Irvine Housing Blog

Cute cartoon. I wonder if the treats will be less for the trick or treaters this year. My neighbor is planning to turn off all the lights and not giving out any candies.

Just curious, what percentage of people can now afford the median house, vs at peak?

Sorry I haven’t been here much, but I have been glued to Calculated Risk.

I’d buy this at 20% more off.  Nice house.

Another fool living in the past. This house will probably sell for $450K in the next few years. I’m curious what steps the lenders are taking to secure their paper? 20% down at a minimum and I’d venture to say that whatever appraisal they get,cut that number by 25%. If they were smart. There’s no way that an appraisal would come it at anywhere near $670K. Maybe last year but not this year.

We just posted one the most comprehensive slideshows on the meltdown we have seen to date.
http://thegreatloanblog.blogspot.com

Think I will take the kids to Balboa Island for trick or treating. From what I understand it is the strongest RE market around so we don’t expect to find many brown lawns.

I wonder if all this deleveraging will fully shake out the real from the fake in Southern CA. 

My wife’s originally from Irvine, and I love the area. My biggest con with Southern CA is the people.  I never felt that they were real.  I guess with their houses being used as ATMs, my gut feeling was correct in that it was not real wealth.

Perhaps with people actually having to legitimately earn a salary to pay for an extravagant lifestyle, a true soul and culture may return to the area.

I have asked this before but never received an answer.  Someone has to know how many loans in Irvine or at least Orange County are Option ARMs?

This would really help gauge how large a tidal wave we have coming.

Anyone?

This house has an un-fixable negative in that it sides to a cheap condo development.  I used to live on Eastmont in the not-as-cheap townhomes across the street from the flats next to this house.  While Woodbridge is arguably the best value in Irvine (no Mello-Roos, $73/month association for 12 pools and 48 tennis courts, etc.), it will be a tough sell. 

Rent would be about $2,900. 
Ownership economic cost would be $3,229.* 
Rent-saver breakeven price: $597,000.*

My projection: more to fall.  At market bottoms, even good areas get to or below rent saver pricing.  Given higher credit standards, and the risk associated with the underlying asset, one could argue that rent-savers will not opt to finance a house until economic cost is well below equivalent rent.

*Assumes 30 year fixed, 6.5% rate, 20% down, 6.5% cost of capital, $100/mo in R&M, $73/mo assoc., $70 prop. insurance, 1% property tax, 28% federal, 9.3% CA tax brackets, that buyer has enough income to where mortgage interest deduction is fully incremental in said brackets, and excludes mortgage principal as this is not an economic cost but a transfer from one asset (cash) to another (home equity).  R&M may be a hair low, but it’s a recession: you should learn to do more yourself!

Again, this home is overprice, if you apply Whitney’s formula.  If back in 1996 the house sold for $275,000, and if I recall, that was the high selling point, then you add 4% yearly and you get around $446,000 for present price.  Plus factor in that it is a buyers market and we have yet to hit bottom. If it sells for around $400,00, I will be surprised, R.E. investments compared to stock market investments returns only around 4% yearly, whereas stock market returns have historically given around 10% returns.  If they seller gets around $400,000 then he should take the money and run.

“Most of the cases of HELOC abuse I profile here are the extreme ones, but nearly every property I look at has some amount of mortgage equity withdrawal.”

I’m curious if the ratio of ‘extreme HELOC abuse” to “properties on market” is rising or falling…appreciating this will be more anectodotal in nature.  In other words IR have you found you have been needed to look at more, or fewer, properties on the market to find the mroe extreme examples of HELOC abuse.

My thinking is that the worst abusers will be the first to be forced sellers, thus would be a high portion of the houses on the market.  So, in theory over time we will see fewer of the very severe cases as the worst ones were the first wave of forced sellers.  To the extent there were some with less abuse, it seems these people may be less likely to become forced sellers and can ride the market out.

the funniest thing is, everyone posting on this blog are going to be helping these and other Irvinites finance/payoff their huge amount of debt.  Who really is laughing now?

Uh…the market tanked after the bill was passed.

Anybody familiar with the case of the woman heloc-ed to death?

http://www.cnn.com/2008/US/10/03/eviction.suicide.attempt/index.html

Grrrr.  I made a long post and didn’t notice I was supposed to write the word in and it got deleted. 

Bottom line is that I’m not buying back into the mkt for a while, and when I sold last fall, vowed I wouldn’t get back in intil it went below 10000 and now I’m thinking maybe less than that.

I’m beginning to see a bottom in South Fla, and it’s a really low bottom.

After reading IHB for a long time, I expect there to be no lawn.

I wouldn’t pay more than 300k, maybe 275 in South Florida for the house.

And of course, I have no idea what the surroundings are.

Fannie Mae forgives loan for woman who shot herself

http://www.cnn.com/2008/US/10/03/eviction.suicide.attempt/index.html

MUST WATCH VIDEO!!!!!!! Bush - a crying wolf!
http://www.thedailyshow.com/video/index.jhtml?videoId=186052&title=Clusterf#@k-to-the-Poor-House—-Dive-of-Death