Mandrake Root — Deep Purple
You have the power. It is A Buyer’s Market. Did you ever think you would see properties under $200/SF again? How about $162/SF? Today’s featured property caused one commenter yesterday to opine, “This must be bottom.” Is it? The price drops have been so dramatic and come so fast on many properties that people can’t get their mind around the valuations. A property selling for 26% off its peak purchase price of just two years ago seems cheap. When viewed through the lens of 2006 prices, it is. However, when viewed through from the perspective of fundamental valuations, a property like today’s featured property is still overpriced. People did not put much effort into understanding prices when they were rising, after all, prices always go up — not. People assume that market prices are fair value and any discount from that price a bargain. When viewed from a broader perspective of valuations based on rents and incomes, the degree of price inflation becomes clear, and the amount prices have yet to fall also becomes apparent. Today’s featured property is probably closer to the bottom than to the top, but at $559,900, it still requires a rental rate of $3,500 a month to reach a breakeven threshold for an owner-occupant. Does this look like a $3,500 a month property to you?
Asking Price: $559,900
Income Requirement: $139,975
Downpayment Needed: $111,980
Monthly Equity Burn: $4,665
Purchase Price: $760,000
Purchase Date: 2/9/2006
Address: 3 Mandrake, Irvine, CA 92612
| Beds: | 4 |
| Baths: | 3 |
| Sq. Ft.: | 3,448 |
| $/Sq. Ft.: | $162 |
| Lot Size: | 3,200
Sq. Ft. |
| Property Type: | Single Family Residence |
| Style: | Traditional |
| Year Built: | 1967 |
| Stories: | Split-Level |
| View: | Park or Green Belt |
| Area: | University Park |
| County: | Orange |
| MLS#: | S546847 |
| Source: | SoCalMLS |
| Status: | Active |
| On Redfin: | 1 day |
 New Listing (24 hours)
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features……..includes a fancy spiral staircase, large livingroom
separate family room, formal dining and added den. If you like to
entertain you have to see this house………separate but open and
flowing rooms. Don’t forget to take a look at the kitchen……and the
view!!! This home is in a great location surrounded by greenbelts and
overlooks a park. Walking distance to the association pools, spa,
tennis courts, basketball courts, volley ball courts and racquet ball
courts.
Fancy spiral staircase? It looks like it was recycled off a naval ship.
Apparently, they really like their pool table… and their dog…
Why is there a giant flat screen in the corner of the dining room?
I think they bought out the local Persian Rug store.
The stool prominently displayed in the kitchen is a nice touch as well. Why would you put a stool there?
They definitely have some serious computing power. I can’t criticize it too much as I have a similar setup…
With the way they raved about the view, you would think the Pacific Ocean was out back…
This property was purchased on 2/9/2206 for $760,000. The owner used a $608,000 first mortgage, a $76,000 HELOC and a $76,000 downpayment. On 10/22/2006 he refinanced with a $675,000 Option ARM and opened a HELOC for $135,000 raising his total debt to $810,000. $50,000 for 8 months ownership: not bad. Of course, now that values have dropped, he is leaving the lender holding the bag. If this sells for its asking price, and if a 6% commission is paid, Paul Financial LLC stands to lose $283,694. The owner will walk away with his $50,000. Perhaps the new buyer can go borrow from Peter to pay off Paul…
.
I’ve got a Mandrake Root
It’s some thunder in my brain
I feed it to my babe
She thunders just the same
Food of love sets her flame
Ah, stick it up
I’ve got the Mandrake Root
Baby’s just the same
She still feels a quiver
She’s still got the flame
She slows down, slows right down
I’ve got the power
Mandrake Root — Deep Purple
When you run out of space on the floor for your rugs, start pinning them to the wall.
Pool table needs to go – it’s making the room looked cramped.
I like the picture of the hook with the park in the background. Very professional.
Stairs cutting through the middle of the room.
Lovely.
Watch out for the Kool-Aid when going up and down those stairs, Mr. Seller.
http://www.crackthecode.us/images/koolaidtrip.jpg
Best photo yet!
At least some of the rugs are covering spaces where there is NO FLOORING. If you enlarge a couple of the staircase photos, you can see clearly that there is no flooring under there…the ceramic tile ends and it looks like concrete. That’s an artful installation of the laminate around the concrete. And here we have another realtor who identifies laminate flooring as “hardwood”. That just makes me nuts.
This is classic!
Note the fake fireplace OVERLAPPING the picture on the wall….
I looked and looked at that — I think it might be a TV, not a fireplace??
Staircase is really hideous. Also, if you’ve ever carried laundry or a vacuum cleaner up and down one of those industrial spiral jobs (I have, I lived once in a house in Mexico that had one), you won’t want that property At All.
Pretty sure it’s a fake fire place… they sell them at Costco 😉
This house might have decent location. However, it is dated, and the fancy staircase is a turn off to me.
Based on $275k in 1997 and 3% increase a year, it is worth $392k. We are not there yet.
That ’97 purchase was nearly bottom of the last housing recession so using it to benchmark proper pricing probably isn’t a good idea.
If they sold this today for asking, which I expect they shall do or better, it would be roughly equivalent to late 2003 prices.
Why shouldn’t this market bottom out the same way it did in 1997? In fact, why shouldn’t it go even lower (adjusted for inflation)?
In 1997, did we have the same confluence of events (banks failing, credit crunch, high gas prices, weakening dollar, etc.)?
It would seem to me that the only thing that might prevent prices from dropping down to inflation-adjusted 1997 values is the mentality of knowing how high things got in 2005-2006. Since everybody remembers when the house down the street was worth $550,000, they can’t possibly imagine it dropping down to $200,000. So when it gets to $250,000, they will think it’s a good deal (even though it’s still possibly overpriced).
I’m not arguing that it shouldn’t bottom out similarly, just that it won’t. The government appears dedicated to a soft landing with regards to the bottom of home prices. In 1997, 30-year fixed rate mortgages were 7.5-8.0%. Throughout that last RE recession, mortgage rates were quite high relative to today, when you can get 30-year fixed mortgages up to $729K for less than 6%…
IMO the only way we bottom like ’97 is if the government decides to stop bailing out everyone and their mother and let prices crash to where they should. It sure isn’t looking like that will occur… They appear willing to inflate us to oblivion vs. allow prices to return to normal.
The bottom will not be as much about rates of loans but about savings rates. If the banks require a down payment of 10% or greater to purchase homes, it is my opinion that could easily see 1997 prices.
Interestingly, Chris Dodd was talking about making sure that people could purchase homes if they could afford traditional fixed rate 30 year mortgages. In my opinion, that is what will get the banking system going again, when banks lend money to those that they know they will get paid back………….
I think you worry to much about the impact of the government’s actions. They are trying to avoid the complete meltdown of our financial system. Any propping up of home prices might be a short-lived side effect. Prices dropped to where they did in 1997 because that is where affordability is. Prices will drop back to affordable levels. They must. That is where the financing will be made available. The days of liar loans and 50% DTIs are behind us.
That is exactly the government wants us to think – that market is at bottom or near bottom.
But, it is definitely not. Now the China story is over and Shanghai stock index is near 2000 from over 6000 less than a year ago, and the China real estate bubble has just started to crumble…
I actually am envious of what you did — sold yours in time and became a renter.
You are saving big time especially on the equity burn as time goes by.
Chris Dodd was also busy taking $75,000 in BRIBES from Countrywide as a quid pro quo for passing their bailout bill verbatim. Countrywide knows that it helps to have the chairman of the committee on the payroll.
Chris Dodd may very well have some good ideas going forward, but that corrupt politician has a lot of convincing to do that he’s no longer on the take.
If the death of the exotics is all it takes, how come Irvine prices have stayed relatively flat for six months in the face of increasing foreclosures? If prices stay sticky for another month or two, it’s got to be more than a DCB?
You don’t think FHA, low mortgage rates, etc. are helping to erase inventory? What is causing this phenomenon?
I have every reason to uber bear, beat on my chest, and say, “Prices are falling, woohoo, I’m so smart for selling”.
Unfortunately, that is not the case. Prices in Irvine have gone sideways for many months now. The “equity burn” number on blog posts six months ago was a fallacy. There has been no significant equity burn since early in the year for Irvine properties.
A condo like mine on my same street is set to close for $10-15K more than I sold my place for in July. I’ve actually lost equity by selling in the very short term. I fully expect prices to start heading back down, but not nearly at the pace and magnitude of most bearish here. I think the governmnet can socialize enough to prop up prices for quite some time…
The main thing moving inventory are the low rates and the activity of knife catchers. Sales volumes are still very low, and the lenders are continuing to tighten standards. Plus, the real influx of must-sell inventory is ahead of us and not behind us. The people buying in Irvine are those who still do qualify, but there are not going to be enough of those people to absorb the inventory yet to hit the market.
I am not sure what is different about Irvine vs Malibu or Calabasas, but both of those have been consistently dropping. There are deals now that people would have sworn would never happen again. In Calabasas, there are a few people freebasing koolaid and asking for 50% over 2006 prices. However, you can get respectable stuff for under $300/sq ft, and a few that have nice pictures for under $250.
Malibu was nuttier to begin with, but you do see some places for under $350/sq ft. My Exhibit A for not mixing meth and koolaid is this listing: http://www.redfin.com/CA/MALIBU/29500-HEATHERCLIFF-Rd-90265/unit-191/home/12434502
“29500 HEATHERCLIFF Rd #191
MALIBU, CA 90265
Price: $1,060,000
Beds: 2
Baths: 2
Sq. Ft.: 1,656
$/Sq. Ft.: $640
Lot Size: –
Property Type: Single Family Residential
Area: Malibu
County: Los Angeles
MLS#: 08-265915
Source: TheMLS
Status: Active
On Redfin: 169 days
Unsold in 90+ days
White water, Ocean, Mountain, and Canyon views. This 2 Bdrm 2 Bth coach features new Bamboo and Travertine flooring throughout. A bonus room opens up through french doors to a large, partially covered deck with glass wind-walls and a beautiful garden.Access to Westward and Zuma beach as well as a community pool, spa, and tennis courts. Located in Point Dume Club Mobile Home Park. ”
Yes, someone is asking over a million dollars and $640/sqft for a mobile home, and you don’t even own the land! Nice to see they put travertine floors in their mobile home. That helps hold it in place during the heavy winds you get on Point Dume in winter.
IR, I have to disagree with you on this one. Price will NOT drop back to affordable levels because there are going to be people who are just going to scoop those properties up during price drop.
Remember, a house is not a stock certificate. You can’t live in a stock certificate, take shower in it, sleep in it, eat breakfast/lunch/dinner in it, etc. A house will have its intrinsic value unlike a stock certificate which can go to $0 (um….FRE/Enron/Worldcom….hello?)
Plus, prices won’t drop back to affordable levels because that would leave rental properties empty 🙂
OMG…a trailer is still a trailer, no matter how great the view is. And, how much is the lot rental at Point Dume?
ipo:
You are likely correct in assessing today’s market. What I meant was to speculate on the coming bottom valuation which might be 2-3 years away.
Great frat house if it’s not already.
From the look of the computer lab, I would say this is a frag house.
Plenty of bottled water in the house if all the fragging makes you thirsty.
One of my prior houses was rented by a porn star when I moved out. I met her, but didn’t recognize her as anyone famous.
A few months later, I’m watching E! and see this chick who looks familiar. Then, I see the mountains in the background and say “She must have been a neighbor”. The camera pans back and she’s sitting on the deck I built. It was my house. On her website, I could see my old house, and in some photos, tons of computer equipment in the background.
Get the feeling those computers were not used for fragging!
Then again, she was most likely using them to frag lonely guys wallets.
I was looking at map of the area & noticed UC Irvine is close to this property. Since so many posters think this is a frat house, could this house have been purchased by some rich kid’s parents for student living. Charge all the roomies rent, then sell the house for the “appreciated” value when the kid graduates or drops out. Oops, Daddy lost, hope the kid at least got a degree.
Are you sure that’s a real dog? It’s in exactly the same position in three photos that based on distance have to be separate in time.
OMG! I think you might be right. I can see the dog in three pictures, and it hasn’t moved. Maybe it is a stuffed pet dog like the one on Scrubs…
Yeah, I noticed the same thing. Who uses a stuffed dog as a prop?
Hmm…if the house was bought in 2206 and sold today, well, I’ve heard of people hanging onto their flips, but this is ridiculous. (Sorry, IrvineRenter: I couldn’t resist. I just had an image of a particularly dumb time traveler who wanted to get in on the housing boom flip market but was a bit unclear on the concept.)
Maybe the market doesn’t hit bottom until 2206, so the time traveler is selling at a profit…
If it’s a frat house, then the dog is just stoned … The rugs leave with the owner, so who cares?
The stairs on the other hand, look industrial to me. If they have to be in the middle of a room, they should at least look good.
I hadn’t noticed the fake fireplace – why would anyone do that? Or maybe it is a well executed trompe d’oeil painting of a painting.
Having a little park out back instead of a freeway is a step in the right direction though. If you could buy it cheaply enough, you could spend some on the interior.
I was watching House Hunters last night and this couple in Denver was looking to buy a home. One of the houses was going for $98 a square foot and one was $78 a square foot (about $270K @3000 sq ft). And here I am in Huntington Beach and houses and condos around me are priced at anywhere from $400,$500 and $600 a square foot. Silly silly silly people. We all know that the good climate brings in a premium but not 4 to 6 times. I think it will take years for sellers and realtors to really understand how affordability plays into the housing market. Becuase in the last 5 years affordability was not in the equation.
I believe – and I could be wrong – the socal premium historically has been a little less than 2x. This doesn’t include certain areas, like beach front or beverly hills type places.
The computer lab is sweet, maybe it comes with a Cern monitoring station.
That’s got to be some sort of day trading operation going on there. And how sweet is that TV mounted on the wall? The carpets hanging on the walls probably cushion the impact from ramming his head into the walls after another failed day of playing the market!
I would almost guarantee that this is being rented to multiple college students. Hence the number of TV’s, laptops, and the prominent pool table.
Bet you’re right, but (guilty confession) there are families with adults/ children/ friends who game together regularly. Common to see whole rooms dedicated for movies/ TV/ pool but have yet to see it tastefully done for gaming.
College kids don’t sit at a desk when they are on a PC. They sit on the couch with a laptop.
Lies. Laptops suck for gaming.
I did it tastefully. If AZDavidPhx would teach me how, I’d post a pic…
My images are uploaded to my own server and then the link is just pasted into the comment form on here.
If you want me to put your image on my server just email it to me (david@crackthecode.us).
What can I say, I’m old!
You can also link to flickr images in the blog. That is how I post charts.
But the deal breaker is the fact they are taking the curtains. Price excludes: Curtains.
Ha, what a bizzare place.
Their is a fundamental problem with using GRM soley as the valuation method. It doesn’t take into affect that renters value things differently than buyers.
I think I said this before but imagine 2 identical houses with same floorplans and upgrades except one has 5000 sq lot and the other has 7500 sq lot. As a renter, both have more than enough for me as I am not planning on living for some extended time and as such, I wouldn’t pay a premium in rent for the bigger lot unless it was a small difference like $50 per month. That means with 160 GRM, the larger lot property could only sell for $8000 more. Now as a buyer, the larger lot is much more meaningful and I would be willing to pay significantly more it, definetly more than $8000!
Today’s property is in the same boat as large lot homes except its there because of a large sq home. Basically, renters might pay the same amount for this house as a 2500 sq 4 bedroom as functionally that is what they are looking for. However as a buyer, this is definely worth more than a similar 2500 sq house.
I find it astounding how few people seem to be losing any of their own money during this burst. I think of all the properties profiled, you could count on 1 hand the number that will actually lose some of their own money.
I thought I was being smart staying out of the way of this bubble. It now seems that I am one of the few stupid people in Irvine that rented instead of stepping up to a nicer place while extracting “equity” and then skipping out on the bill.
I have had the same thought many times.
It seems like you missed a fun party at times, perhaps, but I can promise you a few things: the people getting calls from the bank, consulting bankruptcy attorneys, having to tell people they are losing their houses, and who get to constantly wear the triple shame of failing at life, destroying their financial footing, and undermining the economic dominance of our entire country are not having a great time.
The conspicuous consumption and superficiality has left them broken and depressed in many cases, with failing marriages, often with misguided and selfish children, and while some sit in a house that they intentionally refuse to make payments on, squirreling away whatever money they can before the bank kicks them out after months of desperation, grasping for any hint of a government bailout, concerned only with themselves and their fleeting unearned comforts while ignoring the costs to families, communities, society, and country, they are not in an enviable position. They put on brave faces to conceal their crushed and blackened hearts.
The ones who misrepresented on their loans and in their businesses and continue to break their obligations and defraud their banks are not in better shape than a content family renting in a tiny apartment as the cataclysm rages around them. There is poetic justice in this world. As the Good Book promises, the divine hand of Providence will shelter the honest and the pure in heart in the last days. From the looks of Lehman and WaMu stock today, maybe that’s getting close?
Great comment. Very true. It is good to see you stop by again. I have always appreciated your insights.
Thanks, IrvineRenter. I deeply appreciate your blog and I read it on a near daily basis, I just rarely post. There’s too much going on in business, in the market, and in politics. It’s a wild time to be alive . . . and I love it.
I think you are remarkably perceptive about economics and human nature, and have a gift for expressing complex concepts to readers who are not as familiar with the industry. I was really surprised to first see how closely your predictions for Orange County matched my own and how early you had raised the warning voice. Like a lot of people here, I have no debts to banks, but owe a tremendous debt to people like you who do so much to educate others and return rationality to our market.
Rationality is the best policy. May logic and good sense rule the day when this is all over.
The dirty mits of Hank, Big Ben, et all will shelter the specuvestors, over-extened, and priviledged capital-mongering Wall Streeters until right up to those last days then…
Encore! Encore!
Karma’s a bi*ch, ain’t it 🙂
So, you are not a reader of Casey Serin’s blog? He is Exhibit A as to why crime does not pay.
Looking back, we can all feel this way. In the moment though, it is extremely difficult to time markets and play games with other peoples money.
And these bubbles and crashes happen in the stock and currency markets all the time. So you can always head over there and try and make a killing.
That only applies when you’re playing with your own money. Market timing didn’t even matter in the bubble. 100% financing took care of that. The only thing these people had in the game was their credit rating.
Tell that to all the bubble buyers that put 10% down. I know a few, warned them to wait, they did not listen and now they are out the down payment and the house may be next.
If you had the foresight or luck to HELOC out all your money, then it was a credit score only situation. Still not the easiest thing to time.
What goes around comes around.
Are you really that upset at yourself because you didn’t participate in fraud/theft?
On a road I drove frequently, an armored car somehow had its back doors open and cash came flying out. Tens of thousands of dollars. Only a little was found still lying around. The police asked people to return it. Some people were INTERVIEWED saying they had no intention of giving back the money they found lying around.
I have had a similar impression from some interviews of borrowers during the boom. ” I wouldn’t have loaned me the money, and nobody that I know would have loaned me the money” http://www.npr.org/templates/story/story.php?storyId=90327686
They are so bemused by how easy the money was an how irresponsibly the banks loaned it, that they feel less personal responsibility.
By the way, if you haven’t heard that NPR podcast, it’s awesome.
I don’t believe these people are going to get away with this in the way you think. Sure, the ones who got one loan, never refinanced it, and are defaulting will just walk away with negative credit (at least for non-recourse states like CA).
However, the rest (majority) who indulged in seconds, refi’s, and/or heloc’s, still have an outstanding debt. Sure, the banks for the most part are not setup to pursue these people, but you better believe there exist businesses out there who are. These debt collection companies will buy the debt from the banks for pennies on the dollar and make their money by pursuing those who owe the money. They should be able to gain judgments from the court very easily. With judgments in hand, the collection companies will ensure people either pay up if and when they can, or be forced to play the hiding money game for the rest of their lives.
Does this mean the determined fraudster who purposely yanks the equity out in bulk and hides the money will face justice? Probably no. However, the vast majority who drank the kool-aid and are now throwing up their hands saying I can’t/don’t want to pay shouldn’t expect to walk away with just a simple credit hit.
An acquaintance of mine who walked away from multiple houses (non in CA) is getting the calls now, so there has to be some truth to my assertions.
I’m interested in hearing opinions on this…
I have speculated a number of times about the next cottage industry in mortgage debt collection. It will be harder to do here in California because unless the lender went through a judicial foreclosure, it is very hard to collect on mortgage debt. However, in other states, particularly those without non-recourse lending laws, the debt collectors will hound these people into bankruptcy.
I believe the judicial foreclosure refers to just the primary loan. All the secondary and HELOC loans are a different matter.
From Wikipedia:
“Any liens resulting from other loans taken out against the property being foreclosed (second mortgages, HELOCs) are “wiped out” by foreclosure, but the borrower is still obligated to pay those loans off if they are not paid out of foreclosure auction’s proceeds.”
It does appear a refinanced first loan can only hang over the borrower’s head if the lender goes through judicial foreclosure.
But even if we restrict this discussion to just Seconds and HELOC’s, I think many of the people walking away still qualify and risk creditor action.
I wish we had an attorney who specialized in this area of law to offer an opinion. It is my understanding that all debt secured by real estate is wiped out in a non-judicial foreclosure in California. Basically, lenders who want the collateral security of real estate give up all other means of collection unless they make the debt survive the foreclosure with a court order. I believe this is how the law is interpreted in California. I could be wrong. Other states are probably different.
Not my specialty, but you’re both mostly right.
In a non-judicial foreclosure, the lender can’t come after you for any deficiency — meaning the difference between what you owe and what the property goes for at the trustee’s sale, if it sells for less — and all junior liens/encumbrances (other than some tax liens) are wiped away. This is because the ‘security’ for the junior lienholders — the property itself — has effectively been eliminated. But those junior lienholders can, theoretically, still sue you personally to recover the underlying debt, regardless of whether it’s a HELOC, free-standing second mortgage, whatever.
So, IR, the DEBT is not wiped away, just the property SECURING the debt. Junior lienholders can still come after you directly to enforce the amount due. The case-law buzzwords are that the “sold-out” junior lienor holds valueless security, and can sue directly on the note.
It’s more complicated if the senior lien is held by the same bank as any juniors, or if one of the juniors forecloses first, or if the lender goes with a judicial foreclosure (they can pick and choose which junior liens they want to wipe or keep).
There is a ton of complicated California case law on this stuff, and there are a lot of unanswered questions. Sorry I can’t be more thorough.
I suggest we get LawyerLiz certified in California; she seems to have Florida law pretty well dialed-in on this stuff! I bet she’s a quick study!
6 LCD’s so they can day-trade their HELOC money and a giant old-school CRT with VHS hanging right above with ‘Boiler Room’ looping day and night.
This place is seriously disgusting. Rappers have more class.
It would probably take you years to air out the smell from the kitchen.
The only thing missing is a fireman’s pole (stainless steel, of course) next to the staircase or maybe a granite skate-boarding rink in the living room.
How DO you post photos on the forum anyway ?
If you share your secret, I promise not to abuse it or steal your thunder. I’ve not the editing talent anyways.. : )
I think I need to pull a Rip Van Winkle and sleep for a year and then go house shopping. People pricing homes in Woodbury just haven’t gotten the memo or just refuse to read it. I stopped in an open house of a nice but small place to have a look. 1,640 sq feet, three small bedrooms upstairs. Price = $699,000 plus $205 per month is HOA. Onsite realtor claimed to already have an offer coming in. This despite the fact that the house profiled at 120 Sanctuary is much bigger and “only” wishing for $689k. Realtor commented that the new lower 30yr rate caused by the fed take over of Fannie and Fred will support the price and that this was a corporate relo, not bank owned or short sale. Just we need – more strawmen. Wake me up when this house is selling for $350k and 120 Sanctuary is selling for $450k.
I heard the “offer forthcoming” speech from a realtor too…a month later the place we looked at still sits.
Ha ha.
There is definitely something fishy going on with all of these places “getting offers” or “going into Escrow” and then mysteriously falling apart.
The conspiracy theorist in me says that is some shill bidding going on.
I doubt it is shill bidding; it is realtor lying…
It a realtor lying, but probably the buying realtor saying “we’re going to get an offer to you” and then never producing… I think that happens quite a bit. We had some of those on my place.
Probably only 1 out of every 10 escrows “mysteriously” falls apart in Irvine Dave. It’s much more common to get into escrow and stay there, i.e. never going back active again.
People were saying the same thing 9 months ago and that is one of the reasons I started tracking them. The data, with regards to Irvine, just does not support the notion that once a property gets into escrow one can expect it to fall out.
Do you choose to ignore data? IPO posted the exact percentage of houses that went from escrow to final sale of the houses he has been tracking on his site and it was very high.
I am sure some houses have fishy business but the bulk of the houses tracked on IPOs site are completing escrow just fine.
Doh – I should have reloaded before typing away…didn’t see IPO post. My comment was to AZ…
rkp –
My original comment was aimed at both escrows/fallouts AND the bogus offerings being claimed by real estate agents which have nothing to do with escrow.
You and Ipoplaya just took half the bait, re-worded the argument and unleashed your frothing at the mouth kneee-jerk salvos, ripping into the straw man with everything you had.
Good show.
Aw AZ, don’t be mad. I know you are just pissed that you spouted off about yesterday’s property being overpriced and chasing the market down on the day it went into escrow…
Let it go dude, just another day of wrongness in your life, nothing out of the ordinary. Don’t worry, be happy!
Nice try, Ipoplaya.
The only people who should be worrying are the FB’s on that deal.
I have very similar data for Costa Mesa. About 10% have fallen out of escrow and subsequently went back in and closed, while another 10% have fallen out of escrow and remain on the market. This is over the past six months or so.
Please share.
IrvineRenter, have you come across any/many instances of houses for sale where the seller bought the house for good value pre-2002, and listed it for sale in the past year or so at a price well below the comps – in an effort to sell quickly – yet still higher than they bought it for?
I’m curious if there are many people who bought before the bubble, did so with fundamental financing, did not HELOC or refi and were in a great position to sell for a profit, and do it quickly because they are below comps.
I bought my place early 2002 and if I wanted to be a comp-buster I could still make a decent profit. There were a handful of foreclosures and short sales in our ‘hood that brought prices down a bit but otherwise held up okay. Paid $285k and IMO probably could sell at $400k pretty quickly but after you pay closing costs and realtor’s fees it doesn’t leave you much left.
A few of the regular posters on this board have done exactly that. I don’t see as many of those kind of properties as I thought I might to this point. I suspect many homeowners in this position realize they missed the peak, and they don’t see much point in selling now that prices are down 20%. There will come a time soon when it will not pay to sell and rent because the remaining price drops will not justify the transaction costs. We are not there yet, but I suspect we will be in late 2009.
IPO raises his hand… IR should have profiled my property!
With the profiles I do, I wouldn’t think you would appreciate the publicity… Besides, yours would have been boring because you probably didn’t abuse your HELOC or ask a ridiculous price.
Here is one for you!
http://www.mydesert.com/apps/pbcs.dll/article?AID=/20080911/NEWS01/809110312&s=d&page=1#pluckcomments
2+ common walls for $559k – please let me opine, hell no this isn’t a “deal”.
So let me get this straight. Expectations have dropped so much in Southern Caifornia that for $559k you still can’t even listen to your home theater because the nieghbor will complain about the sub? That’s really nice isn’t it.
Attention 1st time home buyers…
A 41 y/o house is not the same as new construction. Pay for an inspection. Things to look at: windows are they original or upgraded to modern dual pane, makes a huge difference. Roof condition, original shingles (need to be replaced every 25 years) or upgraded. AC & heating unit.. age and condition. If you have to replace windows, roof and AC unit in the first 5 years of ownership, make sure you discount your asking price for these deferred maintenance issues.
Another crappy condo for over half a million dollars. This is in the worst section of Irvine. The city is lousey with crappy condos.
Those of you who trashed this place are way off, sorry. This is not a crappy section of Irvine, it’s actually a fairly desirable section of Irvine. Take a look at comps for places in this neighborhood. This is way below market, I agree for reasons. I didn’t look for any more detail, but it’s got to be a short sale. I practically jumped for joy a couple of days ago when I saw this listing because I’m hoping it’ll bring the neighborhood price down.
Reuters
Fed’s Kohn says no sign home prices stabilizing
Thursday September 11, 2:55 pm ET
WASHINGTON (Reuters) – Federal Reserve Vice Chairman Donald Kohn said on Thursday there was no clear evidence the plunge in U.S. house prices was coming to an end.
“The jury is still out on whether housing prices are close to finding a bottom,” Kohn said in prepared remarks for delivery at a Brookings Institution conference where he was commenting on a series of academic papers.
He said some researchers have noted some easing in the pace of home price declines in some markets but said mortgage conditions have tightened since spring and that may have a further impact on prices since it makes it harder for buyers to qualify.
“They definitely have some serious computing power.”
Really? Where do you see the computers? I only see a bunch of monitors and some keyboards.
And the dog isn’t real – it’s stuffed.
The TV in the dining room looks like it was stuck in the corner as an afterthought. Same with the phony fireplace.
Looks to me like a really bad staging job.