Irvine Housing Blog

So, when someone says that not paying their mortgage is just a business decision, they are saying that they are as untrustworthy in their business life as they are in their personal life.

I think the overpricing of 09 sales has more to do with those people thinking they got a great deal then and wanting to cash in on it now.  Also, those listing homes purchased closer to 2006 may have been struggling with (or not making) payments for a longer period than buyers in 2009, by virtue of their being in the home longer and having paid a higher price.  There probably were some great deals then, mostly foreclosure & other distressed sales, and I’ve seen a lot of very good relocation situations where the relocation firm sold at what might be considered below market price to find a buyer quicker.  I’ve also seen a few where the owners have moved, and not been distressed, but lowered the price quickly to finally move the property.

One thing that will give people pause when buying today, as opposed to the 5-15-25% per-year appreciation days is the >6% transaction costs buying & selling property.  If it takes you 3 years to save the 20% down payment, and then you have to turn right around and sell, losing 6% of the sales price, that is a full year of savings lost.  To many, that is a significant downer.

I know of a family who aren’t even bubble rally buyers listing their 2003-purchased Irvine condo at what appears to be about 25-35% higher than the current comparable market in hopes of simply covering the outstanding mortgage, let alone the closing costs for resale. They’ve actually paid down the original mortgage a good $10K on top of a higher than 20% down payment and they don’t have a second or even a HELOC. I think we could consider them responsible borrowers, other than being caught like everyone else 7-10 years ago in buying overvalued property and getting very little for what was paid for. Even for them, pre-bubble, it’s simply a matter of time before capitulation sets in if they want to sell. Or else stay put and continue to pay the overpriced mortgage on a tiny home.

Ugh, I would hate to be paying the summer AC bill for a 3600 SF home in Portola Springs…

Don’t you all think this will be the case for the foreseeable future?  IMO, the move away from foreclosures and toward short sales was designed exactly to deflate the bubble over a longer period of time rather than taking the losses in sharp intervals.  However, the public wasn’t told about this strategy.  Instead, everytime there is any upward movement in the marketplace, it is deemed a victory….“We’ve reached bottom!!”  “Time to buy!”  The “rally” in Irvine in 2009-2010 was a false market.  With upwards of those ‘buyers’ paying cash, many here on tourist visa’s, a temporary buying surge happened.  NOT a market recovery.

Wow, $8300/month cash outlay to “own” this place with 20% down.  That’s a bitter number to swallow!  Good luck selling this place, but I’m sure there’s a FCB waiting in the wings…hahahaha.

I’ve seen a lot of anecdotal evidence that this is happening, but it’s interesting to see the stats back it up. On my street two very similar houses were listed - one at $689k and one at $795k. Guess which one sold within a few weeks? I think there’s a year or more of this silliness built into the system, as sellers desperately cling to the illusion that they didn’t over-borrow. And yes, some of them will win the lottery, with foolish buyers (i.e. non-IHB readers) stepping in to save their shirts. There’s a very limited number of those buyers tho, and really, even the people who bought that $689k house overpaid and will be trapped for years…

Didja hear? Obama is gonna save all those underwater homeowners, um, loan-owners, next week.

And he’ll screw us savers and renters.

No justice.

Isnt Portola Springs located right next door to the Orange County landfield (OC dump) ???

Who is their right ming would pay lots of money to live near a toxic dump?

Ewwwwwwwwwwww….....

2 weeks without Hedonic Data… I’m going through withdrawal.

The one remarkable thing about today’s listing is the large 8300sft view lot… but it’s next to the toll roads. I’m actually surprised that StanPac was able to sell these Serra homes for over $1mil during the bubble’s deflation.

Hello?  What, suddenly “owners” set the opening price on residential property, not real estate agents after that famous “free market analysis!” Agents have 95% of all sales go through their hands and MLS.  What, no agents help set too high a price?  gosh.  Well, in the real world, Agents have and will always promise anything, especially an unrealistic price, to get the listing first and foremost; one can cut the price later when the owner is beaten down, and thanks to the cozy deal where real estate agents don’t offer more than 3% off any other agent’s property even with the “real” price, well, who’s to challenge this age old game? The real estate agents are as opportunistic and trained to get that listing at all costs, as a car salesman or time share salesman or mortgage salesman is at their unique and disturbing manipulative craft(while appearing “professional” to gain that trust, natch).

Turtle Ridge is next to a dump..and the smell of methane gas is present. Portola Springs is next to an active dump. 5,000 homes have been approved for the “Great Park”, which sits on decades of toxic material. I wonder how the One Ford Road residents in Newport are feeling these days. Their beautiful homes were built on remediated soil after decades of toxic dumping by Ford/Loral/Lockheed. But I’m certain that they were assured that everything is within tolerance. Nothing to see here.

Something actually newsworthy happened today.  I got an e-mail solitation from Lennar to me as a Broker to sign up to be a VIP Agent @4% commission for any and all of their projects in San Diego, Orange, Riverside, and San Bernardino Counties.  IMO that is signaling a major change in the way new homes will be sold.  Most other states operate this way and have for years.  They may continue to have a reduced on-site sales staff, but rely on local realtors for more than just close-outs.

Misstrial - How can that be true? Is there a way to verify the Sage Hill/methane? That is scary.

IHB- I like and respect this blog tremendously, which is why I beg you not to use awful business speak like “takeaway.”  Unless of course you’re talking about take out food in Australia.

Ken Smith’s “Junk English” shows how phony our corporate language really is, e.g. “skill sets” instead of “skills.”