This was posted in a thread on Thursday, but it is such important data, it deserves its own post. The blogging software does not do tables very well, so I apologize if it a bit difficult to follow.
The first column is the income range.
The second column is the percentage of the total in each income range.
The third column is the cumulative total. It shows you the percentage of households that makes at or less than the specified range. I find it interesting that 78% of the households in Irvine make less than $150K.
The fourth column is the most expensive house someone who makes the maximum in the range can afford with a total price of 4 times income. Some will argue this is too conservative, and some will argue it is too high. I think it is a bit too high, but the market bottomed at 4 times income last time, so it is a useful point of reference.
The fifth column is the downpayment that would be required assuming 20% down.
B19001. HOUSEHOLD INCOME IN THE PAST 12 MONTHS (IN 2006 INFLATION-ADJUSTED DOLLARS) - Universe: HOUSEHOLDS
Data Set: 2006 American Community Survey
Survey: 2006 American Community Survey
Estimate -- Percentage -- Cummulative -- House Price Limit -- Downpayment
Total: 63,646
Less than $10,000 -------- 4,633 -- 7.3% -- 7.3% ---- $40,000 ---- $8,000
$10,000 to $14,999 ------ 2,015 -- 3.2% -- 10.4% -- $60,000 ---- $12,000
$15,000 to $19,999 ------ 1,159 -- 1.8% -- 12.3% -- $80,000 ---- $16,000
$20,000 to $24,999 ------ 1,973 -- 3.1% -- 15.4% -- $100,000 -- $20,000
$25,000 to $29,999 ------ 1,233 -- 1.9% -- 17.3% -- $120,000 -- $24,000
$30,000 to $34,999 ------ 1,069 -- 1.7% -- 19.0% -- $140,000 -- $28,000
$35,000 to $39,999 ------ 2,021 -- 3.2% -- 22.2% -- $160,000 -- $32,000
$40,000 to $44,999 ------ 2,071 -- 3.3% -- 25.4% -- $180,000 -- $36,000
$45,000 to $49,999 ------ 2,353 -- 3.7% -- 29.1% -- $200,000 -- $40,000
$50,000 to $59,999 ------ 3,108 -- 4.9% -- 34.0% -- $240,000 -- $48,000
$60,000 to $74,999 ------ 6,169 -- 9.7% -- 43.7% -- $300,000 -- $60,000
$75,000 to $99,999 ------ 8,666 -- 13.6% -- 57.3% -- $400,000 -- $80,000
$100,000 to $124,999 -- 7,924 -- 12.5% -- 69.8% -- $500,000 -- $100,000
$125,000 to $149,999 -- 5,279 -- 8.3% -- 78.0% -- $600,000 -- $120,000
$150,000 to $199,999 -- 6,495 -- 10.2% -- 88.3% -- $800,000 -- $160,000
$200,000 or more -------- 7,478 -- 11.7% -- 100.0% -- $-
Irvine's median income is approximately $85,000:
$85,000 * 4 = $340,000 house with a $68,000 downpayment.
I know I should modify this graphic to fix the title, but it is too much work. Just know it is 1986-2006.
I would like to thank a reader for updating this graphic for me. I am not sure if I can post your name, but thank you.
It is what it is. What do you think?
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FYI,
This is for households and not individuals. These are gross income numbers, not after tax or otherwise adjusted.
Methodology:
The ACS program was fully implemented in 2005 in every county of the United States and in Puerto Rico, with an annual sample of approximately three million housing units.
The ACS is conducted using the best mail self-response techniques of the decennial census combined with follow-up techniques that produce high-quality data. For households that do not respond by mail, the quality of data is improved by using well-trained, permanent interviewer staff using computerized interviewing, which incorporates edits into the collection process. Using a permanent coding staff provides additional improvements in data quality.
Households that receive the American Community Survey are required by law to respond. As with all other census answers, a Federal law, Title 13 of the U.S. Code, provides strong confidentiality protections for all individual information collected by the Census Bureau. Violating this law is a Federal crime with serious penalties, including a prison sentence of up to five years and a $250,000 fine. For more information, visit the American Community Survey Web page at http://www.census.gov/acs/www.
Gonna find my baby, gonna hold her tight
gonna grab some afternoon delight.
My motto's always been; when it's right, it's right.
Why wait until the middle of a cold dark night.
When everything's a little clearer in the light of day.
And you know the night is always gonna be there any way.
Sky rockets in flight. Afternoon delight. Afternoon delight.
Afternoon Delight -- The Starland Vocal Band
Link to Music Video
Or Not...
I don't know why, but this song popped into my head while writing this post. Enjoy...
All publicity is good publicity, right? Well, our seller at 14 Carnelian in Irvine has found a way to get some free publicity at the Irvine Housing Blog -- put something stupid on the MLS.
Aren't those pictures beautiful.
WHERE IS THE HOUSE!!!
Is this house such a POS that you can't put any pictures of the house on the MLS? Is this supposed to pique our interest and make us arrange to see it? Well, here is the data, in case your interested...
Price: $999,900
14 Carnelian, IRVINE, CA 92614
Beds: 4
Baths: 3
Sq. Ft.: 2,600
$/Sq. Ft.: $385
Lot Size: 4,750 sq. ft.
Type: Single Family Residence
Style: Traditional
Year Built: 1985
Stories: Two Levels
Area: Woodbridge
County: Orange
MLS#: S504136
Status: Active
On Redfin: 2 days
From Redfin, "Your clients will love this highly upgraded immaculate home! Remodeled kitchen & baths, travertine & hardwood floors, plantation shutters, added walk-in closet in master. Excellent inside the loop location close to school, park, pool (salt water), lake & tennis. Fabulous Community with unmatched amenities named 'Best Place in America to Raise a Family' by Parents Magazine. Irvine has again this year been named 'Safest City in America'"
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Why not some pictures of the ocean? How about Catalina Island? Yosemite? California is beautiful, you know.
Just to make this listing complete, I thought they could add some images they forgot...
The house is the on the planet earth...
In the Milky Way Galaxy...
This property was taken back by the bank for $541,273. Since the first mortgage was originally $516,000, it looks as if our "owners" had a little problem with their Option ARM. Looks to me like we are 20% off the peak in this neighborhood...
Asking Price: $624,900
Purchase Price: $660,000
Purchase Date: 3/6/2006
Address: 2 Riverstone #36, Irvine, CA 92606
Beds: 3
Baths: 2.5
Sq. Ft.: 1,721
Year Built: 1985
Stories: 2
Type: Single Family Residence
View: Mountain
Neighborhood: Walnut
$/Sq. Ft.: $363
MLS#: U7001714
Status: Active on market
On Redfin: 7 days
From Redfin: "Outstanding detached sfr condo, next to the park with plenty of open s pace. Big backyard, and very private location. this is a three bedroom two and a half BATH home in the highly sought after city of Irvine. Outstanding schools and services. Home is sold 'as-is' and 'where-is' without warranty. Property is a 'Z-Lot' (Zero Lot Line). Home backs to a Rail Road and a Public Park and High Voltage Power Lines."
The brutal honesty of that descriptions makes one suspect it is a bank owned property. The current owner is listed as SBC Bank USA. There is a first mortgage shown at $516,000 and a second at $129,000 both from SBC. It looks as if the buyer originally put $15,000 down. Given that this property was purchased 14 months ago, and the foreclosure process takes 9 months, this was an early payment default, probably a flip gone bad. SBC probably has more on its books than the 545,000 due to lost interest payments and foreclosure costs. If they get their asking price, even with the reduced commissions banks are willing to pay, they still stand to lose over $50,000.
The bank will not be happy about losing $50,000+, but the neighbors trying to sell their homes are going to be really ticked off:
44 Riverstone #58, Irvine, CA 92606 asking $516/SF or $619,000 and
11 Millstone #2, Irvine, CA 92606 asking $546/SF or $655,000.
If 2 Riverstone #36 sets the new comps for the neighborhood at $363/SF, the above two properties just lost 30% or more of their value. Ouch!
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This value drop will be particularly painful for the flipper who bought 11 Millstone #2 for $619,000 on 4/21/2006. This flipper is holding out for a breakeven sale, and they need to get $564/SF to do it. How many buyers are going to pay that price once a house in the neighborhood goes for 30% less? At least this flipper will not be alone. A quick scan of the neighborhood property records shows 5 properties purchased in 2005 or 2006 that will also be underwater. Cry me a river...
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So you took a chance
And made other plans
But I bet you didn't think that they would come crashing down, no...
Your bridges were burned, and now it's your turn
To cry, cry me a river
Cry me a river-er
Cry me a river
Cry me a river-er, yea yea
Cry Me a River -- Justin Timberlake
You know I'm a dreamer
But my heart's of gold
I had to run away and hide
'Cause I couldn't go home
Just when things went right
Suddenly it all went wrong
Just take this song and you'll never feel
Left all alone
I'm on my way
I'm on my way
Home, sweet home
Tonight tonight
I'm on my way
I'm on my way
Home, sweet home
Home Sweet Home -- Motley Crue
Link to Music Video
" Just when things went right, Suddenly it all went wrong" The ode to the 2005-2007 homebuyer...
There are some neighborhoods in Irvine that are so charming, you really need to go see them. This is one of those. I took many pictures here for my community profile on Irvine’s Woodbridge. The houses are small, but very well kept, and there is not a garage door to be seen. Add a white picket fence, and you have the American Dream -- except for the prices of course...
Asking Price: $688,888
Income Requirement: $172,222
Downpayment Needed: $137,777
Purchase Price: $699,000
Purchase Date: 5/31/2006
Address: 15 Sweet Rain, Irvine, CA 92614
1st Loan $559,200
2nd Mtg. $69,900
Downpayment $69,900
Beds: 3
Baths: 2.5
Sq. Ft.: 1,571
$/Sq. Ft.: $439
Lot Size: 3,780 sq. ft.
Type: Single Family Residence
Style: Other
Year Built: 1980
Stories: Two Levels
Area: Woodbridge
County: Orange
MLS#: P585358
Status: Active
On Redfin: 69 days
From Redfin, "Outstanding Location! Inside Loop, backs to greenbelt, full driveway. Away from freeway noise, near park, pool, schools and lakes, walk to all amenities. Remodeled kitchen with hardwood cabinets, granite counter tops and mewer appliances. Updated powder room and guest bath with top of the line fixtures! Laminate wood floors, dual pane vinyl windows, French doors, textured ceilings. Custom speakers through out the house, extra storage spaces, No zero lot line (opportunity to add windows!)"
I want those mewer appliances. I hear they purr like a kitten.
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These people bought at the peak, so they are being a bit optimistic to think they are only $11,000 underwater. If they manage to obtain their full asking price, they stand to lose $51,445. They have $69,900 in equity to lose, so there is a small amount of negotiating room before this becomes a short sale, assuming they haven't HELOCed or used an Option ARM. Unfortunately, the price is too high as evidenced by the over 60 days on the market. They are probably going to become a short sale.
William Blake - Dante's Inferno, Whirlwind of Lovers
Thus concludes yet another week at the Irvine Housing Blog. Join us next week as we continue to chronicle Irvine's journey to ‘the seventh circle of real estate hell.’
I know that it's evil
I know that it's got to be
I know I ain't doing much
Doing nothing means a lot to me
Living on a shoe string
A fifty cent millionaire
Open to charity
Rock 'n' roller welfare
CHORUS:
I've got holes in my shoes
And I'm way overdue
Down payment blues
Get myself a steady job
Some responsibility
Can't even feed my cat
On social security
Hiding from the rent man
Oh it makes me want to cry
Sheriff knocking on my door
Ain't it funny how the time flies
Down Payment Blues - AC/DC
Link to Music Video
Every once in a while, I come across a song that really captures the real estate bubble. How many fifty-cent millionaires out there bought homes with 100% financing so they could put the house to work for them and do nothing?
I think of all the people utilizing 50% DTIs: steady job, can't feed the cat, hiding from the rent (interest) man, Sheriff knocking on my door (REO)...
Now that the bubble has burst everyone has the downpayment blues. The horror of it. Getting a house will actually take sacrifice. The house will require an income rather than provide one. Do you think anyone will really want a house under these conditions?
Asking Price: $750,000
Income Requirement: $187,500
Downpayment Needed: $150,000
Purchase Price: $823,000
Purchase Date: 12/26/2006
Address: 3811 Claremont St, Irvine, CA 92614
1st Loan $658,400
2nd Mtg. $164,600
Downpayment $0
Beds: 5
Baths: 2.5
Sq. Ft.: 2,586
$/Sq. Ft.: $290
Lot Size: 5,166 sq. ft.
Type: Single Family Residence
Style: Contemporary/Modern
Year Built: 1970
Stories: Two Levels
View(s): Park or Green Belt
Area: Westpark
County: Orange
MLS#: S502078
Status: Active
On Redfin: 14 days
From Redfin, "Beautiful 5 bedroom executive home in desireable West Park. Large, corner lot with highly desired floorplan. Wonderfully remodeled kitchen with silestone counters, newer cabinets and appliances; wood floors in living and dining areas; scraped ceilings are accented by crown molding and recessing lighting; Anderson windows installed throughout. Walk to parks, pool, tennis, club house and schools. Motivated sellers- Call today for private showing. submit all offers."
A well-written MLS description. Amazing. Of course, there is a misspelling (desireable) and a sentence starting with a lower case letter, but there are no unnecessary capital letters, and no exclamation points. COOL!!!
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Asking less than $300 / SF in Westpark? That is progress. When properties like this one get down under $200 / SF, we will be getting near the bottom.
Do you think these sellers really are motivated given that they have zero dollars into the transaction? Since they are selling after only 8 months ownership, I conclude this was a flip gone flop. The bank is looking at a $118,000 loss after a 6% commission.
The holders of second mortgages on properties here in California are getting wiped out. I can't say I feel bad for these lenders. Downpayments were one of the last barriers to entry into the housing market. The providers of these second mortgages were in large part responsible for allowing would be homeowners who are not responsible enough to save for a downpayment access to the housing market. This was supposed to be a good thing. However, since people with no money in the transaction don't care about defaulting, these second mortgage holders are bearing the brunt of the housing price decline. The grand experiment of increasing home ownership rates through eliminating downpayments has failed spectacularly.
Downpayments are back, and they are here to stay. The entire market has a severe case of Downpayment Blues.
