Selling Price: $1,050,000
Selling Date: 4/18/2007
Purchase Price: $1,188,000
Purchase Date: 1/25/2006
Address: 25 Lakeview, Irvine, CA 92604
Beds: 4
Baths: 3
Sq. Ft.: 2,500
Year Built: 1977
Stories: 2
Type: Condominium
View: Lake Front, Lake, Mountain, Panoramic
Neighborhood: Woodbridge
$/Sq. Ft.: $420
MLS#: S475949
Status: Active on market
On Redfin: 71 days
Premiere property in the heart of Irvine: This flip should have been a no-brainer…
Perhaps you saw the following letter written by a local realtor published in the OC Register [italicized comments in brackets are mine]:
Late breaking letters: Media experts and the ‘coming’ real estate market crash
Posted, Wednesday afternoon, April 11
It was with great disappointment that I read the latest Jonathan Lansner diatribe on how the sky is falling as it pertains to the Orange County real estate market [“
Both Lansner and Schiff, as well as UCLA and Chapman College representatives have all been predicting the bursting of the real estate “bubble” year after year. They have all been consistently wrong and have probably cost the would-be homeowners, who held off due to these dire and inaccurate predictions, untold thousands of dollars in returns on a sensible real estate investment [so sensible the writer lost his a$$], and the subsequent appreciation (not to mention the significant tax deductions.)
For those foolish enough to listen to them, and who held off purchasing a home, it may be too late. Many will probably never be able to afford a home in Orange County [priced out forever, LOL] now thanks to the doom and gloomers. Particularly offensive was Schiff’s advice: “When everyone in real estate is waiting tables (or in jail) [ROFLOL] and your neighbors think you are crazy for even considering real estate, then it will be time to buy. [Peter Schiff is my new hero]” I have spent much of my life in Southern California real estate. I do my best to provide accurate advice and handle my clients with professionalism and courtesy. Schiff’s broad-brush stereotyping of thousands of hard-working real estate professionals reflects much more on his reputation than ours [Realtors are considered by the general public to be on a par with used car salesmen]. I still consider O.C. real estate an outstanding long-term investment [liar], and history unerringly proves me correct [except in the 90’s when it didn’t].
The primary cause of the recent (and temporary) slow down in this market, in my opinion, is due to the piling on of media and pundits that must feed the fears of their readers on a daily basis in order to stay in business [I feel so powerful. I and a few other bloggers ruined the market. LOL]. Schiff’s prediction of a 50 percent decrease in O.C. home values is beyond ridiculous [he is probably right on]. Despite what Schiff and other fear mongers predict, the law of supply and demand hasn’t stopped working and the whole world still wants to live in Orange County [The whole world wants to live here, LOL. This guy should do stand-up comedy. He managed to make every ridiculous kool-aid-drinkin’ bullish statement in one writing. Great stuff.].
.
{adsense}
.
Boo Hoo, somebody call the whambulance; perhaps our crybaby realtor friend wants some cheese with that whine. When you read a diarrhetic thought stream like that you can’t help wondering if there is more to the story. There is.
(Chuck Ponzi at Southern California Real Estate Bubble Crash wrote a great post concerning this letter.)
This letter to the editor was published one week before our realtor / failed flipper lost $138,000 plus commissions on the property above. He bought a great property in a great neighborhood (waterfront in Woodbridge) and still lost a bundle. Does it make you question the sincerity of his feeble assessment of the “recent (and temporary) slow down in this market?” If it was only temporary why is he dumping this property at a $138,000 loss? Did he write the letter above to generate business while his real opinion about the market shows in his actions? Do his actions speak louder than his words?
Besides being a whiner, what would you call him (I’ll give you a hint)?
Liar, Liar, Liar
Liar, Three Dog Night – 1971
***** Note — Thanks to Zovall, we now have threaded comments. You can reply directly to a previous comment. Enjoy *****
That is a great find.
Sweet, Sweet Schadenfreude.
I am going to post a link to this post over at Lansner’s blog.
—–
Sunset Beach Guy:
Hope you didn’t miss all of the great comments on this over at my blog:
http://www.socalbubble.com/2007/04/how-idiots-get-printed.html
Chuck Ponzi
http://www.socalbubble.com
The real story here is that someone actually paid over one million for a cracker box overlooking a fake lake in Irvine. That place is probably work just a bit over 500K….
Oh that is sweet! Do you think crow tastes better warm or cold?
One positive thing I believe will come from this inevitable debacle is a more efficient real estate market. It’s going to take a complete disaster to break the strong arm grip that the Realtors have on this industry. Though there have been minimal strides to break NAR, some smart business man/woman is creating a better, more efficient way to reduce transaction cost to buy and sell real estate. It should cost no more than a few thousand dollars to buy or sell a home. The legal documents should be condensed and made uniformity.
The legal documents should be condensed and made uniformity.
Um, most realtors for the major brokerages use fill in the blank forms. The forms really are about protecting the commissions and the agency, not the buyer.
IrvineRenter, minor note, you may want to tighten the last paragraph up a bit. You’re mixing the pronoun he to refer to two different people, in one sentence, the failed flipper, in the next the diatribe author.
Unless of course, I’m misreading it an the author is actually the owner of the lake view house.
I read your blog regularly. I still think of you as John Doe.
I liked the e-mail response that one of your posters got!
That’s what I love about public records and the internet, the curtain is getting pulled aside and people can see the two-face BS for what it is.
Now, if OC could just get a decently functioning grantor/grantee and RE purchase online search, it would be great.
No_Such_Reality,
Yes, you have missed the best part: The author is the failed flipper. That is why this is such great schadenfreude.
I actually would defend the use of a realtor here. If you purchase a home without a realtor or from a for sale by owner, you are taking a substantial risk. Realtors do much more than just make commissions. They are supposed to verify that the home is structurally intact and not defficient in any way.
If your roof collapses due to undisclosed water damage and you didn’t have a realtor involved in the transaction, good luck pursuing damages from the seller.
I still think that realtors are by and large “full of hot air” but their core purpose is important to the general public.
I like the first response comment:
“1) I don’t have children but most in my family already own homes, their children will benefit from the wisdom of my generation, and that of their parents, and be able to purchase because of the inheritances they will receive, in large part due to our real estate holdings.”
He sells his flip for a $138,000 loss, but he is telling his family they should hold these properties for their children? Does that make him a liar or just an a$$?
Schiff was the lone voice predicting the demise of housing last year.
His predictions were ridiculed, and he was laughed off during his appreances on Bloomberg and CNBC. Looks like he’s the genius thats laughing now.
I wasn’t referring to the papers that a seller signs when they list a property with a Realtor.
I was talking about the documents that the buyer must sign at the close of escrow. In some cases they are an inch thick.
Between commissions, closing cost, and appraisals, close to a hundred thousand dollars, or 10 percent, can be burdened to the buyer and seller for a million dollar home. That’s a joke, and needs to end.
I was talking about the documents that the buyer must sign at the close of escrow. In some cases they are an inch thick.
Those are all required State forms and are standard. A seller needs to provide them, your realtor isn’t doing any favor if they aren’t having you read them in detail and question any items. Your realtor isn’t going to vet those documents and as soon as you sign them, they are off the hook for anything in them (you are notified) or that the seller failed to disclose (good luck proving it existed before).
For the undisclosed water damage, again, the Realtor isn’t responsible for you and the offer document largely protects them from that. You are responsible for the inspection. The seller is responsible for the disclosure.
They are supposed to verify that the home is structurally intact and not defficient in any way.
Actually realtor’s don’t do that, home inspectors do. I don’t trust home inspectors any way because if they point out a costly problem during escrow, they are black listed from future business. In other words, once an inspector starts slowing down the process, the word gets around very quickly and they are no longer used. They are NOT independent.
Besides, realtor’s are not looking out for anyone other than themselves. They want to close the deal without any hangups, so they can get their commissions.
One of my customers purchased a home in Yorba Linda, and during the move in they noticed a one inch slab crack, about 20 feet long in the rear of the home. The previous seller did an awful job trying to cover it up. They immediately moved out and called a lawyer who sued the errors & omissions insurer who represented the agencies. It was a huge unnecessary mess that should have never happened, and would have been pointed out by a competent, independent home inspctor.
No Such Reality,
I don’t care to debate a buyer or realtor’s responsibilities prior to a purchase. I just believe the entire transaction needs to be more efficient and much less costly.
“They are supposed to verify that the home is structurally intact and not defficient in any way.
If your roof collapses due to undisclosed water damage and you didn’t have a realtor involved in the transaction, good luck pursuing damages from the seller.”
I really thought all this was supposed to be picked up by a competent building inspector whom you’d hire specifically for this purpose… Maybe there are other ‘uses’ of a realtor, but not this, I am afraid.
Amazing. I never knew there could be such a thing as a ‘loss / loss’ situation. Both buyer and seller got screwed.
I think this just goes to show that realtors are really not professional in their own respective industry.
Realtors and Mortgage Brokers are worst than used car salesmen. I put them more along the lines of telemarketers trying to sell you son or daughter credit cards when they turn of age with 35% APRs.
Real estate agents will be as hard to find in about 10 years as a travel agent is now. Remember 10 years ago when every shopping center had a travel agency……..all gone now.
The only value that a real estate agent has(had) was information of the market trends, and a list of homes for sale. As we all know this information is readily available on the internet now. So what does the world look like without a real estate agent:
Homeowner lists thier house on a web site. Potential buyers see it and decide to take a tour. They contact the sellers by email, and set up an appointment. Sellers show the house to prospective buyers. If interested, buyers use forms on internet web site to make an offer. If the offer is accepted, escrow company is engaged to complete the transaction.
I almost feel sorry for the real estate agents…………..
my vote is in his mind he is a legend.
In reality, he is a liar that is perceived as an A$$.
“Almost feel sorry for the real estate agents” Oh my gosh! This statement just about had me busting a gut in laughter.
I believe that there is an anti-trust suit going on right now (I think initiated by the DoJ) involving the NAR as a result of a policy that allowed realtors to keep non-NAR agents from seeing properties listed on MLS (like a selective MLS just for “realtors (TM)”). My guess is that this sort of stuff indicates NAR’s realization that the only way to keep a market for their “product” is by essentially monopolizing info about houses. Hopefully (and probably) they won’t get away with this. That’s one step toward less reliance on realtors and the scenario described above by NanoWest. Maybe I am biased, but IMO, your money is better spent hiring an attorney to do the paperwork at a flat rates (which will be way less than 6%!) and getting someone who actually knows what they are doing and can understand the contracts and negotiate them on your behalf. Hopefully this is where the market is headed.
I’m surprised to hear Schiff calling for such a dramatic price drop. Is there a link?
AFAIK – his argument has been that although housing prices have gone up, their value hasn’t because of inflation. If you price a house in a commodity such as gold, oil, copper, wheat, corn… The overwhelming pattern is that priced in commodities, home values have been dropping the past few years.
And it’ll probably get worse as the Fed lowers interest rates when the recession hits. They should be raising them, but who does the right thing versus the easy thing these days?
On CNBC Schiff made an analogy I really liked. If you have cold, you have to take some medicine. And although the medicine may taste bad, it’ll cure the sickness. IMHO America has a sickness and it’s time for some medicine.
The link you are looking for is embedded in the post. Click on:
Investment watcher predicts O.C. recession
It will take you to the OC Register article in question.
Don’t forget, the ENTIRE world wants to live in O.C.
The man said so.
It must be all those people moving out of New York, London and Paris for the cultural amenities of the OC. They are the ones that will save the housing market… not.
I don’t want to be insulting, but you all DO know that wanted ads listing jobs for mortgage brokers and real estate agents are listed in newspapers under the “sales” section, and not under the “professions” category? And for good reason, as they’re really no different than a shoe salesman.
The real question should be, if everyone wants to live here California, then why are they leaving? Because they ARE leaving in greater numbers than they’re entering.
From http://www.tdn.com/articles/2006/12/12/biz/news04.txt
Another advantage: Washington is one of the top 10 states for what the U.S. Census calls net domestic migration — the number of people who move there from other states.
California recorded a net domestic loss of about 29,000 people last year — the first negative flow since the mid-1990s, according to March statistics from the California Department of Finance.
About 97,000 Californians moved to Washington in 2005, making it the fourth most popular destination for Californians after Texas, Arizona and Nevada. Oregon was fifth, with more than 83,000 ex-Californians, the department reported.
California’s departing homeowners typically use their substantial equity to fund their next real estate investment. Although some Seattle and Portland residents grumble about “Californication,” the trend has helped keep home prices there rising, said Brian Kreick, broker for Lynnwood, Wash.-based Kreick Realty Group.
“I have clients from southern California who can’t believe what they can get up here for the money,” Kreick said. “I showed one guy a house in Redmond that was $830,000 and still needed a new kitchen. He thought it was a great deal.”
I ran across this comment in a pdf by Bruce Norris, called “The California Crash”, available at http://www.thenorrisgroup.com:
“By the way, if by demographics he means continued net migration gains for California, he’s wrong there as well. In a recent article put out by economy.com, they stated California lost 110,000 in domestic migration between April 2003-2004. I was surprised at the large number, and called the author of the articlce to inquire. His source turned out to be tax returns filed with the IRS!”
Non mexican californians are leaving in droves.
Thanks for the link to the great story. No doubt about it, net outflow migration plays a huge part of the housing cycle because it generally reflects how healthy a local economy is.
In the past, most of the people that were leaving Orange County were doing so to find cheaper housing cost. Many of them were looking to cash in on the huge equity gains they made.
However that’s staring to change.
In the future, most of the people that leave Orange County will do so to seek new employment. They are going to be the casualties to this bubble. Many of them will hand the keys over to the mortgage company and simply walk away.
Quail hell?
214 Tall Oak, 755k (11/03/2006) to 700K (01/26/2007) only 3 months
Another one on Tall Oak, 725K (04/20/2006) to 603K (03/06/2007).
Here is a funny one.
Off topic.
2007 Engineering News Record Cost guide for OC.
Drum roll please……
Cost per SF for a 3 bd 1 story home……
$105/sf
Granted that is just a rough estimate of construction costs, but still….
I have seen the same reaction from others as expressed by the realtor in question. They make a bad decision… and then they must blame someone else. Denial… not just a park in Alaska (Denali).
Shows how much residual value is in the land. You think the Irvine Company is making any money when they sell houses for $500+/SF?
I just saw an interesting drop on Zip: 3131 Michelson #908 (in the Marquee Towers). Asking price $859,000. Last sale 9/6/06 for $1.025M!!! Ouch. That’s over a 16% decline.
If cut in half, still too expensive.
melissa, how do you get the last sale info?
On Zip, you just click “estimated value” at the top once you are looking at the property. It is through Zillow. Sometimes they will have information about the last sale.