Irvine Housing Blog

Obtained a few private loans to get through the recession?

WTF is that about?

Don’t people who purchase homes like that have stellar incomes?

Oh…wait.  The bulls all say that homes like this are purchased with “wealth” and not “income”.

So has the owners “wealth” run out?

If not, why take the loans?

I like the way the realtor makes a point about the supposed “over $450,000 in upgrades!”  Interesting how if you take the original purchase price and add the $450k you get a number just above the current asking price.  It must be the right number, dammit!  Also, it’s only a 4% annual rate of return.  That’s reasonable, isn’t it?  The seller believes that he has an inelastic supply curve, apparently.

Rents are now beginning to decline as well…

http://lansner.freedomblogging.com/2010/04/15/renters-costs-fell-0-7-in-march/62573/

Lenders are starting to foreclose:

Foreclosures up in 1st quarter; real-estate owned at record

U.S. properties subject to foreclosure action in the first quarter rose 16% from the year-earlier quarter and 7% from fourth-quarter 2009, consultant RealtyTrac reported Thursday.

Real estate owned by lenders is at the highest level RealtyTrac has seen since it began reporting the data, Chief Executive James J. Saccacio said in a statement.

The report “may be further evidence that lenders are starting to make a dent in the backlog of distressed inventory that has built up over the last year as foreclosure-prevention programs and processing delays slowed down the normal foreclosure timeline,” he said.

Foreclosure filings—default notices, scheduled auctions and bank repossessions—were reported on more than 932,000 properties in the quarter. That means one in every 138 U.S. housing units received such a filing, the Irvine Calif., firm said.

In March, 367,000 properties were subject to foreclosure filings, up 8% from March 2009 and up 19% from February 2010.

Nevada for 13 quarters has been the state with the highest foreclosure rate, RealtyTrac reported. In first-quarter 2010, 1 in every 33 housing units in the state was subject to a foreclosure filing.

That’s more than four times the national average and is up nearly 15% from fourth-quarter 2009. More than 34,500 properties in the state received a filing in the first quarter, down 16% from first-quarter 2009.

Arizona was second with 1 in every 49 properties subject to a filing in Florida was third with one in every 57.

Ten states account for more than 70% of the foreclosure filings in the first quarter, RealtyTrac reported.

In absolute numbers, California’s more than 216,000 properties subject to a foreclosure notice accounted for 23% of the nation’s total. Florida was second with more than 153,500 and Arizona was third, with nearly 55,700.

I think your prognosis might be too agressive.  The real peak on Irvine was 2005.  Five years have passed.  That means only 10 years left for bubble pricing.  It’s possible but I think it will take longer. 

It would be nice to get back to some rental parity fundamentals on this blog.  It may be the only fundamental calculation left.

This property has to be competing with new custom construction.  How much would it cost to build a comparable home, where they buyer would get everything exactly how they want it?  If I’m paying $2M, I’m getting exactly what I want - I hold that opinion at 1/4 the price point, but everyone has a price point beyond which compromise isn’t an option.

Foreclosure-rates-surge!

Soros not having a warm and fuzzy about The Financial Recovery. What does he know anyway. PFFF

Mortgage Modifications continue to fail

Treasury department has no explanation… (too much debt maybe?)

Are there any good resources for SD real estate trends? I never in a million years thought I’d consider living in SD, but my employer has a good opportunity for me there that I’m strongly considering.

IrvineRenter: “The predicted time of peak-to-peak recovery ranges from 2019 to 2033 with an average of 2028.”

Note: It is pseudoscientific shamanism to average these values.

For example, I have 10 inch (height) black cat and 40 inch white horse. However, there is no average (10+40)/2=25 inch gray animal.

Someone bought one close by?
$2,000,000
28 WOODS Trl
Sold on Mar 12, 2010   0.05 miles
5 bd / 4 ba
3,800 Sq. Ft.

At the moment all homes, below 800k, have a hidden premium of 30-40k due to the tax break. Assuming that the tax break will expire, will it translate to a 30-40k drop in the median after april 30th or so…dont know. What is your opinion? I feel that the current spike sales is due to the tax breaks expiring in a couple of weeks.
What happens to the knife catchers are trying to flip before the deadline.

The greater fool comes to mind.
At above $1 million, the banks will not likely want to play this round with a nothing down loan.  May HELOC in the future, but for now is will be a significant amount of cash needed.

As for the $8000 tax credit not being a factor, dream on.  Say house is for $700,000, FHA 3.5% down, 1.5 % other closing cost. $35,000 needed to close less $8000 fed credit, less $3000 state credit, so only $24,000 to buy a $700k house.  For many, $400,000 purchase price is likely, so only $9000 to close or purchase a house.  They can stop paying until after the next election. In the inland empire and mid-American, the house price is under $200K, which is back to essentially no money down loans!  Now that’s a win-win-win for the borrowers, the banks and political parties.  Free rent and getting the bad loans off the bank’s books.  Great stimulus package for the poor folks-We feel your pain and let me help you.  Only losers are the taxpayers, who will pay for the free rent, house upkeep, bad loan, local property taxes, back payments on the utilities , banks fees, attorney fees for the eventual FC, REA fees, closing cost and depreciation.

There are lots of condo’s for under $500,000 in Irvine.  And most families in Irvine have income under $100k, so $11,000 is a big deal for them

$450,000 in upgrades? Maybe I’m under illusions what can be bought nowadays with such an amount of money,  but I don’t see this in the picture. Probably the photographer’s fault, I guess. He should have taken pictures of the golden shower curtains, too! And the realtor should have given a notice that the kitchen appliances aren’t stainless steel, but pure platinum!