The numbers still don't add up

A while ago, we profiled the prospect of owning vs. renting in a Northwood Pointe neighborhood in Irvine. Quick summary: Not a good idea to buy there right now.

This time, we're looking over in another Irvine area: Westpark.
The red X in this picture is 112 Costero Aisle, 92614. It's for rent on Firstteam.com for $1,800 a month.

Here are its stats:
2 beds, 2 baths, 844 sq ft
From listing: Model perfect!!! 2B 2B 1 car garage and 1 carport! Designer carpet, chiseled tile floors, crown molding, base boards, wood shutters, recessed lights, scraped ceilings, finished garage w/granite floors, washer and dryer included. Large patio with trees, next to a large park, close to pools & tennis. Inside laundry (Washer and Dryer included)Property available for occupancy effective AUGUST 1, 2007. MUST SEE HOME!! THIS IS A LOWER UNIT PROPERTY IN A GREAT LOCATION!

Your total monthly cost to rent: $1,800

The house graphic in that above map is 105 Alberti Aisle #323, 92614.
Size: 2 bed, 2 bath, 850 sq ft (built 1987)
MLS: S493361 (20 days on Redfin)
Current asking price: $424,900
Sales history: 06/15/2004: $403,500
12/27/2001: $217,000
10/15/1997: $132,500
05/14/1993: $143,000
01/12/1993: $160,305
07/14/1989: $161,000
11/17/1988: $134,000
From listing: Fabulous Buy! Popular Penthouse Floorplan in Beautiful Westpark! Immac ulate Condition! Light & Bright! Newer Wood Laminate Floors! Large Living Room w/ Fireplace! French Doors Open to Den/Office/2nd Bedroom! Convenient Indoor Laundry! Vaulted Ceilings! Spacious Private Balcony/View Deck! Excellent Location in Complex Near Community Pool/Spa, Garage & Carport! Truly One of Irvine's Best Locations! Close to Shopping/UCI/Employment Centers/Freeways/Parks/Bike Trails/Etc! Must See this Beauty!

Now for the monthly costs for owning, with the premise that a buyer is paying full asking price and putting 20 percent down.
$2,130 Principal and interest (6.375 percent interest rate, per ZipRealty.com-provided rate on a 30-year fixed loan)
$185 HOA dues
$409 Property tax (this number is based on current taxes and would increase slightly, but we're going to stick with this lower figure anyway)
$100 Insurance
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Your total estimated monthly cost to own: $2,824
Amount you save each month by renting instead of owning: $1,024

OC real estate flop of the week

We're revisiting this feature, and hoping to continue it on (at least) a weekly basis. This failed flip in the making is located in the beautiful community of Irvine, Calif. It's a lesson in what bad timing can do to you in real estate.

Address: 301 Rathbourne
Bedrooms: 3
Baths: 2.5
Sq. feet: 1,481
Year built:1998
MLS No.: S470313 (Redfin link)
Days on the market:143
Current price: $599,900

As you can see in these photos, the inside looks nice - everything you would like to see in a nine-year-old home condo. Things turn pretty ugly pretty fast when you look at the price history for this listing, and the sales history for this unit.

Price Reduced: 01/16/07 -- $684,900 to $649,900
Price Reduced: 03/03/07 -- $649,900 to $629,000
Price Reduced: 05/07/07 -- $624,900 to $615,000
Price Increased: 05/11/07 -- $615,000 to $624,900
Price Reduced: 05/22/07 -- $624,900 to $599,000
Price Increased: 05/24/07 -- $599,000 to $599,900

Looks like they're playing the game of lower the price a bit, then raise it almost back to where it was. We've got four price reductions and two increases. All told, the asking price has dropped by $85,000.

Sales history:
06/30/1998: $190,500
05/17/2001 : $310,000 (18.4 percent appreciation per year, according to Redfin)
05/25/2005: $625,000 (19 percent appreciation per year)

If (and trust me, this is a big if) the place is sold at the current hoping price of $599,900, there will be a loss of $61,094 (including 6 percent selling costs).

When numbers don't add up

Welcome to Collage, an attractive 211-unit gated condo complex in Irvine's Northwood Pointe (92620 ZIP code).

It's right in between two excellent schools - Canyon View Elementary and Northwood High.

Plus, there's a community pool. It was closed recently because there was some vandalism to the pool furniture, and some broken glass ended up in the pool. The yellow caution tape is finally gone.

Other than the fact that this neighborhood suffers from an extreme parking problem (50 open parking spaces for more than 200 units, plus the fact that hardly any residents use their garages appropriately for parking cars), it's a great place to live.

But not if you're buying these days.

Let's take a look at some numbers:

2300 Timberwood, a Plan 1, sold March 13th, 2007 for $434,000, according to Zillow. This was the second time this unit sold in the past two years. It went for $400,000 in January, 2005. Assuming 6 percent selling costs, this owner only netted about $8,000.

Plan 1 is the smallest in the complex and is a 1,001 square-foot 1 bedroom plus den, 1 bath and 1-car garage model. That's a selling price of $434 per square foot.

As you can see from these two pictures below that were fused together, it's got a nice balcony, plus some nice space inside:

Here's how much this little beauty would (roughly) cost you per month:
$2,194 Principal and interest (Assuming 20% down, 6% interest rate on a 30-year fixed loan)
$168 HOA dues (Costs vary from listing to listing. This is the lowest value I saw)
$295 Property tax ($3,543 paid in 2006; this figure will go up next year because of the sale)
$100 Insurance
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Grand total: $2,760 per month

So, what if you're renting?

520 Timberwood (the same Plan 1) was recently listed for lease at $1,750 per month. I also know that some of those models are being rented for even less, but we'll stick with that $1,750 figure.

The difference between renting and owning this model in Collage is currently about $1,010 per month. Not too much in the way of recent appreciation, either.

Of course, you do get a break on taxes from paying mortgage interest. But let's be honest - hardly anyone is putting that extra money into savings. Instead, it's going to the leased Mercedes or that second trip to Hawaii.

Imagine what you could do with an extra $1,010 month by not owning a condo here right now.

Want to read about an interesting saga in this neighborhood? Check out this entry from the Irvine Housing Blog.