Sold for $320,000 (photos courtesy of Mark Johnson)
Talk about your Cinderella story. The belle of the ball in the Orange County housing market last month wasn’t a beach-front manor with an eight-figure price tag. Or even a hill-top mansion with killer views.
Instead it was a modest three-bedroom, two-bath bungalow in Anaheim with a brick-lined planter and a dried-up lawn. (See pictures! Click for larger versions.)
So what happened when the lender put this foreclosed, 1,400-square-foot house on South Trident Street up for sale in mid-May?
Offers poured in, said listing agent Mark Johnson of ERA North Orange County Real Estate — 63, to be exact. From 53 different buyers, some of them submitting higher bids.
 |
 |
 |
Agents have been talking for months about how low-cost foreclosures have been drawing multiple bids. In fact, 20 to 30 offers are common these days for a home selling for under $350,000, Johnson said. But 63?
“It’s the most I’ve ever seen,” he said.
But buyers weren’t so much attracted to this home’s features (laminate faux-wood floors, nearly new cherry wood cabinets, granite counter tops). It was the lender’s aggressive asking price of $299,250 and its location in a quiet neighborhood, Johnson said. The home sold for $608,000 at the market peak some 2-plus years ago.
The first offers arrived within hours of the home’s listing on May 18. Suitors included investors looking for a rental property, neighbors, first-time buyers and parents house hunting for their children. Offers ranged from FHA financing to 40% or 50% down and all-cash offers.
One buyer offered $110,000 over the asking price. But in the end, the lender chose an all-cash offer for just $320,000, or $21,000 above the list price. An Anaheim couple was assisting their son and his wife buy a home in their area.
The property went into escrow on May 26. Two days later, it closed. “That was very attractive to the bank,” Johnson said. “How quickly this buyer could move.”
Slices of the market from DataQuick …
- Weakest O.C. housing markets at the beach
- SoCal home price sees first monthly jump in 22 months
- 48 O.C. ZIPs had May sales gains! Did yours?
- Back above $400,000! O.C. home price at 7-month high
- O.C. foreclosures increased in May
Elsewhere …
Welcome to the new real-estate auction system. Price your house below market, take dozens or more offers and let them try to outbid each other. If someone new how to create a business out of this model, they would do very well. Maybe a broker agency that only lists homes to get 20+ offers by below market pricing.
I have seen it happen multiple times. I have assisted a friend with two open houses: One had 230 registrants go through and 20+ offers…another priced significantly higher in the mid $500’s and it had 160 registrants and 5 offers so far. Still waiting on the bank BPO on each.
Unfortunately, people don’t learn from others mistakes even after witnessing a firsthand look at the aftermath.
Here’s a taste as to what these current OC bubble buyers have to look forward to after the governments “mirage” exhausts itself.
“Lifted ban means wave of Las Vegas foreclosures is likely”
A wave of foreclosures is expected to hit Las Vegas as banks lift a voluntary moratorium that was extended from March to the end of May.
http://www.lvrj.com/business/48421767.html
63 offers. Accepted $20k above asking.
How many of those 63 were (a) below asking; and/or (b) with dubious financing? I’m guessing that almost all fit into those two categories.
So list for something approaching reasonable, and you will get multiple below-list offers.
The question is of the 63 offers how many are cash offers. Believe it or not there is a lot of cash out there.
Many current homeowners are walking away from home because they can’t afford them any longer… Yeah, right!!! Many of these refinanced and took a few hundread thousand dollars and hid it. Now they are coming and buying a dirt bottom prices and all cash… Go figure!!!
This worked really well for Ebay sellers many years ago. Not now though.
I think we found the magic number, is this in line with fundamentals, rent, local income etc… I wonder?
according to zilpy.com ~$2100/mo is median rent for a 3/2 for that zip code.
looking at mortgagecalculator.org a 300k house with 3.5% down @ 5.25% with 1.25% tax and .5% PMI comes out to $2020/mo. So yea, I’d say thats pretty ‘normal’
If things fall beneath here I’d think it’d be due to more inventory or higher UE.
Yet areas that have $2800/mo rent still have $600k+ price tags. Go figure.
I mostly work the 200-500 range with first time buyers, and almost every property has multiple offers right now.
Lenders do typically choose the all cash offers even if they are less - its a quick and for sure close.
yeah, but just tell the seller to raise the price over 400K and watch how the multiple offer disappear wonder lady realtor.The only houses that are getting multiple offers are the ones selling for 50% off the peak value. Buyers are not stupid
Has anyone heard of more offers than this on any other O.C. homes?
Two months ago, there’s REO at 8931 Mary Hill Ave, Garden Grove.
Bank listed it at $460K. It draw close to 150 offers within a week, and sold for almost $100K above asking price.
Carl Wawrina at Empire Realty is a listing agent, you can contact her if you want to do story on this.
Of course, Bill would think that the house should sell for $100K bellow asking price.
Couldn’t correct it before I post, the listing price was in low $400K, the CMA/BPO came in around $450K, and it sold for a bit above $500K.
Buyer paid cash for it.
A major correction in property prices and artificial stimulus is helping to create affordability at the low end because its “affordable again” but it’s “artificial” just like the first bubble and subject to fluctuations.
As much as I hate what’s happening to home prices, I think the low low end is forming a bottom for now, but once the stimulus is gone that property today @7% doesn’t look like such a good deal anymore.
“Jeff Collins says:
June 18, 2009 at 5 pmHas anyone heard of more offers than this on any other O.C. homes?”
Well jeff according to the bear den the market is dead so this story must be a lie.
SELL NOW OR BE LOCKED OUT!
$500k+ home sellers drop your price now and sell during this high season or you will be locked out! You can read the news even the NAR says your home will drop in value 20% this year. So next year’s high season will be 20% lower than this year. Don’t make the mistake of trying to time the market to get top dollar. Drop your price and sell now before it is too late!
The home sold for 608K two years ago and the price dropped to 320K. If you brought two years ago and you didn’t put money down, the best thing you can do is stop paying your mortgage and live rent free and challenge any foreclosure.
That is why America is in bad shape. The shear numbers of dishonest people.
let me see the banks are honest duh, boy are you stupid
When I moved down here in 1998, places like this were going for $175k (minus the granite countertops and cherry cabinets, of course). That seemed to be the magic number for dozens of little tract homes in Anaheim.
Of course, the tracts themselves were nice enough, but bordered by 4 major streets that looked like slums. I’m sure they’re both worse now, at nearly twice the price.
Income is much higher now than in 1998, so you cant just look at the price as indication of overvaluation.
How much higher? Especially for this area? What’s the market segment for this neighborhood? White collar? Blue collar?
Hmm…I kind of agree with Gunner. I just threw up a little in my mouth.
There have been 11 years of inflation since ‘98, so $300K looks like it’s getting close. All else being equal (including no deterioration of the neighborhood since ‘98), this place should be around $260 + or - a bit. So we’re getting closer.
Looking at dafox’s metric, the rent/own comparison, it looks like an even better deal. It looks like it makes financial sense to buy this home at this price right now.
Income is much higher now than in 1998? I don’t think so! There has been lots of inflation due to low interest rates and an increase in debt. That does not equal wage inflation.
Don’t be fooled (as so many are here) into thinking “I make a lot more money than I did 11 years ago, so all incomes must be higher.” Obviously, most people in the 20-50 year old group have seen an increase in their own salary as they have 11 years more experience (unless they are laid-off, downsized, outsourced, or whatever).
Do you think average household income in the country, state, or OC has nearly doubled since 1998?
Yes.
you’d be wrong then, median income in OC in 1998 was around $58K…. now it is a moving target….. but I’m guessing $60Ks and dropping… time to face reality..
Lots of blatent lies regarding incomes and prices.
Incomes barely kept up with inflation.
Med Prices went up 300% while inflation along with med incomes come in at 35%.
http://www.housingbubblebust.com/OFHEO/Major/SoCal.html
Oh im sure there were lots of Loan officers at peak years making well over 200-300K annually …but thats gone now!
So stop with the nonsense already. California has 30M people with well over 1M realtors … 30:1 ratio… so im sure there are lots of vested interest on this page.
med prices are heading down to under 300K .. and thats a typical 3/2 1600 sq ft.
As Josh stated prices were correctly balanced back in 1997-98.
Have anyone of you ever seen in past decades California prices go up 300%…
There is no way these prices can be sustainable. Never in our national history have prices skyrocketed as they have today.
Its a bubble cutting prices down to 1998 plus inflation.
dafox,
Thanks for the info, what kind of income would this require. From 608k to 320k should put it much closer to what buyers could afford to pay.
If this falls in line with incomes / rents I can understand why so many offers and with only 3.5% down and no closing w/8k tax credit we may find a bottom in the low end for as long as it last.
I wonder what the price would be if we didn’t have the bubble with normal appreciation etc… probably getting pretty close.
It would make a good grow house.
Tom, you’re cracking me up here.
Cash is king.
I have put in offers on properties higher than the end selling price. I still don’t get the property. Agents are taking bribes or not submitting all offers. The wining bidders are usually flippers, or investors.
That’s a myth. Agents are required to submit all offers that meet or exceed criteria set out by seller.
The reason flippers or investors often win is because of their all-cash offers, even if they’re not the highest offer. Bank love all-cash offer !!!
Just because they are required to do doesn’t mean they do. I have had at least 5 agents in the last two months say the offer isn’t high enough, not submit it then the property is sold for less.
I agree with Dina. It doesn’t matter what they’re required to do, you’re expecting them all to follow the rules, which many obviously DO NOT. I know this for a fact.
Just goes to show that more pain is necessary until the kool-aid rehab is over.
A basic rule of investing is that a deflated bubble doesn’t re-inflate.
I hope the buyers of this home are planning to stay put for a very long time, and don’t expect much equity anytime soon.
Another important rule is that a home is NOT an investment. It’s a place to live.
“I hope the buyers of this home are planning to stay put for a very long time, and don’t expect much equity anytime soon.”
Ummm… They paid all cash.
While dumb dumb (liar loan) was downplaying the severity of mortgage applications, Diana Olick shares my view about this worrisome problem:
“does anyone else find the weekly mortgage applications survey from the Mortgage Bankers Association particularly troubling today?”
“for anyone arguing that the bump up in mortgage rates isn’t a big deal, your answer is pretty clear: It is a big deal”
“70 percent of all loans in existence are from the bubble years, when 5.5 percent to 6.25 percent was common, according to Mark Hanson of the Field Check Group”
http://www.cnbc.com/id/31408299/site/14081545
A 3.5% drop in purchase applications is not affecting OC at the moment. We have a 7-month high median and many stories of multiple offers. In fact, if more of these people could get their offers accepted over cash buyers, you’d see a spike in mortgage applications!
BTW, do you at least have a high school diploma or GED?
A pizza delivery boy trying to critique others that actually have a college degree!
Your ignorant comments give you away.
Brian you are awesome!
Can paying all cash really be considered “assisting” in the purchase?
That’s a lot of cash that is not going to be doing any work, plus no mortgage = no interest deduction.
and all that cash for a depreciating asset. Knife catchers
320k for a 50 year old stucco box in anaslime- lmfao
in one year the very same house will be lucky to get 220
and the year after- 179 maybe- people just dont understand
what our economy is going through- job losses and salary
cuts are only beginning- those whove followed my advice
from the beginning of this blog KNOW I’ve been spot on with
my calls- aint that right lansner– Ive saved those whove listened
thousands- not to mention the nightmares and sleepless nights–
dismiss my warnings at your own peril
I wouldn’t live in Anaheim if you gave me this house for free. They buyers are probably from Riverside and are probably happy to be less than 1 hour away from the beach. It sometimes amazes me how low some people expectations in life are.
Yep. Knifecatchers who thought they got a bargain. But Dad has the money to lose, so no real harm done.
Interest rates –> UP
Unemployment –> UP
Salaries –> DOWN
HOUSING –> ??
This Anaheim home is the perfect example of what will stabilize the market; foreclosure and a cash buyer. Governement programs and bailouts will only increase volatility and instability, and interfere with the market’s process.
Agreed. The parents (probably immigrants) bought the home for their son & his wife; they probably have kids or are planning to. The parents want to keep the family together in OC. They’ll fix up the home and it will stay in the family. Good for the neighborhood, good for the market.
Curious about people hurrying in to buy now in So Cal with a small down payment. Hope they have a big savings account and a solid job. If one loses a job here, good luck finding another, especially one that pays enough to cover the bills. Tough unless one is in a very specialized field. We live in an affluent beach community; two of my daughters friends families wound up living in motels. Parents lost jobs, couldn’t find any job making anywhere near previous salary, credit card debt, little savings, etc. Money runs out quickly. One family eventually moved in with family; the other family is still at the motel.
Appears the realtors are slowing down the process, put the actual price in the window and take the first offer. The mortgage holders should bite the bullet and move on.
In reference to my earlier question (which someone answered with their opinion):
According to the Census Bureau, median HH income in 1998 (all U.S.) was $38,885. In 2007, it was $50,233. That’s a 29% increase. I wonder how incomes have done since 2007?
the OC median income in 1998 was around $58K…. at best it’s high $60Ks now and dropping fast……… with really no end in sight……
My husband and I are currently in the market ourselves looking for our first home. We went to this house to possibly bid on it but the pictures fool you. Everything that was updated was done very poorly and they used cheap materials. Yes, the neighborhood is wonderful and close to schools…..but no, we decided it was not worth our time. Currently, we are up to 13 bids on houses and counting….we anxiously await in hopes that one of our bids will be accepted.
Thank you for the article it is nice to know the reality of the housing market in the OC…..lovely Anaheim, the place we hope to live.
Lol, thanks for the laughs, you’re killing me Yennifer!
this house true value is 178000 and that where it will end up just watch, bidding wars always bring out the suckers