Archive for August, 2008
August 19, 2008
The opening lines of this Orange County Register two-part story about Trabuco Canyon mortgage fraudster Jimmy Osborn, who stole more than half a million bucks from his customers from 2003 to 2007, attempt to explain why this con man was so successful.
To be successful, a con man needs to make people believe in him.
Jimmy Osborn had that ability.
Fair enough. But take a look at this guy!
This is a face you can trust?
The story makes the point over and over that Jimmy was an extremely persuasive guy.
Here’s how Osborn operated: He found people, often with damaged credit, who badly needed a new loan. He’d promise he could cut their monthly payments or get them cash out of their homes. He demanded that they send him money in advance, in cash, purportedly for appraisals, loan processing costs and other fees, prosecutors and victims said. He’d string them along for months or years, often telling them to stop paying their current mortgage while he negotiated a new one. In most cases, he never delivered a new loan.
“He made the world very rosy and sunny,” said Kim Koslovic, an Ohio mother of three who turned to Osborn to refinance her house when her husband was out of work. “The man can talk the talk, that’s for sure. Pretty much we handed ourselves over to him, and in the end he pretty much took everything we had, or caused it to be taken.”
Osborn’s dream client had to be Steve Ryancarz, a 62-year-old businessman seeking to refi his luxury Ohio home and also help Koslovic, his fiancee’s daughter, get a new loan on her house.
Here’s how much sway Osborn was able to exert over his victim: Ryancarz sent Osborn money to bail him out of jail when he was arrested for driving without a license. He also sent Osborn money to pay off a purported fine from the Department of Real Estate, according to records Ryancarz provided.
Ryancarz even sent $5,000 to pay for Osborn, his girlfriend and their children to take mini-vacations at the Loews Coronado Bay Resort.
“He said, ‘I’ve done all this work for you. You owe me a favor. How about putting us up for the weekend?’” Ryancarz recalled.
All told, Ryancarz ended up forking over an astonishing $370,000 to Osborn — and both he and Koslovic still lost their homes!
Koslovic’s persistence ultimately helped get Osborn convicted of fraud; he’s now serving 10 years in jail. But even while the cops were investigating him, Osborn managed to get hired on with several more Orange County-based mortgage companies, all of which apparently failed to conduct background checks on him.
As we’ve seen, oversight of the mortgage industry is weak at best. Until that problem is addressed, consumers are largely on their own. The lessons: Deal with a reputable company; shop around; if it sounds too good to be true, it probably is; and if it sounds bad, it probably is.
Recent Redfin posts:
Santa Ana Homes: Going For the Gold
Getting a Value is Near Impossible
Irvine’s 92614 and 92606 Holding Their Own in Housing Prices
August 18, 2008
New Housing Inventory & Pricing Tools on Redfin’s Website
As I mentioned in my previous post, the 92614 and 92604 ZIP codes in Irvine are two of the only seven Orange County ZIPs that showed an increase in selling price when compared to last year’s selling prices. I also said that a lot more investigation is needed to determine the reasons for this increase. I’ll be looking into these numbers in more depth in the future, but in the meantime Redfin has some new tools to help anyone who wants to do some investigation of their own.
So… If you are interested in pursuing a more in depth analysis for the 92614 and 92606 ZIPs (or any other areas), here is a way to get started:
- Go to Redfin’s map page. (www.redfin.com, Search)
- Enter the ZIP, neighborhood or city name that you are interested in (for example, 92614, Woodbridge or Irvine) in the “Search Listings” box at the top, left of the page.
- Click on the “View Inventory & Pricing Trends” link at the top, left of the map.
This will bring you to Redfin’s new and oh-so-handy “Overview of Homes for Sale” webpage. This page will provide you with plenty of charts, graphs and numbers to help you with your search. Note that this page also allows you to sort data by Newest Listings, Upcoming Open Houses, Reduced Listings, Recently Sold, Most Expensive, and Least Expensive.
Another option for this particular search: Click on the ZIP or neighborhood name links that I provided in my previous post, “Irvine’s 92614 & 92606 Holding Their Own in Housing Prices”; then click on the associated “View Inventory & Pricing Trends” link that will appear at the top, left.
And More…
Other new tools are also available in this latest release of Redfin’s website, for example, new ways to manage your favorite listings. For more information on these tools, see CEO Glenn Kelman’s post or fellow blogger Sheila’s post.
Happy hunting. Let me know how it works out.
The graphic shown above is an example of Redfin’s new updated webpage features.
August 18, 2008
When I haven’t been watching the endless hours of the Olympics, I’ve been tracking price reductions in Santa Ana. I am proud to announce this week’s bronze, silver, and gold medalists in the housing price reduction competition.
Bronze Medalist
3710 S Bear St #83, Santa Ana 92704
2 bed/2 bath; 1,093 sq ft; $219,900 (down 12%)
Price History:
Aug 15, 2008: listed for $250,000
Aug 16, 2008: reduced to $219,900
Silver Medalist
2814 W Cubbon St, Santa Ana 92704
3 bed/2 bath; 1,347 sq ft house; $299,900 (down 21%)
Price History:
Apr 16, 2008: listed for $380,000
Jun 16, 2008: reduced to $350,000
Aug 16, 2008: reduced to $299,900
Gold Medalist
2321 W Borchard Ave Santa Ana 92704
4 bed/2 bath; 14550 sq ft; $300,000 (down 36%)
Price History:
May 8, 2008: listed at $472,000
Jul 7, 2008: reduced to $372,000
Aug 15, 2008: reduced to $300,000
August 18, 2008
For the last year we have been hearing the stories of mortgage companies going under. Loan officers and everyone in that industry are facing incredibly difficult times.
Then the stories of the Realtors starting coming out. If I recall, something like one in every four Californians had a real estate license at one point. Many lost their jobs, started working other jobs, or found new careers as they faced the incredible slowdown in pace.
As the market continued to slide we started hearing about the home stagers, the movers, and the like all facing difficult times. The once booming industry has now ground to a snail’s pace and there is a new group facing an uncertain future – the appraisers.
The San Francisco Chronicle published an article yesterday about the changes in the appraiser’s job. If you thought your job was tough – this group just can’t win. The article reports that appraisers just can’t seem to get the right number in. It’s either seen as too high, thus invalid, or too low, thus also invalid.
They report:
During the housing boom in the first half of the decade, lenders typically evaluated appraisals submitted as part of a loan application by running their own comparisons from their desks. Now, banks are much more likely to send appraisers out into the field to drive by a property and the nearby homes listed as comparables to help establish a home’s value.
I was surprised that this was a “change” in the process. I have family that works in the mortgage and real estate industries, and I myself also worked at a real estate office for about 5 years (back about 10 years ago) and we always sent an appraiser out to assess the values before the mortgage was approved. This was back in the Midwest, but I always assumed it was common practice in even riskier markets (like California).
Not only that, but the very nature of the job has changed. They continue:
The down market has meant that more real estate agents are seeking an appraisal early in the sales process, asking for help determining the price before they put the home up for sale, Mann said.
“I’m seeing an increase of about 20 percent in Realtor activity,” she said. “In a market like this, you have to be as exact with the listing price as possible. If you over-list, you run the risk of staying on the market too long and becoming stale.”
This really surprised me, as I seldom saw agents depending on an outside company to evaluate the value of homes in the initial selling stages. I have seen thousands and thousands of comparative market analyses done by agents alone. But the truth is to sell in this market you’ve got a be a little Drew Carey and make sure the price is right. Many agents realize just how important it is in getting this right and are turning to outside help in order to hit the nail on the head.
That said, I can’t imagine how hard it would be to be an appraiser in this local market. Taking all the factors including a plethora of shortsales/foreclosures, current market conditions, recent sales (that really don’t reflect well since prices are dropping month-to-month) only make the job even more difficult to do.
So today my hat’s off to the appraisers! Good luck and press on…
August 17, 2008
According to an article in The Orange County Register, recent DataQuick numbers show that seven of the 82 Orange County ZIPs increased in price when compared to sold prices a year ago. Two of these, 92614 and 92606, are in Irvine. It will take a lot of digging into the numbers to determine if this is a long-term trend or some other explanation for these up-pricing numbers exit. For now, I will just put this information on the table. If anyone has any insight or comments on this, please leave your thoughts in the comment section.
Most of the neighborhoods in Irvine don’t fit nicely within the ZIP codes in Irvine. Usually, one ZIP contains multiple Irvine neighborhoods and/or an Irvine neighborhood is in multiple ZIP codes. This is true for the 92614 and 92606 ZIP codes.
92614-includes part of the Woodbridge neighborhood
The 92614 ZIP includes only the lower part of Irvine’s Woodbridge neighborhood. The upper part of Woodbridge is in the 92604 ZIP. All the housing in the 92614 ZIP is in the lower part of the Woodbridge neighborhood; some of the area in the 92614 ZIP is outside of the Woodbridge community, but this area is commercial with no housing. Also, there might be a few Irvine homes in the 92614 ZIP that are not part of Woodbridge, but I haven’t come across them.
Woodbridge contains two lakes and there is a certain amount of prestige in saying you live on the lake. Whether this has anything to do with recent good showing for the sold homes in Woodbridge’s south lake area, I am not yet prepared to say.
92606 includes the Walnut neighborhood and part of the Westpark neighborhood
The 92606 ZIP contains the Walnut neighborhood and part of the Westpark neighborhood. Anything that I could say concerning the reason for the up-prices in this ZIP would be speculation at this time, so I will leave that for a more in depth investigation at a future date.
If you don’t want to wait for me and want to start digging into these numbers yourself, Redfin has some new tools to help you with this. For more information on this, see my next post (“It’s New. It’s Improved. It’s Redfin’s New Inventory & Pricing Tools. And More…”).
August 17, 2008
If you’re a first-time home buyer, you’re in luck. The American Housing Rescue and Foreclosure Prevention Act of 2008, passed at the end of July, has some attractive tax breaks built in for home-buyer newbies (per the “Help for Home Buyers” article by Shelly Banjo in the Wall Street Journal). While it’s being advertised as a $7,500 tax creidt, it’s really more like an interest-only loan. If you buy a home between April 8, 2008 and July 1, 2009, you can claim the credit. However, you would end up paying $500 per year, beginning the second year after you buy the house (buy in 2008, pay in 2011 on your 2010 tax return). Also, there are income limits, to get the $7,500, you can’t have joint income of more that $150,000 (or $75,000 individually). As you increase in income, the amount of the credit phases out. Finally, you cannot have bought a home within the three years prior to your purchase (i.e. first-time buyers are targeted).
The positives? Gives buyers an incentive to buy now and not wait until after July 2009. Helps buyers offset the initial cost of buying a home (closing costs, down payments, necessary renovations, etc.).
The negatives? It’s not free money. In my opinion, it furthers the notion that taking on more debt is a-okay. Really, this tax credit should be treated by buyers as debt, they have to pay it back. However, no interest means money (and your own interest you’ve earned with money in the bank) in your pocket today… just make sure you can fork up the $500 a year later on.
Well, if you’re looking to buy and your a first-time buyer, then I say go for it! Buy now and claim the tax credit. To get you going, here are my top picks in Orange, a great city to get a larger place in sometimes a quality neighborhood for less (eh-hem, the first-time buyers’ dream)…
Condos (when you can’t afford the home, a perfect choice)
415 N Clark St #B, Orange 92868; 2 bed/2 bath; 1,080 sq ft; one common wall; possible garage?; $249,000
2100 W Palmyra Ave #58, Orange 92868; 3 bed/2 bath; 1,343 sq ft; townhouse; fireplace; two-car garage; one common wall; $299,000 (down from $344,000)
Homes (if you can afford, consider yourself lucky)
2805 E Hamilton Ave, Orange 92867; 4 bed/2 bath; 1,303 sq ft; 6,099 sq ft standard lot; newly redone; $419,000
4629 W Tiller Ave, Orange 92868; 5 bed/3 bath; 1,885 sq ft; 9,964 sq ft cul-de-sac lot; pool; $425,000
August 15, 2008
There’s been a flurry of action in La Veta Monterey condos. A few sold in July and many more are on the market. What’s this complex have to offer? Well, the location is ideal for many… near St. Joseph Hospital, CHOC, the 22 freeway, and the 5 freeway. The complex has two pools (one that is saltwater), a partial basketball court, clubhouse, laundry facilities, and a playground for the little ones. What’s this complex got going against it? Well, the HOA dues for a one-bedroom are $245 and $280 for a two-bedroom. It’s also in a “moderately” desirable area, on the border of Santa Ana and Mainplace Mall. The one-bedrooms on the market are priced pretty fairly, although I’d still offer lower. Meanwhile, some of the two-bedrooms seem to be out of the ball park with only a couple that are priced competitively. See below for details.
(Photo courtesy GoogleMaps)
Sold:
Unit P13; 1 bed/1 bath; 596 sq ft; sold for $156,000 on Jul 17, 2008
Unit G6; 2 bed/2 bath; 944 sq ft; sold for $211,650 on Jul 15, 2008
Unit T6; 2 bed/2 bath; 944 sq ft; sold (or foreclosed) for $180,400 on Jul 16, 2008; now listed for $245,000
On the Market:
Unit O9; 1 bed/1 bath; 650 sq ft; listed for $154,900 on Jul 30, 2008
Unit O15; 1 bed/1 bath; 650 sq ft; listed for $140,000 (down from $165,000) on Jun 19, 2008
Unit O16; 1 bed/1 bath; 653 sq ft; listed for $159,900 in late May 2008
Unit A12; 2 bed/2 bath; 990 sq ft; listed for $269,900 on Jun 2, 2008
Unit R1; 2 bed/2 bath; 943 sq ft; listed for $249,000 (down from $269,000) on May 13, 2008
Unit F2; 2 bed/2 bath; 989 sq ft; listed for $200,00 (down from $260,000) on Jul 23, 2008
Unit C6; 2 bed/2 bath; 990 sq ft; listed for $245,500 on Jul 25, 2008
Unit M6; 2 bed/2 bath; 990 sq ft; listed for $265,000 on May 11, 2008
August 15, 2008
Got a little extra kick in your step these days? Feel like you’ve lost a little weight? Maybe you hit your summer weight loss goal, or maybe you just have a lot less change to tote around in those pockets of yours! In a totally unsurprising article from the OC Register, we find out that about half of the homes that sold in the OC are now *gasp* selling for less than was paid for them.
You can all pick yourselves off the floor now.
In all seriousness, this news wasn’t totally unexpected or surprising in the least, but does reinforce the fact that this mess is not quite over yet. Other totally totally predictable findings from the article.
- In all, nearly half of Orange County homes sold this past spring went for less than their previous sale price. Among those homes, the median price drop was 27 percent.
- Price drops occurred in 82 of the county’s 83 ZIP codes
- Almost 93 percent of homes bought in 2005 sold for less, with a median price decline of almost 26 percent.
- Almost 97 percent of homes bought in 2006 sold for less, with a median price drop of 33 percent.
The one surprising finding was just how far prices have fallen. The article explained, “Sixty-nine percent of the Orange County homes bought in 2002 or later sold for less in the mid-April to mid-June period.” This indicates that prices have scaled back to near 2002 prices.
And while our pants might feel a little looser, the LA Times blog is reporting that the market has the opposite problem and is “bloated”. Foreclosures continue to soar, but just how bad is it? They report:
In its monthly report on foreclosures, RealtyTrac said total foreclosure filings — including notices of default and bank repossesions — rose 8% from June to July, and 55% over the last year, to a total of 272,171 filings. California accounted for 26% of those filings, with 72,285 foreclosure filings in July, a 5% increase over June levels, and an 85% increase over July 2007 levels.
August 14, 2008
I just returned from a week of visiting family and friends in suburban Philadelphia (thanks to Julie Lance and the rest of the O.C. team for keeping the blog in great shape while I was gone). I stayed with my sister, who lives in Blue Bell, in Montgomery County, and visited my closest friend, who has lived in another part of Montgomery County since she and her husband graduated from Penn State nearly 30 years ago.
My sister paid about $150,000 for her three-bedroom, one-bath house on nearly one-third of an acre in Blue Bell 10 years ago (those are her shepherds in her living room). She used the proceeds from a previous sale for her down payment. Today, she owes about $80,000 on the place, and, thanks to a 15-year loan, should have it paid off in nine years, when her husband expects to retire from his government job at age 55.
My best friend moved into her sprawling split-level home in Maple Glen in 1992. She had my sister, her husband, and I over for dinner while we were there. The place is glorious; it’s on a flat one-acre lot and is surrounded by woods. While we were enjoying appetizers on the back patio, a doe and her two fawns were grazing in the distance.
They paid $199,000 for the place, using the proceeds from their tiny starter home as their down payment. It’s now worth three or four times that, but that’s not of interest to them. They plan to keep it forever — they expect their kids (and eventual grandkids) to spend time there. And they’ll have it paid off well before their retirement in 15 years.
Buying and holding real estate is more common in places like Pennsylvania, where people tend to stay put. There’s also not a lot of speculation going on to drive up prices. Instead, things there are much as they’ve always been: People buy houses and live in them for a long time — often long enough to pay them off and enjoy a mortgage-free retirement.
Homes are a lot pricier here in Cali. They always have been. But the principle of buying low and holding on is still a smart one, if you can swing it. Do you know someone who took the plunge into a house here 10 or 15 years ago? We envy those people now, but at the time, the house they bought probably seemed pretty expensive.
According to this Reuters story, buying low (or at least lower) is already happening in Riverside County. Will buying low and holding real estate ever be possible again in Orange County? Time will tell. But there’s no doubt that buying as low as possible and then holding on is the way to go with real estate.
Recent Redfin posts:
Everything Changes
Where Everyone Wants to Feel at Home: In the Bathroom!
A Final Review of the Housing Bill
August 13, 2008
There’s a lot of discussion about the plans for Prospect Village for Old Town Tustin, housing/retail development built where the old Utt Juice Co. building was. Last week, the OC Register’s Elysse James wrote an article (“Prsopect Village fits, developer hopes“) which highlighted the new development and the ensuing controversy.
According to RPP Architects, the mixed-use development “provides housing, office, and retail development in Old Town along Prospect Avenue. The development is set to include 12 three-story town homes with retail and office space on the first floor, and two levels of residence on the top floors. A 9,000 Sq. Ft., two-story commercial building is being proposed on an adjacent parcel.” While it sounds all cool and hip, much of the opposition is pointed toward the size and the scale of the development. People are worried that it’ll dwarf the other historic buildings nearby.
I’d be more concerned with the price and the developer’s ability to sell these units. James covered some of this concern in her article, such as including Tustin resident Sharon Spiak’s comment, “I think it’s a little expensive in today’s market.” And with prices starting at the mid-$800k’s, I have to agree!
I feel like I’ve got déjà vu. Almost a year ago, I posted on those new live-work-play lofts in Santa Ana. There was a lot of hype about them… a great place for people to have work space and residential space all in one. Not to sound like the constant critic, but I wasn’t so sure. They seemed pricey ($700k-$800k) at the time. And now they’re down to the $600k’s.
It’s great to be able to go downstairs to work, but for $800k, wouldn’t you rather live a few miles up the road in North Tustin? I know I would pick these places (12521 Barrett Ln for $675k, 18092 Allegheny Dr for $800k, or 12972 Wheeler Pl for $800k) over a mixed-use home… of course, I don’t run a business out of my home, though.
The other thing that the developers are counting on is that homeowners will view these properties as income property. As James’ article mentions, “Developer John H. Tillotson Jr. likened the live-work aspect to the duplexes of days gone by. People would live in one and rent out the other, said Tillotson, co-owner of Pelican Properties.” So, rather than renting out a residential unit attached to your house, you’d rent out retail space. Good idea in theory, but not so sure it’ll be attractive to real buyers.
Quick facts on Prospect Village from James’s article:
- Prices start at mid-$800,000
- Homeowner association fees are $155 a month
- Property tax rate of 1.1 percent.
- Homes include granite countertops, recessed panel cabinets, stainless steel appliances, crown moldings, Kohler sinks, tubs and toilets, high-speed Internet wiring, energy efficient appliances.
- Two-car garages with gated access. Public parking lot across Prospect Avenue.
- The city approved special zoning to allow homes and commercial space in the same lots. Info: 714-550-4411.
