Irvine Housing Blog

It looks like WaPo is reading your blog. Even though they focused on Riverside County they acknowledge your premis that prime loans are the next problem.

“But in October, for the first time, the number of prime mortgages in delinquency exceeded the subprime loans in danger of default…”

And these pearls.

“Real estate became what gold was to the gold mining towns…”

“For a brief time in 2005, the housing market showed signs of cooling nationwide and interest rates edged up. Lenders reacted by reaching out to even riskier borrowers with more subprime and other exotic loans to keep the home-buying frenzy going…”

To bad they did reference your blog.

>>Eleven years of ownership, and this guy thinks his property has tripled in value, and he deserves to make $1,000,000. Why not hang on for 33 years and make $3,000<<

And if compounding was used, the profit after 30 years would have been $13 millions. This property owner would be asking for $13.5 million in 2029.

I’m starting to see that in Texas as well.  My wife and I visited an estate sale on Sunday where the owners had finally given up on selling their house, and decided to advertise, very loudly, its availability to rent.  Well, it was a 4/4, with three of the bedrooms so saturated with mold and dust that the estate sale reps had to light candles in them the whole weekend long to cut the stench.  The master bathroom was completely blocked off and covered with plastic, which helped explain the swamp in the back yard right next to the bathroom window.  The foundation had shifted so badly (a regular hazard in North Texas, where almost everyone is built atop 5 to 15 feet of thick clay over 50 feet of chalk) that the back porch and door to the main living room were folded up like a taco shell.  Oh, and the neighbors were so notorious for tearing down the street in monster SUVs that the owners had to put boulders in the front and side yards to keep fratboys from driving their Escalades and H2s into the house.

The best part?  With the significant damage, the owners still expected a minimum of $3000 per month, which by Dallas standards was possible with normal wages if at least three people pooled together their incomes as roommates.  The owners had held off for too long and demanded too much when the house was for sale, and now the rental was probably going to drop prices for the rest of the neighborhood.  “Why the hell should I pay your prices?  I can rent a money pit just like yours right next door, and I don’t have to be responsible for the repairs.”

3800 sq ft REO in Northwood Pointe for $1.073?  Unfortunately, I don’t think this house will be on the market for long.

ipo, what do you think this will end up closing at?

From “Market Conditions” for Costa Mesa, Jim Dwyer:

http://tinyurl.com/9s78oc

“PRICES are still declining and will do so for the remainder of 2009.”

What candidness! LOL. Is a Realtwhore(TM) allowed to say that? But then, a few lines down:

“As people are running away from Real Estate that is the time you need to buy. WHY—Great Opportunities.”

...A bit off topic here, but has anybody been watching how close BofA is to going belly up? 

I’m watching the hearing for Geithner and nobody has a clue on what to do.  Lets face it, we can’t bail-out this ship fast enough.

I spend a load of time in CDM and I have been noticing a large number of properties going up for sale over the last 9-12 months that did not sell and the owners are now trying to rent them.

And now they won’t rent. I have noticed For Rent signs on the some properties being up for 3,4,5 months - some longer.

Who is going to rent a 3 bdr in CDM for $4500 per month? Especially when the owner would sell it out from under you at a moments notice.

This is going to get ugly soon.

If I’m reading the sales history on house #2 correctly it looks like it was a 2003 rollback back in September 2008.  I suspect the 9/08 buyer was a knife-catcher who probably bought this as a distressed sale bought this just 4 months ago and is now realizing what a mistake. Since the sale closed in 9/2008 high ltv jumbo financing was already getting scarce so I’d not be surprised if they financed it with a mid $700k FNMA limit 1st mortgage and the rest was a real cash down payment.  Looks like he is now scrambling to get his downpayment back. 

In addition to distressed sellers from adjustable resets, I wonder how many 2008 knife catchers will be putting their purchases back on the market. I suspect a once-burned knife catcher will be shy the 2nd time.

Wow, you’re right. There’s absolutely no reason that house should be 50% more expensive than the distressed one. I would guess that it’s another case of the foreclosures pushing prices down to a more long-term sustainable level. It’ll be more interesting to see how long that property takes to sell and how far down the price will have to go to make it competitive.

So I found some fun OC Foreclosure data from Matt Padilla’s blog.
I graphed it here
Apparently the correlation is about a year: I shifted the FCs back 1yr and they match up quite well.

We had 5,845 NODs in 2006, which turned into 4,159 FCs in 2007; a 71% conversion rate.
2007 gave us 13,786 NODs, which turned into 11,560 FCs in 2008 - a 83% conversion rate.

What happens when 80% of 25k NODs turns into FCs?

Perhaps this topic has been raised before but where can I search for foreclosed homes in Irvine in particular? Redfin doesn’t seem to do the job well in this department.

From the Washington Post article:
Shane Bohnen lets his wife deal with the lender. He was reluctant to speak for this story. He figures no one will have any sympathy for a family living in a $1 million house.
“We came in with eyes wide open,” he says, standing in the kitchen. “We knew what kind of loan we had.”

“Oh, really,” Robin Bohnen says. She darts him a look from the living room couch before launching into a series of questions that gives some hint of the tension that inevitably comes with financial trouble.
“Did you know that the housing market was going to collapse?” she says to her husband. “Did you know I was going to lose my store? Did you know you were going to lose your job? Come on. There was no reason to believe any of this would happen. It’s not like we did anything impulsive. You’ve been doing this job for 10 years and making good money.”

Did she then say:
“Suzzanne reseached this”

You’ve been doing this job for 10 years and making good money.

Probably more than enough to pay for a house, or most of it, and save money for a slow time.
I’d say they had their eyes wide shut.

so periodically checking Redfin to see if Woodbury is finally ready to get recognize reality has become a habit of mine.  I am getting so sick of waiting and at the same time hearing about all of the Obama bailout ideas that promise to hand my taxes over to the irresponsible.

and then I saw this one last night:

http://www.redfin.com/CA/Irvine/179-INTRIGUE-92620/home/7210978

OMG, has someone actually priced a house in the neighborhood to sell?  This price blows away the comps.  Most people are still wishing for at least $750k for 2,220 sq ft here.

I know it is a non-approved short sale, but still I choose to consider it a drop of hope in a crazy world.  Maybe just maybe I can see the light at the end of the tunnel of waiting.

Am I correct that neither of these have pools.  And the one. Spring Grove does have neighbors behind despite the Realtor description.

Been a while since I’ve seen a property where the realtor bothered to do the “wet pavement trick”.  That is so idiotic—“Wow, there’s a reflection of the house on the ground in front of it—it must be the Taj Mahal!”.  I guess we know “who stopped the rain” that made the ground so wet despite the blue skies, though—the water-squandering realtor.