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Even if mortgage interest rates are artificially forced lower, where is the corresponding wage growth in O.C to support *any* kind of price increase?
If they ever start giving out Academy Awards for YOY bullshit artistry, the California Association of Realtors and “economist” Leslie Appleton-Young would be nominated in all 10 categories.
NAR, is now a new age movement channeling “hope”, but as usual, there is no change.
I need to make a NAR sign for my next Occupy march right here in Irvine, see you there Saturday
Thank You NAR
“Bought in 2004 with 20% down, still underwater, banks got bailed out, I got sold-out”
You were sold-out? How much responsibility did you have in your decision to purchase in 2004 with 20% down?
I call BS! People who put money down - especially 20 percent are our allies not enemies.
Bad decision for sure but, these are the ONLY people that deserve a break!
BD
I don’t think it was a bad decision. How in world could I possible judge someone else’s decision to buy or no buy a home? We bought a home recently and I could care less what anybody else thinks. I was just curious that if Swiller thought that he was “sold out” into buying his home, how much, if any, responsibility did he have in his decision?
I know the market value of the home we just purchased will decrease, and I fail to see how any of the “it’s a good time to buy” morons have any responsibility in my decision. And we put 100% down.
Awgee, the system has been prepetrated by fraud. How in God’s green earth you can even come here to this site and not understand that, I fail to comprehend.
Aye, I already know your judgmental, haughty attitude so I do not expect any compassion OR understanding from your type, after all, I’m a scumbag according to your words.
I got f#$#%# by a system of fraud. Yes, I made the decision, yes I was suckered into it, which makes ME a sucker. Yes, I’m a tool for allowing it to happen, but it doesn’t change the fact the banks got bailed out, and I got financially sodomized.
It’s ok though, I own no credit cards, nor will. I also do not use banks, and use my credit union. In addition, I use CASH, so the financial basta#ds do not make money for nothing on an electronic transaction. Oh, in addition I cancelled my cable TV and cell phone. When I get raped I will fight back, and this fight will now last for life. F U banksters.
Funny 2% protest sign
http://totalbuzz.ocregister.com/2011/10/24/richest-1-get-poorer-sort-of/70413/2-percent/
Calling a bottom is equivalent to saying that prices will go up soon, usually with only faith as evidence.
I’m hoping my market stays pretty flat, but there is no reason for me to expect appreciation. You can get new models similar to my home for about what I paid. You can also find homes in construction where you can pick your finishes. My home will not command a premium over the new homes, and the prices those new homes command will set the market for mine.
You guys remember the infamous “ALT A TSUNAMI/reset” chart?
http://mortgage.ocregister.com/2009/05/20/loan-reset-threat-looms-through-2012/10791/
The theory of early 2009 was that nothing could be done to stop it, and by the time that wave peaked in late 2011, we bears would be swimming in inventory at firesale prices.
Ahh memories…
The bears were right too. Most of the people in the reset chart have defaulted, and they now squat in shadow inventory. The only thing the bears got wrong is what the banks would do with the inventory. Few anticipated banks would allow widespread squatting. I didn’t.
“The only thing the bears got wrong is what the banks would do with the inventory. Few anticipated banks would allow widespread squatting. I didn’t.”
Actually, there were quite a few who saw that once MTM was suspended and anticipated that the whole “2nd wave” wouldnt materialize as such. After that was the case, I always wondered why the bears continued to insist it would still be a huge 2nd wave tsunami hitting in late 2011. Dr. Housing bubble still cant bring himself to admit this…
Most of the comments I read that stated the ARM resets would not be a big deal were focusing on the low interest rate environment. If people face resets during a time of low interest rates, it merely kicks the can down the road. It’s the recast to a fully amortized payment that is the real problem.
I don’t recall anyone making the argument that mark-to-fantasy would allow the banks to create shadow inventory from the reset/recast people. That’s not to say nobody made that argument, but as someone who focuses on this issue every day, I didn’t come across this argument myself which leads me to believe it wasn’t a widely held opinion.
Of course, the banks have created a huge shadow inventory, and the wave is being held back and metered out over time. With that level of overhead supply, it’s hard to see how prices could go higher.
I don’t recall anyone making the argument that mark-to-fantasy would allow the banks to create shadow inventory from the reset/recast people. That’s not to say nobody made that argument, but as someone who focuses on this issue every day, I didn’t come across this argument myself which leads me to believe it wasn’t a widely held opinion.
I dont recall the name I was using then, but I stated that here, on Dr. H, JTR, Westside meltdown, chuck ponzi’s site, etc. At the time, my minority opinion was shouted down by the masses, accusing me of being a knifecatcher, realtard (tm), and various other sundry labels, so perhaps thats why you dont recall it.
“Of course, the banks have created a huge shadow inventory, and the wave is being held back and metered out over time. With that level of overhead supply, it’s hard to see how prices could go higher.”
Agree. Ironically, this admission of yours a mere 2 years ago would have been met with the same sort of disdain, contempt, etc. that disagreed with the early 2009 consensus that “housing prices are going to crash back to oblivion” levels in the very near term.
Also, I dont think you did this here, but I do recall other sites simply deleting my posts…and when I asked why, I was told my thought was “nothing but bullish spin”. Man, the myopia of the day was astounding.
Back in 2009, we all came to the consensus that real estate would not go up, and at best stay flat to declining slowly for years to come. So 2009, not a good time to buy because of all the downside risk with no chance of going higher.
Now it’s almost 2012, and I still think real estate won’t go up…and will stay flat to declining in the years to come.
I was not shouted down..dunno what ur talking about.
“I still keep a toe in the water of the land development industry, and many developers are starting to prepare to deliver product again. Many of these developers are anticipating a resurgent new home market… in 2015” Resurgent? Really? Developers have always been and will always be “criminally optomistic” 6-7 years of gloom for 3 years of sunshine. Right now land purchase prices will force them to deliver product that is still priced too high for folks to be able to afford.
“Right now land purchase prices will force them to deliver product that is still priced too high for folks to be able to afford.”
Yes, that is a big problem. The volume of raw land transactions is still very low because the demand is mostly long-term land bank type transactions. I just had lunch with a developer a couple of weeks ago who has spent about $40M of his $100M available capital, but he hasn’t bought anything since last October because the asking prices still don’t make sense. He is also the one who relayed to me that since so little work has been done on long-term entitlement projects over the last few years, there could easily be a shortage of finished lots in Riverside County in 2015. Depends on sales, of course.
“The local economy is doing somewhat better than elsewhere in the state and this should carry into next year, and the share of distressed sales is among the lowest in the state at 32% in July compared to 35% a year earlier, so county home sales should improve by a bigger margin than the 1% gain for the state.”
Nearly one third of all homes sales in OC are distressed, but somehow these clowns spin that into something positive. These guys are no better than heroin dealers, buy my drugs they won’t hurt you…I promise!
Regarding the point of “Cooler heads do prevail,” you should be aware that Congress is preparing to re-increase the FHA conforming loan limit:
http://www.housingwire.com/tag/conforming-loan-limit
Although it has not passed yet, there is a good chance it could due to political desire to “help homeowners” - if you think we should continue to let markets deflate please write your congressman to ask them to not increase the FHA loan limits. In particular, our Irvine Rep. John Campbell (R-Calif.) has introduced his own bill to restore the FHA increased limits.
Oh the irony - areas that need the most help in allowing prices to return to affordable levels have legislators who want to help inflate prices.
Prices will stabilize in Irvine because the state AGs’ settlement with the banks is going to result in widespread rate reductions for qualified underwater borrowers thereby slowing the strategic default rate - at least that’s what I’m hoping for…
The key to this as viable is “qualified underwater borrowers”....the program as I’ve read about requires that you be current on your mortgage and all other debts. Properties don’t become ‘distressed’ until payments are delinquent. All the interference by government is only making the situation worse. If TARP could have “taken care of the toxic mortgages”, it would have. But that was not possible.
I think you’re referring to the revised HARP that allows qualified borrowers in Fannie/Freddie loans to refinance regardless of LTV. That will “help” (i.e. prevent) a lot of prospective strategic defaulters. However, the conforming loan limit was lower before the Recession. We bought in 2007 when it was ~$417K in Irvine and therefore aren’t eligible.
I’m referring to the state AGs who have been negotiating with the big banks/servicers over many issues. It’s being reported that part of the settlement will require banks to reduce the rates (not refinance) on mortgages they own. Most mortgages were securitized, but many seconds (purchase, refis, and HELOCs) were not and are owned by the big banks.
I’d even accept a rate reduction and give my bank an accelerated payment schedule. e.g. “Reduce my rate to 4% and in exchange I’ll double my payment.” BoA declined this offer a year ago, but times are changing…
Strategic defaults won’t slow until there is some level of appreciation. Not likely anytime soon. If you owned 100 shares of Netflix today, what would you do?
Fair point, but not a fair analogy. I can dump my Netflix shares and deduct the loss - my life doesn’t change. I can dump (stop paying) my mortgage - my credit will be shot and I’ll have to move as quickly as six months.
I don’t need appreciation to discourage me from strategic default. If I received a “small” concession like my rate being reduced to 4-5%, I can reasonably say I would not strategically default (barring another 25%+ drop in value).
(A rate reduction would be a pretty big loss for the owner(s) of my mortgage, but relative to their risk right now, it would be a small concession.)
The point was….there has been a paradeim change in the way and reasons why folks buy homes. Their attitude, fostered over the last 35 years I have been involved in the business, is that “real estate always goes up”, and you will always make money investing in a house. The part that got lost in the cocktail party conversations about “how much is your house worth this week?”, is that all real estate is a long-term investment. The stock market, commodities market are for short term and speculation. Neighborhoods grow communities and need stability. In 1980-82 I was selling homes to folks who camped out in the parking lot of the sales office to buy there at 14% interest. What would that do to today’s market?
Dr. Housing Bubble reported that the Senate has approved reinstatement of the higher conforming FHA loan limits for high cost areas.
I haven’t seen any reporting of this in the MSM, but did find it reported on a congressional website. I hope I’m missing something, but this and the proposed sale of residency to foreign buyers of property at 500k and up is starting to mkae me feel a little sick.
WTF.
http://www.doctorhousingbubble.com/trifecta-of-keeping-the-housing-bubble-inflated-in-pocket-markets-–senate-votes-to-reinstate-big-loan-limits-pushes-visas-for-wealthy-foreign-home-buyers-and-artificially-slams-rates-lower-t/
http://bradsherman.house.gov/2011/10/congressmen-miller-and-sherman-praise-bi-partisan-senate-approval-of-higher-conforming-loan-limits.shtml
Senate approved the amendment of HR 2112, which is a procedural event and is a proposal to change the law. Both houses still need to pass the bill which the president may or may not sign into law.
However, such events can gain momentum and be egged-on by lobbyist until it becomes law.
Similarly, the foreign $500k proposal is only a bill that was recently introduced by Sens. Mike Lee, R-Utah, and Charles Schumer, D-N.Y. - thus if you disagree with such proposals, you should write your congressmen.
I always *used* to say “It doesn’t matter how good or bad things are they will never stay that way”
I don’t say that any more.
But let’s be honest, can anyone foresee anything that is going to happen within the foreseeable future that could even prop up property price in the OC, never mind cause them to start to rise?
I work for a large manufacturing company in Irvine, I work on the front line and I can tell you the future is looking more and more dismal every Day… we haven’t had anything but bad news, furloughs for some and cost cutting measures for the last six months.
The NAR don’t live in the real world so how would they even know?
NAR must live in the real world: How can they not see the decline in dues and membership? How can they not know that many former Realtor® have moved up into higher callings such as armed robbery, and extortion, with some even working as methamphetamine-compensated sexual service providers?
IR,
an update on one of your older posts: “Gatsby’s Egg”
http://www.irvinehousingblog.com/blog/comments/19001-antioch-irvine-ca-92603-turtle-rock/
this house was recently sold for $982,500. It was originally listed for $1,258,000 in Dec. 2009.
Thanks. That’s a great find. So much for their $300,000 in improvements adding value.
Realtor in Turtle Rock told me most people are looking for tear downs. Advice was to not do any improvements whatsoever.
It’s a 1969 house, so would need a lot of upgrades for a $1 million ask.
Note that it has a real lot: 8,900 square feet.
I agree with Duran’s comment above.
The NAR really needs to pick up the phoen and talk to prospective clients more. They seem out of touch with these conclusions (and instructions). Of course, recommending caution and waiting to buy is not something in the NAR marcom repetoire. If they’re not instigating a call to urgency, then it’s considered a failure of the NAR marketing and economics team.
Even for those working in local companies and industries in OC where things are doing relatively or surprisingly well in 2011, most of those same businesses already have or still are slashing expenses, delaying important capital investments in equipment, and/or cutting workforce. In my work I sense that companies are becoming extremely caution/bearish as 2012 nears.
The main area where spending on capital investments has increases noticeably is for government related projects. But, uh…I guess we all know who ends up paying for that…
One of the fortune 500 companies in the Irvine area is doing really well…and they just fired 5% of their work force…U know gotta pay the shareholders….
But really companies aren’t there to give people jobs..they are there to make money..so I ain’t mad atchoo.
$487/mo HOA fees?!
The condo listing says HoA fee #1 is $395 and HoA fee #2 is $82, totalling $477/month.
Note the view is peek-a-boo: ie, if you rent a cherry picker, you should be able to see some waves in the distance.