Quail Hill Foreclosures

GavriloPrincip_IHB · Feb 3, 2008

A few data points on larger houses in Quail Hill:

51 Momento, 5 bed, 4.5 bath, 4150 square feet is in foreclosure and scheduled to be sold at a Trustee's Sale on Feb 13:

ednesday

2/13/2008 2:00:00 PM

Address:

<a title="Get Google Map" target="_blank" href="http://maps.google.com/maps?f=q&hl=en&q=51+++MOMENTO,+IRVINE,+CA+92603">51 MOMENTO</a>

<a target="_blank" href="http://maps.yahoo.com/beta/#maxp=search&q1=51+++MOMENTO,+IRVINE+CA,+92603"><img alt="Get Yahoo! Map" src="http://www.fidelityasap.com/i/icon_yahoo.gif" /></a>

City:

IRVINE

State:

CA

Zip:

92603

County:

Orange

APN:

481-095-25

Sale Status:

Sale Date 02/13/2008

TS Number:

CA07107189NF

Notice of Sale Amt:

$1,501,724.53

Opening Bid Amt:

0

Sold Amt:

0

Sale Location:

<a title="Get Google Map" target="_blank" href="http://maps.google.com/maps?f=q&hl=en&q=700+Civic+Center+Drive+West,+Santa%20Ana,+CA+92701">At the North front entrance to the County Courthouse, 700 Civic Center Drive West, Santa Ana, CA.</a>

<a target="_blank" href="http://maps.yahoo.com/beta/#maxp=search&q1=700+Civic+Center+Drive+West,+Santa%20Ana+CA+92701"><img alt="Get Yahoo! Map" src="http://www.fidelityasap.com/i/icon_yahoo.gif" /></a>

Trustee:

Quality Loan Service Corporation

Trustee Phone#:

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According to Redfin, it last sold in April 2005 for $1,830,000, and was originally sold in October 2004 for $1,616,000.

As foreclosure loomed, the homedebtor has been trying to sell it for 122 days, initially asking around $2.2 million. This weekend the price dropped to $1,799,000.

Nearby, a smaller house at 41 Momento is for rent for $5,500/month. It is 4 bed, 4.5 bath, 3,100 square feet. Using Irvine Renter's Gross Rent Multiplier formula of (rent * 160) = value, 41 Momento is worth $880,000.

GavriloPrincip_IHB · Feb 3, 2008

Also for rent in Quail Hill's Vicara tract with the Momento properties are a pair of Frescoes:

29 Fresco: 5 bed, 4.5 bath, 4,600 square feet. Asking rent is $6,900/month, for which the GRM calculation yields a value of $1,104,000. Keep in mind that this is a much larger house than 51 Momento.

19 Fresco: 4 bed, 3.5 bath, 4,100 square feet. Asking $5,950/month, for a GRM of $952,000. In size and design, this appears to be the most comparable to 51 Momento, suggesting that the latter is overvalued by $850,000, even at the emergency price the homedebtor would accept to avoid the foreclosure sale.

IrvineRenter profiled 19 Fresco back on August 3, 2007 and October 20, 2007, when the wishing price was lowered from $2,249,000 to $1,950,000:

http://www.irvinehousingblog.com/2007/10/20/balcony-view/

GavriloPrincip_IHB · Feb 3, 2008

Further down the hill, 143 Weathervane was foreclosed on in January. It was purchased in January 2007 for $1,450,000, apparently with 100% financing. It went into default in August, and the notice of Trustee's Sale stated a minimum bid of $1,618,228 (Is this a 100% financing neg am?)

The unlucky neighbor just up the street at 149 Weathervane is trying to lease his property out at $3,995/month, indicating a GRM value of $639,200!!

Weathervane and Treehouse are streets adjacent to each other. We have already seen a foreclosure go back to the lender at 102 Treehouse.

GavriloPrincip_IHB · Feb 3, 2008

Finally, in the Chantilly section of Quail Hill, there are a couple of rentals available:

105 Capeberry, 4 bed, 4.5 bath, 3,100 square feet. Asking rent: $5,200. GRM = $832,000

113 Bottlebrush, 5 bed, 5.5 bath. Asking Rent = $5,500. GRM = $880,000.



 Keep in mind that all of the above are calculated based on the asking rents. Most of these rentals have been on the market for a long time at successively lower prices; there are no takers at these prices. GRM prices based on the asking rents are therefore still overvalued.

25w100k+_IHB · Feb 3, 2008

Haven't we seen a chart showing that the gross rent multiplier in irvine has NEVER been 160, and was hovering around 200 before the 'boom'? Obviously, these prices are too high, but lets be realistic here for the area.

graphrix_IHB · Feb 3, 2008

Asking rents vs real rents at a 200 GRM...

41 Momento is for rent for $5,500/month. Real rent $4500, 200 GRM equals $900k.

29 Fresco is for rent for $6900/month. Real rent $5900, 200 GRM equals $1.18mil.

19 Fresco is for rent for $5950/month. Real rent $4900, 200 GRM equals $980k.

149 Weathervane is trying to lease his property out at $3,995/month, indicating a GRM value of $639,200!! At least this guy isn't snorting the Kool-Aid, so I will knock it down to $3750, and with a 200 GRM, it equals $750k.

105 Capeberry is for rent for $5200/month. Real rent $4500, 200 GRM equals $900k.

113 Bottlebrush is for rent for $5500/month. Real rent $4900, 200 GRM equals $980k.

Not much different if you ask me, and I still think the rents I used are a little high. Also, I proved a condo, that sold at the foreclosure auction, did fit in that 160GRM range. If everyone would like, I could find more.

IrvineRenter_IHB · Feb 3, 2008

"Haven't we seen a chart showing that the gross rent multiplier in irvine has NEVER been 160, and was hovering around 200 before the 'boom'?"

Not a chart based on real market rents. The data you were referring to was based on the rental equivalent component of the CPI -- a made up number. Market rents will always be reflective on income because rents are paid out of current income. Look at the income data from 1997, and look at the median sales price, and what do you see?

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Irvine Median Income

Irvine Median

Rent

GRM

2006

$ 83,891

$722,928

$ 2,500

289.17

2005

$ 82,827

$635,675

$ 2,468

257.54

2004

$ 80,520

$609,397

$ 2,400

253.96

2003

$ 75,141

$461,888

$ 2,239

206.27

2002

$ 72,289

$379,852

$ 2,154

176.33

2001

$ 71,821

$334,741

$ 2,140

156.40

2000

$ 72,057

$308,089

$ 2,147

143.47

1999

$ 68,170

$278,148

$ 2,032

136.92

1998

$ 63,959

$263,172

$ 1,906

138.07

1997

$ 62,022

$245,437

$ 1,848

132.79

If you assume the rent on a median home in Irvine was $2,500 a month in 2006, you can take the same percentage of income and extrapolate backward to obtain the median rent back to 1997. We know what the median home price was. Once you have a rental rate and the median home price, the GRM is an easy calculation.

awgee_IHB · Feb 3, 2008

Gravilo - Thank you for sharing this info. I am particularly interested to know what these properties actually rent for opposed to the asked for rent. But, this may be a data point which may not become available.

When we were looking for a home to rent, we looked in Quail Hill and we thought the rents being asked for were way out of line with demand. We ended up in Coto where I am noticing rents decreasing. There is a home, same model as ours, two blocks away that is renting for $400 less per month than we are paying. I would be interested in knowing if rents are decreasing in the Quail Hill and Turtle Rock neighborhoods.

lendingmaestro_IHB · Feb 4, 2008

I see rental signs come and go here pretty quickly for properties at or below 2500 a month. I don't know if they actually get rented or if the listings are just removed. I am guessing it is the former, since this seems to be a desireable place to live. Although, I've been noticing a slow reduction in the number of people I see when I am out and about in the neighborhood. There are many times when I take my little puppy to one the the parks here in Quail Hill, and I'll be the only one in sight. I climb to the top of Knollcrest Hill and stare and all the nice homes going up the hill, and I just get a vacant, empty feeling. Sometimes it feels like a ghost-town, but that doesn't bother me because I like peace and quiet.

QH Renter_IHB · Feb 4, 2008

My experience is pretty similar to that of lendingmaestro. QH seems a little bit on the deserted side and, honestly, that is one of my favorite parts about it. My soon-to-be wife and I will probably look at buying something here (although she wants to buy be closer to the coast) in a couple of years once things get more realistic.

In general, I don't think posted rents are indicative of the market here. From my experience, I would expect that you wouldn't have any trouble renting something for 10% less than the listed rent.

GavriloPrincip_IHB · Feb 4, 2008

Another data point from Vicara: 15 Balcony. 4 bed, 3.5 bath, 4800 square feet is for rent for the staggering, Kool-Aid snorting price of $8,300. (I think this asking price deserves a WTF award. You could have waterfront--lots of it--in Laguna or Newport for this much. But even if the lessor got the asking price, it almost certainly would not cover the monthly mortgage, taxes and fees.) 

Anyway, at $8,300/month, the GRM = $1,328,000. Far less than any of the Vicara properties are asking on the resale market.

lendingmaestro_IHB · Feb 4, 2008

Your last sentence is terrifying. Can homes be that far out of whack with rental incomes?

lendingmaestro_IHB · Feb 4, 2008

All of these Quail Hill properties were built during the heat of the bubble. They were significantly over-priced from the builder from day one. I think we'll see these units fetch prices below what they originally sold for relatively soon.

UrbanVerve_IHB · Feb 4, 2008

Seems the number of foreclosures in QH are starting to exert some downward pressure on prices -- at least, for properties that actually sell and don't just sit on the MLS for a year. I've seen the numbers on some recently solds in the multi-family tracts. 3 bdrm townhomes that were purchased from the builder in the high 600s/low 700s about 3 years ago are dropping to the mid 500s. Two recent sales were $550 (a foreclosure) and $535 (a market sale).

GavriloPrincip_IHB · Feb 4, 2008

lendingmaestro wrote:

"Your last sentence is terrifying. Can homes be that far out of whack with rental incomes? "

Yes. The $8,300 asking rent for 15 Balcony is a totally outrageous, WTF price, almost $3,000/month higher than the nearest comparable, and it still only produces a GRM value of $1.3 million for the house. All of the houses for sale in Vicara are listed at wishing prices of $1.8 million or higher. 

Several houses came up for rent in Vicara at the end of the summer in the $6000-9000 range. To my knowledge, none of them rented at that price. 38 Silhouette, a gorgeous 5 bed, 4,100 square foot house that had never been lived in, dropped its rent lower and lower until it finally hit $4,300 in November. I don't know if it rented even at that price. If it did, it implies a GRM value of $688,000. Bottom line, there is very little demand for houses renting over $3,000/month. 

"All of these Quail Hill properties were built during the heat of the bubble. They were significantly over-priced from the builder from day one. I think we'll see these units fetch prices below what they originally sold for relatively soon. "

51 Momento could be the first "Original Price Rollback." It originally sold for $1,616,000 in 2004. If it is sold back to the lender on February 13 for $1.5 million, and the lender dumps it for that price or slightly higher, it will sell below the original price. (That is, assuming it sells. Right now, it's not selling for $1.795 million.) And if the lender re-sells for $1.5 million, how will any other seller in Vicara be able to sell for what they originally paid? The only sellers up there will be the banks.

ElricSeven_IHB · Feb 4, 2008

Plenty of the condos are selling below original price, by six figures on the larger ones. A lot of FB's in QH.

No_Such_Reality_IHB · Feb 4, 2008

The $8,300 asking rent

I can ask $185,000 for my 2003 Prius with the carpool sticker.

That doesn't mean the market is $185,000 for one.

 

Frankly, that's how realistic many of the wishing price rents are on the MLS. Desperate rent requests to save their sorry butt.

IrvineRenter_IHB · Feb 4, 2008

It has only been over the last couple of weeks that I have started to fully grasp how overpriced the high end of the market is. One of the posters on the main blog, surfing in Newport, provided a link to a rental in Corona Del Mar that showed a GRM of around 400. The Quail Hill properties are bad, but not quite that bad. Originally, I did not think the high end would fall as hard on a percentage basis as some of the undesirable, low-end stuff, but now I am not so sure. The high end has been bid up so high, it is so far beyond WTF that it may crash even harder than the low end. It will take longer to get going downward, but when it does -- look out.

lendingmaestro_IHB · Feb 4, 2008

For kicks just go to redfin and look at properties between 2mil and 4mmil in CDM, NB, and NC. You will be absolutely flabberghasted. There are so many properties purchased for say 1.5 mil in 2006 now for sale for over 2 mil. I saw one home in CDM for sale for 6.2 mil and it was last purchased for 4.5 mil in may of 2007!!!!

The high end in my opinion is the most over-valued. Why? Many people got super-wealthy in the last 5 years, and those people can afford to bu multi-million dollar homes. I wonder how many McMonigle owns?

lendingmaestro_IHB · Feb 4, 2008

Here are a couple to get u started

<a href="http://redfin.com/stingray/do/printable-listing?listing-id=1263283"> 565 Windsor Pl Laguna Beach CA 92651</a>

List Price $3,900,000

Last Sale $1.5 Million 06/05/2000

Previous Sale 1.0 Million 02/28/1990 ONLY 50% APPRECIATION OVER 10 YEARS

http://redfin.com/stingray/do/printable-listing?listing-id=1263283

<a href="http://redfin.com/stingray/do/printable-listing?listing-id=1439444">129 Emerald Bay Laguna Beach, CA 92651</a>

List Price $3,395,000

Last Sale $2,700,000 01/09/2007 Seller looking for 700,000 profit in one year

http://redfin.com/stingray/do/printable-listing?listing-id=1439444

<a href="http://redfin.com/stingray/do/printable-listing?listing-id=1419119">814 West Oceanfront Newport Beach, CA 92661</a>

List Price $3,795,000 (It's a dump)

Last Sale $3,300,000 03/30/2007 Seller looking for 500,000 profit in only 10 months.

http://redfin.com/stingray/do/printable-listing?listing-id=1419119

<a href="http://redfin.com/stingray/do/printable-listing?listing-id=862452">

</a> <a href="http://redfin.com/stingray/do/printable-listing?listing-id=862452"> 222 Evening Star LN Newport Beach, CA 92660</a>

List Price $3,990,000

Last Sale $1,325,000 08/29/2003 Seller looking for incalculable mind-blowing profit in 4 1/2 years!

http://redfin.com/stingray/do/printable-listing?listing-id=862452

<a href="http://redfin.com/stingray/do/printable-listing?listing-id=1425041">1061 Canyon View DR Laguna Beach, CA 92651</a>

List Price $3,495,000

 Last Sale $1,925,000 12/05/2005 Seller wants over 1.5 Million in just over 2 years!!!

http://redfin.com/stingray/do/printable-listing?listing-id=1425041

Quail Hill Foreclosures

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