Everybody Wants to Own the World

Feb 23rd, 2009  
by IrvineRenter  in HELOC Abuse

Astute Observations

Astute Observation by Texas Triffid Ranch
2009-02-23 07:32 AM

One of the things that gets me about the current state of denial is the assumption that if the economy gets better, somehow the real estate market will recover to its old levels.  That, my friends, is a load of gibberish.  The problem that nobody wants to face is that, even if the economy corrects itself before the end of 2009 (possible, but not plausible) and we see a massive economic boom (at this point, nothing short of faster-than-light space travel or cheap matter-to-energy conversion or any number of other science fiction fantasies is going to get us out of our current hole that fast), everyone forgets that most of the folks who bought houses during the last boom aren’t going to be able to buy houses for at least seven years.  Well, they could if they paid cash, but considering the number who are either being foreclosed upon or are walking away, there’s no way they’d get credit again until at least 2015. 

That’s what we have to consider for the next decade.  Even if the boom started tomorrow and we were back to insane lending standards by next Friday, the only people who’d qualify for mortgages are the folks who held off and continued to rent through the whole real estate boom.  And why should they buy now when they can wait another three years, get up a really nice nest egg, and buy when the banks and individual flippers are desperate to get rid of what they have?  And what if we get a repeat of the HUD fiasco and the houses being held by the government turn out to be even cheaper?

Astute Observation by IrvineRenter
2009-02-23 08:04 AM

The really sad part about denial is it prevents people from acting that are still in a position to get out before they go under water. I wrote about this phenomenon in Houses Should Not Be a Commodity, and I wrote about the psychology of it in more detail in Speculation or Investment? Only the pain of loss is going to overcome their denial. By then, it is too late to do anything about it.

Most of us probably know people in denial who could still get out. I do. It is sad they do not, but you can only lead an owner to market, you can’t make them sell.

Astute Observation by maliburenter
2009-02-23 09:27 AM

A landlord I know is one of those hoping prices turn around.  The current market price is 5-10% above what they paid in 2003.  Because the house is slightly cashflow positive, they are waiting things out.

Works great until your renter moves.  Then the house is $100k underwater and it’s vacant.

Astute Observation by AZDavidPhx
2009-02-23 08:58 AM

I personally get a kick out of how the average Joe thinks that a “good economy” is synonymous with “stable house prices” - and some even go so far as to think that a 3% appreciation entitlement per house per year is part of a “good economy”.

These people are unable to backtrace the path starting at the worker in the foreign country who produces all of the goods for slave wages while the consumer in America buys the goods on credit and decorates his house.  At the same time, this consumer believes that he is contributing to the welfare of the global economy by being a sponge who is nothing more than fortunate to be a benefactor of a Hegemony.

These are the same folks who go into the voting booth and believe that their vote counts and that the game is not rigged and will challenge your patriotism for saying otherwise.

These are the same buffoons who start crowing hardship on the local NEWS everytime gas goes up 1 cent because they can no longer afford to take their idiot kid to swimming lessons 40 miles away 3 times a week.

These are the same cows sitting around waiting for the man behind the curtain to turn some knobs and adjust a few dials to make them happy again so they can go on grazing off of the the hard work of others.

Furthermore, it exposes the BS that is the foundation of our entire economy which pushes greater-fool scams and entitlements that function via the players continuously taking out more and more debt than the former while the game-masters at the top enrich themselves and send their paid representatives into government in order to maintain the status quo and legalize crimes.

It’s actually quite amazing to think we have gotten even this far when you consider the housing market is full of hustlers and middle-men; I mean “service” “professionals”, consuming all kinds of money that ultimately results in nothing actually being produced other than a transaction slip and a financial “security” that gambling addicts toss around some casino on Wall Street like a bunch of kids playing a game of hot potato.

All the while, the criminals run the asylum and do not get punished for their crimes as the masses sit around staring at the television, concerned about who is wearing what on the red carpet - drooling from the mouth, stuffing their faces with KFC, cheese doodles, and Starbucks coffee drinks, waving their flags and believing that they are free and independent because the government allows them to keep a Glock in the nightstand and therefore FEARS them.

We are surrounded by morons incapable of an original thought.  We just have to accept it and do our best to be on the side that benefits at the expense of the pawns.

Astute Observation by AVRenter
2009-02-23 09:59 AM

“the masses sit around staring at the television, concerned about who is wearing what on the red carpet - drooling from the mouth, stuffing their faces with KFC, cheese doodles, and Starbucks coffee drinks”

Bwaahahaha.  That is my type of poetry.

Astute Observation by IrvineRenter
2009-02-23 10:04 AM

David’s writing is excellent. I hope he does something with it, besides continuing to write here.

Astute Observation by Az Dave's Sense of Proportion
2009-02-23 10:45 AM

Excellent writing, really?  His writing makes me sad.  He’s so angry and monotonous, that I just imagine his family, friends, etc. must be one step away from putting their heads in an enormous Viking oven.  It’s his obvious and redundant rants that get in the way of constructive thoughts by others.

Don’t misunderstand my point, I tend to agree with his point of view.  It’s the tone that strikes me as pathetic and poorly suited for a wider audience.

Astute Observation by Chuck
2009-02-23 10:49 AM

I always view David’s writing as irreverant but a bit tongue in cheek, so maybe you are taking him a bit too seriously and missing his sense of humor?

Astute Observation by AZDavidPhx
2009-02-23 12:19 PM

My biggest fan -

His writing makes me sad
get in the way of constructive thoughts

Unfortunately, the truth hurts from time to time and there are those who prefer to go the easy route and stick their heads in a sand and write off the nay-sayers as negative-Nancy doom-and-gloomers who just have some kind of psychological or personal problem that prevents them from putting on the rose glasses and being a constructive glass is half-full Polyanna.

He’s so angry and monotonous, that I just imagine his family, friends, etc. must be one step away from putting their heads in an enormous Viking oven

Definitely not monotonous.  I think that you are just playing with big words today.

Sometimes people confuse anger with passion.  It could be that I am writing about something that I think is very important and select words to convey a point of view that may paint a non-pretty picture, but it doesn’t necesarrily mean that the root is some frothing at the mouth anger or that my pet kitten was stolen by a mortgage broker when I was a child.

tone that strikes me as pathetic and poorly suited for a wider audience

Perhaps a more monotonous neutered approach would work better?  Just the fact that you bothered to respond in writing to me shows that it must have been semi-effective otherwise you wouldn’t have bothered to read it.

If it were so unimpressive, you could have just read the first paragraph, huffed and puffed and moved on.  Yet you didn’t - you read every word and it even motivated you to pompously let everyone know that you weren’t impressed.

Can’t please everyone.  Keep up the good work, hater.

Astute Observation by tonyE
2009-02-23 01:06 PM

We should make LSD legal.

Astute Observation by no_worries
2009-02-23 02:21 PM

David,

It’s the venom in your postings that often makes it hard for me to agree with you. There aren’t only two sides to this debate, thankfully, so disagreeing with your tone doesn’t make me one of THEM.

Just as an example:

“their idiot kid” - necessary to your point?

Astute Observation by darms
2009-02-23 02:39 PM

Hope that “enormous Viking oven” is not electric…

Astute Observation by dontbother
2009-02-23 03:23 PM

Perfect.  Well said.  Was hoping someone would point out one of many examples such as this.  His comments are often overlooked by myself simply because they offer nothing.

Astute Observation by AZDavidPhx
2009-02-23 05:40 PM

Idiot kid is necessary.  It may sound mean spirited, but the point is that idiot parents raise idiot children.  Sorry, but look around.  The apple rarely falls far from the tree.

Astute Observation by Muzie
2009-02-24 12:06 AM

More venom where that came from it looks like. Doesn’t look like David can take a hint.

The world is more nuanced with more shades of grey than speculating KFC-eating home flippers and angelic visionary astute renters, in case you hadn’t noticed.

Your writing is excellent the same way that the National Enquirer’s writing is excellent.

Astute Observation by IrvineAccountant
2009-02-25 12:51 PM

“Sometimes people confuse anger with passion.” - AZDavidPhx

I haven’t read all of his comments but I’ve read several over the years and will comment on this latest one.  The problem I have, which allows me to enjoy his comments, is that I am passionate about the world too.

As a kid I grew up thinking that the “adults” had all the answers and always knew what to do, that statistics represented fact, that politicians were intelligent elected professionals that fairly represented their constituents, that teachers only spoke the truth, like when they told me politicians are intelligent elected professionals that fairly represent their constituents; and that the world was a fair and balanced place, except for some meanies in other countries that were bad men.

I was so OFF.  Man was I off.  As I passed through my 20’s and into my mid 30’s I realize there are a lot of dumb people, and they are breeding and raising dumb children. Not ALL of course, before you lance me…but enough to make me nervous. Hopefully the kids will self-correct on their own, but what a handicap to start with.  Sometimes I think we should let the Dolphins or Chimps have a shot at bumbling a Republic.

Why is this so socially unacceptable to say anyway?  Consider natural selection.  Nature makes sure that the strongest in mind and body survive, the genetically weak are eliminated.  Not for us though, and it’s not because every newborn is magically the strongest in mind and body every single time, it’s because we are human and we want everyone to live a good life.  That’s fine, but we also must accept the fact that by removing natural selection, we will in fact produce people who are weaker, mentally and physically.  Again, let me make clear I am not advocating some type of culling process…all I am saying is that…I see dumb people.  They do exist, let’s stop pretending.  No natural selection means EVERYONE lives.  In nature the strongest will breed, in human society anyone gets to breed.  The strongest, the weakest, and the genetic pool reflects the results of generations of that.

As these truths became self evident over the years, the wall between me and my hope for a better world with peace and freedom has been getting taller and wider.  As I learn the truth about politicians, about politics, about man and their greed and violence, about the degrading values of society, corruption and the slow dissolution of the Republic – I lose hope that any of us will unite long enough to build the ladder we need to breach it.  Revolutionaries incite the people to bring change by bringing the ugly truth to the surface, by showing the world for what it is.  Sometimes that is shocking, an affront to your sensitive sensibilities – but that is often what it takes.  Those in power will always drip feed addictive monotonous prattle of fear and government by division to reach a broader audience, to unite the masses to rally to their flag and maintain the status quo, the one where they get to stay in power.

I don’t think he wrote anything that isn’t true.  And when is the truth ever bad, no matter how it’s delivered?

One last comment regarding the Viking Stove.  Those of us who are passionate are not always so all the time.  I will do what I can to help people see the truth, but that won’t stop me from having fun in Vegas, having dinner with my friends making jokes and having fun, taking my wife on weekend trips to quiet places where she can buy new clothes that the tags will never come off of.  I will live life to have fun and to love and to be free and happy.  I will also be passionate and write a tirade of the injustices in the world and pick up a gun to defend a true Republic…  I do what is appropriate for the environment I am in.  He may well be the same.

Astute Observation by ockurt
2009-02-23 10:54 AM

Damn Dave!

You must have had a double espresso this morning!

Astute Observation by AZDavidPhx
2009-02-23 12:31 PM

It was that damn Starbucks coffee that I stuffed my face with last night while looking at what everyone was wearing on the red carpet.

Astute Observation by Gemina13
2009-02-23 12:38 PM

Now that is my kind of jeremiad.

But I’ve encountered people who fervently believe that we’re just one more layoff away from hitting the bottom of this depression (and make no mistake, that’s what we have here).  After that, it’s a huge bounce and a growing economy once again.  We’ll all be able to pick up houses for pennies on the dollar!

. . . right.

It’s not just our economy that’s collapsing, it’s the whole world’s that going under.  We have yet to start rebuilding industry here, let alone get to work on our infrastructure—two projects that could create badly-needed jobs to get our economy going again.  As noted, people think it’s all about the houses.  Just like during the bubble, though, no one’s paying any attention as to where the money’s coming from.

It’s going to be a grimly humorous recovery, in the sense that those of us who know how hard it’ll be, will get some relief watching those who thought it would be easy flail and screech.

Astute Observation by AZDavidPhx
2009-02-23 01:02 PM

We are going to legalize Weed so all of the bubble chasers will start investing in Hydroponics. 

Oh well, at least it will result in some kind of tangible good being produced which is better than what we have now…. at least until we start out-sourcing our pot-production back to the foreign countries who will produce cheaper weed that can be sold at Wal-Mart.

Astute Observation by tonyE
2009-02-23 01:08 PM

Actually, legalizing weed would be good for California and Hawaii.

Astute Observation by Bitter Renter
2009-02-26 11:04 PM

Hey, I just recently had that idea too.  LOL  I was thinking that that was one of the only things you could do that would really create a lot of new jobs and business opportunities nationwide.  As a side benefit, it would cut down a lot on the Mexican drug cartel violence (although unless they could transition into being legitimate suppliers I suppose they’d just be bucking for other illegal trades to get all violent about).  Of course you’d have to hope that the productivity-sapping powers of pot wouldn’t hurt the economy further.  cool smile

Astute Observation by Major Schadenfreude
2009-02-23 02:38 PM

“...the masses sit around staring at the television, concerned about who is wearing what on the red carpet - drooling from the mouth, stuffing their faces with KFC”

LOL!  This is exactly what I did last night!  Ate chicken and watched the Academy Awards.  Although, we Tivo’d it so we could blast through the pathetic speeches.

I thought Merle Steet’s daughters were rather purdy…

Astute Observation by Food
2009-02-23 10:47 PM

David,

This is excellent, and it drives home especially about that idiot kid been driven 40 miles for his unnecessary swimming lesson.

If you are runninig for office, you have my 100% support.  Please keep up with the good works, and don’t let the others intimidate you.

Astute Observation by Alan
2009-02-23 10:38 AM

Another reason current renters are in no hurry to buy now, is uncertainty about their own jobs and/or pay. As a renter, I can move to a cheaper place, city or state pretty much as soon as I need or want to. And I can take a better paying or more stable employment as well. In this economy, I’m not in any hurry to get anchored to a house and paying for it, even if we were at market bottom (which we obviously aren’t).

BWT, $1.2 million for this place is absolutely insane! WTF does not even begin to express it.

Astute Observation by Gemina13
2009-02-23 12:41 PM

No joke.  Yes, I know it’s Irvine, and supposedly that adds a little magical sparkle that increases the value of a foam & stucco matchbox by 300x.  But I can’t believe that a home barely 2500 sq. ft. on a 4500-sq.ft lot is worth over $1 million.  Not unless there’s that much in extractable minerals and oil beneath the surface.

Astute Observation by .
2009-02-23 08:04 AM

He should have used some of that home equity he extracted to pay the tenants to put some of their furniture in storage.  I get claustrophobic just looking at the pictures.

Astute Observation by Lee in Irvine
2009-02-23 08:07 AM

Oh great, here we have the Octomom of our local real estate market.

Astute Observation by AZDavidPhx
2009-02-23 09:05 AM

That’s awesome.  I was thinking that we need to come up with a nickname for this gentleman as we will most likely being seeing his work again in the future.  You are on the right track here.

Astute Observation by Anthony
2009-02-23 10:45 AM

Hey,
Hold on right there guys.  At least he’s been contributing to the local and national economy. 
He will therefore be getting some assistance from Obama.  Maybe he could pay off some of the loans with that.
What have you guys,..and I done for this economy, except sitting around here saying bad things about the boom and being responsible, renting and paying your taxes on time?
That is why you guys,...and I will get nothing from this Obama administration.  No assistance…Zil…nothing.
Why helping a responsible, dilligent, law-abiding, always-accountable citizen?  He does not need help.
Only the crooks and the irresponsibles do.
The key factor for those in government offices to keep their offices and to stay in power is to deliver help to those in need.
Twisted!
But then our society is getting more and more twisted. 
Live with it.  It’s a new norm now.

Astute Observation by Chuck Ponzi
2009-02-23 10:58 AM

How about “Dominus Duodecum”

I think it loosely translates to “Master of 12 Houses”

Chuck

Astute Observation by AZDavidPhx
2009-02-23 01:10 PM

I like it, but “Dominus Duodecum” is too long. 

Let’s shorten it down to street name and just call him “Domino”.  I think it will bring great irony as each housing-piece of the empire falls.

Astute Observation by AZDavidPhx
2009-02-23 01:41 PM

Astute Observation by christian
2009-02-23 09:18 AM

This person had it and wasted it. If look at the houses that he purchased from 2002 or before, this person pulled out over 1.2 mil in equity.  If he had sold he would be living large with all that cash but this person wanted double or nothing and it looks like they will get nothing.

Astute Observation by tonyE
2009-02-23 01:12 PM

Yep… if he had held off and perhaps only bought one home after ‘04 he would have done fine.

Instead he got greedy and he’s about to lose it all.

And the Obama plan won’t help because it’s designed to help homeowners, not investors.  Someone with more homes than McCain surely ain’t on the help list.

Astute Observation by maliburenter
2009-02-23 09:30 AM

There is a similar person in Calabasas.  They had teaser loans on houses they rented out and waited for the prices to go up.  Three of their properties were foreclosed on the same day.  There are two others that were foreclosed that I know about.

Astute Observation by IrvineRenter
2009-02-23 09:37 AM

These people are the most deleterious to the housing market because when they implode, they dump multiple properties on the market. At some point, all 15 of this guys properties will need to be liquidated. He is certainly not alone in holding multiple properties that he cannot support.

Astute Observation by george8
2009-02-23 11:21 AM

I’m speechless. Let’s just watch this little RE empire get crashed.

Astute Observation by Sue
2009-02-23 09:44 AM

Here’s a little history about that area from a long time Woodbridger. Donnie Osmond lived on Emerald for a few years way back when. A crazy Morman man stored bad chemicals in his house and yard on either Emerald or Foxboro. He killed himself and the neighborhood had to be evacuated due to the chemicals. And just last Friday night there was a hostage takeover and murder of the man living at 8 Rainstar.

Astute Observation by Scrawny Kayaker
2009-02-26 12:12 AM

You mean a crazy Morman man *other than* Donny Osmond?  ;->

Astute Observation by Bitter Renter
2009-02-26 11:10 PM

Thanks for the note about the hostage situation—I hadn’t heard about that.  Glad to hear at least that it was perpetrated by someone who knew the residents, rather than just a random home invasion.

Astute Observation by Chuck
2009-02-23 10:13 AM

We went to their open house this weekend, just to find out what could possible justify the WTF pricing on this.  We have been following Woodbridge sales for the last two years and have seen many similar or better properties go for less than $1 million (including the exact same floor plan with an additional added bonus room just a few blocks away).  This house is a joke.  They slapped a ton of Travertine on the floors and he’s trying to mark it up for an additional $200k above what he paid for it?  In my opinion Travertine is fine in a bathroom but not everywhere else!  The yard was dumpy un cared for, the house was very poorly staged with light fixtures missing bulbs, closet doors left off of their tracks, light switch covers missing, towel racks hanging loose due to missing screws, etc.  Plus the house was completely empty of furniture so it seemed like a tomb.  I am amazed the Realtor or owners didn’t spend a LITTLE bit of time trying to make this look a little better.  The agent implied that they are really just trying to get this house leased….but at $4,500 per month I don’t think this will be easy for them….

Astute Observation by IrvineRenter
2009-02-23 10:32 AM

Even if they could get $4,500, which is a stretch, that puts the value at $720,000 with a 160 GRM. Figure in a more realistic $4,000 a month rent, and the value of this place drops to $640,000. With $950,000 in debt, even if they got $4,500 in rent, it isn’t going to cover the payment, not even close.

Astute Observation by Chuck
2009-02-23 10:43 AM

This is what amazed me about the asking price.  I was ready to confront the realator with this math (ok, so I can buy this with 20% down and pay over $7,200 per month all-in, or I can lease it for $4,500?  Why would I buy it?) but I decided it wasn’t worth it…

I have been frustrated with the low inventory of houses for sale in Woodbridge.  We own a small house here now but need more space due to a new baby on the way, but until reality sets in on the pricing it looks like the kids are going to be sharing a room!  Woodbridge and Turtle Rock, which are both older areas with more long time owners, seem to have a lot of people “waiting for things to turn around” so there hasn’t been much to look at!

Astute Observation by ockurt
2009-02-23 10:49 AM

I hear ya Chuck, we are in the same boat with a 10 month old and we would like to get more space since we only have a 2 bed condo.  We like it because the payment is cheap but more space would be nice.

We’ve been looking mainly at Turtle Rock, Woodbridge, and Westpark and you are right more longer-term owners that seem to be “waiting things out”.  I’ve seen a few listings that are more realistically priced, but they go fast.  Most of the others tend to be WTF…and they just sit on the market.

There’s one on Whitecloud in Woodbridge that is totally original on the inside and they’re still asking $730k…whatever.

Astute Observation by Chuck
2009-02-23 10:53 AM

Sounds like we are in very similar situations!  I’d love to find a large un-remodeled SFR in Woodbridge that we could buy for a fair price and work on over the next few years, but we havn’t seen much.  Plus the floor plans are often a bit dated in Woodbridge and the yards can be really small.  We’ll stick to our “comfy” 2BR condo for now.  It will be very intersting to see what the next 1-2 years brings to the market!

Astute Observation by ockurt
2009-02-23 10:58 AM

LOL.

Yeah, “comfy” is how we describe it too…

I agree, we don’t mind buying a house that needs a little work, but not at WTF prices.

It will be interesting to see what the market brings in another year or two…one reason we don’t mind being patient…if something comes along that we like and can afford comfortably and we’ll be in for at least 10 years we’ll go for it…if not…then we wait.

Astute Observation by nefron
2009-02-23 11:57 AM

Good luck finding an unremodeled SFR in Woodbridge.  I get the impression (used to walk my dog in that neighborhood every night) there aren’t too many sitting around.  I’ve been watching Woodbridge for quite a while too…mostly tiny condos on the market.

Astute Observation by Shannon
2009-02-23 02:22 PM

Just a little FYI, Babies and kids don’t really care where they live, they just want Mom or Dad to raise them not a nannny.  I could go back to work full time and buy an awesome house but our family is more important than a SFR 4/2 2 car attached.

Astute Observation by ockurt
2009-02-23 03:10 PM

It would be nice to have my wife stay home but when she’s making almost as much as I am, it’s hard to have her quit working…especially with the cost of living in O.C.

We could go buy that 4/2 in Corona and then she could stay home, but then we would have to live in Corona which is not an option.

Maybe I’ll win the lotto one of these days…

Astute Observation by zubs
2009-02-23 02:35 PM

When people have baby’s, do they really need a new house? Or is that more of a want?

Astute Observation by ockurt
2009-02-23 03:12 PM

First, it’s “babies” not “baby’s”.

Second, wait until you have kids and then you’ll know the answer to your question.

Astute Observation by zubs
2009-02-23 03:34 PM

I remember being 5 yrs old and not worrying about living in a 2 bedroom 1 bath house in Anaheim with my brother.

Astute Observation by irvinemommy
2009-02-23 08:55 PM

Babies don’t cry over square footage. They cry when you leave them…

Astute Observation by Blah
2009-02-24 01:39 PM

You could be like my latino neighbors with five people living in a 2dr/1ba apartment. With three youngsters, it makes me snicker whenever I think about the chaos in that household. No wonder the father likes to smoke weed.

Astute Observation by Scrawny Kayaker
2009-02-26 12:36 AM

Yeah, for about 2 minutes.  Admittedly, our daycare/preschool was probably above average, but we witnessed plenty a scene of the parent leaving the kid in tears and the spawn happily playing with his/her buds by the time we finished handing off our sprog.  And she certainly learned better manners there than she would have picked up at home!

Astute Observation by Scrawny Kayaker
2009-02-26 12:30 AM

You *think* you need more space.  Do you REALLY?  My spousal critter, myself and our 8 year old daughter sleep in the same ~100 sq ft bedroom.  She slept in her 50” crib/bed until last year, and now on a slightly sub-twin bed since she doesn’t want to move into “her” bedroom and the bed I hand-built for her last summer.  A few nights a month one of us flees to the guest room in the basement or even the couch due to excessive snoring or coughing, but most of the time we are really using maybe 1000 sq ft, which would be plenty if we didn’t have so many bookshelves of rarely read books, bins of neglected toys, helmets for formerly owned motorcycles and telescopes under Seattle clouds.

Housing seems analogous to the “need” for a 2.5 ton SUV to transport “a baby the size of a roasting chicken,” to quote my favorite AutoWeek columnist.  He went on to point out that he had raised two kids while driving a Toyota Tercel.

Astute Observation by dafox.org
2009-02-23 11:14 AM

My new fav pass time is to find REO’s in waiting. its very easy. go to redfin, and select an area. find out what things were going for between 2002-2006. grab that number, and do a search on all sales and have that number in the Min box.
example of REOs in waiting:
anything sold for >$1M in downtown HB (there arent THAT many people making $250k smile
<a href=‘http://www.redfin.com/search#lat=33.66463942303811&long;=-118.00028800964355&market=socal&min_price=1000000&regi>Redfin Search: 92648 (zoomed in), sold at any time over $1M</a>

Whats super fun is downloading that list into excel and spot checking some. Note: in Excel, delete the ones that have sold in 2008, cause those are typically resales to either a) people who can afford it or b) banks. Abt 80% of the rest (get a count) are REOs in waiting. Grab a few of the URLs and pop them in, you’ll find a decent number of them are currently listed too smile
do this for any area. I’m halfway tempted to save a list now, put it on the net and just check them off as they go REO. in 5yrs we’ll see what the percentage was.

Astute Observation by mmg
2009-02-23 11:59 AM

“anything sold for >$1M in downtown HB (there arent THAT many people making $250k
Redfin Search: 92648 (zoomed in), sold at any time over $1M”


Hey, maybe not in HB but in IRVINE, no one makes less than 250k   LOL

Astute Observation by idrnkurmlkshk
2009-02-23 11:49 AM

Here is a chart that might wake up some disillusioned, in- denial people out there:

Remember the experts are saying we are not even half way through this thing:

Astute Observation by Chuck
2009-02-23 12:02 PM

It looks to me like our steep percentage decline is equal to or greater than any bear market other than the 1929 decline (in terms of decline in value).  Do you think that because the other bear markets have lasted longer than this current decline (so far) this means that the current bear market will continue dropping at the same rate?  Pretty scary stuff…

Astute Observation by Muzie
2009-02-24 12:10 AM

Are these the same experts that never saw the decline coming in the first place?

Thanks, but no thanks. Enough guessing.

Astute Observation by Soylent Green Is People
2009-02-23 12:42 PM

One should congratulate the owner for taking a long, deep slug of the same Kool-Aid he was peddling to his clients. He lived according to the NAR’s philosophy that “on average, house prices double every 10 years” and is suffering the consequences of that kind of foolishness. That said, some questions:

1)Should the owner be allowed to represent himself as a licensed professional when his actions to date reflect otherwise?

2) It’s highly likely that some of the loans used to purchase these properties were “owner occupied” or 2nd home loans, perhaps even straw buyer transactions as well. When will the criminality of an owner profile like this one be brought to light?

It’s only fair to ask….
2)

Astute Observation by newbie2008
2009-02-23 12:56 PM

IR,
Housing run up are like stock run up.  You don’t know when it will end or reverse. 
The fellow too many bets and they are turning south.  Unlike betting in the stock market and Vegas, housing allowed some players to walkaway without covering their bets.

On a techical aspect, if the banks foreclose, do the banks have formula for bidding at the court house?  Say up the lesser of 10% below market value on the property or the loan value.?

Astute Observation by SteveforReal
2009-02-23 12:58 PM

I do agree with the overall opinion on IHB that the bottom is a long ways off in RE.  However, I do believe many here inaccurately disregard the number of people on the sidelines desperate and foolish enough to jump in now based on tax incentives and the beliefthat they are buying at a steep discount or at the bottom.

Remember, greed is still powerful, and the real estate agents, for some poor souls, are still seen as trusted heady investment advisors.  All of their 2004-2007 tactics will work again on a new set of EXTREMELY inesperienced buyers.

I believe this WILL provide a false sense of hope and unfortunately prolong the inevitable.

Astute Observation by idrnkurmlkshk
2009-02-23 01:41 PM

“I believe this WILL provide a false sense of hope and unfortunately prolong the inevitable. “

I think this was Obama’s strategy.

Astute Observation by AZDavidPhx
2009-02-23 01:49 PM

I don’t think so.  There are plenty of sideliners who are going to jump and lose their money of the next few years.  Let them have at it.  I salute them.

I am not considering to even begin looking to buy until 2012 when I will be purchasing from someone who foolishly buys in today’s market and sells to me at an extreme loss.

In the meantime, I say have at it, sideliners.  Catch that knife.  Soften our landing; I do appreciate it.

Astute Observation by newbie2008
2009-02-23 01:06 PM

IR,
Any analysis on the number of unit to households on:
#apartments: singles and small families
#small homes to small families
#large homes to large families or
#large homes to families with large incomes to track if the number of housing units are in true excess? vs. just overpriced?
I noticed a large number of vacant apartments, but more apartment/condo being built in Irvine.  Almost no construction of SFH except on the UCI campus.

Astute Observation by ET
2009-02-23 01:08 PM

What is he smoking that he thinks that house will go for that price in today’s market? Seriously. I don’t understand why he bothered putting it on the market.

Astute Observation by idrnkurmlkshk
2009-02-23 01:48 PM

His smokey-fogged glasses are still dripping in denial. You have to understand, that it is very hard for most if not all Americans to except that 50yr old ideology where “homes are appreciating assets” is over. At least for decade.

Astute Observation by idrnkurmlkshk
2009-02-23 01:50 PM

The people who bought a home in the past 5-6 years, are underwater. I think prices will roll back another 10 years considering how broke Americans are.

Astute Observation by IrvineRenter
2009-02-23 02:47 PM

The S&P closed at a 12 year low today. Anyone who invested in the market through the S&P in the last 12 years is underwater. We have lost more than a decade.

Astute Observation by awgee
2009-02-24 07:56 AM

We?

Astute Observation by Jason
2009-02-23 02:00 PM

He used to be the owner of the world,
He used to be the owner of the world,
He used to be the owner of the world,
Now he’s just another man who used to be the owner of the world

Astute Observation by Phred
2009-02-23 02:52 PM

My hubby and I are about to close escrow on a very comparable 2600sqft home in Lake Forest for a little over 500k.  I have lived my ENTIRE life between Lake Forest and Irvine and I can tell you there is no difference, except you are never near a gas station in Irvine when you really need one.

True capitulation will be when everyone else figures that out.  I am a product of the Saddleback Valley public school district and am proud that my future childen will be also.

I understand people don’t want their kids going to school in Santa Ana, but what does everyone seem to have against the cities to the south?

Astute Observation by ockurt
2009-02-23 03:19 PM

There’s absolutely nothing wrong with the South County cities except for the fact they are further from job centers.

If the extra drive to work doesn’t bother you, then those places are fine.  Many of them are nicer than Irvine, IMO.

Astute Observation by Irvine5
2009-02-23 04:15 PM

Hey Phred,

What parts of LK are best for families with school age children?  I can’t get a feel for the city.

Astute Observation by Aquagirl
2009-02-23 04:43 PM

It looks like he tried to sell several of these towards the end of 2007 when he realized the market was changing.  Since they didn’t sell he ended up renting them out.  I think he is probably under the impression this drop in prices is “temporary” and is holding on until the market changes.  More than likely he will continue to try and cover the out of pocket costs until he realizes it’s not working and will give up on trying to hold on to the ones where he is underwater.

Astute Observation by Cheapseats
2009-02-23 07:56 PM

Assuming monthly rents don’t cover expenses and the asking prices are unrealistic. I suggest there is a high probability that he will stop paying on the notes and pocket the rents as long as possible. The banks have been very slow to foreclose based on many observations. $12 Mil @ 160 GRM = $75k month.
Even with a 40% haircut, $7.2 Mil @ 160 = $45k month. The IRS will be looking for their cut.

Astute Observation by nefron
2009-02-23 08:05 PM

Isn’t there something unlawful about pocketing rents?

Astute Observation by awgee
2009-02-24 07:48 AM

$1.2 mil?
$500 per sq ft?
WTF?

Astute Observation by Scrawny Kayaker
2009-02-25 11:48 PM

How the !@#$@# did he get a $728K loan on a $293K purchase in 1999???  Did he service the entire bank staff, or is that cumulative repetitive refinancing? 

If that was the original first mortgage, I could see how you could get used to living off the proceeds of legal bank robbery!  I could survive for quite a while on almost $450,000 dollars of free money, and a couple of the other “purchases” paid off rather nicely, too, until about 2004.  What real income did this guy have to convince the banks he could actually pay?  Let me guess, he’s an RE sales-beast or a mortgage choker?

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