Aliso Viejo (Glenwood)

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esq4_IHB

esq4_IHB

New member
Hey everyone - I've been reading this blog for more than a year now. Not a huge Internet/blog person to begin with, but really enjoy and am grateful for all of the insight shared on this blog, especially from the individuals who are the primary contributors.



That being said, my wife and I recently backed out of escrow on a $780K shortsale in Talega. Great place, but despite it's 2005 sale price at 900K, I couldn't convince myself that it was not overpriced. The whole neighborhood down there seems to still be overpriced. Plus, it would have put us in a super-tight cash flow position for the near term (primarily given my student loan debt)



Anyway, since I work in Costa Mesa and my wife in Fashion Island, we decided to restratigize and focus closer. We recently visited Glenwood and are interested in Pasedera. Any thoughts on this would be great. My concerns are 1) the lot sizes; 2) the tax basis - which approaches 1.7% i think; and 3) the resiliency of home prices over the next 2-4 years. Does anyone know anything about this neighborhood? they've told us models that are being built now won't be ready until Oct/Nov - that seems like a very long time to build?



We're also looking at some other places in Aliso and found one we like in the mid 600s (purchased in early 06 for 780k)- but again, even there, I still think it may be overpriced.



Look, the way I see it is this, our joint income is about $250K - and it's difficult for us to afford something we like. If it's difficult for us, it's got to be difficult for everyone. The fundamentals, as this blog has repeatedly pointed our, just aren't there. So I'm curious about everyone's thoughts regarding my concerns on Glenwood above and any general thoughts about Aliso and/or Talega as well. Once again, I'm very grateful for all the input on this blog. Thanks and look forward to reading responses.
 
Prices in Talega are going to crash very hard (if they haven't already.) There are so many Option ARMs and "liar loans" in South County, prices will be very depressed there. You were wise to pass on the deal.



Wait, and you will get much more house for much less money...
 
You have kids TR? The Capo district has a bunch of problems in general and the elementary school that serves Glenwood is mediocre. What are the HOA dues at Glenwood like? We looked hard at AV but the extra commute expenses, i.e. gas (which could be $5/gal in the near future), tolls, extra maintenance, time value of commute, etc., didn't make AV a cost-effective option especially so since my wife and I both work in the Irvine area.



Everything is still overpriced relative to where prices are headed, it's just a matter of how much they are overpriced now. Unless you can pick up something at a 2002/2003 equivalent price, you'll probably burn some equity before the market bottoms.
 
IR and IPO-



Thanks. No kids yet - the plan is buy in AV/Irvine in the near term - live there for a couple of years - hopefully have a kid in 2-3 years, then see what the market looks like then. AV's primary benefit to us is more bang for the buck.



I don't think HOA at Glenwood is that bad, less than $200/month. The mello-roos is super high though. The benefit, from what Shea has told me, is that they give you 3% of your purchase price to use to pay closing costs and/or buy down points and they give you $14K for upgrades - but apparently you can only apply this to flooring. the standard upgrades are pretty nice though - so flooring and/or built-ins would be the top upgrade priorities.



btw, agreed on the tolls/commute - that's just something we'll have to suck up.
 
Glenwood Park in AV.

My ex still lives there. Our son went to the local schools from

3rd grade on. He considered it like being in jail. The High School

had a wonderful Police force keeping the students in line.

Education is not as important as the money the Capo School district

needs to get from the state. It was overcrowded when he was there

5 years ago. I can only imagine now. Do some homework before you

have your children Institutionalized in the Capo School District.
 
[quote author="TR4" date=1209689851]IR and IPO-



Thanks. No kids yet - the plan is buy in AV/Irvine in the near term - live there for a couple of years - hopefully have a kid in 2-3 years, then see what the market looks like then. AV's primary benefit to us is more bang for the buck.



I don't think HOA at Glenwood is that bad, less than $200/month. The mello-roos is super high though. The benefit, from what Shea has told me, is that they give you 3% of your purchase price to use to pay closing costs and/or buy down points and they give you $14K for upgrades - but apparently you can only apply this to flooring. the standard upgrades are pretty nice though - so flooring and/or built-ins would be the top upgrade priorities.



btw, agreed on the tolls/commute - that's just something we'll have to suck up.</blockquote>


Sounds like you should be renting in AV (or wherever) if the purchase isn't necessarily for the longer term.



Why would you considering buying now if renting the same was likely cheaper AND you wouldn't be losing equity?



I get the urge to buy when you are targeting the whole raise your kids family home, but with no kids, not sure of area, maybe want something different/more in a couple of years buying anytime soon seems fairly imprudent. I'd be willing to unload on a house tomorrow but I'm quite sure of where I want to buy, the amount of house I need, etc. and plan to be in my next purchase for 20+ years...
 
[quote author="IrvineRenter" date=1209687190] There are so many Option ARMs and "liar loans" in South County, prices will be very depressed there. You were wise to pass on the deal.



Wait, and you will get much more house for much less money...</blockquote>


So very true. Talega is a warzone right now in terms of foreclosures. I don't have a problem with Aliso - in fact it is possibly the easiest South County city to get to Irvine from since you can take the 133 to the 405/5. But be careful of mello roos and tolls, as ipo mentioned. Lots of foreclosures in Aliso...and plenty in Laguna Niguel as well. Time is certainly on your side. I'm starting to see more 2003 rollbacks pop up in non-condo developments. There are a lot of bad loans to be expunged, and that will take time.
 
Agreed. I've got good friends down their, and they're pretty worried. Although, they were lucky enough to buy in 2003, sell in late '06 - making about $400K free money, which they rolled into another in Talega. The problem with Talega is the supply of homes over $900K far outnumber the supply under - eventually these will fall into the 700s, thus driving down the price of the home we almost purchased into the 600s and possibly lower. No thanks.



I 100% agree that waiting, to the extent one can, is the best policy in markets like this. However, I also think there's value out htere - you just have to be patient and agressive with your offers.



I'm interested to buy for many reasons, mostly, however, because I want a home. I've never lived anywhere longer than 2 years and I want something that's mine. I can use the income tax benefit as well - to the extent the cost of owning outstrips the cost of renting, I'm ok with that because I put a qualitative premium on owning. I'm not ok with losing tons of equity - which is what concerns me about buying new at Glenwood rather than lowballing based on a % discount to 04/03 prices.



Blitserve - I don't know where Glenwood park is, we're looking at the new development at Glenwood (AV Country Club).



What's the consensus on buying 2700 sq/ft in Pasedera for ~$700K? Do you think Shea will drop those prices further? I saw a post here from Nov. '07 that said same homes were about $100-150K higher in asking price? Also, how willing are builders to negotiate added incentives - i.e. more cash for closing costs and/or upgrades? Thanks everyone!
 
Glenwood Park is Cedarbrook and Glenwood.

Just a little South of where you are looking to buy.



Its not a bad area at all. Traffic can be a bit of an issue

in the mornings unless you use the Toll Road. Plenty of places

to eat and shop nearby. But the schools were a disappointment

because of the overcrowding and getting your kids to school in

the mornings is a nightmere as far as logistics.

Foxborough Elementary I think would be the school you would draw.

I wonder if its still just a bunch of trailers in a parking lot ?

It was supposed to be temporary solution until Wood was built

but last I heard its still open.

The other School would be Wood/Avila Elementary.

http://www.trulia.com/schools/CA-Aliso_Viejo/Foxborough_Elementary_School/

http://www.trulia.com/schools/CA-Aliso_Viejo/Don_Juan_Avila_Elementary_School/



Do some reading on the Capistrano School District. It has had issues

in the local news for years.
 
[quote author="bltserv" date=1209772885]Glenwood Park is Cedarbrook and Glenwood.

Just a little South of where you are looking to buy.



Its not a bad area at all. Traffic can be a bit of an issue

in the mornings unless you use the Toll Road. Plenty of places

to eat and shop nearby. But the schools were a disappointment

because of the overcrowding and getting your kids to school in

the mornings is a nightmere as far as logistics.

Foxborough Elementary I think would be the school you would draw.

I wonder if its still just a bunch of trailers in a parking lot ?

It was supposed to be temporary solution until Wood was built

but last I heard its still open.

The other School would be Wood/Avila Elementary.

http://www.trulia.com/schools/CA-Aliso_Viejo/Foxborough_Elementary_School/

http://www.trulia.com/schools/CA-Aliso_Viejo/Don_Juan_Avila_Elementary_School/



Do some reading on the Capistrano School District. It has had issues

in the local news for years.</blockquote>


The elementary for this development is currently Oak Grove. Don Juan isn't a bad school although its combo elementary and middle, which I don't personally dig. Foxborough is hurtin'
 
[quote author="TR4" date=1209770641]What's the consensus on buying 2700 sq/ft in Pasedera for ~$700K? Do you think Shea will drop those prices further? I saw a post here from Nov. '07 that said same homes were about $100-150K higher in asking price? Also, how willing are builders to negotiate added incentives - i.e. more cash for closing costs and/or upgrades? Thanks everyone!</blockquote>


Shea, Lennar, resale home, it doesn't matter. Prices will drop further. On new, even if they don't, incentives will increase. Might not be this summer, but eventually.
 
we just bought in Pasadera at Glenwood and are waiting to move in, so I do have an opinion on this of course. First off, we sold our house and bought a plan 2 in Pasadera. Did we hit the bottom of the market? Probably not. But we didn't sell at the bottom of the market either. I've always believed nobody loses money in Southern California Real Estate over a 5-6 year horizon- so if you'll be anywhere longer than that- you should be fine.



Why Pasadera? Being surrounded by a golf course is really nice- even if you don't play. We see green all around. Plus the acquatic center (many pools) being finished. Plus social members of the country club means being able to walk to dinner or for drinks when people come over. Shea's a great builder, and we've found them to be very flexible. There was an article in the LA Times too that said Pasadera homes were in the 900's in January- and Shea dropped prices $150k-$200k across the board. That's why we looked. And doing that resulted in 20 some sales since January (of 149 total being built). And at their prices now- we couldn't find anything even close at Columbus x or Portolla Springs etc.



The designs are very good as well. The lots are small- but each front yard has an enclosed patio PLUS a pad for patio furniture. I like the back loaded design- garages in back. Upgrades for the most part are a pretty good deal (with some exceptions). A good friend/contractor told me he couldn't make changes for what they were asking- e.g.- $90 for an outlet etc-- and Pacific Sales said "those appliance upgrades for that price? take it!"



They've done everything we've asked them too- even changing the framing to allow for subsequent doggie door installation- at no charge. The $21k buy down got us a 5.25% interest rate with Shea Mortgage.



Assoc Dues for Pasadera, the city of AV, and social membership in the country club are expected to be $180 when the project is complete (correction from orig post).



Mello Roos is aweful- like everywhere for new construction near Irvine- about $500/mo. Finally this is the closest corner of AV to Irvine. We'll just take Moulton to the 405 and avoid the toll road. It's 12 miles to UCI from there.



So anyway- may not be for everybody- but it still looks like a deal to me. Good luck.
 
<blockquote>we just bought in Pasadera at Glenwood and are waiting to move in, so I do have an opinion on this of course. </blockquote>
We looked in this area and really liked the homes. Congratulations. :-)
 
[quote author="waiting-2-move" date=1210053279]we just bought in Pasadera at Glenwood and are waiting to move in, so I do have an opinion on this of course. First off, we sold our house and bought a plan 2 in Pasadera. Did we hit the bottom of the market? Probably not. But we didn't sell at the bottom of the market either. I've always believed nobody loses money in Southern California Real Estate over a 5-6 year horizon- so if you'll be anywhere longer than that- you should be fine.



So anyway- may not be for everybody- but it still looks like a deal to me. Good luck.</blockquote>


Congrats on the purchase waiting.



Do you believe that those people who bought two years ago, quite near the peak, will be back to break-even by 2011? For example, for someone that acquired a Columbus Grove property for $1.1-1.2M in 2006, selling for $900K today, if they just hold for 3-4 more years they will be back at $1.1-1.2M? What conditions exist or will occur that could spur this next round of price inflation? It would appear you think prices may start rising by 20-25% per year after we hit bottom...
 
thanks for the congratulations...

and maybe it's 8 years not 6 to recover- but check outhttp://www.laalmanac.com/economy/ec37.htm - you can see in '95 the median price in the county hit a 5 year low- but prices recovered within 3 years. So in the last 25 years, the guy who bought in 1990 lost money 5 years in a row--- but was even again 3 years later. But this is the worst possible case in 25 years. So based on this I don't think my general assumption is that far off.



who knows, the decline that started in OC a couple of years ago may be the worst in 25 years, but I don't think so.
 
[quote author="waiting-2-move" date=1210072648]thanks for the congratulations...

and maybe it's 8 years not 6 to recover- but check outhttp://www.laalmanac.com/economy/ec37.htm - you can see in '95 the median price in the county hit a 5 year low- but prices recovered within 3 years. So in the last 25 years, the guy who bought in 1990 lost money 5 years in a row--- but was even again 3 years later. But this is the worst possible case in 25 years. So based on this I don't think my general assumption is that far off.



who knows, the decline that started in OC a couple of years ago may be the worst in 25 years, but I don't think so.</blockquote>


Based on the figures you referenced, the decline over five years was less than 15%. The median has already dropped much further than that in a fraction of the time... Even if the median falls only another 15%, the declines vs. the mid 90's will be double the magnitude. Wouldn't that suggest it would take twice as long to recover?
 
[quote author="waiting-2-move" date=1210053279]



We'll just take Moulton to the 405 and avoid the toll road. It's 12 miles to UCI from there.

</blockquote>


I would also suggest taking Glenwood -> Aliso Creek -> El Toro to the 133 (via the 73 off ramp - no toll) to the 405 up to UCI. You will get on the 405 at about Sand Canyon. Then you can get off the 405 at Jeffrey.
 
[quote author="caliguy2699" date=1210114612][quote author="waiting-2-move" date=1210053279]



We'll just take Moulton to the 405 and avoid the toll road. It's 12 miles to UCI from there.

</blockquote>


I would also suggest taking Glenwood -> Aliso Creek -> El Toro to the 133 (via the 73 off ramp - no toll) to the 405 up to UCI. You will get on the 405 at about Sand Canyon. Then you can get off the 405 at Jeffrey.</blockquote>


Congratulations on your purchase.



Excellent advice here from caliguy. Thats the way I used to take in the AM when I lived in Glenwood Park. You will find Moulton to be less than friendly traffic wise in the AM.



My only concern on timing the market is what I see as a Japan like scenario. We go down another 20-25% and it takes a decade before we come back to 2006 prices. And with inflation the resulting performance is less than other investments.
 
I also forgot to mention the driving path I talked about works for coming home too - take the 405 (traffic is not too bad for this stretch) -> 133 South -> 73 off-ramp (again no toll) -> El Toro -> Aliso Creek -> Glenwood.



That is one of the top perks of your location IMO - you have the best access to Irvine from that part of South County, plus you do not need to take toll roads if you don't want to. But, if you are pressed for time or want the luxury of taking the toll road once in a while, then go for it.



[quote author="bltserv" date=1210119978]



My only concern on timing the market is what I see as a Japan like scenario. We go down another 20-25% and it takes a decade before we come back to 2006 prices. And with inflation the resulting performance is less than other investments.</blockquote>


I am also concerned about this, but I will take that risk when buying costs roughly the same to own as it is to rent in the places I'm targeting.
 
WOW thanks a lot for the driving advice! I'm absolutely going to check those routes out!



And when I get a minute with Excel, ipoplaya, I think the way to do it would look at average 30 year fixed mortage rates for each of those years too- to compare a payment given 20% down now versus the last slump (corrected for inflation).



In 1990- average rates were in the mid 9% range. By the bottom of the slump- in '95, rates were near mid 7's.

We're already seen rapid declines in values- AND- interest rates are in the 6's (for comparison sake). So I'd think the decline won't last as long. To bolster that argument, the Register reported this morning the number of months it will take to clear all inventory of houses on the market has turned a corner- i.e. sales have begun to surpas previous months and inventory has just started to decline. Of course, that could be seasonal, but it could also be that this correction may not take 5 years.



But heck, I'm a computer guy not an economist, so my throw of the dart is as bad as anyone's.



Now the commute advice- that's valuable! Thanks.
 
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