Irvine Housing Blog

This is fundamentally an issue of human stupidity.

Sure, municipalities distort markets when they mandate low-flow toilets or zeroscape yards, but government has been mandating all sorts of sprawl and vehicle-friendly development for decades, as well as subsidizing the price of water and, in the case of many HOAs, mandating lawns.

It makes more sense, anyway, to install low-flush toilets and gravel lawns after the price of water has risen, so buyers are just being smart. Some day, we will begin to pay market rates for water. It will be interesting to witness the rapid changes that will ensue.

I also look forward to zoning which does not mandate 50-foot-wide streets, or a certain number of parking garage spaces for each commercial office.

Is it a chicken and egg type question? When the prices are WTF and the buyer can only “afford” the house with enormous DTIs and hopeless loans, then WTF + 20% is a difficult sell.

If the green house was $250K and next to it a similar standard house for $200K, the green one might be preferred. When you can’t afford something in the first place, it is even dumber to pay still more up front. That house needed to come down $500k (and I think, more) anyway, green or not.

I accept that IR knows a lot more about what builders face than I ever will, but until the distortion of the bubble inflation is gone, isn’t hard to judge what people will (can) pay extra for?

Now excuse me, I’ve got to go out and hug a tree.

I checked out 32 vienne this weekend and it was a zoo.  This was the house listed as low as 499k for 2900 sq ft house on 10000 sq ft lot.  The listing is gone now but basically said that the house will be sold to highest bidder and the usual hype that comes with a totally non official auction.  In any case, it was packed and as far as marketing goes, it drew tons of attention and the bid forms were filled to a half-inch thick high pile.  The agents sitting out front said that they will call all bidders on monday and provide them the chance to bid higher than the top bid…and that’s where this thing is hype.  Who is to say what the “highest bid” really is?  Its like asking a friend to bid up your listing on ebay.  “Hey bro, offer 900k…don’t worry, its totally non-official and we won’t commit you to anything”

In any case, we never got our follow up so not sure what the high is.  I offered 527,001 (I really put deep thought into it) for fun.  I am guessing it closes for as low as 700k as it needs some serious cleanup and decent updating.  Btw its next to power lines on harvard but not sure how strong those are and if it should be a concern. 

Anyone else bid?

Am I the only one who did a double take on the featured property.  The owner used a $350 down payment and managed to extract over 322K of equity before losing the house.  Think about that for a second!

You just can’t make this stuff up, this would make any criminal enterprise envious.  No laws were broken, no one goes to jail, just business as usual in our fraud bubble economy.  How can anybody trying to do the right thing compete with these sheisters?

Buyers are not asking/demanding the green house.  Regulators are the ones doing the demanding.

Insulation, passive hot water and heat pumps (in the proper climate) can pay for itself.  A large problem is most manufactures price the new energy saving item according to a projected break even point and not the cost of manufacturing.  The utilities’ rebates something make buy green profitable due to the accerated break even point and overcoming the extra green profit.

LED light (not bright enough) and $ too high for energy saving.  LED are for battery power lights, i.e. flashlights, are great.

Solar panels, questionalbe when manufacturing pollution is considered.  I would use out in the boonies and if the power companies are forced to buy the solar power from me.  Low flow toilets, be prepared to flush 3 times. 

Most buyer only buy on the looks.  Out of sight, out of mind.  If the house falls apart after 7 years, that will be 7 years of dancing.

We used some ‘green’ building techniques, and our builder did some on his own.  We wanted low/no VOC paint and hardwood seal, and also knew that we would probably recoup none of those costs.  Our builder used low-erosion site plans (seeding after clearing the lot), used some recycled/scrap wood in places, covered all entry doors (to reduce water infiltration).  The only one that would help in resale is the covered entries, and that would only help eliminate a possible problem.  We looked into spray-foam insulation, but the cost - 1% adder - didn’t pay up for the r-value increase.

I would argue that a 4900 sqft, $2.5M home sitting unsold says nothing about the green building idea, but a lot about the sale of > $1M non-custom built non-historic homes.

The obvious way to encourage people to fo green is to tax the dickens out of energy, like Europe does. I was struck how on a visit to Germany how everyone was thin there. Then I notices the price of gas, the tiny bar fridge people had, and how they had to walk to the subway to work, then take the subway home and walk to the market to get food to cook as the bar fridge didn’t hold much, then walk home to cook it. Maybe the govt should tie any public health care plan to a carbon tax. Health care per person is a lot cheaper if everyone is thin from walking rather than obese.

One could make the argument that this 4,900 square foot, 7 bedroom monster is not a ‘green’ house at all.  It’s just an state-of-the-art mcmansion. 

Light cigarettes aren’t any healthier than regular cigarettes if you smoke twice as many packs of them, and this supposedly green mcmansion is as dubious as a Hybrid Hummer.

Uh Planet (Un)Reallity, I believe it’s called ‘sarcasm’ not that I would expect you to get it.

BTW I hear that the word “gullible” is not in any dictionary.  Could you check on that for me?  I don’t have one handy.  TIA.

This owner appears to like 32 Vienne’s style:
http://www.redfin.com/CA/Irvine/46-Wheeler-92620/home/4783057

Description: “Beautiful Lite and Bright 3 Bedroom Home. Breakfast nook in kitchen, formal dining room, large master suite with walk in closet, inside laundry, new flooring. Close To Award Winning Irvine Schools. No Mello-roos, No Association Dues. Offers will be accepted at OPEN HOUSE ONLY Sat. Sept. 25 from 12-3 Home will be sold to the highest & best offer on Saturday”

I’m pretty sure they’re wrong about Northwood not having any HOA dues, though. The listing is by “Lawyers Realty Group”. LOL! Double the trustworthiness! Lawyers and [r]ealtors together!!!

-Darth

I know its going to go down another 20%. A friend just closed his restaurant in Woodbury. After 3 years he just cant deal with the crazy rent they wanted. Yet they are building away in Laguna Crossing. I am starting to smell some blood in the streets. TIC is just pushing too hard. Went to the Spectrum on Saturday for lunch. 3 cars total in the Valet over by the Yardhouse. Not a good sign at all. People are telling TIC with their feet that something is very wrong.

The problem with the Costa Mesa house on the golf course isn’t that it is green, it is the $GREEN$, which you can read as $GREED$.

The non-green comps for freshly renovated 3k sf houses on big lots on the course are ~$1M.

check out the houses that have sold in the past few years on the best streets:  Java, Tahiti, Capri.  The highest asks have been $1.7 and $1.6.  The highest solds have been $1.2, $1.0

And the lot that the LEED house is on is not even one of the best of these trophy lots.

If the excess costs due to green were 25%, then they should be asking $1.25M, not $3M.

Its just another ridiculous seller, a la Shady

This post was interesting to hear why builders do what they do. I understand they need to make money, but in the hay day they were making obscene amounts of money, especially in Arizona where I live. I even got caught up in a “lottery” and thank god I pulled out, because I’d be a hurting unit now. Do you think that builder is doing lotteries now? Nope! I’m a small business person myself, so I can relate to doing what’s best for the business, but doing what’s best for the customer isn’t a bad thing either. Just my opinion anyways.

Regards,
Mike