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
We had price increases that were very local, and will have time-to-clear-the-shadows that are local also.
I also don’t like the term ‘heightened credit standards’. Standards are tighter than they were before, but really during the bubble there were no standards - think the ninja loans.
I would say that the 40 months is pretty close. There’s a street in my in-laws’ town, all new homes built in 2007 by a builder/developer whose already gone through bankruptcy and come out. Lots of specuvestors. I expected every property to get sold again within 5 years - either foreclosure, short-sale, or the seller bringing a giant pile of cash to closing. Almost half the street has already been reo sold, foreclosed, or the loss-sale taken. That’s 2 years. Say another 2 - 4 years and you get pretty close to 40 months.
I thought in 2008 that every mortgage written in Florida in 2005/6/7 had problems. Either people paid too much for a home or heloc’d the heck out of it. Now, I would imagine that every bubble-year vintage mortgage left in FL is problemed. Many have already been foreclosed, many are in default, and many more, the ones who could, have refinanced. The enormity of the problem struck me - every 2006 loan would need to be reworked.
Freddie Mac outlines debt outstanding by origination year, and total credit losses (also have breakdown by state) They hold nearly 3X as much unpaid balance on pre-2004 loans as they do 2006 originations, but 2006 loans have generated over 3X total losses. So a 10X shift. That shows that the two products are fundamentally different.
amenitities
A guy wrote that!
It all comes down to Job’s, I would say a few months after the economy starts to create Jobs in an amount to bring the unemployment below 5 to 6 %, the house downturn will be over, then hold on to your boots, your in for a big surprise. When will that happen ??
Don’t know.
They’re not building anything but they still make babies.
5 to 6% unemployment? In what time frame? Haven’t you heard - high unemployment is the ‘new normal”? Unless the Chinese or Indians decide to hire Americans, high unemployment will be with us for a long time.
What’s going to happen as the 99ers roll off the unemployment rolls?
Are we still talking about Irvine? Sometimes this blog is not clear on whether we are talking the nation, Las Vegas, or Irvine.
If we are talking Irvine I wouldn’t look at overall unemployment. The single biggest impact would be a major company moving a HQ or expanding here. For example google expanding would impact Irvine significantly. You are right unemployment will be high for a long time, but unemployment was/is mostly concentrated in lower paying jobs.
A tech company expanding in the US? There has to be good reason - like Google’s deal with NASA Ames. Why would it expand in Irvine rather than overseas like the rest of them?
I did see Latisys is planning a data center expansion in Irvine. But how many employees does a data center take?
War heats up for top Silicon Valley talent
Google’s decision to give all of its employees a 10% pay raise is just the latest volley as it competes with Facebook and other companies for the smartest people in the business.
http://www.latimes.com/business/la-fi-silicon-pay-war-20101111,0,5173884.story
Tech picking up, at least according to airport figures
http://latimesblogs.latimes.com/money_co/2010/11/tech-picking-up-at-least-according-to-the-airports.html
That’s a pretty small segment of the job seekers they are chasing. And that’s in Silicon Valley - last time I checked that was a bitch of a commute from Irvine.
If you go to Google’s website to look for jobs their Irvine location isn’t even in the top 5. Looks like they have 2 tech positions currently open there - kudos to them for hiring in the US. But I don’t think 2 positions is likely to trigger a housing boom.
Cisco “culling” up to 14,000.
Apparently Yahoo is looking at 20% cuts as well.
We’d need more than just jobs to end the downturn. We’ll also need crazy neg-am and 0% financing, which does not look likely.
Even given 5% unemployment, a return to 33% DTI lending with 20% down payments will not sustain current prices.
Current pricing has been sustained in Irvine without 5% unemployment or creative financing.
Either would lead to a return in bubble pricing.
Current pricing is sustained by real incomes,quantitative easing, and accounting rules. That’s been the case for the past 2 years.
Agree,
Meanwhile other areas have got crushed.
Look at the successful response to all the new development that’s taking place
Without the intense demand, TIC wouldn’t be successful.
“Banks will never return to the standards to the 00s unless they want to lose a trillion dollars again.” From what I can see, the banks (financial industry companies) are still largely decoupled from the people running them. Pay and bonuses are still great! Less cash up front (but still loads of it, especially compared to other industries) and more deferred or locked up for 5 years, but the incentive is still enormous to do whatever to get a big bonus. The successful examples of guys like Mozilo are way too attractive, compared to grinding out a small fraction of that in manufacturing or service industries.
At 5% to 6% unemployment there will still be a huge number of unqualified buyers, because significant numbers of potential buyers have had their credit impaired by all of the games that have been played.
Hmm seems to me OC lost a lot of finance, escrow, banking etc.. job’s as well.
Oh well.
It’s kind of a chicken and egg thing,
Only they shot the chicken and they are trying to conjure up an egg.
So maybe they will just settle for inflation but they don’t know how to get you a 50% raise.
Finance jobs could knock unemployment down 1% in Orange County over the next few years. Those are high paying jobs, so that would have a major impact on Irvine.
To analyze specific regions you need to be very surgical in the data that you use.
“So maybe they will just settle for inflation but they don’t know how to get you a 50% raise.”
That is exactly the problem. They will print money and lower everyone’s standard of living by making the cost of everything go up. With persistent high unemployment, this inflation will not go into wages which would support future price increases.
You are crazy if you think inflation won’t lead to wage inflation in higher income jobs in demand.
I agree the median income may not go up and umployment may go up, but wage inflation certainly will occur as it has over the past decade for jobs in demand.
Then I am crazy. But I have been right, crazy or not.
Eventually, it will push wages up - although not as high as Planet REalty bullishly thinks. Wages will not keep pace with price of goods and the end result is a reduced standard of living.
The most relevant item is affordability. Affordability must increase.
This inflation is currency driven cost push, not demand driven. No one in our generation or a few generations in the US has experienced this, so people do not have the correct reference. The more correct references are Argentina, the Weimar Republic, and Zimbabwe.
Bottom line:
With inflation both cost and revenue for companies inflate.
With that comes wage inflation for the productive segment of society with talent in demand.
I’m not saying this is good, but you need to recognize wage inflation will happen even if median income is stagnant and unemployment goes up.
Bottom line:
You are wrong, as usual.
And time will prove you so.
I think awgee is correct. I recall the crazy 70`s
and the instant inflation of that era. Everything just got 20% more expensive in the course of a year or two. And I had a great job at the time. My income sure as hell did not go up 20%. In fact with the Inflation business got tougher. I was in Electronics back then as now. Everything was on allocation and back order. Business sucked. But Gas went from 70 cents to over $ 1.00 instantly.
Just wait till Gas is $ 4.00 again. Wages will trail all the inflation by years.
Awgee, I’ll let you in on a little secret:
One companies cost in another companies revenue, and so on, and so on
Try not to share with everyone, ok?
I don’t see inflation causeing higher income jobs salaries to rise. What I have seen is pay cuts, budget cuts, and increases in out of pocket benefits costs. Plus, we have a looming state budget crisis that will absolutely require higher state taxes and the coming problem of increased commodity prices (gas, food etc) due to QE2. Add in, increased costs of College education (15% CSU in one year!) and we are looking at a perfect storm of family budget problems. Not everyone in Irvine is a DINK.
In Irvine, I am seeing a few people on bikes now not just out on recreational rides. They have baskets front or back and are making trips to the grocery store. The price of gas plus recessionary incomes is starting to change a few people’s transportation habits.
No one yet has found what the way forward will be for the next income boom. In the 80’s it was defense contracting, the 90’s was the Internet boom, in 2000’s the FIRE economy, but for 2010 forward what will it be? It’s not green jobs, or government jobs. The County of Orange believes the greatest growth of employment for the next decade will be in the “service industry”. Not really the kind of employment that can support an average $450k median priced home.
Should inflation rise (not gonna, IMHO) then mortgage rates must rise (not gonna, IMHO) which will then keep buyers out of the market until pricing comes back to reality (not g.. you get the picture).
Income and property price flatlining is the new normal.
Soylent Green Is People.
the next bubble has already started.
in china and india.
we will have high inflation and high interest rates.
what else could possibly be the result of all this borrowing and spending? a declining dollar will make things cost more. Yet i do not see this as being bullish for real estate.
what spending are you speaking of? The net spending by governments of all types are flat if not down because local/state government spending decrease is more than offsetting federal spending increased spending. Also, discretionary spending is under 8% of federal budget. The rest is entitlements, interest payments and defense spending.
So not sure what big increase in spending that you speak of.
As for bullish on real estate, I would point to what is happening in Hong Kong which have now surpassed 1997 “never in our life time again” bubble prices as Chinese money floods into that market.
It will happen in Cincinnati? Probably not. Could it happen in prime locations in major coastal cities in the US? Never say never as HK has proven.
Anyone think it is a good time to buy in Temecula or Murrieta?
It is a good time to buy if it is right for you and yours. If you are asking about price appreciation, no, there will be no price appreciation for awhile and then it will only be in nominal dollars, not real inflation adjusted dollars.
does it matter if it is nominal dollars since your mortgage is also in nominal dollars and (hopefully at a fixed rate) and this is a levered purchase?
With 20% down, even if nominal prices increased by just 2%, your rate of return on initial investment down payment is 10% in nominal terms and 8% in real terms.
(yes I am making simplistic “for arguments sake” assumption that after tax interest, property taxes and other cost of ownership are equal to utility/housing the home provides.)
I do not know how to post a graph here so I will refer to another blog that has the graph:
http://www.cotohousingblog.com/?p=14535
The Fed has printed trillions, historically the most a central bank or government has ever created, and pushed it to the member banks and the federal government and all it has done is created a bubble in treasuries, an inflated value for the equities markets, cost increases in commodities, and yet wages have declined.
Maybe I am crazy, but all the necessities will cost more, and wages will continue to decline, especially on a real vs. nominal basis.
Temecula Valley I think would be OK if your not going anywhere for the next ten years.
Don’t think there is a lot of downside left out there.
You can only be flattened so much after you been ran over with a steam roller already.
IR, I’ve had problems w/some of your hyperlinks the past few days (latest Firefox & WinXP). For example “Should You Fear You Won’t Get Clean Title to Real Estate?” above should resolve to
http://www.irvinehousingblog.com/blog/comments/should-you-fear-you-wont-get-clean-title-to-real-estate/
Instead I get
http://www.irvinehousingblog.com/blog/comments/blog/comments/should-you-fear-you-wont-get-clean-title-to-real-estate/
which no-workee.
Thanks. I have fixed the problem in this post. I will get Zovall to see why that is happening. I am cutting and pasting these links from the library, so that probably has something to do with it.
Inflation makes people feel rich while their purchasing power goes down.
I really don’t see wages going up faster than general price increases. FDR used very high min. wages and no selling below certain prices to jack up inflation. Better spend before the prices when up or the last one sold. Stores could buy and hold for a sale or higher price. I don’t foresee a reoccurance of federal govt jailing people for selling or doing services below the govt/corporate set price. At least I hope not.
Govt is supporting high house price to transfer liability of the bad loans to “new owner” and to the GSE/taxpayers. Someone has to be stuck holding the bag and it won’t be the investment bankers. SS/retirement at 75 y.o.?
Priciest house in Irvine, with pictures
http://irvinehomes.ocregister.com/2010/11/11/irvines-priciest-billionaires-row-home/15420/