Irvine Housing Blog

Most of the people who bought in 2007 or 2008 haven’t given up yet. Although, here is a recent one:

http://www.irvinehousingblog.com/blog/i-wanna-be-a-bagholder/

dafox -

Here are the stats for Irvine for 2008 you’re looking for…

http://www.irvinerealtorsite.com/IrvineDowns.xls

I’m still working on compiling October’s mortgage info.

If you bought in the 90’s then there is still plenty of bubble equity available to you right now in your current house.  These are your current move-up knife catchers.

Ignorant first time buyers are throwing away their small down payments on bubbly properties in less-desired (more affordable) areas which are enabling the sellers to “move up” into higher priced areas with sizable down payments and catch a knife of their own.

These first time buyers are going to lose all of their down payment as their purchase depreciates.  The sellers who are moving up are going to lose more equity and be stuck.

Why?  Because interest rates are too low.  The government will have to raise them eventually.  When they do - the value of the house will drop because first time buyers won’t be able to afford the same loan as the original buyer.

Saying that this will not happen is akin to arguing that gravity is not in effect at all times.

The Pyramid scheme all starts with what the first time buyer is allowed to borrow.  It all trickles up from there which is why it is incredibly foolish for a first time to buy right now.

The lenders I have spoken to have told me that very few of the deals they are doing have been for people who currently own. The wave of knife catchers we are seeing are renters who were “priced out” and now they see the drop in prices as a chance to enter the market.

I’ve never seen a place that close to the freeway.

If I had to drive home to this POS every day, my drinking problem would get a lot worse…

eh, short sales don’t count.

What’s with the blue sliding glass door? That layout from the pictures confuses me…

Congrats on a truly wierd house find though.

“I am really starting to doubt if that will ever happen?”

You are not alone. The most desirable markets fall last because this is where knife-catcher activity is the greatest.

The high end was not dominated by subprime loans, so their mortgages haven’t blown up yet. The key word there is “yet.” These owners are still overleveraged with ARMs, and their resets are coming. Buyers can no longer bid the ridiculous prices they are asking, so the properties just sit there. When the foreclosures start there, prices will drop significantly.

I am in nearly the exact same place as you.  I’m no expert but ask yourself if you intend to live in this home you intend to buy for the next 5-10 years (5 being generous)?  Is your job security good?  Whatever loan product you use be sure that you aren’t mortgaging your quality of life for your home.  My wife and I are in agreement, we will buy when we can safely afford to and only buy what meets our needs for our family and not succumb to the Realtor sales pitches.  Be brave.  My two cents, I think you’ll have plenty of opportunities to choose from in 9 months.

The market (especially in Irvine) certainly won’t be heading back up anytime soon, so signing another 9 month lease absolutely can’t hurt you.

Unless what you’re asking is whether you should take the opportunity to move now to a more comfortable rental to hunker down and wait for the real bottom. That’s a tougher one. I hate moving, hate it with a passion, and we have way too much stuff, but we just moved this September to wait out the housing market for another 12 months and get a better feel for the neighborhoods we’d be buying in, while halving our commutes. It was definitely worth it, but I’m not sure I could have justified it if we had taken any larger of an increase in our rent.

Buy out of need…
If you find the apt. crowded then sure move up.
But if you can live with it for another 9 mo. i’d say wait it out.

No_worries: your bio reads like mine.

I’ve been sitting on the sidelines, and I could have (and almost did, before finding the IHB) gotten in at the tail-end of 0 down loans. Fortunately, I didn’t.

Now, I’m just focused on getting all my ducks in a row, mostly down payment (which I had none before: I put $500 a month into an account at 7% interest now). I’m open to moving, but only if the rent savings works out over the course of a full year (given that I get to take a free bus to work from where I live now, that makes it tough to save by moving).

Anyway, my thinking is that, with fall and winter upon us and the economic shit hitting the fan, we’ll see some capitulation over the next 6 months. Then, I’m going to reassess a time-line. So, my advice (for what it’s worth, which isn’t anywhere near what IR’s or others on this blog’s advice is worth) is that the worst that could happen by signing a 9 month lease is that you find yourself wanting to get into the market a month or two later (seeing as you’d end up with at least a week of double-residences anyway you slice it, and it could easily take a month or two to find a place, see it, inspect it, yada yada yada). If you miss the bottom by a month, is it the end of the world? Not hardly.

However, if you find yourself absolutely miserable in your current situation, and really wanting to set down roots, there’s nothing all that wrong with buying now. It’s only money. Just ask yourself if it’s worth it TO YOU. Nobody else can make that decision for you. Personally, I’m very risk-averse, so I prefer the safety of renting a place that’s too small right now. But, if we get the baby urge or just get tired of the crappy little place, we might be willing to pay for a little equity burn.

“If you have a baby, it would benefit the baby more.”

Absolute baloney!

Nice to have you back NIrvineRealtor!

Hon, the baby doesn’t notice the diff between a SF house with a yard, and an overly-cozy apt. A five-year-old will definitely appreciate a back yard, but an infant doesn’t know the difference.

It amuses me to see people use their children as the justification for their extravagance and self-indulgence. Kids really don’t appreciate the kind of luxuries that adults have come to consider “necessities”, and some of the luxuries geared to kids just might be pernicious.

If anything, the baby might prefer the apartment, because that means his crib just might have to be in his parents’ bedroom, where he can sense their comforting presence, vs. down the hall where he might feel deserted and insecure.

And I’d surely rather raise my kid in an apartment in a fine neighborhood with superior schools, than in an overpriced dump of a house 300’ from a highway on-ramp in an indifferent school district. With so many school districts these days in danger of shutting down altogether because of financial problems, a parent perhaps ought to place that consideration before absolutely everything.

Hear hear.  I get huge numbers of properties bogusly (and likely fradulently) classified as SFRs when I do searches on Trulia or Zillow.  Fewer on Redfin, although it certainly occurs there too.  In answer to a recent round of correction flags from me, they told me that their ability to correct incorrect property type or other details is limited due to MLS rules about changing the data, and that I would have to take it up with the listing agents.  Grrr.