These are all properties pending for sale in the MLS that had an asking price well below the previous sales price in Zillow. Not all of these may make it all the way to the final sale, but they are properties on which the buyer and seller have agreed to a price and set of terms.
Remember, it is more than likely that the agreed-upon price is below the asking price, so the "real" loss will even more when and if the property closes. So, the "depreciation" figures are most likely understating the damage. Note: the depreciation does not include any sales costs.
These examples show that, at least judging by asking prices, the higher-end properties in South OC areas closer to the beach are currently holding values better than homes in regions that are further inland.
22 Via Andorra , Coto De Caza, 92679
Size: 4 beds, 3 baths, 2,400 sq ft
Asking price: $709,900
Peak price: $970,000 on 6/17/05
Depreciation: $260,100 (27%)
Last transaction price: $715,500 on 10/9/07
Days on market: 149
Pending date: 2/14
1693 Hillcrest Dr , Laguna Beach, 92651
Size: 3 beds, 3 baths, 2,000 sq ft
Asking price: $ 1,795,000
Peak price: $1,850,000 on 6/23/05
Depreciation: $55,000 (3%)
Days on market: 21
Pending date: 3/21
21 Via Santander , San Clemente, 92673
Size: 3 beds, 2.5 baths, 2,463 sq ft
Asking price: $699,000
Peak price: $980,000 on 6/20/05
Depreciation: $281,000 (29%)
Last transaction price: $774,253 on 6/6/07
Days on market: 275
Pending date: 3/28
2 Cavalier, Laguna Niguel, 92677
Size: 3 beds, 4 baths, 2,590 sq ft
Asking price: $1,850,000
Peak price: $1,900,000
Depreciation: $50,000 (3%)
Days on market: 16
Pending date: 3/25
8 Sunswept Mesa , Aliso Viejo, 92656
Size: 5 beds, 4 baths, 3,600 sq ft
Asking price: $1,099,000
Peak price: $1,262,500 on 2/10/06
Depreciation: $163,500 (13%)
Days on market: 392
Pending date: 3/19
Sunday, March 30, 2008
Pending luxury rollbacks
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13 comments:
More rollbacks to come.
South OC,
Something that might be interesting to your blog readers is uncovering the massive realtor and mortgage broker fraud that has taken place in south OC in the last few years.
For example, mortgage brokers living in communities, tapping out all of their equity and refinancing several times over - only to market their properties for sale to artificially inflate the home prices in the community. Home prices were being set by phony escrows rather than true comparative sales. We experienced this when we attempted to buy/sell properties in 2006 and early 2007.
Straw buyers who jump escrows before the 17 day periods expire - and other unsuspecting home buyers who enter escrows at inflated prices based on this, eventually buying before "being priced out" - which set artificial prices in communities. I believe some of these straw buyers were also realtors, getting kickbacks.
These same tactics have been propping up the artificial prices in certain communities - and some of the people benefiting from such tactics have been (big surprise) residential real estate agents, picking up prime properties for their own residences.
Also - there should be a property tax payment checker at Chriss Street's office - interestingly, many brokers/agents are not paying their true percentage of property taxes based on sales prices - but rather, the prices that the homes sold for many years ago. Seems that these homes are also eliminated from recent sales data that feed into Redfin and Zillow.
There is certainly much more to this "luxury" bubble than meets the eye.
Anon, I don't doubt what you are saying, but how do you know this? Is it just anecdotal based on what happened to you? Are you a realtor? Also, I'd like to know how realtors are getting away with not paying property tax on the true value of their property? How does get away with this?
Just checked with OC Clerk & Recorder to check for NOD on one of these. Guess what?
Swim, anectdotal based on my experience and hearing the experience of some former neighbors. It has become easier and easier to connect the dots in light of some of the transactions in my neighborhood over the last two to three years. Now, I'm simply checking up on title and property tax records - and what I am uncovering - clearly shows that there were schemes within neighborhoods that had all of the players: realtors, mortgage brokers, appraisers, title executives, straw buyers.
Escaping the true property tax was somehow being done at sale through
title - I am working on finding out exactly how.
Some of these properties have finally adjusted, years later, through the OC Tax Collector's office - tax code 4986.8 "On recommendation of the tax collector, the auditor may cancel any tax bill if the amount is so small as not to justify the cost of collection." Then they are being reassessed.
The tax collector's office is beginning to see the light.
Thanks for the tips. Unfortunately, when there are ways to exploit the system, it seems people are more than willing to take advantage.
I'm going to start doing some digging and see what comes up.
Anon, that is disturbing. The OC DA or State AG need to investigate this. Honest people who paid a lot for their homes are paying ridiculous amounts in local property taxes - 1.25% is a lot for a million dollar home which isn't an uncommon price out there. Hell, it's a lot for a $500,000k home!
Anon-
Thanks again for posting about this, and please keep us updated on any progress, since it's important people know the truth about what's going on out there.
Anyone is always free to post story tips either in the comments section or if you prefer, e-mail them to southoctracker (at) live.com.
Check out the 25% haircut on 304 weymouth in Laguna Beach. This is in the Lux category.
www.bluemove.blogspot.com
Anon's post is speculative at best and at worst doesn't make sense.
How does tapping equity and refinancing affect prices? It doesn't.
Also, appraisers can't use "in escrow" comps unless there are no actual sales that can be used. This was not the case in 2006-2007 when there were always plenty of sales to use.
Now there were crooked operations that involved agents, lenders, appraisers, escrow companies all working together, but they were rare (I never ran across one and no one I know ever did). You would have to all work together for this to work.
What I did run across (and this has been reported ad naseum, so no need to run out and report it) were many buyers who used stated income/stated assets, appraisers who felt pressured to appraise at a high value or they wouldn't get repeat business, and lenders, escrow companies and title companies promising kickbacks to Realtors(r) in return for business.
Finally, the tax issue. What? To sell a home you have to transfer the grant deed, which triggers the tax assessor's office to reassess. You do pay the original tax before the tax assessor "catches up" with a supplemental report, but the assessor always catches up.
Many real estate agents, brokers, etc. bought in the last few years. Through recent sales, including short sales, that I've seen, believe me they've been paying.
Some of the tax assessment differences between sale price could be cash back at close of escrow. For example home sold for $800K but seller got $200K back at Close of escrow so they had the home taxed at $600K rather than $800K. I think this is probably pretty rampant in Ladera (Fradera) Ranch and in Talega. Like the one of the posters suggested as time goes by more and more of this makes sense.I personally can't wait for some Sandy and Rich Marquez in San Clemente who are total realtwhore to go down in flames. I hope they get caught doing something wrong real soon.
How does tapping equity and refinancing affect prices? It doesn't.
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Hmm. It did when:
1. You own a mortgage company specializing in "boutique" loans
2. Each time you got the itch to cash out more, you had your buddy give you a faux appraisal
3. You cashed out all the faux equity in your home several times over
4. You hooked up all your neighbors with similar loans (based on the faux appraisals of your property in the same neighborhood). Boy the neighbors were jazzed with how much their homes were now "worth"
5. Voila! Your home and your neighbor's are now worth millions more than two years before.
"In escrow" comps were most definitely used - more for the benefit of getting other unsuspecting buyers to jump into future escrows - although some WERE used for appraisals. I'm not talking tract homes here with tons of neighborhood sales, so expand your mind a bit.
And no, I'm not talking about supplemental taxes. I'm talking about certain buyers avoiding reassessment for TWO YEARS in some cases. Secured. NOT supplemental.
Cash back at closing went on widely, and continues to this day. Many sellers now selling their "furniture". But - it all goes in the truck on moving day? Hmm. Interesting. Draw your own conclusions.
But since you're the expert - nevermind.
I must be stupid, but I don't understand the cash back at escrow idea. The seller getting cash back at end of escrow??? Doesn't the seller get all the cash at the end of escrow? You're assertion that people are saying a portion of the purchase price is falsly being attributed to furniture purchase makes theoretical sense, but the seller would get creamed on taxes as there is no capital gain exclusion on furniture. Something here seems fishy. Can you provide any links to legitimate news articles that discuss these allegations?
Never said "cash back at escrow".
I said "cash back at closing".
Google is your friend, Lester. Try: cash back at closing, home purchase.
Buyers getting 100 grand back at closing don't seem to care much about having increased property taxes. After all, 100K would cover many years of them. It also gives the realtors increased commissions and props up the comps.
Laughing out loud at cap gain exclusions on furniture. Yeah, I'm sure fraudsters itemized every piece of furniture in the sales docs.
I'm done making my 'allegations'. Read betwen the lines.
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