Irvine Housing Blog

I’m skeptical of this conventional wisdom for the following reasons:

1.  The conventional wisdom has a very bad recent track record.

2.  The current depression in the housing market and its knock on effects in the financial markets and consumer psychology is enough in and of itself to cause a severe recession regardless of oil prices.

3. Many of the same market commentators that you speak of also tell us that the price of oil is primarily driven by the dramatic growth in China and India.  If this is true then a drop in the price of oil suggests that Chinese and Indian growth is slowing and this suggests a worldwide slowdown or even recession.  Who will buy our ever increasing supply of treasury bonds as our deficit balloons, Chinese and Indian trade surpluses fall and the ginormous excess flow of dollars to the oil powers (Russia, OPEC et al) dries up?

There is a 4 bedroom SFR on Sierra Chula in Turtle Rock that has been off and on the market. It is listed as a short sale and then it disappears, only to come back in a month or so. I would be interested in hearing the story behind it.

Also interested in hearing about 18822 Saginaw in Turtle Rock. Another short sale. Lowest list price yet on this model.

The health of the stock market isn’t necessarily tied to the price of oil. Oil has been pretty much been going straight up since August, yet the stock market has had (1) 10% drop and (2) 15% drops in that time as well as a couple of 10%+ recoveries. The market ebbs and flows at its own pace but the trend is undeniably down. We will get rallies but don’t be fooled that this has much to do with the price of oil.

Yesterday I talked to a friend who works as an admin in a realtor office.  She said someone from MLS came to their office to talk to them about the market.  Their spin is that the housing market won’t recover until 2011 or 2012.  For a split second I was giddy that the denial may be ending.  But then she said that they all agreed the market won’t go down any farther between then and now.  They think prices are at the bottom now and won’t go up for a few more years.

Well, the realtors have to tell themselves something not that bad or they’d all quit forthwith.  My more sensible mtg broker/real estate brokers could read the writing on the wall and went and got jobs.  They still have licenses.  They have not closed a loan or a house sale since they shut their doors in February.  I do have a re-fi.  They have said now for months that it was going to close.  I no longer believe.

One real estate and loan broker is hanging on by doing price opinions for banks when deciding what to charge for REOs and what to settle for in short sales.  He says hardly any short sales are getting done, that it’s a waste of time.

Often the banks call back for more accurate comps.  The guy says this is the best I can do.  There ARE no closer comps.  There are no
more recent comps.  The system, which relied on nobody being required to do any thinking is breaking down.

A surveyor down the hall is surviving on flood elevation certificates.  (Virtually all of Miami-Dade County is a flood plain.  The question is, how looow do you go?)

The bankruptcy attys are going great guns.  They are scheduled out for months.

By the way, where are TonyE and Irvine Commuter?  Have I just not looked at the threads they’ve posted on?

Job loses will be the key to suggest how bad this recession will be, and from what I am seeing, job loses will accelerate. Oil may be high due to part manipulation none other than GS/MS/C, however the billions of $$ of loses in housing is real and it will continue for some time to come.  FRE and FNM have no money, Fed will continue to print $$ and bailout the big firms of wallstreet, investors of MBS securities will continue to shy away given the rish vs reward scanerios. I think FHA loans (FRE and FNM) will continue to make loans and sooner or later they will have trillions of dollars bag holders, then what?

Unemployment will rise dramatically from Sep 08-Jan 09, stock market rise this week was nothing but joined efforts of FED coupled with the financial firms jacking up the prices. Why in the hell MER went up yesterday after losing $4.25billion in three months, loss that was 120% higher than analysts lowball estimates suggested?  We are not done yet, I would take the money and get some gold or stocks that sustain during recessions such as PM, General Mills, etc.

I’m keeping an eye on 128 Trellis for sale price.
I think 500k for a 1200sf two bedroom is crazy and someone took the fall after only 6 days. Hmmm….

I can’t believe no one thinks the ‘08 election won’t put a reality distortion field around housing and the economy in general.

It might well be the top for oil, but the stock market has a lot further to fall…..

I live in Huntington Beach (Seacliff) and there are six patio homes for sale on the street next to mine. They are pretty nice and of course a few blocks from the beach. Homes are 2400 sq ft to 3000 sq ft and the prices are in the $1,100,000 to 1,250,000. Most of them are empty and I can’t see any of these homes selling anytime soon. I figure that they will sit and even if they drop the prices by $200K, I doubt there are many people out there ready to scoop them up.
I’ll keep you posted

I’m still waiting for the really big bank failures that are sure to come, Indy-Mac will not be the last.  This will sure put the economy in havoc.

I’m really angry at the accountants who got control.  Why in the h*ll were banks allowed to book unpaid, deferred interest from neg-am Alt A option loans as income on their books.  They will never see that money and when they have to right it off they will become insolvent.

According to seeking alpha, Lehman is in a death spiral despite the fact that it still trades at $20.

Much more carnage to come.

The End is Near.

follow awgee… buy gold! (and bury in back yard)

I’m in my mid 40s and work in the construction business, i have never seen a market like this before. According to the Hoffman Company of Irvine the value of finished lots in Corona has droped 40% in the first 7 months of 2008. The problem now is knowone can peg a value on projects, let alone fund a residental project. With this freefall in values we should find a bottom sooner than later.

IMHO, we just saw the bottom for C and BAC already. They may go down a little bit in next few days, but it will go down too much.

Their next Q earnings will be good though accounting practices they can always delay the bad news. The price will up C to $30 and BAC to $40 at next few months.  The bad news will come 2 Q later. But at that time Wall St will announce the light at end of tunnel. So they won’t go down too much. But WaMu and other troubled banks may disappear.

However, the really stock bottom will happen in 6-9 months. DOW has to test 10000 before next bull market can start

Yes, we must have bottomed.

The LA Times says they’re a lot of “bargains"to be had.

http://www.latimes.com/classified/realestate/rentals/commercial/la-fi-homesales17-2008jul17,0,2013090.story

I think we’re headed for a deep recession.  I hope I’m wrong, but I don’t see it otherwise.

Inflation is a real problem. I don’t see how a retreat in oil prices by itself will cool price growth.  If gas prices retreat to $4 a gallon, it is still high.  I have been reading UK news sites, and they have been documenting inflation worries all year around the globe.  It’s a big concern, and a global problem.

In terms of demand for goods, if India and China see 10% of their people rise to the middle class, that’s 200+ million people.  The fact that asian countries are modernizing and getting wealthier means that they will be consuming lots and lots of goods.  As has been stated demand has been high.  If it remains high, that adds inflation pressure.  If their economies go bust, then we are going down with them too.  It’s a no-win situation.

Then there’s the financial crisis we are in.  There are trillions of dollars that will evaporate, as has been documented here on this blog on a case-by-case basis.  This has to mean big layoffs for lots of people in the financial and real estate sectors.  These job losses and the lack of Housing ATM money will probably lead to lower consumer spending.  That has a ripple effect.  Governments collect less tax money, and in turn provide fewer services, layoff workers, spend less on infrastructure, ...

So you have in aggregate less income in the US, and high inflation.  That has to equate to fewer goods and services being consumed.  Small businesses will also find it harder to obtain credit, so companies on the edge may not be able to ride out the storm.

There are other threats like global warming and a looming water crisis in many parts of the world.  Water mismanagement is a growing issue that doesn’t get much press.  These issues are more long term, but they could add pressure to food prices soon.  A hurricane here, and a drought there and it could get tough.  My fingers are crossed that things don’t get out of hand in the near term, which should give society time to regroup.

I think we need to hit an inside straight for this recession to be mild.  With that said, I believe in american ingenuity and spirit, and I am a bull on the US economy in the long run (with emphasis on long).  I don’t think it’s all doom and gloom.

I’m back in the Solano county area after being overseas for a few years. Radio advertisements are using the phrase ‘hard times’ and similar phrases which were never uttered before. One real estate agent was honest enough to say housing will get worse before it gets better. REOs are dropping to under $150 per square foot.

Vacancy rate at a six year high in OC. (OC Register Lansner Blog. July 20.) This can only lead to lower rents, and even less incentive to pay double to purchase an apartment/condo.

As for me, I am moving. I am tired of paying too much for rent.

Here’s the latest Mr. Mortgage video ! Gawd, after watching this, you know that Irvine housing prices are going MUCH MUCH LOWER, and so are RENTS !!!!

http://www.youtube.com/watch?v=QjY8xVewrPg

Also, Mr. Mortgage on Fannie and Freedie !

http://www.youtube.com/watch?v=WzUjccc9eHQ&feature=related

This guy kicks ass !

Troubled Banks ->Last updated 3/31/08

http://www.geocities.com/tubeguy@rogers.com/troubledbanks.htm

Q: Does anyone have an update to this list ?

52 Cape Cod
Irvine, Ca 92620

What is the deal with that house?