Author Archives: zovall

Parklane – Will this Woodbridge Flipper Succeed? – UPDATE #1

Originally posted on October 16, 2006

Address: 7 Chenile, Irvine, CA 92614 (Woodbridge)
Plan: 2201 sq ft – 4/2.5
MLS: S442943 DOM: 137
Sale History: 4/27/2006: $885,000
9/17/2003: $665,000
Price Reduced: 07/11/06 — $1,045,000 to $999,000
Price Reduced: 08/02/06 — $999,000 to $979,000
Current Price: $979,000

Our flipper purchased this Plan C in the Parklane tract in Woodbridge earlier this year and then put it back on the market 1 month later on 6/1/2006 hoping to flip this home for a quick $160,000! He apparently has had a difficult time finding a GF as this home has been on the market for 4.5 months.

The private remarks state:

Price Reduction for the 2nd time. Great Value for the location with lots of upgrades. Vacant – Owner is extremely motivated to sell. Please show and bring all reasonable offers!

Vacant? That explains the extreme motivation. But 2 price reductions and it’s still priced $94,000 over what he purchased it for! After 6% in selling costs, our flipper stands to make over $35,000 in profit if he gets his ‘reduced’ asking price. We’ll have to keep our eyes on this one. The flipper put 10% down as far as I can tell and so there is definitely some room for this price to come down.

UPDATE #1 – December 26, 2007

Well it’s been a little over a year now and thanks to our wonderful helper britney, we know that this flipper did NOT succeed. The latest listing for this property is: MLS #: S493874. It started out at $947,000, went to a low of $819,000, and is now listed at $850,000.

It looks like when the flipper bought in April 2006, they put 10% down. If sold at the short sale price of $850,000, I’d imagine the bank/seller are going to lose a combined total of about $86,000!

This is a $200k drop from the original asking price in June 2006. Time to buy!! Would you purchase this home for $850k? What about the 2003 price of $665k?

Happy Birthday IHB!

I can’t believe it has already been 1 year since we started the Irvine Housing Blog. A lot has changed in that time: lending standards have tightened, OC inventory has continued to pile up, OC builders have reduced their pricing, foreclosures have picked up, sales have slowed down, 160 major US lending operations have “imploded”, and the US Dollar has set record lows.

Although not as drastic as what has happened to the housing market, IHB has gone through a number of changes as well. ISM and I began this without knowing whether anyone would be interested in what we were going to write. Lucky for us, two sites that provided our inspiration (OC Fliptrack RIP and Bubble Tracking), linked to us and that really got things moving.

Take a look at our stats:

We went from less than 50,000 pageviews in October 2006 to over 550,000 pageviews in August 2007. Do a Google search for ‘housing blog’ and IHB is the 5th site (6th link) listed! There are a few items on this chart I’d like to point out (1, 2, and 3):

The IHB Forums were launched on January 2, 2007. What began with a slow start eventually turned into a very active and knowledgable community. We have 525+ members, 940+ threads, and 17,000+ comments and every day these numbers continue to grow. There is a wealth of information here ranging from Irvine tract and village information to discussions about architecture and design to threads devoted to wine and beer. The forums also gave rise to our IHB T-shirts (thanks Nude!). More recently, we implemented a live chat (thanks Caycifish!) that has proven to be quite popular.

Irvine Renter joined the IHB team with his first post on February 27, 2007 and he’s been simply incredible! Although I realized he knew his stuff, I was still surprised by the sheer volume and depth of topics that he has educated all of us on. He has taken this blog to another level and we’ve received tons of positive feedback from people who have enjoyed and benefited from his writings (especially his analysis posts). The community profiles that he has written clearly show his love for the City of Irvine; take a look at the beautiful pictures and you may discover a park or tract that you weren’t aware of before.

An article by Daniel Gross of slate.com linked to IHB on July 26, 2007. The article was syndicated in the Washington Post and Newsweek/MSNBC and brought some great national exposure to our site.

Many thanks to ISM, graphrix, and socalhousingbubble for their solid contributions. In addition to the main blog posts, there have been numerous blog comments that have provided insight into the feature properties. An interesting stat is that our spam blocker has caught 20,072 spam comments as of this moment. I also want to thank Redfin and our other site sponsors for their support!

Thanks everyone for a fantastic year! All of your contributions are what has made this site become what it is. What’s next? We want to keep the momentum going and we’ve got some ideas for the site that we are planning to implement soon. As always, we’re happy to listen to your suggestions on how to bring more value to our readers.

Go IHB!

Irvine Sales Trends – 1998-2007

We did our first post on Irvine Sales Trends many months ago. Today’s post includes the 2007 numbers through August. Although the charts are an improvement from the past, I still have a lot to learn from twist. Keep in mind that the data used to generate these charts comes from MLS.

We’ll start with a look at # of sales by month from 1998-2007:

The 3 Month and 12 Month Moving Averages help indicate the trend. Next, we’ll compare the data by year. I’ve create separate charts for 1998-2002 and 2003-2007 because it is a little messy with 10 data sets.

It looks like although SFR sales are about the same in 2007 when compared to 2006, Condo sales are definitely slower in 2007.

Now only if I had the median sales price data for Irvine for the last 9 years. 🙂

UPDATE: Here is the data used to generate the charts above: Irvine Sales Trends.xls

Home Sales Data for July 2007

From the OC Register: “For the month of July 2007, sales for all types of Orange County home sales decreased 19.8 percent. The median sales price did not change. The median is where half the homes sold for more and half for less. Types of homes selling, as well as home value changes, cause the median to change.

“Change” is based on comparison to same period one year ago.”

Median sale price

Sales volume

ZIP

code

July 2007

% Change

July 2007

% Change

92602

$746,500

0.6%

-8.7%

92603

$855,000

-37.5%

42.9%

92604

$637,500

-1.9%

0.0%

92606

$725,000

-3.3%

5.0%

92612

$745,000

15.7%

104.8%

92614

$503,000

-16.2%

-56.5%

92618

$590,000

-5.6%

46.7%

92620

$743,500

-11.3%

8.3%

Source: DataQuick

Guess who can undercut the builder?

Address: 1428 Scholarship, Irvine, CA 92612

Plan: 2AL 1213 sq ft – 2+loft/2

MLS: P555577 DOM: 216

Sale History: none

Price Reduced: 04/16/2007 — $624,990 to $594,990

Current Price: $594,990

Although we’ve covered Avenue One before, I think this deserves another post. 1428 Scholarship is a brand new home (Plan 2AL) listed by K. Hovnanian (the builder). After a couple months on the market, the builder dropped the price by $30,000. Apparently, it wasn’t enough to get this place sold (even in the busy summer season). The property is still on the market 4 months after the price cut.

Before we get to who is undercutting the builder, let’s see who the builder is undercutting.

Address: 2475 Scholarship, Irvine, CA 92612

Plan: 2AL(?) 1253(?) sq ft – 2+loft/2

MLS: S497758 DOM: 30

Sale History: $687,469 (?) on 4/5/2006 (from Property Tax Records)

Current Price: $669,000

The builder is severely undercutting the investor that owns 2475 Scholarship. This investor (a RE agent) is currently renting out the unit. The price is significantly higher than what the builder is offering. But wait, it comes “Fully FURNISHED!!” It looks like it is the same floor plan as the unit above but I’m not 100% sure.

So the builder is making it hard for flippers and investors to make money. This is nothing new for Avenue One. Now, let’s look at a unit that is going to make it hard for the builder to move their product.

Address: 1442 Scholarship, Irvine, CA 92612

Plan: 2AL 1253 sq ft – 2+loft/2

MLS: P593507 DOM: 10

Sale History: $692,595 (?) on 7/26/2006 (from Property Tax Records)

Current Price: $539,900

This looks to be the same exact floorplan as the two properties above. The price is $130,000 less than the investor flip and $55,000 less than what the builder is asking!

How is this possible? How can someone sell a property for less than the builder? Meet the bank 🙂 This is a Bank Owned property but I don’t have the details on the foreclosure. If someone has access to the info, please post it.

Perhaps this unit is priced low to generate interest. If it does sell near this price, it’s going to hurt the comps in a big way considering that it looks to have been purchased for almost $700k last year.

Any guesses which property (Builder, Flipper, or Bank) will sell first? And when?