Some lenders are now accepting bids on short sales to spare them the hassles and expense of a foreclosure. Some of these firesale prices–at least by today’s standards–are resulting in sales. Will this one?
Asking Price: $529,000
Address: 4142 Fireside Circle, Irvine, CA 92604
{book7}
BTW, in case you missed it yesterday, the IHB is mentioned in Huntington Homes: Surf City home-equity ‘abuse’: ‘So many you can’t believe it’.
Light My Fire — The Doors 
The time to hesitate is through
No time to wallow in the mire
Try now we can only lose
Wise sellers are pricing their properties to move while there is still bubble equity left in them–assuming there is any. Even the lenders would be wise to sell today, but alas, many of them are holding their REO either because they are overwhelmed or because government regulators are not forcing them to dispose of their non-performing assets. Perhaps the lenders are behaving like a cartel or oligopoly trying to artificially limit supply and keep prices up. If so, it is a strategy that will ultimately fail. Cartel arrangements are inherently unstable due to the incentive each member has to cheat, and with the huge increase in defaults across all borrower classes, the supply of REO is growing faster than the banks are disposing of it.
Most sellers want to hold out and get every last penny of of a transaction they believe they deserve. It is a strategy that works in a rising market; if you ask too much, it just takes a little longer to sell, but you can still get your price. In a declining market it is a disastrous strategy resulting in being overpriced for very long periods of time or chasing the market down and selling for much less. Better to quickly lower the price and sell the property than continually chase the market down to the bottom.
As some point, lenders are going to have to foreclose on the defaulting borrowers and dispose of the REOs. As the inventory of REO builds, so does the pressure to liquidate them in a fire sale. Perhaps it will happen, or perhaps the lenders will try to meter out their REO slowly. If they pursue the firesale strategy, prices will drop quickly, but appreciation will return sooner. If they pursue the slow sale strategy, the inventory will take years to work off, and prices will linger at the bottom for many years. Make no mistake, there will be no market appreciation until the defaults and foreclosures have stopped. Right now, both are at very high levels and increasing rapidly.
Asking Price: $529,000
Income Requirement: $132,250
Downpayment Needed: $105,800
Monthly Equity Burn: $4,408
Purchase Price: $705,000
Purchase Date: 4/28/2006
Address: 4142 Fireside Circle, Irvine, CA 92604
| Beds: | 3 |
| Baths: | 2 |
| Sq. Ft.: | 1,538 |
| $/Sq. Ft.: | $344 |
| Lot Size: | 5,630
Sq. Ft. |
| Property Type: | Single Family Residence |
| Style: | Mediterranean |
| Stories: | 1 |
| Year Built: | 1971 |
| Community: | El Camino Real |
| County: | Orange |
| MLS#: | P685892 |
| Source: | SoCalMLS |
| Status: | Active |
| On Redfin: | 5 days |
a travertine surround fireplace, vaulted ceilings, custom kitchen,
newer stained cabinets, granite and stainless appliances, with a large
family kitchen, overlooking the private patio and grass rear yard.
Amenities include, double paned windows, central air, security system,
new landscaping and hardscape, stone floors and remodeled main
bathroom, custom wood moldings, and doors, ceiling fans, can lighting,
and more. Great location with a community park and pool.
That is not a bad description by Irvine standards.
This property was purchased on 4/28/2006 for $705,000. The owners used a $564,000 first mortgage, a $35,250 second mortgage, and a $105,750 downpayment (ouch). If it sells for its current asking price, and if a 6% commission is paid, the total loss on the property will be $207,740.
This property is being offered for 25% off its peak purchase price.
{book6}
You know that it would be untrue
You know that I would be a liar
If I was to say to you
Girl, we couldn’t get much higher
Come on baby, light my fire
Come on baby, light my fire
Try to set the night on fire
The time to hesitate is through
No time to wallow in the mire
Try now we can only lose
And our love become a funeral pyre
Come on baby, light my fire
Come on baby, light my fire
Try to set the night on fire, yeah
Light My Fire — The Doors
Still 20-25% too high, or another $100k too high.
200k more to go. I know of newer and nicer condos that size who are under 380k
Yes, but I would pay an extra $50,000 – $75,000 for a SFR. Condos can be good (I own one), but they are not the same as a house.
“Yes, but I would pay an extra $50,000 – $75,000 for a SFR. Condos can be good (I own one), but they are not the same as a house”
put the Koolaid down, this is a 1971 house. you will have your choice of SFRs in much better conditions when enough REOs hit the fan 😆
I know and I am waiting for the REOs to hit. I was referring more to the relative additional price for a SFR compared to a condo.
Agreed, accept $429k is still too high.
1/2 million for a 40-year-old 1,500 sq ft dump?
Either I’m crazy or this correction has a looong way to go.
That is a “Mediterranean” style house? Really? I have been all over the Mediterranean and have never seen a house like that. “Tract” house is more like it. And while it is on a street with a cul-de-sac, is it really a “cul de sac lot”? I’d say that a house on a 5000 SF lot with 1500 SF of living space isn’t going to sell at $530K.
I’d also love to see what “granite and stainless” appliances look like. Rock fridge?
That’s exactly what I was about to post!
Rock fridge–HA!
this looks like many of the houses we’re looking at in south huntington. at that price, it’d go in a heartbeat. I’m baffled at who’s paying over a half mill for stuff like this.
dafox,
I lived in Irvine for five years and now I’ve been in Huntington Beach for almost 3 years. HB is a much, much more desirable place to live. All that Irvine has is a reputation for good schools. HB has good schools plus a great beach, parks, bagel shops, and and emerging downtown.
Never forget the bagel shops. Never.
HB has more skinheads than Irvine.
…die stadt ist von touristen uberschwemmt.
To save anyone else the time of looking that up: “The city is super-full of tourists.”
Freeway access sucks in H.B. other than the parts near the 405. Irvine has more parks, though you have to pay for them with your HOA. Some (especially those who have had mold problems in the past when living by the coast) prefer the lower humidity in Irvine. Much better selection of Asian food in Irvine. Lower crime in Irvine.
H.B. is certainly better for smoke shops, gun shops, SCUBA stores, and various and sundry mom & pops.
In short, it’s wrong to say that either one of those cities is “a much, much more desirable place to live” — it just depends on what’s important to you.
History says you’re wrong.
HB has always been cheaper than Irvine. We first looked at HB back in 86 and decided to buy in Irvine. The mark up then was 20%+ to move into Irvine.
Traffic in HB is also a huge mess and the cops, Ay Caramba! the COPS…. If the cops in Irvine and Newport are John Wayne wanna bees, the cops in HB are Das Waffen SS. While the LAPD dreams of moving to Idaho, Das HB Gestapo has created its own Private Idaho West of the 405.
Here’s a picture of the current HB Police Chief
http://hollywoodprop.com/Waffen-SS.jpg
and a healthy community of neo nazis.
Look at the monthly payment. At these interest rates, these prices make sense for those that are tired of waiting.
Once the government is done pushing down rates, we shall see what happens.
Rates won’t rise significantly until the economy recovers completely, IMHO.
I lived in both Irvine and Huntington Beach. Irvine definitely takes the honors for top schools; however, I think HB has much more to offer and is more desireable. Let’s see…HB has a better climate, the great beach, is more centrally located, many parks, more outdoor activities and dare I say more history and culture. Plus you get the 4th of July parade and the various activities near the pier throughout the year. Going riding or running on the beach trail after a tough day is hard to beat.
Depends where in Irvine. The microclimate in TR beats the gloom in HB.
Now, let’s talk 4th of July… wasn’t HB where the cops and beach goers went into battle a few years ago… something about the cops deciding to stop the holiday.
Wasn’t it HB where the cops went around calling out folks that were kicking back and drinking beers during the 4th of July? And as soon as the folks came off their porches and walked up to the cops they got busted for having booze in public? Even though they were in their own front yards?
No man, HB is not such a nice place.
TonyE,
I’ve lived in both TR and HB (near Huntington Harbour). The summer temps in HB were about a minimum 10F cooler, plus you get the ocean breeze. I’m not sure what you’re talking about. Our rental in TR did not have AC and we sure could have used in on many occasions.
The HB cops went bonkers for the 4th of July after the problems in 1995. Things are much more relaxed now. What you are talking about was a one or two year thing.
I’m not a fan of all the out of town riff raff that pours into the city during the summer. Other than that, no complaints here.
For families with young children, I would tend to think that they would prefer Irvine over HB. HB is great for singles (while Irvine is probably not that great). However, it’s only 15+ minutes drive to HB from Irvine.
Plus, I’d rather take my kids to NB or LB than HB but that’s just my preference. If I were still single, HB would be a destination for me.
Only 25% off? All of the Inland Empire yawns in your general direction.
That’s going to give me chuckles all day.
This type of house will be in the $200.00 per square foot range when the housing bubble is completely burst. The downward trend will continue in Irvine for another 5-7 years.
What a sad looking little house.
What is “can lighting”? (Sorry if it is a stupid question; there are no photos of the interior.)
Hopefully there is some sort of attractive view out the back, because there’s only a small window towards the street and forget about the sides. I assume that the back of this house is facing the street, so why not show then the nicer, front view (unless it isn’t)?
Can lighting means there’s lighting in the bathroom, cause you know, ya gotta see whatcher doin’.
No, seriously, I think that’s code word for recessed lighting. The appliance looks like a can, so it’s sometimes called can lighting.
Chuck Ponzi
Mostly OT. Great vid. It’s hip to dismiss The Doors these days as no talent poseurs, when if fact (especially if you grew up with them as I did), you might see them as one of the greatest bands in rock history. And I don’t even rank light my fire in their top 20 best songs lol. Knowing Robbie Krieger and his family slightly I can tell you Morrison was anything but the arrogant punk he’s been labeled (due mostly I guess to his performance antics), but a really thoughtful, considerate even shy southern kid…who ok, toward the end took himself a little too seriously, but was without a doubt the greatest frontman of that era. Oh and a pretty good lyricist too. Thanks for the trip down memory lane and out of this nightmare called “today.”
I could never think of The Doors as poser’s, such a uniqie sound and lyrics. I mean, how many bands don’t have a bass player? I also rate “Light my fire” as a mediocore Doors song.
Another interesting tidbit, it was the only song not written by Jim Morrison….Jim Morrison gave writting credit on his songs to “The Doors”. In other words, every member of the band collects writting royalties on all his songs.
I don’t think I have ever heard of another lyricist giving away creative credit, and 75% of the royalties, ever.
Celebration of the Lizzard… on their Live album.
I really like the Doors. Like most bands, their commercial successes are not usually their best stuff.
I just posted on yesterday’s thread about this same topic – we were posting about why there are so few new homes entering foreclosure on the FR maps for Irvine, yet there’s headlines everywhere about NOD’s increasing. My explanation is just what today’s topic is – in the markets where there are many potential buyers, the lenders are working out short sales, thus heading off the foreclosure process. In marekts where there is less interest and plenty on the market already, like SA, Anaheim, etc… the foreclosures are increasing. Hence, the headlines are right and the FR maps are right. That’s my latest theory, for what it’s worth. And I can see it happening, too – in ipo’s database, homes that were short sales that I thought would sit on the market til they enterested foreclosure are now in escrow.
Okay, I was in a hurry and didn’t spell check.
enterested = entered
marekts = markets
Hey nefron, hopefully you see my reply yesterday.
Your argument does make sense. So we’re gonna see more short sales in Irvine rather than going into foreclosures.
I also wanna add that the more desirable Irvine zip codes probably have more responsible mortgage holders….but that’s just my assumption.
Hey Chris, now it’s my turn to apologize for the late reply. Just read your post…..yup, I think it might make sense to start making offers on short sales. It’s like selling on eBay – the realtor sets this low opening ‘bid’ to attract bidders, and whenever the bank gets around to reviewing the offers, the highest one still in the game wins. Talk about a new realty strategy!
As for why few mortgage holders default in the more expensive neighborhoods, that’s a mystery to me, too. The only thing I can think of is that they have more resources to hold on longer – but, if what Mr. Mortgage says is true, that the primary reason people walk away from their home is because they owe more than the current market value, I would think the distribution of defaults would be pretty even throughout OC. That one, I don’t get.
Nefron, make sure that you don’t overbid so that you can handle your mortgage in a worst case scenario (i.e. unemployment).
“As for why few mortgage holders default in the more expensive neighborhoods, that’s a mystery to me, too.”
I believe that the more desirable neighborhoods have folks who probably didn’t over-leverage. Furthermore, I believe that they didn’t sell and **move up** since they’re already at the top (i.e. desirable neighborhoods). Hence, they’re better off now that they can refi because of the stupid ZIRP adopted by Benny boy and his cohorts.
This doesn’t mean that they don’t have foreclosures or NODs. They just don’t have as many as other undesirable neighborhoods because of my assumptions above.
Again, those are only my assumptions.
Good luck.
So great this heloc abuse is getting mainstream attention—YEA IR—
http://huntingtonhomes.freedomblogging.com/2009/05/12/heloc-abuse-in-surf-city-so-many-you-cant-believe-it/34223/
I think there are more people who read IHB than that OCR blog, so I would hesitate to say “mainstream”.
Regardless, great work as always.
I think every high school student should be required to sell items on ebay for a semester – the idea that things will sell only if they are priced correctly is so simple it is just amazing that most people out there don’t believe it.
Don’t forget about the white trash, neo nazi’s you get in HB too! You can’t put a price on neighbors like that. Centrally located? Yes, if you like to drive 20 minutes before you can reach a freeway…
Dano
HB and white trash neo nazis. When was the last time you were in HB…1990? Things change over a 20 year time period. I’ve seen the old blue collar image of HB change with the times, things are only getting better.
As far as centrally located. There are many parts of HB that are freeway close. Unfortunately, downtown is not one of them. For the most part, HB is more centrally located to employment centers in both LA and OC when compared to Irvine.
* Unemployment rate goes up over 15%
* State and local tax revenues plummet
* Interest rates spike up as monetization fails
* Alt-A mortgages spike up
* More underwater homeowners walk away
* Income earners & producers move out of California
* Crime rates spike up
I could go on but the point is the bottom is still well below.
I wonder how much of a percentage loss does mortgage, banking, building, RE–ect.
contribute to the jobs lost here in the OC—
and it’s tendrils—
still lots of refi going on—
15% is a big loss for unemployment–
“Unemployment rate goes up over 15%”
U6 or U3? Cuz we’re already passed 15% for U6.
http://3.bp.blogspot.com/_nSTO-vZpSgc/SgRo3JesEdI/AAAAAAAAGEc/SUwSRo6ouzw/s1600-h/table-a12-2009-04.png
If it wasn’t for my tax dollar that’s tied to this guy’s house, I could not give a crap about how much he loses.
The market is what the market is, at this point…actually at any point. As long as there are buyers who have confidence in their financial situation and need a place to live, they will determine what is affordable for themselves. There really is no theoretical “bottom” and even if it’s reached, you only know it in retrospect and the curve is on an incline.
There are properties receiving multiple offers and overbids because of low pricing right now and that is a trend that will start to show some market influence.
Our system is currently showing over 13,000 foreclosure listings for Los Angeles.
http://www.neighborcity.com/CA/Los-Angeles/foreclosure/
http://www.neighborcity.com/CA/Los-Angeles/foreclosure/
Look at the average for Redfin’s sold comps:
Range: $458,000 – $641,500
Average: $344/Sq. Ft.
This home at $344/Sq. Ft.: $529,672
That is, EXACTLY what the list price is. Are realtors really just using Redfin’s comps to price houses these days?
If that were the case it would be better than their former pricing paradigm, pulling a large set of numbers straight out of their ass.
I think bid is not very beneficial for the buyer and seller both. Government should stop this illegal rule. Property prices should be set according to their location. Smokinhotpropertyleads.com provides property information like their prices, their availability etc… To get more information about real estate logon here: http://www.smokinhotpropertyleads.com.