Will the Market Panic?

Don’t Panic — Coldplay

Prices are sinking like stones, and we are all done for. It it time to panic?

People will not panic this year. This will be the last year of denial. Only the weakest of speculators have been flooded from the market at this point, and there are many, many more who will be hopelessly underwater and drowning in debt as time goes on. Most of the buying this year has been by foolish knife-catchers who still believe in the fallacies of kool aid intoxication and bought now that they are no longer “priced out.” (Of course, now they are “priced in” forever…) There is still the widespread belief among the general public that house prices will return to the peak in a couple of years and everything will be like it was during the bubble rally. That is not going to happen. This fall and winter, prices will make another big drop just as they did last fall and winter. That drop will put fear in the hearts of everyone who owns speculative real estate (which means almost everyone who bought since 2002.) By next year, we will see real fear and possibly some capitulatory selling. Remember, the speculators we have profiled to date have only been the trickle of water that breaks the dam. This problem is much larger than what we have seen to date.

There is a funny mathematical truth few understand: drawdowns are asymmetrical. If prices fall 50%, it takes more than a 50% increase to get them back up to the peak. In fact, after a 50% drop, prices must go up 100% to get back to where they started. Even now, with prices down 20%, prices have to go up 25% to get back to the peak. The deeper the price drop gets, the harder it will be for prices to recover. This is also why timing the market is important. (I will post on this concept in more detail at a future date.)

Today’s featured property was purchased in 2004, and now it is selling for significantly less than its purchase price as REO.

14921 Yucca Ave Kitchen

Asking Price: $649,900IrvineRenter

Income Requirement: $162,475

Downpayment Needed: $129,980

Monthly Equity Burn: $5,415

FB Purchase Price: $730,000

FB Purchase Date: 12/22/2004

WAMU Purchase Price: $610,000

WAMU Purchase Date: 4/2/2008

Address: 14921 Yucca Ave, Irvine, 92606

REO

Beds: 4
Baths: 3
Sq. Ft.: 2,650
$/Sq. Ft.: $245
Lot Size: 5,000

Sq. Ft.

Property Type: Single Family Residence
Style: Other
Year Built: 1972
Stories: 2 Levels
Area: Walnut
County: Orange
MLS#: U8002616
Source: SoCalMLS
Status: Active
On Redfin: 2 days

Fixer-upper

Large two story pool home in a great interior tract location in the
College Park neighborhood.4 bedroom plus big bonus room upstairs.Lots
of area downstairs with living/dining rooms and family off the kitchen.
Custom oak stair railing, crown mouldings and nice wood cabinets in the
kitchen. Upgrades thru out but will need a little TLC.Low HOA dues and
no MELLO ROOS.

nice wood cabinets in the
kitchen? I have had better in apartments. Did you notice how they were cropped out of the picture?

{adsense-ir}

When this house was purchased, the buyers put 10% down. I don’t know if they abused their HELOCs after that. The data service we have been using has been scrubbing their records after a property goes REO. We are looking for a new one. In any case, if this property sells for its asking price, the total loss on the property after a 6% commission will be $119,094. It is interesting to see how WAMU prices their REO. They have marked up their auction price by 6% to cover the cost of the commission. If this sells for asking, and assuming they bought it for the outstanding balance on the first mortgage, they will recover their cost. Of course, the second mortgage is a total loss, and if they were any HELOCs or other debt, that is gone too. It may be that our 2004 buyer is losing $73,000, but I doubt it…

.

Oh, we’re sinking like stones,
All that we fought for,
All those places we’ve gone,
All of us are done for.

We live in a beautiful world,
Yeah we do, yeah we do,
We live in a beautiful world,
Oh, we’re sinking like stones,
All that we fought for,
All those places we’ve gone,
All of us are done for.

We live in a beautiful world,
Yeah we do, yeah we do,
We live in a beautiful world.

Oh, all that I know,
There’s nothing here to run from,
And there, everybody here’s got somebody to lean on.

Don’t Panic — Coldplay

86 thoughts on “Will the Market Panic?

  1. NanoWest

    I used to think the floor on Irvine homes would be around 225 psf, Could the prices drop to less than 200 psf?

    1. IrvineRenter

      I think for older, larger homes like this one, prices will almost certainly drop below $200/SF. I think you will see the most desirable properties drop to $250/SF, and everything else will be something less than that. I believe $225/SF as an aggregate number is where prices should be, but with all the REOs flooding the market, I now strongly believe we will have significant overshoot to the downside. For a time, we will likely be below rental parity for most properties.

      1. Chris

        IR,

        The problem is that you still have this monster in Irvine called IAC which is essentially a monopoly in the city of Irvine. Unless it drops its rent dramatically, you probably won’t see prices below rental parity anytime soon in Irvine.

    2. George8

      >>Could the prices drop to less than 200 psf? << The bust cycle is only in 2nd or 3 rd inning. Dropping below 200 psf is about as mathematically certain as anything can be in 1-2 year.

    3. NoWowway

      These homes are perfect for families who have small children and look at a home as a place to actually live in without freaking out over stains, too many toys or other aestetic nightmares. These are older homes with larger yards, no Mello Roos and a very small HOA, a walk-to elementary school, nice tot lot and community park.

      The city is responsible for funding/maintaining the parks, most greenbelts and the school that sits in the middle of the development. (Harvard entrance has some major city renovation work/landscaping upgrades going on in the adjacent greenbelt)

      The neighborhood has changed substantially in make up over the years and there are many Asian families who are interested in a value deal here. There are also quite a number of retired police officers who live in the neighborhood.

      One street, Cedron, has the most organized of all streets. They have a major disaster plan in place. They have consistently won the neighborhood 4th of July parades with their automated “floats”.

      I see the pool in the picture and the first thing I think of: What kind of shape is it really in? It needs to have a locking gate around it for safety, if the new family has small children. A good pool inspector is essential for this. This home will host older plumbing and that will need to be disclosed- the home has either had trouble with the plumbing and it was fixed or the home had no trouble with plumbing and so it will need to be fixed. By you. No getting around this – it was some kind of built-in flaw. Roofing and pests may be a problem. The lathe and plaster construction is solid and is much better for keeping the home at desired temperatures. Popcorn ceiling removal is a common goal for homeowners here. Anyone who is ever considering buying a home that is as old as the College Park homes MUST GET A HOME INSPECTION AND INSIST ON A HOME WARRANTY FROM THE OWNERS. That’s my one recommendation.

      The home warranty will gurantee that anything that breaks (major appliances, pool equipment, heaters,A/C etc…) will be covered for a certain amount of time. It is basically insurance that will pay for repairs that didn’t turn up in the home inspection for whatever reason. With an older home, you have to assume that there will be maintenance and repair issues going forward.

      I know some people prefer brand new. Everything lovely and new. But there are some of us who want functional, safe, big enough and usable. We like to take vacations often, we like the safety of leaving our homes on trips and coming back to find that there were no crimes against our property, and we don’t want to badger the kids about spills and toys ruining the atmosphere.

      We own furniture that is kid friendly and as the kids get older, we get stuff that the parents like and then we wait for grandkids to come back and play in our yards and pools and local parks.

      We don’t like big excessive monthly fees for community stuff we really won’t take advantage of. We are content with three community pools and the park/school grounds that the city cares for. It frees us up and it frees our monthly cash up to do a greater variety of things. We think we have more choices this way.

      As I read this, I realize how old fashioned these sentiments must seem. But I just bet that if this housing meltdown burns enough people, then there just might be a move back to this kind of cautious consumerism.

      1. jhill

        Popcorn ceiling! That explains why all the photos are aimed at the floors in this house. I was wondering, are the ceilings falling down? Did the bathtub fall through the floor and is hanging just over the crop in the picture of the teentsy little fireplace?? If the popcorn has asbestos in it, it can cost a nice hunk of change to take out.

        1. NoWowway

          There are several outfits that will remove the popcorn. I believe it has asbestos in it. It takes about 3 days to remove the popcorn, inset kitchen canned lighting and paint. It is fairly messy.

          There is one model (has a balcony) – when you enter the front door, look immediately up and left and see if you don’t see water spots or melted popcorn if no work has been done on the house recently. That’s a typical place for upstairs bathroom plumbing leaks to show up.

          1. alan

            A lot of popcorn doesn’t have asbestos, and if it doesn’t, there’s a $15 scraper at Home Depot that takes a couple hours/room and does the job quite nicely, leaving the popcorn in a bag so minimal clean up. Just pay the home inspector to make sure there isn’t any asbestos before you buy.

    4. OCGolfCourse

      I too think the price will drop below $200 as the dragged out downward spiral will cause people to over reaction and hesitate every time they want to buy a house.

      At the end of the day, no one ever “needs” to buy a house because they already have a place to live so they can always wait.

      1. Priced_Out_IT_Guy

        Just like the cool-aid inspired enthusiasm that was prevalent during the bubble that made so many purchase a home when the timing is wrong, so will be fear that restricts people from buying when the overshoot comes and the timing is right.

      1. Perspective

        Don’t worry too much about the direction of the price of the home. Worry about what you can afford (2.5x income).

        1. LC

          It must be nice to be able risk the permanent loss of a 20% down payment, in your world. Do you throw away $129,980 all the time? If I am going to tie up six figures, it better be in something that appriciates.

          1. Blueberry Pie

            If I am going to tie up six figures, it better be in something that appriciates.

            And therein lies the problem in our housing market. Why do houses have to appreciate? Why can’t a house just be a place to live?

          2. LC

            ROFL! Yeah, there are even soviet-style housing blocks in Irvine now — for a cool million, you, too can enjoy low-rise high density blocks of flats.

    5. Ahart

      According to SiteXdata a Trustee’s Deed – (Certificate of Title)was recorded on 4/2/08 price $610,300.

      To answer your question if the buyer used or “abused” thier heloc the answer is yes it was a concurrent loan used as purchase money.

      Also with regards to the value that really is hard to say our AVM gave a value range from 630-700k but with a low confidence score. There are 7 comps that sold for over 600k the closest being
      14801 YUCCA AVE Sold on: 05/09/2008 Sales Price: $700,000 PSF $267 Year Built: 1973 5,000 SF

      Full Disclosure- I am a rep for SiteXdata.com –

      1. IrvineRenter

        Ahart,

        We use Sitex, and I can tell you that Sitex is scrubbing their property records after a property has become REO. I have numerous saved profiles both before and after a property goes REO, and all of the previous loan information has been wiped clean.

        When I am talking about abusing HELOCs, I mean people who take out multiple loans after the initial purchase. If those records existed on this property, they are not there any longer in your database. Since I know Sitex is doing this, I cannot make any statement about the behavior of the owner prior to when they went through foreclosure.

    1. AZDavidPhx

      Yup. The seller has quite a way to go.

      Although a chainsaw catcher will probably extend the hand around 450K.

    2. Priced_Out_IT_Guy

      Thank you.

      I can already buy a dump like this in oceanside for just 30-50k more.

  2. awgee

    “The deeper the price drop gets, the harder it will be for prices to recover. This is also why timing the market is important. (I will post on this concept in more detail at a future date.)

    But IR, the realtor’s say it is impossible to time the market.

    1. IrvineRenter

      Given how well you did it based on sound reasoning and market analysis, you have certainly proven it can be done. BTW, has the guy that bought you out at the peak gone into foreclosure?

      1. awgee

        No, he sold, and actually sold for a very minor loss, or a minor loss if you count commissions.
        -$25,000 before commission or -$74250 after commissions

    2. LC

      I say this over and over — when a bubble pops, prices NEVER COME BACK. Perhaps it is too harsh a reality to face, even for Bubble Bloggers, but if you accept the Bubble Theory, you must also accept this sad, lingering fact.

      1. Blueberry Pie

        Prices never come back to where? Bubble levels (2005) or pre-bubble levels (1999)?

        1. LC

          Good question. You can factor in a overshoot — most people agree on that. I would say that means 1997 prices for sure, followed by 1999 prices for a long, long time.

  3. no_vaseline

    I believe that IR is not being bearish enough. I see prices (at the bottom) of $125 a foot. There won’t be very many, but you’ll get a few.

    I believe that IR has underestimated the length of time it will take to get there. I think the REO flood will unload Q4, and we’ll see the capitulation selling start then.

    In short, the banks haven’t had substanital pressure to unload thier REO’s yet, although they have gotten noticablly more agressive in the past sixty days. If Graph’s REO/Foreclosure/Pipeline data is to be trusted, supplies of used homes is about to expode. I think the pool of availible buyers has just about dried up.

    There, I wrote it. I’ve got some harder data to back it up, but it really doesn’t matter. See you at Thanksgiving.

    1. IrvineRenter

      If you want to see evidence of prices falling even below replacement costs, you just have to look over the hill in Riverside County. There are resales of houses built in 2005 selling for $85/SF in San Jacinto. Some of my contacts in acquisitions have told me the action in Riverside county for land is in finished lots. The builders are selling these for less than replacement cost. Basically, that means unimproved land — even that with entitlements — is worth less than zero. Raw, unentitled land is worth much less than zero. The vulture funds are out there buying up this worthless land for 10-15 cents on a dollar from peak prices. They have cash and can hold this land for 5-10 years, so they will make good money during the next cycle.

      1. Marian

        If the land is worth close to nothing, then we should expect to see prices at the bottom where prices are now in Midwest or Texas.
        That will be a very sweet bottom!

      2. freedomCM

        IR-

        Are you certain that there will be a “next cycle” out in SanJ/Hemet in 10 years?

        With increasing energy prices, I doubt that area will see any growth until businesses relocate there, as commuting to OC/SD will no longer be an option.

        I see more 20 years when a train is in place for commuters, and the wharehouse/manufacturing operations in Carona/Chino/Ontario move south.

    2. buster

      This property certainly isn’t worth $650,000, but it’s worth far more than $300,000. To be realistic, the house is decent size, the lot is good sized (not big, but far better than the newer stuff) and it’s Irvine. Yes, Irvine is special (which is why there is no CoronaHousingBlog.com).

      Yes, I will pay more for good schools.
      Yes, I will pay more for great weather.
      Yes, I will pay more safe streets.
      Yes, I will pay more so my kids can walk to the nice park without worry.
      Yes, I will pay more to be able to bike to work.

      The question is not will we pay more for Irvine, it is how much more.

        1. LC

          Isn’t OC something like 2x Riverside County — so i suppose this house should be about $150 sq/ft.

      1. AZDavidPhx

        Buster –

        Irvine is not special. It may be nice – but it is not special. It really isn’t. There are areas all over the country that are equally as nice.

        1. NoWowway

          This is the fourth year in a row that Irvine has been named as the safest large city in the COUNTRY.

          I consider that special. I love the consistency of that serial ranking, too.

          1. NoWowway

            Great link.

            However, arresting drunks and frauds sure beats MURDERS that SA and other cities have each year.

          2. lendingmaestro

            Hmmmm….I wonder if Irvine’s demographics have anything to do with those statistics….hmmmm. What’s that liberals? I can’t say such a thing because it is racist and politically incorrect?

            Damn, that’s too bad.

            I wonder if the same profile exists for Irvine’s school system…..naw

          3. Soapboxpolitico

            I don’t follow … What does being a liberal or a conservative have to do with committing crimes? If you claim to be a conservative you’d better tread very, very lightly around that subject if you intend to tie it to race and demographics. Last I checked your party was lusting heavily after voters who match the race and creed you allude to. The whole subject is a slippery slope indeed.

            Additionally, I wouldn’t go bragging about a bunch or drunkards or worse, thieves committing fraud. Not exactly the kind of people I’d want living in my community, conservative or not.

          4. LC

            Hey — one of the best parts of OC is in SA — Lemon Heights, you nitwit!

            PS: The best parts of California are also in Los Angeles too. Yes, even Bevery Hills and Bel Air are not in OC — they are in LA County!

          5. LC

            Yes, you can say that Mexicans don’t rely on law enforcement, so they settle things on their own. Yes, you can say that Mexicans are overwhelmingly honest and hard working and very law abiding. Yes, you can say that the younger generation can be trouble, and there are more younger people in Mexican areas. You can say a lot about the demographics.

            Irvine, on the other hand, is populated by people who are not subject to constant police surveillance and harassment, who are not the constant victims of crime, but rather are people who have come to expect privilege as a natural right of everyone, and are totally blind to the glaring lack of any right next door, among the poorest people, who do most of the hard work in Orange County, who have a few rights, no power, and some that can’t even vote.

            Frankly, I am amazed that anyone in Irvine with any sense of justice can sit by, and not rush to help his brother in Santa Ana. What is this smugness? Shouldn’t you be doing something?

        2. MikeInBoston

          There are only so many places in the country that are inhabitable by professionals. I noticed that you live in Phoenix, despite that fact that you could have bought your place for half or quarter the price in the intersection of Idaho, Nevada, and Utah – aka no man’s land (and interesting to poke around in in google earth). I’m sure it has beautiful views of the Rockies too!

          Whether a property is overpriced for its area cannot be deemed from comparing it to somewhere else in the country. This house in No Man’s land is probably $50,000 or less – but who cares. Similarly, if its half price in Phoenix – it has no bearing on its value in Irvine.

          I’m not saying this property is appropriately priced, but it cannot be compared to a far away place.

    3. earnie

      ” I think the REO flood will unload Q4, and we’ll see the capitulation selling start then.

      And JUST IN TIME for the Alt A and Option arm resets to occur too !!!

      Weeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee !

      3 months ago, a bunch of my coworkers were getting all ga ga over foreclosures, and out buying ’em, thinking the bottom was in. Fast forward to today… None of my coworkers are talking about buying foreclosures now…hehehe
      Talk about knife catchers !!!!! I need to email them the url to this blog…

      snicker.

  4. ConsiderAgain

    I think today’s property is over priced by $300k. Truly amazing. This is a 36 year old, uncared for, non upgraded tract house on a very small 5000 sq ft lot. Why is this worth more? I know it’s an old tune, but this house sells for ~$225k in many other parts of the country….

    1. AZDavidPhx

      AH HAH! In many other parts of the country you say!

      Well we all know that real estate is local!

      We all know that California houses are justifiably more expensive because……

      well…

      hmph…

      hmmm? hmmm…

      well just because!

        1. AZDavidPhx

          Holly Hobby – What’s your pick:

          1.) A half million dollar crack house in Compton, CA.

          or

          2.) A half million dollar beautiful house in Scottsdale, AZ.

          Holly Hobby Me Does Not Like Arizona House California House A Lot Gooder

          1. madhaus

            those are not comparable choices. The kind of person who could afford the McMansion in Arizona wouldn’t buy a crack house in Compton. She would rent somewhere nicer instead or buy a townhouse in California.

            You want to laugh at ridiculous prices, check out what the same place would cost up here in Silicon Valley. We are only having a collapse in the sucky zip codes, the good ones are mostly holding. But I’m sure knives will be caught soon.

            I also find it funny that today’s featured house is called “old.” Around here, that isn’t that old. We have a lot of postwar housing stock. The stuff built in the 1970s is bigger (like today’s palace) but the lots start getting smaller.

            Today’s house in Cupertino would go for about 1.3 million, and I’m not kidding. In Palo Alto I think 1.9 million. Other posters believe those two cities are comparable with Irvine, but there are no cities up here with huge tracts of undeveloped land other than the southern part of San Jose. And since it’s exurban and gas up here is now $4.50/gallon, prices are plummeting.

      1. idrunkyourmilkshake

        As much as I agree with everyone here…we all still have to admit, when it comes to real estate it’s all about location. And with location, you can ever undervalue weather.

        So as long as the rest of the country is freezing in the winter and melting in 100+% heat…CA will always be of more valuable.

        1. Marian

          Agree. But the desirability factor should be about the same as 8 or 10 years ago.
          Between January 2000 and March 2008, the Case-Shiller index for L.A. area increased 2.07 times (peaking at 2.74).
          “Normal” cities in U.S. (with much smaller real estate bubbles):
          Denver, CO: now at 1.27 (peak 1.4)
          Atlanta, GA: now at 1.24 (peak 1.35)
          Charlotte, NC: now at 1.31 (peak 1.35)
          Cleveland, OH: now at 1.06 (peak 1.23)
          Dallas, TX: now at 1.19 (peak 1.26)

          So, to maintain the ratio in prices between L.A. and the “normal” U.S. that was in 2000, the index should drop from 2.07 to around 1.2-1.3. That requires another 40% price drop compared with the “normal” U.S.
          I underline the word “compared”.

          So, there’s a long way to go!

        2. AZDavidPhx

          So as long as the rest of the country is freezing in the winter and melting in 100+% heat…CA will always be of more valuable.

          Only to weenies.

          1. no_such_reality

            Um, what exactly is the weather difference between Phoenix and say anything east of the I-5?

            Other than the traffic, smog and graffiti?

          2. madhaus

            Um, what exactly is the weather difference between Phoenix and say anything east of the I-5?

            Ummm… all your water are belong to us.

          3. jhill

            I hope this is a joke. Arizona is much better positioned for water than much of southern California. Good ground water, solid rights under Colorado River Compact (unless Upper Basin states stop cooperating). You Californians REALLY need to familiarize yourself with your actual water situation, tear up your lawns, replace your toilets and showerheads, and get with reality.

          4. Soapboxpolitico

            Well said jhill!

            I wish I could understand all this hostility toward Arizona. To be openly derogatory really makes no sense, especially if you intend to base your opinion on such things as climate differences. To be fair, weather tends to be a key concern when people choose somewhere to live but since everyone can’t live at the beach, the rest of us are fighting over semantics.

            Lest we forget, Orange County wasn’t always an oasis and a desirable place to live. That is a very recent construct. For decades we were thought of by Los Angelenos as hicks living in a backwater. Lets also not forget that without all that wonderful water from the Colorado River to irrigate our palm trees and Birds of Paradise, the OC would closely resemble much of the Phoenix area. We live in a desert, we just think we don’t.

            Average rainfall stats are tough to come by regarding OC so I used data from the closest “large” city that can even come within a million or two of Phoenix.(I used Long Beach) Phx gets .76 inches/mo. of rainfall annually. Long Beach gets a whopping .24 inches more at 1.015 inches. That is one quarter of one inch of rain per month on average. Not exactly an oasis we live in.

            Let’s take it easy on ole Dave and the ‘Zonians. Couple of more droughts and lawsuits over CO River water and the OC might look suspiciously like Scottsdale. 😀

          5. Soapboxpolitico

            I meant to say rainforest, not oasis … sorry, it’s late … brain broken. 🙂

            Couple additional thoughts:
            We might be in a distinct minority when it comes to our admiration of our home city/county. People vote with their feet and there is a net outflow migration from California and Arizona continues to be one of the fastest GROWING states and Phoenix the fastest growing city.

            On a micro scale, I recall reading an article in the Register, 2-3 years ago, about nearly an entire block of families in Rancho Santa Margarita selling their homes and moving to a newly built block of homes in the Phoenix area. They all literally picked-up and moved out to Phx. Not exactly a vote of confidence for the OC is it?

          6. LC

            Yeah, half the people in AZ are from CA. Why the hate? Those net outflows are flowing right into AZ.

            Great and beautiful state. Hard to believe that McCain is from there.

  5. alan

    I’m still waiting for the first big bank to fail, Bear Stearns not withstanding. WaMu has been mentioned over and over again as having excessive exposure to CA real-estate, today’s property is a prime example. Should WaMu fail, then properties like this would really be sold off at fire-sale prices in the aftermath.

  6. shiny

    everybody always rips on Santa Ana, Garden Grove, etc. but look at the patio for this Irvine property: Sanford and Son would be ashamed to call that place home. I guess I am spoiled by my slice of Irvine but there really are some shocker neighborhoods, places that I would never thought existed there.

    1. AZDavidPhx

      Ok for the last time. All of you Santa Ana and Garden Grove apologists need to understand that your crappy little communities are not members of…..

  7. lendingmaestro

    This is a modest house for a family with modest means. May one good income or two dual incomes totaling 100k.

    This place should be priced somwehere bewteen 3x and 4x income. So roughly 350k. 400k is pushing it, but that’s still below 200/sqft!

    1. DCRenter

      It’s maybe modest by today’s standards, but remember the average size of a house in 1970 was 1400 sqft!

      This is still a big house today by most standards. National average new is something like 2300 sqft. Is the average SFR size in Irvine that much higher?

      If it were fixed up, why wouldn’t it be a house for a higher income family? Less than ideal location? Cost of renovation? More desirable properties elsewhere?

      Thanks.

    2. DCRenter

      It’s maybe modest by today’s standards, but remember it was built when the average size of a house (1970) was 1400 sqft!

      This is still a big house today by most standards. National average new is something like 2300 sqft. Is the average SFR size in Irvine that much higher?

      If it were fixed up, why wouldn’t it be a house for a higher income family? Less than ideal location? Cost of renovation? More desirable properties elsewhere?

      Thanks.

      1. ockurt

        This is a nice-sized house but it is located near train tracks and older therefore making it less desirable. It’s an OK area (most of Irvine is pretty nice) but if you are making decent $ most people tend to look in Turtle Rock/Ridge, Westpark, Northpark, etc.

        1. NoWowway

          “but if you are making decent $ most people tend to look in Turtle Rock/Ridge, Westpark, Northpark, etc. ”

          We have doctors, dentists, small business owners, teachers, etc.. who live in CP. I am not sure what you mean about decent money, but our household income is well above the mean and we are satisfied here. Go ahead and spend $300/month for HOA fees, while we spend $40 or so. That looks to me like we’ll have $2k extra spending cash per year. We’ll spend that cash on our bareboat trip to Barbados next month.
          :coolsmile:

  8. ochomehunter

    Irvinerenter, It is true that we have knife catchers out there and they are still in leaps and bounds. These are the amature investors who missed the boat last time and think this is great time to get in. With REO and short sales, I am seeing or at least that is what is being reported that we are having bidding wars again. Banks putting home in market and selling within days due to low initial price and investors trying to suck it up. I call this a dead cat bounce that will bring out last of the speculators. I also strongly believe that as home values fall rents will fall. Rents will have to fall. There will be properties that will be below market rental in the future. The fact is that we are in very difficult time in US economy and with oil prices and inflation, there arent too many buyers who would either qualify or can afford high rents given that there will be job loses in coming quarters. Mid 2009 will be the one to watch out for as that would be a period for “Survival for the fittest”. Its no magic that walmart, costco and Mcdonalds have picked up substantial sales. that is the clear sign of what is to come.

  9. Lisa

    This house is located very close to the train tracks. We rent in this same community, much further away from the tracks, and the train noise doesn’t bother us where we are. it’s quaint. We take walks in the neighborhood, however, and walk by this street quite often. The train noise on Yucca is not quaint anymore…it’s freakin’ loud! I always wonder how people can live like that. They are asking $400K too much for this house. (Well, for me, you couldn’t pay me to live so close to the trains.)

    That being said, it is a nice community for families, and the yard sizes are quite large.

  10. Home Warranty

    I dont think I could deal with being close to train tracks we already have sport planes flying over and that drives me nuts!

    Jess

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