Tustin: Villages of Columbus and the Flat Earth

“IrvineRenter” over at the Irvine Housing Blog (excellent blog if you’re interested in Irvine or just want a good read) posted a clever little post called “Columbus Lost” yesterday. The post compares Christopher Columbus’ voyage and his “difficulty getting crewmen to serve because they believed the world was flat, and if they sailed far enough, they would fall off” to a myth about real estate that prices always goes up and will never “fall off” (as seen case in point in Columbus Grove).

This comparison of inverse myths got a little chuckle out of me. After hundreds of years, people are still behaving foolishly and going on popular opinion versus scientific research and trends. In Columbus’ time, there was science to support a round earth (stars seen in one region, but not others; the way the sun set; etc.). In our time, there was science to support the idea of a housing bubble and prices going up and up, to only fall and fall thereafter (just look at data from the early ’90s).

IrvineRenter comments on the buyers of Columbus Grove who bought at the peak had their resale values pushed “off the edge of the flat earth.” IrvineRenter continues “… the rate of decline is largely dependent upon the amount of must-sell inventory in specific areas. So far, the areas that have fallen the quickest have been those with large percentages of subprime loans (Santa Ana,) large numbers of new homes (Columbus Grove,) or both (Riverside County).” An interesting depiction of the trouble areas. Of course, in the long run, though, Columbus Grove has a higher likelihood of being able to bounce back given it’s prime (not sub-prime!) location, schools, and new development.

Interestingly enough, though, there are a quite of few homes in the Villages of Columbus that are selling for more than what was paid. Just look in Columbus Square (especially near this home). Whether they will sell or not is another question… my feeling is that they’re overpriced. However, those homes are not painting a picture of heightened trouble in comparison to surrounding neighborhoods. Also, these homes did sell later when the market was already falling, so the previous purchase price may already be reflecting a drop.

Regardless, many Columbus resale homes are telling one story… a “yikes! get me out of this mess!” one. These homes do hint to the idea of new developments being a target for accelerated decline.

428 Hudson Dr, Tustin 92782; 4 bed/4 bath; 2,302 sq ft house; $729,900 (down 9.6% from last sale of $806,500)

1494 Voyager Dr, Tustin 92782; 5 bed/4 bath; 3,088 sq ft house; $850,000 (down 13.7% from last sale of $985,000)

78 Liberty St, Tustin 92782; 3 bed/3 bath; 1,400 sq ft condo; $499,000 (down 16.2% from last sale of $596,000)

661 Loran Way, Tustin 92782; 4 bed/5 bath; 3,118 sq ft house; $849,000 (down 26.2% from last sale of $1,150,500)