I find the place amusing too. Keep up the good work. I know someone who might help you with these real estate properties properties. Thanks for great post and photos.

“It is a nice bit of denial fantasy…”

Let’s assume someone pays near full price on this place. What turnip truck did they fall out of? In my recent property searches I assume that all regular listings are fantasies. The real market is in the trenches.

My wife was thoroughly impressed after meeting you and Shevy yesterday evening at the block party and reading your interview with Erika Chavez. We need more of that “midwestern ethic”.

Sorry I missed the party.  Maybe I’ll be in LA for the next one.

Where did they spend the money?  Everything looks like it did in 1978.  Maybe the new dishwasher cost 100 grad.

Look at Redfin’s sold comps.  It looks like they will probably get more than $700k for this house.  $729k is not an unrealistic listing price here, IMHO.

Whenever I see a listing that starts “NOT A SHORT SALE”, my brain automatically screams “NOT PRICED TO REALITY”.  I have never seen a listing that starts out this way that was priced appropriately to the market.  Double the market price seems to be the norm.

The only benefit of a home not being a short sale is the time/effort saved on waiting for bank approval.  Normally, I would add in as a benefit the ability to lock in the current price on the home, but with the continued drop in home prices, locking in at today’s price is a negative, not a positive.

I’m willing to be that they used the money to start a business. The kitchen, bathroom, windows, and roof have never been updated, and the furnishings are fairly spartan.

My wife and I combined make $150k not including bonuses or moonlighting and would not imagine at our income of buying a $700k home.  How much would the payments, including taxes & insurance be on the ~600k loan?  In the ‘hood of $5k/mo.  The $182.5k income req’d is 33% DTI?  If you have fed & state taxes taking ~40% (6-ss, 25-fed, 7-ca) how much disposable income does this really leave?  Is the $500 or so a month paying down principal considered the owner’s savings? 

It just seems like a stretch to me, but this listing is no different than any other.  I think one of the big ways people justify putting huge percentages of their income towards housing is the ‘investment’ aspect of it.  We have prices, but also incomes falling, but hopefully the DTI people take on also comes down.

Above post is spam, but well done spam.

So did you all drink too much at the block party and then make offers on houses last night?

And this is why, in the long term, prices in areas like Irvine will fall.  If somebody making $150k a year can’t afford a completely ordinary tract home, prices are still too high.

But in the short term, there are enough suckers out there who are willing to stretch themselves to pay $700k+ for this.  This property will sell for 95% or more of the current list price.

I just noticed on www.cnnfn.com that populaton growth in Irvine is still strong.  That might counter the drop in house prices a bit in Irvine.

I’m having that same struggle as well, with the same income as you have.  Last house I bought, in 1999, was $315K and I was making about 100K, which was a stretch to me at the time (no other debt though).  Now after selling my house in 2007 and renting, it just seems foolish to take on so much debt, for a myriad of reasons (like being able to pay for college for kids who are teens now, etc.).  I am a fed. attorney and the job is as secure as those can be (the future is uncertain for all of us), so the steady income is there…but…when I see a house like this, which is supposedly in my price range…I think “I want something that knocks my socks off at that price.”  This house (and those like it) does not do that for me.  I can’t justify spending near this much on a house, in this climate…

Unless the new people are making $200K+ income, I doubt it will help. Prices are falling to levels sustainable by incomes, and there isn’t much that can prevent that.

The FED is not overly optimistic:

SF Fed President Yellen on the Economy

Those kitchen appliances sure look like they are 70s vintage.

The place looks tired and cheap.

Well, the easy HELOC access seems to have killed homeownership as a way to build wealth for most people.  After 18 years in this home, the owners have zero equity and will walk away with nothing after commissions if they get close to their asking price.

  Its not clear why the owners MEWed themselves out of their house but its depressing to see it happen.  I’m curious - what percentage of long term owners (say 10+ years) have more than 150% of their original mortgage debt in refis and HELOCs?

Aw man!  I missed the party.  I even had it in my calendar.  I forgot about it until this morning.  Oh well.  Next time…

Has this listing been pulled?

What is the point of advertising a property as “not a foreclosure or short sale”?

As a buyer, does it matter to me if the house is an organic sale, a foreclosure or a short sale?  (I honestly don’t know the answer.)

I assume there might be a higher chance that the purchase falls out of escrow if it’s a short sale.

This housing bubble is a good cautionary tale for me.  I have been pretty horrible about money decisions in my life.  If I had scraped together and bought a house in 1999, I would not be surprised if I had ended up being a HELOC casualty.  It sure would be tempting to know you could have an extra $200,000 in your pocket by refinancing.

I dodged a bullet.

It must have just been pulled. It was there earlier.

I don’t have aggregate data for the whole of Irvine, but anecdotally, I can tell you that more than 3/4 of what is for sale has increased their mortgage. Probably 1/2 have increased it by 50%, and about 1/4 have doubled it like today’s featured property owners.

Many people do not want to bid on short sales because they take forever to close. If someone had enough equity to close without bank approval, the deal can happen much faster.

...and it’s now off the market.  It probably sold.

A home in that price range may get 50% cash offer, they’re not entry-level as they were in 2002.  I’m seeing that in my area.

How much is $100K these days?  3.5 years rent for the same home? 

Oh, I wouldn’t buy so close to a major street anyways.

I live in NC, thus the Winston & early comments.

$700k here will get you new construction in a historic downtown neighborhood at 4000sqft. 

By IR’s & most underwriter’s math $150k can afford roughly $600k at today’s interest rates.  I personally wouldn’t want to push things that hard and wonder how prevalent >33% DTI is.  I remember seeing something about the SoFL market and the average DTI in 2005/6 being over 40%. 

Another point, being relatively young, it would take 8 years for the 180k buyer to save for the dp at 10%/yr.

I view housing as a consumption expense rather than an investment.  I think that perspective changes attitudes towards how much is good to spend on housing.

Hi IrvineRenter,
I don’t mean to hijack this thread, but check out this home on RedFin, it was originally listed for 8M, now it is a tad under 3M; is this a steal/deal?

http://www.redfin.com/CA/Santa-Ana/Undisclosed-address-92705/home/3417617

Again, don’t start comparing apples with oranges… So what if NC is cheaper than Irvine.  North Dakota is likely even cheaper.

And I’ll bet you can get a big ranch for $10K somewhere in North Pakistan.

Interesting property. I haven’t seen too many luxury homes priced at $148/SF. The owner has certainly been chasing the market down. I wonder if the $2,000,000 price tag in 2006 was for the lot and if this is new construction?

North Pakistan! 

LOL.

You could invite Bin Laden over for dinner parties.

The easy money is very tempting.  My wife and I bought in ‘97 and we would receive about 2 HELOC offers per day either in the mail or dropped at our front door during the peak of the bubble.

  We fell for all the usual real estate tricks and stretched to buy with the assurances that the payments that seemed expensive would soon be affordable.  At least we lucked into a reasonable time to buy.  In the early 2000s, there really seemed to be a switch to debt as something to be managed rather than paid.  We never really bought this and that probably saved us although it is a really tempting idea.

  We almost committed a bubble double-whammy.  We had an engineer friend who almost had us convinced to HELOC and buy Conexant stock in 2000.  Luckily, we didn’t but I can certainly understand the temptation.  I guess more people than I realize did keep leveraging their homes or else those offers wouldn’t have kept coming.

WTF is up with AIG?!!!!!  up 1,500%!!!!!!!!!!!!!!
WTF?WTF?WTF?

http://finance.yahoo.com/q?s=AIG

Tell that to the sellers of $1.2 million fixer-upper Westside homes, getting multiple offers.  They make Irvine prices look dirt cheap.  Tell them their fundamentals are out of whack, tell them the Schiller Index says their homes should be worth $400K.  Tell them you need an income of 400K to buy their homes, it’ll come down.

You’ll be laughed at in Westside, with this blog’s mentality.

New buyers in good neighborhoods are buying with sizable down payments, just like they are in Westside.  We’re turning into a healthier cash market along with long-term homeownership much like the rest of the world, not a debtor’s market with home-flipping abound.

Bwhahaha.

From Yahoo right now:

2:49pm ET: 18.1998 (+)17.0398 (1,468.95%)

20 - 1 reverse split

Hmmm…it’s built on the side of a hill.  I wonder if it’s structually unsound.  Or maybe the owner is in financial distress for non-housing related reasons (since it doesn’t seem to be a short sale) and needs it sold ASAP, no matter what the price.

Nancy,

How sustainable do you think your above examples are?  Do you believe that home prices in that area can be sustained through a protracted period of 12% unemployment?  How big is the pool of buyers who legitimately have a sizable down payment?

There certainly are some people willing, and able, to pay cash to trade up.  My guess is they will lose most of their investment (downpayment) in value.  If they are lucky enough to have the cash to throw away, good for them.  Most people don’t feel like throwing $100k down the toilet.

That would do it.  Should be up 1,900% then, though.

Down 20% in real terms, and dropping.  AIG is toast.

IrvineRealtor or Ipop on the forums has charted the course of the the downpayment amounts as this collapse has progressed. The amounts are decreasing. The cash (or primarily cash) buyers are what kept things going for a long time, but they are also running out. At least for Irvine.

Interesting.  Bin Laden educates on the FUNDAMENTALS of Divine Law, while this blogger educates us on the FUNDAMENTALS of Real Estate valuation.

The world is Black and While, according to some.  You must conform to their model, or you’re wrong, misinformed, misguided.  Evangelize Bad News until the masses concede.

There’s a 300 acre land in Mojave desert for $30K, it’s perfect real estate for the like-minded.

“... but they are also running out.”  Show me the stats, or let me borrow your crystal ball.

AIG’s main purpose is to funnel taxpayer money to CDO/CDS buyers;  it’s sending the settlements to parties offshore… parties you can’t tax or ever get your money back from.  And guess what, the administration won’t remove their loophole.  Recall what happens when “Everyone’s In It?”

Too big to fail…. indeed.  Only when it milks taxpayers.  Never too big to fail the other way around, paying off the taxpayers for fraud (e.g. Enron).

The LA area is benefitting from high times in the entertainment industry.  As has happened in past recessions economic doldrums drive people towards the movie theater.  I have been trying to move closer to my office in the Burbank area and I can tell you that prices are high, competition is tough and realtors are their arrogant, snotty selves.

But this just proves the point.  The reason that Irvine is not like this now is precisely because the job situation here is the polar opposite.  The high paying RE-linked jobs are gone.  The corporate HQ’s are cutting back dramatically.  UCI is cutting salaries and hiring fewers professors.  Prices have to come down to meet the buying power of local incomes, they are nowhere near there yet.

The rotten in Irvine are being weaned away from their properties, cast into life-long lives of living with their moms… or being disgruntled renters living in shady holes, with no hopes of moving up.

The new buyers are cleaning up the mess these money-challenged people left behind.  They’re improving the social fabric and outlook for this town.  Only serious savers with immense fiscal discipline can buy here now.

Kind of like the flopped flippers in Irvine and vicinity that gambled and lost with other people’s money.  But did they really lose?

UCLA is cutting salaries and letting go of many temp staff, Entertainment professionals were financially harmed by long-term strikes, many left town at that point and never returned.  So…

It all depends on how you look at the glass.  It’s always half-empty, by IR fans.  It’s wishful thinking.

While Europe falls into deflation, people waited and waited to see the Euro at $1.4 go back to fundamental valuation of $1.1.  When will it happen? 

Ah, this story is beginning to get very old.

Many made wheel-barrel-loads of money from the housing bubble.  I bet those people are mainly living in the west… maybe in the OC, the epicenter of the Subprime Mortgage Industry.  I bet there’s a few documentaries on that.

This is how CapitalismWorks - capital moves away from the masses, accumulates into the hands of a few.  Then there’s some type of revolt.

OK, the first post by Nancy fooled me, but this post is troll work.  Please don’t feed the troll.

“Only serious savers with immense fiscal discipline can buy here now.”

...as it should be.

Nancy, you seem to be a little confused. He said that prices are falling to levels sustainable by incomes, not that they have fallen there already.

In a nutshell, the premise, everything in Irvine must fit the formula, if it doesn’t, the world is wrong.  The formula is right.

Schiller Index predicts Metro area will decline by X% in 2009.  To the logic challenged, this implies the home I want to buy must go down by X% in 2009.

That’s all what this blog’s wishful thinking is about.

I live on the hill across Crawford Canyon from this house, and it’s been there for the decade that we’ve lived here, so it’s not new construction.  It’s pretty damned ugly to look at, though.  And, seriously, who needs 20,000 square feet?

I assume IR’s ripping on homeowner misery is perfectly healthy and commendable in your perspective?  What if God forbid, he is victim of a medical issue that leaves him penniless, into heavy debt, and his short-sale property is paraded on this blog with assumptions of homeowner debt addiction and abuse? 

One must be willing to receive what one dishes out.

Most of what I’ve read is black-and-white mentality, false logic, fantasy thinking.  It needs a jolt of reality.  It’s burried deep in its own dark cloud.

It’s called “being realistic” you fool.  The sane thinker is willing to analyze the world around him and accept that things are not always great.  Now is one of those times.

I love it when a Pollyanna shows up and cannot find a way to argue other than to accuse the other side of not being a “pothative” thinker.

You have to watch out for the Pollyannas though as they are all more than willing to risk your security with their faith in “pothative” thinking.  Why just think about how optimistic those rebels under Pickett’s division must have been as they charged the wall at Gettysburg, thinking happy thoughts about how their shock and awe salvo of cannon fire certainly must have decimated the union troops on the other side. 

Whoops!  Too bad they didn’t have a negative nancy on their side to stand up and say “What if we missed?”

In a nutshell, the premise, everything in Irvine must fit the formula, if it doesn’t, the world is wrong.  The formula is right.

Straw man.  This has never been claimed by anyone.

Schiller Index predicts Metro area will decline by X% in 2009.  To the logic challenged, this implies the home I want to buy must go down by X% in 2009.

Wrong.  That is an average for the aggregate area and says nothing about any one house in particular.  While I am just as skeptical of these predictions as you might be, they are forcasting these numbers based on the current trends which do have some merit; their fault is in assuming that the future is 100% representative of the past.  If you want to argue it like that then I am the first to agree with you, but if you are just going to huff and puff and rip up a bunch of straw dogs - you don’t get my respect.

That’s right.  That is how the business model works at the moment.  Who did you vote?  If you voted for Diet Coke or Diet Pepsi then it’s your fault for buying into the media’s two chosen candidates.

Huh? Wha? So since I don’t believe you when you say that your neighborhood will defy the laws of economics I’m some kinda of extremist?  A terrorist?  Take you crazy somewhere else lady, we’re all full here.

“Schiller Index predicts Metro area will decline by X% in 2009.  To the logic challenged, this implies the home I want to buy must go down by X% in 2009.”

Total straw man. Nothing of the sort has been claimed.

Again, you are missing the point. Noting what the market is like right now in 2009 is not particularly interesting or useful. Intelligent and well-reasoned speculation about what the market will be like in the next few years is.

Irvine doesn’t follow formulas.  Formulas are modeled based on reality; reality chooses whatever path it wishes to take based on demand and supply, and reality has many shades… not black and white, or north or south.

Comment saved on your battle analogy.  It’s way “out there,” hopefully not coming from a radical fundamentalist with violent fantasies.

Many made wheel-barrel-loads of money from the housing bubble

Wrong.  The biggest profiteers were working on
Wall Street and living the good life back east.

This is how CapitalismWorks - capital moves away from the masses, accumulates

Not true.  The system works when you have a strong middle class.  The problem that you are witnessing is the product of the reduction in the middle class as cost of living has increased, wages stagnate for the working man, jobs are sent over-seas, while the corporate buttheads at the top continue to pigishly take more for themselves.  It’s a cultural problem.

Then there’s some type of revolt.
No there isn’t.  There will be no revolt as long as KFC is still serving up the goods and American Idol is being spoon-fed into the brains of the masses that are more into their gadgets than a newspaper.  Americans are very lazy and have it too well compared to the rest of the world even within a recession.

Oh wait, you’re right.

IR says homes should not be worth more than x% of your income, or if a home rents for $y, then it should not sell for more than $z.

Whichever suits you, they’re all linear and lame formulas, and he’s trying really hard to fit the reality of Irvine market into the formula, on this blog, ensuring to ignore all contrarian indications. 

That’s called data mining… you can support any “truth” you wish via data mining.  That’s how the story of Iraq’s WMD’s was sold to the American public… stovepiped data mining.

Then why all first time buyers using 3.5% FHA loans?  What are the ramifications of allowing such bad loans to be backed by the tax payer?  These will be the next generation of defaults and it will be the US gov taking the enormous losses.

While looking at the pictures of the house I can’t help but wonder about the parties that went on at the “nite club” in this house.  I half expected to see a picture of Al Pacino in front of a bowl or cocaine a la Scarface….

And can you count the typos/spelling errors/poor grammar in this listing:

views views views from nearly every room. this modern enterrainment home has a full disco/ nite club, with large bar casino large outdoor decks off nite club with pool. movie room sushi bar outdoor kitchen by pool with full bath. private maid wing for live in, master suit with 2 his and her baths and walk in closits, spa sauna and 2 steam rooms. this home has too much to list views are stunning with windows from floor to ceiling.

Comment saved on your battle analogy.  It’s way “out there,” hopefully not coming from a radical fundamentalist with violent fantasies.

Ah yes.  Isn’t it fun to engage in internet fantasy?  To sit there and imagine that the person the other end is frothing at the mouth, cackling wildly in a basement somewhere while playing Russian roulette all by himself?  It’s quite the hoot!

Irvine doesn’t follow formulas.  Formulas are modeled based on reality; reality chooses whatever path it wishes to take based on demand and supply, and reality has many shades… not black and white, or north or south.

They are being based on statistical trends which are using historical information that reflects the state of the economy at a specific point in time - that is not mathematical voodoo to understand.  If it has been raining for the last two days at 1 inch per day and it looks like it is going to rain for 2 more days then it is not a total crackpot idea to guess that we may get 4 inches by the time it is over.

Of course, I may be totally wrong and the rain may last 1 day or 100 days or it may rain a lot today and very little tomorrow.  The fault is in extrapolating the future which is unknown but it does not mean that the guess is completely unfounded by some wizard in a tower somewhere.

Okay, so what’s the GRM cut off then? How much more expensive does need to be until people say I’d rather rent?  Since we’re not going back to “gambling” loans, there needs to be threshold.  So what’s the threshold, that’s what IR is showing us everyday and anlyzing what the results of dangerous house gambling will do your financies.  People are still gambling today, the kool-aid is still fresh enough for people to over stretch their financies, gambling that appreciation will save them even if their rental investment is currently negative in cash flow.

IR says homes should not be worth more than x% of your income, or if a home rents for $y, then it should not sell for more than $z.

You may not like it (and I certainly do not either) - but these are methods that have been used by banks to determine a safe bet on a potential slave’s ability to repay a loan.

It’s not that hard to look at the median income of an area and be able to come up with a rough estimate of what the median house should sell for.

If the banks return to this model of lending in order to stop their losses then you can guess what the house will sell for.

Nobody is saying what it should sell for in a perfect world - it’s what the house should sell for under the model that has worked for the lenders in the past.

Again, IR is using his formulas (as you call them) to make predictions about THE FUTURE of the Irvine market. Of course these formulas don’t come close to representing what is currently going on… that’s the whole fraking point of this and every other housing bubble blog. Get a clue.

To quote yourself, “There are 10 kinds of people who understand binary. Those who do and those who do not.”

Seems the world is divided in halves everywhere… North/South, Zeros/Ones, WallStreet’s rich in the East / Misery in the West…

Did you ever manage to “crack the code” or is the code managing to crack you? 

Forgive me for noticing IR’s fans are like-minded.

But you ask the same questions, “what’s your GRM cutoff, then.  Must we see the world in terms of GRM?  How often has GRM applied to prime neighborhoods?  Never.  I’m saying don’t extrapolate from Schiller indices and GRMs.  I don’t know what IR is up to, but I smell unfair advantage (he’s associated with a real-estate agent, after all) dressed up with articles trying to win public sympathy. 

If you think really hard, you’ll find the answers to your questions… they aren’t necessarily found here in this blog.

My stance has always been, don’t buy in my neighborhood unless you’re ready to make a commitment to retiring here or staying at least 10 years.  And in those durations NO ONE loses more than renters.  Renters are the prime suckers of the RE industry.

So, in the world of real estate according to David of AZ… no bank would lend in Westside, LA.

You don’t like my 10 kinds of people?

What is with the “fans are like-minded” remark? 

What do you believe is going on?  Is IrvineRenter dressing up in robe and calling us in for a bible reading on the day’s brainwash?

IrvineRenter is a raging bull compared to my assessment of the situation.

My stance has always been, don’t buy in my neighborhood unless you’re ready to make a commitment to retiring here or staying at least 10 years.

Take it easy there, Nancy - you are blowing lots of smoke.

My stance is even more Draconian than yours.  I say do not borrow one penny more than you are willing to repay via your own blood, sweat, and tears at risk of being thrown into debtors prison if you default.

That would bring prices down and sober up our buyers/borrowers real fast.

It won’t happen though because the big boys running the show are making big fat bank off of the average moron’s appetitite for risk and hesitance to question “the system”.  Scaring off the borrowers is bad for business - the government will not stand for that which is why you see the neutered system we have today.

The other day I thought Nancy was interesting. Now I’m getting tired of her (maybe him, who knows who or what lurks behind a screen name).

Feel free to tune back into TMZ - it’s much more profound than this blog’s material.

Soft-spoken David of AZ:

The government has given so much assistance to American homebuyers, that you will never see in any other country in the world, and that has no precedence anywhere in the world.  Tax-free capital gains, interest deductions, 40-yr conforming loans, with 3% down FHA/VA loans, Fannie/Freddie, direct tax credits this year.  The government has literally started to buy GSE debt that was once invested by Sovereign Wealth Funds.  They pave the ground on which we walk with gold, incentive after incentive, with easy credit.

All they asked from the American consumer was to invest the money responsibly.  We blew it hard and manage to blame everyone but ourselves.  I suppose the banks forced us to take out HELOCS.

There’s no end to our complaints, homes are inaffordable, too expensive, they’re not safe investments anymore…  while the Canadian gets none of our incentives and has low default rates, the Germans have only a trival home ownership rate and their renters don’t have lofty dreams of flipping homes for a living.

Now walks in the Asian saver, who is now importing back the inflation we exported to them by our outsourcing and their undervalued currency.  They buy up our homes nearly all cash, put high-aptitude children to our schools, raise our neighborhood’s desirability and our neighborhood’s sale prices, and they feel grateful for everything they have here, that they didn’t have at home.  They even buy our foreclosures, for the same homes that bought their manufactured plasma TVs. 

It’s a sad picture… and we’ve not seen the end of it yet.  It’s a major adjustment and redefinition of the middle class, in progress.

So if it cost me 3-4x to buy then rent, I’m a sucker for renting?  You remind me of someone who said that the value of their home will never go down because they’ll never have to sell, but then go on to say how much their home is worth.  Bizarre.

1.  3% FHA is not happening in prime neighborhoods.

2.  Don’t throw the baby out with the bathwater.  First-time homebuyers need an opportunity to become debt/rent-free.  Not all such debt is bad.

Assuming you can afford it comfortably, why not buy in neighboring towns, mortgage it with a 15yr and get on with life?  I’m sure you’ll find great deals elsewhere, why the fixation with Irvine?

Nancy, don’t worry whether it makes sense or not. Just go ahead and buy as many houses as you can right now or you will be priced out forever Remember that they are not making any more land

Let the people in this blog suffer by renting for thousands less a year instead of being proud homedebtors, I mean owners.

Hi Winstongator,

tonyE here is demonstrating typical CA chest thumping.  To Californians, there’s nowhere better to live, regardless of how miserable you would be sleeping on a futon and living off ramen while trying to afford a pitiful outdated cottage.

There’s a lot of that on this blog.  You get used to it, I guess.

I see you’re from NC.  For my own amusement, I started a bubble blog for Chapel Hill, following in IrvineRenter’s footsteps.

Chapel Hill Bubble Blog

Hopefully you’ll crawl back under the rock from whence you came - and soon.

Nancy,

Thank you for livening up the discussion. It is good exercise for everyone to remember the reasons they believe house prices have not stabilized and will continue to decline.

Perhaps your neighborhood is “different.” Many people have come through here with that belief. Only time will tell who is right. You appear to be wagering on the “long” side of the transaction. I do not envy your position.

There is plenty of data on this blog in the analysis posts, and there is a spreadsheet in our forums with the closing data of every transaction in Irvine for the last year and a half. Plus Ipoplaya’s site has plenty of data.

From what I have observed, you appear to be unmoved by the rational arguments presented and prefer to mock those who disagree with you. People will tire of that quickly.

BTW, do you know an Irvine resident named Janet?

I see I will have to speak very slowly for you to understand.  What does the USD/EURO exchange rate have to do with the fact that there is a scarcity of high paying jobs in Irvine?

I am confused now. Are these properties really selling for these prices?

Agreed on the 20k part.  This house apparently has a full fledged bar/restaurant/casino inside it.  Unless you are Hugh Hefner, talk about overkill.  Heck, I think 3,000 sq ft is overkill.

I moved to this house three years ago when homes on this block were selling for $900k.  $900 freaking thousand dollars for a three bedroom stucco box with a shared wall because too many people were taking advice from cretins like you.  Three years later these houses are not selling at any price the ‘in-denial’ owners are willing to offer so one-by-one the banks are taking them over.  The moving companies all know the way to our alley.  If I had purchased this house I would be looking at the complete loss of my downpayment, a $700k note on a house not worth $600k and the joy of over $12k a year in taxes, mello roos and double association dues.  Thankfully I am such a loser that I avoided this fiasco, have my money in the bank and have the luxury to make my next move on my own terms.  You know what though?  I am going to make sure I am going to congratulate the desperate home debtors on my street for their incredible wisdom.

With due respect, the number of HELOC abusers far outnumber people with genuine “medical issues”.

Nancy = CapitalismWorks?  Now I get it.  Nice prank.

Forget the general election…the primary is where it’s at…and the last presidential campaign had about twenty candidates in the primaries of the two major parties, and at least three or four in each party who were serious contenders.

Third party candidates usually lose because nobody likes what they stand for and/or thinks they are personaly loony tunes, not due to the “media”.  The media would LOVE a three-way race in the general election-makes things that much more unpredictable and therefore exciting, which boosts ratings.

Nancy:

These are serious questions.

a. As you say, Irvine is different. Fine. What, according to you is the DTI ratio Irvine home buyers bear?

b. What is the percentage of cash they come in with?

c. Per Wikipedia, the household median income is 111K per year. With a 4x multiplier for the amount of loan they can carry, it comes to 444K. (That’s stretching it as it is) Even if they come in with 200K cash, it all adds up to 644K.

Would you agree with the math above?

d. How much longer do you think people will come in with 200K cash for this to continue?

In soviet Irvine, houses buy you!

“First-time homebuyers need an opportunity to become debt/rent-free.  Not all such debt is bad.”

That opportunity will present itself if the government gets out of the hom-buying business.  All “help” by the government to home buyers gets priced into the market increasing home prices.  If you need proof for this phenomenon, look no further that the latest housing bubble.

Unless you pay cash for your house, you’re just another renter. A renter that pays property tax and maintenance and HOA fees and PMI etc etc…

Yes.  Here’s Redfin’s computer generated sold comps.  These all are within one mile of this house and sold within the last six months, including three sold in May:

Nearby Similar Sales

Closest homes of similar size and type, and sold within the past six months:

$685,000
46 Redhawk
Sold on Feb 18, 2009 0.22 miles
4 bd / 2 ba
1,946 Sq. Ft. 
$675,000
84 Nighthawk
Sold on May 21, 2009 0.23 miles
3 bd / 2 ba
1,895 Sq. Ft. 
$615,000
5 Gold Blf
Sold on Mar 26, 2009 0.4 miles
3 bd / 2 ba
1,870 Sq. Ft. 
$749,000
1 Suncreek
Sold on Mar 24, 2009 0.58 miles
3 bd / 2 ba
1,803 Sq. Ft. 
$735,000
11 Whistling Swan
Sold on Mar 12, 2009 0.63 miles
4 bd / 3 ba
2,254 Sq. Ft. 
$750,000
48 Shearwater
Sold on May 22, 2009 0.73 miles
4 bd / 3 ba
2,022 Sq. Ft. 
$720,000
21 Winterbranch
Sold on Jan 28, 2009 0.82 miles
4 bd / 2 ba
1,946 Sq. Ft. 
$567,900
3941 Banyan St
Sold on Feb 17, 2009 0.86 miles
4 bd / 2 ba
2,318 Sq. Ft. 
$650,000
5366 Royale Ave
Sold on May 05, 2009 0.87 miles
4 bd / 2 ba
2,086 Sq. Ft. 
$605,000
14731 Doncaster Rd
Sold on Apr 08, 2009 0.91 miles
4 bd / 3 ba
2,000 Sq. Ft. 

Range: $567,900 - $750,000
Average: $338/Sq. Ft. 
This home at $338/Sq. Ft.: $719,304

That last paragraph is the important part.  According to the prices of recently sold houses of about the same size within a mile, this house is worth $719k.  So listing it at $729k is not a stretch at all.

Even if you just look at the houses sold last month, they still comp out to about the same dollar per square foot.

every bubble has their Janet’s / Nancy’s… they are both entertaining and tragic at the same time….. human nature is a wild thing, often stubbornly self destructive for no apparent reason other than vanity…

I’ve read this thread, and I have one quick point!

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Nancy, your brain is sluggish.
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There, now it’s time to get to my glass of Merlot.