Lake Forest: In God We Trust. But which God? And why?

This was a dumb move in my opinion. In times like these do we really need more credulity? How about genuine inquiry, intellectual honesty, common sense, the search for the truth in all things and the application of reason?

I think this motto was a dumb choice because:

a. it's unoriginal as hell. That motto is on our currency already for the love of Venus, and
b. it makes no sense.

In God We Trust

In what God, precisely, are we supposedly placing our trust?

Yahweh?
Allah?
Vishnu?
Zeus?
Zoroaster?
Apollo?
Venus?
Wotan?
Thor?
Jesus Christ?
Ra?
Jengu?

And what does such trust in one or numerous dead deities have to do with our community?

I would have preferred "In reason and common sense we trust". At least then everyone on the planet, let alone the local community, would know what the hell the city government of Lake Forest is taking about.

The United States of a America is a federal constitutional republic. It was not founded on Christian principles or by the words of the Bible (the inerrant word and inspiration of the Abrahamic god Yahweh). I'm sure that's the deity this young Eagle Scout, his mentors and our mayor-without-a- backbone are referring to. And they were presumably all born in the United States and brought up to believe in Jesus Christ and the Holy Trinity (Father, Son, Holy Spirit), yadda, yadda, yadda.

But had they been born in Iran during the time of the Persians they would have believed in Zoroaster. If they would have been born in the time of the Vikings they would have believec in Loki, Wotan and Thor.

Personally I'm an atheist. I used to be a Christian. A Lutheran to be exact. But I'm not anymore. I don't believe there is sufficient evidence for the Christian God. And even if there were sufficient evidence, the instructions written in the Bible around which we are asked to organize our lives does not lead me or any reasonable person to believe that Yahweh and Jesus Christ are worthy of worship. No. Too much blood, slavery, war, ignorance and bronze age megalomaniacal thinking for my taste. Before you as a reader get pissed off at my opinion here, I'm open to being convinced. Most Christians know exactly what it's like to be an atheist though, because I bet that none of them lose one second of sleep over the fact that millions of contemporary Muslims today believe Christians and heathens like me to be in the express lane to everlasting damnation.

All I'm saying is that not everyone who lives in Lake Forest organizes their life around some celestial CCTV camera in the sky. It seems to me that a better, more original and more inclusive motto than "In God We Trust" could have been chosen that wouldn't trample on the beliefs or lack of beliefs of local members and taxpayers of this beautiful community.

The Jeronimo Zone in Lake Forest

So what's the deal with the "Jeronimo Zone" in Lake Forest, California these days?
This seems to be the only freaking area in the entire community where single family homes are up for sale at a reasonable price.

Oh, wait a minute. It must be that Amtrak line. Yeah, that's it! Dammit if young families with children settling down in Orange county don't just love to live within busted earshot of a howling locomotive.

And what about my wildfires?? I distinctly remember requesting a single family home located as precariously close as possible to one of the more hot, windy and dry areas where wildfires most easily commence in Lake Forest!

Realtors and foreclosing debt freaks, please don't disappointment me now! What do I see here but a few SF homes available in Foothill Ranch!!!!! Sweet!



Hmm, raging wildfires or eardrum bursting train horns? Eardrum bursting train horns or raging wildfires?

Aww Gee, it's so difficult to choose!

Well, according to Redfin.com, there are a whopping 16 single family homes for sales in Lake Forest between the prices of $350,000 and $600,000 (4 bed, 2 bath).

But let's just see what Realtor.com has to say:


Realtors(R) of the NAR hate Redfin.com because Redfin capriciously states the previous sales history data of listings on their site. Realtors have the MLS, and apparently much more additional information and wisdowm that Redfin could ever dream of having. This is the only conclusion I can come to because Realtor.com indicates that there are not 15, but 55 freaking single family homes priced between $350,000 and $600,000 (4 bed, 2 bath) in Lake Forest today.

Meanwhile Zillow.com thinks Redfin and Realtor.com are both full of shit, because there are not 15, and not 55, but 57 single family homes available for sale between the prices of $350,000 and $600,000 (4 bed, 2 bath).

Jesus! Get it right, Realtor.com!



All I can say today is thank goodness for two things:

1.) For Jeronimo (or Geronimo) that merciless Apache medicine man, and
2.) The high level of data accuracy and integrity that is simply flooding the real estate numbers in south OC these days.

Housing Ladder To Nowhere

I've posted a number of local, Lake Forest, Calfornia examples where, during the time frame of approximately 2004 to 2007, people really bought in to the irrational exhuberance over "owning a home" and paying top dollar. The housing ladder only went up and the number of rungs was believed to be unlimited.

The examples I've cited have been mainly single family homes, and typically with 4 bedrooms, 2 baths or more. I want to make this important distinction, because none of us should lose sight of the fact that families are involved here. The lives of parents and children are probably being turned royally upside down by these trying financial times.

In my view, people who work today in the real estate profession rarely if ever admit to the social impact of their recent handiwork. Realtors, mortgage lenders and bank CEOs will talk all day about new listings, median home prices, monthly sales numbers and perhaps notices of default, the new tools for their website, and a recent closing experience, etc. But they don't seem to fully appreciate that behind all of these astonishing numbers are people. People just like you and me. People with hopes and dreams. People with worries and loves.

The downturn in the California housing market has quantifiable ramifications to be sure: bankruptcies, business closings, lost state and federal revenues, lost tax dollars, federal and state budget crises, increased taxes, unemployment (housing related and other), budget-related degradation of public services, and reduction in funding to school districts. These are serious, quantifiable issues that we've only begun to come to terms with.

But the other side of the coin is equally blemished. The social price tag of this downturn may not be known for many years. The housing market bubble and crash has affected people personally and psychologically in terms of their daily stress, their overall health, as well as the cohesiveness and well being of families. It may be too that the crises brings people closer together than before, which would be a good thing. My posts on this blog have often been sarcastic and angry. However, I do feel badly for those who made honest mistakes and for those who suffer because of them, especially young kids who may not fully understand what's gone wrong.

Since I started The Rancid Truth Blog about Orange County Real Estate in 2005, I was pissed off. Really pissed off. I've worked very hard, traveled extensively and earned good money. I've paid more than my fair share of state and federal income taxes, yet I have been utterly priced out of the volatile housing market here. I should be paying more for the privalege of renting a single family home, but I'm not. It's cheaper to rent here. And we all know today that Orange County California home prices were fueled by snake oil sales people (liars), irresponsible lending, irresponsible borrowing (lying on mortgage qualification docs), and unabashed greed.

And I'm still pissed off about all of this.

Sure, I was the responsible one. I didn't take massive risks, yet my federal and state taxes are going up, my rent stays the same, yet I'm helping unqualified people stay in homes that they can't afford, and that I might otherwise have been in a position to buy myself (if prices where allowed to adjust) and assume all of the responsibility that this might entail, including paying local property taxes.

I'm convinced that I'm right to be angry about what's happened here (and still happening here), and to demand change. I don't want a medal for being financially prudent the last 4 years. But I do think that the housing market needs to be allowed to shake itself out and correct, fully understanding and appreciating that there will be significant financial and social casualties in the process. The sooner the market heals itself, the sooner it can recover.

On to today's example:

The setting is June of 2005, Lake Forest, California. The single family housing market is white-hot. Home buyers, lenders and Realtors are living the high life. Homes are selling like umbrellas during a rainstorm, and at stratospheric prices.

A lovely 4 bedroom, 3 bath single family home, 2,150 sq. feet and 10,800 sq foot lot (most of it on a useless backyard incline) located in the beautiful Bennett Ranch area, sold to a new owner for $680,500. That's $311/sq foot.

Fast forward 6 months later to January 2006. The home sold again, this time for $795,000! That's $370/sq ft!

It's now April 2009 and the home has shed it's toxic loan glamour and become a short sale offered at $445,000 ($207/sq ft).

25551 Glen Acres, Lake Forest, CA 92630

Glen Acres is the place to be.

A Home Price Haircut - Apache Style

2005 must have been an interesting year in the Orange County housing market.

Very interesting.

I mean, could things have gone any better for homesellers, buyers and flippers at the same time? No way! College textbooks will no doubt include case studies about 2005 as the year of idiocy, of the seemingly unending, carefree, unregulated, real estate orgy.

15%+ appreciation on home sales. Skyrocketing home prices. Champagne and chocolate fountains. Hot hors d'oerves. And of course, parties around OC would not have been complete without the loud, depreciating jokes about foolish renters and housing market doomsayers.

"I just bought a new SF home for $700K last weekend! Guys, I'm so rich now!!!"

Four years later we can only look back at this period with our heads cocked to the side and a "WTF?" look of grimace on our faces.

That's all we can do. Because the damage is done. And like it not, we're all paying for it. Big time.

Today's example is 21892 Apache in Lake Forest. The location is appropriate. This is a beautiful 4 bedroom 3 bed, single family home with a massive backyard in lovely Lake Forest. The home is close to schools and far enough from the free way and the train to enjoy.

Now let's look at the ridiculous sales history that could only make sense to individuals in complete and utter denial, or in a drunken stupor of irrational exhuberance:

February 18, 2000: Sold $313,000

July 4, 2005: Sold for $700,000

November 14, 2005: Sold for $744,000

April 22, 2009: For Sale for $499,000

The greater fool asks: "So, uh...guys..like, where did my 15% per year home appreciation go?"

Oh, it's in our homedebtor bailout taxpayer checkbook. We'll go get it for you.

$499K for the same house that sold for 40% more before.

Now that's a home price haircut Apache-style.



Thanks again to the Orange County realtors, mortgage brokers, and financially inept borrowers for the greed and complete lack of integrity, and for all of those funny jokes.

Ready To Rumble?

Ahhh, late autumn 2005. All is right with the world. Single family homes are selling like hotcakes all over Orange County, California. 15 to 25% home price appreciation seemingly everywhere you look. OC realtors cashing those commission checks, buying H3 Hummers and brand new Lexuses, or just putting in their own little "cement pond" to celebrate the ongoing gravy train of success. Real estate house flippers are, well, flippin' out.

Good times. Good times.

One fine day, a nice little 5 bedroom, 2 bath single family home on Rumble Drive in Lake Forest comes up for sale for $725,000. Rumble Drive is located within earshot of the excruciatingly loud Amtrak train line between Irvine and San Diego, and the busiest and most treacherous roadway in Lake Forest: Six-lane El Toro Road.

This home last sold for $398K (little over half the original buy price) just 2 years before ($398K in 2003). But it's 2005 and dammit if prices for single family homes weren't hitting the stratosphere all over Lake Forest and all surrounding OC communities! I've gotta fix it and flip it, dudes! I gotta make some moves and be somebody. They all said it could be and should be done. Besides, Gary Watts and Connie de Groot are the smartest people in the whole wide world.

A year after the November 2005 purchase, the home is listed on the MLS in December 2006. Over a series of 2 1/2 years the home is listed, delisted and then relisted again with perfectly neurotic pricing changes. One can almost sense the frustration and disbelief. This can't be really happening. Or can it be?

Today the home is up for sale again on Redfin, his time for a brutal sale price of $499K as of March 29th. More price declines may be in the offing.

Bought for $725K shortly after market peak. Today the home is for sale for $499K at over $225K less than that 2005 purchase price.

22901 Rumble Drive, Lake Forest, CA 92630

What would you do-Oo-Oo, for a Klondike Condo??

Some person might indeed be willing to brave blistering winds and scorching, uncontrollable, wildfires for an opportunity to own and occupy this beautiful 3 bedroom, 3 bath condo in the Trabuco Canyon (Lake Forest) area.

I remember fondly back to a time in early 2005 when I first moved to Orange County and started renting, when a local Realtor, after listening to my confusion about local single family home prices here, proceeded to admonish me about my expectations. He said that I needed to set my "sights a little lower" than a single-family home, and "consider buying a small condo instead". "Work you're way up" the rungs of the home ownership ladder to achieve your dream of Orange County single family home ownership!

In other words, "Ride that bubble, dude!...Don't worry, everybody's doin' it!".

This lovely condo was purchased back in November 2004 at a perfect, Hubba Bubba Bubble Gum price of $435,000!

Today's 2009 Asking Price: $350,000 (a pre-approved, packaged short sale)

Address: 28496 Klondike, Trabuco Canyon, CA 92679

A Little Condo Price Battle

There may be a friendly neighborhood price battle brewing for 2 similar condos on Calle de Paseo in Lake Forest, CA.

21093 Calle de Paseo
3 bedroom, 3 bath Condo, 1606 sq feet, purchased just over 4 years ago for $480,000.
Asking Price: $399,000 ($248/sq foot)
Days on Redfin: 304

21143 Calle de Paseo
Another 3 bedroom, 3 bath condo, 1623 sq feet, purchased March 2007 only a few months from OC market peak at a breathtaking $530,000.
Asking Price: $379,000 ($234/sq foot)
Days on Redfin: 8

According to Redfin, both are short sales.

There remains yet a third condo for sale on the same street:

21123 Calle de Paseo
2 bed, 3 bath, 1441 sq feet priced quite differently.
Asking price: $429,900 ($298)
Days on Redfin: 491

21143 must have seen the writing on the wall and gone for the jugular with the $20K under comp (21093) asking price.

Even if a potential buyer were to come on the scene for any of these condos located in the same lovely area, short sales can take an awful long time to shake out.

Down on the Corner

A lovely 4 bedroom, 3 bath, single family home purchased on a hot August day in 2006 for $715,000. 2,000 square feet and a 5,984 sq ft lot.

Fast forward almost three years later and this corner abode is one of the lowest priced short sale single family homes in all of Lake Forest, California.

$715,000, which is almost 7 times the median income here in Lake Forest (approx $99K per anum), must have seemed like the "price is right" back in 2006. Nevermind the home's location being nestled almost equidistant from both the Amtrak train line and the 5 Freeway.

Asking Price: $399,999

Address: 24191 Hurst, Lake Forest, CA 92630

Creedence Clearwater Revival - "Down on the Corner"

This can't be happening

So you buy a beautiful home in 2006 for $975,000. I mean, why not? Jacuzzi, swimming pool, massive backyard, lovely Saddleback mountain area.
You've got the means. You've got the financing. Home prices appreciating everywhere you look by double-digits. Now's the time. Get in, or be priced out forever.

A few years later things go pear-shaped financially. Foreclosure. Short sale. And suddenly all the granite in the world no longer justifies the scenario where the asking price means double-digit appreciation over the previous buy price.

Asking Price: $749,900

Address: 8 Puerto Nuevo, Foothill Ranch (Lake Forest),CA 92610

This Just In: Housing Prices Actually Linked to Income, Jobs and Mortgage Rates

Holy cow! I mean, if you had been listending to a Realtor the last 8 years, you might never have suspected this 2x4 of obviousness across the face. But it's true.

Wait a minute, you mean, income, jobs and mortgage rates determine..... Yep, there's this complicated thing called "fundamentals".

This is a fantastic article by Susanne Trimbath which restates the critical success factors for prospective homebuyers.

1.) Do I have enough income (take home after expenses and debts) to purchase a home at the market prices?

2.) Will I have a job in 6 months?

3.) How do current and future mortgage rates coincide with local home prices and my monthly take home budget?

This is the part where our hall monitor Realtor friends step in and remind us, in that I-never-sold-anyone-into-foreclosure-ever condescending manner, "real estate is local".

True.

But so too are jobs and incomes.

And last Friday, California and Orange County got some interesting news:

California, the worlds' 9th largest economy according to GDP numbers, has an unemployment rate of 10.1%.

Orange County California's unemployment has reached an all-time high since 1993 of 6.5%

So why is it that a 4 bedroom, 2.5 bath, single family home in Lake Forest, CA is priced at $650,000, or 6 times the median income here of approximately $100,000 per family?

If you were to go to Redfin, Trulia, RealtyTrac, or Zeus forbid, Realtor.com, you'd be surprised as to the homes available for sale in Lake Forest.

And you would be far from impressed.

In a word, almost all single-family homes in Lake Forest, California are over-priced pieces of crap. I'm dead serious here. Most of the homes for sale right now in February 2009 in Lake Forest are foreclosures, or trashed out short sale properties. Nobody who doesn't have to sell is trying to sell their home right now. The availability of quality homes for families with children, for example, to consider purchasing are few and far between. Most fence-sitters must not only cope with still unbelievable home prices (between $450,000 and $750,000), but also the reality that the home they might buy will be riddled with defects and necessary repairs. It's just a fact. And this I'm reporting AFTER the housing crash has supposedly occurred.



Paseo Verdura, Lake Forest, California, 350 days later, still $650,000.
Bank get's an A for stubborness, and an F for creativity.

I submit that parts of Orange County are still living in a dream world in terms of their asking prices.

Why?

Well, because the local real estate market is screwed up. Yes, Orange County is a nice place to live. A beautiful place. Perfect weather, oceans nearby, mountains nearby. I mean OC living has its' merits, and those should be priced at a premium of some measure. But single-family homes remain overpriced.

Earned incomes in OC are higher than the rest of the country. However, I suspect that job market uncertainty combined with ridiculous home prices that bear no relation to incomes will keep many on the sidelines through a difficult 2009.

125 Days Later: Lake Forest Home Still Won't Sell

125 days on the market is really not that much time.

It's only two (correction FOUR) months.

It's now May and homebuying season should be in full swing for families dying to quit renting and start "owning".

And so it is that a 4 bedroom, 3 bath single family home is put up for sale in little old Lake Forest town. Close to the main thoroughfare for which the area was once known (El Toro Road), close to shops, but nestled tightly into a typical OC suburban tract.

22612 Auburn Dale Dr., Lake Forest, CA, 92630

Asking price: $564,900

Asking price/ sq ft: $309

Income requirement: God only knows. Let's divide by 4 and say $140,000 per anum.

Purchase price: $721,000 (holy hell!)

Purchase date: 6/13/06

Size: 4 beds, 3 baths, 1,829 sq ft (built in 1977)

MLS: P619632 (126 days on Redfin)

Zillow Zestimate: $548,500

2007 property tax: $2,187

HOA dues: unknown

Type: Contemporary

Stories: 2 Levels

The Listing: Great price to purchase in 'pride of ownership' Sunwood tract! Priced for a quick sale. Oversized backyard offers room for a pool and possible RV parking too! New roof was installed in 2006. Home has a wonderful flowing floorplan with vaulted ceilings in living & dining room & spacious family room with fireplace. Concrete and covered patio for family fun and weekend entertainment. Large master suite. Free Lawn service for 12 months. Don't be shy.. write it up.

I'm not sure what "pride of ownership" refers to when we're witnessing the current owners vacating the the adobe an entire 9 months after purchase. But OK.

"Don't be shy". I doubt shyness has anything to do with the original $721K price tag or the $156K sales discount in 2008 on this home.

Man, thankfully by now we're all fluent in "Realtor speak" around here.

Love the bit on room for "possible RV parking too!". And with an exclamation mark! These homes on Auburn Dale Drive are situated pretty close together as it is. But, I mean, if you really want to win friends and influence your new neighbors, yeah, go ahead. Park that gas-guzzling vehicular monstrosity of yours in the skinny alleyway right next to your new house (and theirs). The neighbors will just love you for that I'm sure.

And how about "Priced for a quick sale." Well, maybe.

This home was purchased in June 2006 during the sub-prime, no doc hay day for a logic defying $721,000. I will surmise that back in those days nobody in Lake Forest, California even thought twice about a.) leveraging themselves to the freaking hilt, b.) following realtor bullshit lies like "get in now while you still can " and just "refinance later", and c.) paying $394.00 per square foot for a 30 year old single-family home.

But then here we are today, after 2 months on Redfin, and this ideal home for a young family is priced with a $156,100 discount off the original buy price. That's a lot of dough, isn't it? Not if one considers that this home was criminally overvalued in the first place when it was purchased 2 years ago-as were most OC homes.

Still, $565,000 might be a good sale price if one considers comparable homes of similar size and configuration sold over the past 3 months in the area.

But clearly this home is another textbook example of buying at the market peak in Lake Forest, California, well before the certain-to-come market correction. Now prospective homebuyers/fence sitters in Lake forest continue to ponder in amazement as to just when the eerie doppler-effect-effect-distorted, ice-cream-truck-like music might stop.

Divine Intervention Saves Lake Forest Man from Jaws of Foreclosure

His prayer telephone has been literally ringing of the hook as of late, but Almighty God decided to take a nano second out of his manic day to intervene divinely in the life of Arturo Peña, an Orange County homedebtor.

Mr. Peña has been working 3 jobs trying to make ends meet while at the same time facing foreclosure on his Lake Forest, CA home. His life Olivia probably doesn't recognize him anymore, since he is never home. Instead he works his tail off trying to muster together enough dough to meet the monthly mortgage payment.

But not anymore.

Today Arturo Peña won the California Lottery Big Spin ticket for $1,000,000 from a local Albertson's grocery store in Lake Forest.

God knew that Mr. Peña previously only brought down about $30,000 gross per annum. Thanks to the lightening strike at Albertson's, Arturo and his family can add another $37,000 after taxes to their take home earnings.

Great story, and a nice faith-builder for those around the country who need help - any kind of help to prevent their own foreclosure and bankruptcy.

God was not available for extended comment following Mr. Peña check holding ceremony, but was rumoured to have requested "a word or two" with N.A.R. chief economist, David Lereah.