Login
Subscribe
Recent Comments
- zovall on A Review of The Field Tract at Lambert Ranch
- Lee Campbell on Uncovering the History of the Secret Garden
- Kelja on Uncovering the History of the Secret Garden
- Sylvia Walker on Irvine Housing by the Numbers - May 2012 Update
- Casual Observer on Irvine Housing by the Numbers - May 2012 Update
- Astute As It Comes on Open House Review: 35 Bella Rosa
- Sylvia Walker on Open House Review: 35 Bella Rosa
- Darin on Open House Review: 35 Bella Rosa
- Sylvia Walker on Investors Are Busy in Irvine's Low-End Housing Market
- Casual Observer on Investors Are Busy in Irvine's Low-End Housing Market
Recent Posts
- A Review of The Field Tract at Lambert Ranch
- Open House Review: 34 Redwood Tree Lane
- Uncovering the History of the Secret Garden
- Closed Sales from 5/10/2012-5/16/2012
- Open House Review: 52 Secret Garden
- Irvine Housing by the Numbers - May 2012 Update
- Paired Living with Privacy in Woodbridge
- Beige Ruth Sisters
- Closed Sales from 5/3/2012 to 5/9/2012
- Open House Review: 35 Bella Rosa
Categories
Archives
- May 2012
- April 2012
- March 2012
- February 2012
- January 2012
- December 2011
- November 2011
- October 2011
- September 2011
- August 2011
- July 2011
- June 2011
- Rest of archives
Browse Homes
Irvine Homes
- Airport Area Homes
- El Camino Real Homes
- Northpark Homes
- Northwood Homes
- Oak Creek Homes
- Orangetree Homes
- Portola Springs Homes
- Quaill Hill Homes
- Rancho San Joaquin Homes
- Turtle Ridge Homes
- Turtle Rock Homes
- University Park
- University Town Center Homes
- West Irvine Homes
- Westpark Homes
- Woodbridge Homes
- Woodbury Homes
Newport Beach Homes
- Newport Coast Homes
- Crystal Cove Homes
- Corona Del Mar / Spyglass
- East Bluff / Harbor View Homes
- Lower Newport Bay / Balboa Island
- Balboa Peninsula Homes
- West Bay / Santa Ana Heights
- West Newport / Lido Homes
Other Cities
- Aliso Viejo Homes
- Anaheim Hills Homes
- Brea Homes
- Costa Mesa Homes
- Coto de Caza Homes
- Dana Point Homes
- Huntington Beach Homes
- Ladera Ranch Homes
- Laguna Beach Homes
- Laguna Hills Homes
- Laguna Niguel Homes
- Lake Forest Homes
- Mission Viejo Homes
- Orange Homes
- Rancho Santa Margarita Homes
- San Clemente Homes
- San Juan Capistrano Homes
- Santa Ana Homes
- Tustin Homes
- Villa Park Homes
- Yorba Linda Homes
Contact
.(JavaScript must be enabled to view this email address)
Foreclosures
Housing
- Talk Irvine
- IHB Forum Archive
- OC Housing News
- Coto Housing Blog
- Housing Kaboom
- Patrick.net
- Housing Chronicles
- Housing Doom
- Dr. Housing Bubble
- Manhattan Beach Confidential
- Burbed
- SoCal RE Bubble Crash
- Professor Piggington
- Real C'ville
- Westside Bubble
- Bubble Meter
- Portland Housing Blog
- Sacramento Land(ing)
- OC Register Blog
Econ/Finance/Other
- Calculated Risk
- The Big Picture
- Economist's View
- Mish's Blog
- Matrix
- Bakers' Stock
- ML-Implode
- Eschaton
- Best Mortgage Rates
- Crackerjack Finance
Latest REOs
- $199,900 :: 3125 Watermarke Pl, Irvine CA, 92612
- $349,900 :: 10 Greenleaf 16, Irvine CA, 92604
- $439,900 :: 61 Olivehurst, Irvine CA, 92602
- $889,900 :: 14 Upland, Irvine CA, 92602
- $429,900 :: 56 Great Lawn, Irvine CA, 92620
- $465,000 :: 212 Garden Gate Ln, Irvine CA, 92620
- $329,000 :: 1006 Terra Bella, Irvine CA, 92602
- $579,900 :: 8 Star Thistle, Irvine CA, 92604
- $750,000 :: 69 Lakeview 6, Irvine CA, 92604
- $499,900 :: 84 Deermont 51, Irvine CA, 92602
IR,
We should be the ones thanking you for writing this blog. You have helped a lot of us, myself included, to make sense of the Great Real Estate Bubble and prevent ourselves from mortgage slavery and financial ruin.
I only see positive outcomes for all of your research and hard work on this blog, and perhaps a New York Times best selling book!
On a different note, I’m still amazed how builders can grow tenfold in a few years, have the resources to employ professional market analysts, and still get caught with their pants down and having to take hundred million dollar losses when the music stops. Perhaps they drink the kool-aid just like everyone else? Or do the people who are running the show not even care because the potential payoff is greater than the assumed risk?
“Perhaps they drink the kool-aid just like everyone else?”
Believe it or not, this is exactly what happens. The builders do surprisingly little objective market analysis. The do purchase many market studies, but these are generally written by consultants helping facilitate a decision the builder has already made. It is easier for the builder to get both internal and external financing for a project when there is a third party providing supposedly objective information. This is a step up from the seat-of-your-pants methods of years gone by, but it still is not antidote to kool aid intoxication.
I, too, have found myself wondering repeatedly why homebuilders - who ought to know better, shouldn’t they??? - get caught with their pants down. Is it unreasonable to expect them to be able to foresee a peaking bubble and pull back? Are they like a freight train, which takes about a mile and a half or so to come to a full stop if necessary? Or are they simply koolaid-intoxicated?
I wonder about these things when I see Pulte/Del Webb continuing to work on and open developments 60 miles outside of Phoenix, long after everyone and their brother knows that the bubble has popped. I guess I know the answer now - even the big boys, who by all rights ought to have access to the kind of inside information which us proles would never see, just don’t know when to walk away from the table.
This is actually a whole interesting discussion. How groups of individuals come to the wrong answer/decision is a whole matter of study. There is a tendency to dismiss opinions of people outside the group. There is a hesitancy to listen to dissenting opinions. There is presssure on members not to disagree. Excessive confidence in the members decision making skills causes members to shorten the search for information and alternatives.
Why should homebuilders be different than any other group?
Great point, I see it all the time in corporate America; it also apparently affects the President.
Schiller (yes, that Schiller) wrote an article on just that subject in this month’s Atlantic.
http://www.theatlantic.com/doc/200807/housing
I made a post a couple of days ago about how I thought Beverly Hills was a little better than Irvine and Irvine was better than Bakersfield and Bako was better than anything in Arizona. Real estate values be dammed, IMO Arizona just sucks. I don’t think there’s a real premium or penalty one way or another for the location. I have some ongoining allergy problems that make my existance in Arizona very unconfortable.
I have trouble in Bako too.
Its very simple, greed. If you look at corporate america all the rascals that took part in the housing buble made their millions and for the most part, do not have to pay it back.
They take the money and defer the consequences as long as they can, if they lose their job…..big deal, they cashed their stock options.
The herd mentality insulates any one particular group or individual from scrutiny.
Its the little guy that ends up with the sht sandwich, dont believe me, look at prices for small starter places in Santa Ana and the like, they are down 40-50% already.
It seems like living in AZ could be nice for a while, but I just read about how AZ imports *all* it’s drinking water (I’m sure there are some wells, but municipally).
That certainly makes me think twice about buying anything there! Georgia too, after that big drought. Especially out in the boonies, water issues may be adding to the price declines.
I understand your allergy issues—I’m allergic to South TX (Houston, College Station, that area). Once I moved, I haven’t had allergies since.
Actually California imports all it’s water. From Arizona, Oregon, Washington and beyond!
OK, it gets old posting about water (although it is certainly relevant to housing). California is a very large and complex state; most of the northern half of the state uses Sierra Nevada water (a threatened supply what with this year’s very low snowfall). Southern California uses a good deal of water from the Colorado River, amount fixed by interstate compact. Arizona has in recent years also begun to use Colorado River water (remember the “Central Arizona Project”(CAP)?), again, the amount fixed by interstate compact. Southern California also gets a good deal of water from instate (although there are recent complications, such as L.A. County’s commitment to refill the Owens River), as does Arizona—much of the water for the Phoenix area is actually from the Salt River drainage system. In Arizona, there is also considerable use of ground water, heavily regulated; the CAP was intended to permit banking of the irreplaceable ground water. Orange County is now recycling effluent into its potable water system, which is not yet being done anywhere in Arizona, although it’s coming. Southern California and Arizona are both very drought-prone and the eastern half of southern Arizona actually has equal or higher rainfall than southern California. Everyone needs to be careful and the sight of the artificial lake in front of the model condos makes my blood run cold, frankly. Everyone would do well to educate themselves about the actual situation and behave accordingly, rather than repeating strange rumors.
Nope.
California gets a lot of its water from the Sierra Nevada and from rainwater.
Irvine and OC, of all places, inject rainwater and recycle a lot more water right into the aquifer.
I think that is correct. The US business model is for companies to grow continuously and kill off or take over every smaller (or bigger) competitor that they can. The people at or near the top of these ever-larger companies take out a big part of the profits and equity of the companies ($ millions and way, way up). They have every incentive to keep skimming that off up to the last second. When the crash comes, maybe the company goes bankrupt or they get fires/laid off but so what? Retiurement at age 40 with several hundred millions is feasible.
The people lower down who don’t get the big pay, stock options and bonuses get screwed, but again so what from the perspective of the guys at the top. There are fools and suckers nicely distributed throughout the system. Not to mention a government and media who glorify, protect and coddle anyone who finds any way to amass huge wealth.
Southern California does not count local rain water in its planning, so perhaps you could mistakenly say all of its water is imported. But it is mostly imported from the north, and groundwater is very important too. The amount of water imported from other states is not that high, but south OC does get most of its water from the Colorado river.
The problem is that the builders have a vested interest in not pulling back.
Once they’ve committed to buying a large amount of land for (probably) inflated prices, it is in their best interest to keep the party going at least until the inventory is gone.
Even if they see the bubble bursting in a year or two, what choice do they have?? They have a mortgage to pay too. They have to keep drinking the Kool-aid as long as possible to recoup some of the losses they might incur down the road.
The builder world is not a big world. No one wants to be the kill-joy who started reducing prices first and “ruined” the party for everyone else. There may be a small incentive to be the first to reduce prices, but it’s a house of cards and the advantage of being a first-mover dissapates quickly once everyone does it.
So, it’s logical that the builders - not in collusion, but more in a pack mentality - all try to keep the party going as long as possible.
Now this is not letting them off the hook for buying all the land in the first place. The supply/demand analysis was obviously wrong. That’s where the Kool-aid can be found - in acquisitions, not in selling the finished product.
Yes, this is a big problem for the builders. I can attest to their myopia with a personal anecdote. Back in January, I interviewed with KB Homes for a Financial Planning and Analysis position with them. I am a CPA, PMP and have a Masters degree and spent 10 years in manufacturing in a Finance and Accounting roles. I met all of their qualifications according to HR. They didn’t want a second interview. Guess why….....they wanted someone who had worked in the housing industry. Stupid move on their part because that is what got them into this mess.
JWM,
Not selecting you was a blessing in disguise. KB has a horrible reputation in the biz.
FYI here’s a reference one builder that comes to mind: Standard Pacific. They only lost $767,000,000 in one year.
http://builder-implode.com/ailing/builder_StandardPacificHomes_2008-02-21.html
Let me echo the sentiments of Priced_Out_IT_Guy in saying we should be thanking you.
Following on the theme of group pressure and consensus, I heard an interesting version in 2006 when I was telling bubble skeptics prices would drop to 2003 levels or lower. “How could this much institutional money be wrong?” he said.
My reply? “How did the dot com bust happen?”
“But real estate has never gone down on a nationwide basis”. A moderately defensible statement in 2006, but historically inaccurate when following the same homes.
IR,
Count me in as another thankful reader. You have been the perfect antidote to the Lereahs, NARs, CARs, and “economists” who incessantly wanted me to risk my retirement.
It will almost be sad when it is over and we can buy a house again.
IR, I know you’re going to get sick of the congratulations, but let me add mine to the pile. You’re not just helping folks in Irvine to make the right decisions, but you’re making a lot of us outside of California consider our options, too. My wife and I spent the last six years being told “You have to buy NOW NOW NOW, because it’s never been a better time to buy” by our families, and now I look at the aftermath. (Her brother had a gigantic custom home built right at the height of the bubble, and it’s already dropped about 40 percent in value, partly because it’s ridiculously large for any family smaller than the Waltons, and partly because it’s so far away from civilization that you need a full tank of gas just to get back and forth from the grocery store.) We were about ready to bite on the meme that “prices are going down, but that’s why you want to buy now”, and your blog warned us away. Again, thank you.
IR’s analysis has not only helped US residents. I was thinking it was time to move back to the states from overseas and buy a house in 2009, but I am convinced now that prices won’t bottom till 2010-12, and furthermore that they’ll limp along at the bottom for quite a while rather than rocketing back up and pricing me out if I don’t jump. I have a great lease here in Singapore, and I am staying put for the foreseeable future. if IR were to receive 1% of all the money he’s saved people, he’d probably be able to buy Mrs. IR that custom 10 million dollar home she was wanting.
Is anybody else celebrating the ouster of Lehman Bros.‘s underqualified CFO, Erin Callan? She presided over the loss of $6 billion, if memory serves, largely due to investment in idiot mortgages. Probably the hottest CFO in the F-500, but she is a flat-out failure like any fired McDonald’s employee now.
It appears to me like she is being blamed for all the mistakes that were made before she took over, and she is just the scapegoat.
She had the job for six months. She is simply the fall guy (person). She still lied to the public for six months rather than leave the position so IMO she deserved the fall guy chair.
Note: She was the CFO(Chief Financial Officer), not the CIO(Chief Investment Officer). As such was should be concentrating her efforts on matters of accounting, compliance, providing capitol resources, and being a spokesperson. While I am sure she some input on some of the decisions made to walk into what ending up being a chainsaw, I would not place primary blame on her.
Who knows, maybe she second guessed some of the decisions made and this is payback for some of enemies made. Stranger things have happened.
Either way, she was a great high profile scapegoat.
ooooooooooh! What a face !
Im 27, and after 6 beers I would DO her !
Oh yeah ! I WOULD DO HER !
YEAH ! OH YEAH baby!!!!
Ok, its Friday night, and Im bored…
Ohhhhhh Misses Robinson… - The Graduate.
There are a number of times when I almost said, “OK, Let’s do it!” But your blog brought me back to reality.Like others, your input has saved me amount well into the 6 figures. My friends who are renting like me, read your blog daily, waiting for you to say,“The time has come!” Thanks again, IR.
BTW, my friend who bought at Portola Springs stayed at a hotel for 3 days after the Santiago fire was put out because the smoke did not go away. The concave structure of the development has her very worried about if there’s a flood. The water will be trapped in just like the smoke.Not sure if her worries are legit, but sth. to think about.
Oh, speaking of “Porto Poty” Springs, dont forget about the Orange County landfill/garbage dump thats less than 1 mile away as well. And people wonder why the austic birthrate in Clownifornia is sky high.
Clownifornia LMAO
Don’t you mean Mexifornia?
Ay Caramba.. that is really FUNNY. ;-D
Porto Potty Springs !!! HAHAHAHAH ROFL !!!!
Hope no one is drinking any water out of the “springs” there…hahhahaha
CLASSIC !
We looked at Portola Stinks about 18 months ago and thought, “Nice (overpriced) houses, horrible location.” Who thought 1/2 mile from a garbage dump was a good place to put million dollar houses? On a warm day you can, as the Realtard put it, “Enjoy the gentle breezes” carrying the stench of decomposing baby diapers, disgarded dog feces and rotting garbage.
Of course, there is also the constant drone of the 241 toll road just a couple hundred yards away. But don’t worry, there’s a CVS Pharmacy down the road where you can get your Prozac after it drives you crazy.
And the diesel fumes blowing off the 241 as 18-wheelers struggle up the incline belching toxic black smoke—that will help mask the stench of the garbage dump. Not only will you suffer the downside of the 241, they added insult by not having access from Portola Parkway. Last I looked you couldn’t even get on the 241 from Portola Stinks (enjoy the traffic!)
Yes, Portola Stinks is truly one hell hole to avoid.
We looked VERY seriously at this exact neighborhood ourselves a little over a year ago. Very nicely done homes (if you pour $80K in upgrades of course) and we loved the layouts.
Just couldn’t stomach the $350/mo combined HOA’s and the 1.8 Tax/MelloRoos rate. Over $1400/mo. combined on top of the ole mortgage. Just couldn’t do it and that was before I started really analyzing the pricing. Now these joints are sitting and rotting and the poor bastards that bought ‘em are sitting on ticking time bombs.
I do still like the development but not at prices any where near where they are now and certainly not at max tax rate and nearly four bills a month for HOA. Sorry Brookfield.
thank you. Your work on this blog is deeply appreciated.
IR,
I have been reading this blog for two months now and I was compelled to make a comment now. THANK YOU! Yes, you are going to catch some poop about doing this, but you are protected by The First Amendment to the Constitution of the United States which declares that “Congress shall make no law ... abridging the freedom of speech.” Keep writing, and we will keep reading.
IrvineRenter,
Will you be the first to actually “call it” when this does (someday) finally turn around?
I certainly won’t be the first because the market bulls call the bottom every couple of months or so
Seriously though, the best work I have seen on forecasting the bottom has been done by Rich Toscano over at Piggington.com. He has been tracking the ratio between NODs and total sales since the early 90s. When this ratio is below 2 prices go down, when it is above 2, prices go up. When the resets have run their course, and the NODs stop, we will be at the bottom and not before then.
Let me translate that along with the Prime reset chart from a couple days back (http://www.irvinehousingblog.com/blog/comments/a-brief-history-of-kool-aid/#more)
June 2012 at the earliest. June 2013. More likely. And I suspect 6 months form now, we’ll have a new chart out showing the 2008 buyers are DOA come 2013 too making it 2014.
Repeat 2014
Although the nominal ‘bottom’ may be winter 2009/2010 with the market skidding along it for a long time. Rental parity is rapidly approaching. Although the late increase in mortgage interest rates are going to hurt the housing market even more. And I still suspect when all the empty houses come off the market back into circulation, we’re going to see rent decreases and a very soft rental market.
Here is a timely note from Calculated Risk:
http://calculatedrisk.blogspot.com/2008/06/realtytrac-foreclosures-continue-to.html
“Foreclosures will account for 30 percent of national home sales this year”
That puts the sales to foreclosure ratio around 2. As long as foreclosures are 30% or more of sales, prices will fall.
I have been surprised there are already some “good buying opportunities” popping up in South OC (in low-end condo complexes that most people wouldn’t want to own in) - meaning the asking prices make it possible to buy for the same or less than it costs to rent.
It will be interesting watching this spread to many more properties around here.
I hope IR is still blogging then. He will be several years closer to retirement by that time.
IHB thanks from me and a few friends to whom I occasionally rant quoting your blog and others of your ilk. Really I like yours the best and I read it every day for more than a year now. You offer sage financial insights, and balance it with good humor—all very well written too.
Still, our bubble story is not over ‘til it’s over. I mean anything can happen in reality. All this great data and analysis offered from IHB and others, and it is an incredibly rich public service, is based on the best of what is known and historically true.
However in reality, for example, wealthy Canadians and possibly even “sovereign funds” managers can come in from out of the USA where there is a huge additional discount from the weakness of the American dollar. They can buy real estate en masse. To some extent this is happening now too. Only time will tell if they can actually shift the paradigm away from our normal mechanisms of recovery. Thanks to our lending debacle and mortgage based securities such financial entities stand to lose over a trillion dollars collectively and they are looking for something, anything, to recoup their losses.
Notions like that tempt me to discount a portion of what we expect to be true and watch for an early bottom even though the next tsunami of loan rests are surely coming in a huge way next year. There’s a lot of institutional loss going on here and you know they aren’t going to just lie down and take it.
For what it’s worth.
There’s something happening here
What it is ain’t exactly clear
There’s a man with a gun over there
Telling me I got to beware
I think it’s time we stop, children, what’s that sound
Everybody look what’s going down
There’s battle lines being drawn
Nobody’s right if everybody’s wrong
Young people speaking their minds
Getting so much resistance from behind
I think it’s time we stop, hey, what’s that sound
Everybody look what’s going down
What a field-day for the heat
A thousand people in the street
Singing songs and carrying signs
Mostly say, hooray for our side
It’s time we stop, hey, what’s that sound
Everybody look what’s going down
Paranoia strikes deep
Into your life it will creep
It starts when you’re always afraid
You step out of line, the man come and take you away
We better stop, hey, what’s that sound
Everybody look what’s going down
The U.S. is the richest country in the world. There are not enough wealthy people outside the U.S. to come and displace a large fractional dip in purchasing power. Even if they were so inclined. I can count on half the fingers of one hand the number of people I know who own property outside the U.S. Why buy something you’ll hardly every use. In sum, I think the whole foreign investors theory is, while not bunk, not of sufficient force to even move the needle a tiny bit in the other direction.
I enjoy the read at IHB each day. Thanks for all your diligence and energy spent on your blog, IR.
I hope your book is a success and I expect to buy a copy as a way of giving a tiny bit back in return for what you’ve given to me as a reader.
I recently recommended your blog to a woman at Bev Mo’s last Sunday sparkling wine tasting. I hope she’s reading now. She had been contemplating buying over in the Columbus development but was hesitant. I assured her that she did the right thing by not buying right now and to check your blog out.
I also recommend your blog to RE agents that I know. I love knowing that they are secretly reading it
Can you feel the love?
Let me add my “harumph” (good job) all the way from Bangkok.
I sold my Woodland Hills house in 2005, banked the proceeds and am now a “poor” English teacher eating great Thai food at a buck a throw.
Point being I do realtor.com searches, see appealing stuff in Ventura County or on Cape Cod (I don’t have Irvine kind of money) but then read the IHB (religiously) and remember sometimes the best tbing to do is nothing.
Thanks IR.
I am totally jealous! I have not been able to convince the little lady to leave the rat race and go teach English. I am in the same situation, renting, with sale proceed sitting safely in the bank.
My bro is in Thailand (BKK) having a grand time. While I get stuck in Irvine, eating fake Thai food that cost a mint. He enjoyed rubbing it in every chance he get.
Congrat, you are a lucky dude!
A thank you from me and my family too, we were ready to buy in mid 07 and almost bit the bullet, it it werent for this blog i would be in the hole for at least 60k. Thanks for doing your part to restore the sanity.
BTW IR mentioned that you were going to featured in a magazine, did it happen?
mike
[removed]ln(‘Hi’)
I am mostly a quiet reader of this blog, and just want to pile on the thanks to IR for this wonderful blog. Irvine has always been a bit of mystery to me, why it commands such a premium over neighboring communities - and some Irvinites actually get kind of obnoxious about it. But this blog shows that just as a rising tide lift all boats, when the pull the plug Irvine, just like everyone else, will be going down the drain. Maybe one day I’ll be an Irvinite too - but not too soon.
Hey IR…
What’s up with the book??? Have you had any luck shopping your proposal around? Any bites from publishers? Do the editors want you to totally revamp it?
I await the day that it hits the market. I think I’ll pay extra for you to ship me an autographed copy!
I have a small publisher that is very interested in my manuscript. They believe it can be turned into a book in 3-4 months. I am debating whether to keep looking to get in with a major publisher or go with a small publisher that is eager to take on the project. The path of least resistance is to get it published now with the small publisher. Perhaps I should strike while the iron is hot.
I know nothing about publishing, however timing on this thing couldn’t be better. If you go with a small publisher, does that mean you are locked-in? Or could you continue to shop for bigger deals?
I just can’t believe how far up their butts some sellers have their heads. Check this out, on the market for 281 days at a ridiculous price which they then RAISE by $25k.
http://www.redfin.com/CA/Irvine/71-Cape-Cod-92620/home/4794572
$442 PQF.
Quite the deal!
The taxable value ($245k) seems about ok.
Joining the choir here…
I started reading IHB in Jan 07 when I was searching for new insight into why the Irvine housing market was stagnant (& not declining since 2005). Although we made the decision to buy in June 07 after reading IHB daily, the purchase was not made blindly. All of the metrics/tools really aided the process.
The GRM of 160x rent is great. I share it with everyone when discussing housing. It provides the clearest picture of reasonable value.
IR, I have been reading this blog since the late 2006 when I search around for more info real-estate in Orange county particular Irvine and I can not tell you how grateful I am. Not only the daily features writting is informative and interesting, you have been keeping it real, accurate to your prediction but FUNNY as well. The knowledge that you’ve shared on this blog is invaluable to first time home buyers and upgrader like myself. Hope your book will be a success and I too will buy a copy whenever available.
Hello IR,
I have been reading ur blog since Sept 07. I was going to buy a small property in Irvine end of 07 at the insistence of my parents - you MUST buy! B/c of your blog and your analysis i have a better understanding of the buying process in general (such as neighborhood comps and its impact on getting a mortgage) also be able to stood firm on NOT purchasing.
Please keep blogging, your blog is very informative yet not too text book technical. I especially enjoy the objective analysis of how much a home should be worth and not based on the market.
THANK YOU!!
Oh, and the videos, i always thought its quite interesting how u find videos that tie in with the subject of the day.
THANK YOU IR! Your blog and your commenters kept me grounded. I first started doing minimal research back in 2007. I was VERY interested in Watermarke and felt like I could afford a 1/1 at $400K (on a $60K salary….HA!!). For months I just daydreamed (I insisted on having 20% down) but then one day I wondered, what were the reviews of that place?
That was how I found this blog. And that is how I realized, no I can’t afford $400K, and I shouldn’t buy it unless I know I can afford it. This blog has educated me in so many ways. I’m still quite a newbie, but I’m not as ignorant as before!
Praise to the IHB! Stumbled upon this linked from another (now defunct) blog when I was considering a condo in Ladera Ranch.
You and the other bloggers covering the OC have allowed me to not only save money, but my sanity from dumping money into a residence that I would have bought only to “avoid being priced out forever.”
This blog helped me articulate what I already knew, and convince my wife to wait to buy a house. The house we are renting would be about $200k cheaper if sold today, versus its sale price right before we moved in. Partly because of this blog, that $200k is someone else’s loss, not mine.
Many Many Many new apartments were built last few years (just check North park areas, ) and now more are being built in Irvine (check woodbury & portola). Those areas were designed to be either housing, cooperation office or 2 story apartment, not 3 or 4 stories.
Why most other IAC SFH projects are halted. The city councils (We’re missing the legacy) just keep approval IAC request. If the demand for apt are so high, high enough for 3 for stories, if we don’t allow IAC build some apt, then they will build the houses for us.
Maybe we should start an investigation for this.
My close relative own a lot lot of land in one of very desired city (foreigner country) and when they heard IAC story, they just love it (Making money it so easy, I love America).
Bottom line, we should be very careful for a few city councils can has some huge power.
Aye aye aye.
Check out the asking price drop for Irvine (plus surrounding areas) on http://housing-watch.com/
Median asking price dropped $25k in one day. Talk about cliff diving!
Oops, sorry, not one day. One update = from 2 days ago.
OK, I have a request. This post should be renamed the “thank IR” post.
Naturally, I add mine to the list. Only been checking you out for a month or so, but I’ve learned a heck of a lot so far (and, printing out the ol’ rent vs. buy post helped me convince my wife to not be a knife-catcher!)
Regarding this place (or really, mid-county in general)...how far in DO the ocean breezes make it? I live in Fullerton but I’m born and raised in the first house on the coast in West LA…I need breezes! I’m thinking the breezes are predominantly SW/NE (the coastline direction in OC), and get cut off by the mountains past UCI. So, what….NW of Culver? SW of…Edinger? Barranca? Macarthur?
It depends on the day of course, but you get the ocean air west of the 405 quite frequently, between the 405 and the 5, less frequently, and east of the 5 rarely.
OT: Tim Russert, NBC News’ Washington bureau chief and the moderator of “Meet
the Press,” died Friday after a sudden heart attack, NBC News said Friday.
He was 58.
http://www.msnbc.msn.com/id/25145431/from/ET/
That is sad. I really liked him. He and Chris Matthews are the only reporters on TV willing to ask difficult questions. He will be missed.
I heard a story through the grape vine recently I want to share. A couple who has a son my son’s age is getting a divorce. They bought a house in NW Pointe in 1998. Probably paid around $400K. So they put the house on the market last fall. Didn’t get any “reasonable” offers. (According to my source.) So the Dad bought out the Mom at $1.1, and she took her cash to Portola Springs and bought a house there.
How’s that for a couple of kool-aid drinking geniuses? Seems they deserve each other; too bad their marriage failed.
IR and commenters,
Thanks for the education and funny stories.
I bought my old house in 1971 and raised my family there. I was planning on living there till they carried me out feet first. Life is what happens while you are making plans. Then my wife died of some strange disease that I had never heard of. You don’t know how much that hurts until it happens to you.
Long story short: I remarried and moved into the new wifes place and was wondering what to do with the old house. From somewhere I picked up the concept that one should be able to rent a house for about 5% of its value. When I started looking about at house values in my area, it quickly became real that I was not going to rent the place for 5%. This was about 1998 and house prices were going crazy but rents were not. I quickly got a good renter, the daughter of friends across the street. Life was good and the extra income pleasant. As a landlord one becomes more interested in market conditions and I found a link to Calculated Risk where, I think, I found the link to IR. The education I have gained from these two sites is priceless. I did not have a clue about RE, loans, mortgages, default or BK. I coasted through life buying and selling houses as job opportunities happened and never thought of whether I was above water or under water.
Sometimes god protects idiots, little children and Californians. Then sometimes god grinds them to dust.
I coasted thru life on a rising economic tide and all you younger folks are going to need all the help you can get, as provided by the likes of IR and CR, to keep your heads above the economic tidal bore that is rushing down on us.
When this is over and IR needs a new topic to blog on he can switch to covering all the economic scams that will be cropping up to steal the money of old grey hairs like us - reverse mortgages anyone?.
Good Luck to You All
IHB - please make this correction.
Though the address says Conservancy - this is a house that is Manzanita Plan 1 - by Richmond American Homes - NOT Brookfield Homes Paloma neighborhood.
Manzanita’s plan 1 is all very good except the kitchen which sucks - its like the worst tiniest kitchen ever. Even their brand new plan 1s are now selling around 700 - if you put in an offer of 700000 - they wont refuse.
SO please make the correction - why I know is because I’m Palomalove..
IR - I too owe you a personal note of thanks. Words cannot express just how deeply your advice and analysis have helped.
You may or may not recall I reached out to you in a personal note asking advice on a home my wife and I were in escrow on in LF. Our appraisal came back over $60K below our offer. I suspected I was deep into kool-aid intox and my gut was telling me I was pushing a bad deal. You advised that I “beat the seller over the head with the appraisal” and walk if he didn’t come to our new offer. No surprise, he didn’t accept the new offer at appraisal and we walked. Turns out to be the best damn financial decision I ever made! The wife and I are now sitting on our downpayment fund, earning interest and watching the market come to us. For that I (we) are eternally grateful and you’ve definitely got some seriously positive “karmic lottery tickets” coming your way from me!!!
Hi,
I can not explain how grateful we are at meeting and getting to know IrvineRenter and this wonderful, yet sometime snarky group of folks.
Yes, we were qualified to buy in Portola Springs, and was getting ready to purchase in July 2006 for a Decada Plan 4. Sticker price was $790k, with all the options included.
Anyways, fast forward 2 years, and look at how much the prices have dropped. My SO and I wonder if we would’ve been profiled on this website had we bought in 2006.
Keep up the great work IR, and good luck on the book. We won’t be buying until you and Graph say its safe to do so.
Best,
Vicstah
Like the others, I’d like to thank IR for a great blog.
It didn’t save me from buying because it’s been clear to me for a long time that this was a bubble that would ultimately pop, though I couldn’t say exactly when (before). I watched my dad go through the popping bubble of the early 90s, and that made an impression.
I love, however, reading about the tales of woe in the progressing bust of the former bubble. After being shit on by others for not purchasing a home for my family these last few years, it’s nice to be the one doing the shitting.
And thanks from me as well. I won’t have money to buy anything until 2010 or so either way but your blog made me more informed about RE so now I can actually look more rationally when is the best time to buy.
I have never posted here before. I came here from the Housing Panic Blog, I think. This is one of the best housing bubble blogs out there and I read it faithfully although I’m not in the OC.
My parents, like zoiks’ dad, got shafted in the early 90’s housing dip - which looks so tame compared to what is going on now! They bought for $345K in 1988 and when they had to sell in ‘92 due to relocation, they couldn’t. House was on the market over a year (and rented out) and finally sold for, I believe, $355K! Only $10K appreciation after 5 years! What a bum deal.
Except it looks pretty OK compared to what a lot of people trying to sell now might have to deal with…plus they didn’t have some crazy loan that made their payments balloon, forcing them into foreclosure.
My husband and I make a very modest living for San Diego, and we never even considered buying a house during the boom. We didn’t have a down payment saved, and there is nothing worth living in that is 3-4x our income. The funny thing is that if we had actually been aware of all the crazy loan products out there, we might have been stupid enough to get into some no-down-payment ARM for 8x our income. We really did want a house, just thought there was no way.
I am SO GLAD we remained “ignorant” until a couple of years ago, when I discovered the bubble blogs and got a quick education in real estate and real estate bubbles. Now we thank our lucky stars that we rent. We are making plans to buy in a few years, but have NO problem renting for many years to come if it’s what makes the best sense. I do not want to be shackled to the whims of the housing market!
Thanks for the blog and I look forward to more!