Irvine Housing Blog

Whoah!! Gotta love that vertical climb on that first chart!

Looking at the ARM reset $$$ stuff, looks like quite a bit of moolah is gonna reset in the next year and a half. So I don’t think we’ve seen anything in the way of foreclosures, yet. What % of those people do you think will be able to refinance their loans?

I also like the averages for the timeline on the foreclosure and subsequent REO sale. There’s a property we’re interested in that just went REO. Sixty days might not be that too long a wait. Nobody bought it at the auction, which was ~17% less than original list price. Don’t know what price it will list at as REO, but our agent is suggesting at least 33% off original asking.

Keep the the good work, IR!
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No comments yet?  Did I get out of bed too early?

This is why I put on my bear claws when posters write “After the mass foreclosures of 2007 and 2008, things will be pretty normal moving forward” and “2009 and on should be fine…”

Look at the chart!  It’s got 2 humps: one about right now and one in 2011 and it doesn’t taper down until the end of 2012.  Add 9 months for the resets to convert to foreclosures and then add more time because the banks are so slow to approve short sales.  We are just getting started people!

Of course, the foreclosure chart could become completely different if the same herd which jumped off the cliff into insane loans over the past 5 years begins to (relatively in unison) walk away from their homes - a very distinct possibility.

We are just starting the fourth act and I have no idea how the fifth act will unfold.

The suspense!

The last cartoon is a Rorschach test.

Interpretation #1 - They are owners who “bought” the house with an unreasonable loan.  The wife is depressed over their folly and the husband delusional.

Interpretation #2 - They are renters.  The wife enjoys the benefits of renting and is not looking forward to being an owner, but the husband has crunched the numbers according to the metrics explained on the IHB and is ecstatic that now it is finally the right time to buy!

My first impression was interpretation #1.  Perhaps in 3-5 years it will be #2.

PS: You catch Bernake with his arms raised as if in triumph on the back page of the newspaper in the last cartoon?  Riot!

Here’s an interesting article about the NEXT housing bubble to burst from the LA Times. Looks like the current situation could just extend into baby boomers selling their homes, which would create a further glut on the market.

I had originally planned on buying sometime in 2009-2010, but it looks like I may have to wait even longer… crazy stuff.

http://www.latimes.com/classified/realestate/news/la-re-lew10feb10,0,5165011.story?track=rss

Interesing Strom, but I don’t think the boomers are going to retire at the ages that their parents did.  The hub, who is 65, and thus older than a boomer, doesn’t plan to retire until 70.  He works at NASA and loves it.  If he continues to love it, he may work even longer.  Also, full SS doesn’t begin until 66.  Also, as y’all have noted repeatedly, we like to spend money, so will probably work longer in order to avoid cutting back.

We will probably keep out big house and lot at least until our son gets his PhD, and decides where he wants to live, so we can live somewhat nearby.

Hi,

Unfortunately this is a really bad situation because a house is usual a dream of a lifetime, namely here in Portugal where wages are quite low.
I would like to take this oportunity to mention something that I’ve red on another blog stating that some people who are leaving their houses are also leaving their pets abandoned.
If you have the money to buy the house and find a pet, it would be great if you could adopt it.

Kind regards,

José

the boomer retirement story is the real macroeconomic story of the next 20 years.  the degree to which our nation has blown it in the past 8 years is truly amazing.  we actually had a fighting chance at beginning this era as a somewhat solvent nation, instead, we passed the aarp/DeLay donut bill, and made the punchbowl 90% cuervo and 10% punch with greenie’s 1% rate blowout.

the housing mess is really just the cartoon and newsreel before the feature presentation. 

ponder this - if we spend a trillion dollars a year on h & hs now, what will that cost be when 40 million additional baby boomers are in the federal cheese line?  and what kind of tax burden will workers be under in ten years to support those payouts on top of the deficits we’re creating now?  only one thing is for sure - the aarp’s death grip on congress will only get tighter as the boomers age.  old people vote, and voters never, ever give back a penny of an entitlement.

so don’t sweat a 15-year housing bear along the lines of japan.  if anything, pray for it, it means that the general pressure on COL fueled by trillions in congressionally mandated payouts to oldsters will at least have a bright spot.  worry, instead, about 70% marginal rates, 20% unemployment $20/gallon at the pump as the death spiral of boomer entitlements and a hollowed-out economy takes on a momentum of its own.

Y beat me today.

The nicer the weather, the fewer the comments.

Hi Jose,

Most of Irvine attempts to capture the charm of Portugal, in the same way that Disneyland does.

What rate cuts? Use of plastic gets pricier
http://www.latimes.com/business/la-fi-lazarus10feb10,0,771626,full.column
Hundreds of thousands of Capital One and Bank of America cardholders have been notified in recent months that their interest rates are going up—in some cases to as much as 28%—even though they haven’t been missing payments.

David Robertson, publisher of an influential credit card trade publication called the Nilson Report, said a number of factors determine rates for plastic, not least the greater risk of delinquencies these days resulting from the credit crunch.

But he said it seems clear that leading banks, having suffered billions of dollars in losses from the mortgage meltdown, are casting about for new sources of revenue.

“Credit cards are consistently the most profitable retail banking product,” Robertson observed. “The growth is not there anymore. And with a recession coming down the pike, there’s no expectation of more spending by consumers. The industry needs to raise prices to keep profits where they need to be.”

Things are completely out of whack here in Vancouver, Canada.

This is a burg about 3 million max, Metro, that has seen home valuations go parabolic and keep climbing.

Robert Campbell, from San Diego was warning about what is now enfolding, a few years ago - and yet, people were so complacent it was scary.

I just rented a place, and the painters are in next week - and we are gone.

This place is modest 900 sq foot place, with GREAT loacation, in downtown Vancouver.

Second floor of three floor well build, frame building.

We bought it in 1993 for 179 K.

It is going to be listed at $525,000

And that’s CHEAP compared to the crunk that is out there.

We will, GREAT SPIRIT WILLING, take nearly 500 K out and sit out the coming tsunami.

Great blog - please visit mine - I have a link for yours up…..

Thanks for the great work - and I check in all the time.

The West End Automath