The thesis of their report doesn’t explain the Nevada and Arizona experience, does it?
There is a kernel of truth in the paper’s conclusions. The restrictive growth management does cause short term supply shortages that can serve as a precipitating factor to a housing bubble; however, just as a spark does not necessarily cause a fire, restrictive growth management does not necessarily case a bubble. Without free money, a bubble is not going to inflate.
Posted by Gemina13 on 10/24/09 at 07:24 AM
Ugh. Modernist, if not Brutalist, architecture at work.
Posted by Sue in Irvine on 10/24/09 at 07:57 AM
7 Heritage…ok ugly outside. But, they did a good job inside. They did the basic work to help sell it. I’m sure it was crap inside before. The only thing I think they missed were new windows.
BTW…we just got new, beautiful windows installed yesterday. We did the back of the place(patio side) 3 years ago, and yesterday we did the 6 windows on the front and side. I’m a happy lady today
If you are reading today, per your request from last weekend, I am planning on adding an amortization table to the calculator that includes the time-to-payoff feature. When I am done, you can see the impact of increasing payments with periodic increases in pay. I was hoping to have done it this last week, but it didn’t happen.
There have been many signs of optimism on the housing front in recent weeks, with the Case-Shiller Home Price Index showing an unprecedented reversal from negative to positive growth in the summer months.
We’ll also be getting a string of data on the home front this week, with housing starts and existing home sales for September due tomorrow and Friday respectively.
On Friday, “Closing Bell Access” got up close with Robert Shiller is Professor of Economics at Yale University and Chief Economist and Co-founder of MacroMarkets LLC. Shiller is also the other half behind the Case-Shiller U.S. Home Price Indices. (Watch video for full interview).
Maria Bartiromo asked if this uptick was a result of the first time home buyer credit. Shiller replied that he wasn’t sure, given that “we’re seeing other signs around the same time.” Those signs include the record turnaround in the stock market and a major reversal of confidence.
And while many commentators may be concerned of another housing bubble forming. Shiller had this to say, “I look at the data and think it might be happening because it’s such a sudden turnaround. But my instincts say no.”
Shiller also said that when you look across the country, in cities like Las Vegas or Phoenix, that were the most overheated, these parts have yet to see a rebound.
Finally on the important question on mortgage rates and how much longer they can remain this low. Shiller ended by saying that “the Fed is still buying up mortgage… and they said they’ll extend that into next year, but when that stops, if it does stop, that’s when we might see a major change in the market.”
That is the big unknown, isn’t it?
Posted by tonye on 10/24/09 at 09:55 AM
(1) Three bedrooms with only one shower is non starter.
(2) The midrise one might make a good rental. 2 bedrooms, 2 baths near IVC and reasonably close to UCI. 300 bucks a month HOA plus 1500 payment, assuming a 20% down or so…. What would be the rental on that one?
Posted by newbie2008 on 10/24/09 at 05:12 PM
tonye,
For non-owner occupied, i.e., rental, the interest rate is about 1 to 1.5% higher than owner occupied. I got stuck with a non-owner occupied rate because of an existing lease. Refinanced a half year later as owner occupied, but had to pay for title insurance, recorder, points, etc.
say:
At 6.35% interest that would cost $2300 just for interest,tax and HOA. Then add opportunity cost on the 20%, vacancies, repairs, fees, a depreciation (replacement expenses). Also lower prices for the property in the future. It’s not likely a good rental investment. It only makes sense if the property value is going up.
Posted by Henry Bayer on 10/25/09 at 12:42 AM
I like your Cato link that says that the bubble was fostered by “restrictive growth management”. So sprawling overbuilding in Nevada and Arizona was not caused by free government money channeled into the housing market by Wall Street?
Thanks IHB, I learn something new every day.
Posted by tonye on 10/25/09 at 10:28 AM
Have you seen the construction they did in LV and Phoenix?
Heck, down in Henderson and boulder City I saw developments IN THE MIDDLE OF THE DESERT with a huge 12/15 foot wall surrounding the whole thing and the houses crammed inside as bad as in Irvine.
I guess the walls were there to cut down on sand storms or maybe create a private Idaho sort of state of mind where plenty of irrigation created their own oasis in the middle of NOWHERE.
However, it wasn’t like they were building homes like around Lake Los Angeles east of Palmdale… there you pretty much see homes in the middle of their own 5/10/100 acres of desert.
The developers in Nevada and Arizona tried to rebuld OC in the middle of the desert. They crammed homes together in the middle of nowhere.
Odd, huh?
I guess it’ll make it easier to bulldoze them all and return the place back to the desert.
Posted by newbie2008 on 10/26/09 at 08:29 PM
NV is mostly owned by the US govt. especially near LV. How many sand storms occur per year and how many feet of sand is accumulated against the walls? Why even bulldoze them. Let the sand cover them and in 100 years they will be considered historical ruins. :}
A condo near a college is good if your child or yourself will be moving in (owner occupied) for the lower rates and money you will spend anyways. But this one will not generate enough free cash flow for a non-owner occupied loan.
Posted by newbie2008 on 10/26/09 at 08:34 PM
The land lease is listed as “fee.” When is the lease up and what will be the new monthly payment?
Is the land still owned by the Irvine Company?
Posted by fee = fee simple on 10/26/09 at 08:45 PM
I think “fee” means “fee simple” which is (from american heritage dictionary) means: “Private ownership of real estate in which the owner has the right to control, use, and transfer the property at will.”. This is to say it’s owned - not leased.
Posted by IrvineRenter on 10/25/09 at 07:10 AM
The thesis of their report doesn’t explain the Nevada and Arizona experience, does it?
There is a kernel of truth in the paper’s conclusions. The restrictive growth management does cause short term supply shortages that can serve as a precipitating factor to a housing bubble; however, just as a spark does not necessarily cause a fire, restrictive growth management does not necessarily case a bubble. Without free money, a bubble is not going to inflate.
Posted by Gemina13 on 10/24/09 at 07:24 AM
Ugh. Modernist, if not Brutalist, architecture at work.
Posted by Sue in Irvine on 10/24/09 at 07:57 AM
7 Heritage…ok ugly outside. But, they did a good job inside. They did the basic work to help sell it. I’m sure it was crap inside before. The only thing I think they missed were new windows.
BTW…we just got new, beautiful windows installed yesterday. We did the back of the place(patio side) 3 years ago, and yesterday we did the 6 windows on the front and side. I’m a happy lady today
Posted by IrvineRenter on 10/24/09 at 09:15 AM
Yes, they did fix up the inside on that one. I hope you enjoy your new home improvements.
You will find next week’s posts interesting. I am profiling short sales and REO in Woodbridge exclusively next week.
Posted by IrvineRenter on 10/24/09 at 09:18 AM
Cara,
If you are reading today, per your request from last weekend, I am planning on adding an amortization table to the calculator that includes the time-to-payoff feature. When I am done, you can see the impact of increasing payments with periodic increases in pay. I was hoping to have done it this last week, but it didn’t happen.
Posted by IrvineRenter on 10/24/09 at 09:20 AM
Shape of the Housing Recovery
There have been many signs of optimism on the housing front in recent weeks, with the Case-Shiller Home Price Index showing an unprecedented reversal from negative to positive growth in the summer months.
We’ll also be getting a string of data on the home front this week, with housing starts and existing home sales for September due tomorrow and Friday respectively.
On Friday, “Closing Bell Access” got up close with Robert Shiller is Professor of Economics at Yale University and Chief Economist and Co-founder of MacroMarkets LLC. Shiller is also the other half behind the Case-Shiller U.S. Home Price Indices. (Watch video for full interview).
Maria Bartiromo asked if this uptick was a result of the first time home buyer credit. Shiller replied that he wasn’t sure, given that “we’re seeing other signs around the same time.” Those signs include the record turnaround in the stock market and a major reversal of confidence.
And while many commentators may be concerned of another housing bubble forming. Shiller had this to say, “I look at the data and think it might be happening because it’s such a sudden turnaround. But my instincts say no.”
Shiller also said that when you look across the country, in cities like Las Vegas or Phoenix, that were the most overheated, these parts have yet to see a rebound.
Finally on the important question on mortgage rates and how much longer they can remain this low. Shiller ended by saying that “the Fed is still buying up mortgage… and they said they’ll extend that into next year, but when that stops, if it does stop, that’s when we might see a major change in the market.”
That is the big unknown, isn’t it?
Posted by tonye on 10/24/09 at 09:55 AM
(1) Three bedrooms with only one shower is non starter.
(2) The midrise one might make a good rental. 2 bedrooms, 2 baths near IVC and reasonably close to UCI. 300 bucks a month HOA plus 1500 payment, assuming a 20% down or so…. What would be the rental on that one?
Posted by newbie2008 on 10/24/09 at 05:12 PM
tonye,
For non-owner occupied, i.e., rental, the interest rate is about 1 to 1.5% higher than owner occupied. I got stuck with a non-owner occupied rate because of an existing lease. Refinanced a half year later as owner occupied, but had to pay for title insurance, recorder, points, etc.
say:
At 6.35% interest that would cost $2300 just for interest,tax and HOA. Then add opportunity cost on the 20%, vacancies, repairs, fees, a depreciation (replacement expenses). Also lower prices for the property in the future. It’s not likely a good rental investment. It only makes sense if the property value is going up.
Posted by Henry Bayer on 10/25/09 at 12:42 AM
I like your Cato link that says that the bubble was fostered by “restrictive growth management”. So sprawling overbuilding in Nevada and Arizona was not caused by free government money channeled into the housing market by Wall Street?
Thanks IHB, I learn something new every day.
Posted by tonye on 10/25/09 at 10:28 AM
Have you seen the construction they did in LV and Phoenix?
Heck, down in Henderson and boulder City I saw developments IN THE MIDDLE OF THE DESERT with a huge 12/15 foot wall surrounding the whole thing and the houses crammed inside as bad as in Irvine.
I guess the walls were there to cut down on sand storms or maybe create a private Idaho sort of state of mind where plenty of irrigation created their own oasis in the middle of NOWHERE.
However, it wasn’t like they were building homes like around Lake Los Angeles east of Palmdale… there you pretty much see homes in the middle of their own 5/10/100 acres of desert.
The developers in Nevada and Arizona tried to rebuld OC in the middle of the desert. They crammed homes together in the middle of nowhere.
Odd, huh?
I guess it’ll make it easier to bulldoze them all and return the place back to the desert.
Posted by newbie2008 on 10/26/09 at 08:29 PM
NV is mostly owned by the US govt. especially near LV. How many sand storms occur per year and how many feet of sand is accumulated against the walls? Why even bulldoze them. Let the sand cover them and in 100 years they will be considered historical ruins. :}
A condo near a college is good if your child or yourself will be moving in (owner occupied) for the lower rates and money you will spend anyways. But this one will not generate enough free cash flow for a non-owner occupied loan.
Posted by newbie2008 on 10/26/09 at 08:34 PM
The land lease is listed as “fee.” When is the lease up and what will be the new monthly payment?
Is the land still owned by the Irvine Company?
Posted by fee = fee simple on 10/26/09 at 08:45 PM
I think “fee” means “fee simple” which is (from american heritage dictionary) means: “Private ownership of real estate in which the owner has the right to control, use, and transfer the property at will.”. This is to say it’s owned - not leased.