Irvine Housing Blog

“Nobody was actually making any more money, they were just borrowing a lot more. Once the limit of borrowing was reached last year, the rally fizzled. Now that credit is tightening, those who bought at the top are having difficulty finding buyers. The result of all this borrowing is properties like the two I am featuring today.”

Well put.  This pretty much hits the nail on the head w/all the marginal townhomes/condos on the market now.  Last to enjoy the ramp…first to get crushed.

I figure the 750k-990k homes are the next in the firing line…the gray area. 

How long can you hold out is the question?
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Your statement is absolutely correct, and difficult to support with facts…....what happens when first time condo/townhouse buyers need to have a down payment of between 10 and 20 %. My bet is that this will be the drving force for a fall in home prices, and that it will be dramatic.

correct.  something as simple as eliminating 100% financing is enough to put housing into a tail-spin.  Not many people can put down 5% on a 600,000 property.  That’s 30 grand.  I bet many people don’t even have that in a 401k.

Actually, median incomes from 2000- 2005 are up substantially.  One does need to wonder though how much of that median increase is do to inflated bubble earnings.

One thing not discussed much when thinking about median incomes is the impact of mortgage equity withdrawals and spending. Orange county residents have been living WAY beyond their means by using their house as a wage earner. Consumer spending in OC will tank once the housing ATM is shut off. There are lots of pretenders out there.

OC also has a lot of the real-estate industry like the imploding Sub-Prime industry.  OC is to Mortgage like Silicon Valley was to .COM’s.  Not that it matters if its big bucks from real-estate or big bucks from credit both are going the way of the Dodo bird.  There is no way OC can escape this hell storm, I don’t care how nice the weather is.

I have a good friend that works for Sterling BMW.  He can’t believe how many people come in and buy cars with cash (HELOC checks).  These people spend money like wildfire,  I grossed over 115k last year and I hate having to shell out 1750 a month for a 2 bedroom in quail hill.

As the sub-prime industry slogs to the mortuary, I am giddy with curiosity what tact the solvent mortgage industry will take with the curcumstances at hand.
Also, it would be interesting to know how many homes, townhomes and condominiums are on Irvine tax rolls and, of those, how many are in trouble making payments.
I’m ready to stand corrected, but I bet it is less than 5%. Let’s say I’m wrong. Let’s say it is X%.
Whatever it is, proveyors of proper lending need to lend to breathe and never, ever want to be landlords.
The music has stopped. The peak has been sheared-off. So what?
The market will likely absorb this fall-out with new lending products.
Anyone not appreciating Irvine weather quality on the planet has not traveled the earth. Don’t be smug.
Political issues aside, prime weather USA real-estate is some of the safest and world money knows it.
Look for more international money to step-in as things become more ugly.
If we cut the spike in half over 2002-2007 things are still good.
Good times and bad times, our homes are the reflection of of our success, never the source.

IrvineRenter—you noted that this neighborhood is one of your favorites, I could not agree more.  Not sure if you are in a position to move—- but if you are interested—- I just found 202 Garden Gate Ln listed for lease.  This is the 3 bed 2.5 ba model (1,340 sq ft).  MLS #566582.  $2,400/mo.  I think this is a great deal for this place, and would be all over this myself if I had not just renewed with the IAC for 12 mo.  Damn.

CK - I just noticed your comment from back in April 07. I wish I had seen it earlier.  That sounded like a good deal.  Please let me know if you see another one come up on the market.  We are also leasing with TIC; however, we would be willing to pay our breakout fee for a nice house for $2400 per month.

This house is now listed as “Inactive” in Ziprealty.  Does anyone know if it sold or if it was taken off the market?

As a former 3 year tenant at 202 Garden Gate Lane we thoroughly enjoyed the ambience of the neighborhood but the house itself was unbearable! The construction is quite poor…the walls dent and chip with every slight rub or bump. The quarters are terribly cramped. The cottagey style begins to lose its charm when you realize you don’t even have a coat closet or linen cupboard. 202 Garden Gate Lane is a charming, nostalgic, sweet little house, but even with three bedrooms it simply does not have enough room for more than a single resident and a pair of finches! This home is just over 1300 sq feet…we lived in a beautiful IAC apt in turtle rock that was just over 1000 sq feet that lived much more efficently than this place! Oh and dont get me started on the ANT infestation in that neighborhood…dreadful….the worst I have experienced in my 10 years and 4 residences in Irvine.