Should have been different but

It wasn’t different, was

Same old story, dear john, and so long

Should have fit like a glove

Should have fit like a ring

Like a diamond ring

A token of true love

Should have all worked out

But it didn’t

There’s Your Trouble — Dixie Chicks

Link to Music Video

The rally was supposed to be different this time, wasn’t it? People say it every time, but it never is. Today’s property was purchased during the peak of the frenzy to buy real estate. It should have been a ticket to riches; it should have all worked out, but it didn’t…

Asking Price: $649,000

Income Requirement: $162,250

Downpayment Needed: $129,800

Purchase Price: $685,000

Purchase Date: 6/22/2005

Address: 73 Chula Vista, Irvine, CA 92602

1st Loan $547,920

2nd Mtg. $136,980

Downpayment $100

Beds: 3

Baths: 3

Sq. Ft.: 1,820

$/Sq. Ft.: $357

Lot Size: –

Type: Condominium

Style: Other

Year Built: 2002

Stories: Two Levels

View(s): Has View

Area: Northpark

County: Orange

MLS#: M107208

Status: Active

On Redfin: 91 days

Unsold in 90+ days

From Redfin, “Great Opportunity! Highly Upgraded WIth A View!!!! Short Sale!!! Must Go Fast!!! Priced Below Market Value For Quick Sale!!! Present All Offers!!!”

Enough with the exclamation points. Do realtors realize how incredibly stupid they look when they write like that? My guess is no!!!!!!!!!!!!!!!!!!!

What Is With The Title Case?

Must be written for the ADHD buyer. Each sentence has between 2 and 7 words.

That description is painful to my eyes. If realtors are trying to stand out in the crowd with their descriptions, they are succeeding. They stand out as being terrible.

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If this seller gets their asking price — which seems unlikely after more than 90 days on the market — they stand to lose $74,940 after a 6% commission. Of course, the seller is only losing $100, and the bank will lose $74,840. Yet another 100% financing deal gone bad.

I know I am flagellating the equine which has already perished, but 100% financing is hastening the decline of prices. These borrowers have no holding power. These are gamblers who saw an opportunity to make huge sums with no risk, and they acted on it. How many of these properties does it take to cause prices to plummet? How many more of these time bombs are awaiting detonation? If there is any one factor which has the potential to greatly increase the rate of price decent, it is 100% financing deals.

Works for me. I would be happy to buy sooner rather than later…

Does anybody really know what time it is? Sometimes I wonder if I have too much time on my hands.

Another week has passed at the Irvine Housing Blog. Come join us next week as we continue to chronicle ‘the seventh circle of real estate hell.’ Have a great weekend.

🙂

Now here you go again

You say you want your freedom

Well who am I to keep you down

Its only right that you should

Play the way you feel it

But listen carefully to the sound

Of your loneliness

Like a heartbeat.. drives you mad

In the stillness of remembering what you had

And what you lost…

And what you had…

And what you lost

Dreams — Fleetwood Mac

Link to Music Video

Doesn’t that song capture the frustration of missing the market peak, and now you can’t get out?

Today’s post, in its entirety, came to me as an email from an anonymous fan. Enjoy.

Asking Price: $600,000

Purchase Price: $612,500

Purchase Date: 11/19/2004

Address: 47 Passage, Irvine, CA 92603

1st Loan $359,400

Downpayment $253,100

Beds: 3

Baths: 3

Sq. Ft.: 1,582

$/Sq. Ft.: $379

Year Built: 2004

Stories: 2

Type: Condominium

View: City Lights, Mountain, Panoramic, Park or Green Belt, Trees/Woods, Has View

County: Orange

Neighborhood: Quail Hill

MLS#: S497537

Status: Active

On Redfin: 73 days

From Redfin, “Designer touches and upgrades compliment this beautiful home in the heart of Quail Hill. Travertine flooring, granite counters, stainless steel appliances, plantation shutters, designer paint, and surround sound make this home a delight. This perfect Quail Hill location allows walking distance to the association pool, fitness center, tot lot, restaurants and shopping. Quail Hill is located just minutes from the entertainment center called the Irvine Spectrum and the beautiful Laguna Beach.”

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If today’s seller gets their asking price, they stand to lose $48,500 (after 6% commission) after three years of ownership. They have the equity to absorb the blow, but it must still be quite disheartening. What is unique about this home is that it was purchased from William Lyon Homes (the builder) brand new. There has been no price-inflating flipping on this property. This one underscores how bad the bubble was: Purchased directly from the builder in 2004 and they are hoping to get out with “just” a $50,000 cash equity loss. But wait! Don’t home prices in Orange County ALWAYS go up?

You’re in denial, you never will believe it’s you

Denial, you always hide behind the truth

You’ll never believe it, you never believe it’s you

You’ll never believe it, you never believe it

Secrets told you, dreamland holds you, secrets told you

You wouldn’t believe it, you couldn’t conceive it

Secrets told you…

Denial — Ozzy Osbourne

Link to Paranoid Video

This is a difficult time to sell a home. With some in denial and some in fear, sellers are unsure how to price their homes, so there is variety in pricing among similar products. However, there are some disparities that are so large that one has to ask, “Did you even look at the neighborhood comps?”

First our rollback…

Asking Price: $499,999

Income Requirement: $124,999

Downpayment Needed: $99,999

Purchase Price: $565,000

Purchase Date: 9/27/2005

Address: 5294 Plum Tree, Irvine, CA 92612

1st Loan $452,000

2nd Mtg. $113,000

Downpayment $0

Beds: 2

Baths: 2

Sq. Ft.: 1,224

$/Sq. Ft.: $408

Lot Size: 2,988 sq. ft.

Type: Single Family Residence

Style: Ranch

Year Built: 1973

Stories: One Level

Area: University Park

County: Orange

MLS#: S505717

Status: Active

On Redfin: 13 days

From Redfin, “Fantastic opportunity to own a distinctive home with a modern feel and a abundance of amenities. A spiraling staircase leads to a enclosed loft that could be used as a office or an extra bedroom. Contemporary lighting throughout with vaulted ceiling and skylight in the living room. Exceptional association facilities with 2 pools, clubhouse, greenbelts, spas, and BBQ. Great location with easy access to freeways and shopping.”

This seller forgot to ask for the 99 and nine tenths of a cent. I guess this does put them under half a million…

Did you see the red spiral staircase? The only thing this apartment is missing is the stripper’s pole.

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This owner is serious about selling their property. If they get their asking price, they stand to lose $95,000 after a 6% commission — well, actually the bank stands to lose that much.

Isn’t 100% financing great? It is a free call option. There is no risk of loss to the buyer, and they get all the upside.

Asking Price: $678,000

Income Requirement: $169,500

Downpayment Needed: $135,600

Purchase Price: $582,000

Purchase Date: 5/28/2004

Address: 5341 Plum Tree, Irvine, CA 92612

1st Loan $465,600

2nd Mtg. $87,300

Downpayment $29,100

Beds: 3

Baths: 2

Sq. Ft.: 1,532

$/Sq. Ft.: $443

Lot Size: 6,600 sq. ft.

Type: Single Family Residence

Style: Contemporary, Ranch

Year Built: 1975

Stories: One Level

View(s): Hills

Area: University Park

County: Orange

MLS#: S504269

Status: Active

On Redfin: 25 days

From Redfin, “One of a kind corner location, extra long driveway and great curb appeal. Large yard with extra privacy. Remodeled kitchen, new flooring, and much more. Hard to find SINGLE level home in a move in condition. Very close to shops, schools, parks, Freeway and UCI.”

One of a kind corner location? You mean one of a couple dozen similar corner locations? Plus, it is next to the collector street, so it is noisier.

This entire neighborhood is full of single story homes. They are hard to miss, not hard to find.

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This seller is not serious about selling their house. It is not the best comparable to the first property as it is 300SF larger and it has one more bedroom (I suspect they are counting the loft.) However, it is the same street, the same style, the same age, etc., and the purchase prices were almost the same. Basically, this seller is asking you to pay $179,000 more for the third bedroom. I believe 3 bedrooms should carry a premium over 2/2s, but not that much.

You tell me, would you pay $179K in premium for a bedroom?

Big money goes around the world

Big money take a cruise

Big money leave a mighty wake

Big money leave a bruise

Big money make a million dreams

Big money spin big deals

Big money make a mighty head

Big money spin big wheels

Sometimes building ivory towers

Sometimes knocking castles down

Sometimes building you a stairway

Big Money — Rush

Link to Music Video

The high end is immune, right?

There are not many properties in Shady Canyon, and even fewer on which I can find the purchase information; however, there are three rollbacks sighted so far. Will there be more on the way?

The first of this is Mark McQuire’s old place. This property is the market leader on the way to the bottom. The price was just reduced again. The flipper is looking at a loss of nearly a million dollars after commissions. That property is clearly leading in our race to the bottom, but the two properties we have today are working to catch up.

Asking Price: $3,998,000

Income Requirement: $999,500

Downpayment Needed: $799,600

Purchase Price: $4,030,000

Purchase Date: 1/6/2006

Address: 25 Golden Eagle, Irvine, CA 92603

Beds: 4

Baths: 5

Sq. Ft.: –

Lot Size: 0.59 acres

Type: Single Family Residence

Style: Mediterranean

Year Built: 2003

Stories: One Level

View(s): Hills

Area: Turtle Rock

County: Orange

MLS#: S498428

Status: Active

On Redfin: 63 days

From Redfin, “Single Story Custom Home in Shady Canyon. Great, private cul-de-sac location with only one adjoining neighbor. Unobstructed views of pastoral canyon and hills. Tuscan style home beautifully finished with Richard Marshall wood and stone. Spacious grounds with custom built fireplace, BBQ, spa and Wolf appliances throughout. Ideal for family with small child or retired couple. Blueprint and specs for the house are available. Opportunity to expand this single level house to 5900 sq ft.”

What is Richard Marshall wood and stone? I guess I am I not cultured enough to know these things. I Googled them. I guess I should be impressed?

Are Wolf appliances better than Viking or Sub-Zero?

Ideal for family with small child or retired couple? I am sure there are many families with small children who want them running around in a museum with hard floors, not to mention the large numbers of families with small children who can afford this place. I don’t know about you, but I will not want a 5,000+ SF McMansion when I am retired.

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If this seller gets their asking price and pays a 6% commission, they stand to lose $271,880. There is no mortgage recorded on the property (at least in my database,) so this flipper can absorb the loss.

Asking Price: $4,495,000

Income Requirement: $1,123,750

Downpayment Needed: $899,000

Purchase Price: $4,550,000

Purchase Date: 8/8/2005

Previous Purchase Price: $3,553,500

Previous Purchase Date: 12/15/2004

Address: 50 Vernal Spring, Irvine, CA 92603

1st Loan $2,985,000

2nd Mtg. $200,000

Downpayment $1,365,000

Beds: 4

Baths: 4.5

Sq. Ft.: 5,000

$/Sq. Ft.: $899

Lot Size: 0.57 acres

Type: Single Family Residence

Style: Spanish

Year Built: 2005

Stories: One Level

View(s): Mountain

Area: Turtle Rock

County: Orange

MLS#: U7001638

Status: Active

On Redfin: 159 days

Unsold in 90+ days

From Redfin, “Model perfect single level Masters located in the exclusive golf community of Shady Canyon. This single level home offers three bedrooms plus bonus room and a rare four car garage at the main house and a 4th bedroom and office which is attached but functions as a separate casita! The stunning exterior landscape includes a long gated driveway, pool, spa and covered cabana with fireplace all with fantastic views!”

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What I find interesting about this property is how much the previous flipper made: a hair under $1,000,000 in less than 9 months. No wonder our WTF winner from $1,000 Grand thought this was possible. Well, it looks like the supply of greater fools has run out, and this owner is now the bagholder. If they get their asking price, they stand to lose $324,700 after a 6% commission.

These losses are staggering. I don’t care how rich you are, when you are losing a quarter of a million dollars or more, that is Big Money.

Time keeps on slippin’ slippin’, slippin’, into the future… Or is that Time keeps slip sliding away… I hope you aren’t Ticking away the moments that make up a dull day…

Another week has passed at the Irvine Housing Blog. Come join us next week as we continue to chronicle ‘the seventh circle of real estate hell.’ Have a great weekend.

🙂

Here is a little song I wrote

You might want to sing it note for note

Don’t worry be happy

In every life we have some trouble

When you worry you make it double

Don’t worry, be happy……

Ain’t got no place to lay your head

Somebody came and took your bed

Don’t worry, be happy

The land lord say your rent is late

He may have to litigate

Don’t worry, be happy

Look at me I am happy

Don’t worry, be happy

Don’t Worry, Be Happy — Bob Marley / Bobby McFerrin

Link to Music Video

Whether you are a renter or a homeowner, we all have our problems. Don’t worry, be happy.

Asking Price: $498,900

Income Requirement: $124,725

Downpayment Needed: $99,780

Purchase Price: $509,000

Purchase Date: 8/18/2004

Address: 20 Taquitz #38, Irvine, CA 92602

Beds: 2

Baths: 2

Sq. Ft.: 1,400

$/Sq. Ft.: $356

Lot Size: –

Type: Condominium

Style: Contemporary

Year Built: 2002

Stories: Two Levels

View(s): Mountain

Area: Northpark

County: Orange

MLS#: S501493

Status: Active

On Redfin: 34 days

From Redfin, “MISSION IMPOSSIBLE TO SELL THIS FABULOUS NEWER CONDO IN 5 DAYS! Premier Location. Very Inviting Floor Plan w/ Formal Dining Area, Gourmet Kitchen Open to Entertainers Great Room. Decorator Paint, Lighting, Designer Carpet Throughout!Private Master Retreat w/ Walk-in Closet. Close to Freeways, Irvine Marketplace, New Schools. .Voted Best Neighborhood in Irvine. .. .Fabulous Value!”

THE CAPS LOCK IS BACK, AND MISSION IMPOSSIBLE IS RIGHT.

So are the exclamation points! Yippee!!!

Why the “w/”? A “w/” saves 2 characters over typing “with.”

A gourmet kitchen, of course.

You think we would have embarrassed enough of these realtors to quit doing this.

BTW, I really like that dining room table. Do you think they would throw it in to close the deal? (They can keep that awful painting.) I have never seen pill bottles used as a centerpiece before. Have you? Great staging. That should help is sell in 5 days… Not.

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Another day, another 2004 rollback. Is this making you happy?

If this seller gets their asking price, they stand to lose $40,034 assuming a 6% commission. I have to imagine when this property sells, they will be able to quit worrying and be happy…

On a personal note, I imagine all of you can look back on different periods in your life when you were relatively free of worries and very happy. I am enjoying one of those periods right now. Life is good. My family life is great, and I look forward to coming home each evening. I have no debts and any of the worries that go along with it. I enjoy my work and my other productive hobbies. I have a creative outlet on this blog and the sense of community and social contact that comes with it. What more can anyone ask of life?

And so concludes another week at the Irvine Housing Blog. Come join us next week as we continue to chronicle ‘the seventh circle of real estate hell.’

Have a great weekend. 🙂