(UPDATE: Added reference to a third home currently listed for more.)
It’s palatial and French neoclassic. Big dock on the water. You can find it in Newport Beach now up for sale for $38.5 million. And if that price target is hit, this sale could break the record $35 million price paid for actor Nicolas Cage’s Newport Bay home nearby in January.
Agents with HÔM Real Estate Group said their brokerage just got the listing along with Willis Allen Real Estate of La Jolla. This big-ticket listing follows news that an O.C. price record was just set for an off-water home: a $27.1 million sale of a Corona Del Mar house.
This pricey waterfront property new to the market, at the tip of Harbor Island whose residents include Irvine Co. boss Don Bren, is described by HÔM’s listing as a 23,000 square-foot lot hosting a house having 10 bedrooms and 12 bathrooms within 18,000 square feet of living space.
Willis Allen’s Web site described the Harbor Island home, completed in 1990, this way:
“Spectacular and elegant French neo-classic bayfront estate. One of Newport’s most prominent and coveted properties with approx. 300ft of waterfront with stunning views of the main channel. Docks several boats. Expansive garden & pool, cook’s kit., butler’s pantry, 6 fp, elevator, staff quarters 8 car garage.”
Rob Giem of HÔM said, “It is considered to be the finest piece of bayfront property in Newport Beach.” When asked if it would sell quickly, he first said he didn’t make predictions, then added … “But I think so.”
If the Harbor Island home sells for $38.5 million, its price could set a record for a single-family home in Orange County. But it’s got competition from at least three other homes offered for sale in Orange County with higher asking prices. Newport Beach agent and developer John McMonigle currently is asking $77 million for the Villa del Lago estate under construction in Newport Coast. McMonigle also is listing the beachfront Portabello Estate in Corona del Mar for $75 million. Prudential California’s Architectural Collection also is offering an Emerald Bay beachfront home for $44.5 million.
What really matters:
A) Comp Killers are now all over Orange County, driving down the price of real estate. This is the same real estate that was once driven up by the ability to borrow, instead of the ability to repay.
B) PermaBulls are now in complete denial, and still believe the banks and/or the gubernment will reestablish the Ponzi Scheme.
C) So called, local, real estate professionals like, Gary “in the bag” Watts, have been completely discredited.
D) Homeownership is being returned back to a conditional right that is EARNED, instead of an entitlement that was perverted by riverboat gamblers, Wall Street predators, irresponsible home debtors, carnival barkers and latte drinking bimbos.
Hey Lee, what do you think of all the vultures on your team who are nothing more than flippers? Do they fit in that tidy little box you created in your head?
ForeclosureRadar had an article about April REO inventory yesterday…
“Lenders added 22,324 properties to their real estate owned or “REO” inventory in April. Last month DataQuick reported that 38.4% of all home sales in California were from this REO inventory, equaling approximately 9,432 properties. Based on those levels, lenders are increasing REO inventories 1.36 times faster than they are able to resell them.”
So I don’t think we are at a bottom yet…
I think it’s alarming that despite the increase in home sales, the percentage of distressed homes for sale, continues to increase.
Hold on a moment … this wasn’t suppose to happen in The O.C.!
WAKE!…UP!! we need to pass legislation that forbids any non citizen or foreign entity from purchasing both raw land and private residences like this. Forget the fact that it does anything to any valuation calculation, I leave that moot point to be hammered out by the simple minds. This is real property that is really going to foreign interests.
The high priced transactions are all being done by foreign people and companies due to the insanity of the dollar.
just keep waiting…then begin the fight when the sultan of dirtland decides to buy half of huntington beach for a summer villa…
i love OC.
What are they going to do, take it away? The same xenophobia happens every 10 years. The Plaza is still in New York and Pebble Beach is still in California.
SeekingAlfalfa:
I’m glad to see that you learned my lesson from yesterday and are now posting the link instead of just selecting parts of articles that support your bullish agenda.
You are a good boy.
OK National Monkey Bone, I see you can’t dispute Karl Shillers’ message so you attack the mesenger. I guess this blog is how you get your freak on everyday. Well, I’ll leave you alone to panic.
18,000 sq ft? I often wonder why people want a house that is so large. 12 bedrooms, 12 bathrooms… 12?? That’s a lot of sewage and tidy bowl man. I can understand the location and wanting a spacious house, but this is not a “home” this is a mansion for entertaining or an investment or something.
8-car garage? With 12 bathrooms and 18k sq ft I think 16-car garage would be much more appropriate.
mav, you know what that guy’s main “point” was? His whole point is that in the state of California, the average ALT-A CLTV at origination was 89%. Know what Orange County’s average ALT-A CLTV at origination was? For all loans it was 76%, for the cashout subgroup it was 68%. Oops! I bet you didn’t know that. Better wash that egg off, it gets sticky when it dries.
89% vs 76%…that’s suppose to better right? Still not buying..keep trying..someday I’ll buy a home and thank you all your efforts.
Not “supposed to be”, “is”. No one cares when you buy, eat it. We are discussing facts here.
And we care about Detroit because…………
Mav … thanks so much for posting that video. It’s great info!
It’s quite clear that Alt-A will impact Orange County a lot more than subprime has. In fact, after listening to Mr. Mortgage describe the characteristics of Alt-A, it’s got Laguna Niguel, Irvine, Yorba Linda, etc, etc, etc, written all over it.
Key points regarding Alt-A in California as of Dec 2007 (per the Fed):
There are 733,000 Alt-A loans in CA - that’s 230,000 more than subprime.
The avg loan balance on Alt-A is over $445,000 - that’s almost twice the avg balance on subprime. (Think Orange County)
Almost 20% of Alt-A loans are non-owner occupied - vs. 5% for subprime. (Think Ladera Ranch, Talega, etc)
As of 12/31/07, 14% of Alt-A were behind on their payment. Subprime was also about 14% one year prior … now subprime is over 50%. (Think the difference between Aliso Viejo to Santa Ana)
The bulk of Alt-A loans were originated in 05, 06 and 07, and will start resetting in 2009 to 2012. (Think growing number of Distressed property)
Full Doc Loans: Alt-A 16.8 vs Subprime about 50% (Think Orange County and higher income to home multiple — PermaBulls call this a “premium”, I call it more liar loans)
Avg Fico Score Alt-A is 718. (ORANGE COUNTY)
A lot of empty stats there. It’s all about LTV baby.
Pretty funny pointing out ALT-A doesn’t have a lot of full doc. Pure genius!
Facts??? They have nothing to do with the Liberal-Mind-Set…More like emotions & reactionary dribble…
In other words, those who try & convince themselves by the second that the bottom isn’t being pulled out from under the great OC & Calif in general! Liberals are adding to this problem from Sac…Including Arnold who’s thrown in with folks like the bottom-is-here-crowd…
It’s just begun…$20 bil deficit spending not included yet in the full outcome!
A lot of empty stats there. It’s all about LTV baby.
LOLOPLLOLLOLLOOLL!
I’m sorry … I’m stumbling over myself here. WTF? YOU NEED TO WATCH THE ENTIRE VIDEO! Baby!
LoL
Lee…Good stuff! That’s one of the best factually-based reports I seen in this market today…The facts are almost too many to process…I agree with him especially about the shadow-defaults…There are so many NOD’s etc that aren’t even counted yet…
In a market like this, even the MLS becomes a lagging indicator to the facts…3 qrts in the rear to see the bigger picture…
Cut me a break with this Mr Mortgage guy - if you cannot see that his goal is to make a buck off of fear and panic than get some glasses.
Lee…I just watched his “Is Now The Right Time To Buy A Home?” video from apr…I have folks ask me that all the time…The statements he covers are in the heart of why it’s far from the bottom;
LTV (80% min), DTI (harder to qualify), Median-income not median price, today Full-Doc loans no exotic loans anymore…and the big one for longterm is IRR (internal rate of return)…even foreign investers use that one…and the cap-rate combine won’t work in this market…
Sure they say, but it’s a home not an investment! Not true, everyone counts the biggest wealth effect they have…Their Home! Precieved loss in value deflats confidence in local spending…
He also either doesn’t understand some of the data he presents, or (more likely) is intentionally manipulating it. How strange also that ForeclosureRadar.com (who makes money from foreclosure activity) sends him an advance copy of its report before making it public. A foreclosure site teaming up with Mortgage Lender Implode-O-Meter? I’ll pass and wait on Dataquick, more specifically their city by city data.
I dunno mav, a guy in a ten dollar shirt makes a home movie in his closet. Everybody is an expert. Not exactly Huntley/Brinkley
His argument for not buying is heavy on cap rate (as if) and light on replacement costs and supply & demand.
OMG! I forgot: he actually had the balls to say no loans over 80% and full doc only! That was priceless! He’s nothing but a video bubble blogger.
In his closet in a $10 shirt!
DataQuick should go the way of Mr Watts and Huntley/Brinkley from yester-year…It’s a new market! And yes, he’s just one guy…Sure there are few less than 80% LTV loans being made…It’s not the main market…It’s about the future situation. Not today’s pinhead focus…
Character assassins usually work when they don’t have facts?
Hey Thoughtless … PermaBulls kinda remind me of the government CPI figures this morning. They report that Gasoline was DOWN -2% for April. LoL
We’ve bottomed on everything, even Gasoline prices dropped 2% in April. LoL A number here, and a number there, then POOF, gas down -2% … Magic! LoL
Here comes another round of Bag Holders.
Uh…..I provided facts that were much BETTER than his! Speaking of character assassination……
OK, I’ll throw Mr. Mortgage a bone: he was right about keeping your focus to a 1 mile radius of where you want to buy.
Beachcomber, how is it that so many people ask you your opinion on buying now? Hmmm.
actually - most of the alt-A adjustables wont have that big of a jump in payment when they adjust because libor is low again. But the problem is, nobody wants to pay for a mortgage payment that is 3 times the payment that the new guy next door just got when he baught his home for $350k less than the alt-a junkie did. these alt-a borrowers are going to be packing up and moving out in droves by the time we get done with this collapse. Nothing to do with affording the payment, but a lot to do with a bad investement that is getting worse by the minute.
Thoughtful…Because I’ve been in the Coastal OC since 1964 and buying/selling real estate since 1976 (ET,NB,CM,LB,AV) since 1976…It’s called historical experince! Not Newbie…
No one neighbor hood has escaped untouched in this market…Even my friends investing in Shady-Canyon are getting their heads handed to them…And, they thought it would be exempt from any correction! They can hang for now because they have deep pockets…Any further declines and even they will have to do something more drastic… Which will become Comp-Killers there too…
It’s not just bad investing. It’s people that don’t think they have any obligation to pay back loans. Which is the same reason why they were willing to get into something they could never afford in the first place. There’s no financial logic to it. It’s all based upon what the person can get NOW and how they can bail out when they don’t like it any more. That’s part of the problem. The lenders and realtors pushed it and they had a big customer base to work with.
“actually - most of the alt-A adjustables wont have that big of a jump in payment when they adjust because libor is low again”
Actually, a bunch of those Alt-A loans are OPTION ARMS, with amortization kicking in between 110 to 120% LTV. That can double your payment overnight. Think … negative equity.
Here’s the options for the OC real estate market:
A) Home buyers need to save and put down 50%
B) Incomes need to double in a very short period of time
C) Home prices need to continue to decline
Now which option is the quickest to the “bottom”. LoL!
“nobody wants to pay for a mortgage payment that is 3 times the payment that the new guy next door just got when he baught his home for $350k”
Huh? The guy next door bought a $1,050,000 property for $350,000? Where, in Outer Mongolia? Can I get a couple of those? There is so much nonsense on this blog it’s mind boggling.
Thoughtful can you just shut your big mouth for once. It’s really getting old here.
Thoughtful…Yes, I wonder who it’s coming from?
I agree - I put option arms in an entire catagory on its own. Talk about the banks thinking they were going to get rich on a loan program - they went from paying lenders 3 points on these loans to stop offering them in about 2 days.
Thoughtful - what loan amount do you think people that bought homes for $600k to $1mil in the last 3 years can qualify for in todays lending market? Half probably couldnt qualify for any loan, another 20% for a $400k loan and another 20% for $300k loan - maybe 10% can still qualify for the loan amount they have now. this is reality
Beachcomber, please jump in when my facts are incorrect, instead of your empty slurs. Maybe we can have a real debate. I can’t wait.
Mick … thoughtful is very likely a real estate investor who has made some really foolish decisions the last few years. While the smart guys were doing 1031 exchanges out of Ca, thoughtless very likely saw an opportunity to become a millionaire. Little does he know, millionaires typically become that way when things are at their absolute worst.
Despite all the bragging from thoughtless, he very likely has a negative bottom line.
mm, I don’t know and NEITHER DO YOU! You just pulled that out of your a55! As for the relatively small Option ARM issue here: get ready for 120% refis! Wachovia has also retired MANY of these loans voluntarily already. This year also saw RECORD ARM to fixed refis. Dream on.
You have a very active imagination Lee. I thought we were debating substance (or its lack) not my balance sheet (which dwarfs yours). Oh yeah, everybody still makes Option ARMs.
Thoughtful…Folks who prove themselves to be in the discredited column are really not worth the breath…I’m in the ignore mode at this point…I’m week-kneed about the credibility of this blog anyway? Might be a waste of dialog…TBD
Great fact-filled answer.
“Mick … thoughtful is very likely a real estate investor who has made some really foolish decisions the last few years”
I agree. Probably bought housing in 2004-2006 with hopes of selling it by now…still waiting…still waiting…
Thoughtless, You just have to be willing to hold on for a few decades to make money in real esate nowadays! It’s a new era of investing called bubble-pop investing.
I think Thoughtless’ ego has the biggest balance. In fact it has an outstanding, overdue balance that is in foreclosure.
“not my balance sheet (which dwarfs yours)”
You took the bait:
“my balance sheet (which dwarfs yours).”
Ya see, anyone can say anything. It’s kinda like my di*k is bigger than yours … na-na-na!
Come on thoughtless, how do you know and how can you prove you have more wealth than me?
I make a living in RE - I wish I had better news to give you Thoughtful. I am not far off on my assestment of peole qualifying for jumbo loans
On a somewhat tangent subject, I’m pretty sure the house that this article is about is the “Ahmanson house”. Owned or once owned by the son of the guy who started Home Savings. Sits directly across the turning basin from the Dukes old house (which was torn down a few years ago), which was two houses from the Cage mansion. OC, playground of the rich and famous!
the man who shouldve been president…
Ron Paul: Big Government Responsible for Housing Bubble
Published 05/12/2008 - 11:53 a.m. GMT (PressMediaWire) May 11, 2008 - Congressman Ron Paul’s statement on the housing bubble as follows — “The House passed two bills attempting to rehabilitate the housing and mortgage market this week. There doesn’t seem to be any shortage of criticism and blame for the bad decisions, and rightly so. Lenders and banks do share much of the blame for the overheated market. Lending standards were relaxed, or even abandoned altogether, creating an exaggerated pool of homebuyers that led to ballooning home prices that many, especially real estate investors, expected to continue forever. Now that the bubble has burst, the losses are staggering”.
“However, many in Washington fail to realize it was government intervention that brought on the current economic malaise in the first place. The Federal Reserve’s artificially low interest rates created the loose, easy credit that ignited a voracious appetite in the banks for borrowers. People made these lending and buying decisions based on market conditions that were wildly manipulated by government. But part of sound financial management should be recognizing untenable or falsified economic conditions and adjusting risk accordingly. Many banks failed to do that and are now looking to taxpayers to pick up the pieces. This is wrong-headed and unfair, but Congress is attempting to do it anyway”.
“These housing bills address the crisis in exactly the wrong way, by seeking to hide the problem with more disastrous government bail-outs and interventions. One measure, HR 5830 the Federal Housing Administration (FHA) Housing Stabilization and Homeowner Retention Act would allow the FHA to guarantee as much as $300 billion worth of refinanced home loans for those facing threat of foreclosure. HR 5818 the Neighborhood Stabilization Act, would provide $15 billion in loans and grants to localities to purchase and renovate foreclosed homes with the object of then selling or renting out those homes. Thankfully, President Bush has vowed to veto both of these bills. It is neither morally right nor fiscally wise to socialize private losses in this way”.
“The solution is for government to stop micromanaging the economy and let the market adjust, as painful as that will be for some. We should not force taxpayers, including renters and more frugal homeowners, to switch places with the speculators and take on those same risks that bankrupted them. It is a terrible idea to spread the financial crisis any wider or deeper than it already is, and to prolong the agony years into the future. Socializing the losses now will only create more unintended consequences that will give new excuses for further government interventions in the future. This is how government grows - by claiming to correct the mistakes it earlier created, all the while constantly shaking down the taxpayer. The market needs a chance to correct itself, and Congress needs to avoid making the situation worse by pretending to ride to the rescue”.
SOURCE: Ron Paul Texas Straight Talk (House.gov/Paul)
DC isnt even trying to stop the bleeding in CA, NV, AZ, FL - they know they cant help us.
I don’t know what the deal is? But, I for one, haven’t been commenting for a long time to this blog until recently. Given the general weirdness of the major contributor (s) I’m starting to believe it’s non-productive to read or in-put? I think I have more thought provoking things to do?…
Like listen to politicians spin things…They spin less than the main contributor on this blog!
Beach, you just have to go with the flow. Take it for what it is…….a diversion that will never change anything, but is sometimes fun. You may gain some insight, but…………… probably not. Don’t let it get to you. It’s all just a little matching of wits………..and some came unarmed.
Rants: What many fail to realize is that many of the supporters and backers of those bills stand to profit from those bills - either directly or indirectly by reducing their own RE investment losses, or by their equity positions in companies that are hoping to do the same.
There is one underlying fact in all of this: The fed claimed that doing everything possible to put people into homes was for the good of the people - that was not true and their actions were obviously flawed. Now the House is stating that what they hope to do will help homeowners when in fact it is to cover their own investments under the guise of helping the homeowner. There is no real economic basis for what they did and what they are proposing to do. The market must correct itself. The sooner they stop screwing with it - the better off most of us will be - of course there will be losers in the end - and that is always the case. The backers of these bills are simply trying their best to make sure they are not the losers when basic fundamentals has slated them to be. Just stop screwing around with this market and let it run its course.
By most of us - I mean homeowners/investors that purchased property they can truly afford and other people waiting to buy until they know they can afford it.
I’ve said it before and I’ll say it again: having to leverage short term rates (not fully indexed) to buy a home in order to afford the payment is as stupid as giving your money away to the first person you run into (especially when fixed rates are low). Doing it at a time when many other folks are doing it is the most stupid decision a person can make.
I am curious: Does anyone believe that just because you are approved for a loan that you can afford it?
VOR: Whose more stupid?
The person writing the idiot remarks or the one that feels compelled to read every one, contribute in exactly the same manner, and then complain about it?
Give me a frickin’ break. Close the damn browser if you feel this blog is beneath you.
By the way, I personally would take that pepsi challenge anyday. By the way, what exactly are you an expert of? (Not claiming you stated you were an expert at anything besides blogging - just wondering what kind of credentials you have to prop the large head)
I’ll know it is the bottom for the Register and Jon when he interviews OJ. So we have to guess when that will happen and by the quality of things here these days, I got to say soon.
Jon if you mention OJ then I bet you can triple your hits. No more need for thoughtfuls help then. But if you did get OJ would that be a conspiracy ? Curious readers want to know!
VoiceofReason…Thanks…. But I don’t think I like doing battle with the personality-profile you described….I prefer the-meeting-of-the minds in a more factually based debate forum. It’s boring otherwise…When the profile you mentioned, losses the debate, they aren’t even insightful enough to know the difference…Dense comes to mind at that point…
You know, sorta like (God-love-her) Rosie O’Donnell…Best to ya!
NBI
Well, I didn’t read rants remark, so I guess that makes me pretty smart.
And never would I say that this or any other blog is beneath me.
But if you think you are changing any minds or improving our lives in any way, then you are taking yourself way to seriously.
This is the only blog I’ve ever been to. Lucky you!!
(BTW, the “pepsi challenge” line……now that’s comedy)
Beachcomber,
I used to want a little exchanging of ideas and meeting of the minds here because RE is really interesting to me. I soon learned that internet blogs are constantly spamed by people that just want to mix it up. They actually know nothing about SoCal RE, but get off on thinking that they are causing trouble. On the other hand, there are some pretty knowledgable people here, even though I don’t always agree with them. Hang in. I think you can add to the knowledge base here.
I like to look at the reality of the market.
1. There is a high volume of homes on the market as compared to history.
2. Most the homes have languished on the market for months.
3. The vast majority of the homes have reduced their asking price or taken the home off the market for whatever reason with a reduced asking price.
That is the reality. I am sure there are exceptions, probably in the Million plus range, but that isnt representative of the OC as a whole.
The bottom of the market is when homes start selling at traditional rates, prices stop decline and a large quantity of homes are not distressed.
This will happen as long as affordability improves. The faster it improves the faster will hit the bottom.
You know some kook from the middle east is going to buy this place. I’ll bet he doesn’t surf or sail either.
Thoughtful: “everybody still makes option arms” really…have you applied for one at New Century lately?
New Century never had an option arm. the option arms that are available now are a far cry from what was available 12 months ago and they are dying fast. Wachovia just informed me - no rental properties and 70% max LTV in CA about 5 minutes ago.
mortgagemaker,
Just wondering what kind of LTV’s you are seeing on traditional 30 year fixed these days (unless I read that wrong and it is 70% there)
An idea (bailout) for our homeowners in trouble
Problem: People owe more then the property worth
Solution: Rebalance the equity amung all the homeowners.
How: People who has a mortgage smaller then their house worth will be tax porpotianly to the amount of equity he has every year. The money will go toward reducing the loans on houses that exceeds the house worth.
Problem: People have no incetive to buy
Solution: Give people without down payment an incentive
How: Additional tax will be add when a homeowner sell the house with a profit, this will go to cover a tax credit that will be given to first time owners as assitent with down payment.
I am sure Thoughtful and other homeowner will support such incentive
I am only six winning numbers away from owning this home. I wonder if they will take a (bad) check now and wait until Friday, when I win the Mega Millions drawing?
IamYou Says:
May 14th, 2008 at 6:23 pm
“Problem: People have no incetive to buy
Solution: Give people without down payment an incentive
How: Additional tax will be add when a homeowner sell the house with a profit, this will go to cover a tax credit that will be given to first time owners as assitent with down payment…I am sure Thoughtful and other homeowner will support such incentive”
I don’t know. Anything that helps new homebuyers is obviously is an entitlement. I got an idea. Reduce the fed rate to 0. Sure, inflation will jump, but certain people will be fooled into thinking that the RE market will stabilize.
The article doesn’t say who currently owns, or who previously owned, the home. Not that it makes a difference in the transaction, I’m just incredibly nosey.
Also, I disagree with DigDoug’s comment about making it illegal for noncitizens to purchase property. There are millions of legitimate permanent legal residents, both citizens and nontitizens, who are productive and active members of the taxpaying populus. DigDou has the right idea, but the wrong target. Rather than his proposal, I’d be completely in favor of laws that make it illegal for nonpermanent legal residents ( which would include illegal aliens, foreign residents, and non-US companies) from purchasing residential property.
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