Friday, October 14, 2011

Irvine Housing Blog

Irvine Housing Blog

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Does the Irvine school system add value to local houses?

Posted: 14 Oct 2011 03:30 AM PDT

The Irvine Company has invested heavily to promote the Irvine school system to raise the value of local housing. Is it effective?

Irvine Home Address ... 57 ASHBROOK #64 Irvine, CA 92604
Resale Home Price ......  $419,900

Won't you believe it?
It's just my luck

No recess!

Nirvana -- School

My parents both retired from school system work last year. I grew up in a household where education was a focus, and public school issues were a common topic of discussion.

Many people believe certain schools have good test scores because they have better teachers. That usually isn't the case. While it's true that good teachers prefer to teach in highly rated schools, the quality of teaching isn't what makes test scores better. Good schools are largely a product of involved parents and motivated students. It's rare to find a school where the parents are heavily involved and the test scores are poor. It's equally rare to find a school where the test scores are good and the parents have other priorities.

Good test scores are like gravity. A good school attracts the most involved parents who place an emphasis on education and get involved in the school and with their children. In other words, good test scores beget good test scores. This is one of the reasons poor school test performance problems are so intractable. The worst performing schools are populated by students whose parents don't value education, don't get involved with the school, and don't motivate their children to succeed.

Everyone is searching for an answer to bring the quality of education up. Unfortunately, the real problems with education cannot be addressed in the classroom. The problems start at home and resonate through the community.

Donald Bren On The Best Fix For K-12 Education

Kerry A. Dolan -- 9/22/2011

Donald Bren built a $12 billion fortune as a Southern California real estate developer and has been focused on philanthropic giving to support education. That includes gifts at the university level to UC Irvine and UC Santa Barbara as well as to K-12 schools in the city of Irvine (in Orange County), which his Irvine Co. master-planned and developed, and after school program Think Together.

Bren shared his thoughts with Forbes via email.

Donald Bren, real estate developer and philanthropist

FORBES: What is your best single idea for reforming K-12 education?

BREN: In my opinion, education is the finest gift an individual can give a young person.  And many of our public schools are falling short in successfully educating the youth of our country today.

Gone are the days when state governments are fully able to fund our public schools.  Future public education will require involvement and collaboration among various local, civic, private and nonprofit entities, a concept I like to refer to as “community entrepreneurship.

Irvine schools have been successful because of the community involvement. Once these schools gained a reputation, they became a magnet for people who value education -- which is exactly what Donald Bren had in mind.

Over the past 30 years, I have sought to implement community entrepreneurship to benefit our local kindergarten through twelfth grade schools, working in partnership with community leaders, local school districts and well-run nonprofit organizations.

For example, in master planning and master building the new City of Irvine, we have gone to great lengths to ensure our elementary schools and neighborhood parks are contiguous and a focal element creating the important activity center for each residential community.

When state funding for Irvine public schools began to diminish some time ago, my Irvine Company colleagues helped me to provide private funding support for continuation of basic science, art and music programs that had been eliminated by lack of state funding.  Additionally, we have developed annual teacher recognition and reward programs that provide financial awards for teachers who demonstrate outstanding results in educating our students.

By making capital available for unfunded programs and providing a balanced curriculum and financial incentives to teachers based on results, Irvine Unified School District continues to rank among the finest educational systems in the nation.

Yes, they are.

My additional observations for K-12 schools are:

1)    Return full governance and financial control to the local school district board and the parents – they know best.

2)    Eliminate the large bureaucratic administrative overhead expenses that prevent necessary funding from reaching classrooms.

My school teacher parents used to complain about the huge bureaucracy that seemed to exist only to consume resources.

3)    Maximize the existing investment in school buildings and equipment by operating the school campus on a four-quarter or year-round basis.

4)    Compensate professional teachers on a year-round basis, similar to most businesses and government.  By the way, education is big business and should be approached in a similar disciplined manner.

5)    Making a difference requires focus.  Academic administrators will tell you that the most important school years are kindergarten through sixth grade, when students develop confidence in their ability to learn and foundational study skills.  Focus efforts on the early years before trying to fix high school programs that often provide too little too late.

6)    Consider a higher level European-style baccalaureate program for certain schools, and as an example, reducing the need for rudimentary freshman English classes at our prestigious University of California.

7)    And don’t forget, students are living in a digital world where computers and information technology are used at home, at school and in everyday life.  They must learn the new methods of our “plugged-in” society.

The classrooms at my son's school are full of computers.

FORBESIs there any person or any school who you think is doing a good job of improving/reforming k-12 education now?

BREN: In my opinion, the person doing the best job improving education in California is Randy Barth, President and CEO of THINK TOGETHER in Santa Ana, Calif.  He is the most dedicated and innovative professional in K-12 tutoring and mentoring education in California.

THINK TOGETHER provides academic learning through specially designed after-school and summer programs throughout Southern California to more than 100,000 students.  With special attention given to areas such as the Santa Ana Unified School District, with more than 50,000 underprivileged K-6 students, the majority of whom have little chance to get ahead without this unique program. Thus the results are encouraging – academic improvement scores have been off the charts, so to speak.

Fixing our K-12 education system requires a new solution to a growing national problem.  Community entrepreneurship is my recommendation, as it will bring together the necessary resources to make a difference.  Our children are worth the extra human effort and investment.

I’m proud to be among a group of dedicated community entrepreneurs focused on improving our community education programs.

I live in Irvine for the schools

For those of you who have attended my Las Vegas cashflow presentations, you have heard about my son. I am the parent of a special needs child.

My son is a slow learner, and he has limited language and social skills. He is labeled as autistic, for whatever than means. All my wife and I know is that we love him, and he is an endless source of joy and happiness.

I get to spend a great deal of time with him, particularly now that I work from home. I see him for each morning as he and I make breakfast together. Most evenings we get some time to play video games or just hang out. He likes when I read books to him, and his skills at Mario Kart or Super Mario Brothers are remarkable. On Sunday morning, you can most often find us at Disneyland. I can't count how many times I have been on Splash Mountain, Space Mountain, Indiana Jones, Pirates of the Caribbean, Big Thunder Mountain, and the Matterhorn Bobsleds. It's the most precious time of my week. I will never look back and feel I missed out on enjoying my son as he grew up.

My wife and I have thought about leaving Irvine on many occasions. We have considered San Clemente, Ladera Ranch, Las Vegas, and other areas, but when we really think about moving out of Irvine, we think about the education program we would leave behind, and we change our minds. The Irvine special needs programs are truly outstanding. When I factor in the cost of providing this education privately, the cost of renting in Irvine seems reasonable. It would be much more expensive to rent or own somewhere else and have to provide a comparable private education.

The Irvine Schools do add value to Irvine Homes

The bottom line is that people willingly pay the Irvine rental and ownership premium to be in the Irvine school system. We know several parents who moved here from other school districts and even from out of state to have their special needs child educated in Irvine. Parents of typical children come here for the same reason. The high test scores are a big draw. Parents will do whatever they must to give their child every advantage. If that means paying extra to live in the best school district, that's what parents will do.

The responsible bagholder

HELOC dependency and abuse is deeply embedded into the California psyche. The property records on today's featured property show a HELOC abuser who sold it to a responsible bagholder who simply couldn't afford the property. Perhaps unemployment or a loss of income was a factor, but the later buyer didn't add to their mortgage, and they still lost the home. It's now an REO.

The story begins on 11/10/1998 when the property was purchased for $260,000. The buyers used a $234,450 first mortgage and a $25,050 down payment. The refied twice for $290,000 and $322,700 respectively taking out a little less than $90,000 in the process. Based on the frequency and amount of these withdrawals, those owners were clearly using their HELOC money to supplement their incomes.

Despite the bad habits those owners formed, they were amply rewarded when the sold the property to the bagholder on 5/7/2004 for $542,500. The subsequent owner used a $406,875 first mortgage and a $135,625 down payment. They never refinanced or took out any HELOC money.

The bagholder was unable to sustain the payments on their first mortgage, and the property went to auction on 4/5/2011 for $414,265. If the bank gets their asking price, they are out the amount of commissions buy little more. The 2004 buyer is out their entire $135,625 down payment, and their credit is shot. If they knew they were going to suffer those consequences, they probably would have refinanced and maxed out some HELOCs.

Chase has the property now, and they are hoping to sell it and get most of their loan balance back. At this price, they probably will.

This property is available for sale via the MLS.
Please contact Shevy Akason, #01836707 

Irvine House Address ...  57 ASHBROOK #64 Irvine, CA 92604
Resale House Price ......  $419,900

Beds:  3
Baths:  2
Sq. Ft.:  1601
Property Type: Residential, Condominium
Style: Two Level, Contemporary
Year Built:  1978
Community:  Woodbridge
County:  Orange
MLS#:  S675677
Source:  SoCalMLS
Status:  Active
On Redfin:  3 days
This Chase Bank Owned property has been freshly painted and new carpet installed. This is the largest model in the Parkside Tract. Lots of room for a 3 bedroom, 2.5 bath home. Only one common wall for this townhouse style condo. Fireplace in the living room with 2 skylights. Formal dining, family room, new stove just installed in kitchen. Garage has direct access. Rare long driveway for Irvine. High vaulted ceilings. Secondary bedrooms are on opposite side of hall of Master Bedroom for more privacy. No neighbors behind property for increased privacy. Property is located in the Village of Woodbridge - one of the best communities to live in. Many pools, parks, Lakes with boating and Lagoons for Beachcombers, volleyball, basket ball courts, tennis clubs, too many HOA activities to list for adults, children, and families. Close to shopping, banks, houses of worship, schools, movie theaters - all in the heart of Irvine. Look at MLS MEDIA for disclosures. 
Proprietary IHB commentary and analysis 

Resale Home Price ......  $419,900
House Purchase Price … $542,500
House Purchase Date .... 5/7/2004

Net Gain (Loss) .......... ($147,794)
Percent Change .......... -27.2%
Annual Appreciation … -3.4%

Cost of Home Ownership
$419,900 .......... Asking Price
$14,697 .......... 3.5% Down FHA Financing
4.03% ............... Mortgage Interest Rate
$405,204 .......... 30-Year Mortgage
$122,783 .......... Income Requirement 

$1,942 .......... Monthly Mortgage Payment 
$364 .......... Property Tax (@1.04%)
$0 .......... Special Taxes and Levies (Mello Roos)
$87 .......... Homeowners Insurance (@ 0.25%)
$466 .......... Private Mortgage Insurance
$313 .......... Homeowners Association Fees
$3,172 .......... Monthly Cash Outlays

-$302 .......... Tax Savings (% of Interest and Property Tax)
-$581 .......... Equity Hidden in Payment (Amortization)
$21 .......... Lost Income to Down Payment (net of taxes)
$72 .......... Maintenance and Replacement Reserves
$2,383 .......... Monthly Cost of Ownership 

Cash Acquisition Demands
$4,199 .......... Furnishing and Move In @1%
$4,199 .......... Closing Costs @1%
$4,052 ............ Interest Points @1% of Loan
$14,697 .......... Down Payment
$27,147 .......... Total Cash Costs
$36,500 ............ Emergency Cash Reserves
$63,647 .......... Total Savings Needed

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