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“bar b que”
‘A’ for effort! I appreciate a “r"ealtor who tries!
Folks,
Continuing them from yesterday’s post - Take this to heart, prices in Irvine will be going down.
The fundamentals needed to illustrate this are as follows:
Median Income
Median House Price
The DTI of the Median Income borrower buying the median price home w/ a 720 FICO, 20% down, 30 Yr fixed rate mortgage
For Irvine
Median Income - ~112k
Median House - ~560k
DTI of Above Average Credit Median Income Borrower w/20% down and a fixed Mortgage - ~36%
Given the High “good weather” state taxes of CA, the median income worker will take home roughly 62% - 66% of their gross income (even less if high 401(k) saver). Applying that to the numbers above would leave the borrower with ~2500 a month to live on outside of housing expenses. Simply not enough to live a comfortable life.
Given downward pricing pressures of distressed properties, increasing shadow inventory and increasing interest rates, it just all adds up to more downward pricing
Add to that carry costs outside of mortgage expenses, such as Propert Tax, HOA dues, insurance and maintenance.
I estimate these costs alone to be 2-3% of property purchase price / year.
Thus, a $1mm home needs $20/30K of free cash flow
per year just to keep the doors open - *exclusive*
of any mortgage.
The only cartel that has been weak in Irvine the past 3 years is the home buyers cartel.
Post about endless price declines for Irvine one minute.
The next minute admire your 30% cash down payment and other assets in your bank account, your $125K or $250K income stubs in your loan application, and consider what open house you are going to this weekend.
Also continuing a topic from yesterday: 8 Whitecloud appears to already be going into escrow as they changed the status from Active to Pending/Backup Offers. Demand doesn’t appear to be weak as this was on the market for just a handful of days!
I genuinely hope cheaper pricing is on its way, but I’m skeptical in the short term.
Purchased in early 2009 for $660K.
Current market price $700K, pending in a few days.
Welcome to reality.
Cue the fanfare, more supply is on the way
Village of Stonegate scheduled to debut April 9th.
I think Stonegate is still a bit overpriced but selling better than the $1m+ San Marino at Woodbury.
TayMo at Las Ventanas, one of the few non-TIC built tracts, are selling SFRs from $627k-$700k (1871-2302sft)... and has almost sold out Phase 1 without opening the models yet.
Sales pace may be slower than 2010 including some discounting/incentives but ultimately, they’ll sell.
Demand for Irvine remains strong, in particular “new”
I am certain that all the new building going on is targeted at young families withchildren!
They know who has the money.
I think that it was priced right. It definitely caught my attention, and I don’t look in that area much. Just look at the prices of the other decent houses in that area (Landings I).
The statistics you point to says nothing about buyers median incomes.
How many houses are sold in Irvine a year? How many buyers have the income to support it?
Why do you keep pointing to median income as if that is what a typical buyer looks like today.
Why don’t you look at median Irvine mortgages and median irvine income and figure out what the DTI on it is.
90% of the people in my neighborhood I have met purchased prior to 2000. Do their current income have to support current prices or prices are going down?
Why do you keep pointing to median income as if that is what a typical buyer looks like today.
Is this the new theory? You can’t buy a house in Irvine if you make at or below median income?
“90% of the people in my neighborhood I have met purchased prior to 2000.”
Then they should have no problem with their purchase unless they’re HELOC abusers.
The problem is that they control the checkbooks of this nation, and it will be very difficult to supplant them. We have to have people powerful enough prove to the public that these people need to go. Unfortunately, they are one and the same…
“We have to have people powerful enough prove to the public that these people need to go.”
Well, I believe most in this nation thought they had voted for the *one* back in ‘08….turns out that he’s nothing more than puppet #2.
Yeah, unfortunately I would have to agree… unless he starts having some backbone in the next 2 years.
“Banksters should be held accountable for ruining the housing market and economy”
If by Banksters you mean “Central Banksters”. The FED and fractional reserve banking is the ultimate ponzi scheme. You can trace every bubble back to the Fed. The real question is, “who owns the Fed”?
Just think, the nations chief banker is still in charge ... and dictating monetary policy. Not only that, but now the Bernank has completely grabbed hold of our entire economy. No more free market, no more competeing sides. Quasi Capitalism.
AND ... No corporate housecleaning of fatasses on Wall Street. Since the debacle in 08, we’ve seen one man, running a ponzi scheme, ripping off other rich people, go to jail.
Only in America.
Bankers live in the Bizzaro world: http://www.youtube.com/watch?v=IcjSDZNbOs0
I still have a problem with a POS townhome (that is almost as old as I am) with a price tag of over $300k. I don’t care if it is in Irvine. It’s ridiculous. If people would stop paying such outrageous prices, then the real estate market may come back to reality. Maybe.
People buy but can they really afford?
I personally know more than a few folks who
bought in Irvine (during the bubble) but
are living 1 missed paycheck away from disaster.
Why anyone would subject themselves to such
a situation is beyond me.
I think these overstretched loanowners would
be fascinating nutcase guests on Dr. Phil. Let Dr. Phil figure these guys out.
I live in the same subdivision - I rent in Irvine Company’s Deerfield Apts (generic, expensive but immaculately maintained!) - the neighborhood is largely Asian with the best schools but properties are insanely overpriced. Example: I rent a 3 bdrm apt in the same zip for ~$2000/month (including up-charge for multiple dogs). There are plenty of vacant apartments in here, so I can’t imagine the rents going UP. Oh, I have central air. This POS condo DOES NOT have central air. We are not even close to rental parity in this zip code. Pricing FAIL
The only time to do anything about the bankers was when the crisis was at its peak and the banks were desperate. Once the crisis had passed the bankers were like the monster in the sci-fi movie that reassembles itself and becomes stronger than before. It’s hilarious when I see Republicans in Congress talk about “free enterprise” and then go and vote the party line of the American Bankers Association. The ABA has something like 1,000 full time lobbyists in Washington.
Exactly why we need publicly-financed elections, at the very least on the national level.
npr is running a segment this week on the Fannie and Freddie and their role in housing both pre and post bubble. You can listen to the segments at http://www.npr.org/blogs/money/
Unrelated question. How does one get historical information about the refinance and loan activity on a specific property? Does one have to be a real estate professional, like Irvine Renter, to access this information? Many thanks.
I get it through a purchased subscription to sitexdata.com. It is all public record, but here in California, you need a data service to organize it and present it to you.
In some counties in Florida, you can do a public records search by name. Mortgages come up and usually have initial balances and terms come in when there is a arm-type rider. There is probably a 3rd party service too.
I think the obvious was missed in the article in today’s post. Don’t you get it? These guys were promoted because they WERE successful.
They made the housing bubble, they profited from the bubble and then when the bubble burst, they got the government to take their losses and everyone walked away free and clear. I don’t think they had failed ideas and poor judgement. Their judgement looks spot-on, to me.
The electorate failed by not insisting that these guys be held accountable.
Now, if you had a business and were looking for someone to protect you and your business and keep it profitable, would you hire one of those guys? In your heart, I bet you are saying “yes.”
I used to scoff at people who said that Wall Street attracted the best and brightest minds in the last 15 years or so, because of the bubble. Now, I think they were right.
Look it in the eye and see it for what it is.
“The electorate failed by not insisting that these guys be held accountable.”
What make you think the electorate were trying to hold them accountable? There job is to protect them from being accountable and keep the cash coming to them.
Who will pay for the underwater assets? The new buyers with large downpayments and the rest will be covered by the taxpayers.
I though the housing market would burst, but I did not think it would take down the stock market. And I didn’t think the stock market would bounce back so fast with the high unemployment. Low volume gives rise to high manipulation.
The Federal Reserve is owned by a bunch of Jewish terrorists hiding inside the USA and some hiding in European countries.
But American slaves are too docile to smoke these terrorists out of their caves. Think Warren, think Gates..and all you slaves in white shirts and blue ties.