Detailed stats on the Irvine housing market are something we are always
interested in. The Inventory number in the sidebar comes from
ZipRealty. A chart of those numbers shows some interesting trends. We also have some great resources provided by ipoplaya and IrvineRealtor.
A new resource we just learned about are the Neighborhood Analytics that Redfin launched. Irvine charts available after the jump...
Sometimes you see a property where the asking price simply cannot be explained as anything other than greed. This weekend's featured property falls in this category. It has been on the market for 580 days! Do you think they might have been able to lower the price and move it by now? These owners have been very conservative with their mortgage, they have paid it down, and there are no HELOCs. Their asking price gyrations have nothing to do with mortgage conditions or anything other than their desire to double their money in 5-6 years. Their inability to grasp the reality of the market has left them changing their asking price frequently and woefully missing the market. I hope they and their realtor are having a good time because they certainly haven't done much to sell their house.
Listing Price History
Date
Price
Feb 03, 2007
$939,900
Feb 12, 2007
$924,900
Mar 06, 2007
$919,900
May 02, 2007
$914,900
May 04, 2007
$912,000
Jul 21, 2007
$899,900
Jul 25, 2007
$912,000
Aug 18, 2007
$899,000
Jan 27, 2008
$849,900
Mar 03, 2008
$824,900
Mar 08, 2008
$799,900
Apr 30, 2008
$849,900
Jun 30, 2008
$824,900
Source: SoCalMLS
Their listing price activity reminds me of the Curly Shuffle -- two steps forward and one step back.
Beautiful Fieldstone Barrington home located on a cul-de-sac. Nice size
yard w/patio cover/dramatic slate hardscape in back & front
yard/ceiling fans/built-in cabinets in garage/french doors/beautiful
tile floors/full splash in kitchen. Do not miss seeing this home!
Yesterday's post stirred up quite a controversy, and today's probably will as well. It is politically incorrect and full of stereotypes that will make many cringe. There is a reason we have those politically incorrect stereotypes -- they describe large groups of real people who exhibit stereotypical traits and behaviors. The Political Correctness crowd may not like it, and they may pressure people from expressing these stereotypes (at least to the degree that people fear the vengeful wrath of the PC police.) However, if people fit a profile, then there must be some validity to it.
One of the unique characteristics of the Great Housing Bubble was the large increase in market participation among women -- sometimes single women and sometimes as married women buying property on their own. Some amount of this is to be expected as single women establish careers and put off marriage. In the past, most single women rented as did most men in their 20s. Men would often buy a house even if they were single. I suspect many viewed this as proof of their ability to be a provider and to attract a mate (I know I did.) Women more often would not buy a home when they were single. I suspect many did not because they knew they would have to deal with two houses when they got married, and the property would be a hindrance. Also, when you look at consumer demographics and personal savings, single women have not historically been big savers. Sure there are always some who are responsible from a young age, but many single women prefer to run up big credit card bills obtaining the latest fashion trends than worry about saving money (and yes, single men spend a lot on beer too.) The trend toward married women buying property as "her sole and separate property" was also a new phenomenon.
So what changed during the Great Housing Bubble? First, since saving was eliminated as a condition of ownership, many single women decided to buy and have a home of their own. Rather than a property being a hindrance, it became a great speculative asset that provided huge amounts of extra spending money. Several of the properties I have profiled with excessive HELOC abuse have been solely owned by women (not that men were any more responsible.) With the large number of women working as mortgage brokers and
realtors, it is likely that many of the purchases by married women as their sole and separate property were by those in
the business. It was all part of making a living.
Why did I pick the song Stupid Girl? Well, these purchases did not turn out to well for many. Was it stupid? I guess if you got to "live large" in your 20s from the HELOC on your house, perhaps not. The memories are great, and you still have time to recover financially. For the older singles and married women who speculated in the real estate market, there will be more serious ramifications. I don't think anyone is going to label these purchases as a work of genius. Today's featured property was purchased by a married woman as her sole and separate property, and now, after the foreclosure she has bad credit. Do you think this has impacted the family? It can't be a plus.
Charming detached condo on a quiet street. Warm home with peaceful sun
soaked back landscaped courtyard. Wood flooring and custom paint.
Within walking distance to Alderwood elementary. Resort style pools,
spas, gym and parks all part of the association. Near the 405/5/133
FWYs. Close by entertainment includes the Irvine Spectrum and Laguna
Beach.
sun soaked? Look at the surrounding walls and buildings. That courtyard will feel more like a cave than an open patio.
{Adsense-ir}
Paid peak prices past the peak. Check...
Watched prices drop 20% since then. Check...
Asking for a profit despite market conditions. Check...
Praying for a greater fool to come along. Check...
Preparing for a short sale. Check...
Feeling stupid. Check...
.
I know I stand in line until you think You have the time to spend an evening with me And if we go someplace to dance I know that there's a chance you won't be leaving with me And afterwards we drop into a quiet little place And have a drink or two...... And then I go and spoil it all by saying Something stupid like I love you
I can see it in your eyes that you despise The same old lines you heard the night before...... And though it's just a line to you for me it's true...... And never seemed so right before I practice everyday to find some clever lines To say to make the meaning come true...... But then I think I'll wait until the evening gets late And I'm alone with you The time is right your perfume fills my head...... The stars get red and on the nights so blue...... And then I go and spoil it all by saying Something stupid like I love you
Are the rich foreigners going to come buy our overpriced real estate? Not if they are from this planet. Perhaps ET and his buddies will come down to save us?
Three weeks ago in the open thread of 6-28-2008, I suggested that maybe oil would top and the market would bottom. It is too early to tell if this weeks market action saw both of those occurences, but both of these markets have certainly put in a short-term top and bottom. Only time will tell if it lasts longer. Calculated Risk had an interesting post this week on the economy. In it, he suggests that the difference between a moderate recession and a severe recession is going to be the price of oil. If the price of oil drops, inflation will subside, the FED can keep interest rates lower for longer, and the recession will not be as severe. I think he is right. I also think this is what the stock market is betting on. As long as oil does not rally to new highs and stay at elevated levels, the stock market will probably rally -- this isn't investment advice, just an observation... BTW, I also believe the bullish action of the last few days in financials and homebuilders was short covering and both of these groups will make fresh lows -- but I could easily be wrong...
There is no particular theme for the music today, I was just in the mood for Paul McCartney.
What are your observations of the housing market? Are there any interesting properties you are watching? Tell us what you see.
Do you remember the predictions post from January 1st. Well, we saw our first major bank failure this week as IndyMac bit the dust. With all of the Alt-A crap on their balance sheet, this shouldn't be terribly surprising. The only thing that surprises me is the fact that most of the Alt-A loans have not reset yet. The toxic waste they own is going to get much more toxic.
The toxic waste is even starting to poison Freddie Mac and Fannie Mae. The GSEs will be saved, and it is the mechanizm for getting the American Taxpayer on the hook for the housing debacle. I can't say I am too surprised about that one either...
I enjoy looking back on some of the nonsense and denial among the bulls. I came across this one recently: Was there a Housing Bubble?
If you can't see a housing bubble in February of 2008, you are truly blind. Here is my favorite piece of analysis, "Prices will probably drop some more but personally I don't expect to
ever again see index values around 110 (referring to Case-Shiller). Do you? If we don't see the
massive drop back to "normal" levels then the run up in prices should
be described as a shift to a new equilibrium - much as happened during
World War II - see the chart. (It's an important question to ask what
changed and why?). In the shift to the new equilibrium there was some
mild overshooting, especially due to the subprime over expansion, but
fundamentally there was no housing bubble."
His argument or observation shows the wanton ignorance of real estate economics displayed by most purchasers during the bubble. He examines a chart showing a stable, 50-year trend in house prices, and makes the assumption that this is not based on fundamentals, and there is some new fundamental out there that is going to establish an equilibrium at some higher price level. He asks and fails to answer the key question "What changed?" The answer is a wild expansion of credit and a total abandonment of lending standards while simultaneously embracing unstable loan programs. In short, a bubble. His failure to recognize what happened is why he cannot fathom a price drop back to the fundamental price levels stable for the previous 50 years.
It reminds me of a bullish post I saw over at the OC Register Blog some time ago. One of the posters was chiding Peter Schiff by saying that anyone who predicts a 50% decline in home prices has lost all credibility because such a price decline was simply not possible. Oh really? I remember the indignation of the poster -- or was it ignorance -- I guess it is all the same for bubble bulls.
Let's take a trip down memory lane. Tell us about the most ridiculous bullish comments you heard during the bubble, or post links to bullish articles and prognostications that have proven to be totally wrong.
I might be wrong I might be wrong I could've sworn I saw a light coming on
I used to think I used to think There was no future left at all I used to think
Open up, begin again Let's go down the waterfall Think about the good times and never the bad Never the bad
What would I do? What would I do? If I did not have you
Open up and let me in Let's go down the waterfall Have ourselves a good time, it's nothing at all It's nothing at all Nothing at all
Every once in a while, I stop to contemplate the unique place blogs have in
our lives. One such reflection is contained in the post Balance from
late last year. I am constantly amazed at the number of people who come to this
blog daily to read the off-the-wall rants and silly observations we make. When
I reflect on this phenomenon more deeply, I see that is exactly why people come
to blogs like this one.
Media outlets are like restaurants, newspapers are akin to the large chains,
and blogs are like the mom-and-pop restaurants of yesteryear. Large chain restaurants
have a consistent and bland menu of food in order not to offend anyone. If you
are looking for unique, tasty foods, you have to seek out the sole proprietor restaurants
where the cook might prepare something bold and special and offend some of the
general public. The sole proprietor does not need to please everyone to stay in
business. If they develop a loyal clientele that appreciates their food
quality, they will find a supportive niche.
Newspapers have become dumbed down to the point of lacking real news or
substantive analysis. Related to this phenomenon is the strict adherence to the
dictums of political correctness. A few feeble protests from some allegedly
aggrieved party are enough to cause newspapers to retract stories and censure
their output. Is it any wonder the truth has become so hard to find? Also,
newspapers are controlled by the dollars of their advertisers. I can tell the
truth about the housing debacle because I do not worry about the local realtors
pulling their ads from the blog. The fear of economic reprisal is another
factor obscuring the truth. People long for the truth. People want to know what
is really going on and why it is happening -- even if this truth offends
someone or is not aligned with a powerful group's economic interests. Blogs
have become popular because they provide this Truth. Blogs provide a unique
perspective unavailable from traditional publishing outlets.
To change the subject a bit, this week saw a large amount of really bad
news. The stock
market sold off hard, oil
is topping $140 a barrel, consumer
sentiment is at its lowest levels since 1980, the
credit markets are in turmoil, new
home sales are at their lowest levels ever, existing
home sales are at very low levels, and 75%
of the country blames Bush for these problems. When all the news is that
bad, the contrarian in me thinks it might be time to short oil and buy US
equities. It is always darkest before the dawn, and right now, it is pretty
dark. The housing market will continue to decline, and the financials and
homebuilding stocks will likely continue to decline as well, but I can't help
but wonder if the broader market is near a medium-term bottom and the economy
is near the bottom of our unofficial recession. This isn't investment advice,
just an observation on the historic relationship between sentiment and market
activity. If our economic woes continue, the sentiment might be right; however
at some point, sentiment will reach a bearish peak, and that will be when
everything improves.
I will be out of town this weekend. Anyone want to guess where I am going?
I would appreciate some help in designing the cover for my upcoming book (I have almost reached a deal with a publisher.)
The following cover was designed by JesseBee:
I like it, but I don't know if it conveys the level of seriousness the subject matter.
I found this image on the web that I like a lot:
I like the idea of a photorealistic image of a house inside a bubble. The backdrop of a sky is also pretty cool.
A simpler version might look like this (although if it were upside down, it would be even better.)
I will need to design my own cover. If someone wants to take on this task, it would be greatly appreciated. I look forward to seeing what you come up with.
Unsold in 90+ days
