first post!
——-

What the hell does “the BEACH is just a latte away” mean?  That is one of the lamer realtorspeak phrases I’ve ever seen.  Quail Hill is very close to the beach as the crow flies, but driving down Laguna Canyon can be a real pain in practice.  Maybe if you drink your latte really slowly, you can get to Main Street Beach in Laguna in a single unit of latte.

I wonder how many lattes away the Courthouse in Santa Ana is?

This place is not going to rent for $2,400. More like $1,800 and it is only worth about $250,000.  Just becasue there is a starbucks on the corner does not make a property worth 2X.

Style: French. hmmmm

Reminds me a council house from a 60’s British housing estate.

It’s appropriate that the current owners like the color red because their finances will be in the red with this sale,

The living room layout is indeed cramped. Note how that oversized red chair is blocking a great deal of the couch. Makes the room look even smaller.

Perhaps they should stick with French provencial furniture for its dainty dimensions?!?

Darn Nano, this is the same as my place.  You mean I can’t get $700K for it?! 

These detached courtyard style homes by Cal Pac are very popular - Wisteria in West Irvine, San Simeon in NorthPark, Cortile in Woodbury, obviously they were also built at QH as well.  This is a plan 1, and has sold around my neighborhood recently for around $500-525K.  The next model up, which is 1425sf, just closed last week at $600K.  If these people take low $500’s, I think they’ll be able to sell it right now…

“This is the type of property that someone with a median income should be able to afford”.

Thank you for saying this. The property you feature here is a passably pretty attached house with production kitchen cabinets and other standard appointments throughout. Yet the price asked is a “custom” price, that ought to buy a truly custom kitchen and comparably polished and elegant appointments throughout such a small place. It’s a nice place for a single or couple but an awfully cramped dwelling for a family with children, and it’s unbelievable that a family with the Irvine median income of $84K can’t afford something like this.

And if a nice, newer place like this is unaffordable to people with Irvine’s high median income, what of Chicago, where one-bed apartments with 800 sq ft in “marginal” neighborhoods are priced above what is affordable for the median family income of $57K? By “marginal” I mean a nieghborhood that is mostly middle or upper class but is still stuck with pockets of sluminess and crime, like my area?

A one-bed in my area, in need of work and with high maintenance, is asking anywhere from $140K to $170K. Figuring on 20% down, that leaves mortgages of $110K to$140K, for high-maintenance apts where assessments run $300-400K a month and that are suitable only for one person occupancy. A single person usually makes $35K-$55K at most financial and white collar occupations here in Chicago. We are talking units in neighborhoods that still have “problems” even though they are not slums. So, while this might sound cheap to the denizens of SoCal, it is not cheap if you consider that 2.5X your income for a mortgage is the most you can safely go when you are adding high maintenance and escalating taxes.

A two-bed condo here, in a ‘marginal’ neighborhood, that is barely big enough to contain a couple, and cramped with a kid or two, is priced at an average of $300K. If it is in a GOOD neighborhood, it is more like $375K.

Townhouses are priced at an average of $450K. We are talking places with no kind of yard, a short driveway, often located on dismal, semi-blighted streets right next to the el train right-of-way.

And detached SF homes are unaffordable. $375K will buy you an old bungalow on the northwest side, far from public transit and retail, that needs a lot of work and has an old kitchen.

An SF of any size, say 1800 sq ft 1910 era two story that needs much work, is priced at around $650K, in an area that, though very pretty and with many urban amenities, is still burdened with crime and pockets of blight. You can’t let your kids out to play unsupervised around here and you certainly wouldn’t send them to public schools. We aren’t necessarily talking great architecture, either- we are talking a plain 2-story brick box with stodgy, vaguely “prairie style” styling. If the place has real architectural distinction, tack on an extra couple hundred thousand dollars.

I often “visit” other city areas via the realtors.com site to see how they are priced, and the story is the same across the country. If the prices are cheap, beware!  That means the city is a place where you can’t make a decent living and/ or has no cultural or recreational amenities of any kind and probably has skyrocketing crime and that industry and capital are fleeing, like Detroit or St. Louis or Cincinnati.

So, Irvine does not look overpriced compared to the country overall, though I know it is and I know for sure my area is.

Absolutely everything everywhere is shockingly overpriced relative to the local economy and to the incomes of prospective buyers.

Also, a word about the income:mortgage ratio.

Prior to the 80s, the acceptable multiple for the mortgage was 2.5X the borrower’s income. My own mother bought in 1971, with a downpayment fully 40% of the selling price, and her mortgage was only 1.25% her income. In other words, her mortgage was only slightly larger than her yearly income. Yet I remember we were sort of “sqeezed” that first year of ownership, even though Mom had no car payments.

In the 1980s, when I remember seeing the first adjustable mortgages, 4X your income became an acceptable ratio, even though the interest rates were horrifying. A young couple I knew bought a huge house for exactly that multiple of their income on a 16% mortgage, and I’ll let you guess how long it took them to lose thier center-hall colonial.

4X your income may seem conservative by modern standards but it is really much, much too high a multiple. Remember that you will be responsible for many expenses that as a tenant you never had to bother your head about. Plus, most folks now have multiple car payments and massive CC bills.

We should return to the 2.5X income standard. A “no down” fixed mortgage would be acceptable with this kind of ratio. 4X your mortgage is a huge load, especially in areas with high taxes, or if you have other debt and/or a large family. As for “no down” , it might be better for a buyer to go “no down” on a 2.5X income mortgage, and keep their savings in reserve for sudden expenses and surprise repairs, than to put all their cash into the down payment and have no reserves.

“the BEACH is just a latte away”

I hope the carnival barkers selling glamor get foreclosed on themselves, and are forced to move to bitter cold Cleveland.

Now I think I’m going to vomit.

With a 20% downpayment and a 4X home price, the loan is just over 3X. We had a post a few days ago that showed lenders are still willing to loan 5.5X. This is down from the 7x - 8X you could obtain during the bubble (actually 10X or more if you went liar, I mean stated.)

At least you have pockets of affordability in Chicago. We don’t in Irvine. I suppose you could find something affordable in Santa Ana, but I think I will pass.

Sorry, but Boston was a nice band, but strictly commercial (as Frank Zappa did say in Apostrophe).  The kind of band that would have a Sears Poncho… not a real Poncho (again, Zappa in Apostrophe).

For a real guitar duet… Freddie King Live, circa 1977, check out Freddie King and Eric Clapton on Farther on Up the Road.  A live recording on LP…. 

And if you want one of BEST ever guitar solos…. ZAPPA in APOSTROPHE….  I believe it’s either on Kozmik Debris or at the end of Montana (“I may be moving to Montana soon, to become a dental floss tycoon”).

Back to Freddie and Eric… I actually blew a midrange on my old ADS 810s being driven by a gargantuous Sansui 200 watt receiver ( this would be around 1980).

The factory was so impressed that anyone could blow a midrange that they wanted it back for inspection and paid for the replacement.

You see…. Freddie is on the left, Eric on the right, and they play off each other and end up together.

They start at 9, move on to 10 and then blast past 11 to a full 12 that would make Spinal Tap jealous.

Oh.. why would someone want a detached home?  Simple, if the guy next door has a pair of ADS 810s and a 200 watt Sansui and a copy of Freddie King Live, you most definitely DO NOT want to SHARE a wall.

“Tucked away just outside the gates…”

I guess the word “nestled” does not work anymore, so now they say “tucked away”.

At first glance this condo looks very nice and it has some things going for it - attached garage and no common walls. The problem for me is that it is just too small.

This should be a starter condo at about 250k. But who knows - I hear the fed is busy deciding on how big a rate cut to give.

Chicago is a huge City.  Irvine would be but a neighborhood in Chicago.

Think of OC as Chicago, and then you can see that OC does have pockets of affordability and ghettos.  Think Santa Ana, Stanton, Garden Grove and Anaheim as the “affordable”, “working class” areas of OC.

Soon to be affordable again will be Huntington Beach, Costa Mesa, Westminster, Fullerton, Yorba Linda, El Toro, Laguna Hills, Mission Viejo and Tustin.

Historically, Seal Beach, Newport and Laguna have been the most expensive.  Irvine was in the second tier -pretty much by itself.  The cities “soon to be affordable” were in the third tier and the “currently affordable” were always the bottom tier.

The South County Cities were always cheaper than Irvine because of the El Toro Y.  Even today, they are cheaper.

“...Two SEPARATE MASTERS plus COMPUTER NICHE…”

What, you were too lazy to put shelving and doors on the COMPUTER NICHE and turn it into a cupboard?

Shame on you

I’d pay $200,000 for that. On second thought it is Irvine, so maybe I’d go as high as $250,000.

I’m not trying to troll here. For anyone who comes back and says “but there are high incomes in Irvine to support high prices so we’ll never see $200/sq ft,” I urge you to consider the economic principle of supply and demand.

This market is ultimately going to come down to supply and demand. When there are five times as many homes for sale as there are buyers, prices will come down. If economic growth slows down and no more jobs are being added (and maybe some are lost), demand for housing will fall and people might even be forced to move away, adding to the inventory of homes for sale.

tonye,

Can you find a link to either an audio or a video for the duet you mentioned? I would like to hear it.

I agree with joesixpack, supply and demand is the key.  If only buyers could get through their heads that if they don’t pay the high prices, sellers would be forced to lower these extreme prices.  IMO the prices were driven up by greedy RE people and homeowners.  If buyers would only stick to their guns, then we would see prices go down to resonable levels.  But you know there is always a dumb sucker out there that will pay the price, then pay later too.

This is a great website!  In fact it is a daily stop for me since I discovered it.  I recently sold my house in Talega before the blood letting really started happening.  I missed peak by a year and I was able to get out with minimal loss. I know this site is for Irvine, but I have to tell you all that Talega is really destined for a blood bath.  Similar homes in size view and appointments to mine have sold for 20% less just three months later.  it is down right scary how close I was to losing my shorts.  Talega with its distance to good jobs and the fact that they are still building and the fact that many of the residents have jobs dependent on the housing market is destined for a blood bath.  Almost every listing mentions a short sale.  Some that are not short sales even have to say that they are not short sales because people just assume that they are.

Does anyone know of similar site to this with regard to Talega/San Clemente.  I ultimately would like to return to the San clemente area because I do think it is a great place to live especially for a beach lover.  I am high on the long term of San Clemente.

On another note of which you probably already know.  Tempo has put a cap on the number characters allowed in the property description.  Hence, the use of pix in lieu of pictures. The Realtors are just trying to pack as much info as they possibly can given the contraint.

I saw an ad for a subdivision where there are a few repos and many of homes are still for sale by the builder, it read: “few neighbors, low traffic….”

LOL

Get rid of the mortgage interest and property tax deductions and we’ll be back down to 2.5x income.  These over-extended households (> 4x) will suffer greatly.

But you may be preaching to the choir here.  It’s hard to plan everything you want to achieve (and have some freedom) and pay more than 2.5-3x your household income on a home.

Exactly,Tonye.

For example, my area is one of the pockets of “affordability” on the north side. My area is very pretty, with great architecture and wonderful tree-lined streets.

My area is also sometimes very scary. Our crime rates are unacceptable to many middle income buyers, especially those with kids.

For real “affordability” you either have to go to an absolute slum on the south or far west side, or to a pocket of the city so remote the nearest rail line is 2 miles away. I could get a GREAT one-bed for about $80K down at 79th street, if I dare go there.

It stacks up a lot like OC, and so does every other city area I view. They might seem cheap compared to this burg, but when you peel the onion on “cheap” locales, you see no business base, steep unemployment, or a total dearth of accessibility , retail, and/ or cultural and recreational amenities.

That reminded me of an ad I saw for portola springs that called it “conveniently located” - to what? Dead brush? Dirt paths? It’s about as far away from convenient as you can get.

You could try http://caliguy2699.blogspot.com

He does alot with south OC, but not sure if there’s been alot on Talega specifically

We have thought about launching a website covering all of Orange County, but I don’t have the time to write for both.

Yes, Talega is going to be destroyed, and it will happen before Irvine. First Talega, then Ladera Ranch and Rancho Santa Margarita. The wave of destruction will move north until it wipes out Irvine.

I might have given the realtor the benefit of the doubt on saving space if she hadn’t thrown in the BS about the latte…

ipoplaya,

I only know what it is worth to me…....if someone wants to pay north of 500K to live in a 1,000sq. ft. crackerbox in irvine…...thats their business.

Give em hell laura !!!!!!!

But for someone drinking Kool Aid, the beach is right next door…  LOL

For the record, the bass guitar in Apostrophe is played by Jack Bruce (of Cream fame).  It’s considered one of the best bass performances of all time.

I was looking at Zip the other day and I saw a condo that was listed at about $297 sq ft….........We will see lots of properties at $250 sq ft by this time next year.

As for the fools that think that because they live on a hill with quails their places are worth more…......they will have the greatest surprise of all.

Talega is a gorgeous area.  The pricing seems to be similar to newer developments in Irvine, but you get hilltop and ocean views (something commenters here repeatedly remind everyone Irvine lacks).  But it takes a lot for me to consider commuting up to Irvine for work for 30+ minutes.  Maybe pricing there will soon negate this concern…

Too Funny!

The numerous reasons not to live in Chicago are entirely unrelated to housing prices.

Prices won’t come down until someone agrees to take the financial hit. If you are $100k upside down and can tread water, you will in hopes of better times ahead. The banks aren’t exactly lining up to drop prices either. Since no one is eager to place that big red entry in their balance sheet the process of deflating prices will necessarily be dragged out over time.

Just as democracy needs informed, responsible and engaged voters to function properly, capitalism needs informed, responsible and engaged consumers.

This is depressing, you see, as small and “Tucked away” this place may be, it’s apparently not small or tucked away enough for potential Buyers like PeterUK, you see, I don’t qualify as a first time buyer because I earn more than $109K yet I don’t quite earn enough ($147K in this case) to qualify for the Morgage….I either need to ask for a pay cut or a raise. Methinks the former would be a piece of Cake “Cold and lonely, tired and bored just like the Day before, missing out on Life’s rewards, of that you can be sure” Nik Kershaw.

LOL!!!

For those interested in seeing more bank REO property, Wells Fargo’s site is www.pasreo.com. 

The list pricing offered by WFHM on Irvine properties appears to still be very poor in terms of per sf numbers.  From what I hear, banks are sticking to their guns still on offers.  Spoke at length a couple of weeks back with an REO realtor that does a bunch of business with CW and he said Countrywide has been holding out for 99-100% of their computed list prices.

It is only a matter of time….......the march downward will be led by long term homeowners with lots of equity. Homeowners that need/want to sell in a hurry…..and will make a good profit when selling 30% below 2006 comps.

Then what happens is the auditing firms make the banks write down their real estate holdings…...then the fun begins. Another year or so before we see real downward pressure on home prices.

What’s with the funky wallpaper??  I thought people in SoCal had better taste.

skye

Is it me or does it seem that we (bears) are always saying that the prices are going to fall any minute now?  Next spring or next summer.  Sigh.  I hope so.  I still can’t believe that I would have to make $147K to afford a cramped 2B condo with over $100K in the bank.  I know that there is no fundamental reason for this but I still can’t shake the feeling that the normal market price will be 4X to 5X income.  Essentially, making us slaves to our banks and lenders for a lifetime.

How much did that place sell for when it was new?

Because it sold new in 2004, and whatever it sold for then, it’s going to come close to bottoming out at again.  Take that number, and if you are optimistic, add 10%.  But that’s about it.

The homeowners with ‘lots of equity’ are going to drive the prices down.  Isn’t this only a very small portion of homeowners?

Who exactly is in control of the pricing collapse right now?  The struggling subprime owners, the bank repos or the long term homeowners?

Call me old fashioned, but for more than a half of a million dollars, expect more than two bedrooms and a computer niche.

I agree that this is a place for a single.  A couple would merely be biding time in it.

Median household income in Irvine is $82,827.  However median income for year round workers, individuals, is lower.  Males - $78,986, Females - $53,130.

The buyers and investors. 

No CDOs, means banks have to hold their loans, means tougher loans.

Buyers being pinched on loans, will continue to pinch the sellers.

Eventually the banks will give up the ghost on the REOs. Probably going to be lead by San Diego and Sacramento where monthly volume of REOs going to the bank are half the size of the volume of homes being sold on the MLS and rising.

You could probably devote a whole site to an area like Santa Ana, where there’s four years of inventory on the market and counting.

Talk about your subprime disaster.

IR, I found it interesting that you addresses the condo verses SFH issue. I’m currently renting a condo and the notion of owning my unit is extrememly unappealing. For me it comes down to privacy, physical separation from my neighbors and of course much enhanced sense of satisfaction from ownership. The idea of being financially tied to an apt where I will with regularity need to deal with rude neighbors and their barking dogs, loud late night music, Televisions just turns me off.  For me Condos are just apartments, granted some can be quite nice but they are still apartments that expose you to all the potential irritants and hassles that apartment living brings. I’m just aghast at what people have been willing to pay for “Apartments” here in OC. I have always viewed purchasing a condo as a huge compromise that should come at a significant discount compared to an SFR. I don’t care how upscale a condo is, all it takes is one inconsiderate neighbor on the other side of that common wall and you are screwed. I have ridden my bike through QH and yes these buildings look OK from the outside but these are from my perspective just rows and rows of apartments. If I am unable to get into an SFR I would much prefer to rent one of these upscale condos and retain the option of fleeing with 30 days notice.

N Cty,

There are plenty of homeowners in Irvine sitting on big equity positions.  Not everyone bought in 2004 or later. 

Northwood and Harvard Square are populated by many that bought new in 1996-1999.  They will have made a substantial profit.  West Irvine and NorthPark were sold in 2001-2003, and people there are still comfortably ahead based on today’s pricing.  I bought in ‘01, and even with a 12% decline in prices so far this year, I still have over 75% appreciation.  That number is falling everyday, but it’s a slow process to unwind years of double-digit appreciation and you can still sell a home if you price it aggressively.

Plus, some buyers didn’t get the memo about the correction.  They get dropped off by the Sucker Bus and buy up to what they can qual for today…

Nice tribute to Brad Delp…and the rest of NYC today, of all days. And I liked that guitar duet, too.

Other than the weather, I think Chicago has a lot going for it.  Great food, a world class symphony, good culture, the Cubs, the Bears, the Irish…. in many ways I do like Chicago.

It’s just that I couldn’t handle the cold “breeze” coming from the lake in winter, or the sticky hot weather in the summer.

I can’t even afford to rent this place

It’s on CD.

http://www.amazon.com/Apostrophe-Frank-Zappa/dp/B0000009SI

Also, lookie here… ( you might wanna watch your wallet and make sure the ‘Central Scrutinizer’ doesn’t get ya )

http://www.zappa.com/fz/discography/index.html

You might also want to listen to Joe’s Garage (parts 1 and 2)

“It’s shaped like a Telefunken UB47”

And of course, the immortal lines in “Dancing Fool” in “Sheik Yerbouti” (one of his funniest -by far- and commercial albums):

“...

The disco folks all dressed up
Like they’s fit to kill
I walk on in ‘n’ see ‘em there
Gonna give them all a thrill
When they see me comin’
They all steps aside
They has a fit while I commit
My social suicide, I’m a
Dancin’ fool, I’m a
Dancin’ fool
The beat goes on
And I’m so wrong
The beat goes on
And I’m so wrong
The beat goes on ‘n’ I’m so wrong
The beat goes on ‘n’ I’m so wrong
The beat goes on ‘n’ I’m so wrong
I may be totally wrong, but I’m a
Dancin’ fool, I’m a
Dancin’ fool
Youwsa, youwsa, youwsa
I got it all together now
With my very own disco clothes, hey!
My shirt’s half open, t’show you my chains
‘N’ the spoon for up my nose
I am really somethin’
That’s what you’d prob’ly say
So smoke your little smoke
Drink your little drink
While I dance the night away, I’m a
Dancin’ fool, I’m a
Dancin’ fool, (etc., etc.)

I may be totally wrong, but I’m a
I may be totally wrong, but I’m a
I may be totally wrong, but I’m a
FOOL-uh!”

And let’s not forget “Jewish Princess”...

“...

with garlic aroma
that can level Tacoma”.

I love Frank Zappa’s music.

This is a compilation that has the live performance.

http://www.amazon.com/dp/B000026PLA?tag=unlockaustin-20&camp=14573&creative=327641&linkCode=as1&creativeASIN=B000026PLA&adid=0YE247ZSN8P0ZQ46VAFR&

By and by you can not go wrong with Freddie King’s live concerts.

He was a real blues giant.  More of a rocker than Ray Vaughn and BB King and he held his notes a bit longer than Clapton -who sort of picks- but not so long as BB King who makes Lucille hang those notes for dear life.

Excellent tunes.  They’ll get your mind off RE for sure. 

I love Chicago, as I am a lover of large, dense old northern cities. Love the architecture, the “look” , the bustle, the amenities. I could also easily love SoCal, a very different sort of place, for the scenery and style and people. Everyone here talks about the “narcissism” and “materialism” of the SoCal crowd, but it couldn’t be any worse than what I encounter among trendoids here in the midwest, who mortgage thier condos for Porches and plastic surgery. People are all alike.

But the place has become bubbleicious and so has every other locale in the u.s.

I give you the comparison only to tell you that your area, while bubbly, is in keeping with the rest of the hyper-inflated U.S. housing market in having unsustainably high prices on homes purchased with criminal mortgages, helped along by cash out refis and ludicrous debt:income multiples.

We are in bad, bad trouble as a country. We haven’t really sensed the depth of the housing bezzle, and won’t until the trillion dollars or so worth of resets that are coming on this fall happen.

The nastiest part of all this is that so much of our economy nation-wide is tied to housing. The financial sector for example- Chicago is almost totally supported by the financial industry this day. The various subsectors of this field always were laughably overcrowded, and I tremble at the thought of what will happen to me and thousands of others in this burg when the inevitable hemorraghing of financial sector jobs starts to happen. The 40,000 jobs lost in the mortgage industry so far are nothing compared to what will be lost in all divisions of financial as the effects of the mortgage fallout cascade through the rest of the economy.

Because, my dears, we as a nation have very little left outside housing to support ourselves with. We gave our manufacturing away long ago. We can only hope that the activity shifts into other sectors- that we start to relocalize our manufacturing and revive our rail transit. I’m pinning considerable hope on the rails, and consider it a good sign that Buffet has shoveled over $700 million into rail stock. I hope I’m not reading too much into that.

dum
dum
dum dum duuum dum duuumm

dum dum

dum
dum
dum dum duuum dum duuumm

Dream I was an eskimo…

Yep… an extremely great intro.

The other one I can think of is Keith Richards playing the bass in Sympathy for the Devil.  He played the lead with the bass for a big chunk of the LP.

I think IR needs to expand his musical universe.

Sympathy for the devil would be a great song too for this website.

“...
Please to meet ya
Hope you know my name
I’m the lender
with your new mortgage terms… ”

You should consider using “Tragic Kingdom” from No Doubt as the background theme. 

Are you kidding? Chicago’s a hellhole. The traffic is terrible. There is no reverse commute because the old people live in the burbs and work in the city and the young people live in the city and work in the burbs. Even shopping on the weekend is a nightmare since the traffic is so heavy in local neighborhoods. There are no left turn lanes in the city - it’s just expected that when the light turns green 2 or 3 cars will peel out at top acceleration to make a left and 2 or 3 more will go when the light turns yellow. And people create traffic jams themselves for no reason. Once I got stuck in a jam that appeared to have been created by a couple of guys who had stopped on the side of the highway to throw a football back and forth.

The weather’s even worse. You know the old saying - There are two seasons in Chicago: winter and road construction. Either you feel like you’re buck naked underneath arctic clothing when you go out because of the damn wind in the winter or you’re sweltering in the humid summer heat.

As for crime, the week after I moved back to CA my former roommate was attacked from behind and choked until she was unconscious so the attacker could abscond with her purse. Luckily she didn’t sustain any permanent injuries. I was extremely fortunate never to have been attacked since I tended to work late and come home late - maybe because of my size I look like a hard target.

And, to boot, most of it is old, rundown, and really ugly. Especially in the winter when that nasty gray snow is piled up everywhere.

I wouldn’t live there again if you GAVE me a house.

NO F’NG WAY!!  This is place is right across the street me.  In fact I was walking my dog yesterday, and the owner (or owners wife) was outside.  I casually said hello as I walked by and she walked inside.  I remember looking at the home and seeing it was for sale.  I didn’t grab a brochure, but when I saw the asking price above, I almost choked on my lunch.

It is one of the nicer looking ones in the general area.  All of those units though are cunched in there like sardines.  There are no yards, except the homes that back to Quail Ridge PWKY, and even then the backyard is just a patio.

..trying to type and eat at the same time

That’s an interesting comment about how we’re going to support ourselves. I completely agree with you. I’m in tech, which has obvious problems in that area, what with all the high tech companies importing H-1B’s if they aren’t just flat out hiring overseas. It’s BS that we don’t have enough high tech people here - companies just don’t want to pay what they’re worth or train them for anything. You have to already have experience in that particular product/language before the company will even consider you. I have almost 15 years experience and have put my resume out numerous times with no response. Luckily I have a pretty stable job already - I just keep looking to keep in practice interviewing in case of the worst. Eventually I’ll have to stop doing what I love - programming - and start managing.

I was just reading in BusinessWeek that China is losing low end manufacturing to other lower cost countries (and because of quality problems). What comes around goes around. Ha ha ha. I don’t mind fair competition, but right now it isn’t fair. Low cost countries don’t treat their workers properly and don’t allow their currencies to float like they should. Maybe when that happens it will be cost effective to bring the factories back here and we can all get hourly factory jobs.

We as Americans are responsible for this. We have to stop voting with our dollars at places like Wal-Mart that encourage these conditions.

Things will really only change when corporations stop seeing third world countries as cheap sources of labor and materials and start seeing them as sources of customers. It’s starting to happen, but not fast enough.

In this site"Talega Real Estate - Homes and Property For Sale “:

http://www.isocal.idxnetwork.com/401831w/index.php?main=filter02

there are 153 entries.

The supply and demand curve is different than most commodities.  We are not talking about something that you “buy.”  People (even rich people) finance their homes.  This makes supply and demand a function of financing available.  The financing available is a function rates and guidelines.  Those two factors are in complete disarray right now.

The demand for homes could go through the roof, but if people can’t get financing they can’t get a home.

I don’t really agree with the IT statements by Patience above.  Even at those working at IT companies, it’s hard to find a really good computer programmer.  Among random interviewees, it’s much much harder to find 1 that can do a decent whiteboard answer on a coding question.

I myself, self-taught w/o a Comp Sci degree, managed to eventually break in & keep a software developer job with a leading software design company.  The industry is deperate enough to value talent (ie. can you code?  how’d you do on the whiteboard quetsion) wherever they can find it regardless of degree, country of origin, immigration hassles, etc.

Come into the games industry.  I’m a graphics programmer and I’m CONSTANTLY hounded by recruiters to join their companies, and these aren’t recruiters who work for little shady firms; they work for the actual game development companies.  The salaries are good, but the hours still get a bit crazy every now and then.  The last time I actually had to look for a job it took me 2 weeks to get hired.  I’ve been doing this for 7 years, granted, but the industry is strong, even down in OC.

Keep doing what you love doing.  There will always be demand for it, even if it requires you to learn some new tricks.

Really interesting article regarding banks & REO sales

http://sacramento.bizjournals.com/sacramento/stories/2007/09/10/story1.html?b=1189396800^1517107

Be patient, these things take a long time to unwind.  Look at the downslope on the other side of the .com bubble; it wasn’t instant.  Stocks are WAY more liquid than houses are.  Crack open a brew, sit back, watch the show and enjoy.

As a rule of thumb… you’re forced into management or -if you’re lucky like me- into SW and System architecture.

I still prototype and then give to the poor younger schmucks who have to turn my stuff into a product while lauding my brilliance and sheer audacity at designing world class algorithms and designs that can jam as much CPU into a single line of code.

Of course, the poor schmucks then mush the whole thing into some newfangled C++ or Java interpretation so that I have to give them a new (you know what) at Peer Review time.

Aaah… life’s good.  If you can’t do it with a UINT32 or a void cast then it ain’t worth doing.

And yes, I do agree about the wholesale import of indentured developers and exporting of work to China an India.  It’s a fact of life.  I has been for longer than 20 years.

It is still very difficult to find good IT talent these days in OC and LA.  I am the CFO of an IT staffing firm, mostly programmers, engineers, biz analysts, proj managers, and DBAs.  Our problem is still on the recruit side, not the job order side.  We have many many requirements from great local companies that simply can’t be filled due to lack of qualified candidates.

Many companies have learned that offshoring the kitchen sink doesn’t work.  You need good communicating developers and analysts here in the US to control and manage the dev cycle if you want a quality product.  Too many lines of buggy code come back from India and the offshore PMs are nowhere near as good as experienced ones here…

Heck, even Countrywide is still looking for good technical people, and they have somehow managed to keep paying their bills at under Net 30.

Realtors: Home price slump through ‘08
Home prices are likely to end 2008 below last year’s peaks as slump is now seen as worse than previously forecast.

http://money.cnn.com/2007/09/11/news/economy/realestate_outlook/index.htm?postversion=2007091110

COUNTRYSLIDE
MORTGAGE LENDER’S SHARES PLUNGE; SEEKS 2ND BAILOUT
http://www.nypost.com/seven/09112007/business/countryslide.htm

Wow, the NAR thinks prices will recover by late 2008…  Everyone run out and buy right now!

http://www.dallasnews.com/sharedcontent/dws/bus/stories/DN-homes_11bus.ART0.State.Edition1.35ab4ef.html

Freddie Mac surveys show that almost 60 percent of home foreclosures in this country are primarily the result of job loss or illness.
...
Almost a third of home purchase mortgages scheduled to close in August were canceled, according to a new poll out Monday.
...
And about 60 percent of mortgage brokers surveyed said they could not refinance adjustable-rate mortgages with increasing rates, according to the poll by Washington, D.C.-based Campbell Communications.

The survey also found that a substantial number of fully approved loan commitments made by lenders were not being honored.

I’m listening to it right now…

A 24/96 recording from my LP at home with my “audio computer” using a Linn/Grado Master/Grado phone preaap/CJ PV9 preamp/M-Audio 24/06 Delta card to a WAV file in a hard drive (about 1.4 GB for both sides of the LP).

Playback: USB hard drive/M-Audio Transit/Grado battery powered headphone amp/Grado SR325i phones.

Dude…  Freddie’s on my left ear…... while Eric just teases him on the right….  on and on…

And Mr. Zappa awaits on another bunch of files.

What RE crash? - ooh… there they go…. Freddie and Eric…... oh OH OHO HOHO…. It’s cranked up to 12 now…. You gotta run and get this….  ;-D

I’m listening to Apostrophe right now.

You’re quite right.  He plays the bass with a bit of edge distortion like a madman while Zappa plays a very clean guitar tone.

And they play off each other.  With a really percussion/drums beat on the background.

I guess I never paid enough attention to this song as it’s instrumental (I must have like listened to it a couple of thousand times at least).

Time to put my son, the aspiring bassist, on this one.  Of course, he’ll want a new pedal too.

Back to your Real Estate forum.

“Just as democracy needs informed, responsible and engaged voters to function properly” —Very few exist, this is why the U.S. is not a democracy.

Mortgage brokers say 57% of customers couldn’t refi
http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2007-09-11T133803Z_01_N11406461_RTRIDST_0_USA-HOUSING-BROKER-SURVEY-URGENT.XML

That response was the equivalent of, “I’m just sayin’”

The fact is these houses are selling for 500K right now.  Yes, we will likely see more declines, but to think it will drop another 50% is just rubbish.

I for one would like to see a little more follow up on properties that are profiled on this blog (as time permits and information is available of course) to put some of ridiculous assertions in perspective.

Washington Mutual Sees Housing `Near-Perfect Storm’ (Update3)
http://www.bloomberg.com/apps/news?pid=20601087&sid=aVd5WiPryyok

Who Cares about Starbucks? I bought an espresso Machine 3 years ago I pull shots now for pennys on the dollar.

What an incrediabal rip off. I’d like a four-Buckachhino Please.

I think any real espresso drinker should get a Machine.

O.C. home prices seen 25% too high

http://lansner.freedomblogging.com/2007/09/10/oc-home-prices-seen-25-too-high/

IrvineRenter, this website is truly great, especially the Analysis section. I’ve recent started my own site that will focus on the Federal Reserve’s role. You set a very high bar for analysis and ground-level detail. I’m setting off on a two-week trip, so when I get back my work will be cut out for me.

I have a question for you: I read this write up (your style just cracks me up, by the way) and see that you used a multiple to turn the likely rent ($2,400) into a value. Maybe I didn’t read the right article in the Analysis section here, and if so then I apologize. I’m curious as to how you arrive at the multiple.

I’d also like to know what you think of the CEPR Housing Cost Calculator. I’ve been putting house prices in and using a 10-year holding period to come up with values based on rental equivalents. If it’s a really depressing like box, such as a 600 sq ft condo, then I’ll use a 5-year holding period. With a 10-year holding period, it spit out $320K for the condo you highlighted, but that doesn’t take the monthly fee into account.

Something else occurs to me: Markets overshoot in both directions. Seems to me that the analysis thus far assumes that housing will bottom out at its intrinsic value, but I actually wonder if that might not wind up being overly optimistic. What do you think?

Family Guy….........

As the market turns and prices start to drop you will be shocked at what happens….........many of these homes will end up on the banks shelves for years to come. Eventually the banks just sell them for anything that people will pay. A co-founder of one of my companies picked up a condo in Houston that was originally selling for 1.4 million…...he paid 125K.

Fear and Greed….............

While I wish the 50% sky-is-falling plummet would happen, I am with you FG.  I think another 15-20% could happen, depending on how much the government intervenes, and sure hope it does.  It would be great to pick up a currently $1M house for $800K.

Another 20% decline puts my place down to the high $400Ks, low $500Ks, which would be roughtly equivalent to an inflation-adjusted 5% appreciation rate over the past six years.  That doesn’t sound particularly bubble-like, although there were a few years of run-up before I got in the game…

Square footage prices in the $200s, especially on smaller places, doesn’t sound very probable.  One can always hope for such a bargain!  I have seen some larger homes sell recently in low $300 range, like $310-320, but they were north of 3,000sf.  There is one 3200sf place out there now with a low list price at $305 per sf.

I too live across and down the street on Rhythm. This is another dinky
2 Bdrm.  Rent would be about $ 2700.00.  Almost ZERO yard.  The Garage is a bonus. But the living room is tiny. Whats up with the chair
and the sofa ?  This thing will sit on the market till the cows come home at this price.  It is a nice area but not that nice.  Its tiny at 1150 Sq/Ft.
Price needs to be about $ 400K Max.  Poor people that bought at the top are going to get crushed hard.

This web site publishes the sales volume and inventory for Irvine.

http://www.ochomereview.com/homewp/chart/

About a year ago 160-200 homes were selling in a month. This site says that 11 homes closed so far this month…...we are on track to sell 40 homes or less in Irvine over in the month of septmeber. If the site is correct and there are about 1200 homes on the market…....the inventory in Irvine will be about 30 months at the end of september…..........

This is going to get ugly….....really ugly…...........it will be amazing if prices fall by only 50%.

OMFG!

If that’s accurate we are in for a monumental sh*t storm.

When, Where, and how much is it worth now?

Comparing that figure to the historical number presented on the chart 11 looks to be right in there.  In fact the chart presented on that page shows sold properties in Irvine over the past year over 5 day periods, and I can’t see a single-day period with more than 15 sales.

Considering we just had Labor Day and the start of school (both would be downward adjustments when trying to indentify any trends), this is probably meaningless.

Please note that Sales were extremely low around Christmas and New Years last year, even lower than now.

The Total Inventory figures chart on the other hand is more interesting.  Though the total numbers are spiking, the overall figures are still off the highs of late 2006 (it would be nice to see a longer history).  The interesting part is how much more jagged the line during the uptrend that started in May ‘07.

Additionally, the spike in Rental Rates over the past few months is extremely interesting.  Using the data, it seems larger units are being offered for rent at a higher rate.  Is that seasonal? 

We need longer data series to make any real inferences.

To all of you that don’t know how this works…..read this washington mutual article….....

See the ........“one-time write down”............that means that the banks are starting value their holdings at less than the thought they were worth. We call this a ....“get out of jail free card”.....its when the mangers proclaim they made a mistake…....... As this happens they start to lower the expected value of homes that they own and guess what…....they start to sell them for much less than they thought they were originally worth.

We will see lots of “one-time write downs” over the next 5 years. Every once in a while the senior manager get fired for haveing too many one-timers and the new senior managers get a new shot at the…..“one-time write down”.

Nobody ever wants to face up to the ugly truth of what is really going on…....

Sounds low….I rent it for a heartbeat for 2k a month.  My rent in quail hill for 2 bd 1 bth 1 car garage 1000 sq ft is 1785.

The inventory numbers are right Nano.  There are 1204 places on the market in Irvine right now.  That number was running in the mid to low 1300’s for a good bit, but a bunch of people pulled their listings in recent weeks.

I run the same search everyday, of 2200+ sf homes in Irvine, built after 1980, up to $1.1M.  I think I have only seen 6-7 go into escrow over the past month.  So few, I can almost remember each of their addresses.  I am pretty religious about monitoring this search.  Normally see 4-5 price reductions per week.  The list drops have been small though, normally $10-20K.  People just trying to entice more traffic, not really get a deal done.

Wells Fargo REO just came online in NorthPark at $383 per sf, $980K for 2,600 square feet.  Recent comps are on this same exact model home at more like $890-925K.  Appears that they priced according to other listings, not what the few relevant comps suggest…

IPOPLAYA - I think there are many people out there that think like you do.  Everyone knows RE is bad right now, but at some point in the decline money will come back into the game.  It’s all about perceived bargain, and sooner or later the fear that exists right now will be outweighed by the perception of a value.  Like it or not, the inflated bubble highs set a psycological bar in people’s collective minds.  People would see a house that once sold for $600K now selling at $300 as a true bargain.  I believe the floor on this thing is higher than others would lead you to believe.

Lol, “a hill with quails”!! I think the quails are long gone…probably relocated due to the outrageous real estate prices.

Where do you get the 160 - 200 homes figure?

I was in a meeting most of today. I heard rumor at this meeting that new home sales for LA, Orange and Riverside counties totalled 116 for the last 30 days. This is the lowest 30 day total ever recorded.

Lendingmaestro called in in our forum on August 8:

http://forums.irvinehousingblog.com/discussion/576/9/most-important-post-ever/

Uhmm, actually it doesn’t. Capitalism that is. Capitalism needs people who try to maximize their utility subject to their budget constraint…which most of us do (not consiously though).

FamilyGuy,

I feel the anguish and anger this market situation is creating for you. It comes through in some of your postings. For your sake, I hope you are right and this correction does not turn into a full scale collapse. Good, hard-working people like yourself who were just providing shelter for their family shouldn’t get hurt this way.

Check out this site:

http://www.orange-county-real-estate-coach.com/weblogirv.html

When times were good this RE agent used to publish all of the closed homes….it was normal to see between 30 and 50 homes a week close.

Also, check out theis site:

http://orangecoastrealestate.com/irvine/irvine_real_estate_trends.htm

and add the homes plus the condos.