Irvine Housing Blog

dear trooper,

I’m a realtor from malaysia. Just wanna check with you, how do you get the exclusive listings from the buyer? mind to share. thanks.

kkchua

One thing to be consider, probably not in your situation, but I appreciate the opportunity to use you as an example, is principal repayment.  You correctly ran those numbers but your figure of $3,005 includes over $500 in principal repayment.  This “forced” savings will increase your networth by $500 each month ceteris paribus. 

For a proper expense based comparison between renting and buying, you should exclude the principal portion of the payment calculatiojn.  In other words, that cost of ownership that you came to of $3200, which includes over $500 of savings via principal repayment, is actually the same on an expense basis as your rent of $2700 today.  Obviously on a cashflow basis, it is a different story as the savings is indeed “forced” unless you opt for interest only loan with a higher rate.

Or to make it even more simplistic, the $3200 you arrived at via those calcs is practically the same in terms of net worth as paying rent of $2700 and putting $500 into a money market each month.

Then again, if the place is fugly and you love your apartment, who cares!

Hi, ex-tangelo! Thank you for welcoming me. You guys and gals are great!

Hello, ipoplaya, and thank you for your warm welcome and detailed analysis.

I’ve actually looked at that very same property on Coral Rose! Although on paper it seems like it’s bigger than the 1200 sq ft rental we have now, in person it is cramped and dark. The garage and closets are tight. I think a lot of that extra 200 sq ft is wasted space we wouldn’t be able to use, strange little nooks and stairways.

(This shouldn’t really be part of the analysis, but… overall, that development has the same feel as the old rowhouses in Baltimore. Rent the movie Tin Men to see. And no views from that property. We do have a a little bit of a pretty view here from the windows and balcony at our IAC. And woe is me, I have normal-sized furniture that won’t fit in those little rooms.)

When I do the math, I get $3,005 a month on a 5.75% 30-yr fixed of $515,000 (assuming $100,000 down payment.) The RE taxes add another $625/month. HOA adds another $196/month. From experience, I’d budget $100/month for repairs and maintenance. For a total of $3926/month for a place that seems less bright and spacious than what we have now for $2700/month. Sure, there are tax deductions for the RE taxes and interest: brings the cost of owning that place down to about $3,200/month.

I guess what I’m saying is that that property doesn’t offer a compelling enough set of features to make me want to pay a premium just to own, vs renting. Although your offer to come over and change our filters and lightbulbs for a monthly fee is tempting!

The floor is level, the house isn’t.

Wonder why so many around the world hate us?  Shame on the American consumers - we carry over 9 trillion in debt!.  And the US government for promoting consumerism, especially with the recent talk of rebate checks.  Iraq is a prelude to the ultimate fight for natural resources with nuclear technologies.  For those of you who are naive to believe wars are fought for the sake peace you might as well go back into the caves - no economy survives without natural resources, unequivocally.

There is an old saying in Chinese, roughly translated: rather be the head of a chicken than the tail of a cow.  And if you think Koreans are different from Chinese, think again.  Not all asians want to have their children in top schools.

I highly suspect what your acquaintance have told you is true - they may have told you in order to save face (moronic asian behavior).  No family is happy when loosing hundreds of thousands of dollars.  No matter asian, white, or otherwise.  Unless they are extremely well-off and I doubt Irvine is the destination of choice for the well-off.

However, I am not discounting the falling dollar which makes US properties in general more attractive to foreigners.  Still, in macro economics, their presence will be marginal.

This is good data - also look at this for good Laguna Beach tidbits:

www.bluemove.blogspot.com

That all depends on the depth and length of recession.  The beginning of the housing boom started after the tech recession when unemployment was in the low 5% range in OC.  Conventional 30-year fixed mortgages declined from 7% to 5.5% fueling home purchases and prices and then the exotics and subprimed kicked in. 

So right now at this time, conventional mortgage rates are very close to where they were in the early boom period and unemployment is lower than it was then.  Unfortunately conventionals won’t get you squat yet, hence the slide in home prices. 

IMO, if unemployment goes up to only 5-6% locally and stays that way for period of a year or two at most, home prices will fall the 20-25% they probably should and rents will remain relatively stable.  If unemployment spikes past that, into the 6.5-8% range, rents will have to come down and further drag down home prices.  The extent of that will depend on how long the recession continues for and how widespread unemployment is nationally.

This is obviously pure conjecture at this point.  Yes a recession is likely.  I believe that enough to have moved my entire 401k balance out of equities in December and put a bunch of other money into bonds and commodities.  How big it it will be, no one really knows.  Just a few months ago the Street was saying 50-50 on recession and most of the target portfolios for high net worth investors at the big brokerages just recently started adjusting to accomodate recession.  MS, GS, ML, half the time they are just getting on the bandwagon…

...So what happens then when, not if, the recession - now predicted by GS and so many others - materializes?  Look at LEADING INDICATORS The facts are these:  rising unemployment, inverted yield curve, risng energy costs, negative savings rate, yadda, yadda, yadda… Gentlemen don’t debate the facts - just the implications.  So folks, what’s the implication for OC and RE in OC?

What if, what if, what if… What if we have a couple of quarters of slow to no growth and the economy turns around before the end of 2008? 

We have lost RE jobs already, whole entire subprime companies are gone, and OC unemployment is at 4%.  Residential construction has already slowed substantially.  Do you think there are a vast number of mortgage companies employing people today to do nothing while volume has wilted to almost nothing?  No, those people are already on the street.

Companies react quickly to changes in market conditions.  OC unemployment jumped in the summer when the mortgage industry hit the skids (from 3.5 to 3.9%) but has since only ticked up to 4.2%.  Sure that is going to get worse, but you aren’t going to see 7-8% unemployment in OC as a recent of housing price declines and home sales volume slowing alone. 

When I talk about bottom, it’s in the context of over-valued house prices resulting from extremely low mortgage rates, exotic mortgages, subprime purchasers, etc. over the past 5-6 years that have artificially inflated home prices, especially in this region.  They aren’t so crazy across the entire US… This is an asset bubble. 

At any time, our economy could suffer or falter from a massive variety of reasons and it would adversely effect home prices everywhere.  Personally, I wouldn’t even try to predict that.  That is not an asset bubble, which is the primary concern of most here, that is just the natural ebb and flow of a market system.  There are economic expansions and contractions.  They happen and the economy rolls on… It’s natural and fairly unpredictable given the number of variables.

Yeah, with all of the educated people in Irvine, it just doesn’t make sense that they would choose to live in a corporate feedlot.

Don’t waste your time CW.  Weird Al makes claims and puts forth assertions and doesn’t back ‘em up with facts or analysis. 

Yesterday it was why would someone pay $1M for an Irvine house when they could buy instead on Newport Coast for $1M… Well, turns out, there is nothing on Newport Coast evn close to $1M.  He just spouts some stuff to see what sticks.  Not necessarily any facts behind them…

I still get a kick out of Alan’s contention that the 4000sf place in guard gated Northpark that will fall below $700K at bottom.  sub $175 per sf in nominal dollars to live in a Northpark mansion.  Okee dokee Al…

I was addicted to Quake III for a while.  In 98-99, while living in San Diego, I’d work my Fortune 500 accounting manager gig during the day, manage my Etrade empire in the evening, and then play Quake III online for 3-5 hours a night.  I think I was sleeping from 2am to 7-8am…

Something had to give, so I quit my cushy Fortune 500 accounting gig (with a pension plan that the company contributed 7% of wages to, 100% 401k match on up to 6% of wages, and an annual performance bonus of 15-25%) and moved to Irvine to live the life of a day trading gamer. 

Man, what a dumb move that was… At least I got my wife and now my kids out of it though so it’s all good.

I walk past this property when I walk over to Culver Plaza. Nice property except the back of the house points right at the Culver/Irvine Center Intersection.

If there was no tax benefit, housing prices would be lower.  I think much is clear.  Taxes would reduce move-up equity.

We may be the same person after all!  Quake III consumed many hours.

Wow is an immersive online RPG involving hundreds of thousands of player interacting in a virtual environment.

That’s a WTF rent.  Who in their right mind would pay 2300 a month for an REO property the size of a shack?  My god, Irvine is bizarre.

We may be the same person after all!

No a pissing contest would be a comparison of incomes, education, savings, number of notches on the bedpost etc.

Verification of unsubstantiated claims is what intelligent people do in order to correctly form ideas and resultant expectations.  But then you knew that already.

OK, let’s get this straight.  Here’s your quote:
“During the boom, the number of buyers was inflated by at least 50%…”

Is it possible that you referrring to SALES and not BUYERS?  That seems to be what the chart you linked to references…

Hi TurtleRidgeRenter!

Is anyone concerned that all of the careful analysis of price bottoms etc. is predicated on things like inflation, falling rates and rising rents?  What if our economy entered a serious local or national recession?  The smartest guys on Wall Street (Goldman) are calling for it now! 

What if we were in for a protracted period of disinflation or stagflation (slow or no growth with rising fuel and commodity costs) - sound familiar?  What if local OC employment weakend significantly because of lost RE jobs and that spilled over into reduced consumption which caused further weakness and job losses?  This is exactly what happens when a recession occurs.  It’s a cyclical process that builds economic momentum in the exact way that leveraged housing booms build momementum only in the WRONG direction.  Tell me are you not concerned?  If these things come to pass in even a very modest way, it will be tough for our unprecedented and extraordinarily over priced RE to bottom where many of you expect it to...because your thesis based on a return to normal, not on significantly weaker economic growth or a recession.

Great episode! Love how the kids get fat with pimples spending so much time playing video games.

What’s World of Warcraft?  Haven’t watched much South Park since my young and single days so I couldn’t tell ya.  I do play that South Park Xmas song ever year, what’s it called?  Merry F’ing Xmas I think.  That’s one .mp3 I’ll keep forever…

JK on WoW.  Also in my younger and singler days, I was a gamer.  Mostly Unreal and Quake III.  Oddly enough, when I was a gamer, I was in the best darn shape of my life… Then again, I had no kids and no wifey so I could work, game, work-out, booze, play the market, and still find time to sleep somehow.

Do you like South Park Ipop

They did an episode a couple years ago “WOW” about a troll on World of Warcraft who was a fat slob, sat at a computer all day and killed all the other characters.

Do you look like that character?

I’m a desk jockey Weird Al.  Just tidying up our year-end numbers and waiting while my staff preps our stuff for the annual audit.  It’s a slow time of year in the services business.  With everyone at our customers out on vacation during Xmas and New Year’s, we don’t put many people to work in early January.

I’ve got two big ole flat panels on the desk so I can keep IHB up and running on one of them all day long and do my work on the other.  You’ll never be rid of me, at least not until I buy a house.  Once I buy, even if the market is still tanking, I’ll be the resident bull.

assessed price is $838 so they are still asking for more than they paid.

by the way IPO, I think you set a new record for posts today.

did your wife kick you out of the house?

if you have this much time you should take up golf!

wow…

a pissing contest…

hey, I don’t have to prove nothin

here’s the link..

looks like i overstated the numbers

between 1980 and 99 annual sales flucuated between 2.5 and 4.5 million units, then w the free money infusion sales zoomed up to over 7 million units, about 50% greater then the average anual demand in the previous decade.  tanta’s point is that these excess sales can be looked as as caniblizing potential sales from future years.

Yep IPO, we sure have looked at all of those areas...Personally, I have grown to prefer TR to Northpark....It has more of a neighborhood feel to me --- but my wife is really hung up on the manned guard gate. Whatever. I’ll keep working on that, we’ve got some time.  One way or another, we are headed for a 714 (or now 678) area code.

http://www.redfin.com/stingray/do/printable-listing?listing-id=1218762

Another big price drop, $100K.  $250K in drops in 84 days of list.  Think they brought it on too high?

http://www.redfin.com/stingray/do/printable-listing?listing-id=1303038

This bad boy just price dropped to $959K.  Purchase price of $1.15M, plus the cost of landcaping, puts it at $1.175M.  After commish, at this price, which is still too high, a $275K loss in 1.5 years.  Yikes!

Market price for this place right now is probably $850-900K based on other new home offerings in VoC.  Hate to be this buyer…

Read my posts.  I said at $350K its a good deal based on today’s market… At $500K its a shame. 

I seriously doubt my place will go all the way back to 2001 prices in nominal dollars, but if it does, good for me as the bigger SFRs will be going for $500-600K and my household income will likely have gone nowhere but up.

I think to propose that prices will fall to 2001/2001 prices in nominal dollars means we are going to see wage deflation over the few years.  How probable can that be?  My house has dropped in value by 18% already but I’m getting a 4% raise to start 2008 to cover increase in CPI.

because IRVINE IS DIFFERENT :mrgreen:

I rent a bigger detached house with amazing view in a nicer city for 200 more, no way this appartment rents for more than 1700.

I hope you are right mmg.  We make very solid money now (my wife makes close to the Irive median herself and she is the lower wage earner) and our daycare expenses will drop by $800-1000/month in a year or so when switch up from nanny to full-time preschool. 

A year is the longest we’ll be able to hold out… I’ve got kid crap all over the place, can’t park anything in the garage, and already pay for a 150sf storage unit that is practically full.  While I might be one of the more bullish ones here, I fervently hope for a quick and vicious decline in prices.  I’d much rather buy my 30-year house for 3X household income vs. 4X.

IPO

your 1600 sqft place will drop to 350k in a couple of years, then let us kno if you are willing to buy this appartment for 500k :mrgreen:

IRVINE IS DIFFERENT :mrgreen:

well I have news for you, houses will drop to around 200 sqft including irvine, for condos it will be less.  anecdotal evidence all around me suggest people are going to be hurt big time, people are losing jobs, those that havent lost their job have lost their housing ATM and you know what that can do ITS LIKE LOSING A JOB :LOL:

IPO if you are making good money in your house hold, you will be surprised at how much you will be able to buy in one to two years, IR had an earlier post about how rents and prices where close in Irvine, will are on our way back, may take long but will get there.

No family making >120 is going to buy 1000 sqft, or at least I think.

my prediction 250k tops.

Hey CK.  Did you ever consider the Peters Canyon, Pioneer, and Beckman trifecta?  I have been looking at places in Tustin Ranch.  The stretch of TRanch that goes from where Pioneer hits Jamboree at the top down to Portola.  I kind of like El Dorado, which is the development just above Peters Canyon.  Kids can walk to both elementary and junior high and have Cedar Grove Park right there as well.

I have heard nothing but good things (except for complaints about traffic) about both schools…

I’ve also considered Sheridan, which is TUSD as well with an Irvine address, with Myford, then Pioneer, and Beckman.  Sheridan is small, but nice.  Have starter condos up through 3000sf detached.

Certainly there are more than a few on this board doing that, but move away from this board, now how many?

Most people I know buy just one house.  When it gets to small, they sell it and dump the profits into the larger house.

I’m sure it is a benefit if a couple retires and they move to a smaller house.  However, a lot of the retiring folk around here are under Prop. 13, so they are going to hang onto the big house.  It makes family gatherings during the holidays more convenient as the out-of-towners can stay there.  Plus all the neighborhood roots.

I can see the benefit for a party that can buy one house, live in it for a couple of years, then buy another house without having to sell the first house.  They sell the first house after it appreciates by more than 250K (which doesn’t happen that quickly in a normal market) and collect the tax-free profits.

However, most people I know don’t have enough cash lying around to buy a second house.

So, the “tax benefit” is inconsequential to most people, IMO.

Plus TUSD requires uniforms in Elem school, IUSD does not to my knowledge.  I like that.

Dano and Mark --- Oh, I agree with both of you 100% --- and know our influence is primary, and the environment is secondary.  Note that we did tour both of the elem schools serving our current address, to “get behind the numbers”—Culverdale and Westpark.  We just were not impressed with the schools.  I’ll leave my opinion at that as others here may have a different opinion.  I’ll also note that we actually decided on the schools serving Northpark as our final destination --- which are actuall Tustin USD (a lot of folks here like to imply TUSD is inferior to IUSD).  After visting Hicks Canyon Elem we were much more impressed by what seemed to be a balanced focus on academics and socialization than in the IUSD schools in our preferred neighborhoods.  Plus we feel we can get both a starter and move up home (eventually) without ever leaving Northpark. Thanks to both for your thoughts.

There be definitely somes white trash in iRvine.  One of my neighbors did a midnight move last September, stiffed the landlord on 3-mos rent, and quit his job to be a cage fighter (no kidding).  Some lady in a suit knocked on my door about three weeks ago and said she was from Enterprise Rent-A-Car.  This guy had “stolen” a car by renting it and never returning it.  Now that’s true Irvine White Trash.

Yes, I have seen the site, and NO I haven’t seen anything supporting your claim:
“During the boom, the number of buyers was inflated by at least 50%...”

When you have a moment please post the link.  I find the information truly unbelievable.  Meaning, I don’t believe it. 

If it is indeed true, I would like to verify the source as such verification would have a tremendous impact on my level of bearishness (which is already quite high I would note).

Yeah, it’s very nice and 2700 sf on a single story has got to feel very big inside…

Judging from the outside the Bella Rosa house appears rather plain.
The inside tells a different story altogether.
I’m amazed with the décor.
Luv the interior, with all the upgrades, this one’s a trophy.
The $1.1M price tag is way too high but this house has one of the best interiors I’ve seen in a while.

Not a parent, but I agree that the parent is THE most important factor by far.  The second most important factor IMO is the socio-economic status of the friends your child will have at the school.  If the other kids are pressured to do well and expected to make it to a prestigious school, that will influence your child greatly.

Just a note to CK - don’t make your housing decisions based on test scores of the various Irvine Elementary Schools. It’s not the schools that will make your kids successful, it’s not the teachers, it’s not the principal and it’s not the student/teacher ratio. If you and your spouse value education and pass on that value to your kids then they will do fine at any public school in Irvine. Move to a place that you can afford and will make you and your kids happy. When my kids were in school (UCLA and UCI graduates) I saw many families move their kids to “better” schools only to destroy their children’s social lives by moving them away from their friends and neighbors. Then the parents had to spend hours each day driving their kids to “magnet” schools or other schools that were not in their neighborhoods just so they could be in the “best” schools. Then years later you see the test scores and their own neighborhood school scored just as well as the “magnet” schools...it was such a waste. There is more to school than just test scores.....

psychosis.

I like those 2002 prices. 2002 prices = reality. 2007 prices= psychoses .  BUY AT 200-225 SQ. FT.

Ipop, I won’t and can’t some particulars with you however, the whole adjusting for inflation thing-automatic rent increases over time may not be a valid model going forward.  Just as a SFR for sale in 2001 at price X+ inflation isn’t necessarily a valid for, well, for much of anything right now.

I’m not saying that adjusting for inflation is invalid in general, all I’m saying is, these are uncharted waters we are sailing into.  Trying to apply the map of the past to them could be hazardous.

And who knows, I could be wrong, maybe rents will go up.

Me too blah.  Doesn’t change the fact that OP is dreaming…

The “Piece of crap” thing made me laugh hard.

I thought this new listing was funny:

http://www.redfin.com/stingray/do/printable-listing?listing-id=1385639

No houses behind and private because it sits on Portola and thousands of cars go roaring by every day…

I think you are all smoking a little too much of the “it’s special here” weed.  Rents will definitely take a hit in a recession, a recession that has already blossomed in OC with tons of high-paying-real-estate-related jobs blown to the winds. 

I recall my bz law professor always using an analogy for his contract lessons: buying used underwear at garage sales.  We would laugh but he would say laugh now but you will see differently in the future.  It has been 30 years now but I worry that he may have been a mini-Nostradamus. 

The harbingers of economic bad tidings are becoming overwhelming.  don’t believe me, click on reuters or yahoo bz news.

http://www.redfin.com/stingray/do/printable-listing?listing-id=1207294

Not showing on redfin yet, but this place just went contingent.  Guess those massive RE job losses Alan thinks we’ve had didn’t stop someone from deciding to pay over $1.1M for this place…

IR does for me..

Look at the links on the right side of your page.

“Now, if a person sells their home, rents for a spell while the market crashes about them and then purchases a home later after their tax break money has appreciated substantially, then I’d say the break worked to their advantage. I don’t know too many people doing this.”

I know people doing exactly this… Several, in fact.  In fact, I think there are more than a few on this board.

“I read calculated risk dude...” LOL.  Good for you.

Please post the source reference.  Considering Home ownership rates increased roughly 3-4 % during the bubble years, I am trying to reconcile with the 50% increase in buyers… Obviously, there was an increase in “qualified buyers” by virtue of easy credit.  The 50% figure sounds more than little high to me.

anteater: you may want to investigate the performing arts center by south coast plaza:  all manner of high-falutin’ culture/ballet/symphony/opera and whatnot.  I don’t appreciate such things but I do like the fine dining in the area: Mortons/Pinot Provence/Antonellos/Marche Moderne/Scotts:  all pretty good but travel to San Francisco and bring some cash if you want some real gourmet fare.  Check out Cyrus in the wine country, nothing like it down here.

Welcome TRRenter.  I am a bit curious about your $5K number.  I see a place that is probably similar to what you are renting:

http://www.redfin.com/stingray/do/printable-listing?listing-id=988923

I assume one could acquire this place for $575K.  It’s a few hundred more square feet than your apartment… If you fully financed $575, i.e. no down, assuming a 6.75% jumbo rate, the pre-tax interest + property taxes would be $3901.  After tax cost with tax deduction for interest + prop taxes would be approximately $2500-2600.  Toss in $200 for HOA and $100 for insurance and you’d have a total after-tax cost of $2850 vs. your rent of $2700.  Not a sizeable difference but obviously not a good buy decision.

Assuming you had 20% down in the bank earning %5 and re-running the numbers using a conventional with a rate of 5.75%, I get an after-tax spend of $2167 + foregone after-tax interest earnings of approximately $300/month for a net cost of $2478.  If you had the cash in the bank, and you could get this property for $575K, you’d save money every month vs. the rent you are paying and have a couple of hundred more square feet.

If this place dropped to $500K and mortgage rates stayed the same, the fully financed monthly total would fall to $2562 and the 20% down number would go to $2291.  Therein lies what I would call the difficult choice.  Keep renting for $2700 or save $400 per month by buying… In your situation, sounds like you’d prefer to pay the “premium” in this case to rent and have the service. 

If you ever do decide you want to buy, let me know and for that $400 per month I will change your bulbs/filters, etc. and keep your appliances working.  Appliance home warranty plans are a few hundred dollars per year.  I’d buy one for your property and still clear $4000 per year for helping you maintain your home.  Why should IAC make that money?!  They are rich enough!

Zip Code 92606 (Irvine, California) people
View levelCityStateMetroCountyCityZip Code The 2007 Irvine (zip 92606), CA, population is 24,071. There are 7,949 people per square mile (population density).

Family in Irvine (zip 92606), CA
The median age is 33.7. The US median is 37.6. 52.81% of people in Irvine (zip 92606), CA, are married. 9.31% are divorced.

The average household size is 2.57 people. 29.70% of people are married, with children. 7.38% have children, but are single.

Race in Irvine (zip 92606), CA
42.11% of people are white, 2.13% are black, 47.59% are asian, 0.22% are native american, and 8.14% claim ‘Other’.

7.32% of the people in Irvine (zip 92606), CA, claim hispanic ethnicity (meaning 92.68% are non-hispanic).

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Here optimal idiot. Here is your 5 to 1 white people to asians.

http://www.bestplaces.net/zip-code/Zip_Code_92606_Irvine_CA-PEOPLE-79260600010.aspx

http://www.ocalmanac.com/Employment/em21e.htm

Largest Employers in Orange County, 2002-2003

Optimal idiot.

5 to 1 whites to asians in westpark. Now I know you’re totally stupid and clueless. Go back to your Matrix dvds optimal moronicus.

Definitely rents can go down.  Can they go down by almost a third in the near term?  Highly unlikely unless unemployment sky rockets in OC.  Will Boeing, UCI, and Disney have a vast number of layoffs as a result of a recession spurred by a credit crisi.  Probably not, but I supposed anything is possible.

For any bloggers needing a 50% reduction in current market home prices to buy, I submit you need to spend less time blogging and find ways to make more money.  Things are closing escrow in the $300-350 per sf range.  They are not likely to drop to $150-175 per sf.  Will we see a 50% drop on some of the WTF prices out there today?  That is possible but it is more a factor of just how high a wishing price is being asked. 

For example, I know my place is worth around $575-600K today based on very recent sales and yet people still offer my home up for $700k or even $750K.  If I slapped it up at $550K tomorrow, you can bet I would have a buyer within 30 days.  Obviously the guy who lists my place for $750K is going to wait for a buyer that never shows and need to come down 35-40% at the bottom of the market assuming he hasn’t found a knife catcher.

I love your blog, IrvineRenter, have been lurking for awhile, this is my first post, so here’s my own-vs-rent story.

My husband and I moved here a year ago from the Washington DC area. We sold our 2500 sq ft, built in 2002 townhouse in Northern Virginia in April 2007 for exactly what we paid for it in April 2004. We got that thing sold just in the nick of time as the whole DC market was imploding. We almost broke even on owning vs renting in Virginia for the 3 years we lived there. For the “privilege” of home ownership.

Things do need repair, even in a new, well-built house. We paid plumbers, handymen, appliance repair people and HVAC people to fix things, averaged about $1,200 a year. I spent a week’s vacation power-washing and sealing our deck. I was not a Real Housewife of Orange County. I was a Real Housewife of Loudoun County.

Now we are happy to be back home in Irvine, renting IAC townhouse, 1200 sq ft, 3 floors, 2-car garage, Turtle Ridge for $2700/month. Great closets and storage. Beautiful pool, hot tub, and garden maintained like a botanical garden.

The Irvine Company fixes everything, inspects smoke detectors, changes filters, changes ceiling lightbulbs for us. We don’t even have to own a ladder. We’re in our early 50s, so this is huge. So much value-added for us.

To buy the exact same type of townhouse in this area would cost us around $5000/month. And we would have to do our own maintenance. No increase in the quality of life for almost twice as much money. This is pretty much of a no-brainer for us. We’re both working hard at our jobs, enjoying the SoCal lifestyle, and in no hurry to buy a house. In fact, we might never want to buy a house again.

driving through Nashville I was impressed with the variety of neat stuff on the radio - many genres, several NPR stations… went to visit a friend who bought a 1000 sf 2-1 sort of near Paducah for $17k and started making metal artwork.

I’m not taking sides here but I do think that anyone who believes rents are immune to downward pressure in an extremely unstable economic place we are in might be a bit of an optimist.

Can rents go down 30%?

Perhaps.  Is is assured that rents will not go down at all?

I would opine that is highly unlikely.

As to the value of a property, I still think anyone who buys anything now is taking a big chance (and my sympathy to those who have to for their own reasons).  Saying any given property won’t be worth less in a year than it is now is a bit of stretch.  IR has posted examples up and down the spectrum.

I’ll say this, it’s a cute little place and IR seems to think well of the hood.  It looks cute (speaking on someone who isn’t a size queen).  Maybe it will hold.

Either way, you could be stuck in a lot worse.

Yeah, those kids are such babies nowadays.  I had to walk a mile through the snow with holes in my shoes to school.  Or was that two miles?

but at least they don’t have to walk to school in the snow…

but the ability to see the market eat all of the down payment is truly priceless

I got the Armada when the 2nd kid came… Why pay a premium for the Denali when I could have a better-built gas guzzlin’ monster from Nissan?

Have to say, I am a big fan of the on-board entertainment system.  My son can watch a DVD with the ole wireless headphones and I can listen to whatever tunes I want.  Great invention.

Hey renter, did you ever consider that asians can read, understand math, etc?  “Assume that prices have always been high"… They don’t need to have lived here to figure out what prices used to be… Think about what you are saying.  If you move to Phoenix, are you capable of learning about historical housing prices there if you so choose? 

You are talking about people whos kids prop up the API scores of IUSD schools, especially so where there are larger concentrations.  Somehow you think they aren’t intelligent enough to make prudent buying decisions for themselves?  Plaza Vista ranks out better than other Westpark schools likely because its 56% asian.  Culverdale and Westpark Elementary are 44%.  These are families that put a huge premium on education…

The asians you have issue with have probably been better savers traditionally, often live in higher concentrations (with three generations in a house, double up the kids in bedrooms, etc.), so they can probably afford to spend more.

You bully!

I’ll bet you make your kids walk or ride their bikes to school too!

Oh, the humanity…

If this home isn’t covered by any restrictions on remodeling (is it part of an HOA that doesn’t allow it, etc), and if I were to move in to a place like this that felt cramped, I’d see about removing interior non-load bearing walls and making a more open, brighter space. The ‘great room’ has been trendy lately, but in small spaces it really does help.

(I don’t know the floorplan, so I don’t have even the faintest idea if it’s possible or would even help)

And that gas range looks like the cheapest possible model. If it comes with the home, and it bothers you, sell it and get something you like instead. $600-1000 gets you a ridiculously nice range. Don’t turn down a home for something easily changeable like a kitchen range.

the knoxville symphony orchestra actually has a good rep.  in any case, if fine arts, museums, other high culture things are your bag, you’ll avoid OC like the plague.  and the idea that laguna is any kind of artist’s colony is best left in the 70s, unless one considers investing an art form.

How many people have benefited from that tax break?

Typically, the proceeds of a home sale go towards the purchase of another home, so they don’t really enjoy the “appreciation” of their home investment - except in the form of their new, larger home.  It would be ridiculous if the government “taxed” this transaction.

Now, if a person sells their home, rents for a spell while the market crashes about them and then purchases a home later after their tax break money has appreciated substantially, then I’d say the break worked to their advantage.  I don’t know too many people doing this.

LOL....wonder what area you live in.  It’s more 5 to 1 Caucasians to Asians with a little mix of Persians and such in my neighborhood in Irvine.  BTW...nice jab at my name but I am married.  So flame elsewhere

I agree, all people have a hint of racism in them...they just hold it in instead of just single out a group like you.

Didn’t you folks get the memo?  Americans need an incremental increase of least 1,000 additional sq ft per child, as well as at least 1,000 additional pounds of steel and glass for their SUVs for each additional child.  1,000 sq ft home is fine for a couple....But you need at least 3,000 sq ft with two kids.  A CR-V is fine with no kids, but with two you need at least a Yukon Denali XL for two kids. 

How do they do it in Europe and Asia?

i read calculated risk dude…

tanta has many graphs

the one I’m referring to is annual housing units sold in the USA

it was mostly stable but spiked about 6 mil/yr but spiked up to i think 10 mi during the free money bubble.  tanta expects sales to fall this year to as i recall 4.8 mil/units.  the excess units (10 mil - 6 mil) sold during the bubble can be considered pre-sales form future years, depressing next’s years sales until supply demand normalize.

Read tanta dude, your the one talking out of his A***

Kids can share a bedroom. Crazy, I know. My poor kids.

Let me reaffirm my contention. Asians who come in from another country don’t remember when houses in Westpark were 399k in 2000. They assume that prices have always been high. Thus they have nothing to compare the current prices to and they buy it. As to the racist comment, all people have at least a little racism in them. If they say they don’t they’re just lying. I am just saying when I walk around Westpark and there’s 12 asians to my one white person I kind of feel out of place that’s all. So get off your high horse Optimus Prime. Great name. Just another geek.  So go pop in another star trek dvd or matrix dvd and wish that you could have a date with a woman. LOL!!!!!!