Zillow’s Make Me Move feature was intended as an alternate listing service; instead, it has become a hall of shame for WTF asking prices.
Irvine Home Address … 21 Aspen Tree Ln Irvine, CA 92612
Resale Home Price …… $960,000
{book1}
Diamonds are forever,
They are all I need to please me,
They can stimulate and tease me,
They won’t leave in the night,
I’ve no fear that they might desert me.
Diamonds are forever,
Hold one up and then caress it,
Touch it, stroke it and undress it,
I can see ev’ry part,
Nothing hides in the heart to hurt me.
I don’t need love,
For what good will love do me?
Diamonds never lie to me,
For when love’s gone,
They’ll lustre on.
Diamonds are forever,
Diamonds are Forever — Shirley Bassey
Real Estate has the same appeal as diamonds; it is tangible, it stores value and it has glamor for some. Southern California has a wide variety beautiful properties, and the most desirable have not deflated from their bubble highs, so we continue to see pricing that makes you wonder, “What the F!@#$ is this seller thinking?” Over the weekend, an inspired reader posted a link to a new WTF image to supplement our seasoned veteran.
Today’s featured property caught my eye for a number of reasons; (1) it is an FSBO with a rare reasonable presentation, (2) the property is very nice, and (3) the pricing represents some of the most delusional I have seen in ages. This seller seems to believe his property has appreciated 30% since January of 2008. That alone earns a WTF listing price award, but given the comparable properties available, this guy is underwater.
In this seller’s defence, I think this listing originated as a Zillow Make Me Move price — which is the most prevalent method of putting WTF listing prices in the market. Make Me Move is a competition to see which owner is most delusional. Creating an alternate listing marketplace is a noble idea, and I commend Zillow for trying; however, what they created is an alternate universe where prices continued to appreciate at bubble rally rates. It is an interesting study in human psychology and an amusing foray into the mind of a Southern California homeowner.
Irvine Home Address … 21 Aspen Tree Ln Irvine, CA 92612
Resale Home Price … $960,000
Income Requirement ……. $206,312
Downpayment Needed … $192,000
20% Down Conventional
Home Purchase Price … $731,000
Home Purchase Date …. 1/23/2008
Net Gain (Loss) ………. $171,400
Percent Change ………. 31.3%
Annual Appreciation … 13.7%
Mortgage Interest Rate ………. 5.33%
Monthly Mortgage Payment … $4,279
Monthly Cash Outlays ………… $5,270
Monthly Cost of Ownership … $3,870
Property Details for 21 Aspen Tree Ln Irvine, CA 92612
Beds: 4
Baths: 2.5
Sq. Ft.: 2,107
$/Sq. Ft.: $456
Lot Size: 6,300 Sq. Ft.
Property Type: SingleFamily
Style: Modern
View: Park
Year Built: 1968
Community: Irvine
County: Orange
Listing #: 25492574
Source: Zillow
Status: Active This listing is for sale and the sellers are accepting offers.
On Redfin: 418 days
Great Home In uinversity Park, on the most desired streets.
What the Owner Loves: Open floor plan, Hardwood floors thought out home.New everything.
FSBOs don’t spell better than local realtors….
I hope you have enjoyed this week, and thank you for reading the Irvine Housing Blog: astutely observing
the Irvine home market and combating California Kool-Aid since
September 2006.
Have a great weekend,
Irvine Renter
Interesting sales history on this house. The 1990 purchaser took a bath; losing 30% in the 1994 sale. The 2006 buyer also lost big. Current owner must have thought they were getting a bargain since they paid less than the previous owner. So they list it eight months later. When they didn’t get an offer, they responded — by raising the price! It’s been on Redfin now for what, 460 days.
Yes, I noticed that Redfin listing statistic too, although I think it’s 418 days. What does that mean? Did the owner try flipping within a few months of purchase? Or is this the Redfin listing from its previous sale offering, before Dec. 2008?
My guess is that it was an attempt at a flip. “new Everything.”
If it were a flip I think it would be turned around faster.
My guess is that it was just a typical glorified renter playing the old “buy and hold for two years” in order to avoid capital gains on real estate profits.
Notice we are upon the two year anniversary of the purchase? Coincidence?
Nevermind, I missed the:
ON REDFIN: 425 days
Which blows me theory out of the water.
“Me theory”?
Just read the above with a Scottish or Irish accent and it will sound more sophisticated.
Aye lad.
Is it national Talk Like a Pirate Day?
Argh, me hearties!
.
http://www.crackthecode.us/images/21_Aspen_Zillow.jpg
Classic! The graph says it all….
Nice chart. Only $450 per sf. One of a kind new outdoor entertainment center.
BUY NOW BEFORE YOU’RE PRICED OUT OF THE MARKET !!!
WTF price, some times you get lucky. Shows that you better buy now before the price goes up again. Or unfortunate for the buyer (new borrower). FHA and other GSE need to adjust their loans, so this house can be bid up 10% in price — reduce down to 1%. Then only be $26k is needed to move-in less $8k tax credit, $18k net. Then have free rent ($2500 x 14 = $35k for a year or two years. The new owners will be $17k ahead of those dumb renters, who are losing all that rent money. That’s nearly 100% ROE.
What was the financing on this house?
If the seller walks away, will it be at a profit or a loss? I suspect a loss, cause refinancing with equality withdraw seems unlikely, but with innovative loan products anything is possible.
That’s just me guess. Ey, Ladde.
+1
ROTFLMAO!
Fed Eyes Extending Scope of MBS Purchases
by DIANA GOLOBAY
Wednesday, January 6th, 2010, 4:29 pm
The Federal Reserve, in notes from its mid-December meeting, considered extending and expanding government-led initiatives to buy assets from mortgage agencies Fannie Mae (FNM: 1.18 0.00%), Freddie Mac (FRE: 1.50 0.00%) and Ginnie Mae.
The size of these purchases are being reduced gradually with time, with the aim of preparing private investors to return to the market. Questions abound, however, as to the effect of a potential exit by the government from the mortgage securities market.
A few committee members considered the possibility of at some future point providing more policy stimulus through an expanded scale and time line of large-scale asset purchases extending beyond Q1 2010. This scenario, according to the Fed minutes, would be especially applicable in situations where economic growth were to weaken or mortgage market functioning were to deteriorate further.
Such a scenario — the so-called double dip — is expected by many in the financial markets, including PIMCO bond chief Bill Gross, who in an interview with TIME Magazine this week said he expects economic growth in the U.S. to weaken in Q3 and Q4 of 2010, “which would basically call for some additional help.”
According to Gross, the Fed will exit mortgage markets, only to have to consider a re-entry later this year. “[B]ased on our forecasts for the second half of the year, they may have to reinitiate it, and that will be difficult to do once they stop because it then becomes a political hot potato,” he told TIME.
Most of the Federal Reserve’s liquidity facilities are set to expire February 1st, but the Term Asset-Backed Securities Loan Facility (TALF) for loans backed by new-issue commercial mortgage-backed securities (CMBS) is set to expire June 30th.
TALF facilities for loans backed by all other types of collateral will expire March 31st, but committee members indicated they were prepared to modify these plans, if necessary, to support the securitization markets.
Quite the scam they have going here!
I want to open up my own bank where I can create all the money I need out of thin air and buy whatever I want!
It feels like we’re just digging this hole deeper and deeper.
The Fed has been working to keep interest rates low for two reasons; 1) there are tons of 30y prime ARMs that would default if interest rates were above 6% (I’m not saying that they would go there in the absence of the MBS purchasing program) and 2) low interest rates allow mortgage purchasers to bid higher principles on the houses they’re shopping for. Buying trillions in MBSs artificially raises the prices of houses The consequence of 2) is that banks reselling foreclosed properties loose less money and fewer current home owners are psychologically impacted by being under water.
The crisis in housing is due to home inaffordability. Buyers from 2002 to 2008 paid too much for their homes. The crisis is not resolved by having buyers in 2009 and 2010 take these houses off their hands for the same inflated prices — the house has remained overpriced, it doesn’t matter who owns it.
The Fed is risking inflation (by printing money to buy MBSs) in order to lure todays buyers into overpaying for houses. That really gets my goat. The government is actively subverting the investments of todays buyers. Todays buyers are going to have to pay for the mistakes of yesterdays buyers — not just in general weakness of the economy and extra taxes, but because they’re being shackled with debt they’ll never be able to repay.
Once the Fed stops printing money, interest rates will rise. Once the economy starts to improve, interest rates will rise. How long are we going to keep fighting the inevitable? Why is the government actively subverting the interests of its younger population (today’s buyers) in order to protect the interest of yesterday’s irresponsible buyers?
… I’m so ready for this bubble to be over. During the dot com bubble, I didn’t really care that stocks were overpriced because I didn’t really ever want to own a tech stock. But now, I’ve got a child on the way and a wife who really wants a yard for our dog and I can’t put her off for much longer waiting for this bubble to release the rest of its noxious gas. I want to buy a house but I don’t want to piss away years of savings paying too much for it. But my own government is making sure that if I act now, I will.
But when you buy, you are just throwing your money away…
U.S. Now a Renters’ Market
With Apartment-Vacancy Rate at 30-Year High, Landlords Cut Prices 3% in 2009
By NICK TIMIRAOS
Apartment vacancies hit a 30-year high in the fourth quarter, and rents fell as landlords scrambled to retain existing tenants and attract new ones.
The vacancy rate ended the year at 8%, the highest level since Reis Inc., a New York research firm that tracks vacancies and rents in the top 79 U.S. markets, began its tally in 1980.
Rents fell 3% last year, according to Reis, led by declines in San Jose, Calif., Seattle, San Francisco and other cities that had brisk growth until the recession.
Gains in home sales have been driven by government stimulus, leading some to wonder if the nascent housing recovery needs federal assistance to sustain, Nick Timiraos reports.
Landlords now must entice tenants to renew leases. “We’ll shampoo their carpets. We’ll paint accent walls. We’ll add Starbucks cards,” said Richard Campo, chief executive of Camden Property Trust, a Houston-based real-estate investment trust that owns 63,000 units. He said the first half of 2010 should be “pretty ugly,” but was optimistic the sector would pick up later in the year.
Landlords were also hit last year by competition from a wave of new supply that hit the market. The 120,000 units that came onto the market last year, including some busted condo projects that had to be converted to rentals, represented the most new construction since 2003, according to Reis.
Maybe a more productive question would be:
How can I help the expedite the fall of housing prices? I’m tired of waiting for them to fall on their own — or rather — I’m tired of waiting for our government to get out of the way of their fall.
“How can I help the expedite the fall of housing prices? I’m tired of waiting for them to fall on their own …”
I think it is misconception.
If You need 1 house for Your family to live, then You need good price for 1 house. Payments are affordable now. No need to wait for everything to fall.
If You dream to buy McMansions cheap and sell dear, then wake up.
I’ll be competing with other buyers when I buy. What I pay for the house will be determined to a great extent by what other people are willing to pay for a house.
What worries me is what my future buyer will be willing (or able) to bid for my house when the day comes that I have to sell it. I don’t plan on moving, but I don’t feel like my job will last forever. I’d like to minimize my maximum loss. I think that makes me “rational.”
Sure. Houses may not become more affordable than they are now (I’m not sold on that argument) but I know their price will decrease.
The difference in the interest rate I get when buying a house and the interest rate my buyer gets determines how much the price decreases.
I want my interest rate (and the interest rate of all of my competitors) to be the same when I buy the house as when I sell it
If price is too high, you can always walk away and keep renting. It is loser who wins bidding war.
It may be a bit premature to worry about future buyers bidding for your virtual house. Maybe government will draft you and send to war tomorrow.
Nobody knows the future, and anyone who pretends to know is not to be trusted.
“..and a wife who really wants a yard for our dog..”
Isn’t that what most Americans face all the time?
https://www.youtube.com/watch?v=Ubsd-tWYmZw
Yeah, Suzanne researched this.
I suggesting renting a SFH…sign a 2 year lease, check out the owner’s prop tax and year he/she bought the house to make sure that the owner doesn’t skimp on the mortgage 🙂
Yeah — I understand — wait longer, save money. I’m just sick of waiting and want to complain about how the government is making we wait longer.
I got until 2015 but I share your frustration 🙂
Don’t worry — the dog won’t be able to tell whether the grass he’s pissing on is rented, or whether it’s owned by the bank and you’re paying interest on it instead.
I agree with David. There are a lot of houses up for rent.
Maybe. But if the Feds don’t keep rates low a goodly crew will scream loudly about the threat of inflation, so whaddaya gonna do?
Try showing your wife the numbers. I hope she’ll be reasonable – or offer to get three new jobs to pay off the amount you’ll lose if you buy now.
Well, unless you get a large Treasury auction failure, you can’t stop this shenanigan.
Question: was there any doubt that the FED would stay in the re-purchase business?
What the Owner Loves: Open floor plan, Hardwood floors thought out home.New everything.
LOL! You can tell a whole lot of thought and reflection went into this. It reads like it was written by a caveman:
“Me Owner! Love open floor plan!” GRUNT!
“Hardwood floors thought out home make Me Owner much love!”
and then at the very end you can tell he just completely lost interest and said “Ah, f_ck it – NEW EVERYTHING”
I suggest the seller revise to:
What the Owner Loves: everything.
Owner?
I didn’t realize the bank loved the wood floor or open floor plan.
I agree. Zillow should be referring to these people as “seller” not “owner”.
I am sick and tired of seeing house debtors usurp the title of “owner” for themselves when they own maybe a measly microscopic percentage of it with their “equity”.
I suspect this “owner” has ownership rights to perhaps the front door and maybe a fixture or two.
I suggest that people who have no mortgage be called “100% owner”. Everyone else could be described by their loan to value ratios. “15% owner”, etc. People who are underwater might be “20% negative equity”
I am envisioning a series of pie charts showing people’s percentage of “ownership” and “money rent.” People would span the continuum of “money renters” with negative ownership to full 100% owners with most people being a mix. For instance, someone could be 20% owner and 80% money renter….
I think I just found an idea for a post for next week.
Extra slices of pie for underwater owners?
I think Zillow’s “Make Me Move” listings are just what it says on the label. That is, “I don’t really want to sell right now, but if you give me $X, you will Make Me Move”. I would imagine most of them have WTF prices, by design. They aren’t real attempts to sell the house.
Yes, Redfin should probably exclude these “listings” from its database. It just pollutes the data with people who really don’t want to sell.
Redfin is trying to include as many listings as possible, to be a “complete list of every single house for sale”. Thier agents don’t even work with FSBOs! At least they color code them and you can filter them out in searches.
Do they count the WTF prices in the average to show what a good deal the FSB REA house is?
In the Listing $/SqFt average, probably. But that number is of little use anyways. The one that counts is the Sold $/SqFt.
Exactly. I have a “make me move” price on my condo, and it’s intentionally a WTF price, about 50% higher than it’s worth. And I’ve actually gotten an inquiry on the property!
I think it can be effective for those who are serious about generating interest in the sale of their home. I used it as a test and it did generate a couple of inquiries prior to hitting the market in July. I think it will only work though if you are aggresive with pricing.
We priced 50k under the nearest comps and sold in 48 hours after some fha bids drove it up 20k over asking. Our asking was 8k below the appraised value and we sold for over 10k above appraisal… the buyer did ask for price cut to appraised value but a backup contract for 5k more than buyer’s offer negated that tactic… we bought in ’99, never took out equity, and made a nice sum to repurchase when this all shakes out…
good luck to all
There are enough buyers looking for bargins that underpricing your house significantly but not ridiculously is a good tactic. Start a bidding war. The end price may be higher than if you start high and hope somebody bites. It will be a much quicker sale, too.
This is a very nice house, and the indoor kitchen is beautiful. But there’s no way the place is worth more than it was two years ago. $1M is once more a lot of darn money for a house. The 2002 price is probably more like it, given the glut of nice houses in your area.
And the OUTDOOR kitchen is a symptom of everything that’s wrong with modern Americans and their approach to handling money. Outdoor kitchens are the most wasteful and extravagant home enhancements ever. It’s beyond decadent when people go into non-survivable debt just to expose a bunch of high-end appliances to sun, rain, snow, and ice, and whatever else the weather can do.
Snow? Ice? In Irvine? Unlikely. Rain is uncommon for that matter. Sun and general exposure will definitely rot these appliances though.
Do they make appliances that are specifically designed to be exposed to the elements like this? I think they do. In any case, it’s not like they have a dishwasher outside-it’s usually a sink, BBQ, stove, and mini-fridge.
The weather out here is pretty nice and pretty dry so it’s unlikely that stuff outside will rust. Most likely it will fade with all that sunshine and it will be a bit## to keep clean ( I got an all black BBQ that never needs cleaning unlike my neighbor’s stainless steel jobbie).
As much as I agree on the uselessness of an outdoor kitchen with all of them fancy appliances, I guess they’ll come handy when they have to put up four big tents in the backyard and take on 12 more tenants to pay the rent.
Screw is turning – more ‘strategic’ foreclosures coming
— http://www.nytimes.com/2010/01/10/magazine/10FOB-wwln-t.html?em
If Morgan Stanley can do it, why can’t the underwater homeowner?
Has anyone really seen a “make me move” transaction work in the wild? Why even have it up if it’s not going to work?
My .02c
SGIP
Gee — IrvineRenter is the closest thing I could imagine to a Steve Irwin of the real estate market. If he hasn’t seen a wild MMM transaction, there probably aren’t any.
Dear Soylent,
If you’re the same person, I just want to let you know how much I enjoy your haikus on CR’s Bank Failure Fridays.
Zillow “make me move” listings are like the pre-facebook for houses instead of people. TMI.
Why do people post photos of themselves and details of their lives on the web? Why do they post interior shots and descriptions of their houses? People enjoy being the center of attention, or in the case of facebook or make-me-move, thinking that they are the center of attention.
Remember those stories of WWII stranded soldiers that were found and they still believed that the world was still at war? It happened in the Pacific, if I remember correctly.
Well, here we have an owner that didn’t get the memo that the bubble is over!? :-/