Foreclosures in Los Altos! Near golf courses! Is the world ending?
1566 PLATEAU Ave, Los Altos, CA 94024 | MLS# 80844204
1566 PLATEAU Ave Los Altos, CA 94024
Price: $1,725,000
Beds: 6
Baths: 3.5
Sq. Ft.: 4,110
$/Sq. Ft.: $420
Lot Size: 0.28 Acres
Property Type: Detached Single Family
Style: Contemporary
Year Built: 1978
Stories: Tri-Level
View: Mountains, Neighborhood, Golf Course
Neighborhood: Country Club
County: Santa Clara
MLS#: 80844204
Source: MLSListings
Status: Active
On Redfin: 101 days
Unsold in 90 days
Stunning contemporary home with spectacular views of mountains and golf course featuring a chef’s gourmet kitchen w/ Sub Zero, Viking, wine refrigerator, large center island, separate LR/FR w/ fireplace, formal dining rm, vaulted ceilings, luxurious master suite w/ marble flrs & counters, sunken jetted tub, large marble stall shower. Limestone & hrdwd flrs, spacious bedrooms w/ built-ins, decks
Burbed reader Justin Sane had this to say:
Is Los Altos not part of RBA? Do we need a RLA? Because foreclosures do not happen in the RBA, right? Yet, I see a
bank owned foreclosure mansion listed in Los Altos. Right next to the golf course too.
Good question… I don’t know! Let’s look at some more data:
Wow. I must say that this is pretty concerning. Again with the roller coaster prices.
Fortunately, this is just one house in Los Altos – and one house does not make a trend.
February 25th, 2009 at 7:27 am
Marble floors and counters, but no marble columns? Definitely a faux pas.
February 25th, 2009 at 8:02 am
You’d have to be alto not to buy at that rock-bottom prince.
February 25th, 2009 at 9:34 am
nice house. curious what it will go for. The discount on foreclosures is not that high, so we’ll see the true sales price from a very motivated seller.
February 25th, 2009 at 9:39 am
Here it coooomes….
February 25th, 2009 at 9:52 am
Hmmm, the NAR had a press release today, and none of our housing bulls cared to post parts of it yet – maybe that’s because it didn’t offer much in the way of good news.
http://www.calculatedriskblog.com/2009/02/existing-home-sales-decline-to-449.html
When the NAR doesn’t have much to say besides “things in Chicago are not nearly as bad as Santa Ana, CA”, you know it was a rough report.
Super-short summary: January 2009 Existing Home Sales were down from December 2008, AND down from January 2008, neither of which were good months. So this is a weak report.
Since new home construction is virtually nil, almost any sale at all does tend to work through inventory, which is dropping from astronomical levels (so that’s ‘good’, or I would say ‘less horrible’), the problem is the sales rate fell faster than inventory this month, so the ‘months of supply’ metric actually went up. Nationally it’s at 9.6 months – 6 months being considered more like healthy or normal.
Hey, it’s better than 11 months!
Inventory and sales rates are key components of basic supply and demand in the market – that’s why I miss the numbers posted regularly on the Bubble Markets Inventory Tracking blog, which went defunct after the owner finally bought a home in the San Diego area!
He found 1997 pricing in a location he liked, so he moved on it! Now he’s tired of following the Real Estate market, I think! That makes sense…
February 25th, 2009 at 9:53 am
That seems like quite a nice house. Sub-zero and everything! Setting new comps…
February 25th, 2009 at 10:00 am
Well, CalculatedRisk again has the best housing market analysis you can find:
http://www.calculatedriskblog.com/2009/02/more-on-existing-home-sales-and-graphs.html
He just does such great work.
If only we could have these data cut down to local market levels, and not finessed by realtors.
Key terms to learn: “Shadow Inventory” (homeowners wanting to sell, but waiting for a better market), and “Ghost Inventory” (REOs being held off the market by lenders…overwhelmed with REOs/waiting for a better market/not wanting to book the loss right now).
February 25th, 2009 at 10:28 am
Re #5: Ah, but inventory is also down! The law of supply and demand will soon kick in—prices are set to soar!
February 25th, 2009 at 10:43 am
Prof. Bleen: I don’t think so. The number of families has not grown faster than the number of new units, so there are extra units on the market. If anything can set prices below the 1950-2000 price level, it’s this extra inventory that needs new household formation to soak up. I don’t see the US suddenly increasing immigration to fill up its idle housing stock.
February 25th, 2009 at 10:47 am
Sorry, zanon, I forgot the tags around my last comment:
<realtard>
and
</realtard>
February 25th, 2009 at 10:57 am
a lewis, exactly right on the key terms. right now the RBA ghost inventory is low but the shadow inventory is very high. there is quite a pricing standoff. I suspect the winners and losers will be more obvious by summer.
burbed, great post. the sales history is awesome.
family A buys house: 11/24/1997 $912,500
family B buys from family A: 8/16/2005 $2,500,000
family B moves out and bank “buys” house back: 10/17/2008 $1,897,500
it is obvious that family A does well and the bank does poorly. but what about family B? it turns out they did just fine too. let’s dig a little deeper:
Event date 8/16/2005
Owner address 1566 Plateau Ave
Lender # 1 Washington Mutual FSB
Loan amount # 1 $2,500,000
100% financing! Un-f***ing believable WaMu s**t, except it isn’t. This is just a simple variation on what Irvine Housing Blog writes about every day.
My hat is off the the Tamayos. They must have had substantial assests for WaMu to pony up $2.5M, but by taking only 1 loan (purchase money*) the note holder (now Chase) and we the taxpayers have no legal recourse in California to recover our money. Way to live rent free and risk free. My only hope is that the IRS will treat the (likely) 800K difference as income. Can anyone address this?
* if there had been a 2nd or a refi, the bank could go through judicial foreclosure and then seek a deficiency judement. not an option with “purchase money” loans, however, and, in reality, an option a bank rarely persues.
February 25th, 2009 at 11:11 am
steve, thanks for giving the lie to the idea that there were no risky loans in the RBA. 100% financing on $2.5M – Un-f**ng believable is right.
About your only consolation is that Family B’s credit rating is trashed for 7 years…but even that is going to be so common now, it probably won’t have the stigma it used to.
One hopes at the least they will never qualify for a risky loan again, and will be forced to have skin in the game next time.
One hopes…
February 25th, 2009 at 11:19 am
they are clearly laughing all the way to and at the bank. so they rent for the next 7 years — that will likely turn out to be a good financial decision too.
February 25th, 2009 at 12:09 pm
Actually, if you’re going to go bankrupt, you might as well go out with a bang. There’s no difference if you’re bankrupt on a $2.5M purchase that dropped to $1.9M vs. a $600K purchase that dropped to $300K. At least this guy got to enjoy the house for a few years, as opposed to a guy who lived in a low end San Jose home and ended up the same way.
February 25th, 2009 at 12:25 pm
RE, they are not bankrupt; they just mailed in the keys. They didn’t lose a penny on this — you and I did.
They lived at our expense and all of the assests they likely showed when qualifying for their 2.5M mortgage are still their assets.
Had they lost 500K of their own money, I would feel much better about the situation. Foreclosure and bankrupcy are very different things.
February 25th, 2009 at 12:30 pm
Hey, glad burbed ran this one.
RE: #11 My only hope is that the IRS will treat the (likely) 800K difference as income. Can anyone address this?
I believe there was an explicit provision in one of them stimulus package bills within the last year which tells the IRS not to treat as income such mortgage shortfalls written off by banks.
February 25th, 2009 at 12:33 pm
http://www.irs.gov/individuals/article/0,,id=179414,00.html
February 25th, 2009 at 12:41 pm
justin, thanks for answering my question. it is possible that absent this act it wouldn’t have been taxable as it was a non-recourse loan, but the Act seals the deal. I’m really happy we are ready to forgive up to $2M! in gap between loan amount and REO sale. yep, those are the folks we should be bailing out.
it didn’t prevent the tulip craze, it is very bad for entrepreneurialism, and it is quite unfair for medical expense driven bankrupcy, but I’m liking the idea of debtors’ prison more each day.
February 25th, 2009 at 1:46 pm
They didn’t lose a penny on this — you and I did.
They lost out on, from the looks of it, two years of payments.. which, on a loan that size, could have been close to $200,000.
February 25th, 2009 at 2:02 pm
Umm… If they took out a $2.5m mortgage, and the bank foreclosed for $1.9m, then that means they paid up 600k, doesn’t it?
Something wrong with my arithmetic?
February 25th, 2009 at 2:05 pm
I’ll bet they were making interest only payments with a teaser rate. Let’s say $8K/month. Taxes were another $2K/month. When you add in the time they lived there without making any payments at all, it is likely above rental cost, but not that much. And, if the bubble continued, all of the upside would have been theirs tax-free. The mind boogles, or, in the case of RE, admires:
At least this guy got to enjoy the house for a few years, as opposed to a guy who lived in a low end San Jose home
Just another way rich people are better – this time at ripping off tax payers.
February 25th, 2009 at 2:06 pm
oops, “theirs tax-free” should read their risk-free.
February 25th, 2009 at 3:00 pm
steve, great posts on today’s house. I just checked the county tax records and the taxes are current. Payment #1 is a whopping $15,000 and Payment #2 is due by April 10th. Guess that’s the bank’s problem, huh?
Looks like the Fine Borrowers paid their taxes a couple months late last year, and got hit with a $1500 penalty! And surprise, surprise, they did the SAME thing a year before that! Clearly they were following the example of the previous owners, who also were dinged 10% for paying late, but they only had $4000 payments (2 of them) to worry about.
February 25th, 2009 at 3:03 pm
A Lewis, re: your comment about construction being nil. There’s a new bunch of homes going up on West Fremont near Hollenbeck, on the site of an old church. I wonder how much of a bath Classic Communities is going to take on Trinity Park. This would be 94087 but on the wrong side of Fremont for CUSD, but it would get Cherry Chase for elementary and Homestead High. The weak link is Sunnyvale Middle. Looks like another glorious set of SFHs built within 2 feet of each other, for people who don’t care for sunlight. Goths will love it.
February 25th, 2009 at 3:03 pm
justin, this is a case where having a friend at a title company would come in handy. I can think of several explanations for the 600K difference between the originally recorded loan amount and the foreclosure value:
1) mortgage securitization artifact
2) foreclosure process artifact
3) the bank had written down some of the loan
4) there was a refi not captured by propertyshark that split this into a 1st and a 2nd. (2nds always get screwed although they do have recourse)
5) the homeowner added 600K of equity in 2006 or 2007
as a taxpayer, I sincerely hope it was the last but I find this almost impossible to believe. any bankers out there with the real scoop?
February 25th, 2009 at 3:15 pm
#14 – Wow, you’ve done it again. Again I had to write 1,000 words and throw them away because the vitriol might make burbed impose new rules again.
Oh hell, I wrote another 1,000 words and threw those away.
Never mind…I’ll just say I think we should all try not to be selfish, and look out for each other.
It reminds me of a joke:
Two lawyers are in line at a bank, when suddenly armed robbers break in, tell everyone to put their hands up, and start to go around relieving each patron of their valuables.
Terrified, with his hands in the air, the first lawyer feels someone putting something into his pants pocket – he looks down and realizes it is the second lawyer!
“What the hell are you doing?”, he asks in a furious whisper.
“Here’s that fifty I owe you”, comes the smug reply.
February 25th, 2009 at 3:18 pm
#24 madhaus: I was speaking from the national perspective of that post by CR. Looking at the housing starts data from last month it’s very very small compared to the last 20 years. Almost nil. Of course there are some houses being built, and some projects that were better to complete than cancel, but not many.
February 25th, 2009 at 3:50 pm
one more point about this house to replace my previous obsession — it currently can’t sell at more than 30% off peak price. wow!
as justin mentioned to start us out, los altos is now on super-secret double RBA probation. If this closes at 1.6 or below they may be out for good. Pretty soon it will just be atherton, hillsborough, woodside and a tiny slice of palo alto — not because prices won’t be falling but because they are well outside of the range any of us is tracking.
February 25th, 2009 at 4:33 pm
A Lewis, I know you meant starts are way down but not zero. I am going to keep an eye on Trinity Park. Maybe it will be the Gables End of 94087. Actually I found the Gables End of Cupertino; right on a freeway entrance! Well, it’s in San Jose, but you can’t have everything!
You know, I drive by Gables End (via 101) a couple of times a week, and the Now Selling sign is still up! Anyone feel like giving the friendly salesfolk there a call? It must be lonely in that trailer!
steve, like I said, 94087 lost their RBA status at the beginning of 2009. Let’s check my handy-dandy list to see where Los Altos was on that list.
Hmmm. After parts of Palo Alto, but before Atherton and Woodside.
February 25th, 2009 at 4:44 pm
madhaus – here’s that fifty I owe you.
February 25th, 2009 at 5:04 pm
#20: Umm… If they took out a $2.5m mortgage, and the bank foreclosed for $1.9m, then that means they paid up 600k, doesn’t it?
Something wrong with my arithmetic?
(Followed up by #25.)
Since I am trying not to be cynical, I would say the odds are very good that the buyers of this home bought the house with an I/O loan and nothing down before they sold their previous home. Then, when the previous home closed, they paid down their new loan with the proceeds. I say that because I’ve seen it done, and because it’s just too insane to think anyone could get a $2.5M house with zero down. And no requirement for an impound account for property tax.
My 2 cents.
February 25th, 2009 at 5:54 pm
#29, I gained a new respect for houses that are built really close together after visiting a professor’s house on Forest Hill in SF. 3500 sf lot, four-level 2000 sf home with awesome views from all four. It felt really grand inside, but then look out the window and surprise – the next house is 2 feet away! It certainly helped that the lot fell away from the house and helped it feel open, but it really opened my eyes to how a house like that doesn’t have to feel like a dungeon.
February 28th, 2009 at 1:47 pm
btw, house is now pending without release. burbed, are you getting a commission? any guestimates on the close price? I’ll go 1.65.
May 23rd, 2009 at 1:30 pm
oh my! sold for a shockingly low $1.5M
1566 Plateau Ave
Los Altos, CA 94024
LAST SALE: $1,500,000 (04/03/2009)
Aug 16, 2005 Sold $2,500,000
May 23rd, 2009 at 2:07 pm
The aptly named plateau ave. LOL.