Irvine Housing Blog

Ignoring the allure of a interest-only variable rate (which gives you an artifically low payment and probably no longer exists), I don’t understand getting a variable rate mortgage when rates are historically low (as is the case now).  If you think rates are going to be higher soon, get a fixed rate mortgage.  If you think rates are going to drop, then a variable rate mortgage makes sense.  It also might make sense if you plan on only owning a property for a short period of time-but in that case, renting probably makes more sense.

No the real problem IS government trying to control free markets. We in the US had little controls going up the bubble, and now have government trying to keep in inflated with bank bailouts and loan mods on the way down. This was strictly done for our Wall St masters and has nothing to do for Main St. It’s too late, we will now have a declining housing market for 5+ years thanks to the fed and government trying to “fix” the problem. The problem is them!

I like the red couches in the living room with the fireplace. But the red office is too much.

We were in Vancouver in August of 2006 (or ‘07, I can’t remember). We stayed in a hotel near the water downtown. There was a lot of high rise condo construction going on. A hotel employee told us one development sold out within 1/2 hour.

I am glad that the listing agent clarified the fact that one of the three bedrooms is currently being used as an office.  These are details that I am very interested in knowing; how the current seller uses one room for a computer and two others for beds.

If I buy this place and turn the room into a Meth lab will the sales description be sure to indicate that the third bedroom is currently being used as a laboratory?  I would certainly hope so.

I like this place, have had my eye on it for a while.  In fact, I’ve been wondering why it’s still on the market.  I think the HOA fees over there are really high, though, and I wonder if they include any golf privledges or membership in the racquet club over there.

Off topic for a moment. A Redfin listing today for a $360K short sale condo in San Clemente has this statement by the realtor, “Buyer must agree to a short sale negotiation fee of $3,500 so we can assure a quick process.” This is apparently in addition to any commission paid at the close of escrow. Am baffled as to how this assures a quick process - and why it exists in addition to usual commission. Any one know?

I like the red decor.  What I don’t like is the wet bar in the office; this should not be called a third bedroom, it’s definitely an office or den.

The US didn’t have no regulation, just deregulation on the area of need and regulations to keep barriers of entry.

FEDs keeping prices high by lowering interest rates are regulations, GSEs and other loss limits with no profit limit for WS investment bankers are regulations, abide poor regulations to stiff the taxpayers.

Articles on dramatic drop in consumer sentiment after 3 month of improvements.  At Tahoe over between Christmas and new years, there were almost no lines for skiing and the condo were asking if you wanted to stay longer instead of reminding you to be out by check out time.  Plenty of parking.  The media can spin all they want to get BHO plans through and poll numbers up but when you’ve been out of work or see many of your friends out of work, you know the economy isn’t improving for the working man. 

BTW, aticle on 17% increase in bonus.  Implies the little guy is getting lots more $ in bonus, but not necessary so.  Take company X with 10% overall cash bonus (16.5 million salaries, 1.66 million for bonus) and 150 employees.  Top 5 in company make 8X over medium salary of $80,000, (average $110,000) and are at 30%-50% and 100% for CEO of salary for bonus.  About 60% of the cash bonus is used for the top 5 in the company.  The remaining 95% split the remaining 40% or 4%.  Very common in many companies.  Makes bonus structure look generous, but generous for whom?  Very similar to the multi-trillion $ bailout/recovery package, very generous but for whom?

FDIC Troubled Banks Increase

The spin is that the “overall” industry made a profit.  So if you factor in the bailouts and under the covers Tom Foolery propping things up - all is getting better.

I live in Vancouver, Canada, and since the latest stat shows that it is currently *one of the most unaffordable city* in the world, I do not have much enthusiasm for Flaherty’s solution to the problem he had a huge hand in creating.  The current median house price to median income ratio is 9.3!!

Just a couple years ago, Canadians used to be able to buy houses with 0% downpayment, amortized 40 years.  This was introduced in 2006 by the same government if I am not mistaken.  They realized they screwed up and increased the downpayment requirement to 5% and max amortization to 35 years.  Banks are lending to anyone with a pulse because most of the mortgages are insured by the Canadian Mortgage and Housing Corporation (CMHC), backed by the government (read: taxpayers).  The CMHC has increased their total guarantees to many hundreds of billions (I can’t remember since they kept upping the number).

I’m not saying the new regulations are not welcoming changes.  I just wouldn’t eat crows for them.  The biggest issue of CMHC backing all mortgages with under 20% downpayment is still not addressed.

As a whole, the bubble is not that big in Canada.  But in some major cities far from Ottawa, the bubble can’t get any bigger.  Saying Canada has a small bubble is like saying the US has a small bubble, except people who live in Irvine or Vancouver don’t feel the same way.

I must say, that interior in that house is amazing. Person who designed it, had a great sense of house designing. Of course, I didn’t see details of this house, even when we take into consideration how old it is, but from my first sight it is really worth that price.
Take care,
Julie

You write ... “Canada is likely to experience a slow grinding decline similar to ours over the next decade as interest rates rise keeping loan balances small, appreciation minimal, and foreclosures abundant”.

I expect prices to fall rather RAPIDLY once an economic crisis hits the United States, such as a Treasury Auction Failure and a resultant rise in interest rates, with a continental wide response made to economic disruption under the terms of the Security and Prosperity Agreement, the SPP.

I recommend a read of the complete thoughts on the enclosed link.

Don’t get too optimistic ...

‘Volcker Rule’ Stalls in Senate
http://online.wsj.com/article/SB10001424052748703503804575083823511212204.html?mod=WSJ_article_LatestHeadlines

Interesting map - click on California, then mouse over the green $ signs.  Yes, Irvine is on there.

http://www.portfolio.com/interactive-features/2010/02/us-wealth-centers/

Just got back from Vancouver and Whistler.  An amazing amount of coolaid being consumed right now.  All the same things people said here in 2006.  (20% year of year increases are normal and sustainable, foreign cash buyers, etc..)  You can’t throw a dead cat without hitting brand new 25 story condo buildings.  Studios are starting at $300,000.  I’m guessing the cost of living is close to the bay area, incomes are not.

Predatory Lending is a major contributor to the economic turmoil we are currently experiencing.

Here is an example of what I am talking about: 
Scott Veerkamp / Predatory Lending (Franklin Township School Board Member.)

Please review this information from U.S. Senator Jeff Merkley regarding deceptive lending practices:
“Steering payments were made to brokers who enticed unsuspecting homeowners into deceptive and expensive mortgages.  These secret bonus payments, often called Yield Spread Premiums, turned home mortgages into a SCAM.”

The Center for Responsible Lending says YSP “steals equity from struggling families.” 
1. Scott collected nearly $10,000 on two separate mortgages using YSP and junk fees. 2. This is an average of $5,000 per loan. 3. The median value of the properties was $135,000.  4. Clearly, this type of lending represents a major ripoff for consumers.

http://merkley.senate.gov/newsroom/press/release/?id=A09C6A80-537A-4EB1-83C5-31925F046B6F