I second this. This is the same exact problem that I’m seeing with condos literally across the street from my house in Dallas. The owners of properties for rent in my neighborhood are following the market down, still in denial over what’s happened to the market. The condos are the usual converted apartments, about 35 years old, with living room and kitchen windows that give a fabulous view of the filthy, muddy alleyway separating the building from the back of the nearby Chili’s. However, the owners of the condos are still trying to get rent at the same rate as they were getting back in 2006.
The problem here is that we’re starting to see a consolidation of rentals, and most property owners don’t want to understand why. The presumption among many real estate agents and apartment managers was as people had to abandon their homes, they’d still need places to live. Ergo, not only did apartment prices stay stable, but in some markets, they went up. The bad news for these greedheads is that the folks mailing in their keys and walking away aren’t moving into brand new apartments. Either they’re moving in with friends (the house I rented ten years ago now has three families living in it, apparently with the blessings of the owner) or family, but they’re not moving into apartments. The high-end apts are expecting higher credit ratings, and the rest are still asking waaaaay too much for people who had to abandon everything and move out.
Posted by Shadax on 03/02/09 at 07:21 AM
Great post today, IR.
Posted by Priced_Out_IT_Guy on 03/02/09 at 07:22 AM
For the Woodbridge HOA dues of *only* $355/mo this place sure isn’t very close to any of the amenities (lakes, pools, tennis courts, etc). IHMO Deerfield is the second worst part of Woodbridge right after to the ghetto apartments at the corner of Irvine Center and Jeffrey.
Using the calculator on this site, the $2,491.96 in cash outflow per month at a $300,000 purchase price with $60,000 down doesn’t exactly inspire me to go out and take on a 30 year commitment.
IR, you really think this is already at rental parity? Somebody put sunshine in your coffee this morning!
I’d rather keep my $60,000 down payment and rent an equivalent apartment (lets not fool ourselves) with no strings attached for much less than $2500/mo for the next 10 years. Oh, and I won’t have to bring my own paint and carpet…
Posted by lunatic fringe on 03/02/09 at 08:22 AM
I think rental parity is a bit of a moving target right now. If I look online I can see that the IAC apartment I rented 1-1/2 years ago is now 15% less than my lease rate then. We are undergoing deflationary pressures in just about everything and with the vicious cycle caused by unemployment and falling demand, who knows where rental parity will be in the future.
This is the one thing about IR’s writings that drives me a little crazy. When he says a property is at rental parity I wonder how many people might be going out to buy the place thinking they will always be at breakeven.
Posted by george8 on 03/02/09 at 08:52 AM
No smart investor will touch this until it is below $200k.
Posted by h on 03/02/09 at 09:03 AM
While the irresponsible lending and borrowing were the basis of the current mess, the ability for Wall Street to package up these loans and play all kinds of financial shenanigans has amplified the problem thirty-fold.
What is truly frightening is that the loss of 100-500K we see on these properties is only a fraction of the overall loss, as these nearly worthless loans were packaged, sold, re-sold, and used as collateral for more borrowing, much of this insured against losses by AIG with no reserve to back them up, and on and on, enriching a few people who are now hiding out on their own private islands.
Posted by maliburenter on 03/02/09 at 09:43 AM
Updated chart through year end 2008.
Posted by nefron on 03/02/09 at 09:50 AM
I know you’re exaggerating to make a point, but there is nothing in Irvine that even approaches ‘ghetto.’ It just smacks of that the ‘everybody deserves to be rich’ mentality that landed our entire society in this mess in the first place.
Posted by Chuck on 03/02/09 at 10:51 AM
For what its worth, this condo is not part of Woodbridge. I believe Deerfield is a separate village of Irvine (Refind calls it El Camino Real, actually) that doesn’t have access to the Woodbridge pools, lagoons, etc. So if the dues are really $355 per month this is crazy…
Posted by TheNumbersNeverLie on 03/02/09 at 11:33 AM
“AIG posts $61.7B 4Q loss, bailout is restructured”
Yeah, talk about the smartest guys in the room – how about Martin J. Sullivan, the CEO that left AIG in July with a 47 million dollar severance.
This guy must think to himself, “what a bunch of idiots!”, as he sees news of the world’s economies collapsing.
I wish I could be the smartest guy in the room for once.
Posted by nowwaat on 03/02/09 at 12:23 PM
“Somewhere around $232,000 is a reasonable bottoming figure, perhaps a bit higher if interest rates remain artificially low. Just think, the peak appraised value for this property was around $450,000…”
This is pretty good mathematics; But would one say that economic conditions were better in 1998 than 2009? Should there be a price hit for that? IMHO, the job insecurity and sentiment that exist today is significantly worse than in 1998.
Posted by LC on 03/02/09 at 12:29 PM
I think that you make a good point about credit expansion, that can be easily demonstrated at home with a credit card. Put $500 on that credit card in a month, and it is an apparant income gain in one month. But the debt sticks around for a while. Put on a macro level, you can see how this thing is not sustainable. Credit expansion has built our economy over and over again in good times, but it a one time boost that does not last very long, and we pay for it for a long, long time.
Posted by tlc8386 on 03/02/09 at 12:30 PM
In the paper this weekend I noticed more rental ads—one a 5 bedroom in Tustin renting for $2700 another in Santa Ana renting for $2400 but it would be happy to take in two families. Rents are coming down a few others in Northpark for $2400 (three bedrooms).
Posted by mmg on 03/02/09 at 12:37 PM
Excellent post
I was just thinking about this over the weekend, if we could come out with firm rules based on income and down payments, the market would come out of severe denial into cold hard reality
we then could reassess the damage and move on. In most parts of the OC, whild lending standards are tighter than 2 years ago, still some sellers live in WTF territory. if every one knew the new lending rules that would help the housing market readjust much quicker.
The Gov should hire IR (and other bloggers who have been the closest in analysis to reality so far such as Mish, CR and others ) as a consultant ASAP instead of all the so called economists they have.
Just my 2 cents.
Posted by nowwaat on 03/02/09 at 12:45 PM
I agree that rental parity is a moving target. I would add my “2 cents” which is to say that to see if a place is at rental parity TODAY, I would do the math assuming 0% down (just for mathematical purposes) interest only to calculate monthly payment (i.e. strip out monthly amount going to pay down principal) and see where the math takes me.
Posted by tonyE on 03/02/09 at 01:03 PM
Walnut and Jeffrey…. that’s an “Irvine Ghetto”.
Posted by nefron on 03/02/09 at 01:06 PM
I do agree, if you want to talk about the worst section of Irvine, that area is a top candidate
Posted by Jeff H on 03/02/09 at 01:10 PM
This is a worthwhile read. It validates a lot of what I have read here.
“Ghetto” ? I would not use that word for that area at all. That area still has good schools, safety..etc. And Jeffrey Road is being improved, will look a lot nicer. IMHO, the Orangetree area is the least “prestigeous”.
Posted by tlc8386 on 03/02/09 at 03:37 PM
super blog thanks Jeff—
Posted by tonyE on 03/02/09 at 03:49 PM
Proper you should mistype “prestigious”.... That place is everything but prestigious.
Dang it, you can smell the chinese restaurants from the Santa Ana Fwy as you go by… and the parking lot SW of Jeffrey and Walnut is always packed with people waiting to eat at Taiko because it’s cheap.
Yeah, they may have Lexus and what not but I avoid the place like crazy. We’ve been almost run into several times.
And now I ignore the place, particularly when they ran out my favorite cheap mexican restaurant in Irvine: El Conejo. The place had been there forever, with good hot salsa and cheap beer. Now, it just another pseudo asian hole in the wall… (Thai Cafe, owned by Persians)
Piggington rate of change in price yoy recent post suggests that we may have just passed the halfway down mark with a “bottom” in Jan 2010. But I am with the wise poster above who suggested that 2010 may not be as rosy as all that, and the declines go on well beyond. $180? especially if you enforce the 20% down rule. This apartment is for people with no down payment 60 month auto payments.
Posted by chuckconners on 03/02/09 at 05:54 PM
My old man always said fixed thirty year and it even worked during the Carter years,but had to live in Corona and drive to Brea to work.Interest rates were 18 to 23 percent but with a new family and plenty of energy for the drive I didnt care.Would I do it now? NO..but I dont have to.
Posted by Bitter Renter on 03/02/09 at 05:57 PM
I don’t know that the parking lot is always packed due to Taiko. Certainly it’s a contributor, but there are a lot of great and unique Asian businesses in that center that are popular (e.g. Yogurtland, which is certainly not cheap), and not enough parking to go around.
I will admit that the frequency of bad driving skills seen in that parking lot reinforces a stereotype about Asians (I’ve never had a problem at the Asian center across the street with 99 Ranch, etc., though).
I feel your pain with regards to losing a favorite restaurant, but personally I thought El Conejo was only so-so, and I stopped going there several years ago after they (I’m pretty sure) gave me some bad food poisoning. At least there are branches in other cities, if you care to drive there (I know, not too useful if you were going there primarily because it was cheap).
Per your article, the new Thai place is owned by Indonesians, not Persians. At least closer to the right part of the world.
Posted by Still renting on 03/02/09 at 06:14 PM
I have been looking at buying a home and still find most Irvine homes are holding around the 700-800k price mark. I feel they will fall, like everyone on this blog. Since most of us here are probably renting, I was wondering if renters have taken the plunge or waiting another year.
We will probably rent for another year and are wondering have rents come down? I feel they have and our lease is up in April.
Anyone have their rents drop? some examples would be great as we negotiate with our landlord.
We have a standalone house, brand new when we rented. 4 br. 3 bath, 2100 sf. $2,900 / month.
Posted by chuckconners on 03/02/09 at 06:20 PM
I drive from north orange county to Santa Ana every day and my question is if the rental market is so hot where the hell did everybody go?Nothing but vacant properties-rentals,empty houses etc..My brother lives in Dana Point and its no better.So no more articals in the Orange County Register about the hot rental market and speculords jacking up rents anymore.Its a ghost town out there.
Posted by newbie2008 on 03/02/09 at 06:54 PM
IR,
Some observations on your implied assumptions:
1. “This is not just.” Were you expecting otherwise? And
2. House appreciation at 4%. Houses depreciate due to wear and tear. Land can appreciate.
Your doing a great service in educating people in making an informed decision on housing.
IMHO, the cost of the condo at ~$2000 per month with taxes, HOA, repairs, etc. And about $1500 or less as possible rent for an old place. An aligator with greater than $500 per month feeding expense. Price needs to significantly come down as an investment. Plus on the place is straight stucco that’s easy to maintain.
Posted by idrnkurmlkshk on 03/02/09 at 07:26 PM
I agree. Built in 1974, and only 1,150 sqr ft? Is the 3rd bathroom a toilet in a closet??
This old piece of crap should bottom out at $195k.
Posted by granite on 03/02/09 at 08:19 PM
We decided to rent a house 3 months ago and used our good credit rating to get 10% less than the going rate of $2500 on a 1600 sq ft. house. Even though we thought we got a good deal we are considering offering less next year. We’ll see.
Posted by Forbear on 03/02/09 at 08:37 PM
My 2 cents on parking in an Asian plaza, don’t go between the hours of 11:00AM and 3:00PM. Any Asian plaza you go to during this time will be a zoo, Asians love their food and will run your ass over for it.
Posted by Roberto on 03/02/09 at 09:24 PM
You are sounding rather Big Brother-esque in your prose above, IR.
“We can require high down payments…. We can limit the debt-to-income ratios of borrowers” etc.
The problem with going down that slope is that it is slippery, and steep.
Busts are the unfortunate ugly parts of capitalism, but they are not as ugly as statism.
Governments that grow, and almost all do… inevitably hobble the invisible hands of capitalism over time. Some regulations are necessary, but do you want gov pencil pushers deciding whether you will get your business loan in the future? Do you want members of congress telling you how to run your business, what car to drive, nay what products to build (cars for example)?
The banks have learned their lesson. Regulating them now on financing guidelines makes about as much sense as screening for shoe-bombs at airports. The gov obviously hasn’t, as they are putting forth a plan to do the same kind of neg-am home finance that contributed to this mess.
Part of the problem was certainly Fannie an Freddie, TBTF, leveraged to the hilt, encouraging and backing reckless lending.
As for Alan G - why is it debatable that he was a great central banker?
Is it debatable that GW Bush was a great President?
Posted by Roberto on 03/02/09 at 09:40 PM
I should add that I fully share the frustration of the moral hazard we are being inflicted with by the last and new administration. This hazard won’t directly encourage the ‘exact’ same behaviour on the part of banks, borrowers and hedge funds, but it does send a message of non-responsibility/accountability, and it thrusts a horrific debt and tax burden on us, and future generations. The honest, responsible, and careful pay a steep price.
Posted by tlc8386 on 03/02/09 at 09:40 PM
Our rental is around a bit over 2k sqft. 3 bedroom 2.5 bath with loft (made into room) 3k a month but it has a very large pool. But the house is old has tile first floor and in master. Has some decent upgrades. Large yard. fyi
Posted by Chris on 03/03/09 at 12:49 AM
You are too nice. I say $100k.
Posted by Headless Unicorn Guy on 03/04/09 at 10:10 AM
Perhaps they should not have been loaned more money than they could pay back…
Perhaps they should have housing ATMed out all the equity for bling-bling, then held out (using all the legal tricks to delay foreclosure) for the Gummint Gravy Train.
Because the REAL top of the food chain is The Parasite.
“Here comes Santa Claus,
Here comes Santa Claus,
Right down Bailout Lane;
Fannie Mae & Freddy Mac
A-pullin’ on the reins;
Gummint Gravy pouring in,
All is Happy and Bright!
Dream of condos to flip flip flip
‘Cause Santa Claus Comes Tonight!”
Posted by Texas Triffid Ranch on 03/02/09 at 08:29 AM
I second this. This is the same exact problem that I’m seeing with condos literally across the street from my house in Dallas. The owners of properties for rent in my neighborhood are following the market down, still in denial over what’s happened to the market. The condos are the usual converted apartments, about 35 years old, with living room and kitchen windows that give a fabulous view of the filthy, muddy alleyway separating the building from the back of the nearby Chili’s. However, the owners of the condos are still trying to get rent at the same rate as they were getting back in 2006.
The problem here is that we’re starting to see a consolidation of rentals, and most property owners don’t want to understand why. The presumption among many real estate agents and apartment managers was as people had to abandon their homes, they’d still need places to live. Ergo, not only did apartment prices stay stable, but in some markets, they went up. The bad news for these greedheads is that the folks mailing in their keys and walking away aren’t moving into brand new apartments. Either they’re moving in with friends (the house I rented ten years ago now has three families living in it, apparently with the blessings of the owner) or family, but they’re not moving into apartments. The high-end apts are expecting higher credit ratings, and the rest are still asking waaaaay too much for people who had to abandon everything and move out.
Posted by Shadax on 03/02/09 at 07:21 AM
Great post today, IR.
Posted by Priced_Out_IT_Guy on 03/02/09 at 07:22 AM
For the Woodbridge HOA dues of *only* $355/mo this place sure isn’t very close to any of the amenities (lakes, pools, tennis courts, etc). IHMO Deerfield is the second worst part of Woodbridge right after to the ghetto apartments at the corner of Irvine Center and Jeffrey.
Using the calculator on this site, the $2,491.96 in cash outflow per month at a $300,000 purchase price with $60,000 down doesn’t exactly inspire me to go out and take on a 30 year commitment.
IR, you really think this is already at rental parity? Somebody put sunshine in your coffee this morning!
I’d rather keep my $60,000 down payment and rent an equivalent apartment (lets not fool ourselves) with no strings attached for much less than $2500/mo for the next 10 years. Oh, and I won’t have to bring my own paint and carpet…
Posted by lunatic fringe on 03/02/09 at 08:22 AM
I think rental parity is a bit of a moving target right now. If I look online I can see that the IAC apartment I rented 1-1/2 years ago is now 15% less than my lease rate then. We are undergoing deflationary pressures in just about everything and with the vicious cycle caused by unemployment and falling demand, who knows where rental parity will be in the future.
This is the one thing about IR’s writings that drives me a little crazy. When he says a property is at rental parity I wonder how many people might be going out to buy the place thinking they will always be at breakeven.
Posted by george8 on 03/02/09 at 08:52 AM
No smart investor will touch this until it is below $200k.
Posted by h on 03/02/09 at 09:03 AM
While the irresponsible lending and borrowing were the basis of the current mess, the ability for Wall Street to package up these loans and play all kinds of financial shenanigans has amplified the problem thirty-fold.
What is truly frightening is that the loss of 100-500K we see on these properties is only a fraction of the overall loss, as these nearly worthless loans were packaged, sold, re-sold, and used as collateral for more borrowing, much of this insured against losses by AIG with no reserve to back them up, and on and on, enriching a few people who are now hiding out on their own private islands.
Posted by maliburenter on 03/02/09 at 09:43 AM
Updated chart through year end 2008.
Posted by nefron on 03/02/09 at 09:50 AM
I know you’re exaggerating to make a point, but there is nothing in Irvine that even approaches ‘ghetto.’ It just smacks of that the ‘everybody deserves to be rich’ mentality that landed our entire society in this mess in the first place.
Posted by Chuck on 03/02/09 at 10:51 AM
For what its worth, this condo is not part of Woodbridge. I believe Deerfield is a separate village of Irvine (Refind calls it El Camino Real, actually) that doesn’t have access to the Woodbridge pools, lagoons, etc. So if the dues are really $355 per month this is crazy…
Posted by TheNumbersNeverLie on 03/02/09 at 11:33 AM
“AIG posts $61.7B 4Q loss, bailout is restructured”
Yeah, talk about the smartest guys in the room – how about Martin J. Sullivan, the CEO that left AIG in July with a 47 million dollar severance.
This guy must think to himself, “what a bunch of idiots!”, as he sees news of the world’s economies collapsing.
I wish I could be the smartest guy in the room for once.
Posted by nowwaat on 03/02/09 at 12:23 PM
“Somewhere around $232,000 is a reasonable bottoming figure, perhaps a bit higher if interest rates remain artificially low. Just think, the peak appraised value for this property was around $450,000…”
This is pretty good mathematics; But would one say that economic conditions were better in 1998 than 2009? Should there be a price hit for that? IMHO, the job insecurity and sentiment that exist today is significantly worse than in 1998.
Posted by LC on 03/02/09 at 12:29 PM
I think that you make a good point about credit expansion, that can be easily demonstrated at home with a credit card. Put $500 on that credit card in a month, and it is an apparant income gain in one month. But the debt sticks around for a while. Put on a macro level, you can see how this thing is not sustainable. Credit expansion has built our economy over and over again in good times, but it a one time boost that does not last very long, and we pay for it for a long, long time.
Posted by tlc8386 on 03/02/09 at 12:30 PM
In the paper this weekend I noticed more rental ads—one a 5 bedroom in Tustin renting for $2700 another in Santa Ana renting for $2400 but it would be happy to take in two families. Rents are coming down a few others in Northpark for $2400 (three bedrooms).
Posted by mmg on 03/02/09 at 12:37 PM
Excellent post
I was just thinking about this over the weekend, if we could come out with firm rules based on income and down payments, the market would come out of severe denial into cold hard reality
we then could reassess the damage and move on. In most parts of the OC, whild lending standards are tighter than 2 years ago, still some sellers live in WTF territory. if every one knew the new lending rules that would help the housing market readjust much quicker.
The Gov should hire IR (and other bloggers who have been the closest in analysis to reality so far such as Mish, CR and others ) as a consultant ASAP instead of all the so called economists they have.
Just my 2 cents.
Posted by nowwaat on 03/02/09 at 12:45 PM
I agree that rental parity is a moving target. I would add my “2 cents” which is to say that to see if a place is at rental parity TODAY, I would do the math assuming 0% down (just for mathematical purposes) interest only to calculate monthly payment (i.e. strip out monthly amount going to pay down principal) and see where the math takes me.
Posted by tonyE on 03/02/09 at 01:03 PM
Walnut and Jeffrey…. that’s an “Irvine Ghetto”.
Posted by nefron on 03/02/09 at 01:06 PM
I do agree, if you want to talk about the worst section of Irvine, that area is a top candidate
Posted by Jeff H on 03/02/09 at 01:10 PM
This is a worthwhile read. It validates a lot of what I have read here.
http://economistsview.typepad.com/timduy/2009/03/when-does-faith-in-financial-engineering-wane.html
Jeff
Posted by nowwaat on 03/02/09 at 03:05 PM
“Ghetto” ? I would not use that word for that area at all. That area still has good schools, safety..etc. And Jeffrey Road is being improved, will look a lot nicer. IMHO, the Orangetree area is the least “prestigeous”.
Posted by tlc8386 on 03/02/09 at 03:37 PM
super blog thanks Jeff—
Posted by tonyE on 03/02/09 at 03:49 PM
Proper you should mistype “prestigious”.... That place is everything but prestigious.
Dang it, you can smell the chinese restaurants from the Santa Ana Fwy as you go by… and the parking lot SW of Jeffrey and Walnut is always packed with people waiting to eat at Taiko because it’s cheap.
Yeah, they may have Lexus and what not but I avoid the place like crazy. We’ve been almost run into several times.
And now I ignore the place, particularly when they ran out my favorite cheap mexican restaurant in Irvine: El Conejo. The place had been there forever, with good hot salsa and cheap beer. Now, it just another pseudo asian hole in the wall… (Thai Cafe, owned by Persians)
http://irvineretail.freedomblogging.com/2008/01/17/el-conejo-closes-down-spot-will-become-thai-cafe/
Posted by ignorantoutsider. on 03/02/09 at 05:06 PM
Piggington rate of change in price yoy recent post suggests that we may have just passed the halfway down mark with a “bottom” in Jan 2010. But I am with the wise poster above who suggested that 2010 may not be as rosy as all that, and the declines go on well beyond. $180? especially if you enforce the 20% down rule. This apartment is for people with no down payment 60 month auto payments.
Posted by chuckconners on 03/02/09 at 05:54 PM
My old man always said fixed thirty year and it even worked during the Carter years,but had to live in Corona and drive to Brea to work.Interest rates were 18 to 23 percent but with a new family and plenty of energy for the drive I didnt care.Would I do it now? NO..but I dont have to.
Posted by Bitter Renter on 03/02/09 at 05:57 PM
I don’t know that the parking lot is always packed due to Taiko. Certainly it’s a contributor, but there are a lot of great and unique Asian businesses in that center that are popular (e.g. Yogurtland, which is certainly not cheap), and not enough parking to go around.
I will admit that the frequency of bad driving skills seen in that parking lot reinforces a stereotype about Asians (I’ve never had a problem at the Asian center across the street with 99 Ranch, etc., though).
I feel your pain with regards to losing a favorite restaurant, but personally I thought El Conejo was only so-so, and I stopped going there several years ago after they (I’m pretty sure) gave me some bad food poisoning. At least there are branches in other cities, if you care to drive there (I know, not too useful if you were going there primarily because it was cheap).
Per your article, the new Thai place is owned by Indonesians, not Persians. At least closer to the right part of the world.
Posted by Still renting on 03/02/09 at 06:14 PM
I have been looking at buying a home and still find most Irvine homes are holding around the 700-800k price mark. I feel they will fall, like everyone on this blog. Since most of us here are probably renting, I was wondering if renters have taken the plunge or waiting another year.
We will probably rent for another year and are wondering have rents come down? I feel they have and our lease is up in April.
Anyone have their rents drop? some examples would be great as we negotiate with our landlord.
We have a standalone house, brand new when we rented. 4 br. 3 bath, 2100 sf. $2,900 / month.
Posted by chuckconners on 03/02/09 at 06:20 PM
I drive from north orange county to Santa Ana every day and my question is if the rental market is so hot where the hell did everybody go?Nothing but vacant properties-rentals,empty houses etc..My brother lives in Dana Point and its no better.So no more articals in the Orange County Register about the hot rental market and speculords jacking up rents anymore.Its a ghost town out there.
Posted by newbie2008 on 03/02/09 at 06:54 PM
IR,
Some observations on your implied assumptions:
1. “This is not just.” Were you expecting otherwise? And
2. House appreciation at 4%. Houses depreciate due to wear and tear. Land can appreciate.
Your doing a great service in educating people in making an informed decision on housing.
IMHO, the cost of the condo at ~$2000 per month with taxes, HOA, repairs, etc. And about $1500 or less as possible rent for an old place. An aligator with greater than $500 per month feeding expense. Price needs to significantly come down as an investment. Plus on the place is straight stucco that’s easy to maintain.
Posted by idrnkurmlkshk on 03/02/09 at 07:26 PM
I agree. Built in 1974, and only 1,150 sqr ft? Is the 3rd bathroom a toilet in a closet??
This old piece of crap should bottom out at $195k.
Posted by granite on 03/02/09 at 08:19 PM
We decided to rent a house 3 months ago and used our good credit rating to get 10% less than the going rate of $2500 on a 1600 sq ft. house. Even though we thought we got a good deal we are considering offering less next year. We’ll see.
Posted by Forbear on 03/02/09 at 08:37 PM
My 2 cents on parking in an Asian plaza, don’t go between the hours of 11:00AM and 3:00PM. Any Asian plaza you go to during this time will be a zoo, Asians love their food and will run your ass over for it.
Posted by Roberto on 03/02/09 at 09:24 PM
You are sounding rather Big Brother-esque in your prose above, IR.
“We can require high down payments…. We can limit the debt-to-income ratios of borrowers” etc.
The problem with going down that slope is that it is slippery, and steep.
Busts are the unfortunate ugly parts of capitalism, but they are not as ugly as statism.
Governments that grow, and almost all do… inevitably hobble the invisible hands of capitalism over time. Some regulations are necessary, but do you want gov pencil pushers deciding whether you will get your business loan in the future? Do you want members of congress telling you how to run your business, what car to drive, nay what products to build (cars for example)?
The banks have learned their lesson. Regulating them now on financing guidelines makes about as much sense as screening for shoe-bombs at airports. The gov obviously hasn’t, as they are putting forth a plan to do the same kind of neg-am home finance that contributed to this mess.
Part of the problem was certainly Fannie an Freddie, TBTF, leveraged to the hilt, encouraging and backing reckless lending.
As for Alan G - why is it debatable that he was a great central banker?
Is it debatable that GW Bush was a great President?
Posted by Roberto on 03/02/09 at 09:40 PM
I should add that I fully share the frustration of the moral hazard we are being inflicted with by the last and new administration. This hazard won’t directly encourage the ‘exact’ same behaviour on the part of banks, borrowers and hedge funds, but it does send a message of non-responsibility/accountability, and it thrusts a horrific debt and tax burden on us, and future generations. The honest, responsible, and careful pay a steep price.
Posted by tlc8386 on 03/02/09 at 09:40 PM
Our rental is around a bit over 2k sqft. 3 bedroom 2.5 bath with loft (made into room) 3k a month but it has a very large pool. But the house is old has tile first floor and in master. Has some decent upgrades. Large yard. fyi
Posted by Chris on 03/03/09 at 12:49 AM
You are too nice. I say $100k.
Posted by Headless Unicorn Guy on 03/04/09 at 10:10 AM
Perhaps they should not have been loaned more money than they could pay back…
Perhaps they should have housing ATMed out all the equity for bling-bling, then held out (using all the legal tricks to delay foreclosure) for the Gummint Gravy Train.
Because the REAL top of the food chain is The Parasite.
“Here comes Santa Claus,
Here comes Santa Claus,
Right down Bailout Lane;
Fannie Mae & Freddy Mac
A-pullin’ on the reins;
Gummint Gravy pouring in,
All is Happy and Bright!
Dream of condos to flip flip flip
‘Cause Santa Claus Comes Tonight!”