Irvine Housing Blog

Ancestral Call

My rural roots

My roots run deep in the rural farm community of Friendship, Wisconsin. My fraternal family line can be traced back to Thomas Roberts, a Welshman born in 1831. Thomas arrived with two bothers in New York, but sadly, he became separated from them and never saw them again. Thomas immigrated to Adams County, Wisconsin where he started a family which still boasts many local residents. Although my name is Welsh, the women who married Roberts men for the next several generations were of Scandinavian descent. I am a mutt of the American melting pot.

Housing price bottom delayed to at least 2013

The following headlines suggest the market will not bottom in 2012:

• Chapman: Excessive supply prevents appreciation in 2012
• Mortgage delinquencies expected to rise into 2012
• Surge in discounted REO expected next year

I am not the only market observer who has come to this conclusion.

Home Address ... 90 LEHIGH AISLE #58 Irvine, CA 92612
Asking Price .......  $449,000

Strategic default is the banker’s stigma of convenience

Bankers foster the idea that strategic default on a primary residence is immoral. Bankers want borrowers to continue to repay loans even when it is not in the borrower's best financial interest to do so. I and many others have argued borrowers have a greater moral duty to do what's in the best financial interest of their family. Obviously, bankers disagree.

Home Address ... 1229 ABELIA Irvine, CA 92606
Asking Price .......  $319,900

Increasing borrowing costs will lower house prices

Borrowing costs are likely to increase in 2012 for a variety of loans. The lower conforming limit will push many borrowers to either the FHA or the jumbo market where borrowing costs are higher. The FHA may also raise its borrowing costs again to cover the inevitable losses from the ongoing decline in home prices. Further, the new rules on conforming mortgages will push up costs on loans which do not conform.

Home Address ...    44 BLUE HERON Irvine, CA 92603
Asking Price .......     $13,900,000

Home prices across OC continue to plummet

Prices across most of Orange County continue to decline. The OC Register reports prices have hit a near three-year low. My own analysis of the MLS data shows Irvine teetering on the brink of taking out the 2009 low and setting a new eight-year record low.

Home Address ...    8 KANSAS Irvine, CA 92606
Asking Price .......     $639,000

OC Republican John Campbell successfully lobbies for more government handouts

The loan limit on FHA loans is now $729,750. The venerable FHA which was founded to provide loans for low to middle income Americans is now being used to subsidize the mortgages and the house prices of high wage earners in places like Irvine.

Home Address ... 76 VINTAGE Irvine, CA 92620
Asking Price .......  $499,000

Surge in discounted REO expected next year

Banks dramatically increased their scheduled foreclosure auctions in November 63% over October. They appear serious about clearing out shadow inventory and getting what capital they can out of the loans secured by houses occupied by delinquent mortgage squatters.

Home Address ... 415 East YALE Loop #13 Irvine, CA 92614
Asking Price .......  $487,500