December 2011 Archives » Irvine Housing News

$306,000 in mortgage equity withdrawal on an $11,150 down payment

Dec 312011

The former owner of today’s feature REO timed the market well. The bought at the bottom of the last cycle on 11/10/1997. They paid $222,500 using a $211,350 first mortgage and an $11,150 down payment. Off that tiny investment, they proceeded to pull out $306,000 in mortgage equity withdrawal over the ensuing 10 years. These borrowers weren’t periodic HELOC abusers who were paying off yearly credit card bills. In fact, they were prudent up through 2005 when they refinanced with a $395,00 first mortgage. It appears that doubling of their mortgage debt was enough to push them over the Ponzi threshold requiring further cash infusions to make payments. They got a $469,000 Option ARM on 1/30/2007, and they got another [Read More...]

Woodbridge REO 30% off its 2004 purchase price

Dec 302011

The condos in Woodbridge really had a wild ride. The rate of appreciation on these units during the bubble was astonishing. The decline since the peak has been equally as remarkable. Today’s featured property was purchased in July 2004 just as prices were going vertical. It was nowhere near the peak. The fact that these properties have dropped 30% from its 2004 price underscores how far it has dropped from the peak. These condos will likely be a full 50% off before they bottom out. The former owners of this property paid $619,000 on 7/30/2004. They used a $433,300 first mortgage, a $123,800 second mortgage, and a $61,900 down payment. On 8/22/2006 the obtained a $125,000 HELOC. It’s not clear [Read More...]

Northpark REOs ask 25% or more off the peak

Dec 292011

Today’s featured REO is one of 20 in Northpark. The banks have been remarkably consistent in their management of distressed inventory. Nearly every community in Irvine has between 30% and 35% of its inventory that’s either a short sale or REO. This doesn’t happen by accident. Lenders know if they flood the market with REOs, prices will collapse, so they queue them up and manage the flow to keep prices from crashing. Lenders are most successful in some areas than they are in others. Northpark REOs are asking 25% or more off the peak. Today’s featured propoerty is one of them. The cost of ownership is still a bit too high relative to rental parity, so I expect further price [Read More...]

REOs dragging down prices in Oak Creek

Dec 282011

Of the 30 properties listed for sale in Oak Creek, 10 of them are distressed. By definition, distressed sellers are motivated. They will lower their price to move the property whereas an equity seller may just remove it from the market. With so much competition from distressed sellers, prices are likely to continue to go down. Today’s featured property shows what happens to knife catchers who buy too early. This property sold for $725,000 on 10/17/2005. That peak buyer sold two years later for $690,000 to our knife catcher. In late 2007, the decline in prices was starting to gain momentum, so the buyer watched prices steadily and steeply decline from the moment she bought the property. The knife catcher [Read More...]

$1,141,900 REO in Woodbury

Dec 272011

The high end in Woodbury is certainly not immune to the price pressures of the rest of the market. Today’s featured property was purchased nearly five years ago, and it has been steadily declining in value ever since. This property was purchased on 1/22/2007 for $1,370,500. The owner used a $1,096,040 first mortgage, a $274,010 second mortgage, and a $450 down payment — you read that right — a bank required the borrowers on a $1,370,500 transaction to put less down than most renters do for a security deposit. Needless to say, once the prices started going down, the borrower didn’t find much reason to stay and pay. The NOD was issued on 2/18/2009 which means these borrowers stopped paying [Read More...]

University Town Center condo prices fall to new lows

Dec 262011

Once sign the market may be nearing a bottom for condo pricing is that annual appreciation rates are beginning to look rational. This condo was purchased in 1994, near the bottom of the last housing bubble. At its current asking price, the annual appreciation is less than 4% per year. Wage growth in Irvine has been nearly that good, and interest rates are less than half of 1994 levels today. In short, this property is even more affordable today than it was in 1994. Does that mean we are at the bottom. No. But it is another sign we are getting closer to it. – —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- [Read More...]

75% of Columbus Grove listings are distressed

Dec 252011

If it’s for sale in Columbus Grove, it’s probably distressed. Currently there are only eight active listings in this community, and six of them are distressed. Today’s featured property is being offered for nearly 30% off its peak purchase price. With the high Mello Roos and HOAs, it’s not yet at rental parity. Columbus Grove will experience more pain before the bottom is in place there. – —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- [Read More...]

Did Shady Canyon appreciate 35% since 2008?

Dec 242011

The owner of today’s featured property believes his property has appreciated 35% since early 2008 when he bought. The rest of the market has declined about 20% since then. Is it reasonable to think this house went the other way? Some say the rich get richer, but only if a greater fool comes along to pay a lot more for an already overpriced house. – —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- [Read More...]

Increasing borrowing costs will lower house prices

Dec 222011

Borrowing costs are likely to increase in 2012 for a variety of loans. The lower conforming limit will push many borrowers to either the FHA or the jumbo market where borrowing costs are higher. The FHA may also raise its borrowing costs again to cover the inevitable losses from the ongoing decline in home prices. Further, the new rules on conforming mortgages will push up costs on loans which do not conform. The result of higher borrowing costs will be greater pressure on home prices. If borrowing costs go up, affordability declines, and it’s only affordability which will put a floor beneath home prices. New rules would raise mortgage costs By JEFF COLLINS / THE ORANGE COUNTY REGISTER — December [Read More...]

3582 South MALL St Irvine, CA 92606

Dec 222011

The bank is playing flipper on this one. This property was in such a state of disrepair after the former occupants left that the bank spend money renovating it to get a better price. Asking only $227/SF, it’s another Irvine property trading well below rental parity. – —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- —- — ————————————————————————————————————————————- This property is available for sale via the MLS. Please contact Shevy Akason, #01836707 949.769.1599 sales@ochousingnews.com [Read More...]

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