Irvine Housing Blog

buster,

that’s an awesome way of looking at this debacle.  i just hope the repetition occurs faster to drive price down faster, but i guess we just have to wait until the fundamentals of the market works itself out.

I never stop being amazed at how many people just don’t think, or their logic stops working, or just plain stupidity, or they just let their emotion takes over, when it comes to buying a house.  They just can’t see that OC houses are way overpriced.  Don’t they look at the sale records at 1998, 2000, 2002 for people buying in 2005, 2006, or even 2008 like this idiot, and see that the house triple in price in 7-8 years, and don’t they question that they might be the ones holding the bags.

People are clueless and have no sense of how much a house should cost, and I think that’s THE biggest problem.  I usually use this example when talking about house price to my relatives:  let’s say you want to buy a shirt, a car or whatever.  let’s use the example of buying a car.  let’s say you want to buy a Camry, and you know that that model you want should cost around $20,000.  Now, let’s say there a Camry bubble, and the dealer is asking $60,000.  would you buy it?  Think about it, no one in their right mind would buy a 60K Camry, and yet people are buy houses that cost 3X its value.  Isn’t that mind boggling?

but then that’s bubble mentality.  Why should a tulip cost anything at all in the 1600’s!  just plain madness!

From the link above:

“We had a ball”

The whole CA and especially Southern CA had a ball during those years too, just like Ms. Carr!

“After the Good Life Goes Sour

Like many Americans who saw their home values shoot up during the housing boom, Christine Carr found lots of ways to spend her equity windfall.

A decade ago, she and her husband paid nearly $180,000 for a three-bedroom home in Dallas, N.C., outside Charlotte. Their income easily covered the $1,100 monthly mortgage payment.

In 2006, after discovering the house’s value had skyrocketed by $100,000, the couple took out a second mortgage and got cash. They bought a $70,000 camper, took a cruise to Alaska and vacationed in Belize. The new loan added $698 to the couple’s monthly payment.

“We had a ball,” she said.

Three years later, her husband moved out and stopped contributing to the mortgage payments, she said. Then she lost her job as a consulting firm’s marketing manager. In April 2009, Ms. Carr put the house on the market for about $235,000. With no income, Ms. Carr, now divorced, didn’t qualify for a loan modification, which would have lowered her mortgage payment.

In July 2009, she asked the lender, Bank of America, to let her hand over the home to avoid the foreclosure process. But the two sides couldn’t come to terms.

With no interest from buyers, Ms. Carr stopped making payments that August. “It was a gut-wrenching decision,” the 46-year-old woman said. “I was raised to live up to my commitments.”

These days, she receives a monthly statement that details the swelling late fees and penalties for both of her loans. Although she found work in March this year, Ms. Carr said she had no intention of paying: She has moved to a rental and her Dallas home sits abandoned. The luxury camper was sold for “a lot less” than the purchase price, she said.

Ms. Carr said she felt guilty but was ready to move on. “It makes me sick to my stomach sometimes, just thinking about it,” she said. “But once you make the decision, you stick with it.”