Irvine Housing Blog

This is why I liked the google real estate maps.  They would show homes that were distressed or in foreclosure, and also for sale (you could turn the buttons on or off).  I guess they trolled court proceedings to find LP’s and NOD’s (I don’t know what they did in my area because those are harder to find).  You could also get the view of a neighborhood from people who lived in it - knowing that a house had been foreclosed but not on market, a home had been vacant (owners relocated).  You’d hope a buyer’s agent would find that stuff out for you.

How much local control does a bank have with listing foreclosures?  I don’t see the massive delay in this part of NC.  Many of the loans are held by smaller local banks and were small builders that went under.  Where I see the bigger losses are not in the poor sales prices, but the 3+ years of unpaid interest.  I guess when the securing capital on that is a savings account paying 0.25%, lost interest is not a huge deal.

On a purely visceral level, $410,000 for the “median” priced home (even in idyllic OC) strikes me as ridiculously high.

Furthermore, thanks for the update on attorney Pines.  Please keep us posted (although, frankly, I think his 15 minutes are up).

I posted this comment a couple of weeks ago. Somehow it was the one day that PR didn’t stop by and cheerlead. So let’s try again now. At this point, these links are a bit old—and the facts have swung even further away from PR’s orbit:

I’m sure that using actual facts and information is hopeless, but I would just like to point Planet Realty to a couple of links:

http://www.redfin.com/city/9361/CA/Irvine
https://www.wellsfargo.com/mortgage/rates/

So, Mr. Realty, your two big points for months have been 1) The best time to buy in Irvine was spring 2009. Everyone here missed the boat, and 2) Interest rates will continue dropping and get down near 2%.

Ladies and Gentlemen, the clear and unassailable debunking of Planet Realty. Do not waste your time reading his comments; they are simply useless and baseless.

Thanks for playing…

PS - I believe I saw some garbage from PR about how SFRs are still above 2009, at least in Irvine. Really? Playing that game now? When that fails to be true then he can point to certain areas like Turtle Rock. And when that fails to be true he can cherry pick house by house…

I guess the bigger point here isn’t that PR will ever recognize his failures. But the rest of us certainly can and do.

Is the Great Inflation coming this year?

Gas is going into the $5 direction.
Food prices are up 4% in February.

Investing into housing seems to be a sensible decision during inflation.

The house is listed at $499,900 on Redfin. And the HOA is ($264 + $73). Please correct the info.

Looking at the historical home prices it seems to me most of the homes I see post on this blog at $550,000 should probably be about $350,000 once their bubble premium is removed.

I wonder who in their right mind is buying now? You are almost assured a minimum of a 20% loss.

-Perplexed

If the math works, then it may make sense to buy in the face of a 20% drop. If your options are rent for 3-5 years at $2500/mo, or lose $100k in equity over the same time period,I think I’d chose to lose equity as its not real dollars until you sell vs. the rent goes straight into the toilet.

tacoshell:

Your post makes no sense.

Both renters and homeloaners have to pay monthly. The former rent, the latter property taxes, maintenance, insurance, mortgage payment, HoAs, etc.

With 5x DTI, the former pays half the latter, and can move if a job relocation is needed.

How is that “straight into the toilet?”

FYI gang and newbies… you have heard me say this before - ANYTHING that requires borrowed money to buy will get destroyed with inflation. 

Example - buy your 1M dollar house today with 5% borrowed money and sell it a decade later to a person who has to buy with 9% borrowed money.  Yikes… you have owned for a decade and will loose 30%+!!!  $300K to purchase price after owning and paying…. unfortunately in the first decade of ownership in a 30 year fixed mortgage you have only paid about 18% additional in your equity.  So with 20% down (200K) AND another 150K in paid for equity you break even after commission sales!!!  Ohhhh and it wasn’t a burden to your family to be house poor and live one spouses job loss away from default. 

Oh sure… just do it… obviously rates aren’t going to rise, and downpayment requirements aren’t going to rise, and mortgage interest deductions aren’t going lower and conforming loan limits wont go back to 417K (because the rest of the US wants to subsidize stupid CA borrowers of course).... 

Just model best and worst case situation over the next decade!  Remember it’s not the price you buy at!  It’s the price you sell at that matters!!!!

B

Wow… can you imagine what happens to prices over the next decade if we get sustained rate increases and higher taxes with stagnant wages??  Just rent until you can buy for what it costs to rent!!!!  I’m in a gorgeous ocean front condo for 2700 a month but to own it is 4000+ why do it????  Oh… and there is no mortgage interest deduction if you make any real money.  AMT takes that away… so do some math. 

B

Irvine Renter…..your math is bad again today.

Your example shows FHA financing which requires FHA mortgage insurance. Financed FHA upfront mortgage insurance would make the total loan amount $486,744. Monthly mortgage insurance that you omitted from your example would be $361.80/month making the total mortgage payment including escrow impounds for taxes, insurance and HOA dues $3725.80. Income to qualify at standard FHA DTI ratios is a minimum of $144,244/year.

Under your heading of “Cash Acquisition Demands” you have left out the required tax adjustments, initial homeowners insurance and escrow impounds that would add approximately $5575 to the total (based upon taxes paid annually).

Your estimate of $83/month for “Maintenance and Replacement Reserves” is incredibly low for a $500,000 home…....$83/month wouldn’t even cover lawn maintenance and pest control.

“If there were an owner-occupant capable of sustaining ownership, their bids for properties would almost certainly be higher than an investor’s bid.”
Don’t forget that the servicer won’t allow the owner-occupant to bid, they won’t accept the offer.  That would effectively be the same as principal forgiveness or the FHA loan recast strategy the banks have repeatedly said would exacerbate the borrower’s “moral hazard.”  But I agree, that if the owner-occupant were allowed to bid, the bid would likely be much higher than the investors’s and perhaps even higher than the servicer-determined fair market value.