Money’s Too Tight to Mention — Simply Red
Everyone was livin’ large with all that HELOC money coming in. Now that the housing ATM has been shut off, money is too tight to mention.
Income Requirement: $137,475
Downpayment Needed: $109,980
Lender Purchase Price: $459,200
Lender Purchase Date: 3/12/2008
FB Purchase Price: $649,500
FB Purchase Date: 12/28/2006
Address: 37 Olivehurst, Irvine, CA 92602
Beds: | 3 |
Baths: | 2 |
Sq. Ft.: | 1,752 |
$/Sq. Ft.: | $314 |
Lot Size: | – |
Type: | Condominium |
Style: | Traditional |
Year Built: | 2001 |
Stories: | Two Levels |
Area: | Northpark |
County: | Orange |
MLS#: | S528888 |
Status: | Active |
On Redfin: | 8 days |
laundry room, vaulted ceilings, granite counter tops, stainless
appliances. Bank to paint the entire interior, clean the carpets and
replace the garage door opener.
Did you notice the pergraniteel?
.
.
I find it interesting that this property went for $459,200 at auction. The flippers wouldn’t even step up to buy it. I also think it is interesting that the lenders have modified their loss mitigation procedures and are no longer automatically bidding the amount of the first mortgage. They appear to be letting these go at 10%-15% discounts off the first — if someone will take it. I suppose it is better to take the 10%-15% loss than deal with a larger loss on REO. The owners who lost the property put $129,900 down, unless their is a 2nd that doesn’t show in Sitex. Despite the hefty downpayment, this went into foreclosure in just over 14 months. They could not have made too many payments before opting to let it go back to the bank. If the bank can get their asking price, they won’t lose any money, but it doesn’t seem likely they will get a quick sale on this one given how low it went at auction. We will see.
Have any of you noticed signs of a slowdown in our local economy? Do you have any stories for us?
.
I been laid off from work my rent is due
My kids all need brand new shoes
So I went to the bank to see what they could do
They said son looks like bad luck got a hold on you
Moneys too tight to mention
I cant get an unemployment extension
Moneys too tight to mention
I went to my brother to see what he could do
He said brother Id like to help but Im unable to
So called on my father, father
Almighty father, he said
Moneys too tight to mention
Oh money money money money
Moneys too tight to mention
I cant even qualify for my pension
Money’s Too Tight to Mention — Simply Red
Is this a 3-story townhouse, anybody else above or below?
MLS#52888 is a lucky number. If it were a license plate number, it probably can fetch thousands of dollars in the auction in Hon Kong or mainland China. HOA $388 + Tax $680= $1067/month. That is substantial burden for such a place.
Can it rent for $2500 a month? GRM 150 makes it $375k. This one has long way to go. The lucky MLS# may not do the trick until the ultimate amenity is offered.
As of today, this home is in escrow, taking back-up offers. Maybe the MLS# is lucky, afterall.
Bank to paint the entire interior, clean the carpets and replace the garage door opener.
WTF? This is part of the sales pitch? Shouldn’t this all be done before the property is put on the market?
I’ve seen some references to Santa Ana and I’ve posted about Santa Ana, neighboring city of Irvine. One of the reasons why Irvine looks much more tempting than the surrounding cities is the fact that it is organized, predictable and very resident friendly. Contrast that to a place like Santa Ana where there is exactly one and a half libraries. Where there is discussion over whether a parcel of land should be used for affordable housing that is accessible to the disabled OR a much needed park for children. In Irvine we easily have both- and plenty of both. Those are the no-brainer issues that the city cannot figure out – of course those are only the tip of the larger iceberg picture.
Recently Santa Ana is getting ready to float a new bond issue to upgrade the city’s schools. (They also had their water rates doubled, recently.) The school district is receiving failing grades from the state and there appears to be a looming take over by the county department of education. The dilemma for the voting citizens will be: should they risk approving the bond money to the same folks who have mismanaged the district in funds and execution time and time again, or should they say “NO!” and continue to have the same broken down facilities and outdated technology?
Quite the decision. I’m glad we don’t have those unsavory choices here in Irvine.
For anyone who likes to read about “Downtown Orange County” (aka, Santa Ana – and REALLY it should be renamed the “slum” of OC) here is a current link to their local Blog:
http://www.theorangejuice.com/2008/04/santa-ana-facing-gentrification-by.html
The above link will bring you to the discussion surrounding the HOA fees and excessive taxation that are helping to break the backs of SA homeowners, already stretched thin from the subprime mortgage meltdown.
The dual problems of massive foreclosures and a train-wreck-in-progress school district makes for a facinating tale of another city right next door to Irvine. Orange Juice! is one of my other daily reads, besides IHB.
This one’s still up. So it looks like those other listers got bids. They were “cheap” and steep discounts unlike this one.
Good thing, because I need redfin for my D.C. housing search, so I wouldn’t like to think that they were getting more traffic than they could handle and resorting to draconian measures.
My sign first of slowdown is quite simple: lower traffic. It used to take me 1:15-1:30 at rush hour to get to work. Now it’s more like 45-50 min.
I’ve noticed that in LA taking just a few drivers off the road has an immense effect on average speeds. UCLA or USC on break, Chinese New Year, Columbus Day, any minor holiday, and speeds are much higher.
The second sign of slowdown is retail for rent, especially furniture, flooring, lighting stores that have closed.
Haha, true! I was talking with my brother yesterday as I was on the 5 North near Jeffery at 5:15 and there was little traffic each way. He said that’s cuz no has jobs.
lol
Gas prices? I myself have taken to ordering $20-$30 items online stuff online – even if I have to pay shipping, by time I add up gas it’s often cheaper to buy it online.
I had noticed the better traffic (Cerritos-Irvine) and also associated to the economic slow down. Although I am not an expert, traffic is clearly a non linear problem and a few more/less cars in the highway will make a big difference. I thought it may be a seasonal change (holydays), but the trend has continued; currently, traffic in 405 is clearly better than last Fall.
I’ve been commuting on the 405 from West LA to Torrance for over 10 years now.
I’ve noticed that daylight savings makes a noticeable difference on traffic speeds. Rush hour traffic moves faster during daylight savings. I’m not sure why but I dread driving my car when CA moves from daylight savings to standard time.
I wish we could edit our entries…
What I find interesting is that the lender is asking for more than they paid at auction. Why is yesterdays listing was below the lender purchase price but today’s is above?
They are free to ask whatever they wish, and each lender has a different loss mitigation procedure. I would not be surprised to see this start coming down in price rather quickly to find a buyer.
IHB had a mention in this article.
http://seekingalpha.com/article/73552-the-impending-mortgage-crisis?
I’m seeing increases in the frequencies of list price declines on homes lately. Woke up this morning to 6-7 price drops on my main search…
I’m also seeing what I’d consider an increase in the escrow cancellation rate, which I would assume is the result of tighter lending.
http://www.ipoplaya.com
And/Or people are stating to cancel their contracts in the belief that they are still overpaying.
I work in commercial vehicle sales. Large corporations and trucking firms have idled 10>15% (or more) of the vehicles they own. They just sit on the back fence, drivers laid off, fewer mechanics and support staff needed. Bankrupt firms have entire fleets in holding yards, banks desperate for buyers. Down go new and high quality used vehicle sales. Some trucking companies expect never to return to capacity. They offer their excess units for sale and failing a bite they cannibalize them for parts. Parts sales go down. The commercial market sale values are trashed just like a cheap house ruins comps in a neighborhood. Fuel prices are driving owner-operators broke. They can’t get fuel, parts and labor discounts on par with corporations and the margins are too thin. Many of the trucks you see on the road are held together with baling wire and duct tape for lack of repair funds, driven around scales and inspection points to avoid getting grounded. The scene I descibe surely can be assumed at play in other transportation sectors. Taxi firms, airlines, busing, railroads, limo services, recreation sales and rentals. Very bleak.
Steve, are you in Orange County, CA?
No, Midwest. I do talk to people all over the nation though, no territory limitations. Pretty much described to me the same way by everyone. As in all cases there are exceptions, some firms doing well. It’s seldom I personally hear a positive, growth oriented report on business conditions. My income depends on locating buyers and right now it’s a hard scratch.
Which do you think is the bigger factor, the economic slowdown or high diesel prices?
Increased operating costs (higher$$ diesel, for one) can be dealt with by raising freight rates. Customers squawk but eventually relent and then pass those rate bumps to the end consumer. It’s really more the economy in general than fuel issues. A perverted dynamic comes into play though. Large freight companies actually LOWER their freight rates on select, targeted accounts. They’re large enough to absorb hauling for cost or even a loss to pull it off in the short term. This robs the accounts from smaller firms (accounts they can’t afford to lose) and those firms go belly-up. Allegiances are abandoned or switched for as little as a penny per mile. There are many more bankruptcies, repossessions and downsizings to occur. Lots of lost jobs, lost careers, shuttered terminals and grounded equipment. Very analogous to (and intertwined with) the housing industry.
I just saw a truck being pulled over and then followed by a police van on 405 this morning… Being grounded perhaps? That means it’s going to be more dangerous on the highway if the trucks are not in good shape.
Irvinerenter, a litte off topic from today’s post but I really wanted to share this story.
I went to SS Construction’s development in Laguna Niguel (cornerstone) back in Jan 2006 and at that time the cheapest deached townhome was being offered for $650,000. Two years on and now we have the offer raised to $750,000. While the entire OC market has seen loses in value in excess of 20%, do you think this developer will sustain or homeowners will sustain? Its 75% soldout and I am sure there are several suckers/flippers in the mix and they face some tough times ahead. The worst part is that its adjacent to 73 Toll Roads and that noice is annoying. Any comments?
I don’t know the project in question, but given the depth of the declines, it is hard to imagine the developer/builder will sell out the project without severe price cuts or major incentives.
How bad can the RE mess get? This 1900 sf 3/2/2 in Cape Coal, FL rents for $1100/month and is asking $75k for an incredible GRM of 68.
http://www.realtor.com/search/listingdetail.aspx?ctid=10263&ml=3&mxp=15&bd=4&bth=4&typ=1&pfbm=1010&sid=57cd5b4476bd4289a344b3b9da567490&pg=4&lid=1096094931&lsn=39&srcnt=39#Detail
As I recall from my reading, I’m not from Florida, Cape Coal is a special case because there was excessive speculative building for buyers from out of Florida, i.e. Midwest, Northerners, and when those buyers didn’t buy, the whole town became a ghost-town. Southern Cal is now-where near being a speculative ghost-town.
Alan:
You are absolutely correct. Many Florida bubbles are tied to heavy investors’ speculation. However, the outlining areas of S. Cal. is in pretty bad shape already. Just look at this beautiful 4/3/3 2400 sf in Temecula. It is asking $88/sf. And, there are many more below this price around.
http://www.realtor.com/search/listingdetail.aspx?ctid=3509&mnp=22&mxp=22&bd=4&bth=5&typ=7&sid=3ec826901a1d4bafbc8126596d9a7434&lid=1098351438&lsn=4&srcnt=67#Detail
Cape Coral/Ft Meyers is the inner circle of doom for Florida–and other places too.
I’m seeing some movement in South Florida, not much, but some.
My friends parents own a catering business that did business with many businesses catering their corporate parties. They were making an income of over $12,000 month. Their business has slowed to almost nothing. Their home is now on the market, they are lucky they have owned it for 20years and have equity, but they have to sell and move and start over.
On a recent trip down to Solana Beach, we replaced a small piece of photography in a gallery where we had purchased it last summer. The owner of the framing/art shop said that she’s been in the business at that location for 25 years and this is the worst she’s ever seen business. She said that business virtually dried up about 7-8 months ago and she’s not sure if their business will make it for very much longer.
Art and framing are luxuries that dry up early during financial hard times.
should we put in a fireplace or should we put in a media nook? let’s do both!!! honestly, why do they even bother to put fireplaces in these units. i have no problem with fireplaces in southern california, my problem is when there is no consideration for their placement. i can’t believe that people continue to buy crappily designed housing.
Another sign of tough times ahead = inflation. Rice, wheat, gas, milk, eggs, etc. are all going up. This is going eat into people’s purchasing power. Even if you do have a stable job, you may be forced to buy fewer goods.
Well, we keep hearing all about the doom and gloom, but none of that seems to faze the broad equity markets.
Anyone notice the huge Blizzard Entertainment offices on Alton? They have lots of job openings on their website. Maybe all the unemployed real estate and mortgage people are playing World of Warcraft to while away the time…
Naah. Tney’re flipping real estate in Azeroth for Warcraft Gold.
Prices have nowhere to go but UP UP UP UP UP!
Buy Now Or Be Priced Out FOREVER!
Pay No Attention to that DemonGate in the Back Yard!
You’re doing it FOR THE ALLIANCE/FOR THE HORDE!
Comment text boxes are back! Me likey. Thanks, zovall and IHB.
We’re getting there 😉
I’ve a friend who works for a cloth retailer in the Brea mall. Sales are about HALF of what they were last year!
That would be a “clothing retailer”…
It’s easy now to find parking in the little food malls near John Wayne at lunchtime. A year ago, it was crowded and difficult.
Economic slowdown? I can share my personal story. I work for a very large telecom, I sell network and application solutions to the largest companies in Southern California. In nearly every case, my customers have frozen IT budgets or worse, cancelled projects previously in contract discussions. Needless to say, my production numbers are 40% of last years numbers with no major deals in the pipeline anymore. I’ve been given 90 days to find another role within the company or accept a severance buyout and I’m not alone.
So far I’m OK. Fortunately I read this blog and knew collateral damage like this could occur in the economy. So I planned ahead. We didn’t buy that $700K house we had our eye on and we continue to rent. I saved commissions compulsively and between my wife and I we’ve got substantial savings. Although those savings were/are earmarked for a down payment, we will be OK for more than a year in a worst case scenario. We both did (do) very well in income and we own a small rental property we’ve had for 10 years that is now almost paid off.
I say all this because I suspect we’re very much the exception but we’re still pulling back on our spending so I can only imagine what others in my situation with the added burden of a home headed to foreclosure might be experiencing. I do seem to notice a lightening of traffic patterns and certainly less people on average in local mid-range eateries. A read a story about McCormick & Schmick’s on Main turning into a virtual ghost town since the closure of New Century, prior to NC’s imploding it was fat times there. I think this is all only now starting to ripple thru the local economy as it becomes increasingly clear a recovery is no longer just around the corner. Thanks for listening!
A few anecdotes for our own Beige Book.
My wife was at Target (spectrum location) recently, using coupons like she always does (she is near fanatical), and the checker commented that “more and more people are using coupons again”.
My accountant, who deals primarily with small business owners, said the average revenue for filings this year on his clients’ returns was down 20-30%.
Home Depot on Sand Canyon at Woodbury is a ghost town. I was talking to an employee there who stated flatly that it was the “slowest I have ever seen”, continuing he mentioned that he was concerned about losing his job as a result.
Recession or Depression?
These are the signs that this country is going down the drain. High Govt budget deficits, high inflation, high cost of gas, dollar is losing in value, housing is in a mess and a stockmarket going south.
It’s amazing to think that we live in an interesting time, compared to trains, US is a stalled train while China, India, Asia, Russia, Brazil, Canada, Australia, New Zealand and Europe are all like Fast Trains with zooming economies.
Quite interesting…..
I’ll add my two cents…
I ride my bike to work past a home appliance discount store. The past few years their drivers were loaded up and ready to go by 8:00 am for delivery. The trucks, 10 of them, just sit in the parking lot all day now.
Also… I applied for a new job in the school district I work at and 200 applicants submitted for a 3 hour a day job. Crazy!
My Uncle is a dentist in Newport/Costa Mesa area. He has noticed a slowdown in traffic to do dropped insurance coverage and requests for cosmetic work. It seems that the first thing people get rid of is their dental insurance, and if they don’t have insurance they just don’t go to the dentist.
Up here in Seeattle where our market is ‘special’, I too have noticed a significant reduction in traffic on the Eastside. Less RE people shuttling clients? More telecommuting? Less construction? I dunno – it’s like ‘silent spring’.
And just recently I was at a popular watering hole and was surprised how it suddenly became empty after happy hour ended… it was uncanny.
Here is South Louisiana, traffic has increased and people in the stores and restaurants have also increased. But our economy is tied to the price of oil and thus runs countercyclical to the West Coast. I remember the last real estate bust. A debtor I knew of had a 10,000 sf house in Coto that he said was worth $1 mil and people thought that value was inflated. He was a lath and plaster contractor. I dealt with a number of contractor related bankruptcies back then, so I would assume it will be the same this time around.
In that last picture it looks like the hot water heater is missing – I hope the bank replaces that too…
I play Basketball every Saturday morning without about 20 regular guys that range in age from 20 to 50. At least 3 of them have lost their jobs as a direct result of the real estate slow down. If my math skills are correct – that’s a 15% job loss from that very small but random sampling…
Dano
“In that last picture it looks like the hot water heater is missing”
To me it looks like a washer and (gas) dryer. A (gas) water heater should have a pan, gas line, vent, water piping, and probably earthquake straps — most of those are present in the room, but not close enough together for one appliance.
There are five currently listed foreclosures on my very short street. There are at least two vacant houses that were listed at one time but aren’t now.
I teach at a small career college, my graduates are not finding work and many new students are arriving from (where else) the real estate industry.
Going I-5 South between I-605 and 91-hwy used to be so bad that I take the detour for last 5 years of my commute. Right now, I can zip all the way to OC pass the construction zone. I feel it has more to do with higher gas price than people who lost job, since I only experience it very recently.
I’m wondering whether the bank price decreases will come at a MUCH faster rate now that they’ve changed their bidding/unloading strategy??? Not to mention their growing volumes of inventory. Where it took them 6-9 months to decide to take a loss on properties in OC, will we see immediate discounts in northern ca?
Not sure where else to put this, but it seemed relevant. My apologies if someone already posted this.
McAllister Ranch developer defaults on $235 million loan
“A default notice recorded Tuesday shows Irvine-based developer SunCal Cos. owes more than $4 million in late payments to lender Lehman Commercial Paper Inc., a New Jersey-based commercial money market dealer.
“The filing is the first legal step in the foreclosure process, which could result in the property being repossessed if SunCal fails to right the debt. The notice lists the borrower as LBREP/L SunCal McAllister Ranch LLC, the affiliate company formed by SunCal for the McAllister Ranch project.
http://www.bakersfield.com/hourly_news/story/426289.html
I was in Linens n Things in Tustin Marketplace last week to use up my gift cards before they file for bk, just in case. There were only 5 other people shopping in the whole store. I can understand why they’re about to file for bk.
I hate to say this but I think we may have a bottom in price. 22 Daffodil 92618, listed at $359k, has about 20 offers so far. Although this price is close to $200k below its peak, it may be the bottom unless there are more bad macroeconomic news to come.
I’m also seeing more new homes in the Bay Area that are not dropping their prices from about a month ago (it used to be that every month is a new lower price) and that more folks are sitting down talking to builder reps regarding purchasing a new home. So unless your house is priced reasonably (meaning no kool-aid asking price), you might be able to find a buyer if your house is in a reasonably good location.
In sum, those that bought after ’02 in Irvine is probably going to lose equity. However, those that bought before then can see a stability unless they bought in a bad location.
Good luck guys.
We’re not at any bottom yet. Yes, some people that had pretty much been priced out are jumping on some of the current “deals”, but there won’t be enough of them to eat up all of the current and soon to arrive inventory and sustain prices at the current level. Prices may stabilize (or even rise slightly – watch how the REIC starts spinning that) heading into summer, but they’ll continue there drop come fall and winter. Just look at the rate at which NODs are being filed. It is continuing to accelerate and we still haven’t hit the big reset bump that is coming.
It’s true that we haven’t hit the big reset bump for subprime that’s due during this summer. However, so far, AFAI can tell, I don’t see that massive selling that I’m hoping to see so far this year. Furthermore, most of the desirable locations in Irvine (for me, it’s Westpark and Oak Creek. To each his own if he’s different from mine) don’t have desirable homes for sale or have some at kool-aid prices. That to me is an indication that people are willing to park and wait so I really don’t see your argument regarding inventory.
Remember, for folks that are living in their own homes and didn’t use their homes as ATMs, the current equity loss is a non-factor because, like stock, it’s not a loss if you don’t **sell**. Apparently, that’s what’s going on in Irvine at this point or else the number of homes on sale would have quadruple or quintuple from last year or last quarter’s sales figure. I’m positive (and I’m sure many will agree with me) that the majority of homeowners view their homes as a sanctuary/abode and NOT a bank. If not, then Irvine should have been a foreclosure city by now.
My last paragraph can be compared with Cleveland and I just don’t see it in Irvine. Perhaps not *yet* but it’s been close to a year since the subprime implosion.
Will time tell? Who knows. If I knew, I would’ve quit my day job.
“Remember, for folks that are living in their own homes and didn’t use their homes as ATMs, the current equity loss is a non-factor because, like stock, it’s not a loss if you don’t **sell**. ”
Chris, Just beacuse you dont sell doesnt mean mean the 20% downpayment isnt gone. It is gone. Your HELOC is gone. Realestate wont bottom out (I suspect) until the very people your are talking about ( people are willing to park and wait) decide to sell. When realeste isnt in the news any more then its hitting bottom. I think the first peeple who sell will be the ones with 100% financing (speculators, Alt-A loans). With so little investment, its easier to walk away.
I guess that subprime homes werent much of factor in Irvine given the price of houses versus say Lake Forrest or Santa Ana. I think that many Alt A loans were giving and will reset in 09-10. If you have a cheap loan, compared to renting, you would stay in your home. This gives you time for the mkt to come back. And when/if you do decide to default, you can get another 6-9 (maybe 12) months of free rent while the forclosure procedure move fwd.
Once you lose your equity your upside down. Why pay for a house that has a larger loan than actual value? Once people start selling, they will drive comps down. Its ususally the less disirable houses that are discounted first.
I think chris was talking about buyers before ’02. If someone bought in 2002 or before and didn’t use their house as an ATM, then I agree that they are safe. I think prices will bottom out at 2002-2003 prices and hence, the 2002 buyers should be able to sell without a loss.
Also, the avg hard working person who isn’t using their house like an ATM isn’t going to walk away just because their house is upside down. My parents and my inlaws both bought in 94 and within a year or 2, they both were upside down assuming they only put down 20%. They didn’t walk away and neither did the masses that bought in the early 90s.
On the Ventura County craigslist ad for apartments and housing I am noticing a drastic increase in the number of rentals available. I don’t know if this is a function of increased rentals available, or an increased number of people who have discovered craigslist.
Is a housing crash going to result in more rentals available and the price of rentals to go down? It would seem like if people are getting kicked out of homes they “own” that they would then be looking to rent instead and drive up prices.
Or, is it a matter of displaced homeowners moving out of the area, and few people moving into the area because it’s too expensive?
And, just for fun, if anybody wants to see a house being listed for 51% of its 10/21/2005 purchase price of $545,000, check this out:
http://www.redfin.com/stingray/do/printable-listing?listing-id=1268131
This is an opportunity ?