That bottled water sure is some lovely staging!

Where’s the fridge?  Did it find it’s was to Craigslist perhaps?

If he had the money to do those upgrades without increasing his debt, he probably has either the cash or the credit (consumer loans at under 8% do still exist) to pay off the realtor fees and get out with his credit unscathed if he can sell at list. Given he had no skin in the game to begin with, this is kind of like putting in his downpayment at the end of ownership rather than the beginning. Given the upside potential that he chose not to exploit, paying under a 10% loss is not that bad of a deal, compared to having to put in 20% to begin with.

I found these quotes on the internet yesterday.  Very interesting time line …

The smartest man in the room:
”[T]he long-term cost of a bubble to the economy and society are potentially great.  They include a reduction in the long-term savings rate [and] a seemingly random redistribution of wealth … I think it is far better that we burst the stock bubble while the bubble still resembles surface froth and before the bubble carries the economy to stratospheric heights” ~ Larry Lindsey, Federal Reserve Governor, FOMC transcript, September 1996 [Greenspan chaired this meeting]

The Prophet:
“There is room for the Fed to create a bubble in housing prices, if necessary, to sustain American hedonism.  And I think the Fed will do so, even though political correctness would demand that Mr. Greenspan would deny any such thing.” ~ Paul McCully, PIMCO, July 2001

The Table setters:
”[B]anks of all sizes bucked their stereotype as conservative investors and gorged on subprime, which can be as much as three times as profitable as their equivalent prime products.  Indeed the big banks have been snapping up subprime lenders, and been bolstering their own internal subprime lending units.” ~ Wall Street Journal, August 2001

The Chairman:
“A substantial part of equity extraction related to home sales, which is running at an annual rate close to $200 billion, is expanded on personal consumption and home modernization, two components, of course, of GDP” ~ Alan Greenspan, FOMC, August 2002

The Idiots:
“The nations home builders have said it, the Realtors® have said it, and now Alan Greenspan has said it once again, in no uncertain terms: there is no such thing as a current or impending house price bubble.” ~ David Seiders, Chief Economist, National Association of Homebuilders (NAHB), July 2002

“I believe that in years to come historians will see the beginning of the twenty-first century as the golden age of real estate” ~ David Lereah, Chief Economist, National Association of Realtors, March 2005

The dumbest men in the room:
“Go shopping more.” ~ President, George W. Bush, December 2006

Speaking about Freddie Mac and Fannie Mae: These institutions are fundamentally sound and strong.  There is no reason for the reaction we’re getting” ~ Senator, Christopher Dodd, Senate Banking Committee, July 2006

$2600 a month is a lot to throw down, but this place looks very nice! Can anyone comment on the quality of these condos?

I wonder how many more of these homes we’ll see coming on the market exactly five years after they were purchased? This coincides perfectly with the 5 year option ARM. Assuming the peak was 2007, I believe we’ll see more and more well through 2012.

The location is amazing. There are 3 churches within a block from the condo. It’s like the Temple Mount with a church of nearly every religion sharing the same acre.

The only thing missing is a bucket of KFC to really enhance the improved standard of living that these slabs of granite bring with them.

Or

I would say “houses of worship”, since the Islamic Center of Irvine is most definitely not a church.

Oh Lord, do we have to go there?

Houses of worship would include banks and ATMs though.

The payment isn’t too bad for this place.  Now if we could just get rid of that pesky $91,000 CASH we need for a down payment.

Where are the irresponsible lenders when you need them?

The property seems to be delisted in redfin.  How come?

What in the world do we need a downpayment for?  FHA’s 3.5% downpayment should also be extended to condo to stabilize the condo market, i.e., reinflate the bubble.

The kitchen looks very functional with the granite back splashes—easy to clean.  But
$321 per sq. ft?

Lee, If enough Fed members and hacks say the market will go up, it will go up.  Only beware if they are also selling.  Someone else will be holding the bag of toxic assets.  This time the taxpayers and future grandchildren will be holding the bag.

If the seller removed all his equality and is selling short, he is not losing much of his own money.  If he has another house to live, bad credit for a few years should have little effect on him.

When I was looking for new digs in Sept., I looked a a very similar place.  $1900/month, but with 2car attached, not this silly 1/1.

A rental like this should be $300k.

Cashing out now is a smart move. At least this seller sees the bigger picture.

Think of US economy as a runner. He has been told to constantly keep a fast pace (>3% GDP growth). But the problem is that the runner is very sick, erratic heart beat, liver is shot, kidney failure, joints all worn out… but every time he fails to keep up the pace he is given an adrenaline shot (stimulants). For a while he is able to keep going although his physical condition continues to worsen. Over the time the amount of steroid and stimuli needed to sustain his pace rose steadily, and he is getting higher and higher doses on a more frequent basis. Now he is getting multiple shots a day with an oxygen tank strapped to his back (zero rates, QE, fiscal stimulus…). Nobody cares to fix the real problems of his health. We just want to keep the game going at whatever cost. And various speculative betting games also become part of the fun. Markets are developed for increasing number of gamblers on the performance of the runner. The hottest topic in the town is the potency of the latest “stimulants” – “hey this new brand of magic steroid may just keep him running forever”. But deep down we all know that without treating the underlying disease the runner (patient) will eventually collapse. The question is not “if”, but “when” this is going to happen. And some more curious bunch even began to second guess “how” this is going to end. Some say the cumulative massive amount of stimulants will turn our runner into a human molakov cocktail and self combust (hyperinflation); whereas others say our runner will gradually drain all his life force and eventually turn into a comatose (stag-deflation).

Who knows how long our runner is able to keep going – 6 months? 1 years? 3 years? 10 years. There should be no suspense as to where this will end. Speculators are betting on “when”, and the academics are debating on “how”. Just don’t be fooled by all the noises generated by mainstream media to think there is going to be a happy ending.

Excellent ... I wonder what will come first for the runner,  Death or Rehabilitation?

California foreclosure rate in Oct-09 is up 50% from October 2008. The spin is that it’s decreased 3% or so from the month before…

http://www.usatoday.com/money/economy/housing/2009-11-11-foreclosures-down_N.htm

The owners must have changed their minds between when I wrote this post and when it came out.

shhhhhhhhh!

You are going to ruin the party for the bulls!  Quick look the DOW is up!

The party continues! The party continues, I say!

Irvine Renter:
There seem to be an increasing number of bulk sales, mostly or all condos, in Florida. Do you think bulk sales will eventually involve California and, if so, what are the bulk buyers thinking? Rent til prices increase sufficiently to sell for profit - or some other maneuver?

Given the fact that after 2 years into this great recession nothing has been done to fix the real systemic problems in our economy, I have to rule out the possibility of rehabilitation. The patient is getting sicker, but appears to be out of ICU thanks not to any real treatment to the disease, but to the unprecedented amount of adrenaline shots administered.  These points have been repeated so many times and they begin to sound like cliché.

1.  Debt driven economic growth model. Debt load has not reduced, the only difference is some of the private debt has been moved to public balance sheet.
2.  A financial system built on wild gambling thru financial derivatives using other people’s money. The proposed financial reform by Obama administration is a joke - all about putting a band-aid on a gashing wound. Just look at its “supposed” new regulation on CDS market.
3.  Too-big-to-fail. Well, they are getting even bigger now. BoA acquired ML, JP Morgan Chase acquired WaMu. WF bought WB….on and on.
4.  Mis-allocation of resource. By now I think it’s safe to say that US gov’t has effectively turned three of our largest industries – Financial/Banking, Housing and Auto, into zombies. More and more capital resources in the form of taxpayer money get sucked in to sustain the “life” of these sectors through endless schemes – massive Wall Street bailout, cash for clunkers, 1st time home buyer tax credit…. More blood transfusions are coming up for sure. The future growth in our free market economy hinges on the market’s ability to direct capital and resources to the most productive and profitable segments of the economy. Gov’t’s incessant meddling is causing precious resources being deployed to the sectors that are not competitive and mired by over-capacity
5.  Global imbalance. While US gov’t and Fed are pushing hard to reflate the asset bubble and revive private consumption, China and rest of the emerging markets are betting on “recovery” of US consumers. Much of the stimulus dished out by Chinese gov’t thru easy credit provided by state controlled banks are pumped into export sectors.
6.  Fed’s massive liquidity injection via zero rates and QE is not helping the real economy. Banks either hoard the cash or use the money borrowed from Fed at virtually no cost to bet on risky assets and fuel more bubbles. Meanwhile consumer credit continues to contract at fast pace.
7.  Gov’t intervention in housing and auto market is creating even more non-performing loans to the already staggering pile down the road.
…….

The list goes on and on but I think we all get the picture.

more inventory on the way… It looks like some more “homeowners” will be renters, and some more renters will be “homeowners”...

http://www.usatoday.com/money/economy/housing/2009-10-15-foreclosures-leap_N.htm?obref=obinsite

AZDavid:

I for one am very glad to see you back!

“Designer kitchen is complete with upgraded cabinets, granite counter tops, and tile floors.”

Most kitchens are complete with cabinets, counters and floors, this one is complete without a refrigerator.

“Tasetefully upgraded floors is gorgeous wood.”

“Floors is…....”?

There is something comforting about a return to basics, overpriced apartments, bad grammer and KFC on the granite. Oops, designer granite. I don’t know how I live with Formica.

SB

To fix the problem is not so easy (or fast) so take the easy way out but for how long? I don’t know. To fix the problem is to encourage manufacturers to bring back the jobs stateside at the risk of higher prices to consumers. But that will upset the consumers - not to mention the debt holders who had imported these jobs (actually, jobs were exported to them to save costs, and be competitive… or so was the rational).

Come on buster, you mean to tell me you don’t have 91K saved up? If not, then don’t worry because you don’t belong in Irvine anyway.

Soap Box-

People like ME need to stop bitching and become more engaged in what is wrong with this madness.  I am guilty for becoming too gawd damn jaded ... so much that I don’t vote anymore ... I know a lot of people who feel just like me ... and that’s how we end up with morons running the govt.  We need to duplicate the passion we express in these blogs to places where we can impact change.

Scumbag politicians need to understand that there NUMBER ONE job is protecting the US Treasury, NOT emotional, hot seeded issues that make the left and right scream at each other.

BTW, The Associated Press just release this:

Federal deficit sets October record of $176.4B
Federal deficit hits record $176.4 billion for Oct. as revenues plunge, spending remains high

WASHINGTON (AP)—The federal deficit hit a record for October as the new budget year began where the old one ended: with the government awash in red ink.

Economists worry that if such deficits continue it could push up interest rates, further dragging on the fragile economic recovery.

The Treasury Department said Thursday that the deficit for October totaled $176.4 billion, even higher than the $150 billion imbalance that economists expected.

The deficit for the 2009 budget year, which ended on Sept. 30, set an all-time record in dollar terms of $1.42 trillion. That was $958 billion above the 2008 deficit, the previous record holder.

October was the 13th straight month to show a monthly deficit—another record. It was the fifth-largest monthly deficit ever.

The imbalance came mostly from lower receipts of individual and corporate taxes. Receipts were $135.3 billion, a 17.9 percent drop from last October.

It’s not being jaded, Lee - it is coming to a rational conclusion.

Your typical neighbor receives his news from Corporate NEWS networks.  His views of the world have been heavily scrubbed in favor of the sources advertising revenue sources.

How many of your voter friends knew that more than two people ran for president last year?

The average Joe doesn’t do a lot of homework.  His time is spent doing more important things like tracking college football scores, watching television, fishing, golfing, checking his stock gamblings, etc.

It’s just the Tyranny of the majority that we live in.  The average guy wants the politician to fix some kind of problem in his life - so we get these politicians who show up promising to make our wildest dreams come true.  The average voter thinks government exists to solve our problems. 

I, for one, am ready for someone to make an adult decision.  I know it will be painful and a lot of people will be pissed off, but the country will be better off in the long run.

That attitude is not what you find today.

Tyranny of the majority.

David ... you’re clearly one of the most astute observers in this venue.  But please don’t add to my cynicism ... we’re all stocked up with disgust over here.

BTW, I become more jaded when I watch corporate news.  Example ... last night I was watching Anderson Cooper, and I heard one of our famous politicians say:

“Only Dead Fishes Swim With the Current”

My wife and I looked at each other and didn’t know if we should laugh or vomit.  I bet you can guess who that politician was.  Hint ... It’s a she.

Thank you.

Granite KFCWare is my favorite.

It reminds me of these eager-to-be house debtors you see on the Property Pornography channel who demand their property have granite counters and then admit that they don’t cook very often.  I always imagine the KFC bucket sitting on the glistening granite counter.

That’s right, Lee - follow the money, and VOTE!  Who’s getting paid by what lobby to deregulate finance/throw good money after bad/protect insurers at the expense of the insured (or uninsured)?  Let your reps know you don’t like Pay to Play.

I think Florida is also characterized by mass depopulation in some areas, which makes the bulk sales easier.  This may be happening in some areas of California, but more likely the Inland Empire than OC.  Places where the basic jobs/wealth aren’t good enough to support hope for near-term recovery.  Just a guess.

I did not see it, but it sounds like what I call ‘Dittohead talk’.  I would guess a former VP contender.

After the election, people ask ‘Whod ya vote for’ and you would not believe some of the incredulous reactions from people when you don’t play ball with their juvenile view of the process.

You voted for who?  Who is that?  Did you just not want your vote to count?  This is the most common reaction - people who do not know what an electoral college is believing that their vote counts and mine does not.

How do you tell these people close to you that they ought try a book occasionally or find something a little more educational to watch next time at the video store?

Hence, my conclusion that elections are really erections.  Just a social superbowl that we all play every 4 years like a big national game of charades.  The players gather on the screen and promise to make our wildest dreams come true while we all pick from two contenders that the media selects for us like a bad episode of American Idol.

An excuse for people to drink and be entertained.  Nobody wants a grownup around for that!  It’s time to party!

Have you ever been to one of those dance clubs where they have hired dancers to go and dance in order to get other poeple in the mood and eventually come out on to the dance floor?

Everytime someone jumps up cheering these meaningless head fakes in the stock market, I picture one of those dancers trying get me in the mood to dance at a bar that ran out of alcohol a year ago and everyone is sobering up and wondering why that fool is out there dancing all by himself.

Oh, now I understand the meaning of the KFC reference.

KFC is too high brow for this place. We need a tub of Church’s chicken out there to be realistic.