The Irvine Housing Blog is being featured in the print edition of the Irvine World News this weekend. For any new visitors that found us from this article, I like to say welcome.
The Irvine Housing Blog is a blog devoted to real estate in Irvine, California. As such, we analyze local and national issues that impact prices in our housing market. Since its inception in September of 2006, we have been bearish on real estate in Irvine. The reasons for our bearishness can be found in great detail in the analysis posts found both in the sidebar and on the analysis tab above. These posts are organized into the book, The Great Housing Bubble. We are not a bubble blog, and though we are often referred to as part of that community, we will only be bearish as long as prices are elevated above fundamental valuations and market conditions point to continued deterioration in prices. At some point, we will turn bullish.
In early 2007, we published a series of predictions for Irvine median house prices. The red line in the chart above is the original prediction, and the green line represents what happened through April of this year. As you can see, we have a reasonable record with respect to forecasting future median home prices.
We are a vibrant community of more than 3,000 daily visitors. Our forums have over 1,500 members and over 78,000 posts. Many Irvine residents come to our forums looking for information on Irvine housing, discussions about the economy, politics, or just to hang out and be part of the community. The forums are free to join, and everyone is welcome to participate.
In a typical post, we examine a property for sale in Irvine in our own irreverent, snarky style. There is usually a featured song for everyone's entertainment, a preamble with discussion or analysis of market issues often with a tie-in to the featured song. After there is a presentation of the featured property with two pictures (if available,) and a breakdown of the asking price, the income requirement and downpayment requirement based on traditional financing, the monthly equity burn (the amount the buyer will lose each month assuming prices drop 10% a year for the next 2 years), the original purchase price, the date of purchase, and the address with a link to the listing on Redfin. Below the fold, there is more detailed property information from Redfin and the MLS including the property description. The quality of the writing on MLS listings is often horrendous, and we will ridicule this descriptions just for the fun of it. Then we go in to detail on the mortgage debt on the property showing how much each of the parties to the transaction is going to lose in the eventual sale. The stories the property records reveal are often quite illuminating and instructive -- instructive on what not to do.
If you are new to the site, we encourage you to look around, and please join in the fun by adding your own "astute observation" to the post below. Welcome.
For those of you who are regulars to the site, go check out the article in the Irvine World News print edition. We will also be featured in the OC Register on Wednesday. As a reminder, out IHB get together and book signing will be this Wednesday, November 12, at 6:30 PM at JT Schmids at the District. Everyone is welcome to attend.
It has been almost 7 months since our last call for lurkers to come out of the shadows. For all you readers out there who have never posted before, please say
hello. We know you are out there. This is another chance to break the
ice...
Welcome to the jungle We got fun 'n' games We got everything you want Honey we know the names We are the people that can find Whatever you may need If you got the money honey We got your disease In the jungle Welcome to the jungle Watch it bring you to your shun knees, knees I wanna watch you bleed
Welcome to the jungle We take it day by day If you want it you're gonna bleed But it's the price you pay And you're a very sexy girl That's very hard to please You can taste the bright lights But you won't get them for free In the jungle Welcome to the jungle Feel my, my, my serpentine I, I wanna hear you scream
Welcome to the jungle It gets worse here everyday Ya learn ta live like an animal In the jungle where we play If you got a hunger for what you see You'll take it eventually You can have anything you want But you better not take it from me Welcome to the Jungle -- Guns n' Rose
The election is coming up in a few days. Has all the bull$hit being thrown around left you dazed and confused? I got a call from Robo-Bill Clinton today. I felt so special. I am planning to sit down with my California General Election voter information guide this weekend and make up my mind on how I plan to vote on the various initiatives. Since the topic of the weekend is politics, I thought it would be good to explore some of the politics of the housing bubble.
There are many ideas floating around the blogosphere regarding what can and should be done about the housing crisis. I have received a couple of emails recently from people with ideas on changes to our current system. One is from a local realtor named Shevy Akason who is championing legislation that would help the flagging housing market and get it on more solid ground (His blog is here). This isn't a bailout, and although I think there are some issues, it is a proposal worth examining:
The proposed bill adds provisions to the current IRS code that allows for SEP IRA deductions outlined in IRS Publication 560 to be expanded to cover HEA (Home Equity Accounts). The bill will allow prospective homeowners to put money into a designated HEA (Home equity account). This money must be used for the down payment or closing costs on a primary residence. In addition, this legislation will allow current homeowners that have less than 50% equity to place money into an HEA account designated for homes they purchased after January 1, 2000 and before Jan 1, 2009 or 180 days after this legislation takes affect, whichever is later. Finally, it allows current homeowners that participate in this program and remain current on their mortgage to go back as far as 2000 and claim an income tax deduction on any money paid toward the principle of their home including their original down payment. To participate in this program homeowner must be in or re-finance into a fully amortized fixed rate 1st mortgage. The legislation should take affect immediately upon passing and be limited to 360 days with options for extensions.
Above is merely the summary. The PDF contains more information. It is an interesting proposal. Personally, I like the idea of a tax advantaged savings account for downpayments. However, I don't believe expanding our subsidization of real estate through the tax code is a good idea. We already oversubsidize real estate with the home mortgage interest deduction. Encouraging debt in this way is part of the problem. I do like how the proposal encourages saving and paying down mortgage debt. I do think this program would not do much for those on the margins who are likely to go into foreclosure. The problem these people have is too much debt and too little income. To qualify for the program as outlined, people would need to refinance into a fixed-rate mortgage. I like that idea, but very few marginal borrowers can afford to do this, and those who are distressed are underwater and could not obtain fixed-rate financing even if they could afford it. Basically, this proposal would help those who need it least.
The proposal is not a fix for the foreclosure crisis. There is no fix. It does address the problem of saving for a house and the use of exotic financing, and I like that.
It has been a year-and-a-half of foreplay here on the Irvine Housing Blog. It has been a long time coming, but the book, The Great Housing Bubble, is finally here.
I am pleased to announce we will be having an Irvine Housing Blog party and book signing at 6:30 on Wednesday, November 12, 2008, at JT Schmids at the District. This is your chance to meet the people behind the screen names.
You have plenty of time to order and receive a copy of the book from Amazon. I will also have a large but limited number of books available at the signing. These will be available for a $15 "donation" to the IHB. You are under no pressure or obligation to buy a book or have it signed. All who wish to be a part of the IHB community and meet others in the community are encouraged to attend.
I hope to see you all there.
Its been such a long time I think I should be goin, yeah And time doesnt wait for me, it keeps on rollin Sail on, on a distant highway Ive got to keep on chasin a dream Ive gotta be on my way Wish there was something I could say.
Well Im takin my time, Im just movin on Youll forget about me after Ive been gone And I take what I find, I dont want no more Its just outside of your front door.
Its been such a long time. its been such a long time. Foreplay/Long Time -- Boston
BTW, We have a private room, and although this is publically announced, it is a private party. Agitators will be asked to leave.
