Irvine Housing Blog

IR:

I love your update on the informative prediction charts. It is so clear and powerful.

It speaks volume.

Thanks,
George

Do you think the speed of the decline will really effect the depth? Given the coming impact of Alt-A recasts, I don’t think the second prediction graph is yet ruled out.

What strikes me about some of these profiled listings is the sparsity of the furnishings, etc. in high-priced homes that are (or were) obviously occupied.

For example, this home features a glider in the front yard that I believe was on sale at Wal Mart for $79 last week.  The cheap roll-up blinds (I think these are one step up from the paper kind) in every photographed room would be another.  I’m wondering if the expansive bank of kitchen cabinets contain only a box or two of Ramen noodles inside.

It appears to me that many of these “homeowners” were stretched so thin that they could not afford to properly furnish their McMansions. 

A peculiar way to live, no?

It sure would be entertaining to know exactly how much income people really had when using Alt-A loans.

incredible

finsup, that’s exactly what happened. They bought big huge houses they could not afford to furnish. They took the money from the HELOC and bought new cars to show off in the driveway so their neighbors would think they were wealthy. inside their kids have a bed and maybe a dresser for their clothes.
On the other hand perhaps they are getting rid of furniture so they don’t have to move it.
Or their agent suggested they move half the crap out so the place would look big and people could imagine their own stuff in the spaces.
Or doing what we are, just divesting ourselves of crap we no longer want, need, or use. And we own our own home free and clear. I am just tired of dusting junk.

There isn’t much doubt in my mind the bottom graph will come to pass, at least in magnatude.

The shape of the graph as it reverts to the mean is subject to debate.

This home is located on the corner of Irvine and Culver.  The street noise must be terrible.

Do you think the electricity is already shut-off, or are they just conserving energy.  Those were the darkest interior pics I have ever seen.

BTW, this place looks like something from Ladera Ranch.

based on the actual numbers, doesn’t it look like the new bottom would be somewhere in the winter of 2010-2011?

This property sold for $719,000 in 03.  I thought we were down to 03 prices already, so this is still priced at 04-05 levels.

Your charts are amazing, they take the breath away (most certainly for those desperate homeowners hoping for the much touted bottom). Luckily, I rent.

But they do pose a quandary. I was hoping to be a homeowner sometime in the next couple years. Best I can hope for is a quick bloody collapse.

Government intervention won’t stop the inevitable but will slow it down. That’s unfortunate for those looking to become homeowners.

Maybe the Realtor is thinking the eights in the listing price will pique the interest of Chinese buyers?

Seriously, as SoOCOwner pointed out, this home is at the corner of Culver and Irvine Blvd. Way too major an intersection when there are properties on Thorn Hill with similar square footage and priced about the same. I’d rather be near the freeway than at a major intersection with all the braking and accelerating all day long.

I think the “bad as bad can get” chart will accurately reflect the whole of Orange County. Not necessarily Irvine though.

Check out this new realtor spin site:

http://www.happyrenews.com/

The gang from HP went over and left a number of hilarious comments.

Thanks for the great post today, IR. Great to see a higher end property that is in distress. The graphs are amazing, I can point to your first prediction graph way back in early 2007 as the single biggest reason I put away the checkbook and decided to keep renting.  Owe you a lot for that analysis.

I also think we are likely headed the way of the “how bad can it get” graphic. I’m particularly interested in the rent saver line, as that’s my category.  I’m still planning on buying in Q1 2009, and although we won’t be at a bottom, this scenario at least seems to support we will be at rent parity…which is all I am hoping for.  Thanks again.

Irvine Renter:

8 is a lucky number in the Chinese culture. Their word for “eight” sounds the same as their word for “wealth” or “prosper”. If you look at the aerial map you will see the house lies at the end of a cul-de-sac ... which many Asians will not buy (just like a house on a T-intersection) because a car could come crashing through - unsafe for your family. I suspect they might be trying to counteract that. Just a guess. I think it is smart to keep feng shui principles in mind when purchasing property if not for your own beliefs, just for the fact that you want it to be marketable to the Asian population in Irvine. Hope this helps.

Sounds like the FBI knew how bad it was to be:
http://www.latimes.com/news/la-fi-mortgagefraud25-2008aug25,0,7603327.story?page=1&track=rss

Problem is, they were ignored:
“Until there is a catastrophic loss, there is no incentive to investigate criminal conduct,” said Cynthia Monaco, a former federal prosecutor in New York.

What does the third (bottom illustrated) graph represent?

Correct me if I’m wrong, but the first represents what IR originally predicted.  The second, what is actually happening superimposed on the first.  However, the third shows a much deeper decline, but I don’t know upon what it is based.  Or is it just a “lower limit” estimate?

Thanks.

This is a short sell.  Soon to be REO.  Mobility Home loan is the loser.  Homeowner took out a 1st of $920,000 and then a second of $230,000 in 2007.  Original asking price was 1,200,000. On the market for 184 days.  Has Mello Roos and HOA’s.  Was served NOD.  FYI this proberty sold for $574,000 back in 2003.

Congratulations, Irvine Renter! You have found a house that is surely going below the original purchase price: $719,000 when brand new. No way is this going to sell for even that much. Things are dropping over 50% in some places, and the Alt-A resets are not even getting started.

Sadly, there are not really residential ymca “suites” anymore.  Nor boarding houses, or poor houses per se.

Having said that, i would rather live eternally in a thousand fucking such places, with bedbugs, than live in the skeevy caucasian paradise known to the sorry as “Irvine, California.”  May a million Koreans and Armenian flippers suck out the life of this sorry part of “Orange County” and render it as empty as the CGI fantasies of modern masturbatory Hollywood entertainments.

There dwelleth (or dwelled) the intestinal parasites known briefly as the “upper crusties.”  May all of them and their noisome children be reduced to powder and released upon the breezes of the prairie.

Also, Irvine Renter, certain people think that due to the velocity of the downfall, we should hit bottom sooner, which is good news.

My intuition tells me that hitting bottom at such a speed might produce a nice cratering effect. Sort of like punching a hole in the bottom of you chart. At any rate, I can’t see things getting back to normal in 04/09.

In Chinese, number 9 sounds like “longevity” and 8 sounds like “prosperous”. I think it is likely that our Asian rescuer is jumping ship.

IrvineRenter, thank you for showing your predication against the available data. Please continue to post updates in the months ahead.

It is amazing to see reality is worse than expected.

Regarding the charts, don’t let IR fool you.  He was sandbagging the whole way