Since this is an off-duty weekend for me (the ex has my little guy) I was able to feed my open house/model home habit for a little while this afternoon. I ran some errands from my (rental) home in Westpark through Woodbridge on my way to Woodbury. I noticed a paucity of Open House signs as compared to recent weekends. It's Saturday, and Sundays appear to be more popular for Open Houses in Irvine, so that might be one cause. Perhaps Realtors have some Open House fatigue, too. What with the summer just past, weekend after weekend sitting in the same Brady Bunch houses, they're probably a little depressed! (I sure would be!).
So I turned into Woodbury from the new Sand Canyon entrance. The city recently finished rehabbing Sand Canyon in that area and it's great - nice and new and wide. I drove by the La Casella sales office, noticed it was open, did a U-turn and pulled into the parking lot. There were 4 other cars there. Assuming one was the sales person's, this place was practically hopping compared to my recent observations of Woodbury's sales offices!
The lone sales guy at La Casella was rather strange. For starters, he didn't look like your average (i.e. professional dress, borderline haughty demeanor) home sales guy. He had lots of facial hair and kind of babbled at me when I asked for an information sheet. He told me the townhomes started at $730k and went to $900k and the way he explained it, made me think I wasn't going to be getting an information sheet! He ended up giving me one, mutttering something about some people quickly leaving without even looking at the models after being told the prices. So he was actually trying to make sure I was not one of those door darters before giving me a propaganda brochure and price sheet! Hmmm, is this a cost-savings thing I wonder?
Anyway, I went into the $730k plan first (actually listed as $735 on the sheet). It's a Lennar "Everything Included" home. Single story, very nice. The casita thing, though, is a hate it or love it gamble on Lennar's part, in my opinion. It's the third bedroom/bath, completely detached from the house, across the cute little courtyard which has an outdoor fireplace standard in it. The garage is also detached, in that you have to go through your private courtyard in order to get into the casita or the main house.
The casita thing would be fantastic for me if it had a kitchenette, so I could rent it out. Otherwise, it strikes me as kinda weird. And for that much money, I want my garage to be ATTACHED!
I went through the two larger models pretty quickly. Standard stuff - very nice, but not worth $835k and $890k!
As I departed through the sales office the salesguy called out to me "That was fast!" Uh, yeah.
The information sheet lists Irvine High, not Northwood, as this development's high school. Hmmm, I had thought that all of Woodbury would feed into Northwood. I'll need to be careful if I ever do buy into Woodbury - Northwood is the only high school in Irvine that I'd want my boy to attend.
I stopped off at just more one more place in Woodbury since I needed to do a Target run. 81 Mission, a Treo Plan 2. The Realtor's flyer had "$819,000" crossed out and $799,000 handwritten underneath. This was actually the first home I have been to in Woodbury that I really do NOT like. It feels a LOT older than it really is. Maybe that's because the owners apparently chose not one single upgrade - plain carpeting, linoleum, and a barren side yard made this feel more like a plain-vanilla apartment than a Woodbury house. I wouldn't buy this house even if the price dropped a full 50%.
It's kind of strange - even as the Commons and the shopping center get closer to completion, I find myself less and less enamored of Woodbury. This time last year I was practically obsessed with the place. I didn't buy for two reasons: my son's current daycare is in Westpark and I want to keep him there for a while (and I choose to live very close to it) and of course, I saw the bubble popping clear as day. Could it be because Portola Springs is even newer and is more topographically interesting? (Woodbury is flat, flat, flat, whereas Portola Springs is in the hills and has some nice views). Or could it be because my desire for a lake view has increased? (hello, Lake Mission Viejo!).
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Thank you again for allowing us the opportunity to present ourselves to you in this manner. We look forward to working with you.
Sincerely,
Larry Roberts
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When you are ready...
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The following are links to the analysis posts of Irvine Renter:
6-15-2009 -- Should Adjustable-Rate Mortgages be Curtailed? -- Another look at the problems created by adjustable rate mortgages and their place in the housing market.
6-1-2009 -- How Much Cash Do You Really Need to Buy a House? -- A review of the cash demands homebuyers face.
5-18-2009 -- Irvine's Future REO Inventory -- A review of the building wave of foreclosures due to hit the Irvine market.
5-11-2009 -- Temporary Affordability and the Third Foreclosure Wave -- An analysis of the problem adjustable rate mortgage create for the future of the housing market.
5-4-2009 -- Negotiating for Real Estate -- An overview of the negotiation process for residential real estate.
4-27-2009 -- California Personal Finance: Ponzi Style -- The methods of personal finance developed during the housing bubble created an unsustainable lifestyle.
4-20-2009 -- Pent-Up Supply -- A buildup of inventory at the mid to high end of the housing market signals an upcoming drop in prices.
3-30-2009 -- Responsible Homeowners are NOT Losing Their Homes -- People who were truly responsible with their borrowing are not losing their homes in the housing price crash.
3-23-2009 -- Real Estate's Lost Decade -- Rising interest rates could stop appreciation for a full decade.
3-9-2009 -- The Market Bottom Is Not a Price Point -- The bottom of a real estate market is not a specific price point, but a state of affordability.
3-2-2009 -- What Risks Should Borrowers Be Allowed to Take? -- Excessive risk caused the rise and fall of the housing bubble. Should some of the riskiest practices be eliminated?
2-12-2009 -- The Financial Implications of Short-Sales and Foreclosures -- Reference to an attorney's description of the what can happen in
short sales and foreclosures depending upon the circumstances of the
borrower.
2-9-2009 -- The Moral Hazard of Market Supports and HELOC Abuse -- Is the government's efforts to support the real estate market going
to serve to create the psychology that inflates the next one?
2-2-2009 -- Fire and Ice -- Is it better for the market to correct quickly or slowly? An
analysis of the implications of both methods of market correction.
1-26-2009 -- The New Real Estate Sales Business Model -- A proposal to change the 6% realtor sales commission model currently popular in the United States.
1-19-2009 -- Tax Policy and Housing -- A review of the various tax programs and how they impact house prices
1-13-2009 -- Unlocking the Housing Market Recovery -- A review of a popular proposal for saving the economy and the housing market.
1-12-2009 -- Bring Back Paternalism in the Mortgage Market -- A plea to re-regulate the mortgage market.
1-5-2009 -- Debt-To-Income Ratios: The Forgotten Variable -- The impact of debt-to-income ratios on house prices and the housing market.
12-8-2008 -- 4.5% Mortgage Interest Rates? -- What would happen if mortgage interest rates were dropped to 4.5%.
11-17-2008 -- A Free-Market Solution to Prevent Housing Bubbles -- From the final chapter of The Great Housing Bubble.
11-13-2008 -- Reverse Liar Loans -- An example of how bailouts are creating more problems than they are solving.
11-12-2008 -- The ARM Problem -- Adjustable rate mortgages scheduled to reset from 2009-2011 are the
next wave of foreclosures that will flatten the real estate market.
11-11-2008 -- The Carrot and The Stick -- a look at what is really necessary to make a homeowner bailout program successful.
10-6-2008 -- Fundamentals at a Market Bottom -- A review of what market conditions prevail at the bottom of the housing cycle.
9-29-2008 -- Desire is not Demand -- A revealing look at the final myth propagated by realtors during a price decline.
8-25-2008 -- I Was Wrong, It’s Worse… -- A review of projections of future price drops 18 months later.
8-18-2008 -- Affordability Mortgage Products Make Prices Unaffordable -- A frank discussion on the problems caused by lender's solutions to the problem of affordability.
8-11-2008 -- Timing Does Matter -- An analysis dispelling the myths about timing the residential real estate market.
3-31-2008 -- Investment Value of Residential Real Estate -- An economic analysis of the true investment value of residential real estate.
3-29-2008 -- Efficient Markets vs Behavioral Finance -- An overview of the two competing theories of market price movements.
3-17-2008 -- Bailouts and False Hopes -- A cynical look at the psychology of potential bailouts.
3-15-2008 -- Mortgage Default Losses -- Parsing the distinction between default rates and resulting default losses on residential loans.
3-13-2008 -- Floplords -- A discussion of the phenomenon of accidental landlords.
3-12-2008 -- Mortgages as Options -- A look at how borrowers and speculators gamed the system using mortgages as option contracts.
3-11-2008 -- Houses and Commodities Trading -- An examination of the parallels between commodities markets and the behavior of residential real estate markets.
3-10-2008 -- Mortgage Equity Withdrawal -- An overview of the role mortgage equity withdrawal played in the recovery following the 2001 recession.
3-8-2008 -- How Big Was the Bubble? -- A review of statistical measures of price to evaluate just how big the housing bubble really was.
3-4-2008 -- Systemic Risk in the Housing Market -- The second of a two-part series. This posts examines the failures of
structured finance and suggests methods for addressing this failure to
prevent future housing bubbles.
3-3-2008 -- Structured Finance 101 -- The first of a two-part series. This post provides an overview of
what structured finance is, and how it was used to during the housing
bubble.
2-28-2008 -- Affordability -- A review of the concept of affordability and what it means for the housing market.
2-25-2008 -- The Credit Crunch -- A discussion of the causes and implications of the credit crunch.
2-18-2008 -- Selling for Less -- A look at the changing market environment where buyers are in control of the action.
2-4-2008 -- What is Equity? -- Looking at the components of homeowner equity and the factors that impact it.
1-28-2008 -- Speculation or Investment -- Comparing the motivations and activities of two distinct classes of
purchasers of real estate. Knowing the difference between speculation
and investment can make the difference between making and losing money.
1-14-2008 -- Rent Versus Own -- A detailed look at the cost of ownership and the various reasons to rent or own a particular property.
1-7-2008 -- The Fallacy of Financial Innovation -- Shattering the myth of "financial innovation" and reinforcing the
use of 30-year, fixed-rate, conventionally amortizing mortgages.
12-3-2007 -- What is a Bubble? -- The concepts and beliefs that when acted upon by the general public create an asset price bubble.
10-1-2007 -- What Caused the Bubble Rally? -- A detailed analysis of the conditions the preceded the bubble rally and the causes of its inflation.
9-24-2007 -- A Buyer’s Market -- A hard-nosed look at negotiating when market conditions change.
9-13-2007 -- The Market Bottom -- A review of the conditions that formed the last market bottom and why it formed at the price level it did.
9-10-2007 -- The California Social Contract -- A meditation on the plight of homedebtors written from their perspective.
2007-07-16 -- Land Value 101 -- A detailed explanation of how raw land is valued when used for residential construction.
2007-06-25 -- Houses Should Not Be a Commodity -- A discussion of the psychology of commodity market trading and why this is an undesirable element in housing markets.
2007-06-18 -- Telling Good Analysis from Bad -- An evaluation of Gary Watts Real Estate Outlook for 2007 and a
description of the characteristics of a robust market analysis.
2007-06-11 -- The Reservoir of Schadenfreude -- A whimsical look at the emotional phenomenon of taking pleasure in the misfortune of others.
2007-05-21 -- The Day the Market Died -- A look at the conditions which led to the bursting of the bubble with analogies to Don McClean's American Pie.
2007-05-14 -- The Anatomy of a Credit Bubble -- A detailed, mathematical analysis of the impact changing lending
standards had on home prices. This is fundamental to understanding of
the mechanics of the real estate bubble.
2007-05-07 -- Your Buyer’s Loan Terms -- The precursor to The Anatomy of a Credit Bubble. It discusses house prices from the perspective of the future buyer of
your home. It demonstrates the impact changes in loan terms will have
on future buyers and how this will impact the amount your future buyer
can bid for your home.
2007-04-30 -- Appreciation is Dead -- Rapid home price appreciation has become an accepted truism in
Southern California. There are many reasons to believe this is not a
basic Truth of Life. This post examines the causes of appreciation and
explores the reasons why it may all be coming to an end.
2007-04-23 -- It’s not the Borrowers; It’s the Loans. -- The "subprime containment" meme has been used to quell the fears of
investors since the collapse of subprime lending in early 2007. This
post examines the spurious nature of the subprime containment idea and
explores the implications of the larger problem being hidden from the
general public.
2007-04-16 -- How Homedebtors Could Avoid Foreclosure -- A look at a potential financing mechanism which might be used to
assist homeowners who are underwater. It also examines the potential
implications of the widespread use of such tools.
2007-04-08 -- Southern California’s Cultural Pathology -- An exploration of the unique cultural beliefs which made the housing
bubble take hold in Southern California. This is a critical post to
understanding why the bubble was so pronounced here while in other
areas of the country it was not as extreme.
2007-04-02 -- How Bad Could Bad Get? -- A look at the worst case scenario for our housing market, and why it is not unrealistic.
2007-03-24 -- Who is responsible for this mess? -- A rant on the difficulty of identifying the party or parties responsible for our current problems.
2007-03-14 -- Why the Sub-Prime Meltdown is a Problem -- Many have postulated the sub-prime collapse would not impact housing
prices in more affluent areas like Irvine. This brief post debunks this
idea.
2007-03-11 -- Predictions for the Irvine Housing Market -- A prediction for the future of housing prices in Irvine based on an
analysis of emerging data and trends. This is the capstone post tying
together the series of posts from 3-1 to 3-9.
2007-03-09 -- What if Prices Dropped to Fundamental Values? -- A brief "what if" on the impact a decline to fundamental valuations would have on Orange County housing prices.
2007-03-06 -- What is Past is Prologue -- A review of the mechanics of the collapse of the last bubble to
provide a foundation for the projections of the market action in our
current market bubble.
2007-03-05 -- How Sub-Prime Lending Created the Housing Bubble -- A simple thought experiment to show how a loosening of lending
standards helped create a commodities market mentality and inflated the
housing bubble.
2007-03-03 -- How Inflated are House Prices? -- A discussion of the fundamental valuation of housing prices. This
post is essential reading to anyone wanting to understand how
residential homes should be valued.
2007-03-01 -- Financially Conservative Home Financing -- A review of available financing terms and a discussion of why the
new "innovations" in home financing are disasters in the making.
2007-02-27 -- I am IrvineRenter (Inventory Cholesterol) -- A brief introductory post and a discussion of the different types of housing inventory and how they impact prices.
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