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It’s OK IR. I also like this property “ironically.” I wonder if somebody actually painted Roman garden on the wall, or if it is some kind of print? If it’s hand painted, it would be so tacky that it’s kind of cool.
“You went full retard! Everybody knows—never go full retard!” - Kirk Lazarus
I believe it is hand painted. Look at the leaves and vines that extend onto the nearby arches and columns. And I agree, it is so tacky that it’s kind of cool.
It’s very easy to go overboard with the ‘faux’ stuff. This house is teetering on the brink of overboard. Nicely done ‘faux’, though.
If you look at today’s ‘lovelylisting.com’ entry, you will see an example of BAD faux painting. Very bad.
ZOMG…
The listing before that is possibly even worse. As for this house. It is one thing to paint this on your own or have this type of work done with your own money on a house you own outright, but to do this on a property you really do not own(mortgaged) that are supposedly worth over a million dollars is beyond tacky. I want to use the term criminal neglegence. The property was technically owned by someone else and this work has rendered them almost unusable to someone else. It might have been better if they ripped all the copper and pergenteel countertops(I am sure they only went for the very best in tacky fake marble) out of the house. That can be replaced. To even try to remove this off of the house would require house of work just to remove the paint.
I love artistic expression, this just seems more like vandalism to me. I don’t think art should cause damage to another person, place, or thing. I believe this does that. I would file this under kitsch.
It’s definitely bizarre. The housedebtors had some kind of a hard_on for some kind of foreign palace.
Sort of like an American wearing an Asian Calligraphy tattoo. Sounds cool when you are drunk but a few years later you wonder WTF you were thinking and what the quickest painless way is to get rid of it.
LOL So, if you think those are bad, check out this castle
WTF…
What the hell is someone going to do with a *$#@ing castle?! They also want 7.9 million for this thing! Who wants to take bets that some genius at a bank decided to finance this thing for 100% of its original value? This castle is located in the mountains, it it pretty far from everything.
I will look up its finance situation it might be comical. Thanks!
I actually like the painting. After so many blandly tasteful properties, it’s fun to see something with personality and originality.
Way overboard on the walls, ceilings, and floors.
Don’t forget you’re over it. Remember?
Wouldn’t it make you feel like you are living some kind of a lie? If I had to live in that, it would be a slap across the face each time I looked at that wall. “You are not in Italy - this is all fake imagery - You are a fraud” would be thoughts going through my mind.
I know!
They can sell the house to Olive Garden
David..now that’s funny
LOL! I knew I had seen that wall before….
hahahah… Olive Garden. Classic!
“Bailouts Did NOT Save Us from the Second Great Depression”
Totally agree, Every dollar we print now, we actually lose 50 cent.
In the ancient time, if people cannot hunt for the food, they will hungry to die, then human find a way to trade money for food. Today people can loan money from credit card.
During the 1st GD, there is no globalization and no unified monetary policies, each country is by his own in terms of financial co-relationship.
Today US dollar is an international monetary tool and US is the only country has privilege to print money freely (but with obligation to pay back).
Fed and Bernanke try to scare people that if we don’t keep printing huge amount money, we will have GD II. Pritning money is one way to save economics, but not a profitable way: Every dollar we print now, we actually lose 50 cent.
We and our children need to pay back in the future. I predict this will happen much faster than you can image.
Maybe bailouts didn’t, but government spending sure did. Lots and lots of government spending. WPA infrastructure projects to start and bombs and planes and tanks to finish.
Save Wall St. 1st and then people.
Obama is so smart, and know how to KO his political enemies. I can only compare him with Mao Zedong.
Republicans please give up you fight completely, for your own and also for you country. The more your fight the more embarrasses you will be, after the 1st bail out St. and re-nominate Bernanke, there should be no more fight.
Wait until 2016. But time will give us a fair judge.
Those of us who have savings lose a percent of our net worth every time a dollar gets printed beyond what is justified by economic expansion. We may not see the loss immediately but the loss will materialize sooner or later. We actually lose a % of our salaries as well.
With easy monetary policy, we also lose about 3% to 5% a year due to the Federal Reserve crowding out savers when banks borrow from the Feds at 0% instead of paying savers the higher rate.
This is true, but who is going to cry for change when the culture is hell bent on save nothing and live beyond your means?
The morale of what I said is that we, currently, are paying something for the bail-outs, and we’re NOT passing it all down to the children. Sure, some way, somehow, the kids will pay some of it as well.
Yesterday, I posted a house with the same square footage in Hemet as the one shown in Irvine. (The price difference was $115k vs. $715k). Let’s do that again today, shall we?
http://www.redfin.com/CA/Hemet/1869-Overland-Ct-92545/home/8170226
For Sale (MLS-listed)
$180,000
1869 OVERLAND Ct
Hemet, CA 92545
Beds: 5
Baths: 4.5
Sq. Ft.: 3,698
$/Sq. Ft.: $49
Lot Size: 0.32 Acres
Property Type: Residential, Single Family
Style: Two Level, Other
Year Built: 2005
Community: Hemet/San Jacinto
County: Riverside
MLS#: P683300
Source: SoCalMLS
Status: Active This listing is for sale and the sellers are accepting offers.
On Redfin: 352 days
Approved Short Sale. No long time waiting. Back to Market as of 3/8, Buyer did not perform, looking for serious buyer that can close quick. GREAT OPPORTUNITY. 5 Bedroom, 4.5 bath in beautiful Willowalk Community. Large open rooms, big open kitchen with built in appliances, formal dining room, laundry room, master bedroom with walk in closet, Fireplace in Living room, Huge lot 13,939 sq ft. This beautiful home is looking for a new Owner.
Just a reminder that you aren’t buy a house when you buy a house in Irvine, you are buying a tiny lot in a particular corner of the world that happens to have a house on it.
I understand your purpose, but you might as well throw in a house from Detroit to make the comps.
Hemet is a nasty place.
I say use Corona as a comparison. Its close enough to jobs in Irvine because of the 241 and has many new comparable houses. Hemet/Riverside is to far for someone considering Irvine real estate.
Well, your average house in Detroit would be seventy years old and missing all it’s plumbing, windows, and roof. This house is five years old, and while it appears to be “builder’s grade” (tile counters instead of granite, etc.), it also appears to be in good shape with a modern floor plan, very similiar to the Irvine house (sans radical paint scheme).
A similiar house in Corona would cost twice as much this Hemet house. Still less than a third of the Irvine house.
My only point here is that, these days, 85% or so of the cost of an Irvine house is for the land. Transport this house to Hemet or Iowa or elsewhere in the vast majority of the country, and the house itself is worth $150k or so (probably less than construction cost).
Please refer to this nice little article about the joys of living in Willowwalk, Hemet - Featured in today’s LA TImes -
http://www.latimes.com/business/la-fi-hemet30-2010mar30,0,7301923.story
I belive the headline is “From bucolic bliss to gated ghetto”.
Probably need to come up with a better angle Geotpf.
Hemet is also features in today’s LA Times: http://www.latimes.com/business/la-fi-hemet30-2010mar30,0,7301923.story
They don’t paint a pretty picture…
They call THAT a ghetto?
Because someone tried to steal a van?
Call back when the drug pushers hit the street corners and stray bullets are whizzing past the breakfast nook.
Hemet is having a rash of crime. Attempted bombings on the police and setting city cars on fire.
Will it be another Gary, IN?
The photo in the middle reminded me of this:
RR: A recession is when my neighbor is out of work. A depression is when I’m out of work.
With 10% unemployment, 17% underemployment, 20% with “discouraged worker,” those that gave up. We are essentially in a depression if your income is dependent upon working. If you’re a bankster or on federal payroll, happy days are here again.
AzDavePhz, Here’s a quote for govt encouraging education and thinking, but a little is lost in the translation and memory.
Thoughts are more dangerous than guns. We don’t allow our enemies to have guns. Why sould we allow people to have thoughts (thinking)?
IrvineRenter,
The purchaser was bright. He didn’t fully game the system, because he bought at the near high. IMH-NLO: the one action rule applies with some residual liability on the second. The first bank is using its one action on a trustee sale. The “owner” is likely loss $230,000 of his own money ($154k down plus discounted second), but his downside is mitigated with free rent and no property taxes. If he connected, maybe 2 to 3 years of free rent-taxes at $60,000 per year?
Do you think the second bank will settle with less than 30 cents on the dollar and be made whole by the federal govt?
I agree with you, the house looks very nice.
Carlin said it best that people would rather stroke themselves. People calling this a recession are just stroking themselves. When the history books are printed 100 years from now this period will be the known as the second depression.
Thoughts are not dangerous if you can influence the majority of them. Get people thinking about Ricky Martin’s social life instead of how badly they are being ripped off. Oh and make them feel very afraid of terrorists around every corner. Did you see how the bombing in Russia yesterday caused NYPD to dispatch their militia of soldiers carrying M16s and wearing full body armor into the Subways? Quite a demonstration to the masses I say.
I consider people thinking about the headline news of Tiger, Ricky, etc. being amused, i.e. a diversion of thought or thinking. In other words: not thinking.
The govt, media, bankster complex is trying to keep the people amused and not able or willing to think about issues and about indirectly mortgaging our children into indentured servitude. “People would rather die than think. And most do.”
The BS of the USA entering as a service economy was big dogma in the 1970’s. Too bad being a protein food rotation engineer at Burger King as not provided growth opportunity to the masses. Most of the well paid service sections has been in repackaging money or companies. Drain the cash and technology out of the company and sell it again. A very sickly company is left at the end, but what’s it to them, they had great ROI’s for a generation.
Most private sector Ph.D. levels jobs in America has lost ground in the last 10 years. The die was cast about years ago.
MD’s will likely loss ground next because the die is being cast today. MD’s have professional schools and licensing to slow down the their decline.
Doctors can thank the AMA for pressuring medical schools to limit the number of medical students who get admitted; thus, limiting the supply of doctors, and keeping their salaries and income high.
We are in DP II. But of course the official announcement will not come out until maybe 2020. What separates recession from depression in modern days is long duration of stagnation and lack of sustainable recovery. Gov’t spending and central bank QE programs do not cure the disease but can mask the symptoms and reduce ongoing pain for long stretch at a time. Even during GD I and Japan’s lost 2 decades sporadic (sometimes rapid) GDP growth and market rallies interspersed with equally severe declines in short intervals. Temporary expansions spurred by fiscal and monetary stimuli have no lasting effect and economy reverses its course once the gov’t spending/QE induced high wears off.
Even unemployment rate does not tell the whole story. If you replace 10,000 high paying IT/manufacturing jobs with 10,000 Walmart jobs, unemployment rate remains the same. If most of the realtors in CA make less than half what they made during bubble years, unemployment rate remains the same. For years housing bubble masked the stagnation of American household income, but the housing/financial crisis inadvertently accelerated this downward drift of income.
The current policies are focused on supporting (bailing out) both ends while squeezing the middle (or more precisely, the responsible middle), until the middle is gone and 90% of population collectively settles for a standard of living several notches below where we are today.
Good analysis. Good analysis. If high paying (hint: manufacturing) jobs are not increased, then it’s inevitable that we’ll see a decreased standard of living. Ok, we have a great agricultural sector which employs about 2% of the population but how can the rest of the 300 million U.S. people be supported by service jobs alone? I think agriculture and manufacturing are the main part of the economic pie that services are built around (example: insurance, health care, entertainment for the factory worker/builder/manager/farmer). But if we do not have enough actual goods to peddle, what do we build the economy around?
Manufacturing jobs are not high paying and never have been. A doctor is high paying. A scientist potentially can be high paying. An engineer is high paying. A computer programmer is high paying. A lawyer is high paying. Heck, even a plumber or auto mechanic can sometimes be high paying. All of these require a degree and/or specialized training. The only high paying manufacturing jobs are those with specialized skills (a jeweler perhaps), or those that are heavily unionized or protected by government action (high tariffs, perhaps). But barring that, almost all manufacturing jobs are low skilled and therefore low paying.
The only difference now is that poorer countries are now advanced enough, and world trade is advanced and free enough, that it makes economic sense to build a factory in China or Mexico instead of the United States.
Ahhh, Geotpf, you aren’t thinking about union jobs in industries like steel and automaking. I didn’t grow up in SoCal, but I think the aerospace manufacturing jobs were like that, too. Those were manufacturing jobs that paid a good enough wage for a blue collar worker to buy a modest house in burbs and send kids to the local college. And they got a pension. That was what was happening in the 1950’s, 1960’s and 1970’s. Those jobs are just about gone, to Japan and more recently, China, I believe.
When I mentioned manufacturing jobs, I did not exclude the scientists and engineers but I included them as they are workers as well - regardless of titles and they are needed for manufacturing. It makes sense in the short term to export jobs to China or India but after they have had enough of our dollars, what are we going to give them in exchange for their goods? Also, a regular factory worker is not highly paid but definitely makes much more money than a cashier at Target. And doctors? Doctors will have to accept less money in real terms than now if everybody’s standard of living declines. The same goes for lawyers salesmen…etc.
The hour pay for a scientist is very low to start with and get to be middle class wages later. They are expected to work 50-60 hours without overtime pay. Graduate school is 5+ years working 6 day/week 11 hour days, 2+ years post-doct training with similar hours and all for $60,000 to $70,000 for the first real job that’s “exempt” from overtime. Their real wage has been going down for the last 15 years or more.
Speaking of education, I am seeing more and more ads & commercials for private colleges like Phoenix and Everest lately. Is it because the government is now going to begin funding student loans instead of private banks?
I find it funny that people would go into debt at $20,000 ~ $200,000 just to go to college, and come out to find no job or a job that doesn’t need an advanced degree.
The private colleges just seem to be a scam for government student loan money. I’m looking at DeVry, Phoenix, Everest, etc….
Don’t stop there. Those schools are “bottom of the barrel” institutions, but “real” private colleges are turning-out grads with near-six-figure debt to fight over scarce jobs paying a fraction of their debt. And then there are the law schools today graduating attorneys with $200k+/- debt and no real prospects.
Zubs, what do you mean,” begin funding student loans”?
The government has been funding student loans for 30 years now, and it has been the EZ money for non-dischargable student debt that has not only caused the nightmare inflation in college tuition, but has totally degraded our colleges and universities, and spawned hundreds of garbage private and online colleges that charge as much as $40K a year for inferior “education”.
Worse, the Sallie Mae and Stafford loan troughs have enabled the formation of dozens of new law schools that are inundating the law profession with 45,000 new JDs every year, way beyond the usual demand for newly minted lawyers. I have a young relative who has rung up $200K in post-graduate college debt to attend law-school, and I hope she can get employed at a salary that will enable her to service this monster debt and still live. Whether she will ever be able to realize the kind of income that justifies it in such an overcrowded field is questionable.
That mural left me w/ a headache…...
The Dean Baker article misses a critical point that obviates his premise: the fact that Gramm/ Leach/ Bliley allowed I banks and regular banks to merge, thereby allowing I banks to use depositor funds to gather more leverage to make progressively larger derivative trades. Furthermore, simple regulation such as barring derivatives from being given a AAA rating probably would have had profound consequences in derivative trading. Would the demand for mortgage backed derivatives have skyrocketed had they had more appropriate credit ratings? Would mortgage providers such as Countrywide had the impetus to loan to people with no verifiable income or worse yet, knowing they couldn’t afford their loan? I highly doubt it.
Does Spain have such regulation of derivative trading? Or did their bubble lead to a recession in a different way?
This article is conclusory at best. Belongs at Foxnews.com along with the birthers and the death panel screamers.
That does bring up the question as to what financed the Spanish housing bubble. I don’t know the answer. Perhaps it was from overseas money that came from derivatives.
You point is well taken. The bubble would not have inflated to the degree it did without stupid money coming through securitization.
The unintended consequence of bailouts and accounting gimmicks was that they did not control the mortgage revenue stream into the banks. Banksters just assumed it would remain constant. Debtors are weighing their options—Eternal debt or 12 to 18 months free rent. I have an idea which choice is going to be more popular in the near future.
I went to meet a friend for lunch today. I passed yet another two lots where the houses were being torn down to the pads. As I pulled into the parking lot, I heard a commercial. “Learn how you can make a fortune in real estate! Real estate millionaires are being made every day!”
I laughed myself into a coughing fit. Remember, this is Phoenix, and we’ve already experienced up to 50% price drops in housing. When Fulton Homes runs the same “we’ve sold 200 homes in the last 60 days” from October ‘09 to March ‘10, you know nobody’s making any money in real estate.
As for the house shown above . . . I must have no taste either, because I love it. It’s totally unlivable. It’s a piece of candy-studded kitsch. And if I had the cash, I’d buy it in a hot minute, just to have someplace this Godawfully fabulous where I could have my friends over to party to the strains of “Purple Rain.”
There is plenty of money to be made in flipping properties, even in a depressed market. If you can buy a property at 50% off peak and sell it for 30% off peak, you just made money.
Let me give you a random example here in Riverside:
http://www.redfin.com/CA/Riverside/6697-Jerome-St-92504/home/4906462
Here’s the sold records of the house:
Mar 25, 2010 Sold (MLS) $145,000 — Inactive MRMLS #W10001811
Dec 03, 2009 Sold (Public Records) $94,500 -18.8%/yr Public Records
Dec 30, 2004 Sold (Public Records) $264,000 24.0%/yr Public Records
Feb 16, 2001 Sold (Public Records) $115,000 2.1%/yr Public Records
Jun 01, 1989 Sold (Public Records) $90,000 — Public Records
The property was bought at 64.2% off peak and sold at 45.1% off peak. The flipper clearly put work into it (new landscaping, a new kitchen, paint and carpet), but it still doesn’t have air conditioning (and is less than a thousand square feet). He maybe spent $20k on upgrades and $10k on commissions and other selling costs, for a guesstimate profit of $20k or so on a $125k investment for four months. Do that three times a year, and you are making a 50% yearly profit.
The post from yesterday has gone viral. Patrick.net and other news aggregators have picked it up. My statistics also show hundreds of email forwards where the recipient clicked through to the IHB.
Congrats IR,
It was a good post and it certainly made my eyes pop. 45,000 foreclosures a month by December is breaking news. To get to that point, BOA will probably cumulatively foreclose on more than 100,000 properties in a 3 to 4 month span. If other large banks follow suit this could have a significant impact.
Your blog does the work that the 24 hr business networks should be doing.
Thanks for the time and work you put into it.
Wow, Gemina, I totally want to come to your party! Like it’s 1999
I have to say that I found the report yesterday regarding B of A’s actions pretty disturbing. This is beginning to feel like the ocean has receded and some of us are grabbing for the (small inventory of) exposed fish…meanwhile, here comes the tsunami. 4,500 homes per month? I smell doom.
LOL Want a castle?
Great article—timely too.
Being naive, that is a simpleton, I missed my economic stimulus as I did not take out OptionArm loans, a 1st, a 2nd, and 3rd from Washington Mutual, or one of the other mortgage lenders: shame on me. If I would have been one of the informed and smart ones, I would not be writing these notes here, I would have pocketed taken the money out of the house, and put it in gold, and not in a brokerage account, not someplace where Goldman Sachs could get their hands on it. And I would have gone to live outside of the US, maybe Panama, in a condo tower; the drug money flowed into Panama real estate and built some nice places.
I look at the Real House Price And Unemployment Rate Chart ... Unemployment will go up, and up well past 25% ... so prices will fall and fall, there will literally be no bottom.
You write “We have created moral hazard. Lenders know they can take unlimited risks an we will absorb the losses”. I came across the term moral hazard about a year ago, I believe it to be an Austrian Economist term, and I think it lets people off too lightly. I guess blog authors use it instead of terms like crime, criminality, and those types of terms. Well, I would say it like this: ... The lenders know they rule, so they can take on unlimited risks and they know we will absorb the losses.
Thanks for you blog site ... it’s a daily read
theyenguy,
The lenders are taking essentially no personal risk becasue the bailout will make them more than whole. The fees are paid up front and if the loan becomes non-paying, classify the non-payments as receivables and bill the govt, i.e., bailout money. Have the shareholders (or consumer loses), banksters do some legal actions that the current shareholders must pay, and collect some more money, but the retail holders of the mortgages.CDO will not likely see more than 5 cent on the dollar for the legal action (since they do not have legal standing as a secondary purchasers). Not legal advise, but just what I have observed in reading the trade journals and papers.
Construction at Great Park to start next year
http://lansner.freedomblogging.com/2010/03/30/construction-at-great-park-to-start-next-year/61053/
Gov/t guarantees = no investor gives a shit what happens to the investment.
So is the fed actually going to stop purchasing and start selling MBS?
Gov/t jobs will not save us from the second great depression.
It can artificially mask the problems and destroy future viability however.