Irvine Housing Blog

(1) Wife Happy….. agree wholeheartedly.  That’s worth a couple of million in the bank.

(2) You got your two little kids and like the place.  Making the payment.  Hey, enjoy life..  The kids are about to go into preschool, later Kindergarten, etc..  At that point I agree with your wife, it’s your HOME and it has a ton of memories.

(3) My wife and I will no entertain moving until our kids are out of High School at the very least.. and then we’re only entertaining the Windward side of Oahu ( maybe Leeward…) or the Naples neighborhood in Long Beach.  Right on the canal.

(4) Those 250K sound good, but it will rip your life out.  When you got little kiddies that’s an issue.  My kids handprints are on the garage, this is our first and only house, I have memories of the house, I know where the studs and electrical lines are… yaddah, yaddah.  Know what I mean?

Hey Cap.  Forgot to tell you yesterday, but good luck on the home sale…  Hope you find the craziest of knife catchers.

Do you put the all important granite counters in?!  We started prepping for sale last year so of course we added crown (for way cheap), granite (pretty cheap), and painted.

I find the infinite land argument particularly egregious.  I am disparaging the sentiment.  Though I can see how people who believe it would be bothered!

Btw, pls note that the agent describes the interior as “designer-inspired”, emphasizing the fact that the proud homeowner (a “senior exec”, for heaven’s sake!) did this to the house himself. It’s not probable to think the builder protested much, as long as the money was ok. Well, the results are showing. Good place to improvise a “haunted house” on halloween.
|-(

Oops, I got confused. The living room seems to be the area on the first floor, that leads to the dining room. Must have happened because the bar disturbs me so much. Especially that monster of a long, low table, build of glass and I-don’t-know-what. This makes Jess’ wagon wheel table (in “When Harry met Sally”) look like a design masterpiece! Really, who in his right mind would “design” or buy such an eyesore? Eek!

Hmm, I don’t think so. I guess we agree that this isn’t the home of a female, and no straight male would “decorate” his office space with drawings of nude male bodies, right? Or use so much of red and pink colors. Imho this is the home of a gay male who, defying a widespred cliché, has no taste at all.

Btw, is the “bar” supposed to be the living room? Horrible. And what’s the point of having a dining table one floor above the kitchen? It will hardly ever be used there. And all those dark, depressing colors - a nightmare. This is obviously one of those cases where the “taste” of the homeowner will have a severe impact on the market value of the house.

... I guess I shouldn’t even mention the Mini Cooper ...

the s&p will be at 1550 in jan 10.  unfortunately for some, gold will also be at level.

Tangelo, do you really think the many couples with two children are looking for a $700,000 two bedroom?

I can understand a family of four in a 3 bed.  Even a family of five.  But once you exceed one per bedroom beyond the couple,  most are in a make do situation.

A couple with one child will be fine, provided they aren’t planning a second.  Or an accident.

Why would you bet me?  I didn’t say it.  If you want to bet, bet Sir John.  And when your making your bet, maybe you want to ask him if he is an infinte land moron, since you seem to find it necessary to disparage those you disagree with.

ex-Tan you are on fire today…  Lotsa Starbucks this morning?!  Great stuff.

No_Such_Reality: I’m not sure what the target market is for this unit? It’s only two bedrooms. A single parent? An ‘urban’ single professional that wants a guest bedroom? A young couple looking to instantly out grow the unit with the first child? Maybe the infamous DINKs. Downsizing empty nesters?

*counts people in my home*

*counts number of bedrooms*

Me: Honey! We forgot and had too many kids! We gotta put one of ‘em up for adoption!

Her: Again?

I will give you 5 to 1 odds than prices don’t decline 90%!  Seriously.  Any amount.

TED spreads should trade more on the dollar injections than Euro injections.  And yes both the ECB and Fed will continue to inject capital (or whatever else the market needs) until the LIBOR spread normalizes with a TED spread between 30 and 50 bps.

Tangelo has a point.

Makes me even happier with my 1500sf dual master 2.5 bath townhome w/ 2 car garage for $1900 that’s barely a mile from the beach in HB.

I’m not sure what the target market is for this unit?  It’s only two bedrooms.  A single parent?  An ‘urban’ single professional that wants a guest bedroom?  A young couple looking to instantly out grow the unit with the first child?  Maybe the infamous DINKs.  Downsizing empty nesters?

Irvine’s amenities and major pluses, schools, etc. are geared towards families.  I wonder if the rent premium will hold for what is primarily a single’s unit.

Thank you. I corrected the post. I copied those from a previous post and forgot to update them.

You better get a double wide before yer priced out forever.

ice, I’m not a millionaire yet, but my household net worth is well past halfway to that mark, and what we do in the evenings is hang out with our kids.  Watch them play outside.  West Irvine is a newer area so there are tons of little kids…  Eat in or at least bring home reasonably priced take-out.  Weekends?  Taking the kids to karate, or kids gym, or endless b-day parties.  Reading lots of books with them.  Shopping, Costco, Target and Old Navy.  Forget Fashion Island.  Lots of little home improvement projects I do myself.  This weekend’s agenda, add to the closet organizer I installed in one of kid’s closets and replace the last of those hollywood vanity bathroom lights we still have.  Light fixtures are cheap, easy to put up, and definitely help spruce up a room.

Ted spreads did not narrow because of anything the Fed did or because of some fantasy arbitrage dreamed up by a Fed governor.  It narrowed because the ECB printed $400 billion to $500 billion and gave it to the Euro banks.

“IN BULK, not pipsqueeks. The article references Morgan Stanley buying up entire complexes at that price. Don’t worry boys YOU won’t even get this pricing (unless of course you have a couple hundred million to spend).“
Two or three years ago, Sir John Templeton was being interviewed by a Florida newspaper and he said that he thought re prices would decline 90% from their peak.  He must be one of those infinite land morons.

SAN FRANCISCO (MarketWatch)—Credit-card company American Express Co. said Thursday it “is seeing signs of a weaker U.S. economy” that is impacting its cardholders’ ability to make purchases and pay their bills.  As a result, American Express said in a statement that it will take a pre-tax charge of approximately $440 million in its fourth quarter, due to a combination of lower spending and higher delinquencies and loan write-offs. American Express shares fell nearly 6% to $46.02 in after-hours trading. American Express is one of a number of credit-card companies suffering through the current credit crisis. Also on Thursday, Capital One Financial Corp. said it is lowering its earnings outlook for fiscal 2007, and raised its loan loss reserves.

Just remember… “Happy wife, happy life.“

Excellent point ex-Tan.  Something I personally often lose sight of…  Thanks for the smack around. 

Not only were the kiddies born into our home, I proposed there back in 2001 before the builder had finished it.  While I could do it to save the mega bucks, I think it would be very difficult for my wife to leave a home with considerable sentimental and emotional value to be “rootless” in a rental.

I might make another run at the wife in a few months.  My problem was she was about ready to deliver our 2nd child when I first broached the topic, and in full blown nesting mode.  The next time I tried to convince we were barely past the dreaded colic phase and overall sleeplessness associated with newborn baby so the thought of showing our place was painful.  Now that little #2 is over a year old and much easier, a summer move to a rental might not be too bad.  My only shot is probably bartering with a “you don’t have to work summer school this year if we sell and move”...  I suspect will indeed be selling by summer, just not sure if the move will be to rental or a purchase.

Dude. It’s not a house, it’s a home. That your kids are growing up in. Height marks on birthdays in the doorframe. The built-in bookshelf she learned to climb on and scared the crap out of you. The tree you planted on his 5th birthday. Things like that. More important than money.

We should chat.  I had the same debate with my wife and prevailed.  We are selling now (guess which house in Irvine .  After this thing sells, we will rent.  And yes, I am priced well below all recent comps!

No problem IR.  You were correct in your take on my adjusted outlook, it has gotten more gloomy. Happy to eat some crow on this one.

Oh.. that house.  I know the area.  I think that house is attached on one side, so it’s technically a townhome, I guess.  And yet, that area doesn’t feel as crowded as TRidge, QH, etc…

Note the lot, though.  It’s 8500 sq feet.  However, I think there are restrictions on what you can build on the lot and the neighbors can see into it.

And, even then, they are asking for 450…. which when you think about, in nowhere as overpriced as the stuff on the other side of the Santa Ana Fwy….

We looked into that area back in ‘87.  But we decided we’re rather get a zero lot home than an attached one.

Besides, I love sunsets, and those homes are on the NE side of the hill.  Which means the sun sets over the hill and gets darker earlier.  Not my cup of tea.  I prefer to sleep in.

I know, I know IR.  I have been trying to convince her to sell since my neighbors bailed at $730K.  I told her we could sell then, rent for bigger place for a couple of years, and buy the place our neighbors paid $1.2M in Woodbury for $900K at bottom.  KKKKKHHHHHAAAAAANNNNNNNN!!!!!! - classic Shatner reference of immense frustration for any that don’t get it.

She is totally old school and believes whole-heartedly in home ownership.  She fears a price out, i.e. what if we started renting and prices went up and we couldn’t buy again?  She has a number of friends making decent money that the bubble priced out and doesn’t want to be like them…  Nevermind what her Econ grad, CPA, MBA, CFO husband says!

It’s quite crazy.  She trusts my judgement enough to have me manage her father’s entire retirement nest egg (bonds and gold for many months on his IRA) but not heed my call with regards to selling and renting.

I have to console myself with the fact we are saving at least $100 per month for every $100K decline in home prices mostly via lower prop taxes.  Too bad mello roos don’t fall as values drops as well.

I beg to differ.  I think TRidge is far more crowded that TR and it’s far more overpriced.

Just because it is newer, it make look nicer TODAY… but given the quality of construction in the rush during the last ten years, I doubt those homes will look half as nice as TR in ten years.

Overall, I think there are always junkers everywhere that ride the coats of names and their neighbors.  But overall, I think that the “older established” neighborhoods will suffer far less because they are nowhere as overpriced as the newer ones.

I have been in some of those homes with a view and trust me they are head and shoulders above that ersatz italian crap in TRidge.  These homes look like the traditional SoCal coastal homes, with well laid out plans and some have views to kill for.

They are not McMansions and they feel more open than that newer stuff.  Sure, there are the Brady Bunch residences here and there, but by and by, if you can find one such, buy it.

IMHO, older homes were built with less pretense and more quality.

Comes back in some ways to how much equity you have today, what type of loan you got, your own financial state and how much you want to move.

For example, it would take us four or five semi truck to move us out of the house and this would call for the Mother of All Garage Sales.

Then we’d do it again in two more years?

Plus, our Prop 13 RE tax is so low that the market would have to drop 80% from the peak to match what we pay…..

So, perhaps those 250K are not that real.  If they were, most homeowners would have sold their homes in ‘05 and ‘06.

As we’ve discussed, your home is not necessarily your sole investment.

Actually, I was cool w price declines during the early 90’s even though my equity mostly evaporated because I went to the county 4 times for property tax reductions and I wasn’t planning on selling so I just got a lower tax out of the deal.  OC isn’t great on lowering your aprasial, you have to pay the tax then file an appeal and it takes nearly a year to get your money back.

Now of course, my property is apraised at less than half the peak, so I wouldn’t be getting anything out of this decline.

I don’t think a rational homeowner should be too concerned about the price decline, assuming they bought a home well within their means.  If you own a home in the Irvine area, sure you’re losing equity, but that home you didn’t want to stretch for when you bought, is coming back within your grasp.

I don’t want to “upgrade,“ but if we see price declines of 40%, I may bring cash to the closing table (to account for negative equity) and buy something more upscale.

When I look at that Lonetree property, all I see is a big painting and window treatment project. Brown, brown, brown walls. Roll-up blinds and cheesy curtains on the windows. And a strange 1970s diagonal choice on the dark wood floor. How much $$$ would it cost to turn this thing into a light and airy space to live in?

Just tried to short some CFC on Etrade, I’m betting that BofA ends up with it at 6 or less…

Etrade said..  “shorts are not allowed as we are unable to borrow any of this security (CFC)“

After the virus kills everyone in 09, leaving only Will Smith alive there will be no S&P to worry about.

I love how you forecast with such certainty.  Can you tell me where S&P 500 will be two years from now too?

IR did an excellent analysis on this some time ago, I believe.

The ceiling fan over the bed is so that you can wake up in the morning like Martin Sheen in Apocalypse Now and go: “Turtle Ridge. Sh***t. I’m still in Turtle Ridge.“

ipoplaya,

Thing is, if you sold now and bought back in 2 years, you could pocket that $250K. Your wife must have quite an aversion to renting to pay that price.

That bet could have gone either way, I would have thought BK was more likely than a buyout.  It aint’ over till the Tan Man (fat lady) sings.

Taking risks like that was ok when you were single IPOP, now with a wife and kids; there is no difference between betting on CFC’s future or the ponies.

At least at the track, your outside, you get to walk around so there’s some exercise and they have a bar.

What’s wrong with eating in

I’m really into the cooking channel now, Alton’s my hero..

I eat much better, food tastes better when it’s homemade.

What’s the point of those granate counters…  show

BTW..  real chef’s prefer charcoal, gas grills don’t generate enough radiant heat and are for sissy’s

CapitalismWorks,

That is the first time I have heard you agree with my more gloomy outlook on the market. Your posts have always been either searching for or predictive of a higher bottom. Being a homeowner, it seemed to me you were looking more for avenues of denial than a greater degree of accuracy. If have been mistaken, I apologize.

Capitalism - Then they’ll flip them for 12.50% profit, yielding the individual buyer a net price of 45% from the asking prices a couple months ago.  Unless, of course, you think Morgan Stanley wants to sit on 5,000 condos for a few years—NOT.  It’s a big flip with a big fish and everybody wins (except the neighbors who saw all their equity vanish in a blink of an eye and are now bankrupt because they owe far more than the new reality price).

Much koolaid in TRock. 

Much koolaid spiked with Cap Morgan’s I think…

http://www.redfin.com/stingray/do/printable-listing?listing-id=1283177

Insano, crazy, koo-koo, nutso.

Crap I should have loaded up on CFC yesterday.  I thought about it when it crested below 5 but I was just too chicken.  It was blinking wildly at my on my streamer…  If BK was really in the cards, that $4.75 could have been $1.00 per share in a heartbeat.  Argh.  $10K of CFC yesterday would be $16K today…  Sure looks like they’ll announce a deal around $8/share for an acquisition.

Tonye, i don’t disagree with you often, but I must say TRidge is nice that TRock.  The only reason I say this is TRidge is way way newer.  There is a lot of older overpriced garbage in TRock trading solely on the name.

Not saying TRidge isn’t overpriced mind you.

Where can you get an ocean view for $350?  Please post a link.

Exactly tonye, I need to buy to have the darn backyard.  Or rent I guess but I just can’t convince the wife to become a renter. 

My backyard is around 12 ft. deep except in one area and what teeny tiny space I have is used up by a kid’s playset…

Hmm… what backyard?

You could build one hell of a court in your backyard for that cost, amortized over a few years.

yes, that is typically how people afford higher end homes.  the problem now is that very soon if not aready one can’t sell the house they bought for $250k six years ago for any thing like $500k.

Me too, and I like it.  I understand it can be repaired. like new.

At a market cap of only $4.5 billion, it’s cheaper than renting…

SAN FRANCISCO (MarketWatch)—Bank of America is in advanced talks to acquire Countrywide Financial, possibly stepping in to save the struggling mortgage lender, The Wall Street Journal reported on Thursday, citing unidentified people familiar with the matter.

Nice…  Friggin’ CFC still owes my company $15K on an invoice sent in September.  Hopefully BOFA does buy them so we can get paid.

Bond yields move for many reasons.  Today, in spite of promises of lower Fed rates by Bernie, yields spiked as money flowed back into equities.  The bond market will start to price in expectations of further rate cuts though so the 10-year should keep trending down…

OC mails out assessments in Aug., 1st payment was due by Dec 10th.,  the buyer would have gotten a supplemental assessment for the difference between 639 and 442 for the time between 01/07 and the end of the 07 tax year.  So the increased assessment would have been picked up.

Here’s a nice graphic showing mortgage rates and the 10-year Treasury bond yield:

I wouldn’t be saving $250K bigmoney because I already own.  If my move-up house goes from $950K to $700K my existing home goes from $600K to $450K.  With my buying and moving today vs. at a potential bottom, I’d be foregoing perhaps a $100K net improvement.

That’s $3900 per year after-tax @ a 6% mortgage rate.  For $4K per year, I’d rather have the bigger house today and be in a neighborhood where I intend to live for the next 20-30 years.  My oldest will be starting kindegarten in less than two years, and I’d prefer he start in the school where he’ll continue on until junior high and go to school with neighbor kids he’ll be going to school with for many years to come.

Hell, being able to shoot hoops in the driveway is worth $4K per year in my book.

IR, apparently you believe I am like every homeowner in your imagination - Shaking in my shoes about price drops-.  Well, don’t worry about me.  Conservative financing, ample income, and an equity position of nearly 200% over mortgage value at peak pricing provide more than enough cushion.  Yes, I bought early enough.

Am I worried about price drops at all.  Hell No.  I love ‘em.  I am licking my chops waiting for this thing to hit bottom.  What am I afraid of?  A huge decline in mortgage rates, combined with legislative action, serving to induce a sideways market for the next 5 years as commodity and wage inflation raise the fundamental support to something that justifies current pricing.

As for the REOs.  I know these are a central tennant in your forecast as they will continue to overburden the market with supply.  If rates continue to fall, then more and more homeowners will have financing options that they can live with.  That means that the full measure of the Credit Suisse ARM reset graph does not result in the enormous growth in defaults predicted.

I fail to understand your point about permanently lower rates…  You must recall that inflation is always running in the background.  Wages are growing, population is growing, prime land is being used up (remember I proved this with the example of NB building over the last decade for all of you infinite land morons).  All the Fed has to do is keep things from sliding off the table, and magically in a few years the fundamentals support a higher intrinsic value.

Now I will say that I was wrong wrong wrong on my prediction of a 15% drop from off-peak pricing.  We have blown through that number already.  IR, your 40% figure looks quite accurate.  I am trying to figure out what would prevent us from getting there.

What if you paid 250K for your house six years ago and now it would sell for 500K netting you 250K in profits plus whatever principal you paid down?

The people that will buy this type of property are just transfering equity from one place to another so for them it does not really “cost” them what you think.

They can disconnect, i.e. Fed rates and mortgage rates, but that is not usually the case.  The Fed has been dropping rates and mortgages have come down in general.  30-year conventionals have eased over half a point since the summer.  More easing by the Fed should mean even lower interest rates.

IR - Yours is the million dollar question.  If rates get low enough, the volume of potential foreclosures would be impacted and a higher bottom could result.  We aren’t at 20% down and 28% DTI yet.  As rates come down, the 28% DTI will be easier and easier to hit.  I think its a bit of race to see if credit rates can get down low enough before lenders really start pricing in higher and higher premiums for risk.

That would be “sell” not “sale”. LOL

Mortgage rates are closely tied to bond yields, not the fed rate.

IN BULK, not pipsqueeks.  The article references Morgan Stanley buying up entire complexes at that price.  Don’t worry boys YOU won’t even get this pricing (unless of course you have a couple hundred million to spend).

The comments make me happy to be still alive.

I was about to say How should I know, there aren’t any in the Bay Area… Then I looked them up to see where the nearest one was, and holy cow, there’s one next to the Walmart. Then I was all like, Walmart? When did one of those show up? What next, Hooters? (looks it up) Oh Jesus Christ. It’s RIGHT. NEXT. DOOR.

Must have been a straight designer,

my gay decorators/designer would puke

Homes in Turtle Rock with a view of the ocean (yep, there are) go for around 550 per square foot or more.

These are homes, mind you.  With reasonable yards, plenty of rooms, a garage and low HOAs.

TRidge is wildly out of whack.

Egawds!  What a bunch of pleistocene taste buds you folks all have.

In’N'Out does NOT make burgers…. it makes the most delicious Protein Double Double with grilled onions… or for my son the animal four by four with grilled onions.

Nothing else compares.

Wow, I wish my time was so valuable that it wasn’t worth it to wait a couple of years and save $250K. Must be nice.

No way this gets $4500. You can find SFRs in Newport Beach proper or Laguna Beach all day long with that budget.

Wrong. The cake is delicious and moist.

Their properties.  Unsold properties are being sold in bulk to investors at 40 cents on the dollar.

There are places not far away from here where $350 commands an ocean view.  The drive along the 73 is nice, but I would rather look at the water.

It sounds as if you have at least yourself convinced.  Is it easier to sleep at night now?

Yes! Yes! Why doesn’t Albertson’s bakery sell yellow cakes with chocolate frosting? Are they being paid off by Betty Crocker?

Yes! Yes! Why doesn’t Albertson’s sell yellow cakes with chocolate frosting? Are they being paid off by Betty Crocker?

The cake is a lie.

ipop:

I used Zip to search. I did a poor job and missed these few. Thanks for correcting my error.

Now looks like this owner is being outrun by other guys chased by a huge bear (market).

The Fed funds rate can affect the market for mortgage rates, but there’s not a direct relationship, and over the short term there can be a complete disconnect.

For example, see this graph. The Fed raised it’s rate from 1% to 5% over more than 2 years; the market rate for mortgages hardly moved at all.

Here’s a longer term graph. Over the long term there is a stronger correlation.

http://www.phoenixrealestateguy.com/Web Graphics/WSJ Shailesh Graph.PNG

What is selling for $.40 on the dollar? Their stock price? Their homes? The mortgage bonds backed by homes?

I see you are still optimistic that you will not go underwater. In your “higher bottom” scenario do these interest rates become permanent, and do they become available to enough people to absorb the huge inventory and increasing number of REOs?

It looks like my prediction, correction the markets prediction, that LIOBR spreads would normalize.  Ted Spread down 30 bps from the beginning of the year currently around 117 bps.  What does that mean?  It means mortgage rates are coming down.

http://www.bloomberg.com/markets/rates/index.html

That is what the Fed can do.  I still predict we will see all time lows on mortgage rates in the next 12-18 months.  For those of you with short memories all-time lows on 30-year fixed were 4.75 comforming and 5.25 jumbo.  And, before anyone pipes about about credit availability, long way to go, etc. Please look at the page linked to above, and consider that Bernanke is planning on at least another 125 in cuts.

The net result is a higher bottom.

To give you some rational on the price this is a great area.  Right behind turtle rock, a stone’s throw to fashion island (big shopping center and industry center) etc.

Definitely on the fringe of the ‘nicest’ neighborhood in both Newport and Irvine (newport coast and shady canyon, respectively).

Now, another thing that makes turtle ridge so desirable is the view.  I drive right over the 73 every week and its gorgeous.  I’d love to have a view like that. 

My turn to play big bear.  I don’t see the view from the pictures.  My guess is there is barely a view, or they are outright lying and they mean the ‘neighborhood’ has a view. 

Even with a nice view, if we put the rest of irvine at around 300 a square foot for a newer, nice home, I doubt a view commands THIS much of a premium.  Maybe 350 a square foot, maybe a bit more.

No

Must build larger wall

Don’t let them out

Oh yeah - and help the kids with their endless homework every night.

re: evenings - eat in, wash your own car.  Open windows when it’s hot because there’s no money left to pay for air conditioning…

Reminds of the movie “The Village” by Night Shyamlam, maybe one day the people of Irvine will step out and see that it is all in their head and it is all created by the Realtards and their own greed and excessive pride.

Do you smell fraudulent, greedy, superficial, inwardly hollow (thanks lending maestro) folks? Well no smoke without fire, so I am sure that is the kind of people inhabiting Irvine AKA Utopia (bad things do not happen here).

I like la land
http://latimesblogs.latimes.com/laland/

While I love to join in the fun there is always an initial sensation where I’m a bit taken aback by some of the negative comments on many of the houses posted here.  Oh yeah, many of them are ugly, butt-ugly.  But this one isn’t bad.  The photos are reasonably well done and while it’s grossly over-decorated, it’s still probably broadly appealing.

That said, I choked on the $486 per square foot.

Hilarious.

I have a feeling somebody is getting something in Irvine that they didn’t get when I used to live sort of nearby.  $486?  Seriously, for a condo?  Almost three quarters of a million dollars for a 1500 square foot, 2/2 condo in Irvine?  Does it come with a massage therapist?  Free food?  Free cable?  Slaves?  Something?

I’m just curious to hear, from the locals, about the culture in Irvine.  And I say this with almost no sarcasm, I’m looking for information, but what do all these millionaires do in evenin