Irvine Housing Blog

If Cotter thinks that the 1970-83 period is the same as the 1996-2007 period, he either does not comprehend inflation adjustment, or is not good at math.  If you just took 1970 prices and adjusted for inflation, you’d be at $63,251, then to the actual $114,370, your inflation-adjusted increase is 4.7%.  Compare to the other period’s 8.3% after-inflation increase - nearly double.  That is the opposite of the 12.5% to 11% data he presented. 

In other words, looking at the data the way that every economist, and every sensible financial advisor, adjusting for inflation, the data he presents as saying ‘the price rise of 1970-1983 was sharper than the 1996-2007 rise’ is false.  His whole article is based on ignoring inflation, which no reasonable financial commentator does.  That’s it.

IR,
I think you’ve got a typo under the “maintenance and replacement reserves” above….. $5063/month seems kinda steep

Heck, even a broken clock is right twice a day…allow him to cling to his ‘reality’ ‘cause you never know….it could happen

Newspapers are struggling these days. If real estate companies/brokers are the ones buying ads then why do you think they have these op-ed pieces instead of real news. It’s the OC, of course!

The real question is why has cash flow value and fundamental value diverged from each other in the last ten years?

By golly, if it’s in the Orange County Register, that paragon of journalistic objectivity, then it is for certain absolute truth.  Who are we to question it?

Over decades home price increases are pretty much in line with inflation. If you accept the bubble started in 2000, then home prices should now be about 30% higher.
  In 2000 median home price in south Orange county was about $160/sq ft. It’s now just under $300/sq ft. AFTER falling from just over $400/sq ft in 2006.
  Even after the fall, the price is 100% higher than in 2000, over 3 times the rate of inflation over the same period.
  Right, Mr. Collier, we are definitely no longer in a bubble.

Note to Ken Brusic (Editor) of The Register.

Ok ... OC Register, whatever you say ... “there was no real estate bubble”.  I don’t feel the need to be right anymore ... history speaks for itself, and your newspaper just lost more credibility.

There is an article in OC register that explains anomalies. http://www.ocregister.com/news/county-291335-census-population.html

“Irvine gained thousands of white and Hispanic residents, the census showed, but it was the Asian population that pushed it into third place among Orange County cities. That population nearly doubled between 2000 and 2010, to nearly 83,000 in a city of about 212,000.”

Irvine is already 40% Asian, and this proportion has been growing steadily.
The Chinese have billions of dollars that they don’t know where to spend. So, they buy houses, factories, oil, gold, etc.

Look at this Irvine realtor’s website: http://www.ocexclusives.com/. It has the second language, and it’s Chinese. He knows who has mad money.

I’ve just awoken from a brief IHB induced diabetic coma to ask one question: Do you know anyone under the age of 30 who pays for a newspaper subscription today?

My .02c

Soylent Green Is People.

CA census data posted today… per LA Times… CA would have lost population of not for the influx of Latinos…  Check that.. “would have lost population” from 2000 to 2010.  Homes only go up when you have increasing population and jobs.  With the middle class bailing and job growth stagnant to negative, CA is in for a long slow burn.

I don’t get it !

He (MIKE COTTER) has presented data in his article which which define a bubble. Price go up, rapidly, price come down, rapidly.

Is he just arguing semantics? Or just suggesting that bubbles are normal in the market place and we should just expect it to happen ever so often and there is nothing we can do about it?

Me thinks he needs to understand how inflation works, and what wages going up or down mean.

Maybe the OC Register will pay for him to get an economics degree from UC Irvine !

“When realtors are allowed to post their bluster as news on the OC Register, many people take it as information rather than indoctrination. It soils the OC Register when they permit this.”

Fact: Realtors practically OWN the OC Register and are its primary revenue source, thanks to the mega-bucks they spend on advertising therein.

This is why the OC Register is already so SOILED that it STINKS even more than a diarrheic three year old’s diaper on a hot, humid summer’s day

This realtor isn’t taking into account affordability.

I did a hypothetical debt-to-income ratio analysis a few months ago to see just how unaffordable homes were at the peak. At the top of the market in 2006, a median income purchasing a median-priced home in SoCal using 20% down and a 30-year fixed mortgage would have had a 70% debt-to-income ratio even if they had no other debts.

The bottom line is that if prices reach the point where nobody can buy anymore, you have to have a correction. I don’t know how this realtor can say with a straight face that a correction in the last boom was not inevitable.