You're kidding yourself if you think prices are going to drop even more. We have already hit the bottom. I don't understand why "potential homebuyers" are under the assumption that there is going to be some sort of "correction." Get it through your thick skulls people.....right now is seriously the time to buy. I am not saying this as a Realtor but as a person with common sense.
Don't get me wrong, many areas of the US will continue to face declining RE markets, but not Orange County.
Helping out our friends
"We want to give a shout out to our buddy Harry who opened a deli in Irvine a few months back. Harry's Deli has quite the followingalready and received a very favorable review in the OC Weekly. If you are in the area during the week, it is definitely worth checking out!"
Writer's Corner
From Friday's post it is clear that I am looking forward to my vacation in Wisconsin. I am planning to take my voice recorder and spend a few days alone on the lake, and I hope some meaningful writing becomes of it. I was planning to write about my old home town back in December, but I thought I would wait until I could spend some time there and clear my head. That time is now.
Raw land deals historically have not been highly leveraged because land values are notoriously volatile. Lenders forgot that fact during the housing bubble and extended large loans on raw land deals many of which are blowing up now.
Today's featured property was purchased by Baldwin Investment and Development in 2007. It was picked up at auction on 4/6/2010 or $500,000 by the lender. If you believe this property is worth $2,000,000, it was quite a profitable foreclosure for the lender. This lot is worth whatever the final product could be sold for minus the cost of construction and profit.
Buildable lots in Irvine are very rare. Since the Irvine Company builds all of its own product, a foreclosure on pre-build like this one is the only way such a lot would enter the market. How would you value such a unique property?
Home Purchase Price … $2,350,000 Home Purchase Date .... 5/3/2007
Net Gain (Loss) .......... $(474,700) Percent Change .......... -15.1% Annual Appreciation … -5.0%
Cost of Ownership ------------------------------------------------- $1,995,000 .......... Asking Price $399,000 .......... 20% Down Conventional 4.84% ............... Mortgage Interest Rate $1,596,000 .......... 30-Year Mortgage $405,593 .......... Income Requirement
$8,412 .......... Monthly Mortgage Payment
$1729 .......... Property Tax $550 .......... Special Taxes and Levies (Mello Roos) $166 .......... Homeowners Insurance $400 .......... Homeowners Association Fees ============================================ $11,258 .......... Monthly Cash Outlays
-$1613 .......... Tax Savings (% of Interest and Property Tax) -$1975 .......... Equity Hidden in Payment $740 .......... Lost Income to Down Payment (net of taxes) $249 .......... Maintenance and Replacement Reserves ============================================ $8,659 .......... Monthly Cost of Ownership
Cash Acquisition Demands ------------------------------------------------------------------------------ $19,950 .......... Furnishing and Move In @1% $19,950 .......... Closing Costs @1% $15,960 ............ Interest Points @1% of Loan $399,000 .......... Down Payment ============================================ $454,860 .......... Total Cash Costs $132,700 ............ Emergency Cash Reserves ============================================ $587,560 .......... Total Savings Needed
Property Details for 86 CANYON Crk Irvine, CA 92603 ------------------------------------------------------------------------------ Lot Size:: 0.77 Acres Property Type:: Lot/Land View:: Canyon, City Lights, City Turtle Rock County:: Orange MLS#:: U8003599 ------------------------------------------------------------------------------
* * * $1 MILLION PRICE REDUCTION !! * * * Prime custom lot with front row canyon / city lights / sunset views set amongst the hillsides embracing Shady Canyon. Take advantage of the rare opportunity to build your dream home. Long, estate-style private driveway set back from the road for complete privacy, with only one neighbor adjoining. The lot size is over 33,000 sq ft. There are architectural plans to build a grand-scale custom home up to 18,000 sq ft. secluded in the hills. A truly prestigious enclave.
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