Irvine Housing Blog

IHB: Property Valuation Reports

2009-11-08T10:30:12+00:00

IHB Property Valuation Reports

Over the first few years of writing for the IHB, I outlined a number of property valuation principals based on the property's rental cashflow. Pulling together all the financial information about a property into a single report allows buyers to make informed purchases and allows sellers to establish a pricing strategy that will allow them to sell for the best possible price.

The IHB Property Valuation Report is six pages of calculations and notes. It sounds intimidating at first, but once you go through the information it contains, you will not want to buy or sell real estate without this report.

Cover Sheet

The report cover sheet contains summary information; it has some pictures, the address, and a few defining characteristics to identify the property. The first piece of summary data is the asking price, and this is followed by the Comparable Value, the Likely Transaction Price, and the IHB Fundamental Value.

When we prepare a Brokers Opinion of Value, we include what we believe to be the most Likely Transaction Price based on recent comparable sales and the trend of the market. This is our best guess at what the final sales price of this property will be.

The IHB Fundamental Value is based on the rental comps with some subjective adjustment based on a property’s desirability. Since market information is always changing, the report is time sensitive, and it is dated for reference.

IHB Owner-Occupant Brokers Opinion of Value.pdf

Cost of Ownership and Acquisition

The second page of the report is full of of data and calculations. It looks daunting at first, but it is arranged to provide six (6) data points critical to understanding a property purchase:

Monthly Payment
Monthly Cash Outlays
Monthly Cost of Ownership
Monthly Ownership Gain (loss)
Total Cash Costs
Total Savings Needed

The first three items on the list look superficially similar, but they all provide slightly different information. The monthly payment is the check you will write each month to your lender; pretty basic. We assume conventional 30-year mortgages in our calculations because it is the stable financing of long-term homeowners.

The monthly cash outlays is the total amount of all checks a homeowner will need to write each month to be current on payments, including property taxes, insurance, HOA fees and other expenses. This amount is often much larger than most people realize. Some will try to reduce their monthly cash outlays by deferring property taxes to a lump sum payment every six months, but the expense is still there, and this total can eat up a significant portion of someone’s take-home pay. I recommend using an impound account to pay property taxes to avoid the last-minute scramble.

The monthly cost of ownership is a more accurate accounting of the true cost of owning property. There are many items which add to or subtract from the actual cost of ownership such as (1) income tax savings, (2) equity hidden in the payment, (3) lost income on the downpayment money, and (4) maintenance and replacement reserves.

Once the full cost of ownership is properly calculated, this figure can be compared to the cost of a comparable rental. Any cost savings or ownership premium is reflected here. As mentioned previously, blue chip properties often carry an ownership premium whereas undesirable properties generally demonstrate significant positive cashflow.

The final area of concern is having the cash available to close the deal. The downpayment is an easy expense to identify, but it is not the only cash a buyer will need to obtain the property. Buyers have to budget moving and furnishing expenses, closing costs and interest points (if any) to accurately assess their cash needs. Also, it is not a good idea to spend all your cash on a house and leave no emergency reserves. The spreadsheet estimates 6 months net salary based on the financing qualifications for the loan amount. The total cash costs plus emergency reserves equal the total amount of liquid savings needed to close the transaction.

Estimates of Value

The third page looks at values and sets the stage for negotiation. It is composed of three sections:

Comparative Sales Value and Negotiating Range
Cashflow Value and IHB Fundamental Value
Asking Price and Value Ranges (chart)

In Negotiating for Real Estate, I outlined the negotiation process and described how the top and bottom of the negotiation range is established. The Comp Range is a measure of the highest and lowest prices of recent comparable sales. The Comparable Sales Value is a blend of the mean and the median of comps used to establish value. By blending the two values, it recognizes outliers without putting too much emphasis on them.

In a stable market, properties may trade at a premium or discount to rental parity based on their desirability as owner-occupied housing. The most desirable “blue chip” properties trade at a 10% premium to rental parity, and transitory rental properties trade as low as 25% below rental parity. When the IHB prepares a Brokers Opinion of Value, we subjectively rate the property based on its owner-occupant desirability, and we adjust the cashflow value of based on our market experience. The resulting value is a theoretical basis for a property’s minimum value in the open market. When prices begin to fall, they generally do not stop until all properties in a market reach their fundamental value.

The chart showing asking prices and value ranges displays all the numbers in an intuitive format and shows the relationships between the numbers. For instance, in the chart below, the negotiating range and the comp range is significantly above a property’s current cashflow value. A buyer wanting to pay cashflow value will not obtain this property as market comps reflect a large ownership premium.

Comparable Sales, Comparable Rentals and concept notes

Page four of the report has the raw data on comparable sales and comparable rentals used to generate the report. This important raw data eliminates much confusion and debate over current valuations. The sections on Comparable Sales Value and Likely Transaction Price and Cashflow Value and IHB Fundamental Value generates the most questions and confusion, so a more detailed explanation of these concepts is included.

Report notes

In an effort to explain many of the concepts and calculations in the report, we have included a line-by-line series of notes detailing any assumptions.

Ignorance is ...

George Orwell in 1984 wrote, “Ignorance is Strength” to describe how power is maintained by the few through the ignorance of the many. Those who are responsible for helping people buy and sell homes have preyed on the ignorance of buyers for generations to maintain their strength. They see little reason to change.

Thomas Gray in “Ode on a Distant Prospect of Eton College” wrote the line, “Ignorance is Bliss” to illustrate that ignorance to a problem creates happiness—while the ignorance lasts. This bliss may be welcome at times when the problem is intractable, but ignorance that prevents people from taking appropriate action does not lead to bliss, it leads to pain.

Ignorance is Pain. Ignorance to the housing market can lead to foreclosure and bankruptcy. There is nothing noble or romantic about ignorance to the value of real estate. I have no need to exaggerate the importance of getting this decision right.

I used the tools encapsulated in this report to avoid buying during The Great Housing Bubble. I have shared my methodology with you, and now, the IHB set up to work with you to apply these techniques to your personal situation.

Informed Decisions

I want people to make informed decisions. Based on these reports, some people will wait, some people will look elsewhere, and some people will buy anyway. We do not attempt to persuade; most people are self-motivated when it comes to real estate, and when contemplating such a large purchase, pressure just makes the process stressful.

In time the numbers will say “yes.” I will know when the time is right because my analysis will tell me. Now, the same information is available to you.

Thank you again for allowing us the opportunity to present ourselves to you in this manner. We look forward to working with you.

Sincerely,

Larry Roberts

When you are ready to buy or sell a home, we are here to serve you.

IHB News 11-7-2009

2009-11-07T10:30:12+00:00

Is everyone ready for the our block party on Monday night?

Irvine Home Address ... 3 PRIMAVERA Irvine, CA 92614
Resale Home Price ...... $839,900

We sit and we sigh
And nothing gets done
So right, so clued-up
We just get old

And all the while
Been torn asunder

Bloc Party -- Compliments

IHB News

I want to invite everyone to our next IHB Block Party from 6:30-10:00 on Monday, November 9, 2009, at JT Schmids at the District.

I have updated our library. You can now find all the analysis posts in one place.

Housing Bubble News

Why the Commercial Real Estate Collapse Could Be a Good Thing

The Big Money - Jonathan Weber - ‎Nov 3, 2009‎

There's plenty of evidence that the same forces—namely, easy credit—that led to the residential real estate bubble also fed significant overbuilding in ...

This Commercial Real Estate Collapse Is Way Different Than The One In The 90s The Business Insider

Has The Housing Bubble Burst Completely? Real Estate News | BiggerPockets.com (blog)

Economic Double Bubble, Toil and Trouble New West

Sorry, Folks: Goldman Sachs Was Not "Secretly" Short Housing During The Bubble ...

The Business Insider - ‎Nov 1, 2009‎

In reaction to a study published by two academics in the Wall Street Journal that purported to show there was no housing bubble, Hatzius authored a note ...

McClatchy Digs Into Goldman Sachs' Dealings In Subprime Mortgages NPR

Report: Goldman bet against own products United Press International

Goldman Eyes Tax Credits Fannie Mae Doesn't Need New York Times

Daily Walk of Shame: The Fed

Motley Fool - Alyce Lomax - ‎Nov 3, 2009‎

Just as Internet and telecom stocks started tanking, the housing bubble began to take off. The housing market mayhem was just as crazy and speculative as ...

Fed's Path to Higher Interest Rates Begins to Take Shape Wall Street Journal

From Patrick.net

Get Serious About Selling Your House: Lower The Price (nytimes.com)

L.A.-area agents holding open mansions (latimes.com)

Fannie Mae offers borrowers rental option instead of foreclosure (news.yahoo.com)

Lobbyists Defeat America: Homedebtor Tax Credit Extension (housingwire.com)

Irvine Home Address ... 3 PRIMAVERA Irvine, CA 92614

Resale Home Price ... $839,900

Income Requirement ....... $156,351
Downpayment Needed ... $167,980

Home Purchase Price ... $601,285
Home Purchase Date .... 6/19/2009

Net Gain (Loss) .......... $188,221
Percent Change .......... 39.7%
Annual Appreciation ... 39.7%

Monthly Mortgage Payment ... $3,648
Monthly Cash Outlays ............ $4,720
Monthly Cost of Ownership ... $3,540

Redfin Property Details for 3 PRIMAVERA Irvine, CA 92614

Beds 4
Baths 2 full 1 part baths
Size 2,144 sq ft
($392 / sq ft)
Lot Size 4,012 sq ft
Year Built 1987
Days on Market 3
Listing Updated 10/28/2009
MLS Number S594048
Property Type Single Family, Residential
Community Westpark
Tract Br

Gorgeous home in the highly sought after and desirable neighborhood of Westpark. Spacious, bright, and airy floor plan. One bedroom downstairs. Addition to the house plus architectural details by prominent architect. Gorgeous and luxurious with travertine flooring on first floor, oak hardwood in master bedroom and granite counter tops throughout. Tastefully remodeled, turn-key and ready to move in. All within steps from association pool and tennis courts. University High School district. Low association fee.

Revealed

2009-11-06T10:32:12+00:00

Today we have a property emerging from shadow inventory. Also, I want to invite everyone to our next IHB Block Party from 6:30-10:00 on Monday, November 9, 2009, at JT Schmids at the District.

Irvine Home Address ... 13 CHRISTAMON EAST Irvine, CA 92620
Resale Home Price ...... $714,800

Oh let the sun beat down upon my face
With stars to fill my dream.
I am a traveler of both time and space
To be where I have been.

To sit with elders of a gentle race
This world has seldom seen.
They talk of days for which they sit and wait
When all will be revealed.

Kashmir -- Led Zeppelin

All will be revealed in time. It is fun to speculate on where prices will go and when they will get there. I have an educated guess as to where real estate market prices are going, and I stand behind my analysis and predictions.

I have a few guidelines and an understanding of market relationships that has proven successful in the past. I was posting on this blog as either a commenter or a writer since late 2006. I was bearish then, and drawing on the collective wisdom of the bubble blog community, I began expounding a bearish point of view.

It was easy to be bearish in 2006. An analysis based on conventional financing showed the market pricing was ridiculous, and when you connected the dots between ARM resets, the credit crunch, foreclosures and lower prices, it was rational to be bearish. People caught up in the emotional frenzy, and those that counted on the stability of Option ARM financing -- which was most people -- were bullish. Kool-aid intoxication has an enormous appeal.

It has only been over the last year that signs have been at all ambiguous. The Federal Reserve's unprecedented manipulation of the mortgage market has certainly created some mixed signals.

Payment affordability in Irvine is actually reasonable. If you look over the hill at Riverside County, payment affordability is very high, but this is accomplished through market manipulation. How do you forecast the impact of this? How long will this go on? This is no longer a market event, it is a political one.

The price drop of the early 90s must have been much more difficult to predict, particularly the 94-97 stage. The market was choppy and signals were mixed during this period much like the next three years will be.

Over time, a fuller picture of the inventory problem will come out. The degree of market overhang will vary by location, and there may be isolated pockets where high pricing at very low volumes is maintained. Will Irvine emerge unscathed? I doubt it.

Irvine Home Address ... 13 CHRISTAMON EAST Irvine, CA 92620

Resale Home Price ... $714,800

Income Requirement ....... $133,063
Downpayment Needed ... $142,960

Home Purchase Price ... $603,457
Home Purchase Date .... 7/29/2008

Net Gain (Loss) .......... $68,455
Percent Change .......... 18.5%
Annual Appreciation ... 12.8%

Monthly Mortgage Payment ... $3,105
Monthly Cash Outlays ............ $4,030
Monthly Cost of Ownership ... $3,030

Redfin Property Details for 13 CHRISTAMON EAST Irvine, CA 92620

Beds 4
Baths 2 full 1 part baths
Size 2,474 sq ft
($289 / sq ft)
Lot Size 5,661 sq ft
Year Built 1979
Days on Market 4
Listing Updated 11/4/2009
MLS Number S594917
Property Type Single Family, Residential
Community Northwood
Tract Pp

According to the listing agent, this listing is a bank owned (foreclosed) property.

Open floor plan with new carpet and paint throughout the home gives the home a fresh feel. Spacious and airy kitchen with eating area. Formal dining room adjacent to the living room. Fireplace in the family room. Huge bonus room upstairs great for office or play room. Inside Laudry, Large yard great for entertaining. Cul-de-Sac street. Seller will be replacing the roof in the month of November. Great Value on this REO Home. All Bedroom upstairs. House to be tented and new roof to be installed. Offers will be reviewed after work is done.

The property was purchased back in 2003 for less than $500,000. After some refinances and general HELOC abuse, he managed to pull out over $200,000. Then his Option ARM blew up...

Foreclosure Record
Recording Date:    05/05/2008
Document Type:    Notice of Sale (aka Notice of Trustee's Sale)

Foreclosure Record
Recording Date:    02/19/2008
Document Type:    Notice of Sale (aka Notice of Trustee's Sale)

Foreclosure Record
Recording Date:    02/19/2008
Document Type:    Notice of Sale (aka Notice of Trustee's Sale)

Foreclosure Record
Recording Date:    01/28/2008
Document Type:    Notice of Default

Foreclosure Record
Recording Date:    11/09/2007
Document Type:    Notice of Default

Foreclosure Record
Recording Date:    11/09/2007
Document Type:    Notice of Default

Foreclosure Record
Recording Date:    07/20/2007
Document Type:    Notice of Rescission

Foreclosure Record
Recording Date:    07/09/2007
Document Type:    Notice of Sale (aka Notice of Trustee's Sale)

Foreclosure Record
Recording Date:    04/02/2007
Document Type:    Notice of Default

This guy defaulted before I started writing for this blog. He dragged out the process and it finally went back to the bank -- over a year ago.

Do you see where shadow inventory comes from? Is this owner the exception or the rule?

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

The Market Sleeps

2009-11-05T10:30:20+00:00

The market is entering a restful period waiting for the arrival of shadow inventory.

Irvine Home Address ... 8 NEW SEASON Irvine, CA 92602
Resale Home Price ...... $375,000

Near the village the peaceful village
The lion sleeps tonight
Near the village the quiet village
The lion sleeps tonight

Hush my darling don't fear my darling
The lion sleeps tonight
Hush my darling don't fear my darling
The lion sleeps tonight

The Lion Sleeps Tonight -- The Tokens

The market is entering its winter hibernation. Transaction volumes are falling as part of the usual seasonal pattern; however, I suspect this winter will be a little different than the norm. We are entering the winter on below normal volume despite the apparent increase off last years record lows. There are a number of buyers who did not complete their purchases during the main buying season, so we will have some left-over demand from the summer to keep up volumes over the winter.

The circumstances today will persist indefinitely or until new supply shocks the system:

limited supply
unsatisfied demand
very low interest rates
high payment affordability
inflated prices
below normal volumes
huge overhang of foreclosure supply
high unemployment that is getting worse

The first four conditions are very bullish, but the last four are not. I am of the opinion that the negatives outweigh the positives and prices will continue to fall. Being bullish is not always a good thing....

BTW, I was emailed a press release from our Attorney General, Edmund G. Brown. Apparently he is quite worried about ARM resets,

"Homeowners with Pay Option ARMs are sitting on ticking time bombs that the lending industry has the power to defuse," Brown said. "Unless these banks and loan servicers act quickly, hundreds of thousands of mortgages will reset across the state, creating a new wave of foreclosures."

Irvine Home Address ... 8 NEW SEASON Irvine, CA 92602

Resale Home Price ... $375,000

Income Requirement ....... $69,808
Downpayment Needed ... $75,000

Home Purchase Price ... $530,500
Home Purchase Date .... 3/20/2006

Net Gain (Loss) .......... $(178,000)
Percent Change .......... -29.3%
Annual Appreciation ... -8.3%

Monthly Mortgage Payment ... $1,629
Monthly Cash Outlays ............ $2,160
Monthly Cost of Ownership ... $1,630

Redfin Property Details for 8 NEW SEASON Irvine, CA 92602

Beds 2
Baths 2 full 1 part baths
Size 1,187 sq ft
($316 / sq ft)
Lot Size n/a
Year Built 2005
Days on Market 2
Listing Updated 10/28/2009
MLS Number S594319
Property Type Condominium, Residential
Community Northwood
Tract Tamr

According to the listing agent, this listing may be a pre-foreclosure or short sale.

YOU WILL LOVE this sophisticated, split-level townhome, from the CUSTOM flagstone entry, stairs, and patio, to the INVITING interior with GORGEOUS marble flooring, crown molding, plantation shutters, recessed lighting, custom in-ceiling speakers for home-theatre surround-sound, stainless steel appliances, in-home laundry, attached 2-car garage, AND TWO master suites. NO ONE ABOVE OR BELOW....does NOT BACK to I-5 or Culver Drive. Just a block from Lower Peters Canyon Park, and steps to Tamarisk Community Pool, Spa, tennis courts, & BBQ. Close to Tustin Marketplace! ALL THREE Tustin schools are CALIFORNIA DISTINGUISHED SCHOOLS, scoring very high on API. This is your chance to live in a very DESIREABLE, NEWER neighborhood, built in 2005-2006. You MUST see this beautiful home!

WHY did the agent USE random CAPITALIZATION?

This was not the best speculative effort of 2006 from the lender's perspective, but the buyer used 100% financing and even managed to get some HELOC money despite buying very near the peak.

The property was purchased on 3/20/2006 for $530,500. The owner used a $424,300 first mortgage, a $106,050 HELOC and a $150 downpayment (it technically was not 100% financing).
On 12/5/2006 he refinanced the first mortgage for $464,000 and took out another HELOC for $78,000.
On 4/5/2007 he managed to increase the HELOC to $116,000.
Total property debt is $580,000.
Total mortgage equity withdrawal is $49,500.

Not a bad take considering how bad the timing was. Do you think this owner is sitting in his rental plotting his return to HELOC riches?

Kick in the ...

2009-11-04T10:30:33+00:00

Today we have a 2004 speculator taking a kick from the housing market.

Irvine Home Address ... 2233 MARTIN 213 Irvine, CA 92612
Resale Home Price ...... $265,000

How lucky can one guy be;
I kissed her and she kissed me
Like the fella once said,
Ain't that a kick in the head?
The room was completely black
I hugged her and she hugged back.
Like the sailor said, quote,
"Ain't that a hole in the boat?"
My head keeps spinning;
I go to sleep and keep grinning;
If this is just the beginning,
My life's gonna be beautiful.
I've sun- shine enough to spread;
It's like the fella said,
"Tell me quick
Ain't love like a kick in the head?"

Ain't That A Kick In The Head? Dean Martin

Ain't that a hole in the boat? When the boat (property) is underwater, it is dangerous to have a gaping hole either because the property has negative cashflow, or the ARM is about to explode. The reset is a kick in the head many have endured and many more know is coming.

With the impending doom of underwater owners, many are walking away before the resets hit. The negative impact of mortgage resets is being pulled forward into 2009 and 2010. This is market capitulation and the only way to clear out this bad debt once and for all.

Capitulation is painful; it is subordinating your will to the Will of the Market; it is the collapse of entitlement; it is the abandonment of dreams.

Irvine Home Address ... 2233 MARTIN 213 Irvine, CA 92612

Resale Home Price ... $265,000

Income Requirement ....... $49,331
Downpayment Needed ... $53,000

Home Purchase Price ... $425,000
Home Purchase Date .... 6/29/2004

Net Gain (Loss) .......... $(175,900)
Percent Change .......... -37.6%
Annual Appreciation ... -7.6%

Monthly Mortgage Payment ... $1,151
Monthly Cash Outlays ............ $1,560
Monthly Cost of Ownership ... $1,190

Redfin Property Details for 2233 MARTIN 213 Irvine, CA 92612

Beds 1
Baths 1 bath
Size 934 sq ft
($284 / sq ft)
Lot Size n/a
Year Built 1994
Days on Market 3
Listing Updated 10/27/2009
MLS Number S594166
Property Type Condominium, Residential
Community Airport Area
Tract Met

According to the listing agent, this listing may be a pre-foreclosure or short sale.

Gorgeous 1 Bedroom Plus A Den/Office (could Be Bedroom), Neutral Beige Tones with Upgraded Carpet, Granite Counters In Kitchen & Bath with Tumbled Stone. Master Bedroom Has a Walk-In Closet with Built-Ins. Master Bath Has Walk-In Shower with Rain-Glass and a Large Separate Tub. Den Has Direct Bath Access for Guests. Crown Moulding in Living Room, 9 Foot Ceilings, Updated Fixtures, Lighting and Window Treatments. Refrigerator and Stacked Washer/Dryer Stay. Light and Bright with View of Trees. Set Back from the Street with a Large Private Balcony you can Access from Living Room or Master Bedroom. Two Deeded Parking Spaces. Beautiful Tropical Pool and Spa Area, Gym and Entertainment Room. 24-Hour Guard-Gated Entry. Great for the Corporate and Urban Lifestyle. Walk to John Wayne Airport, The Irvine Museum, and San Joaquin Wildlife Sanctuary. Drive to Balboa Island and Newport Beach in Minutes.

Why Is This In Title Case?

Urban Lifestyle. Walk to... Not in Irvine, not yet...

I don't have the property records on this property, but it isn't the only property for sale under duress in this complex:

2233 MARTIN St #324 Irvine, CA 92612

2243 MARTIN #111 Irvine, CA 92612

There are dozens for sale at higher price points, so there is no shortage of supply if prices tick up a bit.

Agony of Defeat

2009-11-03T10:30:00+00:00

Many smug speculators are suffering what Wide World of Sports aptly described as the "Agony of Defeat."

Irvine Home Address ... 9 TALL OAK Irvine, CA 92603
Resale Home Price ...... $649,900

Scouring the internet to bring you the constant variety of properties
The thrill of schadenfreude
The agony of kool aid
The human drama of real estate markets
This is the Irvine Housing Blog

Wide World of Sports

I was a kid during the Wide World of Sports era. Before ESPN and other sports outlets came along, ABC's Wide World of Sports was your only source for unusual or international sporting events. According to Wikip edia, "Wide World of Sports was the first program to air coverage of Wimbledon, The Indianapolis 500, the NCAA Men's Basketball Championship, the Daytona 500, the U.S. Figure Skating Championships, the Little League World Series, Triple Crown, The Open Championship, the X-Games, the Grey Cup, and many other events."

The great part of Wide World of Sports was not always the events they covered; in fact, they were often quite boring. The show had a unique way of getting you to tune in each week, and sometimes you would stay and watch the entire show.

The opening sequence featured many different images of winning and losing, but none are more famous than ski jumper Vinko Bogataj, whose tumbling faceplant of March 21, 1970 was featured from the early 1970s onward under the words "...and the agony of defeat." Bogataj's fail is featured in Rich Hall's book Sniglets as "agonosis," which is defined as "The syndrome of tuning in on Wide World of Sports every weekend just to watch the skier rack himself." It is an indelible image that captures the complete failure of individual performance.

Sports provide a great microcosm of the struggles of life. The agony of defeat is something we all experience when an investment goes bad or a business deal doesn't work out. Most of us suffer in obscurity and silence. The only evidence of the pain is the vapor trails on the web showing asking and sales prices and debt going bad. Far from being obscure statistics, these are our neighbors -- or were our neighbors. It is hard to say where they end up after foreclosure.

Irvine Home Address ... 9 TALL OAK Irvine, CA 92603

Resale Home Price ... $649,900

Income Requirement ....... $120,982
Downpayment Needed ... $129,980

Home Purchase Price ... $561,267
Home Purchase Date .... 8/26/2009

Net Gain (Loss) .......... $49,639
Percent Change .......... 15.8%
Annual Appreciation ... 15.8%

Monthly Mortgage Payment ... $2,823
Monthly Cash Outlays ............ $3,680
Monthly Cost of Ownership ... $2,770

Redfin Property Details for 9 TALL OAK Irvine, CA 92603

Beds 3
Baths 3 baths
Size 1,800 sq ft
($361 / sq ft)
Lot Size n/a
Year Built 2004
Days on Market 3
Listing Updated 10/27/2009
MLS Number S594108
Property Type Condominium, Residential
Community Quail Hill
Tract Ivwr

According to the listing agent, this listing is a bank owned (foreclosed) property.

Beautiful 3BR/3BA detached home with views! Custom tile entry leads to open living, dining rooms. Living room has a large balcony and media niche. Nice upgraded kitchen with granite countertops and newer appliances. Each bedroom has it's own private bath. There is a large master bedroom with ceiling fan. Lots of additional built in storage. Oversized 2 car attached garage with epoxy flooring.

This property was purchased on 6/23/2004 for $640,500. The bank just bought it at auction for $561,267, and now they are hoping to get their money back from the FED supported prices. When the property was originally purchased, the owner used a $519,272 first mortgage, a $97,363 second, and an $18,130 downpayment.

At some point, he knew he was in trouble, so he tried to sell it. He spend a year and a half listing, delisting and chasing the market down.

Date	Event	Price
Oct 27, 2009	Listed	$649,900
Aug 26, 2009	Sold	$561,267
Sep 16, 2008	Delisted	*
Sep 13, 2008	Price Changed	*
Sep 03, 2008	Price Changed	*
Sep 03, 2008	Price Changed	*
Aug 21, 2008	Price Changed	*
Jun 15, 2008	Price Changed	*
May 21, 2008	Price Changed	*
Apr 12, 2008	Price Changed	*
Feb 26, 2008	Price Changed	*
Dec 19, 2007	Delisted	*
Dec 06, 2007	Delisted	*
Dec 06, 2007	Listed	*
Oct 18, 2007	Price Changed	*
Oct 18, 2007	Price Changed	*
Sep 19, 2007	Listed	*
Sep 19, 2007	Listed	*
Aug 29, 2007	Delisted	*
Aug 28, 2007	Price Changed	*
Aug 23, 2007	Price Changed	*
Jul 01, 2007	Price Changed	*
Jun 30, 2007	Price Changed	*
May 30, 2007	Listed	*
May 20, 2007	Delisted	*
May 16, 2007	Price Changed	*
May 05, 2007	Price Changed	*
Apr 10, 2007	Listed	*

He finally gave up in late 2008 as evidenced by the final delisting and...

Foreclosure Record
Recording Date:    05/28/2009
Document Type:    Notice of Sale (aka Notice of Trustee's Sale)

Foreclosure Record
Recording Date:    02/26/2009
Document Type:    Notice of Default

It looks to me like he defaulted as the moratorium was put in place and got a few extra months. Perhaps the banks were behind in processing? Perhaps he continued to make payments even after he delisted in late 2008?

The agony for this foreclosure statistic is apparent. He over-borrowed and over-bought, and the weight of payments was crushing, so he tried to get out from under the dead weight. The property is listed for sale, and the owner relinquishes his dreams of prosperity slowly as he chases the market down. When he finally realizes the piggy-bank is empty, he capitulates; Atlas lets the world fall.

Everyone is invited to our next IHB Block Party next Monday, November 9. 2009, at JT Schmids at the District.