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Well done. You asked “Does anyone think the traditional sales market is going to rebound this fall and winter?”
Honestly, I don’t even think the great spinster Dr. Yun at NAR believes that. I’m thinking it is a minimum of 7 years to consume the foreclosures in most markets, with niche markets going faster or slower. This winter ... no way!
$24 a night hotel stays in Vegas, yep that is desperation.
Take one trip to the Irvine Spectrum and marvel at the activity. The future of Irvine is bright. There is no comparison.
Actually, there is a comparison: Irvine properties are seven times the price of Las Vegas properties. I’ll take my chances that an imbalance that large will break in favor of Las Vegas.
Good luck, your best investment may be a bulldozer to knock down miles of Las Vegas homes and the growing number of casinos in other parts of the country. You may also want to invest in something to stop the shifts in entertainment consumption.
That doesn’t tell me much. I have a half dozen 35-45yr old friends who have lost their high tech jobs, and moved home with the folks and are still spending like crazy. I don’t think they are even looking for jobs.
Certainly none of them are in any position to even think about buy a home let alone a $900,000 one in Irvine.
It will take years for the banks to clear out the shadow inventory, especially in areas like SoCal. Banks and the government will drag this out as long as possible with desperate measures taken every several months. Once the baby boomers have to start down-sizing in a couple of years even more homes will flood the market, competing with all the distressed sales. Older people will stop spending and many will have to move in with their kids as their pensions and retirement savings evaporate. Yes the average Irvine owner is better positioned than most Americans to withstand the storm, but this will be a national depression and everyone will be affected for years if not decades. Good morning
I was thinking about this the other day - will baby boomers really downsize, or will they start staying in their homes so that their kids can move back in with them to raise a third generation? The baby boomers’ houses have appreciated so much that the boomers’ children cannot afford to buy in the neighborhoods they grew up in. But they still have the amenities and schools that make a great place to raise little ones.
I hate reading listings that talk about a great “family neighborhood” where the homes start at $2M. Yeah, it was a great family neighborhood when you bought there in the 80s for $150K. Just don’t complain when you wind up in public assistance elder care because your kids have a crippling mortgage and can’t afford to help you.
Will the boomers finally give up their “me me me” sense of entitlement and let younger families move into the “family neighborhoods” - either by letting prices fall or by letting the kids and grandkids move back in?
I doubt it - I’m guessing many of them will have to sell, because they deserve to travel the world and drive Lexuses in their retirement, and they need the money locked up in their homes to live the lifestyle they deserve.
It depends on the area/situation. I think the majority will HAVE to downsize to extract their equity and have any comfortable retirement to speak of. Since they’re not employed, these boomers have more flexibility to move. For the kids, they could only move in with mom and dad if they had jobs in that location - doesn’t matter how “family-friendly” the neighborhood is. So even in the more affluent areas, as they age the boomers will most likely in my opinion sell and either retire to smaller homes and use their equity to help support themselves and their kids, or just move in with their kids.
I love it when I see people over generalize here and make crazy ass extrapolations.
Dude, the vast majority of boomers live in 100K to 200K homes that are paid for across the country.
In Irvine boomers live in million dollar homes that are paid for, but they make up a minuscule portion of the boomer population. Open your eyes to Reality, Irvine is not the norm to be generalizing the future of boomers. You shouldnt worry your little head about what will happen to the tens of thousands of Irvine boomers that exist on our planet.
Dude. Talk about crazy ass extrapolations. These $200k - $1 million homes won’t be worth that for long. And since you say every one of these is “paid for” the boomers will have the choice of either sitting on that equity until they die or selling soon to cash out and buy a smaller house for much less. That’s reality.
I thought all the Orange County boomers lived in Seizure World?
The reality is your kids generation will be complaining about you should you be so lucky to own a home that is paid for 30 years from now. Cue the circle of life music.
That’s the thing - those Irvine boomers were able to buy those “million dollar homes” with upper-middle-class jobs and 30 year fixed mortgages. And they sure didn’t pay a million dollars for them, at least not when they were starting their families.
While most of the country is not as bad as Orange County, the effect is exaggerated here with the higher home prices and fact that we have older homes that are still desirable. I’m not generalizing the future of boomers nationwide based on the norm of Irvine - rather I’m extrapolating the huge problem in Irvine based on the norm of baby boomers, which does worry my little head. Enjoy the state-run assisted living facility in Riverside, Mom, at least you’ll be closer to the grandkids!
I don’t blame the individuals at this point; the system has blown up so that their expectations seem reasonable to what they see around them. But doesn’t it seem the least bit greedy to be looking for an $800K profit on something that you spent 25 years defecating and vomiting in?
I know several examples of well-to-do older parents who have given their kids my age as much as they can without busting their retirement savings, and their kids still need help. They have the following options: A) They sell their homes to cash in to augment their retirements/support the kids. B) The kids get higher paying jobs and out of financial trouble. and C) They basically say “Screw you kids. We’re going to continue living in our over-sized houses with rooms we never go into until we die while you drown in an ocean of debt we helped you get into by convincing you that real estate is the bestest investment ever!” And all of this has to start playing out in the next 5-10 years, precisely when the foreclosure hangover will be in full force. Option A seems most likely to me.
Strategic Default? What about “Strategic Foreclosure” which the banks are guilty of at the moment?
Some fault the homeowner who defaults strategically. What about focusing on the banks who are performing strategic foreclosures.
Term was just coined by Barry Ritholtz.
Reluctant Realtors: Fannie, Freddie
http://online.wsj.com/article/SB10001424052748704652104575494123756247944.html?mod=WSJ_article_LatestHeadlines
“Those horseshoes are great: Get Lucky!”
Oh, that’s what they are! Thanks, I was thinking they were toilet seats and wondering why ...
Quite a lot of wasted space for a single guy’s home, and not much of a loss for a knife-catcher. Though I guess the loss is bigger than is apparent even if the HELOC was completely used, since it would have to be squandered on purchases with no (travel, restaurants) or low (car, electronics, boat) resale value. Granted having a new car is better than nothing, but the spending money is gone. Or is it possible to take out HELOC money as cash?
SoCal rent cuts end after 10 months
http://lansner.ocregister.com/2010/09/17/socal-rent-cuts-end-after-10-months/81700/
Yea, Orange Country is depressing. Burbank, the media capital of the world, is the place to be. We have value homes in Toon Town, and we also throw in Disney and Warner Bros, not to mention NBC and ABC. CBS is only a couple of miles a way. The Burbank airport is great. Walk on and off. We have trains and subways as well.
The people that work at the various entertainment and media companies commute to Burbank.
They don’t actually live there.
Lay off the weed.
$172/sf for a 5BR SFR in Westpark?!?!
http://www.redfin.com/CA/Irvine/32-Vienne-92606/home/4623407
Yep, you read that right. It’s a Westpark 5BR SFRIt will be interesting to see what this eventually sells for. This one will most certainly be flipped, but it is yet another data point on where home prices are headed in Irvine and all of The OC.
As with my previous posts, I am not a [r]ealtor, and I have no connection to this home whatsoever. I am not posting this because I think it’s such a great deal, but rather because I think it’s more confirmation of the jaw-dropping plunge that is NOW HAPPENING in Irvine home prices. Some knifecatcher(s) will snap this up, and they will be underwater within 1-3 years.
Be patient, aspiring loanowners. Supply cometh.
-Darth
Too quick on the Submit button…
Meant to say: “It’s a Westpark 5BR SFR for <$500K.”
-Darth
P.S. After El Camino Real and Orangetree, Westpark is one of my least favorite Irvine neighborhoods, so yet another reason that I am neither trying to grab this up for myself or pitch it to others. This is ONLY the latest in a long stream of data points on how Irvine home prices are getting CRUSHED.
Also, we now have the first 3BR SFR in Woodbury below $500K:
http://www.redfin.com/CA/Irvine/7-Arboretum-92620/home/12257355
These cramped stucco boxes are SFR’s in name only, as the Woodbury builder went to the extreme in cramming this tract of SFR’s onto the tiniest lots possible. This lot is a mere 690sf bigger than the house!
In any case, more of these price drops are sure to follow, and all these Woodbury properties have the joy of another 6 years of Mello-Roos tax. Yippee!
-Darth
but $4k/yr MR plus $2400/yr HOA.
so add another $120k on to the selling price for the true price.
Just noticed this in the description: “Tax records indicate this property as SFR, but it is a Detached Condominium.”
I don’t understand that definition. How is it fully detached AND a condo? Anyways, its ‘condo’ status is what results in the higher HOA (Woodbury HOA + condo HOA). I wonder what that condo HOA covers? If it includes exterior upkeep/damage (walls, roof, landscaping), then that’s a pretty reasonable deal as condo HOA’s go.
-Darth
Speaking of the boomers, you forgot to mention that Mom and Dad aren’t living there any more. Mom might be, with her third husband, Bob, the one she married after Uncle Al, the second one, got arrested for child abuse. Bob’s loud and keeps ranting about “them,” and how they’re trying to take over the country.
Dad, on the other hand, still lives with Betty, the hard-drinking blonde he ditched Mom for, but you and Betty never got along anyway. Besides, Dad and Betty have a couple of kids of their own, and they’re not about to let you move in.
Where’s an X-er or a Y-er to go?
Seriously, changing patterns of household formation and extinction and the short-term nature of modern jobs (and marriages) threaten the financial future of all those McMansions even more than the soaped nails and substandard plywood they were built with threaten their physical future.
And with the dollar already weak against other currencies (I’m old enough to remember not only a 360 Yen dollar, but a black market of 400 Yen or more), there is little room for a Nixon-style inflation and little appetite among US trading partners to allow further deterioration of the dollar.
Remember that quantitative easing in itself does not create new money; that only happens when the bank actually lends—and banks can’t lend when they have such massive liabilities (on the books as assets). Borrowers, too, won’t borrow when their promised assets turn out to be worthless, so we enter the vicious circle of deflation, forcing younger people to rent, share or delay household formation, even if they have to live with Bob.
Hehe - so true. The Bobs of the world make it even less appealing to move in with mom. Plus with these newfound “loves” the boomers aren’t inclined to focus on their kids and would rather finally travel the world and eat out several times a week.
Hello All -
...does anyone disagree that in general here in SoCal and other ‘hot markets’ we likely pulled a decade or more of appreciation forward? The estimates that I seem to suggest that we won’t be back to the highs until 2020 or later.
I personally don’t think it will be that soon. Can anyone please explain to my logically how prices will rise from here or why buying is a great opportunity?
I have a friend who works at one of the large banks. He and his family are wanting to buy but, despite the cheap rates believe that 10 years from now they are still likely to loose money on the purchase simply because of rates that must rise. By 2020 the US will be at 100% debt to GDP… ugly things will happen when spreads blow…
Don’t get me wrong.. I want to own! But, it makes no sense to pay twice to own what it costs to rent…
BD