, rather than anecdotal remarks?).
Thanks.
I can say since 2000 in Irvine.
Negative. Average apartment rent has exploded in Irvine. Like for like apartment rent has marginally outpaced inflation.
The increase in rent numbers you see isn’t driven by increases, it’s driven by the new developments that are larger and more resort like.
It’s kind of like the median growing because the average home used to be a 1500ft 3/2 and is now a 2400 3/3.
My experience mirrors NSR’s. IAC has built and released quite a few high-end apt complexes that simply didn’t exist seven years ago.
Like-for-like private condo rentals have definitely increased in the last 2-3 years but not by much.
“the claustrophobia is inescapable.”
I know the feeling. There is a condo complex in Aliso Viejo named “Tiburon” with the similiar design for the front. I would not feel relax if I have that tiny space as the front entrance of my “house.” One also has to be careful if one wants to back out of the garage because 4 houses would share the same space and the 2 that form the corner are the worse. Back in 2005, a 1900 spft condo in the corner with the back yard right on Aliso Creek and the road enters the compex commanded 735K. I was very naive then but now I know the house was staged as most of the houses I visited. I watched this property for a year. It was taken off the market. Since I discovered Ben’s blog a couple months later, I didn’t waste my time going around anymore, unless it is somethings huge like the auction at Canyon Villas around this time in 2006.
Anyway, as a monkey “feng-shui” master who learned from reading “feng shui’ book ;), it is not a good idea to have such front for the house. One’s financial situation and health will decline. (So said the book, if you trust the book). The jammed feeling is for real, though.
Monkey.
I almost laughed when I read your comment.
A good friend last year bought into Tiburon. There was no way to convince his wife otherwise. He knows he bought at the top, but is willing to ride it out 15 years or more (good thing his IO doesn’t reset for 10 years). He paid 679K for his place. yikes!
The sad thing about a housing bear admitting that they’re surprised that people are still buying (I’ll admit it at least) is that it’s not a reflection on the strength of the market, so much as it is a reflection on the stupidity of humankind.
Yes, there were people still buying stocks in April 2000, and all the way til 2003. Just because you have a couple pennies to rub together doesn’t mean you should spend it. It seems that humanity has some kind of built-in dysfunctionality with this concept. Perhaps the uncertainty of the world makes it easier to spend than save, maybe it’s the media, maybe it’s the FED, maybe, maybe, maybe, but it still happens.
Nirvinerealtor seems to not understand the glaring problem presented by falling transaction numbers, but we can all see where this is headed. Strength in the market? Sure, people will still be buying houses, just like stocks in 2000. But, if you think that buyers won’t take advantage of the long market times by lowering asking prices, you don’t know human nature.
Volume always precedes price.
Always.
Always.
Always.
Chuck Ponzi
http://www.socalbubble.com
Hi ripcord, the Diedrich’s in the Crossroads shopping center across from Santa Rosa is one of the two stores in OC that are not closing or converting to Starbucks. So we are very lucky around here!
“Nirvinerealtor seems to not understand the glaring problem presented by falling transaction numbers . . . .”
Oh, I think Nirvinerealtor understands the glaring problem very well. It’s just that what he/she finds to be the glaring problem is not what you see as the glaring problem. Think micro vs. macro.
Enter past the gated entry at Corta Bella and go left. There are four houses for sales/lease among the first five houses on the left. Inventory is exploding. Possible panic by summer.
ELS,
You are quite correct with my take of the problem.
As MMB mentioned, it’s a foreclosure sale. The person who bought and defaulted 100% financing might be an investor. In fact, the buyer has the same FIRST and LAST name as the REALTOR who represented the buyer. You get my point.
So, is this Condo a distressed sell from a true buyer, or was it planned to go into foreclosure at point of sale.
Hm! and 100% financing is a thing of the past! We may only see a few more sales such this.
Who would buy one of these places? It’s like living in an alley!
I can’t believe how many experts have chimed in here. Everybody offers an explanation but nobody knows the facts. Good thing none of you are my realtor (though I give credit to quite a few intelligent comments – thanks).
I know a homeowner there. It is an outstanding community and I hope to buy a home there. Like many others, I am hoping for the market correction to ease. The Italian courtyard architecture with amazing floor plans, charming fountains and beautiful landscape sets this community above others. Someone picked on the size of this unit. There are about 5 models of various sizes and configurations (and $) just as in any community. Some are 2250’sq or more! If you don’t like it, don’t buy it.
In 1999, the economy at that time was booming, and there was a huge hiring trend that brought in out-of-staters to fill tech/mgmt positions. 1999-2000 was a great time to buy since homes in this community more than doubled value since then. If a small market correction means a 10-20% value drop, your still way ahead. Who can control that? Certainly not this community any more than other communities. And remember that timing is everything in real estate profits. Tell me anyone that is making huge profits in this market on quick-turns (not!). Also, 1999 was when the final phases of construction were complete and there was full occupancy. That may have slowed prior increases in value. Don’t forget about the economic and realty slump in the mid ’90s that slowed property value increases.
What nobody mentioned was that demand for housing is and will continue to be strong. Supply and demand are key. Some people need to move at a particular time and can’t control their timing. So there will always be buyers and sellers, even if you think it is a bad deal. Housing price corrections are occuring everywhere. It is interesting that the units in this community have been selling extremely well (sure they slowed in recent months like all homes). It doesn’t matter that you see four or ten units for sale – they always sell. I thought it strange at first but when I saw how fast the unit prices rose in the last 5-7 years, it didn’t bother me. This is similar to all other communities. So why did you pick on this unit? Especially without knowing the info behind it?
Rents in Cali are incredibly high. Especially when you add water, waste, fridge, micorwave, and all the other nit-picking things that are seperate here (but included in rents in some states – but not Cali). Irvine Co has a monopoloy on rentals. It is like a competition between rental and owning prices for highest charges. Irvine Co is driving housing prices higher with their actions.
Condos are better than apts! As a youth, I thought a condo was stupid because it seemed like an apt. with a piece of paper that committed me to pay taxes. But significant tax deductions mean the government is helping you to invest in a home. The key word is invest. It takes ~30yrs to pay off a home – your single largest financial liability. Start by 30 and have it payed off before retirement. Now you have significantly reduced your liabilities for your fixed income during retirement. With an apartment, you have continued rent costs (and water, waster, fridge, etc) forever. So you need to have a mature outlook on the investment aspect. This is why a smart realtor will tell you to buy the biggest most expensive home you can comfortably afford – to maximize your investment and build equity quicker (don’t jump on me here – I said comfortably afford). These are not condo conversions – be leary of conversions as they can still be a good investment (usually lower priced) but are less likely – do your homework.
Obviously, there isn’t a high expectation of huge profits for this unit at this time. But other units in this and other communities are different. I tried to take a different view with my comments. Hope my points were helpful.
beg_to_differ,
Thank you for taking the time to comment here. I beg to differ with a few of your points:
“What nobody mentioned was that demand for housing is and will continue to be strong.”
No it is not, and for the next several years it will not. That is a bear market. Do you remember the early 90’s?
“It is interesting that the units in this community have been selling extremely well (sure they slowed in recent months like all homes). It doesn’t matter that you see four or ten units for sale – they always sell. I thought it strange at first but when I saw how fast the unit prices rose in the last 5-7 years, it didn’t bother me.”
The reasons units sold and prices rose is because we were in the middle of an irrational market bubble rally. That bubble has now popped, and these units will not sell at near the price or the rate of previous years.
“But other units in this and other communities are different.”
You do realize every community says they are “different.” In each case they are wrong. These units in this community are different — they are far less desirable than other products at the current price point. In other words, they will be severely impacted by the slowdown. The good news is that you should get to buy in here at bargain prices, and if this place makes you happy, I am happy for you.
Market demand will continue to be on the rise (maybe that is better than sayting it will be strong), but understand why that is said by so many to be expected (I hate to call them experts but I refer to those that track this stuff for a living). Certainly there will be highs and lows in the demand, but there will always be an increased demand on average for all housing in So Cal due to ever increasing population. Irvine and Newport Beach are now building high rise apts and condos to help add supply and must go up because there isn’t much land left to build on. Obviously, we had a few great years, and now we will have some slow months/years, but demand is still increasing along with the population. I can say this a different way. There are different demands – demand to buy a primary home is different than demand for investment opportunity. Demand by people that want to buy a home to live in is continuing to grow. I’m not trying to paint a rosy picture, just pointing out one of the reasons home prices have climbed, and will influence prices in the future however that may occur. That is why I don’t worry about the bottom falling out and just consider it a correction. A lot of factors derermine how much correction for how long, many of which are not related to real estate and interest rates (like employment, the war, whoever is president, etc). Of course, it is easier to be calm if you purchased in 1999 (good gains since then) then if you purchased in 2006 (poor gains).
You may be right that these prices are a bit high, I surely won’t base that on one unit. But I watched prices here for a while and noticed that these homes were very desirable and climbed faster than other communities. That may mean there could be more correction for a while, but if we ever get out of this slump these will climb high again.
I think we both agree that prices are coming down and it will be a long time before we see them this high again. Irvine is a pretty nice area and consequently overpriced in general. But that’s the way it is.
No bitters? Too funny.
I want to encourage all those who think that; re prices will not fall far, they aren’t making any more land, demand for SoCal housing is always increasing, re is always a good investment, if you don’t buy now you might miss your only opportunity, the bottom is in or isn’t far, prices may fall but not in my neighborhood, buying is always better than renting, prices are inversely correlated to interest rates, immigration or population increases will always create demand, the media has caused a temporary blip, there will be more buyers in the spring, summer, fall, winter, the foreclosure increase is a temporary blip overreacted to by the media, weather and schools will always keep prices high, foreign money and parent money are moving in, prices never go down by more than 10%, etc., etc., etc.. Please continue to hold these beliefs firm. From what little I understand about markets, the re market cannot fall far without folks thinking bullish on re. From what little I understand, the longer folks think bullish, the longer and farther the re market will fall.
I will know it is time to buy again when most folks are saying re sucks and rents equal p/i payments with 25% down. Yea, I know I am dreaming, but everybody I talked with thought I was crazy when we sold our home at the top of the market. So, for now, we will rent and be content with thinking and acting 180 degrees different than the herd. Remember, hold that bullish course.