In a Liquidity Trap although Saving (S) is abnormally high investment (i) is next to 0. The Keynesian Paradigm I=S is not verified.
The purpose of Quantitative Easing is to lower the yield on savings but it doesn’t create $1 on investment. It does diminish the yield on long-term Treasury Bonds but marginally lowers the asked yield on savings.
This and other issues are explored in our Tract:
A Specific Application of Employment, Interest and Money
Abstract:
This tract makes a critical analysis of credit based, free market economy, Capitalism, and proves that its dysfunctions are the result of the existence of credit.
It shows that income / wealth disparity, cause and consequence of credit and of the level of long-term interest-rates, is the first order hidden variable, possibly the only one, of economic development.
It solves most of the puzzles of macro economy: among which Business Cycles, Stagflation, Greenspan Conundrum, Deflation and Keynes’ Liquidity Trap…
It shows that no fiscal or monetary policy, including the barbaric quantitative easing will get us out of depression.
It shows that Adam Smith, John Maynard Keynes, Karl Marx and Alan Greenspan don’t contradict each other but that they each bring a meaningful contribution to a same framework for understanding macro economy.
It proposes a credit free, free market economy as a solution that would correct all of those dysfunctions.
In This Age of Turbulence People Want an Exit Strategy out of Credit, an Adventure in a New World Economic Order.
I see that they have removed the popcorn ceilings and have added recessed lighting. At least downstairs.
No pictures of the bedrooms. Didn’t they advertise a terrific master bed?
Those trees in the back yard will not allow grass to grow under them. They tend to make a mess year ‘round with their leaves and little red pepper balls that drop everywhere. If there is a pool/s on the other side of the wall your neighbors will expect you to be responsible for keeping your trees trimmed and on YOUR SIDE OF THE WALL at your expense. And they will bitch if you don’t because those trees really clog up the pool filters and generally make a huge mess in other yards, as well as your own. Oh yeah, and the root systems for those trees tend to go rogue and tear up walls and concrete pads - not just contained in your yard, but can affect your neighbors as well.
There was a real class of asshats that bought up properties in our older neighborhood the past five years. They acted completely entitled and many of them had very marginal jobs. Some of them have capitulated and have been replaced by unassuming asian buyers. I think today’s property kind of explains what was going on and how the debtload the homes may/probably have on them allowed some real jerks to live large and beyond their means. It really gave way to very aggressive know-it-all attitudes in our schools, kids sports teams, HOA meetings etc… There are four families that I will enjoy seeing the moving truck in front of their homes. I am now convinced that it is just a matter of time.
There REALLY IS a difference in attitudes between people who didn’t put in the work to actually own a home within their means and people who had the discipline to buy and own responsibly.
Posted by NoWowway on 01/01/09 at 07:07 AM
Wow, IR. That thread with angry Janet is something else.
I don’t see my asshat neighbors getting all publically angry like that… they are more into slinking away.
“There REALLY IS a difference in attitudes between people who didn’t put in the work to actually own a home within their means and people who had the discipline to buy and own responsibly.”
This is the difference you used to see between owners and renters in a neighborhood. Apparently, “owners” who put no money down, have no equity, and made no sacrifices for ownership are not any different than renters. Hmmm…
Posted by Schadenfreude on 01/01/09 at 07:47 AM
Hmm angry homedebtor or bitter renter?
Posted by ocbear on 01/01/09 at 08:51 AM
Long time lurker, first post here.
I have been watching the beach areas for the last year and have seen three types of transactions. The first is the REO which is listed low and gets multiple bids. Most of these usually sell for above asking. If the REO is not listed low it sits.
The second type is the above average home priced in the average house range. These sell for about 95% of list.
The third type is what confuses me the most: A house that sits on market for a long time, maybe gets a 20K reduction and then sells for 103% of original asking. I suspect there is some form of FHA fraud going on with these. I believe that an FHA can get up to 3% back for repairs and up to the begin of this year only required 3% down. I have suspected these transactions are using some form of hard money loan seasoned for 2 months and then are repaid with the ‘repairs’ funds. These transactions always sit pending for quit a while (enough to prove 2 months of funds). My hope is that these transactions go away with the CalFHA being suspended because of the budget crisis.
Posted by idrnkurmlkshk on 01/01/09 at 08:56 AM
Hi Janet,
I havnt been following the issue you are having with IR, but what points are you specifically looking for facts on? In order for the truth to be known, everyone should tone down blog-trash talk.
IR, I don’t believe Irvine’s price declines were as large as you predicted for 2008. You were thinking 12% in 2008, which looks to be more like 8-10%, and another 16% in 2009…
So if the median declines for Irvine in 2009 won’t be as high as 2008, are you now thinking maybe only 6-8% off in 2009 for Irvine for a two-year total of 16-18%?
I guess we did not have to wait to long to see an uptick in trolling…
Posted by Orcian on 01/01/09 at 09:44 AM
Last week (Dec. 25) in the OCR, there was an article about Mission Viejo’s Life Church, and problems its members are having. The article mentions that at least 25% of the 2,000-member congregation faces foreclosure. Phil Munsey, the founding pastor, said, “We have people in nice homes and cars that can’t afford groceries. It is the Orange County dilemma….” I wonder how many in Irvine are in the same boat. Hard to tell, because everyone seems to be doing so well. Many that we know spend (borrow?) a lot more than we do on “stuff.” I guess we will know more as the next couple of years unfold.
I haven’t seen the final numbers on 2008, but I thought it was worse than 8%-10%. I think we will see another 10% in 2009. Interest rates will work to support prices. It all depends on how much supply is forced on to the market, and how many people will qualify under the new terms. Prices are still too high, but if supply remains low and there are enough knife-catchers qualified to buy up the inventory, prices may remain supported at elevated levels.
Posted by george8 on 01/01/09 at 10:13 AM
It is likely that the government will employ desperate and reckless means to artificially suppress ALT A and ARM reset pains. Therefore the decline may be put off a little longer as projected.
Posted by newbie_2009 on 01/01/09 at 10:41 AM
Happy New Year!
Hi, I am a newbie and looking to buy in 2009 or 2010. Just have some questions about the medium “home” price prediction for Irvine:
1. Is the medium “home” price for SFR only or does it include the condos as well?
2. What’s a medium “home” like in Irvine? i.e. how old is it and how big it is?
Thanks!
Posted by alan on 01/01/09 at 10:47 AM
IR…
I have a HELOC which I opened but didn’t abuse, there good to have for the rainy day. Citibank cut my line in 1/2 last yr but it’s still a good amount. After the most recent interest cut, my rate on my HELOC is 2%.
Currently I’m getting 3.7% on my savings at Indymac so here’s a situation where I could tap my HELOC, move it into a savings account and make money. I never thought anything like that would happen.
I have added the MLS lease history through 12/31/08, but expect the MLS sales history to take a bit longer to be reported.
www.irvinerealtorsite.com
Happy New Year, all.
Posted by Hal on 01/01/09 at 11:27 AM
I’m in Florida and the housing market is hurting here big time too. I think you’re right that we will see prices continue to fall but not as much as in ‘08.
Though I think it could be possible for something even worse after watching I.O. USA video and it scares me quite a bit as we go into the new year.
Here’s another video from the Wall Street Journal worth looking at: How Iceland Collapsed.
I think a lot of people are going to be turning toward saving money. And gold probably will be one of the modes to that end because I think the dollar will be toast. I see from ExactPrice that gold is taking off after close today and is at 883.90 right now. Given it all I am beginning to wonder if Peter Schiff’s prediction isn’t right about it going through the roof in ‘09. He claims $2,000 an ounce will likely be hit.
Well, I guess that’s my predictions. I know one thing I resolve to do, and that’s cut back and save money.
Posted by The Moar You Know on 01/01/09 at 11:45 AM
Boy, it really is, and she just keeps coming back for more. I haven’t seen anyone self-pwn like that since Budd Dwyer.
Posted by Priced_Out_IT_Guy on 01/01/09 at 12:09 PM
This is my assumption as well. I don’t think you can predict the future at this point because the recklessness we’re going to see by our government in 2009 will be unprecedented.
Once the ARM problem comes to full light the government will figure out some way to ease the reset burden by stealing from the general public and giving to the ones that helped cause this mess through tax subsidies in some way shape or form.
Personally I foresee a continued drop in pricing in the two markets I follow: OC and North County SD. OC is still way overpriced for first time buyers and north county SD is still a bit overpriced but quickly approaching rental parity. As a first time buyer I am still planning to delay my purchase until 2010.
Posted by Priced_Out_IT_Guy on 01/01/09 at 12:15 PM
Don’t cut back and save money—do your damned patriotic duty and spend like a playboy in Vegas with an AMEX black card. If you don’t do what’s right the era of $5,000 leather sofas, $4,000 flat screen TVs, and $85,000 domestic tank SUVs will disappear and never return.
Posted by dafox on 01/01/09 at 12:51 PM
Here’s some fun chart porn
http://spreadsheets.google.com/pub?key=pGy0BQU1PZ9CNMZ8GMweHNg&oid=3&output=image
Blue = Current LA Case Schiller as of Oct 08
Yellow = If the bubble were mirrored from the top, thats what the 2nd half would look like
Red = Mirrored, but from the current location (~179 on the index)
Green = +3%/yr starting from Jan 87
3 things that this shows me:
1. The fall has been faster than the rise
2. the red/green crossing point is Nov 2010
3. Peak prices wont be seen for LONG time. at least past 2025.
Posted by nefron on 01/01/09 at 01:03 PM
I agree with george8 and Priced_Out. You do not know to what lengths our government will go to support the real estate financial complex in this country. We are all hoping that the market will be left alone as much as possible to self correct but I think that you cannot rule out major tinkering/bank arm twisting by the government to blunt the effect of the ARM recasts. Not that I’m in favor of it. I need prices to go down. But I’m not optimistic. The loud-mouthed, self-absorbed, self-entitled have a way of getting what they want in this country.
Posted by MalibuRenter on 01/01/09 at 01:41 PM
According to Cyberhomes, it’s 17% off over the last 12 months. Probably a similar number when December figures are in.
Posted by Priced_Out_IT_Guy on 01/01/09 at 02:42 PM
I also predict that we’re going to get more people to come down to earth who have been earning 100K+ salaries while working phony jobs that contribute nothing to the economy. Case in point:
I have received a stream of offers from BofA to borrow at 1.99% unsecured. I can get a higher return on a CD at BofA.
There might be some sort of regulatory capital calculation going on. Since banks have leverage ratio requirements, if I borrowed $10,000 and put it back in the same bank, their capital ratios would look better.
The median home price will include all transactions. The median is exaggerating the decline in prices right now because most of the activity is at the bottom of the market.
A median home in Irvine is a large 2/2 or a small 3/2 most likely a condo. SFDs, even the small ones, are the minority in Irvine.
Posted by Perspective on 01/01/09 at 06:27 PM
“...by stealing from the general public…”
They’ve been stealing 40%+ from me & the Mrs. for years.
This is exactly the situation the FED hopes to create. The easiest way to stimulate borrowing is to pay people to do it. I know it sounds facetious, but I am totally serious.
The Cyberhome figures include Nov and Dec 2007, which were big decline months for Irvine as well as the rest of the country.
If you look at Case-Shiller data, those two months were 2 of the largest 3 months of declines. I think in calendar 2008, Irvine would be lucky to be off 10%, especially with closing prices up in December…
Posted by tlc8386 on 01/01/09 at 08:47 PM
I think our neighbors had a heart attack to see the renters fixing up the place—LOL—Then they saw how we live and must of thought we owned a home either flipping it or doing a heloc and walking away like everyone else—No sorry just a regular old honest person if any exist any more! Only problem we still don’t really fit in. OH well that is the way it goes!!
I have an idea though why can’ we buy some property and build our own homes—like Green types. Is there any property we can own? I am at the point where I would rather build my own—at least I would not be over spending for some termite old falling apart house totally over priced for what it’s worth.
Is there such a thing or does IAC own everything???
Posted by tlc8386 on 01/01/09 at 08:57 PM
You have to ask yourself where are the jobs that are going to support Irvine—This alone will continue to decline given the financial meltdown.
The city needs to cut back and fire some of their over paid employees—time to cut back Irvine and get back into reality.
Posted by Hal on 01/02/09 at 07:29 AM
lol
I guess you’ll have to call me un-patriotic if that’s the definition.
IR… You have a fundamental error on your “home-price meets rent-cost” chart. You show a rising rent-price line. Recent (6-month at least) empirical data shows rents *falling* (at best “steady”). IAC is reducing rents and (horrors!) offering 15-month leases.
IAC is being hit by falling rent-prices of personally-owned condo’s, and must compete.
Yes, when I originally did the projections, I did not factor in how much the downturn in the economy would impact rents. Firming rents will be the first sign of the recession ending.
I think 2009 will start to level out around the end of the year, but it will be tricky for some people before then. I wouldn’t expect property values to do anything but drop in the meantime.
Some of us delusional homeowners have stopped drinking the kool aid! I grew up in South Orange County, moved to San Diego for school, got married, and started looking to buy a home.
We totally drank the kool aid, believed if we didn’t get in now, we were missing out and bought in 2005 with little money down. (5/1 interest only arm 1st, fully adjst interest only 2nd). 1 year later, we refinanced into a 7/1 arm and fully amitorized 2nd, and took no money out. My husband was graduating from law school, and our hope was to re-fi at the end of the fixed period, or with the huge bump in income we expected to have, be able to afford the difference. We weren’t chugging the kool aid, just drinking too much.
We split in October, and now I don’t have 1/2 the money for the mortgage, so I’m going through bank hell right now. It’s my own damn fault for not doing my homework, and I don’t expect a bailout. (I wouldn’t say no to one of course, but I don’t expect it or feel ‘entitled’ to it.)
Anyway, my point is that not all of us idiot homeowners are angry! I read to educate myself for next time. Plus, it’s nice to see there were people who were a lot stupider than I was.
I’m willing to take most of the blame for this, and will be paying for it with my credit. There definitely were some other factors, my lender told me, “Oh, you can’t get a good house for that amount, you can qualify for $100k more”. We said, “No, we can only pay x per month, we’ll find something for that.” Which was one of the few smart things we did do!!
I think 2009 will start to level out around the end of the year, but it will be tricky for some people before then. I wouldn’t expect property values to do anything but drop in the meantime.
There REALLY IS a difference in attitudes between people who didn’t put in the work to actually own a home within their means and people who had the discipline to buy and own responsibly.I have an idea though why can’ we buy some property and build our own homes—like Green types. Is there any property we can own? I am at the point where I would rather build my own—at least I would not be over spending for some termite old falling apart house totally over priced for what it’s worth.
Posted by Orcian on 01/01/09 at 10:32 AM
I don’t blame IR for deleting your posts, Janet. If he spent all of his time battling delusional minds, he’d have no time for his family.
Posted by Gindy on 01/01/09 at 04:36 AM
The discounted commission shows. The least the agent could do is not put multiple pictures of the same things on the house’s selling site.
Posted by Adam Smith on 01/01/09 at 05:25 AM
Quantitative Easing Won’t Work
In a Liquidity Trap although Saving (S) is abnormally high investment (i) is next to 0. The Keynesian Paradigm I=S is not verified.
The purpose of Quantitative Easing is to lower the yield on savings but it doesn’t create $1 on investment. It does diminish the yield on long-term Treasury Bonds but marginally lowers the asked yield on savings.
This and other issues are explored in our Tract:
A Specific Application of Employment, Interest and Money
Abstract:
This tract makes a critical analysis of credit based, free market economy, Capitalism, and proves that its dysfunctions are the result of the existence of credit.
It shows that income / wealth disparity, cause and consequence of credit and of the level of long-term interest-rates, is the first order hidden variable, possibly the only one, of economic development.
It solves most of the puzzles of macro economy: among which Business Cycles, Stagflation, Greenspan Conundrum, Deflation and Keynes’ Liquidity Trap…
It shows that no fiscal or monetary policy, including the barbaric quantitative easing will get us out of depression.
It shows that Adam Smith, John Maynard Keynes, Karl Marx and Alan Greenspan don’t contradict each other but that they each bring a meaningful contribution to a same framework for understanding macro economy.
It proposes a credit free, free market economy as a solution that would correct all of those dysfunctions.
In This Age of Turbulence People Want an Exit Strategy out of Credit, an Adventure in a New World Economic Order.
Read It.
http://edsk.org/
Posted by NoWowway on 01/01/09 at 06:24 AM
I see that they have removed the popcorn ceilings and have added recessed lighting. At least downstairs.
No pictures of the bedrooms. Didn’t they advertise a terrific master bed?
Those trees in the back yard will not allow grass to grow under them. They tend to make a mess year ‘round with their leaves and little red pepper balls that drop everywhere. If there is a pool/s on the other side of the wall your neighbors will expect you to be responsible for keeping your trees trimmed and on YOUR SIDE OF THE WALL at your expense. And they will bitch if you don’t because those trees really clog up the pool filters and generally make a huge mess in other yards, as well as your own. Oh yeah, and the root systems for those trees tend to go rogue and tear up walls and concrete pads - not just contained in your yard, but can affect your neighbors as well.
There was a real class of asshats that bought up properties in our older neighborhood the past five years. They acted completely entitled and many of them had very marginal jobs. Some of them have capitulated and have been replaced by unassuming asian buyers. I think today’s property kind of explains what was going on and how the debtload the homes may/probably have on them allowed some real jerks to live large and beyond their means. It really gave way to very aggressive know-it-all attitudes in our schools, kids sports teams, HOA meetings etc… There are four families that I will enjoy seeing the moving truck in front of their homes. I am now convinced that it is just a matter of time.
There REALLY IS a difference in attitudes between people who didn’t put in the work to actually own a home within their means and people who had the discipline to buy and own responsibly.
Posted by NoWowway on 01/01/09 at 07:07 AM
Wow, IR. That thread with angry Janet is something else.
I don’t see my asshat neighbors getting all publically angry like that… they are more into slinking away.
Posted by IrvineRenter on 01/01/09 at 07:11 AM
“There REALLY IS a difference in attitudes between people who didn’t put in the work to actually own a home within their means and people who had the discipline to buy and own responsibly.”
This is the difference you used to see between owners and renters in a neighborhood. Apparently, “owners” who put no money down, have no equity, and made no sacrifices for ownership are not any different than renters. Hmmm…
Posted by Schadenfreude on 01/01/09 at 07:47 AM
Hmm angry homedebtor or bitter renter?
Posted by ocbear on 01/01/09 at 08:51 AM
Long time lurker, first post here.
I have been watching the beach areas for the last year and have seen three types of transactions. The first is the REO which is listed low and gets multiple bids. Most of these usually sell for above asking. If the REO is not listed low it sits.
The second type is the above average home priced in the average house range. These sell for about 95% of list.
The third type is what confuses me the most: A house that sits on market for a long time, maybe gets a 20K reduction and then sells for 103% of original asking. I suspect there is some form of FHA fraud going on with these. I believe that an FHA can get up to 3% back for repairs and up to the begin of this year only required 3% down. I have suspected these transactions are using some form of hard money loan seasoned for 2 months and then are repaid with the ‘repairs’ funds. These transactions always sit pending for quit a while (enough to prove 2 months of funds). My hope is that these transactions go away with the CalFHA being suspended because of the budget crisis.
Posted by idrnkurmlkshk on 01/01/09 at 08:56 AM
Hi Janet,
I havnt been following the issue you are having with IR, but what points are you specifically looking for facts on? In order for the truth to be known, everyone should tone down blog-trash talk.
Posted by ipoplaya on 01/01/09 at 09:14 AM
IR, I don’t believe Irvine’s price declines were as large as you predicted for 2008. You were thinking 12% in 2008, which looks to be more like 8-10%, and another 16% in 2009…
So if the median declines for Irvine in 2009 won’t be as high as 2008, are you now thinking maybe only 6-8% off in 2009 for Irvine for a two-year total of 16-18%?
Posted by IrvineRenter on 01/01/09 at 09:42 AM
I guess we did not have to wait to long to see an uptick in trolling…
Posted by Orcian on 01/01/09 at 09:44 AM
Last week (Dec. 25) in the OCR, there was an article about Mission Viejo’s Life Church, and problems its members are having. The article mentions that at least 25% of the 2,000-member congregation faces foreclosure. Phil Munsey, the founding pastor, said, “We have people in nice homes and cars that can’t afford groceries. It is the Orange County dilemma….” I wonder how many in Irvine are in the same boat. Hard to tell, because everyone seems to be doing so well. Many that we know spend (borrow?) a lot more than we do on “stuff.” I guess we will know more as the next couple of years unfold.
Posted by IrvineRenter on 01/01/09 at 09:48 AM
I haven’t seen the final numbers on 2008, but I thought it was worse than 8%-10%. I think we will see another 10% in 2009. Interest rates will work to support prices. It all depends on how much supply is forced on to the market, and how many people will qualify under the new terms. Prices are still too high, but if supply remains low and there are enough knife-catchers qualified to buy up the inventory, prices may remain supported at elevated levels.
Posted by george8 on 01/01/09 at 10:13 AM
It is likely that the government will employ desperate and reckless means to artificially suppress ALT A and ARM reset pains. Therefore the decline may be put off a little longer as projected.
Posted by newbie_2009 on 01/01/09 at 10:41 AM
Happy New Year!
Hi, I am a newbie and looking to buy in 2009 or 2010. Just have some questions about the medium “home” price prediction for Irvine:
1. Is the medium “home” price for SFR only or does it include the condos as well?
2. What’s a medium “home” like in Irvine? i.e. how old is it and how big it is?
Thanks!
Posted by alan on 01/01/09 at 10:47 AM
IR…
I have a HELOC which I opened but didn’t abuse, there good to have for the rainy day. Citibank cut my line in 1/2 last yr but it’s still a good amount. After the most recent interest cut, my rate on my HELOC is 2%.
Currently I’m getting 3.7% on my savings at Indymac so here’s a situation where I could tap my HELOC, move it into a savings account and make money. I never thought anything like that would happen.
Posted by IrvineRealtor on 01/01/09 at 11:12 AM
I have added the MLS lease history through 12/31/08, but expect the MLS sales history to take a bit longer to be reported.
www.irvinerealtorsite.com
Happy New Year, all.
Posted by Hal on 01/01/09 at 11:27 AM
I’m in Florida and the housing market is hurting here big time too. I think you’re right that we will see prices continue to fall but not as much as in ‘08.
Though I think it could be possible for something even worse after watching I.O. USA video and it scares me quite a bit as we go into the new year.
Here’s another video from the Wall Street Journal worth looking at: How Iceland Collapsed.
I think a lot of people are going to be turning toward saving money. And gold probably will be one of the modes to that end because I think the dollar will be toast. I see from ExactPrice that gold is taking off after close today and is at 883.90 right now. Given it all I am beginning to wonder if Peter Schiff’s prediction isn’t right about it going through the roof in ‘09. He claims $2,000 an ounce will likely be hit.
Well, I guess that’s my predictions. I know one thing I resolve to do, and that’s cut back and save money.
Posted by The Moar You Know on 01/01/09 at 11:45 AM
Boy, it really is, and she just keeps coming back for more. I haven’t seen anyone self-pwn like that since Budd Dwyer.
Posted by Priced_Out_IT_Guy on 01/01/09 at 12:09 PM
This is my assumption as well. I don’t think you can predict the future at this point because the recklessness we’re going to see by our government in 2009 will be unprecedented.
Once the ARM problem comes to full light the government will figure out some way to ease the reset burden by stealing from the general public and giving to the ones that helped cause this mess through tax subsidies in some way shape or form.
Personally I foresee a continued drop in pricing in the two markets I follow: OC and North County SD. OC is still way overpriced for first time buyers and north county SD is still a bit overpriced but quickly approaching rental parity. As a first time buyer I am still planning to delay my purchase until 2010.
Posted by Priced_Out_IT_Guy on 01/01/09 at 12:15 PM
Don’t cut back and save money—do your damned patriotic duty and spend like a playboy in Vegas with an AMEX black card. If you don’t do what’s right the era of $5,000 leather sofas, $4,000 flat screen TVs, and $85,000 domestic tank SUVs will disappear and never return.
Posted by dafox on 01/01/09 at 12:51 PM
Here’s some fun chart porn
http://spreadsheets.google.com/pub?key=pGy0BQU1PZ9CNMZ8GMweHNg&oid=3&output=image
Blue = Current LA Case Schiller as of Oct 08
Yellow = If the bubble were mirrored from the top, thats what the 2nd half would look like
Red = Mirrored, but from the current location (~179 on the index)
Green = +3%/yr starting from Jan 87
3 things that this shows me:
1. The fall has been faster than the rise
2. the red/green crossing point is Nov 2010
3. Peak prices wont be seen for LONG time. at least past 2025.
Posted by nefron on 01/01/09 at 01:03 PM
I agree with george8 and Priced_Out. You do not know to what lengths our government will go to support the real estate financial complex in this country. We are all hoping that the market will be left alone as much as possible to self correct but I think that you cannot rule out major tinkering/bank arm twisting by the government to blunt the effect of the ARM recasts. Not that I’m in favor of it. I need prices to go down. But I’m not optimistic. The loud-mouthed, self-absorbed, self-entitled have a way of getting what they want in this country.
Posted by MalibuRenter on 01/01/09 at 01:41 PM
According to Cyberhomes, it’s 17% off over the last 12 months. Probably a similar number when December figures are in.
http://www.cyberhomes.com/neighborhoods-irvine-ca/1024707.aspx
Posted by Priced_Out_IT_Guy on 01/01/09 at 02:42 PM
I also predict that we’re going to get more people to come down to earth who have been earning 100K+ salaries while working phony jobs that contribute nothing to the economy. Case in point:
http://money.cnn.com/2009/01/01/news/economy/pay_cuts/index.htm?postversion=2009010111
Posted by maliburenter on 01/01/09 at 04:14 PM
I have received a stream of offers from BofA to borrow at 1.99% unsecured. I can get a higher return on a CD at BofA.
There might be some sort of regulatory capital calculation going on. Since banks have leverage ratio requirements, if I borrowed $10,000 and put it back in the same bank, their capital ratios would look better.
Posted by IrvineRenter on 01/01/09 at 06:26 PM
The median home price will include all transactions. The median is exaggerating the decline in prices right now because most of the activity is at the bottom of the market.
A median home in Irvine is a large 2/2 or a small 3/2 most likely a condo. SFDs, even the small ones, are the minority in Irvine.
Posted by Perspective on 01/01/09 at 06:27 PM
“...by stealing from the general public…”
They’ve been stealing 40%+ from me & the Mrs. for years.
Posted by IrvineRenter on 01/01/09 at 06:28 PM
This is exactly the situation the FED hopes to create. The easiest way to stimulate borrowing is to pay people to do it. I know it sounds facetious, but I am totally serious.
Posted by CapitalismWorks on 01/01/09 at 07:38 PM
Yawn
Posted by ipoplaya on 01/01/09 at 07:56 PM
The Cyberhome figures include Nov and Dec 2007, which were big decline months for Irvine as well as the rest of the country.
If you look at Case-Shiller data, those two months were 2 of the largest 3 months of declines. I think in calendar 2008, Irvine would be lucky to be off 10%, especially with closing prices up in December…
Posted by tlc8386 on 01/01/09 at 08:47 PM
I think our neighbors had a heart attack to see the renters fixing up the place—LOL—Then they saw how we live and must of thought we owned a home either flipping it or doing a heloc and walking away like everyone else—No sorry just a regular old honest person if any exist any more! Only problem we still don’t really fit in. OH well that is the way it goes!!
I have an idea though why can’ we buy some property and build our own homes—like Green types. Is there any property we can own? I am at the point where I would rather build my own—at least I would not be over spending for some termite old falling apart house totally over priced for what it’s worth.
Is there such a thing or does IAC own everything???
Posted by tlc8386 on 01/01/09 at 08:57 PM
You have to ask yourself where are the jobs that are going to support Irvine—This alone will continue to decline given the financial meltdown.
The city needs to cut back and fire some of their over paid employees—time to cut back Irvine and get back into reality.
Posted by Hal on 01/02/09 at 07:29 AM
lol
I guess you’ll have to call me un-patriotic if that’s the definition.
Posted by Paul Pencikowski on 01/03/09 at 11:34 AM
IR… You have a fundamental error on your “home-price meets rent-cost” chart. You show a rising rent-price line. Recent (6-month at least) empirical data shows rents *falling* (at best “steady”). IAC is reducing rents and (horrors!) offering 15-month leases.
IAC is being hit by falling rent-prices of personally-owned condo’s, and must compete.
Posted by IrvineRenter on 01/03/09 at 09:06 PM
Yes, when I originally did the projections, I did not factor in how much the downturn in the economy would impact rents. Firming rents will be the first sign of the recession ending.
Posted by Edmonton Real Estate on 01/05/09 at 11:20 AM
I think 2009 will start to level out around the end of the year, but it will be tricky for some people before then. I wouldn’t expect property values to do anything but drop in the meantime.
Ryan Philipenko - Real Estate Edmonton
Posted by SD Kate on 01/06/09 at 03:50 PM
Some of us delusional homeowners have stopped drinking the kool aid! I grew up in South Orange County, moved to San Diego for school, got married, and started looking to buy a home.
We totally drank the kool aid, believed if we didn’t get in now, we were missing out and bought in 2005 with little money down. (5/1 interest only arm 1st, fully adjst interest only 2nd). 1 year later, we refinanced into a 7/1 arm and fully amitorized 2nd, and took no money out. My husband was graduating from law school, and our hope was to re-fi at the end of the fixed period, or with the huge bump in income we expected to have, be able to afford the difference. We weren’t chugging the kool aid, just drinking too much.
We split in October, and now I don’t have 1/2 the money for the mortgage, so I’m going through bank hell right now. It’s my own damn fault for not doing my homework, and I don’t expect a bailout. (I wouldn’t say no to one of course, but I don’t expect it or feel ‘entitled’ to it.)
Anyway, my point is that not all of us idiot homeowners are angry! I read to educate myself for next time. Plus, it’s nice to see there were people who were a lot stupider than I was.
I’m willing to take most of the blame for this, and will be paying for it with my credit. There definitely were some other factors, my lender told me, “Oh, you can’t get a good house for that amount, you can qualify for $100k more”. We said, “No, we can only pay x per month, we’ll find something for that.” Which was one of the few smart things we did do!!
Posted by North Myrtle Beach Condos on 01/06/09 at 10:35 PM
I think 2009 will start to level out around the end of the year, but it will be tricky for some people before then. I wouldn’t expect property values to do anything but drop in the meantime.
There REALLY IS a difference in attitudes between people who didn’t put in the work to actually own a home within their means and people who had the discipline to buy and own responsibly.I have an idea though why can’ we buy some property and build our own homes—like Green types. Is there any property we can own? I am at the point where I would rather build my own—at least I would not be over spending for some termite old falling apart house totally over priced for what it’s worth.