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Financing in a Declining Market
2008-05-24 00:00:00
How Many More Years -- Howlin' Wolf Check out Howlin' Wolf's description of the blues (it's at the beginning.) It cannot be denied (rationally) that we are currently in a declining market. In a declining market, banks look at appraisals and comps differently than they do in a rising market. When prices are rising the lender will look at the highest comparable sales to determine total value upon which they will base their loan. When prices are declining like they are now, the lender will look at the lowest comparable sales or asking prices to establish the value upon which they will base their loan. This is a major headache for sellers. Remember the post I did on the big drop in Turtle Rock recently How to Lose $500,000 in a Year? Once that seller put that house on the market asking $800,000, he ruined the comps for every similar home within a mile of his location. Let's say you are the neighbor at 6022 Sierra Siena Road who is asking $950,000 for a similar property. If you find...
More About: Market , Financing

WOT 5-24-2008
2008-05-24 00:00:00
Against the Wind -- Bob Seger On Friday, May 23, 2008 , I went to the Ron Paul rally in San Diego. My main purpose in going was to meet the man himself and speak with his senior staff and see if I could get them interested in my manuscript. If I could get Ron Paul to co-author or write a forward to my book, it would sell more copies. He mentions the collapse of the housing bubble in his stump speeches as part of the problems with a lack of fiscal discipline and the use of a fiat currency through the Federal Reserve. I bought a copy of his book, The Revolution: A Manifesto, but I didn't wait through the two-hour line to get it signed. It was a cool, blustery day in San Diego. It rained for the hour before the rally, but it did not deter about 500 people from attending and listening to his hour-long stump speech. What surprised me was the number of young people there. I did not expect his message to resonate with young people. He isn't offering any handouts. Maybe fiscal responsibil...

20% Lost In The Woods
2008-05-22 00:00:00
House of Fire -- Alice Cooper The Village of Woodbridge is a desirable Irvine Village. It is an interesting study in the collapse of the market. Woodbridge is laid out with a large loop road framed with large duplexes giving the impression of driving through a series of manor homes. Behind this pleasant veneer is a great deal of high density housing. Outside the loop has the highest concentration of attached product while inside the loop has many large, single family detached homes. As the market decline has progressed, the low end has been deteriorating more quickly than the high end, and this has created a great disparity between the prices on the outside of the loop as compared to prices on the inside of the loop. This large disparity cannot persist forever. Either prices outside the loop will rise (which isn't very likely) or prices inside the loop will fall. People who might want to live inside the loop will find the price differential so great, that many will purchase outsid...
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A Shooting Star
2008-05-21 00:00:00
  Shooting Star -- Bad Company Sometimes when you see an egregious case of HELOC abuse, you have to ask, "On what did you spend the money?" On many of the properties we profile, the owners at least put some of the money into the property and outfitted it with pergraniteel. Apologists offer the possibility of health issues or investment, but it seem pretty obvious that most of these people just blew the money. It is living like a shooting star, you burn brightly, but it can't go on forever, and when your equity has burned up, you just fade away. Today's featured property took over $400,000 out of their home, and it is being offered for sale as a fixer upper. So I ask again, "On what did you spend the money?       Asking Price: $499,000 Income Requirement: $124,750 Downpayment Needed: $99,800 Monthly Equity Burn: $4,158 Purchase Price: $210,000 Purchase Date: 7/11/1997  Address: 5 Star Thistle, Irvine, CA 92604 Beds: 3 Baths: 2 Sq. Ft.: 1,600 ...

Walk Away
2008-05-21 00:00:00
I'll Walk Away -- James Hunter Calculated Risk recently had a post Freddie Mac on Walking Away. During a recent conference call, the following exchange occurred: Analysts: What do you see? Is it in line with historical default rates as they get underwater or does it ...Freddie Mac: No, it is different. The rate of increase in defaults in that part of the population is much steeper. For those borrowers that bought a home based on rapid house price appreciation as a way to grow wealth, if they find themselves quickly underwater - you know we're even seeing it when we try to modify and renegotiate those loans - they are walking away. They're finding it not constructive. In short, when people go underwater, they are walking away from the property. We now have some statistical proof this phenomenon is occurring. Statistics are great for discussing macro trends and the like, but we take a microeconomic approach here at the Irvine Housing Blog: we show you the properties the owners are ...

We Will Spend You
2008-05-21 00:00:00
We Will Rock You -- Queen As far as HELOC abusers go, today's sellers are just like boys playing in the street. They made a big noise, tried to take on the world, and ended up a big disgrace. The market put them back in their place. HELOC abuse crosses all socioeconomic lines. We have profiled high end, middle class, and now small-time condo owners freebasing the kool aid and spending themselves out of house and home. Everyone has ambitions to better themselves and their station in life. However, some people hatch plans to accomplish this goal that are not completely successful. Sometimes it is just fate or bad luck that causes some people to win or lose in life. Sometimes it is bad execution, and sometimes it is just bad planning. HELOC abuse would fall in the "bad planning" category. How was this supposed to work? Even if the kool aid dreams were true and you could perpetually borrow against your house as it increased in value. What is the end game? Is there no limit to the amoun...

WOT 5-17-2008
2008-05-18 00:00:00
Joni Mitchell - My Secret Place This is an open thread. There is no specific topic. The post which follows is merely intended to stimulate conversation. You are forewarned that the images are a bit risqué. 107 Stepping Stone Irvine, CA 92603 Price: $625,000 Beds: 3 Baths: 3 Sq. Ft.: 1,750 $/Sq. Ft.: $357 Lot Size: - Property Type: Condominium Style: Traditional Year Built: 2004 Stories: 2 Levels View: Hills, Park or Green Belt, Has View Area: Quail Hill County: Orange MLS#: S532361 Source: SoCalMLS Status: Active On Redfin: 1 day New Listing (24 hours) Stunning Home with Premium Location overlooking Greenbelt w/Soaring 20 foot Ceilings and Bedroom plus Full Bath on First Level! This home includes 3 Bedrooms + Office + 'Secret Room' as well as a 2+ car garage that can park 3 cars! Relax on the Large Covered Front Porch or the Even Larger Rear Patio on the Second Level with a View of the Hills! Elegantly Upgraded with...
More About: 2008

$186 Per-Square-Foot in Irvine
2008-05-16 00:00:00
This Ole House -- Stuart Hamblen Today's property sets a new low standard in Irvine . This is the first property I have seen below $200/SF. Granted, it is a fixer-upper, but those properties will always be the low-price leader. I really did not think we would see price levels this low in 2008. This is the kind of property that will interest me in a couple of years. If you find a house in need of major cosmetic surgery (but nothing structural), you can buy it with FHA financing and take what would have been your 20% downpayment and renovate the property to your taste. After the renovation, you can get the property reappraised, and hopefully, you will have added enough value to be able to stop paying private mortgage insurance. At that point, you are in a house finished the way you want it for equal to or less than a "normal" property in the community. Right now, it would just be a money pit, but when we are closer to the bottom... Asking Price: $499,000 Income Requirement: $124,750...
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The Price of Being Wrong
2008-05-15 00:00:00
Nantucket Sleighride -- Mountain Don't cry little Robin-Marie 'cause you know you're losing your home... It always makes me sad when I see these foreclosures and short sales with pictures from the children's rooms. The disruption to family life caused by the Great Housing Bubble has only one precedent in the United States: The Great Depression. Hopefully, this family will be able to move into a comfortable rental rather than a tent city or Hooverville, but they will have to move. Basically, anyone who bought late in the bubble rally is underwater, and these homedebtors will fall into one of two categories: 1. Those who are forced from their homes (or choose to leave), and 2. Those who are trapped in their homes. It is difficult to determine who is worse off. Those who are forced from their homes will have ruined credit and difficulty in obtaining a home in the future. Those who are trapped in their homes have a complete lack of mobility to take promotions and crushing debt servi...
More About: Price , Wrong

Double Down
2008-05-15 00:00:00
Two as One -- First to Last   When your playing blackjack and the dealer has given you great cards, you have the option of taking one more card and doubling your initial bet. When the odds are in your favor, it is a smart play. Since the real estate market was a "sure thing," and prices always go up, it makes sense that people would have doubled down in the real estate market. The more property you owned, the more money you made. Well, at least that was the idea after a few kool aids. If you made the mistake of drinking the kool aid in the summer of 2006 and buying two low-end properties right at the peak, your double-down bet was a short cut from first to last. Asking Price: $359,000 Income Requirement: $89,750 Downpayment Needed: $71,800 Monthly Equity Burn: $2,991 Purchase Price: $500,000 Purchase Date: 8/30/2006 Address: 15 Bellevue #1, Irvine, CA 92602 Beds: 2 Baths: 2 Sq. Ft.: 1,280 $/Sq. Ft.: $280 Lot Size: - Property Type: Condominium Style: Other ...
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Equity Inferno
2008-05-14 00:00:00
  Disco Inferno -- The Trammps The twin towers known as the Marquee at Park Place is a lasting symbol of everything wrong with the housing bubble (Two mass fires, yes! One hundred stories high.) These urban units were 30 years ahead of their time, and perhaps in 30 years, the buyers in these towers will be able to sell their units for what they paid for them. The obscenity of the prices there will be laid bare in today's post. I will run through the cost of ownership numbers as compared to the cost of a rental and demonstrate what these units are really worth to an owner occupant. I must confess, I have been holding off profiling these towers. There is limited information available on these units in the data services I use, so my picture is somewhat incomplete; however, the main reason I have waited to post on these units is because in the very first post done on this unit back in early 2007, I lost it in the comments section. It is pretty rare that I lose my cool, but I did t...
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Middle Class HELOC Abuse
2008-05-14 00:00:00
Country House -- Blur The posts we do on over-the-top HELOC abuse are gripping because the dollar amounts are so large. However, focusing only on the extreme cases gives the impression of HELOC abuse is an unusual behavior of a few spectacular cases. HELOC abuse is not unusual or uncommon: it is widespread, and it is going to pummel the middle class. What possesses people to borrow and spend so much money that they lose their homes? The simple answer is that they didn't think they would lose their homes. Most believed their house values would go up forever and their house would pay off all their debts. All they had to do was continually refinance with very low interest rates and service the debt will a little of their work income. It never occurred to them that they might actually be required to pay down this debt with their wage income. But even if people drank the kool aid and believed this pathological nonsense, why did they take the money out and spend it? Why not let it accumu...
More About: Abuse , Middle , Class , Middle Class , Middle-Class

WOT 5-10-2008
2008-05-10 00:00:00
In Da House -- Crazy Frog Part of our formula for success at the Irvine Housing Blog is to be entertaining. Reading about the housing market can be dry and boring, or it can be lively and entertaining. We always try to make it fun, funny and entertaining.   My wife cannot stop laughing at the crazy frog... We have done many kinds of posts at the IHB: Analysis Flips Fraud WTF prices Big losses HELOC abuse We try to inject fun and humor in our posts by adding music, making fun of bad descriptions, and creating funny graphics. If possible we try to weave all these together in a manner that informs as well as entertains. So tell us what you like about the IHB and what you would like to see more of. If you have ideas for other posts you would like to see, please share them here.
More About: 2008

Woods WTF
2008-05-09 00:00:00
Norwegian Wood -- The Beatles The WTF prices of Great Housing Bubble are an obvious illustration of the greater fool theory. Usually, the detachment from fundamental values is not so great. Prices that look foolish in retrospect do not always look foolish in the moment. Irvine house prices from 2004 onward looked foolish even as people were paying them. The absurdity of the situation becomes even more apparent when you see the asking prices of those who purchased at the peak of the Ponzi scheme as they look to find the next greater fool. Today's property is one dramatic illustration. These buyers grossly overpaid right at the peak in summer of 2006. Rather than admit defeat, they are asking for 50% appreciation from the peak with an asking price that is so ridiculous you just have to ask, "WTF?" Asking Price: $2,975,000 Income Requirement: $743,750 Downpayment Needed: $595,000 Equity Burn: $24,791 Purchase Price:  $1,882,500 Purchase Date: 7/13/2006 Address: 28 Woods Tra...

FSBO - For Sale By Optimist
2008-05-09 00:00:00
Don't Dream It's Over -- Crowded House You don't need a realtor to sell a house. A title company can take care of most paperwork, and an attorney can draft the rest for a minimal fee. Realtors are supposed to be experts at sales and marketing, but if you possess these skills, there is no need to pay someone 6% to draft a poorly written property description and sit in your house on the weekends. You can do it yourself and save a great deal of money. There are advantages of to selling on your own. You don't have to base your asking price on comparable properties. You can make up a number and put the property for sale for whatever price you want. There is no neutral market observer to tell you your price might be too high. Who needs to pay attention to comps? Also, you don't have to worry about the time and money your realtor is going to spend marketing your home because you will pay all those expenses yourself. Today's featured property has been featured on IHB before. The prev...
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The Ultimate Post
2008-05-07 00:00:00
The Ultimate Sin -- Ozzy Osbourne What would be the ultimate post we could do at the Irvine Housing Blog? We have been getting a great deal of attention lately for our posts on HELOC abuse, and our post on Monday showing the $500,000 loss was also very well received. This is only one way you can top what we have done to date: combine the two. Today's featured property is the new pinnacle. We are raising the bar. Today, we have a property where the owner took out over $1,000,000 in a series of small refinances and general HELOC abuse, and now the lender who has taken back the property is looking at a $650,000 loss. It does make me wonder... How can I get a lender to give me $1,000,000 that I don't have to pay back? Asking Price: $895,000 Income Requirement: $223,750 Downpayment Needed: $179,000 Total Property Debt: $1,490,000 Lender Purchase Price: $909,195 Lender Purchase Date: 3/19/2008 FB Purchase Price: $520,000 FB Purchase Date: 4/6/2000 Address: 3 Green Hollow, Irvine, CA ...
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35% Off the Peak
2008-05-07 00:00:00
Comfortably Numb -- Pink Floyd Have you become numb to the losses we see here at the Irvine Housing Blog? The dollar amounts we are talking about are almost too large to comprehend. Monday's property is going to be an over $500,000 loss. Today's is $140,000, and it is a tiny condo. It can be hard to relate to the size of these numbers, and even harder to relate when it is a big corporation losing most of the money. These losses will continue to mount. If the lenders had to do a mark-to-market on all their loans based on the value of the underlying collateral, our entire financial system might collapse. It might anyway. I guess it is a good thing that we have runaway consumer price inflation, or the monetary deflation of all these bank losses would be a real problem. Asking Price: $232,000 Income Requirement: $58,000 Downpayment Needed: $46,400 Monthly Equity Burn: $1,933 Purchase Price:  $359,000 Purchase Date: 10/31/2006 Address: 47 Lakepines, Irvine, CA 92620 Beds:...
More About: Peak , The Peak

How to Lose $500,000 in a Year
2008-05-05 00:00:00
Ship of Fools -- Robert Plant Today we are breaking with our tradition of profiling a $250,000 loss, and we are going big time -- $500,000 lost on one property. This flip is sunk. These flippers are so far underwater, they are not on a ship of fools; they are on a submarine. Asking Price: $799,000 Income Requirement: $199,750 Downpayment Needed: $159,800 Monthly Equity Burn: $6,658 Purchase Price:  $1,299,000 Purchase Date: 6/8/2007 Address: 20 Silver Cres, Irvine, CA 92603 Beds: 4 Baths: 2 Sq. Ft.: 2,128 $/Sq. Ft.: $376 Lot Size: 6,741 Sq. Ft. Property Type: Single Family Residence Style: Contemporary Year Built: 1977 Stories: 1 Level View: Hills Area: Turtle Rock County: Orange MLS#: S529152 Source: SoCalMLS Status: Active On Redfin: 17 days Fixer-upper BRING YOUR CONTRACTOR....This home has great potential. Lowest priced detached home in Turtlerock. Endless possibilities with this spacious single level ho...

Silent Spring
2008-05-03 00:00:00
Silent Scream -- Slayer It doesn't look like we are going to have a bear rally this spring. The rate of price decline is accelerating, credit is still tightening, foreclosures are still increasing, job losses are mounting, mortgage interest rates are rising, inflation is rising, the economy is sputtering, and sales are still anemic. Did I forget anything? Rachel Carson wrote Silent Spring in 1962 about the death of eagles caused by DDT. Who will write about our silent spring? Oh yeah, I did. Asking Price: $670,000 Income Requirement: $167,500 Downpayment Needed: $134,000 Monthly Equity Burn: $7,166 Purchase Price:  $860,000 (via Sitex) Purchase Date: 5/19/2006 Address: 36 New Hampshire, Irvine, CA 92606 Beds: 4 Baths: 3 Sq. Ft.: 2,270 $/Sq. Ft.: $295 Lot Size: 3,500 Sq. Ft. Property Type: Single Family Residence Style: Colonial Year Built: 2000 Stories: 2 Levels Area: Walnut County: Orange MLS#: P626711 Source: SoCalMLS S...
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WOT 5-3-2008
2008-05-03 00:00:00
Fix You -- Coldplay Everyone either has or will be impacted by the housing bubble. It will be one of the defining events of our lifetimes. It changed lives. Like many others who either could not or would not buy, I had to rent during the housing bubble. So tell us, how did the housing bubble affect you? . When you try your best but you don't succeedWhen you get what you want but not what you needWhen you feel so tired but you can't sleepStuck in reverse.And the tears come streaming down your faceWhen you lose something you can't replaceWhen you love someone but it goes to wasteCould it be worse?Lights will guide you homeAnd ignite your bonesAnd I will try to fix youAnd high up above or down belowWhen you're too in love to let it goBut if you never try you'll never know"Just what your worth"Lights will guide you homeAnd ignite your bonesAnd I will try to fix youTears stream, down on your faceWhen you lose something you cannot replaceTears stream down your face and I...Tears st...
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Short
2008-05-01 00:00:00
Short People -- Randy Newman Short sellers got no reason to hope. They got little houses, little pets, they go round borrowing great big debts. They got little kitchens, little stoves, granite counters; they are selling in droves. Don't want no short sales, don't want no short sales round here. Today's featured property is a typical 100% financing deal gone bad. There are two types of distressed properties that have caused the 20%+ declines we have seen in the last year: 100% financing deals and HELOC abusers. We have profiled many of each type. They have set the stage for the next wave of foreclosures when all the ARMs begin to explode. We haven't begun to see the fallout from that problem yet. Asking Price: $780,000 Income Requirement: $195,000 Downpayment Needed: $156,000 Monthly Equity Burn: $6,500 Purchase Price: $960,000 Purchase Date: 5/19/2006 Address: 26 Midsummer #1, Irvine, CA 92620 Beds: 4 Baths: 4 Sq. Ft.: 2,386 $/Sq. Ft.: $327 Lot Size: - Propert...
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Craving
2008-04-30 21:30:00
Silently Craving -- Michael Kiske The Second Noble Truth of the Buddha is that all suffering is caused by craving. People who took out HELOCs to fuel consumer spending gave in to craving, and they are about to endure a period of extreme suffering in their lives. People crave for just about everything they believe money can buy: cars, boats, vacations, status, lovers, self-esteem, and many other things or states of mind. HELOCs enabled people to obtain things that would have been denied to them under ordinary circumstances. When people obtain objects of their desire, it leads to a temporary state of satiation followed by an even more intense wanting. It is like drinking salt water: you think it helps, but drinking it makes you even more dehydrated and causes you to crave water even more. Those that drank the kool aid of the Great Housing Bubble took out HELOCS and tried to satisfy the craving beast inside. It didn't work. What is worse for them is that they are now accustomed to fee...

Cheap?
2008-04-29 21:30:00
Cheap is relative. Compared to pricing at the peak, the prices of houses in Irvine right now are cheap. Of course, they will get cheaper, but today's property caught my attention because I did not get an overwhelming feeling of revulsion at the high price. That is real progress. I am not sure what attracted me to this property. Perhaps it is like ZZ Top's Cheap Sunglasses. We are the Irvine Housing Blog, and I rarely profile properties outside of Irvine, but today's property is in the Irvine school district, and although it is in Tustin, it is certainly Irvine adjacent.  Asking Price: $507,900 Income Requirement: $126,975 Downpayment Needed: $101,580 Lender Purchase Price: $503,477 Lender Purchase Date: 1/28/2008 FB Purchase Price: $598,000 FB Purchase Date: 9/2/2005 Address: 362 Flyers Lane, Tustin, CA 92782 Beds: 3 Baths: 4 Sq. Ft.: 1,938 $/Sq. Ft.: $262 Lot Size: - Type: Condominium Style: Contemporary Year Built: 2005 Stories: Three or More Levels ...
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Give Up
2008-04-28 21:30:00
Tear the Roof Off The Sucker (Give Up The Funk) -- Parliament Tear the roof off? Remember when Jim Cramer said we should plow under the Inland Empire? That might be a bit extreme, but these lazy houses need to be punished somehow, don't they? Houses used to provide a steady supplemental income, and now they don't. Think about all the people out there who became accustomed to the free money their houses were generating. If I were one of them, I would be pretty angry. Today's featured property is another in our endless series on HELOC abuse. For any of you that thought this was not common, I hope all these posts are opening your eyes to the reality of the situation. HELOC abuse is everywhere, and these people are watching their supplemental income disappear which in turn is taking down our local economy. Are these cases the exception rather than the rule? It really doesn't matter, does it? There are enough of these properties to materially impact the market. These are properties t...
More About: Give up

WOT 4-26-2008
2008-04-27 00:00:00
Free Money -- Patti Smith   Every night before I go to sleepFind a ticket, win a lottery,Scoop the pearls up from the seaCash them in and buy you all the things you need.Every night before I rest my headSee those dollar bills go swirling 'round my bed.I know they're stolen, but I don't feel bad.I take that money, buy you things you never had.Oh, baby, it would mean so much to me,Oh, baby, to buy you all the things you need for free.I'll buy you a jet plane, baby,Get you on a higher plane to a jet streamAnd take you through the stratosphereAnd check out the planets there and then take you downDeep where it's hot, hot in Arabia, babia, then cool, cold fields of snowAnd we'll roll, dream, roll, dream, roll, roll, dream, dream.When we dream it, when we dream it, when we dream it,We'll dream it, dream it for free, free money,Free money, free money, free money, free money, free money, free money.Every night before I go to sleepFind a ticket, win a lottery.Every night before I ...
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Tip
2008-04-25 00:00:00
Tiptoe Through The Tulips -- Tim Tiny Isn't that the most annoying song you have ever heard? Can you fathom a reason why someone would write and record it? In the same way, can you imagine why someone would buy this old condo backing on the 5 for $699,000? Some things you look back on and go, WTF? Actually, this does illustrate the mindset of the bubble rather well. Any property is a good property when prices are going up. Quality doesn't matter because the property's desirability comes from increasing prices, not from the characteristics of the property itself. This guy bought the tip; he purchased on the high tick of the market action. There was nowhere to go but down. Asking Price: $263,000 Income Requirement: $65,750 Downpayment Needed: $52,600 Monthly Equity Burn: $2,191 Purchase Price: $435,000 Purchase Date: 7/3/2006 Address: 8 Orangetip, Irvine, CA 92604 Beds: 3 Baths: 3 Sq. Ft.: 1,785 $/Sq. Ft.: $308 Lot Size: 2,517 Sq. Ft. Type: ...

Money’s Too Tight
2008-04-24 21:30:00
Money's Too Tight to Mention -- Simply Red Everyone was livin' large with all that HELOC money coming in. Now that the housing ATM has been shut off, money is too tight to mention. Asking Price: $549,900 Income Requirement: $137,475 Downpayment Needed: $109,980 Lender Purchase Price: $459,200 Lender Purchase Date: 3/12/2008 FB Purchase Price: $649,500 FB Purchase Date: 12/28/2006 Address: 37 Olivehurst, Irvine, CA 92602 Beds: 3 Baths: 2 Sq. Ft.: 1,752 $/Sq. Ft.: $314 Lot Size: - Type: Condominium Style: Traditional Year Built: 2001 Stories: Two Levels Area: Northpark County: Orange MLS#: S528888 Status: Active On Redfin: 8 days Wonderful large model in Northpark/Auburn. Large bedrooms, separate laundry room, vaulted ceilings, granite counter tops, stainless appliances. Bank to paint the entire interior, clean the carpets and replace the garage door opener.  Did you notice the pergraniteel? . . I find it interesting that this property went...

Gilligan?s Aisle
2008-04-24 00:00:00
The Ballad of Gilligan's Island -- George Wyle and Sherwood Shwartz Would you like to get stranded on Alicante Isle? (I know it is spelled Aisle and it means something else, but just go with it.) People buying properties as flips during the down cycle are betting on the return of the market. There is no shortage of ignorant prognostications of the bottom, and if flippers are foolish enough to believe them, then they deserve to become bagholders. If flippers and lenders became the bagholders for the decline, Karma would be delivering its comeuppance. Flippers hope to get in and out of a property quickly, and like the passengers on the US Minnow who thought they were going on a 3 hour tour, getting off the island will likely take much longer than planned. They end up stranded in a condo searching desperately for a way to get out. The market will eventually rescue them. The castaways of Gilligan's Island were only trapped for 4 years until the series was mercifully cancelled. The fli...

Low Watermarke
2008-04-22 00:00:00
Water Runs Dry -- Boys II Men Don't buy now. Just say no. Don't let your downpayment wash away with the declining market. As Boys II Men say "We'll make the biggest mistake of our lives. Don't do it baby" Today's featured property is a major comp killer establishing a new low water mark in the Watermarke development. They developers of this property are geniuses. They started a high-end apartment complex just as the bubble was taking off, and being opportunistic, they decided to convert the properties to condos, and they made a fortune off the frenzied buying of the Great Housing Bubble. The property was purchased on May 18, 2005 for $367,500. It was flipped on July 3, 2006 for $435,000 right at the peak. The 2006 purchaser used 100% financing (big surprise,) with a $348,000 first and a $78,000 second. The property went REO on January 23, 2008 for $324,900. It appears as if the loans were originated by IndyMac. It was purchased by Deutsche Bank National Trust Company, and the ...

Quail Hell Comp Killer
2008-04-22 00:00:00
Ghost Town -- The Specials Did you see the recent CNN article on Irvine, Welcome to subprime's ghost town? How about the post at Calculated Risk on the See-through buildings - reminiscent of the '80s. The Business Week article The Other Orange County about the boom town gone bust? We are becoming the center of attention as the housing bubble deflates because the activities here were largely responsible for inflating it. Are we reaping what we sowed? The rest of the nation seems to think so... Today's featured property was featured before back in November of 2007. It is back now as REO. Last year it was offered as a short sale for $529,000. Anyone who thought about buying that one will be happy they didn't. Now it is for sale for $459,900. Asking Price: $459,900 Income Requirement: $114,975 Downpayment Needed: $91,980 Lender Purchase Price: $535,500 Lender Purchase Date: 1/28/2008 FB Purchase Price: $567,500 FB Purchase Date: 12/29/2004 Address: 109 Reunion, Irvine, CA 92603 &...
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