Irvine Housing Blog

It’s hard for me to understand why Columbus Grove is not considered to be Irvine, and doesn’t command the Irvine premium.

It has a lot going for it.  The location for one seems to be prime next to the District, very close to the Irvine business center, good schools, nice grounds, brand new with extremely nice interiors.

The HOAs and mello roos are very high.  That’s certainly a negative.  Maybe it has a high concentration of condos and apartments but that’s true of most of Irvine.  I’ve heard all the toxic waste or garbage dump rumors, again I imagine that’s true for most of Irvine.

The fact is CG doesn’t command the Irvine premium.  It’s a shame because these units are nice.  Even at this price it commands a $3000 per month cost of ownership.  Someone is going to be very happy at this price.

Are the single family houses here still going for $1M?

IR: Thoughts re this?

WSJ: Cash Buyers Lift Housing
Bargain Hunting Boosts Prices in Depressed Cities; Broader Asset Rebound Spreads

Buyers in markets around the U.S. are snapping up homes in all-cash deals, betting that prices are at or near bottom and breathing life into some of the nation’s most battered housing markets.

Cash buyers represented more than half of all transactions in the Miami-Fort Lauderdale area last year, according to an analysis from real-estate portal Zillow.com. In the fourth quarter of 2006, they represented just 13% of deals. Meanwhile, downtown Miami prices rose 15% in 2010 from a year earlier, according to the Miami Downtown Development Authority.

WSJ’s Mitra Kalita reports more and more homebuyers are selling investments to pay cash for real estate, sensing a bottom in the housing market.

The percentage of buyers in Phoenix paying cash hit 42% in 2010—more than triple the rate in 2008, according to Raymond James’s equity research division.

Nationally, 28% of sales were all-cash transactions last year, according to the National Association of Realtors. The rate was 14% in October 2008, when the trade group began tracking the measure.

The jump in real-estate purchases made with cash is another sign of the revival of animal spirits in the U.S. economy.

I just can’t believe someone paid $801,500 for this place back in Nov. 2006. I remember looking at the models for fun. The outdoor space is that little front patio and you’re squeezed in between your neighbors. And is that $801,500 before the updates they did? Wow. Unreal.

500k to hear your neighbor flush their toilet? HA!

The power lines next to Columbus Grove (and part of Westpark) are a big turn-off for me.

There could be a movie in this story, working title: (500) Days of Squatter.

The 10-year bond is taking it on the chin again today, up another 8 bps, yielding 3.73%.  That may not sound like a lot, but it’s up about 145 bps in the last 4 months and/or since The Fed announced QE2.

JMO ~ This is exactly what The Fed doesn’t want because they know low mortgage rates are key to housing affordability.  They want rates to remain low while they create reserves (dollars), hoping to inflate the economy quickly enough so that the banks can dump all these nonperforming assets at prices that are much closer to par (the banks capital cost).

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Most of us know that the banks do not have to mark an asset to market until the asset is sold to another party.  Even when the property becomes an REO, they don’t have to take the loss until they sell it to another party.

ALSO, when a borrower stops making the payments on the house, it becomes a nonperforming asset.  HOWEVER, the banks get to continue to accrue phantom interest on that non performing asset and include this phantom interest on their quarterly/annual statements as income.  This is the primary reason why the banks are showing healthy profits, and the bonuses are back to pre-2008 levels again.

The trick for the Fed is to inflate the economy while keeping interest rates low.  This is how The Fed is gonna try to save the insolvent banks.  Now The Fed has become the primary buyer of new government issued debt (Quantitative Easing).  This puts more dollars into the economy, while suppressing bond yields.

This is indeed a zombie economy, and it ain’t gonna work.

If I were in charge of govt/banking policy, I’d seize all the big banks, destroy the equity and bond holders, markdown all the assets, transfer that to households.  Then I’d break the big banks up, recapitalize them as public IPOs, and make them compete.  And I’d do all this while reestablishing Glass Steagall.

What are the odds of that happening?  0

I suspect that most of the 100% cash are court auction sales and flippers.

Las Vegas market is basically a different kind of market than Irvine.  LV was filled with lots of second houses or vacation properties.  It’s alot easy to give up the extra house instead of your primary residence.

The decreasing number of loans serious delinquent is a sign of either economical improvement or issuing new loans or modification to cover/hide the delinquencies.

As a Chicagoan, it is funny to see how the topic of discussion changes from squatters nationwide, to local Irvine housing trends.  No wonder this blog is called Irvine Housing Blog.

In any event, does anyone have an opinion on squatters who game the system, or is that old news?

Extra wide base boards!  HOLY COW!

Home Affordability Returns to Pre-Bubble Levels

http://online.wsj.com/article/SB10001424052748703313304576132291585938656.html?mod=WSJ_hp_LEFTWhatsNewsCollection

The power lines are closer to Westpark than they are to CG.  Westpark prices haven’t cratered (yet).

THIS time it’s for REAL: THE SKY IS FALLING!!!

calculator is broken
http://www.idealhomebrokers.com/calculator/