Open Thread 1-24-2009

Jan 24th, 2009  
by IrvineRenter  in News

Astute Observations

Astute Observation by South County
2009-01-24 08:15 AM

I have been involved with construction and development in Orange County for the past 18 years. I enjoy reading this blog from time to time. If you are looking to purchase a home, wait untill new home production returns to Orange County. I can tell you this when new capital and investment are devoted to new home development in Orange county the product will sell. There are several large land projects in default in the county and when reworked and developed the product will sell. Any new development in this market will sell and you will be surprised at the pricing.

I can tell you this, the two major land holders in this county know were the the market is for merchant builders. Land values and lot sales will soon meet the market.

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Astute Observation by IrvineRenter
2009-01-24 09:32 AM

“Any new development in this market will sell and you will be surprised at the pricing.”

Yes, I will be quite surprised if people can continue to pay unaffordable prices when they cannot obtain financing on the unsustainable terms of the bubble.

I will agree that any new development in OC would sell, if they lowered the price to affordable levels. The only reason there are not new developments selling homes in OC is because landowners want unrealistic prices. Residual land values in OC are still positive, unlike Riverside County where land values are negative, so there is potential for new construction in OC. Unfortunately, land values are not high enough for the landowners to be willing to sell, so nothing is happening. It certainly does not look like new capital and investment will be entering the OC home market any time soon.

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Astute Observation by South County
2009-01-24 10:05 AM

As I mentioned above the major land owners in the county know the true value of there finished lots in Orange County. At this time $200K-$300k for finished lots with a possible 20% decline in the next 12 months. The default of the two Suncal projects in south will pull finished lot values down futher. In the fullness of time the other major landowners will move there lots at lower market values. Give the market 12-24 and you will begin to see land deals. These large land holders with favorable equity positions still need cash flow for operations.

Capital and investment will return, it always has if there is money to be made.

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Astute Observation by MalibuRenter
2009-01-24 01:54 PM

In the early 1990s, I watched as a number of nice single or small developer lots followed the same pattern.  Purchased for $300k in 1988 or 1989.  Foreclosed in 1992.  New owner paid $80k and revived or initiated new permits.  Foreclosed a second time in 1996.  Sold for $20k.

Then, sold again in 2003 for $300k, or 2005 for $800k.  The people who bought for $800k in 2005 didn’t get permits and houses done fast enough to sell before the bubble burst.  If they are still sitting on raw land, they might have gotten $500k in early 2007, probably can’t get $250k now. 

The people who paid $300k and actually had a completed house by 2005 or 2006 made out quite well.

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Astute Observation by tlc8386
2009-01-24 11:57 AM

Two things that would sell one is decent sized lots in the 8k to 10k sq.ft. range and larger would be a huge improvement over quality of life, driveways that actually could fit your car. A back yard that can fit your pool. There are so many pools in Irvine but they are all community owned I would rather have my own. Riding past many of these empty pools are just a waste of space unless it’s a young neighborhood with lots of children. More HOA money wasted.

Second a way to really sell homes would be Green Homes that involve all the new ways to save the environment. Ironically here in CA we have none. That would get national attention and command a higher price that many would pay especially if you get a decent sized lot for your garden/pool.

I would buy one of these in a minute. Instead of on top of your neighbors, postage sized stamp homes that are extremely overpriced.

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Astute Observation by george8
2009-01-24 08:49 AM

I want some TARP, they are giving money away for free…


IR and company, where and how do I get it?

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Astute Observation by zoiks
2009-01-24 09:50 AM

Oh you’ll get plenty of TARP, not to worry. You’re just going to be on the paying end of The Great TARP, not the receiving end.

BTW, my kids want to thank all of you who helped bankrupt the banks and supported the bailout/TARP deals (anyone remember “it’s for Main Street, not Wall Street” - yeah right). The thanks is in the form of them (and me) hoping you eat shit. And that goes for the banks and the corrupt politicos, too.

Especially all the clowns in Orange County. Few times have I seen so many people fully deserving of eating shit.

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Astute Observation by george8
2009-01-24 01:38 PM

So, TARP and all bail out are basically punishing the responsible to pay for the irresponsible and the crooks?

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Astute Observation by zoiks
2009-01-24 05:30 PM

Yep. Amazingly, the prudent, the savers, the responsible lenders, and the responsible borrowers are the only ones not getting bailouts. Sadly, they still get to pay for the bailouts through inflation and higher tax burdens.

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Astute Observation by mav
2009-01-24 09:18 AM

it’s pretty easy
you just need to be wildly insolvent on top of assets from the wealthy

If you don’t already meet this criteria then you are just the kind of person we are looking for to pay for the TARP.  Do you have any kids? Yes?, you say….fantastic we can get them started on a reasonable payment plan today !!!

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