Irvine Housing Blog

Happy Anniversary, IR.

In 1995 this home sold for $240K.  That was a huge premium to surrounding areas.  In 1995 you could buy a much bigger house with a real yard in surrounding areas.  The Irvine premium is not new but it has gotten stronger.

I’d be curious to see how this one plays-out. Most homes you profile (even some that appear as WTF pricing) are in the LOW 300’s per sq ft.

At $320/sq ft, this investor stands to lose a lot of money!

Will they really get over $400/sqft???

“Is the housing market ready to survive without government props and supports? We are about to find out.”

The government has stopped some support of housing, but the fed holding rates at 0% and the unlimited support of Fannie, Freddy and FHA are still big props to the market.

We are still quite some way from housing standing on its own.

I suspect the owner giot sick or divorced and their life fell apart.

people heavily depressed lose the will to fight

Congratulations, Mr and Mrs IR

as for this place, while PR may claim that this is “rental equivalent”, I doubt that you could get $3000/month for this 3/2.5, even with the “Irvine premium”.

$2250?  $2400?

either way, this isn’t a “forever house”, but a starter.

Congratulations IR!

IR, I will respectfully dispute you on one major point.

The housing & credit rampage of the 00s was NOT caused by an unregulated free market. This particular meme is clouding our thinking and setting us up for the next financial debacle.

The insanity of the past 15 years, with the total collapse of lending standards and crazed speculation, was the result of government-driven economic and social engineering. Were it not for the alphabet soup of socialized housing programs like FHA and the “private” agencies like Freddie, Fannie, and Ginnie, which have always had the implicit backing of the taxpayers, lenders would have pulled in their horns around 2000 or so, when it became obvious that things were getting a little out of hand as evidenced by price hikes that were divorced from underlying fundamentals.

There is nothing “free market” about deregulating a particular industry while offering it unlimited government assistance if things go bad. A truly free market means NO government involvement whatsoever. No FHA, no Fannie, no Freddie, no Ginnie, and no Federal Reserve to push interest rates down in spite of increased lending risk. And it means NO bailouts ever. You live and die by your own judgment. You keep your profits and you eat your losses.

We had to know what we were setting ourselves up for with the S&L bailouts of the 80s. But the real signal to go insane was the Long Term Capital bailout, after years of warning regarding the amplification of risk inherent in the exotic new derivative products that began to be used in the 90s. Yes, in the early 90s, everything was in place. When LTC was bailed, it became very clear that our politicians would do whatever was necessary to prop up an increasingly corrupt and over-leveraged financial system, to foster the illusion of growth, when the only real economic growth we’ve had in this country since 1980 is in debt. Then, after 2000 and the collapse of the high-tech stocks, our leaders were committed to doing whatever was necessary to keep the money moving, and decided that the best way to promote growth was through asset inflation and debt creation. This was done deliberately and knowingly, in spite of warnings from Paul Volcker, among other prominent financial leaders, that the risk in the system was growing.

We have not had free market capitalism since around 1900, and every government intervention since has skewed markets in such a manner as to require more government intervention to correct problems caused by the previous one.

Freedom and responsibility walk hand in hand. This debacle could have been prevented simply by letting the failures happen early on, and by letting the major financial players know that there would be no succor for them from the taxpayers if their bets failed them. Financial concerns do not take risks they know they’ll have to eat. We assured them that they would not suffer for their insanity and malfeasance. What our political leaders did was not create a truly free market, but the equivalent of handing your kid with ADD and hyperactivity an American Express with an unlimited line of credit and telling him you’ll pay the bill but that you trust him to do the right thing. Go ahead and play, we told everyone, someone else will pay.

What did we expect to happen? And how can we say we had a truly free market when the taxpayers at large are enslaved to pay for mistakes they had no part in? Far from being a free market, the housing and credit markets of the past two decades are a wonderful example of the evil wrought by politicians purchased by the financial interests.

from the main article above: “With interest rates below 5% again, payment affordability is good.”

I simply do not see this. I’m currently renting a 3BR SFR in Woodbridge. My monthly housing payment would nearly double, yes DOUBLE!, if I were to use an FHA loan to buy the house that I’m currently renting, even with loan rates at 5%.

Even after accounting for the tax advantages of owning and ignoring maintenance costs, it would cost me an additional $1,700/mo to own this place vs. renting.

-Darth

IR - do you think a lender would move to foreclose quicker on a property with equity, or one deep underwater?  I think owners with equity can work out a mortgage mod to get right, but mods just don’t work for deep underwater borrowers.  From the point of working through the weakest positions, you pick the furthest underwater.  BUT, those are the loans the bank will take the worst loss on.  This auction they may have booked a profit!

Foreclosure a rent-free approach?
[“I stopped paying in August 2008,” said Mr. Tsiogas, who is in foreclosure on his house and two rental properties. “I told the lady at the bank, ‘I can’t afford $2,500. I can only afford $1,300.’ ”]

Why did they lend to this guy to buy rental properties?  Did his rental properties’ loans have non-owner occupant riders?

Congrats on the 10 yrs. You must have gotten married the same week we did. Our 20th was just celebrated. Yes, it is possible. Hard to believe as it’s been a mere twinkling of an eye since we got hitched.

Remember: Marriage isn’t a word, it’s a sentence.

My .02c

Soylent Green Is People.

I really like your blog and would like to subscribe to it.

But I don’t want to subscribe in a way that it goes to my email. I would think most people’s desire is to pare down the amount of email they get, not needlessly increase it.

But what I’d like to do is subscribe in my reader, but it seems to me you don’t allow that. If you do, my bad, if you don’t, if others are like me, you’re losing a lot of subscribers. You have a good blog.