Irvine Housing Blog

And look at that bubbly median price in the included chart!  Oh boy!  Where do I sign up to buy?!  I totally want to be a 30-year house debtor when the bottom falls out of that market!

Of all the astute observers that come here, you are the most resigned to the idea that the housing Ponzi scheme must continue. You may be right, but I don’t think its a good idea to have the California economy continue to be completely dependent upon the cycle of the housing Ponzi scheme. Like you, I tend to believe the California economy will not fully recover until the next Ponzi scheme begins to inflate.

If most new businesses are financed with HELOCS then they are probably bull$hit businesses to begin.  I don’t want the Federal Government backing house debt so Irvine-Dick can start up his Dog-Wash Pet Resort.  Sorry.

i think small biz owners use HELOCs to finance their businesses because its easy - not because its the only source.  there are many other sources of capital and most require more work such as a biz plan so outside of additional work, small biz owners will still be able to finance their businesses.

As you noted in both of your examples, a move up requires more income and/or more savings. That isn’t how most Ponzis see it. Most believe you simply have to buy and own real estate and the equity from appreciation pays for the move up. It doesn’t work that way.

Here’s one for you PR:

“Hey I bought a house 5 years ago, paid down 30K of my mortgage, unfortunately I am still 150K upsidedown.”

Even if you were a saver and got decent wage increases there will be NO move up buying!

It’s a good thing that you paid down 100K of that mortgage because the “r"ealtor fee is going to have to come from somewhere.  Hopefully the thought of slaving away for years to pay a “r"ealtor to sell your house isn’t a problem for you.

50% higher income in 10 years?  What’s the name of that planet your from again?

We bought our house in ‘88, reasonably nice 3 ` 1/2 well built house in a good hood, adequate to raise our two kids in.  We paid it off in about 12 years, and have lived rent free since (except for the property tax).  The house is worth today maybe 2X what we paid for it, and had we sold at the peak it would have been worth maybe 3X. 

A couple of times since we retired the original mortgage we considered a move up.  Both times, upon further review, we decided that there was no incremental benefit to the move up, certainly not enough to justify being strangled again by a mortgage.  Freedom from a mortgage (or rent payments) allows a trememdous degree of “emotional freedom”. 

Of course, our house doesn’t impress the relatives and friends like a McM would, but I can live with that.

I agree that there is a move up market like you described, but the point is that most people don’t view it like that.

Most people were buying bigger houses by essentially flipping their original house. I never understood it…like this blog points out, If prices jump 25%, the “move-up” house jumped by more dollars.

Say you own a 200k house and want a 300k house. If both double in price, now your house is 400k and the other house is 600k. Sure, you doubled your money, but now instead of a 100k jump, you are jumping 200k.

I never understood how people didn’t get this. I’d listen to people talking about selling their house because it’s twice what they paid for it, and how much money they made…but so was every other house out there! All they saw was the profit they made…totally failed to acknowledge the increased cost of the next purchase.

I don’t think they are frozen by uncertainty but the refusal of the older generation to accept that fact that the run up in house prices over the years was unsustainable.

Recording Date:  07/02/2008    
Document Type:  Notice of Default

The notice of default was recorded in July of 2008 which means they haven’t been making a payment since April 2008 at the latest. In all likelihood, the bank allowed them to be delinquent more than three months before issuing the NOD, so it is quite possible they have not made a payment in 4 years. They also managed to extract $150,000 in free money plus their $75,000 down payment on their 2003 purchase.

Do you think they bothered to save any money going 4 years without a payment? After pissing away $225,000 in loan booty, I rather doubt it.

Hopefully she did something to lose the non-recourse protection of her loan.  Won’t be much reason to boast when the IRS sets in on her.

I think you can do it. I investigated this initiatlly, but went the route of working with a realtor (I was buying).

The trick will be finding an attorney who knows what the hell they are doing because the California Real Estate Industrial Complex are all assassins of trees.  Seriously, I’ve never observed so much ridiculous paperwork in all my life and for what? Just to buy a house? Where does this disdain for trees come from! If only Ents from the Lord of the Rings movies were real, they’d kick every California realtor in the ass.  I worked with a Realtor to buy my house in OC. He was very good and the transaction went smoothly. But to save some bucks, I guess you could go the attorney route.

Hi Marc; There are a number of options available. Most importantly the fee is always negotiable. Please contact us if you would like to meet and discuss different options.

That is because houses are generally purchased with a high degree of leverage.