Irvine Housing Blog

When I first read this thread I thought: Wow, someone did something to IR’s drink this morning.

I guess I haven’t been a reader for >2 yrs but who is this “Yummyhatorade” person and when did they say “there was no housing bubble”... Or did I mess a recent (astute?) observation?

IR: “Ah, the life-sucking drain of negative energy in the morning.”—NICE!

IR: “Did you beat your wife again this morning too? Kick your dog?”—WOW, uncharacteristic.  Don’t let this person get to you, it is just words typed by someone somewhere.

We all dig the time you spend on here. Thank you for that.  Please remember that folks like “Yummyhatorade” add to the fun times here ... Especially when followed by “Ah, the life-sucking drain of negative energy in the morning.”

I am usually very tolerant of my guests, but sometimes when I recognize what someone is trying to do, and I don’t have the patience to deal with it, I would just like them to go away.

I don’t mind the occasional Gadfly as they often have a point or advance the conversation. I can deal with annoyance, but trolling hostility adds no value. I encourage other points of view, allow others the final word (usually), and try to promote a lively yet focused discussion.

I could have spent all day with linguistic jujitsu, and perhaps that would have been more interesting, but I decided to live without my dose of hate today. It happens.

For what it is worth, I thought your response to that idiot troller Yummyhatorade was completely appropriate.  I would assume though that the motivation for his post was probably a pathetic attempt to get some attention.  I assume they are happy now.  There is always a fine line between ignoring an obvious troll and giving every comment a worthwhile response.  Your mistake (if any—I don’t imply you actually made a mistake) was to give this idiot the respect of treating their ‘question’ seriously, instead of simply ignoring them.

I meant to say, we’ve been seeing low-end prices in the $240,000 range for 2-bedroom condos in the South OC area. I don’t want to spend more than that and it seems like we’re priced out of the 3-bedroom condo market. So if you see some at those prices that aren’t short sales, please point them out.

But your age is not relevant.  What matters is your income.  Your point is predicated on age having a causal relationship to income.

Isn’t it possible for a 28 year old engineer to take home more bread than a 50 year old school teacher?

You may humble yourself by calling yourself an ‘average Joe’ in order to further your bullish argument but most people do not save that kind of money which is why I said that maybe Irvine is different and it just defies the savings rate of most Americans.

TACOSHARK, your savings habits and financial situation are nowhere near the average Joe around here.  Trust me on that.  If you saved 100K in 3 to four years, you are saving $2500+ per month.  Most people won’t even come close to this.  You are obviously making close to or over 100K.

Assume you pay normal rent here ($1400+/month) and all the msc expensives…school loans, car loans, retirement savings, utilities, food, spending while maintaining somewhat of a social life.  Throw in a family and your expensives go up dramatically. 

You must be single and do the roommate thing with the $700/month rent.  I applaud you for being a saver, but don’t think that everybody out there has the same habits as you.  They don’t…especially in superficial OC.  I know enough people around here and have dated enough people to come to this conclusion.

You are assuming that everything said was accurate and not overstated.  Unless the author feels like publishing their their income tax return it cannot be validated.  It seems ridiculous for an anonymous blogger to lie about their personal circumstances - but if you have no counter argument to refute arithmetic it makes for a great diversion because it attempts to shame the reader into accepting the argument backed by nothing but hot air.

So hostile. I merely stated my experience. Nothing more, nothing less. If its typical or not is the choice of belief we have.

I once believed in Santa Clause, my friend.  It was not until I got a little bit older and thought about how likely it was that a fat man in a red suit was flying the world, crawling into stinky filthy chimneys, etc to trade some sweet toys for a plate of cheap cookies and a glass of milk.  I suppose that if I ignored enough things I could still believe it today.

Looks like somebody got coal in their stocking this year.

OK, so you are saying then that the median buyer is going to leverage a 401K plan in the future in order to scrounge up this large down payment via a company ‘loan’.  This sounds like a sweet arrangement - I am taking notes here.  We need to get the word out FAST: do not save!  Invest in your company’s 401K Casino plan and hope for the best!  Roll the dice!  Savings is for schmucks!

And if you ever get laid off or leave your place of employment, the entire balance of the 401(k) loan is due and payable within 90 days or it’s a withdrawal with taxes and penalty due.

“PC:  the entire balance of the 401(k) loan is due and payable within 90 days”

No, it is company-specific detail. Quote from my old 401K plan:

“If you leave XXX before repaying a loan, you may continue to make loan payments by personal check or ACH Debit, subject to restrictions imposed by comapny upon the repayment method. XXX will send you a payment book with instructions on when and where to mail your payments.”

“AZDavidPhx: so you are saying then that the median buyer is going to leverage”

Median buyer is pseudo-mathematical abstraction.

Total $10.06: 1 penny, 1 nickel and 1 $10 gold coin. Out of 3 coins which one is the most important? Median (nickel)?

There are three kinds of lies: lies, damned lies, and statistics. Thanks to Benjamin Disraeli.

“AZDavidPhx: Invest in your company’s 401K Casino plan and hope for the best! Roll the dice! Savings is for schmucks!”

Well, might I ask what is Your risk-free proposal?

Fundamental rule of the world: no risk, no gain.

Stock Trader -

Your nickel analogy is a classic strawman argument.

We are talking about the median income related to median sales price.  There is an obvious relationship between these two indicators no matter how much you try to blow smoke and muddy the discussion with false analogies that evade the original argument.

The question being debated how a working man earning the median income can afford the median sales price of 550K.

Your nickel example doesn’t come close to addressing this; instead you just restated the question into something else and answered it.

Got BS?

“We are talking about the median income related to median sales price. There is an obvious relationship between these two indicators ...”

It is easy to calculate median sales price, but how did You calculate median income of Irvine homebuyer?

Please, note: Irvine homebuyers and Irvine workers are not the same people. For example, canadian businessman was buying something in Lennar’s Actoria, but he did not work in Irvine.

And, by the way, I am not a trader. I buy to hold. I sell if there are better investment opportunities.

Stock Flipper -

ow did You calculate median income of Irvine homebuyer?

I used the 99K figure cited on Wikipedia - I suspect it is about as accurate as a Zillow ZEstimate as it “jumped” from 85K recorded in the 2005 census magically to “99K” by 2007.

Irvine homebuyers and Irvine workers are not the same people.

More hot air!

David,

There may be a misunderstanding here.  A “401k Loan” is not really a loan but an approved withdrawal from one’s 401k plan.  It is a ‘loan’ in the sense that you are supposed to pay it back with interest, but—you are paying it back to yourself as part of your future 401k contributions. 

I never had much non-401k savings when I purchased my first home and most of the down payment came from a 401k loan.  Which does indicate that the computations you have may not be totally accurate, since although 401k loans are limited to 50% of one’s 401k balance, but on the other hand, 401k balances are pre-tax dollars.  I am a big fan of 401ks, needless to say, so I wouldn’t characterize them as a ‘casino plan’ as you do.  There are a great mechanism to save and to build wealth. 

If anyone else has negative experiences with 401k loans, I would be interested in hearing them, but 401ks are great vehicles.

So you are hedging your entire argument based upon a volatile number like a game of Roulette which nothing more than a number plucked from a crystal ball.  I think Wall Street is your true calling.

Humor me, how many single family homes will be sold in irvine over the next 3 years?  If you were less lazy you could probably get an average in any point in time.  You would also probably have more money saved.

I would also gladly accept another 15 paragaph 1500 word post that goes nowhere.  That would give me another laugh.

I don’t own a home.  In the past year I have saved over 100k, so part of your last post may have some validity.

I am pretty sure that the number of sales will be inversely proportional to the decline in median price as well as proportional to the increase in foreclosures.  Irvine is looking at a pretty nice shadow inventory but how slowly the banks unload them can only be known by fortune tellers such as yourself.

Congratulations to your successful 100K savings in the past year.  I saved a couple trillion myself; let me guess, you called the number that was on the flyer stapled to the telephone pole giving out the big secret.

If you still don’t understand that very few large down payments are required to support 500-700k prices in Irvine then you are hopeless.

I am more than willing to accept your solution; just show me your arithmetic so I can correct my thinking.  You have made several assertions, but have only managed to explain them with that little wave of the hand thing that you keep doing over and over again.  Leave the Jedi mindtrick to the movies.

The best part is that all of the arithmetic was done in your never ending post you only questioned the large down payments.

This blog will provide sales volume of single family homes in Irvine over the past 30 years.  Maybe you should re-read your 1500 word essay and this blog another half dozen times.

Then maybe it will sink in, but I’m not holding my breath.

Can you not see how silly your propaganda is?

To make a ridiculous statement like:

Those who buy in Irvine don’t need to currently live in Irvine

So I am going to go ahead and buy that Irvine McMansion by putting down 200K and fill out all that paperwork for the 350K mortgage because I don’t feel like commuting from the Malibu beach house up on the cliffs that I own outright and in the clear.

“I don’t own a home.  In the past year I have saved over 100k”

you must be a 40 yrs old, single, living with parents, have no life to be able to save 100K in a year…

I saved 100k a year as well for the past 5 years. I’m not 40, living with parents or no life. I do have very good income and I rent.

Of course I’m not typical, I’m an anomaly.

Multiple Tables’ point was with transaction volumes and sample sizes being so low (aka. 1000 per year as he mentioned), it doesn’t take many “anomalies” to skew the “expected” result.

I don’t really buy Multiple Tables’ argument, as the substitution effect kicks in and at that point you’re looking at much more than 3000 relevant transactions in 3 years - sales compete with neighboring areas. I’m not particularly interested in Irvine myself.

Not planning to buy, but trying to see both sides.  People here underestimate the stubborness of sellers and banks.

I for one don’t see why the government shananigans won’t continue for the foreseeable future. May not cause any price appreciation, but if you told buyers what they can expect is 3-5% depreciation for the next ten years very few will be willing to wait that long, or at all.

So arithmetic does not hold for houses.  A bubble of epic proportions explodes in front of this observer and he is so drunk from his bubble fortune that he cannot see the consequences awaiting us.  He is just business as usual.

The truly alarming thing here is that people like this demonstrate that we have not learned our lesson yet.

What is it going to take?  A complete collapse of the Dollar?  Widespread poverty?

Keep it up, Multiple Tables, we are getting there.

David you are off on your little planet again better known as IR’s blog.  I’m getting sick of holding your hand.

How hard is it for you to understand that someone making $100k per year can afford a $550k home now with a 20% down payment.

I’m going to throw in a freebie for you: I bet you don’t realize your boss makes 3-4 times your income.

More hot air - no arithmetic.

“The volume of single family homes sold per month is very low in Irvine, but the demand and desire is very high.  The proof is in the current offers, multiple all cash and high down payment offers abound.”

This has certainly been the case over the last couple of years, and it may continue. I just don’t think it can or will because there are too many bad loans.

“Irvine single family homes are not an FHA purchase.”

That is true, partly because the FHA loans often are not large enough, and partly because cash-heavy buyers are outbidding FHA buyers. I see no reason to believe that trend will not continue.

Don’t mind David. Sometimes he is like a dog with a bone and won’t let go.

“That is true, partly because the FHA loans often are not large enough, and partly because cash-heavy buyers are outbidding FHA buyers. I see no reason to believe that trend will not continue.”

You know, the last couple of years I totally agreed with you on this but I can’t seem to see an end to this nonsense. I think there are either going to be tons of new buyers trying to get good schooling for their kids or there are going to be fence sitters (such as myself) who decide that it is OK to throw away some $ in exchange for something that you can eventually own (and change as you will right now).

It does not seem likely that we will ever reach IHB (the other one) “Fundamental Value”, or even fair market value, as there seems to ALWAYS be a greater fool/fish.

Don’t mind David. Sometimes he is like a dog with a bone and won’t let go.