Friends, Irviners, countrymen, lend me your ears;
I come to bury Danbury, not to praise it.
The evil that markets do lives after them;
The good is oft interred in stucco boxes;
So let it be with Irvine.
William Shakespeare — From Julius Caesar (III, ii, 78-79)
(paraphrased by IrvineRenter)
Welcome to Oak Creek week at the Irvine Housing Blog. I will be looking at properties from this neighborhood all week. For those of you not familiar with Oak Creek, you may want to start with our Oak Creek Community Profile.
Personally, I like Oak Creek as I have rented units in two of the apartment complexes there. It will be one of the neighborhoods I strongly consider when I am ready to buy.
The prices in Oak Creek have been more resilient than in some other Irvine Villages. It has only been in the last several weeks that I have been noticing rollbacks, and pricing has just gone under the $400 SF level.
There is a cute neighborhood called Cobblestone at the intersection of Alton Parkway and Jeffrey Road in Irvine’s Oak Creek neighborhood. It features small, single-family detached homes arranged in a 6 unit cluster with 2 houses on the street and 4 units behind. This neighborhood is a model of good land planning for a small-lot, detached condominium project.
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The loop street is narrower than typical Irvine local streets with pockets of green with street trees located in what ordinarily would be parking spaces. The front setbacks are very tight with houses set back 5 feet from the sidewalk on the narrow street. It all sounds rather claustrophobic, but this neighborhood doesn’t feel that way. The judicious use of street trees, a slight bend in the street, and the abundance of landscaping makes this neighborhood feel more cozy than cramped.
Lets take a detailed look at what is happening in the market on this street…
Asking Price: $590,000
Purchase Price: $324,000
Purchase Date: 6/14/2002
Address: 50 Danbury Lane, Irvine, CA 92618
Beds: 2
Baths: 2.5
Sq. Ft.: 1,200
$/Sq. Ft.: $492
Lot Size: –
Year Built: 2000
Stories: 2
Type: Condominium
County: Orange
Neighborhood: Oak Creek
MLS#: M105109
Status: Active
On Redfin: 164 days
Unsold in 90+ days
From Redfin, “LIGHT & BRIGHT IN HIGHLY DESIRABLE COBBLESTONE, IN OAK CREEK! * EASY A CCESS TO 405 & 5 FWYS. QUIET NEIGHBORHOOD. LOW HOA’S, PINE LAMINATE & CERAMIC FLOORS TRHOUGHOUT. CUSTOM PAINT, ATTACHED GARAGE W/ OVERHEAD STORAGE & LOTS OF BUILT-INS. LARGER, MORE PRIVATE, WRAP-AROUND BACKYARD W/ NO HOMES BEHIND. WALKING DISTANCE TO ASSN. POOL, SPA, TENNIS, PARK, RESTURANTS & MUCH MORE! MOTIVATED SELLER. BRING ALL OFFERS!!! *”
Turn off the CAP LOCK, please…
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This is our low-price leader in this community. It has been on the market for 164 days, so this price is not done dropping: Bad news for our house flipping neighbor…
Asking Price: $598,000
Purchase Price: $610,000
Purchase Date: 10/10/2006
Address: 55 Danbury Lane, Irvine, CA 92618
Beds: 2
Baths: 2.5
Sq. Ft.: 1,200
$/Sq. Ft.: $498
Lot Size: –
Year Built: 2000
Stories: 2
Type: Condominium
County: Orange
Neighborhood: Oak Creek
MLS#: S489835
Status: Active
On Redfin: 39 days
From Redfin, “Absolutely Charming Detached Home w/ 2 Master Suites + Loft and Vaulted Ceiling at Cobblestone in Oak Creek with an Stone Arch Exterior Design. Highly Upgraded includes New Polished Travertine Flooring Thruout, 4′ BaseBoard Around inside of the House. New Berber Carpet and New Paint. Plantation Shutters Thruout and Crown Molding in 2 Bedrooms. New Professonal Landscaping in backyard. Close to the Gelsons’ Market & Restaurants in Walking Distances.”
Has “thruout” become a word now? I think “thru” has become accepted through extensive use, but I haven’t seen other forms yet. No matter…
This seller is hurting. They are priced $8,000 over an identical neighboring property, and that property is overpriced. In short, they are going to bleed some more before they bury this stucco box. If they somehow manage to get their asking price, they will lose $47,880 after a 6% commission. That is a great deal of money to lose after only 8 months of ownership. When you factor in holding costs and the additional $30,000 they will need to drop the price in order to sell this property, they will really lose more like $75,000.
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Also in this cluster is one of two properties priced at borderline WTF territory which are beginning a race downward to find the market. They still have a ways to go…
Asking Price: $674,900
Purchase Price: $488,000
Purchase Date: 12/19/2003
Address: 56 Danbury Lane, Irvine, CA 92618
Beds: 3
Baths: 2.5
Sq. Ft.: 1,360
$/Sq. Ft.: $496
Lot Size: –
Year Built: 2000
Stories: 2
Type: Condominium
County: Orange
Neighborhood: Oak Creek
MLS#: S492424
Status: Active
On Redfin: 23 days
From Redfin, “WOW!!You’ll Love this Detached Stunning Sweet Home in Highly Desirable Cobblestone Community in Oak Creek. The Home Is Upgraded w/ Amazing Designer Media Niche & In The 2nd Bedroom w/ Walk-in Closet, Crown Molding w/ Custom Paint, Laminate Floors Throughout, New Carpet, Professionally Landscaped Backyard w/ Mature Palm Trees and Inside Light Switch. 2-Car Attached Garage w/ Driveway. Quiet Neighborhood, Easy Access to 405 FWY & UCI. Walking Distance to Asso. Amenities, Restaurants and shops.”
You lost me at WOW!!…
Asking Price: $647,900
Purchase Price: $267,500
Purchase Date: 6/29/2000
Address: 33 Danbury Lane, Irvine, CA 92618
Beds: 3
Baths: 2.5
Sq. Ft.: 1,350
$/Sq. Ft.: $479
Lot Size: –
Year Built: 2000
Stories: 2
Type: Condominium
County: Orange
Neighborhood: Oak Creek
MLS#: S495255
Status: Active
On Redfin: 4 days
From Redfin, “MOTIVATED SELLER – WILL LOOK AT ALL OFFERS!!! Location! Location! Loca tion! Fabulous French Country exterior. Pristine detached 3 bedroom home located in the exclusive Oak Creek Community. Features include ceramic tile flooring, newer designer carpet, custom paint, built-in media & private rear yard. Great resort amenities and walking distance to Irvine schools, parks, pools spas and sport courts.”
I can’t believe how consistent realtors are with the three exclamation points. Is that on the realtor test?
So what do we have in these last two Danbury properties? These are two identical floorplans across the street from each other. The first seller hits the market with an almost $500 SF asking price. This is a wishing price bordering on WTF. Then seller #2 comes along and undercuts the seller #1 by $27,000. Now both of these sellers are well above the market. They will probably be closer to $600,000 to $625,000 before they sell. They might even break under $600,000. They both have plenty of equity to reduce price — assuming they haven’t HELOCed themselves into oblivion — so this should be an interesting race to the bottom.
They are not alone. on the street around the bend, Cherrybrook Lane, there are 2 pairs of identical houses having the same game of chicken.
Pair #1:
Price: $669,000
Irvine, CA 92618
Beds: 3
Baths: 2.5
Sq. Ft.: 1,357
$/Sq. Ft.: $493
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201 CHERRYBROOK LN
Irvine, CA 92618
Beds: 3
Baths: 2.5
Sq. Ft.: 1,350
$/Sq. Ft.: $496
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Pair #2:
Price: $699,000
Irvine, CA 92618
Beds: 3
Baths: 2.5
Sq. Ft.: 1,500
$/Sq. Ft.: $466
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Price: $699,000
Irvine, CA 92618
Beds: 3
Baths: 2.5
Sq. Ft.: 1,500
$/Sq. Ft.: $466
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So far, none of those sellers has blinked. We will see…
a greater fool here:
28 Danbury Ln, Irvine, CA 92618
06/15/2007: $682,000
01/09/2004: $518,000
05/27/2003: $485,000
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I imagine these other sellers wish there were more of them to go around.
Another link
CDO Losses May Be $52 Billion, Credit Suisse Says (Update2)
http://www.bloomberg.com/apps/news?pid=20601087&sid=aGQqNEmAo8Mk&refer=home
600k for 1200 sq ft!
That’s so 2005!
Have fun making that payment….and paying 7500 per year in property taxes to start with.
A life of debt servitude for an asset that is currently declining in value!
IrvineRenter,
Three exclamations? I believe it is some kind of Realtor Fung Shui. The power of the realtor trinity is not to be underestimated. Take, for example, the old saw : Location, Location, Location. A realtor will say these are the three most important things in Real Estate (of course if I say that is one important thing three time they will look at me with a blank stare). So the three exclamation points signify the Trinity of Real Estate.
Isn’t it obvious?
The one ad said “Light and Bright.” That’s all it takes to sway me.
the Trinity of Real Estate.
LOL!
“Subprime defaults are “clearly a huge problem” for investors in collateralized debt obligations, Credit Suisse analysts led by Ivan Vatchkov in London wrote in a report. “But we do not think that they are a systemic one.””
Not a systemic problem? I call BS on that one. It is all about the loans which is a systemic problem.
$52 billiion? LMAO
Executives at New York-based S&P, Moody’s and Fitch say they are waiting until foreclosure sales show that the collateral backing the bonds has declined enough to create losses before lowering ratings on some of the $6.65 trillion in outstanding mortgage-backed debt.
I see. Total losses will be less than 8% on bonds which can’t be sold for 50 cents on the dollar.
Pigs with lipstick.
http://www.prudentbear.com/articles/show/2054
“Three exclamations? I believe it is some kind of Realtor Fung Shui”
RIOT !!! !!! !!! !!! Hey, I just realized…when I type 1 exclamation point, two more auto-add ! lol.
Where’s NIR ? Surely she can confirm or debunk the Feng Shui possibility….
Chicken real estate, ooooh, time to get the popcorn, should be a fun one to watch.
Great Finds!!! (You Like My Trinity Of Real Estate?!?!?!)
it’s hard to even type like that.
Re: Realtor for 56 Danbury
I didn’t see any spelling mistakes in the description!
Must be one of those flukes – you place 5,000 monkeys with 5,000 typewriters and eventually Hamlet comes out.
That deserves a “WOW!!”
‘Robert Rodriquez, chief executive officer of First Pacific Advisors, was even more blunt. “We haven’t seen much of a problem in the subprime area [but only] because the pricing is a fraud; the ratings are bullshit,” said the two-time recipient of Morningstar’s Fund Manager of the Year…’
Another interesting link
U.S. Rebound May Be Bumpier Than Fed Expects as Credit Tightens
http://www.bloomberg.com/apps/news?pid=20601109&sid=a6C26XqucNwI&refer=home
Mortgage Mess Shines Light on Brokers’ Role
http://www.realestatejournal.com/buysell/mortgages/20070706-simon.html
Fun gizmo to graph various housing inventories across the US
http://online.wsj.com/public/resources/documents/info-flash07.html?project=housingInv07-0705&h=540&w=750&hasAd=1
Great article explaining credit spreads and the effects of tightening. Thank you.
since we hopped on the subject of CDO’s (mortgage-backed securities) let shed a little light on how far up sh*t’s creek we are. I’ve posted comments about this on doc housing bubbles sight as well.
The mini (yes it is mini in light of things to come) land slide that has occurred recently was heavily weighted with subprime loans. These traunches of the CDO are known in advance to be risky, so while the defaults make investors skittish and enforce margin calls, none of this was truly unforseen.
The hideous monster is the high risk prime paper that is masquerading as high quality/low risk in the equity traunche. The 80/20’s, the high LTV neg am loans, are grouped together with the prime 30 year fixed/10 year interest only, etc.. The people that stand to lose the most are the prime borrowers that maxed out or bought with no money down. Simple economics of supply and demand, GDP and job growth, and rising rates will bring values down. Subprime sludge will only facilitate a further slide in prices.
I can tell from first hand experience that high risk loans, as far as LTV is concerned, are still being originated. Neg ams are still being originated. These loans are not going to recast/adjust until 2008,2009,2010, and beyond. When this happens, all hell is going to break loose on wall street, and john q public, who doesn’t even know what neg am means, is going to see his pension plan evaporate.
“What started as a financing squeeze in the subprime- mortgage market now threatens other parts of the economy. ”
No…How can this be? What a surprise!!!
That’s a good point. The pension plan. Now, I know someone who’s reading this that is quackin’ in his boots…. but I’ve always believed in 401Ks and SEP-IRAs.. pension plans are nice but you little control of how they’re invested.
What I can’t understand is why a banker would lend high risk on the face of declining RE prices.
I think that’s ridiculous. If money is so cheap still, then heck I might as well borrow a couple of MIL and invest it in CSCO. I think that’s a lot less risky in this environment….
At what point do you see this crazyness stopping? Why is Wall Street still priming the pump?
If I am not mistaken, shortly after the the first dramatic drop of the market during the crash of 1929, a group of our largest bankers and financiers on Wall Street tried to prop up the market and instill confidence in the institution. They went out and bought a lot of stock and ended up being bagholders as the Great Depression was just getting underway. Is history repeating itself?
Because they can still sell the mortgages. Because spreads are still narrow enough and the yen is still so cheap that there is still a market for MBSs and CDOs. It is slowing, but there is still a market.
On a semi-related note.
I have a couple year lease on a home in Oak Creek in the tract east of Danbury. I make notes whenever I see a rental. 57 Danbury is a 2 br/2.5 bath/loft that was listed for $2,200 a month last year.
I swear one of the Danbury’s address is a REO from a bank on the east coast (it might even be 57.)
Hey guys… I actually lived at 62 Danbury lane for about a year starting in early 2004. Funny story actually. I moved from Oregon to be with my gf (at the time) and she just bought this home in late 2003. It is the same floor as 50 Danbury lane. She was making pretty good money at the time as a Loan Processor. She was way in over her head when she bought this home. During my stay there, the mortgage industry started to slow down and she was starting to worry. Not to mention she just bought a brand new BMW M3! Well to get right to the point, she ended up cheating on me (thank god) and I moved out. Two years later, I was browsing around zipreality and found her home on the market, bank owned! I guess the bitter side of me was happy to see that. What goes around comes around. She was the perfect example of the greater fools who get themselves in heaps of trouble buying when they probably shouldn’t be buying and also having a semi expensive lifestyle. Her house did appreciate quite a bit from the purchase price of $450,000 so she was basically living off the appreciation for a while. I don’t know what she was thinking of buying a brand new M3 on top of a $3,000 mortgage payment! Dummy….