Irvine Housing Blog

If you define “market price” to be the current prices given the lenders’ withholding of inventory, then, yes, they could sell one house that way, discreetly.

If they intend to clear their inventory in this manner, they will be selling quite a few houses. Sotto voce, strictly hush-hush, and on the QT discretion won’t preserve current market prices if thousands of homes are offered, because being low-key will not defeat the laws of supply and demand.

Sure, thousands of homes would still sell, albeit quietly, at market prices, but those will be prices lower than the current ones. But this is all tautological: properties always sell at market prices.

Prices need to be recorded w/gov’t officials, so even if they were outside MLS, they would still be available.

In my area, banks are not sitting on foreclosed inventory.  Properties go through pretty fast, and if need be, massive price drops are used to clear (home that sold for 750k in ‘04 reo’d for 245k.)

Areas where there is minimal negative equity and fewer delinquencies will work through their foreclosures MUCH faster than areas with lots of neg-eq and foreclosures.  3 yrs from now, there will still be some shadow inventory places, but other areas will be as close to ‘normal’ as they’re going to get.

We lived next to a foreclosed condo that was empty for more than a year.  I don’t know how long the owners squatted (I actually think they were collecting rent while it went through the foreclosure process), then it sat on the market for ~9months before selling.  The new owner rehabbed it before moving in, making it about 1.5 years before we had a new neighbor.

Even in a community where the outside grounds are nicely maintained by the association, it was clearly abandoned. No car in the driveway, ever.  No lights on, ever. No outside adornments.  Oh yeah, and teenagers smoking weed and making out in the shadows. 

The new owner turned out to be a busybody nightmare.  Made me miss the days it was empty.

Maybe you like where you’re living, and you understand on some level that life is not a business.

I cheerfully encourage anyone considering strategic default to do what’s best for their balance sheet, but I don’t think that financial considerations should always come first. If there are other issues, then weigh them in the decision and act accordingly.

Right now, having been treating like ____ by three successive landlords, I have a good understanding of the other considerations which make ownership desirable.

Without getting into specifics… are you in a newer or older area? An SFR or a condo?

I ask because not only do I not know anyone who has strategically defaulted, but I don’t know many people in Irvine who are underwater by a significant amount.

I personally know a few people who have/are strategically defaulting.  2 of my friends own their own businesses so first thing they did was to show a drop in income to negotiate a loan mod.  One friend got 5 years at 2% and another got something similar for 7 years.  It bothers me that they game the system but then again, it really feels like all people have lost morals and just care about “me”. 

The person who has strategically defaulted was a neighbor and he would brag about not paying.  He got close to 2 years of free rent and doesnt need to default.  Good job that hasnt changed, nice cars, etc.  Obviously no clue if he is living beyond his means but his lifestyle or income didnt change before the crash so he just didnt think it made sense to pay any more.  In our building, condos have dropped over 50% from peak.

Congratulations! I hope you will be very happy in your new home.

Congrats SoCal78!

Congrats.

I bought a new car last week after 15 years with the same car; but your news is more exciting!

That’s great SoCal78 ... be prepared to refinance that conventional loan in the next few weeks.  After what happened with the Fed statement, the 10 year bond is yielding 2.26% right now.  That’s about 100 bps (or 1%) less than a month ago.

Congratulations SoCal!

Thanks for the kind words. The finishing line could not have been reached without my processing, doc drawing, and closing support teams, along with the attention to detail your professional Realtor (with a bonus capital R no less….)provided during the purchase. Buying a home today has a Rube Goldberg feel to it, but the right mechanics will come alongside to make the gears mesh correctly.

Cheers,

Soylent Green Is People.

Congratulations SoCal78 and thanks for the kind words!  Have fun getting settled in.   I hope to hear more soon.

congrats socal78!  we considered foothill ranch but just felt too far from 405 to us…we spend a ton of time in Santa Monica and love being near 405.