Are You Prepared?
O Holy night, the stars are brightly shining
It is the night of our dear Savior's birth
Long lay the world in sin and error pining
Til He appeared and the soul felt it's worth
A thrill of hope the weary world rejoices
For yonder breaks a new and glorious morne
Fall on your knees
O hear the angel voices
O night divine!
O night when Christ was born
O night divine!
O night, O night divine!
And in His Name, all oppression shall cease
Sweet hymns of joy in grateful chorus raise we
Let all within us praise his Holy name
Christ is the Lord!
Their name forever praise we
Noel, Noel
O night, O night Divine
Noel, Noel
O night, O night Divine
Noel, Noel
O night, O holy Divine
O Holy Night -- Celine Dion
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Asking Price: $524,900
Income Requirement: $131,225
Downpayment Needed: $104,980
Purchase Price: $682,763
Purchase Date: 5/29/2007
Address: 81 Chantilly, Irvine, CA 92620
Beds: 2
Baths: 2.5
Sq. Ft.: 1,824
$/Sq. Ft.: $288
Lot Size: -
Type: Condominium
Style: Other
Year Built: 2005
Stories: Two Levels
Area: Woodbury
County: Orange
MLS#: S515272
Status: Active
On Redfin: 3 days
From Redfin, "Great 2 level condo located in Woodbury!! Very open and spacious with large rooms throughout. Family kitchen, wood and stone tile floors, living room with fireplace, seperate laundry, and private courtyard entry are just some of the features of this home. Close to everything Irvine has to offer!!"
Two exclamation points? I thought three was the standard?
seperate?
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Sales History
Date...................Price
05/29/2007 $605,032
09/08/2005 $679,000
I assume this is an REO. Interesting that it took them 6 months to list it. If they get their asking price, assuming they originally loaned $679,000 and they pay a 6% commission, the total loss would be $185,594. Notice this asking price is 22.6% off the peak sales price. Yikes!
There is a reason for the credit crunch: lenders are losing money. Lenders don't like to loan money when people do not pay them back. The more they get burned, the more conservative they become. As they get more conservative, fewer people qualify for loans and loan amounts decline. This in turn puts more people underwater makes refinancing that much more difficult and causes even more bank losses. It is a classic downward spiral. This is why credit will not loosen any time soon. There are people out there who believe the credit crunch is a temporary thing that will pass soon. It isn't, and it won't. In fact, it is likely to spread to other forms of borrowing as the situation continues to deteriorate.
So what does all this mean, and how do you prepare for it? Basically, it means borrowed money will not be widely available, and what is made available will be more expensive. If you live a life without credit dependency, the credit crunch will not impact you much. If someone takes away something you do not use, it doesn't harm you much. However, if you are like most Californians and you are addicted to credit, you are in for some struggles.
The best thing you can do to prepare for the upcoming deepening credit squeeze is to stop using credit. Pay off what you have and stop using it. If you don't, you might find your interest expense increasing dramatically, and you will find yourself subject to the whims of your creditors. There is no freedom when you have debt. The next thing you can do is to start saving money. Things could get very bad, particularly locally. We have already seen waves of layoffs in the real estate industrial complex, but this could easily trigger a wider slowdown in the economy and put people in related fields out of work. It could be you. Save now, and you will be prepared to weather the storm.
AZDavidPhx - Obviously you have struck a nerve in some people based on the flack you are catching. Try telling a homeowner that his house is going to drop 30% or more in market value in the near future, and you will get a similar reaction. As a resident of Irvine (former owner, now renter), I can say that there is nothing magical about this city, and like any other it has good and bad attributes. A bad one being the cost of living. And, Irvine is as vulnerable to the current recession as any other area. Maybe even more so because of the many RE industry and related jobs (New Century, Ameriquest). Irvine is a very boring city and has no culture whatsoever. There really isn’t anything special about it.
No, just apples.
“What matters is people will not buy the house if they perceive the value will continue to decrease in the following year(s) thereby wiping out their money down.”
That is wrong in my opinion. I am going to buy a house, likely within the next twelve months, and fully expect the value to decline over the following years. If I am buying on a 30-year time horizon, why should I care about what the value will be in 2, 4, even 10 years. I need a bigger house, want a bigger house, can afford a bigger house, and think that mortgage rates are relatively low today as compared to what they may be in the future. As I can handle the payment comfortably on a 30-year fixed mortgage, why not buy today? The house will fall and eventually rise. I don’t really care about how much equity it has as it will be paid off in 30 years no matter what it is selling for at the time. Since I already own, I am losing money anyway, so that makes the decision even eaiser…
You say “stay observant” and suggest words like “it’s just not possible” are too strong and yet you spout a “people will not do this because”. Can you contradict your own point any more? I would agree that many or even most people won’t buy if they perceive a significantly downturn on the horizon, but there are always buyers on the way down for one reason or another. If there were NO buyers as you suggested, this bubble would burst and correct very quickly as opposed to years of slow leaking to deflate the bubble pricing.
Woodbury is a nice master-planned development. I don’t live there and passed on the chance to drop $1.2M on a 2900sf Lennar place a year or two ago that is probably worth $1M today. It’s not my cup of tea, but rents don’t lie. People must like it or they wouldn’t pay more than they do in Westpark to rent the same square footage. The market and pricing tells the story, I don’t have to… Personally I wouldn’t buy there because the lot sizes are too small for me, but that doesn’t mean I ignore what the market says about the place.
You might not like Woodbury so you likely wouldn’t pay a premium to live there, but obviously you are in the minority as rents and home prices there are higher than in many other areas of Irvine. Again, prices should tell you what is more desirable to the overall market. If you don’t understand supply, demand, and pricing, I suggest a basic econ course would be in order. I had 15-20 such glasses during college, since I graduated with an economics degree, so I have a bit of a headstart on you there…
Kids out of college with technical degrees are making more than $40K in most cases right now. Business grads are making $35-40K easy. My business is employment. That is what my company does. I have to pay these kids out of college and see what the competition is offering them. I have a pretty decent handle on professional wage scales in OC as that is what I deal with every single day…
What does that even mean?
K.O. And you are relevant because.... ?
Your argument seems to imply that it’s quite plausible for house prices to overshoot the rent-equivalent price by 2X during bubble - and yet it’s “not possible” that house prices can undershoot the rent-equivalent prices by the same amount.
It doesn’t matter that a house is a bargain compared to whatever metric and you could juggle numbers all day to prove that a certain house is an impossibly hot deal.
What matters is people will not buy the house if they perceive the value will continue to decrease in the following year(s) thereby wiping out their money down.
I don’t think we need to get shotguns and go live in a farm in Montana - but you need to stay observant of what is unfolding and saying things like “it’s just not possible” doesn’t belie that attitude. ANYTHING is possible in financial markets - but some things are unlikely.
So where is your degree from Yale?
Ugh, more talk about how great Woodbury is. Ipo, you sound like tonye is about TR.
More of what you tout about Woodbury sounds like Realtor (TM) talk more than anything. And your assumptions that those out of college are automatically making 40k/year are just ridiculous. Maybe those with technical degrees are, but rare for others.
“$2300 per month property in a nutshell.”
It isn’t, at least not at the moment. A “duplex” townhouse rental of *1100* sq ft is ~2600 in <a>Woodbury</a>.
Somewhere on this blog/forum I read that the two Woodbury HOA’s can add up to upwards of 400/month as well. *shudder*
Everyone seems so tense with the holiday a few days away, so I apologize if this seems like an attack, dataguy, but I felt with all the screaming about having the actual numbers it would be worth pointing out what TIC charges to rent ‘stucco boxes’ in Woodbury.
and IR, I love this site, thanks for putting so much effort into it.
The Feds cannot let MBIA or AMBAC fail (or even be donwgraded), because the only meaningful market for the Muni bonds they insure is US pension funds and other entities required to hold AAA paper. If the Munis are downgraded, they’d be nearly unsaleable and every pension fund in the US would be suddenly severely, severely underfunded--to the degree that it’s likely that many would stop paying (or at least, cut) current benefits. Most of the other bond insurers might go down, but MBIA/AMBAC have to be untouchable--not that they’ll necessarily have any future business.
actually, real estate was the best investment at the bottom of the great depression around the time of FDR’s revaluation of gold from $20 to $35. even though this gold was verboten in the states, the inflationary ramifications filtered through to real estate fairly effectively. all one needs to do to understand the american economic history of that era is see what joe kennedy was doing. in the mid-30s, he was buying real estate. a lot of it.
in any case, depressions are a natural part of any economic cycle:
http://www.angelfire.com/or/truthfinder/index22.html
however, flooding an economic system with mountains of bogus paper in attempts to stop this natural cycle isn’t the brightest approach, and tends to make the lows a little lower. soup, anyone?
I don’t think I’ll take a pay increase for 2008… I don’t think I’ll be giving out any either.
My company does staffing and consulting and we’re already seeing signs of weakening demand for IT labor and projects. My bashing of AZDavid totally aside, Phoenix has actually been our most sluggish market of late. Things were pretty hot in 2005 and 2006, but seems to have been slacking off for quite some time.
Maybe it’ll pick up when the ‘08 budgets get approved but we’ve seen a number of projects cut, delayed, etc. over the past few months. Feels like companies are already tightening their belts so we are as well… Time to hunker down and wait to see if a recession plays out.
“In a “normal” market, judgeing by what I see and read of Irvine and its rents and salaries, $370K would be about right for this place.”
I wonder how those salaries are going to look in 2008 & 2009 when the 2007 & 2008 census surveys compile.
Laura and LawyerLiz:
You stated it in terms that I simply could not. Mea culpa to the loyal readers of this blog for littering my frustration towards AZDavidPhx on this forum.
There are more important issues at present, as shoes in the residential finance sector space continue to drop.
If a place like this condo were to go below $300K, it would mean we are in a depression.
Rollbacks that severe happened in the great depression.
In a “normal” market, judgeing by what I see and read of Irvine and its rents and salaries, $370K would be about right for this place.
It would cost more than $200K just to build it.
This blog is worthwhile reading for anyone in any housing market because it educates the reader on the fundamentals of housing and just how far the housing markets everywhere have departed from them.
And, yes, real estate is intensely local. Many people talk about how much cheaper real estate is in Ohio or Kansas, but it is actually just as overpriced relative to the local market in those places as it is in most top metros. As I once said, $140K for a gorgeous antique 3-bed in Shaker Heights, OH, sounds cheap until you consider that most people there are lucky to have a job.
The place in Shaker Heights has a long way to drop, since I saw it at $100K only a year before. But if this Irvine condo were to sink to anything like $200K, it means we have fallen off the cliff economically and that the whole country is for sale.
Let’s hope that doesn’t transpire.
Rent costs haven’t gone up very much during the bubble, at least not for IAC units. The place I rented for $1650 in 2000/2001, a 2/2 in the Westpark area of Irvine, is going for $2050 right now. We’re talking about a net 24% over the past 6-7 years. That is almost exactly the rate of inflation measured in the OC/LA over that same period…
If there is deflation over the next few years, rents will go down. If there is high inflation, that’s not going to happen.
Personally, I give all the credit to Truthiness from Lansner’s blog.
I’ve been enjoying the carnage in real time…
http://finance.yahoo.com/q/cq?d=v1&s=fxe+gld+uso+gsg+pmi+aca+sca+abk+fse+mbi+xl+cfc+imb+fre+fnm+xlf+uyg+bac+c+rf+wm+hov+kbh+ctx+dhi+len+phm+ryl+spf+mth+bzh+hov+mdc+tol
respectively, the roasting of the dollar, bond insurers, banks, and homebuilders
Hey, guys, go over to Calculated Risk and look at the posts on the muni bond mkt and the bond insurers that are about to blow up. This has been mentioned before, on various posts on various threads, but it is making me very very nervous. And way more important than whether someone from AZ should be speculating on what Irvine costs.
Tell me I should be less nervous.
What about diamondbacks? They sure are *purtty*
I love to get my *hand* on one of them.
True, my calculation can also go PFFFF when inflation goes out of whack, or Irvine median wage decreases to the point that makes Gary, Indiana looks desirable, etc.
I was merely mentioning that with the current condition in mind plus the fact that IAC owns most of the Irvine rental properties and thus have a *monopoly* factor.
Thank you,
El Camino/ now known as Woodbury API 881
“Sure, let’s agree to disagree on the rents going down as the crash ensues.”
If you read my post, I actually say that rents will go down. Was 2000 a fair year to compare the rent? 1996? I don’t know. Maybe rent will become $1000 for my current 2b/2b though it probably hasn’t seen that price since the early 90’s.
I would like you and others who make very low predictions for housing to describe the scenario that will lead to that. I personally believe that within the attached products, the nice properties will settle around $225/sq ft and middle of the road ones will settle around $200. This apt/condo/townhome is one of the nicer ones in a very nice area so at $225, it will be worth around $400K.
The reasons I see $400K being supported for that is because of the likely equivalent rent of $2500. Like I said earlier, we all here to understand that bottom.
I can explain my analysis in better detail for why I believe this property can still rent for $2500 in a few years when rents in general will come down but only if you are looking to have a conversation and not label me and everyone else as some wishful thinkers.
“The only place I know that has truly beautiful weather is Irvine”
Have you ever even heard of San Diego?
No, not elitist AZ ---- just perplexed at why the need to come here and tell us the way things should be for us. It would seem that would be for us to worry about, not you. I’m not worried about your market, and why should I be—unless I really, really wanted to move to the desert.
Wait, maybe that is why you are here? You own every season of The OC on DVD, and watch it each night while secretly plotting the day you can come here and live the good life? So your strategy is to come to IHB and talk down the market to a level you can afford? Brilliant!!
A couple of links from Eschaton help.
Hey, we have sand in Newport Beach too! I think what differentiates us from Scottsdale is that we have, you know, water with our sand. And I’m not talking about that last bead of sweat you perspire before you collapse and die in the desert.
“Scottsdale is a lot like Newport Beach”
Come on. Aside from the sand that is…
Work? In December?
Vacation!
I love californians - they’re so parochial (I used to be one).
Really there’re a lot of neat places out there. I used to live in Mpls and I still miss the snow (just not 5 months of it).
I prefer to find the special, unique parts of where you are. And there’s a lot to be said for making your own fun - which you can’t do if you’re working 2 jobs to pay your living expenses.
Totally agree. But that still doesn’t change the fact that a house in Irvine isn’t the median product.
rkp -
That’s totally understandable. I realize that you have to do what you have to do.
The only problem is that this housing scheme can only go on for so long before the fundamentals kick back in.
I don’t know where the prices will settle.
To me this condo I mean apartment is not worth more than 150K, but that’s why I would never move there. I don’t see the intrinsic value in it the same thing that other people do. That’s fine. It’s one less person in the market to compete with.
ROFL! “beautiful weather” in Scottsdale? Uh, I think not. Trust me - I grew up there. It truly is hotter than hell there in the summer which can last from May to September. The only place I know that has truly beautiful weather is Irvine - not that I’d want to pay those prices or live with some of the nuts there again.
Your apartment complexes are going to price competitively to the house prices. When house prices go down, so will the rent. Otherwise they won’t be able to find renters.
Your rents will come down. Fear not.
Not much this week… Things are slow at year-end.
LOL! Yeh, real estate guys got nothing better to do with the slack!
Don’t you guys work?
note el camino moved to become woodbury elem
Wow, the link on median income suggests median rent in 2006 was $1660. That must mean that median residence is in the 800-1200sf range, likely a 2/2 or small 3/2.
Joseph and others - by generally agreeing with tealeaf, it doesnt mean that I agree with every single statement. The whole OC>IE>AZ is meaningless. IE is the dumps. Actually, the funny thing is that I grew up feeling the same way about OC. That is, people who can’t afford LA lived in OC much like many people see the IE. I grew up in West LA and always thought of OC as the place that people who couldn’t afford LA live at.
However, living here now, I see that its more vibrant and has its own economy. But I am not a fool and don’t think its some magical place that is any better than the numerous places I have lived in my life.
The whole goal of this blog is to understand what the local economy can really support and at what price many of us should jump back into the market. If we can’t analyze and discuss this intelligently, this blog becomes a waste. Just as bad as AZ is with rediculous price calls, there are other folks who think the second you counter a point with anything about the specific area or location, you are automatically a bull and believe that OC/Irvine is something different.
I want to simply figure out what the pricing bottom will look at. If you disagree with some of the arguements, please explain why but simply dont say that one can afford xyz in abcland.
If they would sell it to me for that much, I’d do it in a heartbeat. If I could turn the equity in my home into a low risk $500+/month return, like I said, it’d be a no brainer. As a matter of fact, if I could take my $175K down payment fund, pick this place for $300K with a $125K mortgage, I’d do that too.
Tell ya what, you get the bank to take $300K on this property and you have an investor. Actually, I’d call up six friends, get them all to put $10K in for a $60K down on a group investment. We’d share the profits and make $75 or so each month. That would be twice, i.e. 2X what that $10K would earn each of us earn in the bank. They’d all think it was a no brainer too…
Make it happen AZ. Just tell the bank this thing is going to be worth $150K soon. I’m sure they’ll believe you… Your arguements about median income and the tumbleweeds in AZ will sway them easily.
In Houston transportation costs frequently outstrip housing.
It’s OK. At least it gets people talking. Even if it elicits a few nasty grams here and there.
How do you explain rents here being higher? Is that also phony?
AZ - please read my above post regarding median incomes vs. median house prices.
I think what irks you is people who think that Irvine is something more amazing than what it really is. The funny thing is that it is you who keeps saying the sacred land phrase and that we all think that we are better than the rest of the country. I don’t think that and I don’t get that feeling from the rest of the board either. I have lived in Portland, San Jose, Fort Collins, and outside of the country and absolutely love a lot more cities than Irvine.
But, fortunately or unfortuantely, my life and my community is here so I need to deal with that. Hence, I can’t care about pricing in other areas because I am stuck here and have to deal with the pricing that I am given.
You are assuming that your rent prices are not inflated. If your rent cost goes down in the future then your logic goes PFFFF.
Not gonna happen, Ken.
Tealeaf’s Superiority Lemma has proven that only the dregs of California’s inland empire move here.
Might be a bit too much house for them now that nobody can sell their overpriced home.
really, I think the place looks pretty nice for a condo - appropriate for single, couples & empty nesters. just overpriced. I don’t know why you guys have to rag on it.
I’m not even from AZ (I’m a content Angeleno), so I have no dog in this hunt. But I stand by my point that the ‘Irvine is *special*’ mentality is utter delusion, and that the IE > NV, AZ assertion is absolutely ludicrous. In fact, they’re not even remotely comparable, since they’re in completely separate markets and states, with different tax bases, local government, commerce, etc. IE is an oversized industrial park, hurriedly converted into cheap housing in order to absorb the priced-out Angelenos and OC’ers throughout the past decade. But once you leave California, it’s a new ballgame.
So, in short, my point is a simple one:
1) comparing AZ markets to the Irvine market is silly
2) comparing, in turn, the IE market to the NV and AZ markets is equally silly
That said, I at least give AZDavidPhx credit for challenging the herd mentality that is endemic to the OC. You need to let go of preconceived notions of some inherent worth of the Irvine market. That is, if you want to understand what is happening now, and not be shocked at what will happen in the coming 1-10 years. Word to the wise.
Yup. You trade off one expense for the other.
High gas prices? Low electric? High electric? Lower gas prices? Ugh. Always something!
AZ - you sure started a fire today…
Here is the point about median incomes that you and others keep seeming to miss. We all agree that generally, a median income should be able to afford to live in the median property type for the given area. The problem is that the median property type varies from area to area.
Below is a simple example. Imagine both communities have median incomes of $100K.
Community 1:
50 apt
100 sfr
10 mansions
Community 2:
200 apt
100 sfr
10 mansions
The median property type in community 1 is a SFR and hence, the $100K should be able to afford that. However, in community 2, the median property type is an apartment so the same person making a $100K will be able to afford an apartment.
If you drive around Irvine, you will notice the immense amount of mega apartment complexes and they aren’t all filled will college students or young people. Just like my wife and I, many of my neighbors are working professionals who make good money and the apartment is the right product for their income level.
I remember when I lived in Portland, the suburb areas like Hillsboro had their share of apt. complexes but nothing like the number of apt complexes in Irvine. It was expected that the median income could support an SFR over there.
In any case, I hope this puts your meaningless comments on every post to a rest.
I sold at the top of the bubble and became a renter. I’m sure the guy who bought it is not happy right now.
Re:AZ
Bottom line: Speak to a person after duely considering his/her intelligence, knowledge and capability to think outside the box. Else you end up inviting more drama and silly comments!
too expensive
Not much of a difference in the average API scores between Fountain Valley and Irvine. I’m not sure why you keep mentioning GG or HB? There are many bright, hardworking, talented kids in Fountain Valley and for you to argue otherwise is rude. As far as paying a premium to live in Irvine because you want your child to go to a great school, that is you choice. I think it is narrow minded to think your child can only get a good education in Irvine. 2300.00 a month is way to expensive to rent a 2 bedroom anything.
Silly Mom, your link is 4 years old.
As anyone noticed that after the discussion on morality, the number of comments soared and stayed ‘way high?
Coincidence?
Seattle -
You got me on that one. I went back and checked the constitution and you are correct. It doesn’t mention anything about a house with a yard.
I take everything back.
I was so busy day-dreaming about my entitlements that I forgot that the new American dream is to raise a family in a 2 bedroom crapshack.
NanoWest....no....at least your prediction is ***sound***.
“Oh the 3 asterisks....IR....can you ding me please....I feel like Barry Bonds x 3”
“AZ is the place folks in CA who can’t afford the IE go.”
We have a new logical argument: “Tealeaf’s Superiority Lemma” defined as the “CA citizen is superior to the AZ citizen”.
It explains the higher wages and higher house prices.
Thanks for the enlightenment!
Hey, I live in North Scottsdale, I love it here. Just next month a partial list of things going on in this valley: Fiesta Bowl, PF Chang Rock ‘’n Roll Marathon, Barrett Jackson Auto Auction, FBR Open and the Superbowl!!! Scottsdale is a destination Resort City with beautiful weather, exotic scenery, fabulous shopping, world class golf, exquisite restaurants and nightlife and nice people everywhere. This place rocks and any article that says it sucks is crazy. Now, with that said I would like to sell my 4140 sq ft home in a gated community for $298 a foot. Please help me sell my house so I can buy another a little smaller (3024 sq ft for $330/ft). I am doing my part for the economy, and I invite all Californians, (as well as Canadians, families from Chicago, professional athletes, retirees and snowbirds) to continue to move here and make the Valley of the Sun their home
<blockquote cite="AZDavidPhx">We can agree to disagree on that one.</blockquote>
No, we are not going to “agree to disagree” on that one.
First, your assumption is incorrect.
<blockquote cite="AZDavidPhx">I am assuming that since you used a designer vehicle like a Ferrari; I am assuming that you believe that today’s featured condo I mean apartment is one of the Ferrari’s of real-estate.</blockquote>
No, I used Ferrari because that is the kind of car that I would like to have but I cannot afford. It has NOTHING to do with what I think of this condo.
And I never, ever say this in an open forum like this, but you really need to chill out, step away from the keyboard and stop posting here for awhile.
You post here that anyone who makes a median income should be able to afford a nice size house with a nice yard.
Why should that be true??? Where does that sense of entitlement come from? Last time I checked the Constitution, it mentions nothing about a “nice” yard being part of your rights.
It may be true in many parts of this country, but it does not mean that that should be true for all parts of this country.
Median folks in Manhattan (NY) make at least twice what people in Irvine make, but they can barely afford a 800sqft studio, let alone a house with a yard. Hell, even if you made over a million dollars a year, you can’t afford a house with a yard in Manhattan.
Is the Manhattan case extreme? Of course. But it does demonstrate that real estate is local. The housing price and what you can get for the median price varies GREATLY based on geography and make up of the local population. Irvine may not be Manhattan, but “nice houses with nice yard” are rare enough that it is beyond the reach of median income folks. That is not only true in Irvine, it is true in Seattle as well as many popular coastal cities like SF, Boston, and Washington Dc.
So again, I beg you - please stop posting. Every time you post, the average IQ of this board drops measurably.
Please don’t ruin this board for the rest of us.
Let’s say $180k since you say it should fetch more more than $175k. You sir must be drinking spiked coke.
At $180k, I can rent this place out for $1700/mo and make more than just putting $180k in secure CDs/MM making less than 5% a year.
Check the current rental for 2 bed/2 bath condo versus this one that doesn’t have neighbors on top or below you (only side, I believe). Beats the hell out of renting 2 bed/2 bath apartment complexes from IAC.
Here’s something that’s strange....on the same street (Chantilly), there’s two more homes that are REO. 49 Chantilly went back to the lender in early September and 75 Chantilly (one unit over from 81 Chantilly), went up for auction on December 5. Asking price for 75 Chantilly was roughly $499K. Does someone have access to verify if 75 Chantilly was sold and for how much or did it go back to the lender? It’s also strange that 49, 75, and 81 Chantilly are the exact same floor plans.
Perhaps that’s why he’s still renting in AZ.
Sorry but your *normal* market of $150k would work out probably in Santa Ana.
Perhaps Scottsdale is the mirror image of Richmond, CA.
That’s the real question - “Is it different this time”?
The “It’s different this time” argument does not have a very good track record due to its close resemblance to its cousin the “just because” argument.
In reality, it’s totally psychological. If you believe that everyone else believes that where you live is better than where they live then that is some pretty strong motivation for the “just because” argument. That’s what the sacred land argument is based upon.
From some of the posts I have seen, Irvine is a pretty ‘ordinary’ place. Nothing all that special other than a lot of nearby jobs. Oh and designed by God himself.
If the jobs go away (like in a recession) then will everyone still believe that Irvine is the hip place to be? Or will everyone start chasing a different color of tulip?
I don’t know.
I’m going out on a limb to defend tealeaf.
Joseph: “The interesting thing to me is that your mentality is precisely the kind of kool-aid-guzzling realtor-speak that has fed into this mess from the beginning: the belief that something about Irvine is *special*.”
This part, although somewhat true, is probably not what tealeaf had in mind or else he would have stayed as a mortgage borrower instead of a renter. Perhaps his Inland Empire comparison is not *quite* correct but truth to the matter is Irvine pricing should not be compared with Scottsdale pricing. When AZ mentioned that this condo should sell for $150k, he’s saying that this would be the price he would pay for this condo....presumably in Irvine. HELLO! You can be a bear on current housing price but to make this kind of statement is just outright foolish without consideration of other factors....and the most important one: LOCATION!
I can be from Cleveland and said that this condo should only sell for $40k max. If you think AZ’s price target is sound, then you would definitely defend this Cleveland native’s *ultrasound* price prediction......
NOT!
Okay, I read the article, but still unsure why “Scottsdale sucks”. Doesn’t seem much different than places here in the OC.
Either way, it’s not like I’m some older guy who’ll be staying at the Phoenician, playing golf and bidding on cars at the Barrett-Jackson auction.
Scottsdale (middle to north) is a really beautiful city.
I can’t say that it is very exciting. There are some of bars/night clubs if you are into that.
The golfing is supposedly very good here too (although I don’t play golf).
Yes, by all means, read the blog about Scottsdale sucking. There is a hint of truth in what he has to say. I’m just not so sure I would lambaste an entire city for things that can be found all across in many cities.
I don’t think that I fit the profile that the guy paints. Oh well.
You can make up your own mind when you visit.
AZDavidPhx, TeaLeaf, Alan ~ don’t sweat it - I am growing tired of reading this blog, as it seems that most posters have now adopted the mantle of ‘it’s different here’ with regards to Irvine’s future fortunes. I miss the good old days when mentions of 50 - 70% declines elicited cheers and agreement . . . talk about having recently picked up the jar of Kool Aid . . . it’s just sad. And BTW - This condo/apt *should* fetch no more than 175K - this from someone who’s lived on ‘the west side’.
No, I hear ya - I had those same thoughts leaving a brand new home for one 30 years old and 2/3 the size. Funny thing is that I left for California right during their energy crisis. My family back in AZ was freaking out because they thought I would be getting nailed by the energy costs. But in Irvine we ran our air conditioner only about 5 days a year. My electric bill dropped to literally 20% of what I was paying in Arizona. But the house… what a piece of crap! I don’t miss it at all! I just miss the weather.
Yup.
Scottsdale housing is imploding too.
Glad I decided to rent when I came here. That could have been bad if I bought. EEK!
Elitism.
I’m bearish on the pricing, let’s get that straight. My money is where my mouth is and I’m a proud mortgage-owner turned renter.
AZ is the place folks in CA who can’t afford the IE go. Median home values are simply lower, that’s all. My point is that location matters and all pricing is relative. So, yes, the statement that home values in OC > IE > AZ still stands (and is true for rent prices and incomes, etc).
mark -
Your comment is not valid. This blog receive comments on a daily basis from many people stating what they think the value ‘should be’. I did not invent this; I just followed the crowd and threw my 2 cents into the arena.
It’s obvious that some numbers are more acceptable than others depending on the reader’s stake in the game.
Some numbers (that the reader wants to read) require an advanced mathematical proof whereas others using the proof by sacred land are valid by common knowledge and thus are acceptable without any other validity required.
Let’s not cherry-pick posts now.
tealeaf: “Point is, “parts” of any place are nice.”
Which just proves my point. In your hyperbolic response to AZ’s hyperbole, you simply made yourself sound foolish. You cannot make the blanket statement that IE>NV, AZ without sounding as idiotic as someone making the blanket statement that the OC should be priced like Phoenix. The interesting thing to me is that your mentality is precisely the kind of kool-aid-guzzling realtor-speak that has fed into this mess from the beginning: the belief that something about Irvine is *special*. No. There is indeed not. And that is why this blog is so entertaining. A few months ago, the herd mentality was that no way prices would fall at all. Then it was “no way prices fall more than 10%!” And then a bit later it was “no way prices fall more than 30%!” Keep drawing the line in the sand, and I’ll keep watching the waves of foreclosures wash it away.
ipoplaya -
It sounds like you bought your place back when it was affordable.
Nevertheless, here is your chance.
Why don’t you cash out the 300K equity on your house and put it down on today’s featured condo I mean apartment as an investment?
Prove all those chicken littles’ wrong! Whatya say?!
Sorry for the double post. There was a 10 minute black hole lag inbetween.
It’s not sacred ground. It’s just that all things are relative. Did you even read what I said?
Folks as far away as Seattle are frustrated with your comments because they are completely ignorant.
Irvine has 14 zip codes, 2 area codes, and a mountian of VERY nice apartments. And the family income median is $103k. This creates a massive disparity between areas. There are some not-so-nice areas of Irvine (The Willows immediately comes to mind), and there are some areas bordering Newport Beach.
Point is, your comments don’t take any of these dynamics into consideration.
There are plenty of Phoenix housing blogs out there. Check ‘em out - you will sound more coherent!
The experience will be, umm, fantastic. I spent many a moon there when my employer relocated some operations a couple years ago.
Read this before you go for a great perspective.
http://nevercoldcall.typepad.com/scottsdale_sucks/
First, the median family income is $103k in Irvine.
problem is there are tons of apartments in Irvine. Nice ones, too. IAC makes SURE they are nice so that you won’t think twice about leaving.
There are 14 zip codes and 2 area codes.
This is a vast (by So Cal std’s anyway) stretch of land with dynamics and pockets and differences.
And you don’t know them.
I didn’t say “sacred ground”—I said there are differences in the dirt in Irvine, that’s all. If this listing was in The Willows, no one would be getting on your case, but it’s not.
So how in your right mind can you assign values when you just don’t know?
Your posts are simply ignorant, and that is what is so infuriating to folks on this board from as far away as Seattle.
No go insult your intelligence on a Phoenix housing blog. There are plenty of ‘em.
The beauty of Irvine and OC is non-reliance on a particular industry. I think the largest local employer is Disney, at least they used to be a couple of years back… Sure there is tech, but it does not dominate the area like it does in San Jo. Lots of jobs in education (UCI is a big employer) service, retail, healthcare, real estate (both commerical and residential) insurance, financial services, leisure, entertainment, manufacturing, etc.
I don’t believe there a reliance on any one or even two industries here. Since I’ve been in OC, I’ve worked in energy, hi-tech software, and now professional services. Never had more than a weekend between positions either… Actually, I think I worked for both employers for a bit every time I have changed jobs. My point is, there is less cashflow and income risk working in this fairly robust job market. I don’t need to keep six months of savings (although I have it) as the longest I’d probably ever be out of work is a month or two. In a pinch, I could take a position in North SD county or LA and deal with a commute if I had to as well.