Author Archives: zovall

IHB Upgrade Planned for Saturday, April 5th

Yup, IHB is growing up! In order to add more features in the future, we’ve decided to upgrade the site. We’re planning for the upgrade to take place next Saturday (4/5/08). During the upgrade, IHB will not be accessible. The estimate is for ~4 hours of downtime that day.

The plan is to move as much content as possible to the new system. Your existing forum username/password will continue to work. One item to note is that Forum Whispers will not be part of the migration. So if you have any important info in your Whispers, please copy it out before next Saturday.

We’d like IHB to be a resource for all things related to Irvine Housing. If you have ideas for how IHB can be more useful, please send them in. If you are a Real Estate Agent or work in New Home Sales, we’d love to hear from you too.

More Avenue One Price Drops – UPDATE #1

Originally posted December 27, 2007

P609516e

Address: 1124 Scholarship, Irvine, CA 92612
Plan: 1A 725 sq ft – 1/1
MLS: P609516 DOM: 46
Sale History: none
Current Price: $334,990

See our previous posts on Avenue One. This brand new home is for sale by the builder, K Hovnanian. The builder listed a similar property in October 2006 for $396,990 which translates to about a 15% drop in asking price in the past 14 months.

Here are the private remarks on the property:

BROKERS AND REALTORS, DOUBLE YOUR COMMISSION TO 6% ON SELECT UNITS. Contracts must be written by 12-31-07 and COE by 1-31-08. MOVE-IN-READY. $10,000 Deposit required. Agents must bring Buyers to the Sales Office and register them during their very first visit to Avenue One. Our Sales Office ( 2100 Scholarship ) is open Mo. 1p.m. – 5p.m. and Tue. – Sun. 9a.m. – 5p.m. Please call a Sales Consultant at 949-975-8545 and ask about our current specials , incentives and upcoming events.

{adsense}

The builder has priced this well below other units with the same plan. It’s putting this seller (a RE Broker who has the highest asking price for this plan) in a tough spot:

P584759a P584759e

Address: 1138 Scholarship, Irvine, CA 92612
Plan: 1A 725 sq ft – 1/1
MLS: P584759 DOM: 123
Sale History: About $409k on 8/2006?
Current Price: $420,000

These 725 sq ft units can bring in a rent of $1400-$1600/month. What’s the unit worth to you?

UPDATE #1 – February 13, 2008

Recently, I noticed that several units in this complex were labeled as ‘Sold’ in MLS. What’s interesting is the price listed in MLS as the Sold Price. These units were all sold by the builder:

  • 1164 Scholarship – Plan 1B – 1/1 – 602 sq ft
    – Sold for $323,990 on 1/10/2008

  • 1124 Scholarship – Plan 1A – 1/1 – 725 sq ft
    – Sold for $253,492 on 1/30/2008

  • 1327 Scholarship – Plan 1A – 1/1 – 725 sq ft
    – Sold for $280,591 on 1/29/2008

  • 1434 Scholarship – Plan 2AL – 2/2 – 1213 sq ft
    – Sold for $445,042 on 1/25/2008

And here’s what is pending from the builder:

  • 2138 Scholarship – Plan 2A – 2/2 – 1037 sq ft
    – $474,990

  • 2434 Scholarship – Plan 2AL – 2/2 – 1213 sq ft
    – $556,990

  • 1446 Scholarship – Plan 3AL – 2?/2 – 1538 sq ft
    – $674,990

The Sold prices are significantly lower than anything we’ve seen in this tract. I haven’t been able to confirm this information with the Title info. If anyone can confirm, please post. As I’ve mentioned on other Avenue One posts, the builder is going to sell these units one way or another.

The 1124 Scholarship unit is the one that started the this post on Dec 27, 2007. If it can be rented for $1600/month, then it is at just under the 160 multiple.

Collage – Northwood – The second casualty in this complex – UPDATE #1

Originally posted December 30, 2006

The first casualty reported by us in the Collage tract was 714 Timberwood. And yes, these are the actual pictures advertising this property. Kinda crappy huh? You really need to evaluate the smaller no-name real estate brokers/agents before you entrust them with your $500k+ sale.

On to the details:

Address: 1602 Timberwood, Irvine, CA 92620 (Northwood)
Plan: 1267 sq ft – 2/2.5
MLS: S467201 DOM: 43
Sale History: 02/21/2006: $560,000
10/31/2003: $300,000
4/18/2001: $240,000
Current Price: $560,000

So what happened here? Well our flippers got in over their heads. They purchased in February 2006 for $560,000 using 100% financing. How common is this?!?! 😉

What I find interesting here is that in the 2.5 years from the original sale in 2001 to the 2003, the price went up $60,000 (25%). And then in the next 2.5 years from 2003 to 2006, the price went up $260,000 (87%).

The buyer in 2003 put down about 27%. The flipper in 2006 put down 0%.

In a rapidly appreciating market (from 2003-2005), flippers used other people’s money and made out like bandits. They were looked up to as ‘real estate gurus’. My guess is the current seller wanted to get in on the game and not be left behind. Too bad for them. At the current asking price, they are facing a loss of about $33,000 (assuming 6% in selling costs). Oh wait! They didn’t put anything down.. I suppose the lender (Fremont Investment & Loan) will be the biggest loser given that the private remarks state: “ALL offers need short sale approval from mortgage holder.”

UPDATE #1 – February 5, 2008

Yes, it has been over a year since this property was featured. It looks like the property went back to the bank (La Salle Bank) on 5/25/2007 at a price of $484,358.

It was then listed as a REO on 6/5/2007 for $532,500. The price kept dropping over a few months and it finally sold on 12/27/2007 for $447,000 (~20% off the 2006 price).

Serissa – Why pay more here when you can get a brand new home (exact floorplan) in Woodbury for less

Originally posted January 27, 2006

Address: 52 Tea Garden, Irvine, CA 92620 (Northwood)

Plan: 1600 sq ft – 3/3.5

MLS: S442227 DOM: 246

Sale History: 11/27/2004: $754,000

Price Reduced: 06/13/06 — $899,000 to $859,000

Price Reduced: 06/24/06 — $859,000 to $848,000

Price Reduced: 07/17/06 — $848,000 to $819,000

Current Price: $819,000

First, we’ll look at the flip. Here we’ve got a Plan 1 in the Serissa tract built by Lennar in the Village of Northwood. I believe this particular area of Northwood is called Northwood II and it consists of 4 neighborhood tracts that were built around 2003-2005 or so. This home was purchased from the builder for $754,000 in November 2004 (Phase 5). The private remarks on that listing were “This is a model leaseback opportunity. Rare to buy new home on the Irvine Ranch with no owner occupancy requirement. Builder will cover monthly PITI&HOA until the end of June 2005. 2% referral fee paid for escrow that closes no later than November 30, 2004. Please call with any questions, or come and see our beautiful models. Thank you!” I find it strange that the builder was advertising this on MLS at that time.

Lennar found a buyer who came up with a 20% down payment and took out a mortgage for 80%. This buyer purchased the home as an investment property. Perhaps he leased it back to Lennar for a few months. Then he found a new tenant (MLS S397784) to rent it for $2900/month starting in May 2005. I don’t know how $2900/month would cover a $600k mortgage + taxes + HOA. But those were good times and the property probably saw some huge appreciation (on paper).

Anyways, a year later (after the 12 month lease was up), this investor placed the home for sale in May 2006 (just in time for the peak summer buying season). The initial asking price was $899,000. That would give him a nice $150k profit (excluding commissions). Unfortunately for him, the market did not like that price. After a few price reductions during the summer (the investor knew he needed to find a GF that summer), the price stabilized at $819,000. Soo.. for the last 6 months the price hasn’t changed. Why not? Maybe he doesn’t want to lose money on the sale. Perhaps he thinks he’ll wait out the downturn and in the meanwhile just bleed a little money since the unit is rented out.

The private remarks on the current listing state: “VEry VEry MOtivated SELLER!!! REduCEd THe PRICE , REduCed And REduCEd, Now offering 3.5%, yes 3.5% to the buyers’ agent. SHOWS like a model!. MOTIVATED agents.” If sold at the $819,000 asking price and assuming 7% in selling costs, this investor stands to make a whopping $7,000 profit!

Here’s the competition in the Serissa tract:

  • 48 Bamboo – Plan 1 – $798,000

  • 37 Wonderland – Plan 1 – $789,000 (Thanks EvaLSeraphim!)

  • 45 Bamboo – Plan 2 – $819,000

  • 47 Secret Garden – Plan 2 – $849,800

  • 43 Secret Garden – Plan 2 – $849,000

  • 68 Shadowplay – Plan 2 – $869,000

  • 62 Shadowplay – Plan 2 – $879,000

Unless there’s a considerable difference in upgrades or location, our seller will have to adjust the price at least once more. It gets better (or worse)… Thanks to IRVINITEEE, I learned that the Serissa tract is pretty much the same as the La Casella tract in Woodbury. La Casella has just started to sell their homes and from what has been gathered in the thread, the Plan 1’s that just sold started around $690k. That is $130,000 LESS than what our featured seller is trying to unload 52 Tea Garden for.

How will the La Casella sales affect the appraisal values for Serissa? Anyone hear the sounds of instant equity evaporation?! Lennar has priced Phase 1 of La Casella in Woodbury (a full Village with a ton of amenities) in January 2007 to be lower than Phase 5 of Serissa in Northwood II which was sold in November 2004! (I am comparing $690k to $754k) As has been stated before, the builders are going to do whatever it takes to move their product.

UPDATE #1 – February 2, 2007

Thanks to a tip from EvaLSeraphim in the comments, I’ve learned that this property has been relisted.

MLS #: S473840

The asking price is now $799,000. With 6% in selling costs, the seller will be about $3,000 in the hole. Will a $20k reduction in price help sell this place? I doubt it. But only time will tell.

UPDATE #2 – December 28, 2007

52 Tea Garden is still on the market (it’s been on the market under various MLS listings since May 2006). Here’s the latest listing: S494270

The new asking price is $759,000 which is about the same as what the investor purchased it from the builder for in November 2004. It’s yet another example of a seller chasing the market down. Had this property been priced at $759k in May 2006 it probably would have been sold.

Here’s what happened to the other properties in the original post:

  • 48 Bamboo – Plan 1 – Sold for $746,500 on 4/24/2007

  • 37 Wonderland – Plan 1 – Reduced to $749,000 and then the listing expired

  • 45 Bamboo – Plan 2 – Sold for $800,000 on 4/3/2007

  • 47 Secret Garden – Plan 2 – Sold for $792,000 on 8/7/2007

  • 43 Secret Garden – Plan 2 – Sold for $800,000 on 7/20/2007

  • 68 Shadowplay – Plan 2 – Asking price is now $800,000

  • 62 Shadowplay – Plan 2 – Reduced to $814,900 and then off the market

    • And here are a few other properties that are on the market in the Serissa tract:

  • 20 Shadowplay – Plan 2 – $838,880

  • 60 Shadowplay – Plan 3 – $875,000

  • 35 Secret Garden – Plan 2 – $849,000

  • 27 Wonderland – Plan 2 – $675,000

  • 61 Wonderland – Plan 1 – $699,900

    • 27 Wonderland (short sale) and 61 Wonderland are definitely going to make it harder for the rest of the sellers in the tract.

    REO in San Juan Bautista (Irvine)

    S516101c

    Address: 28 Bolinas, Irvine, CA 92602

    Plan: 3 – 1622 sq ft – 3bd/2ba

    MLS: S516101 DOM: 4

    Sale History: 12/4/2007: $638,586 (back to the bank)

    9/9/2005: $680,000

    6/11/2004: $675,000

    Current Price: $529,900

    This Plan 3 in the San Juan Bautista tract in Northpark went back to the bank earlier this month. At the current asking price, the bank is willing to accept a $100k+ loss on this property.

    Here are the private remarks:

    Combo R-E-0. Buyer must submit a prequal w/Wells Fargo along with the offer. (Bank rules)Call xxxxxxxxxxxx Property sold AS-IS. $1,000 bonus to selling agent if closes by 2/28/2008.

    There is actually another Plan 3 REO townhome in this tract (15 Bolinas) which is pending sale at $532,900. These 2 REO’s will definitely have an impact on the comps.