Run Away

Everybody’s all gone

Everybody’s had enough

It’s gettin’ ugly out

I’m so tired so tired so tired so take me home

It’s getting late (getting late)

Come here and wait for me

Let’s get out of this place

It never changes, it just stays the same

So take me home

(Come on, let’s go)

I just wanna run away, I’ve had it here

I just gotta get out of here, I’ve had it here

I just wanna run away, I’m done with this…

Take Me Back To Your House — Basement Jaxx

Link to Music Video

The market is getting pretty ugly right now. Do you get the feeling some of these sellers have just had enough? Over 100 days on the market after rolling prices back to 2004 levels? If I were them, I would want to run away and just be done with it.

213 Huntington Inside 213 Huntington Kitchen

Asking Price: $399,000IrvineRenter

Income Requirement: $99,750

Downpayment Needed: $79,800

Purchase Price: $399,000

Purchase Date: 7/15/2004

Address: 213 Huntington, Irvine, CA 92620

Beds: 2

Baths: 2

Sq. Ft.: 987

$/Sq. Ft.: $404Rollback

Lot Size: –

Type: Condominium

Style: Contemporary

Year Built: 1986

Stories: One Level

Area: Northwood

County: Orange

MLS#: S487213

Status: Active

On Redfin: 133 days

Unsold in 90+ days

From Redfin, “Nice floor plan 2 Bedroom 2 Bath, with new laminate floors, master bathroom upgraded. Well kept unit. Close to UC Irvine, Close to shopping malls, restaurants, church and easy access to Hi-way 5”

.

.

You have to make almost $100K to own a small, twenty year old, two-bedroom apartment in Irvine. Does that feel right to you?

Another 2004 rollback at the low end of the market. At 133 days on the market, they are not done lowering their price. I think we have seen enough of these to conclude the low end of the market is now at 2004 pricing and still declining. The dreams of later buyers hoping to get out at breakeven are starting to look like sad fantasies which will never come true.

If this seller gets their asking price (which seems unlikely), and they pay a 6% commission, they stand to lose $23,940. Doesn’t sound like much, but this is a summer 2004 purchase. Those weren’t supposed to lose money…

97 thoughts on “Run Away

  1. Don from the Tanning Salon

    Good thing it’s “close to Church”…, that way it’s quicker to go pray that you don’t get foreclosured on. I’ll bet anybody on this board a cup of coffee that this place smells like cat pee on the inside. It just has that look to it.

  2. carl

    I wonder how much they lost in opportunity cost, taxes, insurance, and upkeep over the three years they owned the home. I bet if you could somehow tally how much they spent owning over the last three years (assuming they even get asking) versus how much they would have spent to rent a similar property, it would probably make your jaw drop.

    feeling luckier every day,
    Carl

  3. Mr Vincent

    When they bought the place for 400k, they put down 100k.

    Then it gets interesting: At the beginning of 2006, they refied into an adjustable rate mortgage for 300k and then took out a second at 100k.

    I have seen this story over and over again. A large percent of consumer purchases has been based on Home Equity Extraction over the last few years.

    Our economy has been built on a house of cards since 2001. I initially thought that the fed could inflate their way to a rescue, but I am not so sure now.

  4. homebear

    You never count your money
    when it’s sittin’ on the table.
    There’ll be time enough for countin’
    when the dealin’s done.

  5. IrvineRenter

    It seems that everyone in Irvine is not sitting on mountains of equity, and they really were spending themselves into oblivion with HELOCs. Actually, it doesn’t take many like these people to drive property values down for everyone.

  6. Larrygg

    Do you know what you can buy in Portland or Seattle for $400K? You can buy a 2500 sq ft, 4 bedroom house on a 1/4 acre lot. I wonder which quality of life is better? Living in a 900sq ft shoebox and have sunny days or living in a custom built/spec house and having some cloudy and rainy days. Interesting dilema.

  7. Jim Jones

    This unit is on the ground floor at what looks like 10 feet from the parking lot. YUK. This is the kind of unit you rent when you’re going to college. I can’t imagine buying something like this at any price. From my perspective units like these should only be rentals. The idea that someone paid 400k for this yucky apt with the intent of living in it just boggles the mind. YUK!

  8. mark

    But your money’s always “on the table.” The money in your house is subject to market forces; the money in your equities investments is subject to market forces; and the money in your savings account is subject to inflation. i.e. The dealin’ is never done… of course, until you die…

  9. Bill Jones

    IrvineRenter-

    Thanks for these posts. Would it be possible to also include the likely monthly payment, as well as property taxes and HOA? Also include likely rent for a place like this so people can see how much more expensive it is to buy as opposed to renting.

    Thanks

  10. caliguy2699

    I’ve heard the same argument tons of times – the whole “most people have been in their houses for a while, so they have plenty of equity.” Obviously, that’s not always the case.

    It’d be interesting to see just how many properties are out there that were purchased before the bubble that were HELOC’d like mad. That’s the first thing I think of when I see a previous sale date a number of years back, for a lot less money, and the property is sitting on the market with little or no price reduction.

  11. IrvineRenter

    That would take more time and research than I have to devote to these posts. Although, the numbers I am showing for income levels and downpayments would result in an affordable total housing payment, assuming a person making that much money and having that much cash would be willing to live in these units.

  12. N Cty

    More evidence that inflation and rents are going to be climbing~

    From the U-T today:

    San Diego County’s apartment complex vacancy rate has dropped to 2.58 percent from 4.54 percent over the past six months, as a national credit crunch has restricted access to mortgage loans.
    A report released yesterday by MarketPointe Realty Advisors showed a dramatic reversal from March, when vacancies were at the highest level in 12 years.

    The semiannual poll, called RentalTrends, also showed the price of rentals rising, said Robert D. Martinez, director of research.

    β€œCountywide, we had a $30-a-month increase over six months, 2.43 percent,” he said. β€œThe average rental rate is $1,291.”

    Landlords have growing bargaining power as tight credit and mounting foreclosures have put more households on the rental market.

  13. N Cty

    Sorry for the ignorant off the topic question–

    When you have your county assessment reduced to match comps, do prop 13 increases start over from the revised assessment?

  14. Stupid

    Depends on where you buy in Seattle or Portland.
    If you buy in Seattle’s Irvine equivalent (ie. Mercer Island – a Seattle suberb with the best public schools), $400,000 doesn’t go very far.

    http://redfin.com/stingray/do/listings-search#search_location=Mercer%20Island,%20WA&residential=true&min_price=&max_price=&num_beds=&num_baths=&time_on_market_range=-&min_listing_approx_size=&max_listing_approx_size=&sold_within_months=3&min_parcel_size=&max_parcel_size=&min_year_built=&max_year_built=&status=1&lat=47.56212358113485&long=-122.227397786245&zoomLevel=15&currentLocation=Mercer%20Island,%20WA&disp_mode=B&market=seattle

    Picking a random 4 bedroom off the map, I see this. It’s not even on the water.

    Price: $3,450,000
    Redfin Savings: $69,000
    1 of 15
    4828 W Mercer Way
    Mercer Island, WA 98040
    Beds: 4 On Redfin: 53 days
    Baths: 4 Year Built: 1991
    SQ.FT.: 6,182 Lot Size: 1.82 a
    $/SQ.FT.: $558 MLS#: 27137729
    Status: Active
    Last Sale: $422,000 (12/01/1999)
    Listing: Windermere Real Estate/East

  15. No_Such_Reality

    Rental rents are highly variable and you’ll see a large amount of disagreement as to how much this place would rent for.

    IAC’s Serrano is near there and 2/2s rent for $1940-$2040. One of the tightest spreads of IAC communities.

    Las Palmas is also near there and renting for $1770-$1905. http://www.rental-living.com/Communities/Las-Palmas/Prices-And-Floorplans/

    A 2/2 (989sf, same size) in Villa Siena rents for $1855-$2300. http://www.rental-living.com/Communities/Villa-Siena/Prices-And-Floorplans/

    Given the dated kitchen, one garage spot, etc, IMHO, anybody renting from a private landlord for more than $1800 is a fool. And frankly, should probably rent it for $1700 or less given the vast availability of $1800-$1900 units in the IAC properties.

  16. No_Such_Reality

    No.

    The original purchase price stands and the taxes can be re-raised to the purchase price plus 2% annual increase based on comps & appraisals or any lesser value.

  17. IrvineRenter

    This volatility in rental and occupancy rates is to be expected. When someone gets foreclosed on, they have to find a rental immediately, so there is a spike in demand. The house they vacated will likely sit vacant for some time until it is sold. This has the effect of limiting supply temporarily because the vacant unit is not offered for rental.

    Eventually, this unit will sell to a renter (or if it is a move-up an renter will be the first-time buyer at the bottom of the chain,) or this unit will be sold to a cashflow investor who will keep it as a rental. In either case, a rental will be freed up to add to supply, but there will be a time lag of several months in between.

    The total number of households has not changed, so there is no long-term shortage in rental units, only a temporary shortage caused while an owner occupied dwelling gets converted to a rental.

  18. IrvineRenter

    Interesting. So if bubble buyers go through the cumbersome process to get their house reappraised to lower their taxes, the benefits are transitory as market values may increase back up to their original purchase price and take the taxes up with it? I had assumed the lowered tax basis would be permanent. Good to know.

  19. mark

    In order to get an apples-to-apples comparison, you would need to discount the total housing cost according to the tax situation of the prospective borrower as well. This not only complicates the numbers, but could be misleading.

  20. mark

    The assessment appeal is a simple form to complete. Gathering the comps is time-consuming, but likely worth the effort in this environment. If the assessor raises your value the next year, you do have to go through the process of appealing the assessment again. But if the assessment is accurate, that would be a good thing, right? It would mean your value has returned.

    So the person who bought at the peak in late 05/early 06, will pay the same property tax as someone who buys today, so long as they’re proactive with their assessment.

  21. jj

    Larry-
    Interesting you mentioned a comparison with Portland-Seattle area. I have a few friends living there and i do this comparison all the time.
    My friend bought a 2800 sqft 5 bedroom, hilltop home with views of downtown and Mt.Hood in 2004 for $250 and its valued today at $440. Also CNN Money listed Portland-Seattle belt among the best growth areas for next 25 years.
    There is absolutely no comparison between my lifestyle and theirs coz they have so much more disposable income. I do envy them at times for the quality of life they enjoy.

  22. tonye

    I hear you can buy umbrellas at Costco in Bellevue for 6 bucks a six pack. The cost more in Redmonds, of course.

    Wooohooo…

    Of course, the only homes in Seattle for 400K are in Federal Way. And who really wants to live in Federal Way anyhow?

    Who cares about the prices in the NW anyhow? I thought we were discussing the prices in OC?

  23. tonye

    I truly do not understand the $400 sq/foot for these properties. They are apartments, plain and simple.

    If this were a town home, with not one up or down, then I could see a certain premium “cachet” ( hehehe ) but for an apartment, and one in a dark first floor, I just don’t get it.

    Look instead at University Marketplace across UCI. There you have both town homes and apartments.

    This values will come down at some point. Perhaps the Irvine Company is just waiting for prices on these developments to hit $200 per square foot and then they’ll buy every one out and rent the whole place?

  24. skeptic

    No_Such_Reality,

    I think the IAC rents are overstated — the IAC websites typically inflate the rent. I consider the website listings as asking prices, at best. I have had good success with securing lower prices by negotiating in the rental office. For example, the IAC website for my community lists my unit at $1740. I pay $1545 (still too much IMO). That’s an 11% difference. Anyway, I guess what I’m saying is that using the IAC asking prices for an ownership-rent comparison makes owning look better than it actually is.

    If we apply the 11% discount to the Villa Siena price of $1855, we get $1651. As you note, the IAC apartments are much, much nicer and likely deserve a price premium. My conclusion is that this place should rent for $1400-$1500.

  25. No_Such_Reality

    I’d agree. Shopping is the power tool in renting, sadly too many don’t do it.

    You might rent it at $1500, but that’s if they list it at $1700-1800. If they drop below $1600 listed, they’ll be beset with too many lookers.

    Landlords are kind of the reverse of the old saying. Instead of “you get what you paid for”, they are “you get what you are pricing for” which applies to the kind of tenant they are looking at.

  26. rastaman

    the Pacific Northwest is due for a hellacious beating: Their subduction fault is like the Indonesian one and will rupture far more destructively than the San Andreas: from Portland all the way to Vancouver. Combine that with lots of unreinforced masonry and it spells trouble. Besides, the chicks up there all have to wear sweaters/goloshes and thus they bloat compared to what we get to leer at.

  27. Genius

    Which is probably much nicer than O.C. –

    714 tattooed on my head
    I find myself labeled, I’m a victim instead
    Abide by the rules, I don’t see the way
    I’d rather be dead than have the price that they pay

    Cause O.C. life is not the life for me
    Stupid little girls and egotistic fags

  28. Stupid

    Enough already. Mercer Island : Seattle is analagous to Irvine : LA
    It’s a suburb, and it has the best public schools.

    And the prices don’t look terribly different.

    http://redfin.com/stingray/do/listings-search#search_location=Mercer%20Island,%20WA&residential=true&min_price=&max_price=&num_beds=&num_baths=&time_on_market_range=-&min_listing_approx_size=&max_listing_approx_size=&sold_within_months=3&min_parcel_size=&max_parcel_size=&min_year_built=&max_year_built=&status=1&lat=47.56212358113485&long=-122.227397786245&zoomLevel=15&currentLocation=Mercer%20Island,%20WA&disp_mode=B&market=seattle

    Actually, that makes me feel better about buying in Irvine, that there’s some kind of overpriced comp that’s about the same in another city.

  29. lendingmaestro

    Tonye,

    I get your defense of OC and SC as a whole. I like it to, that’s why I live here and pay a premium for it. We cannot disregard the fact that we live in a global economy and people are deciding to move OUT of orange county. When push comes to shove, prices in other areas of the country will matter, as people will be forced to move to cheaper areas.

    Personally, I like to hear stories of prices elsewhere. It makes me remember just how expensive it really is out here. The opportunities to make money where we live are much more prominent and diverse than other areas of the country.

  30. tonye

    Not to mention that we have an overabundance of very good looking women. πŸ˜‰

    On my first flight into LAX -from Seattle- I saw an old guy with two very good looking women step into a town car… while the “Central Scrutinizer” drone on about the “White zone is for loading and unloading only”. (*)

    Needless to say, the confluence of Frank Zappa overhead and the realization that if that old guy could get two chicks, surely I could get at least one, sealed the deal.

    I accepted the job offer the next day.

    I found my wife in SoCal.

    Who cares if you live in small cracker box when you got a looking woman with you.

    Wooohooo!

    (*) Zappa, Joe’s Garage.

  31. joesixpack

    I had 714 tattooed on my head, then somebody had to change it to 949 making me look like an idiot!

    I was old school, when Irvine was still 714.

  32. joesixpack

    If you rent instead of buying, you’ll have more disposable income too! You’re either renting a place to live from a landlord, or renting money from a bank to ‘buy’ a home (then you’re ‘renting’ from the city in the form of taxes)

  33. N Cty

    It will be interesting to see how figures into tax revenues. Is it divided out between city, county and state or is it all county revenue?

  34. tonye

    Unlike most people in the world, I know the difference between Queen Anne, Redmonds and Federal Way.

    I have also been to “The People’s Republic of Fremont”. Which you best do by driving “slowly” from Ballard.

    And, did you know that the history of the Crapper Seattle Fill are closely intertwined?

    here’s a link that has both Fremont and the crapper

    http://www.notduck.com/07/seattle07.html

    So… no one should be surprised when the RE is Seattle goes down the crapper… It happened once before. πŸ˜‰

  35. IrvineHomeowner

    Since when is Northwood “close to UCI??”

    You can’t be much further from UCI, and still be in Irvine.

  36. tonye

    I lived in Denver for a while during the Reagan years.

    It was very dry, the weather wild and the place was filled with people from Connecticut who though Denver was “the West” and never came to California (thank God).

    The skying was fantastic, the fresh Coors was great and the shows in Boulder pretty good.

    But it’s over 1000 miles from the ocean and -except for that episode- I’ve always lived on the coast or an island.

  37. tonye

    The west (sunset) side of Mercer Island is very nice and the drive to downtown Seattle is similar to the South Bay Curve in Torrance: it can be hell during rush hour or a breeze otherwise.

    There are really nice homes there… check this one out… 8 bedrooms and 15 baths. These people really take their crappers seriously!! They must have taken the tour in Pioneer Square once too many.

    http://redfin.com/stingray/do/printable-listing?listing-id=498089

    The property, jokes aside, is truly nice. Low bank, view of the back side of Seattle, sunsets, a boat dock so that you can cruise Lake Washington, or go up the Ballard locks to the Puget Sound.

    The only thing they should have done is get a better, classier boat. That speed boat marks them as yuppies. Maybe a 45′ Tolly instead.

    For my money, I gotta admit I’d rather buy this Mercer Island Property than anything in Newport Coast.

  38. mopar777

    Right on Tonye! There are more attractive women in one restaurant in OC than there are in a whole town in the midwest. Just don’t act like a lovable loser when you’re around them.

  39. Sue

    Why are credit card rates still out of control?
    Despite congressional hearings, headlines, lenders push up rates and fees
    http://www.msnbc.msn.com/id/20811184/

    Greenspan Says Recession Still Possible After Fed Cut (Update4)
    http://www.bloomberg.com/apps/news?pid=20601087&sid=aIYJ4sONrIo0&refer=home
    By contrast, Greenspan suggested a future hit to household spending.
    “To the extent we see a flattening out of the net worth of households, we would expect to find some erosion in consumer expenditures, but we haven’t seen it yet,” Greenspan said.

  40. Stupid

    If you’re going to go though the trouble of getting a waterfront property to keep a boat, Seattle’s a much better location – there’s a lot more to see when you go sailing.

  41. lendingmaestro

    Correct. There is more money here. People flock towards people with money. Men and women who have money can afford to take care of themselves. They also seek to mate with more attractive mates, thus more attractive offspring.

    Our entire civiliation, IMO, exists to make oneself more attractive to other mates, whether consciously or subconsciously, thereby ensuring the best possible offspring.

  42. Ken

    Having lived in both areas (born in Irvine, and now living in downtown Seattle) I can confidently say that Mercer Island is much more analagous to choicer spots likeNewport, Balboa or perhaps Laguna than Irvine. (Paul Allen, one of the richest people in the world, lives on Mercer Island) The better comparison to Irvine is probably Bellevue.

  43. Sir Gallahan

    You OC’ers are kinda weird. Do you have rain allergies? Have you not marvelled at a gorgeous thunderstorm? I’ve never understood this autistic need for an invariant weather pattern, day in and day out.

  44. Dean Knight

    How will the rental rates be affected by all the owners who need to move but don’t want to sell their house in this market? Won’t that depress rental rates?

  45. IrvineRenter

    The unknown many have speculated on is the number of flipper-owned units which are sitting unoccupied in the market right now. If there are a lot of these — which seems to be the case when you see the MLS photos — then rental rates may come down when these are put on the market as rentals.

  46. ipoplaya

    BTW, the property is pre-foreclosure. Had a Notice of Trustee Sale filed on it on 9/13. Had a couple of Notice of Defaults go through on 9/6. Gateway FSB is holding both the 1st and 2nd, so they are into this property for $400K+… Assuming the owner can’t bring the cash to close, this’ll be yet another languishing short sale.

    For you experts out there, if the 1st and 2nds are with different banks, do both need to approve the short sales or can it be done by just the 1st folder?

  47. ochomehunter

    I am a firm believer that as prices fall and come close to fundamental values, rental > or = mortgage + taxes, lots of investors jump in to invest into properties and turn them into rentals.

    As foreclosures skyrcket and homes come to the market, first home owners/burned owners will get into rentals and eat up the rental supply, then other renters who have been waiting for correction would either buy foreclosed homes OR rent for better life style. Eventually, rents will drop with dropping home values. Didnt rents go up when the home values had run up? I think it did and to a certain extent, it did substantially.

  48. Genius

    I lived there until I was 18 and moved out to go to UCLA. I do honestly prefer socal, but Denver ain’t a bad place to live at all. If I wasn’t a game developer (most of the jobs are in socal) I would move there for a while and come back to socal when the market was at least 1% rational.

  49. tonye

    IMHO, that’s not entirely true. Not all of Mercer Island is that expensive. You could think of West Mercer Island as Newport while East Mercer Island and Redmonds are more like Turtle Rock.

    The thing about Seattle is that -generally- the price of homes is more heterogeneous than in SoCal.

    For example, in Magnolia you got some awfully expensive homes and two miles away you got something a middle class family could buy.

    And really, I think I’d rather live in Magnolia, Queen Anne or even West Seattle by the waterfront than in Mercer Island.

    Or, you could go the REI/Eddie Bauer route, move to Vashon and become intimate with the Fauntleroy Ferry and parking by Lincoln Park.

    Definitely, ignore Bainbridge unless you really like parking lots and yuppies.

    I think, though, that if I had to live in the Puget Sound again, I’d try to get a house on the East Side bluffs of Alki Point.

    That, ladies and gentlemen, is the damn best view in the whole West Coast. And, if you don’t know what I’m talking about, then you don’t know Seattle.

  50. Iblis

    Ah, yes. California.

    Best weather, anywhere.

    The ocean.

    World class universities.

    Mineral wealth.

    Agriculture.

    Sea ports with unique access to Asian markets.

    Hollywood.

    Silicon Valley.

    Well educated, highly productive work force.

    And we’ve managed to bankrupt it in a single generation. Current forecast is that, after the 2010 census and for the first time in its history as a state, California won’t pick up any new electoral seats. People are leaving. Fleeing. Well done.

  51. tonye

    You twist my words like a Realtor trying to sell me a McMansion in Laguna Niguel.

    The only thing I’ve ever got into strictly for its looks was my 1976 Alfa Romeo Alfetta GT.

    Like anything else, we appreciate things most when they are in balance:

    A smart, kind and good looking woman.

    A guy with good hygiene, a paid off Credit Card, some money in the bank and a job.

    21 years and counting. πŸ˜‰

  52. tonye

    Ay pendejo… it’s no problemo.

    We’ll just give the illegals the right to vote and we’re set.

    ( But not the Guatemalans! no, no, no…)

    Figure we’ll pick up a third of the US Congress.

    Ole America del Norte !

  53. Iblis

    It’ll be interesting to see what happens with rentals. Seems to be the $64 question.

    My uninformed, knee-jerk reaction is that rents have been tied to wages and inflation, while housing prices have not. If that’s true then the processes driving the correction in house prices need not affect rental rates.

    That is, unless the correction does something to supply and demand in the rental market. And that I could argue either way.

    The good news is that whatever happens to rent prices, it will seem obvious in retrospect.

  54. ipoplaya

    Alert! Alert! Whopper of a price drop sighted! It’s not appearing on Redfin yet, but it looks like 74 Wonderland in NW2 has dropped their price by $98K today, from $997K to $899K. Yikesouchwoof!

    Original list of $1.099M in April now down to $899K. If I was the seller, I’d have fired the idiot realtor that thought $1.099M was a good price to start at… Of course, it could have been an idiot seller thinking that the place had to be worth $1.1M because they were foolish enough to pay $950K for it a couple of years ago.

    Still pricey at $375 per sf, but they probaby could have unloaded this thing in the summer for $925-950K if they would have been smarter and/or more realistic in the beginning.

    Amazing how people are willing to piss away equity holding out for top dollar when the market is decelerating all around them. Sellers need to look at the comps, forget the past, offer up 3-3.5% to the buyer side, and get out while the gettings good (or at least better than it will be)…

  55. Laura Louzader

    Interesting observation.

    One of the things that the housing bubble triggered was the conversion of many older rental apts to condo that were built as rentals and are intrinsically unsuitable for condo conversion.

    In my city, there are thousands such units languishing on the market, and that is only those that are listed, or visible. There are many times as many that are “market overhang”- in other words, they are not on the MLS, but will be when the first 5 units in the bldg are sold. The developer doesn’t list them all at once because that would make it too obvious that there is a massive glut of condos at all price points cluttering up the market.

    These usuitable conversions will, of course, be the very first to convert back to rental. It has happened very quickly for some, as the building is only one third sold, say, and has to be auctioned off when the short term construction loan matures and has to be paid, and there are no buyers. At the peak of the housing lunacy a couple of years ago, I looked at one-bed apts that had been redeveloped from studios, with 300′ feet; places with just one small closet and a 10′ X 12′ living room; ugly bldgs right on top of the el tracks, corridor apts with 225 sq ft.

    The silver lining is that we got a large number of formerly very bad buildings swept out and completely rehabilitated into attractive units with lots of marble and granite and stainless and new carpeting and good insulation, that will attract good tenants to this “gentrifying” neighborhood.

    However, many foolish people, both buyers and developers, will absorb stupefying losses in the process. Fine with me. If they hadn’t been so greedy and/or delusional and self-indulgent, these places could have been sold for sustainable prices to people with extremely moderate incomes who are often the backbone of a good neighborhood.

    Now, we are afraid these places will re-slumify as “investors” snap up the units for as little as 40 cents on the dollar- I saw this happen a few months ago!- and rent them out to the first people that walk through the door with a Section 8 voucher, thus undoing all the good work that has been done around here in the past 10 years.

    My sympathies to the moderate and middle income solid homeowners of your SoCal communities, who will have a similar situation on their hands as the cruddy little shacks and cardboard condos that sold for $400K go at auction for less than half that, to investors who buy the things in bulk and rent them out to whoever can show an income from whatever source, with no care for the community.

  56. Stupid

    That isgnores the school factor.

    The Mercer Island schools get the best scores in the state, every year. And there’s a large Jewish population on Mercer Island (this following the assumption that Jewish people, like Chinese, value education highly and are willing to pay a premium to live near the best school).

    Bellevue is lame by comparison – I used to live near there. The schools are worse than King County next door (Redmond/Kirkland) which in turn are worse than Mercer Island.

    Bellevue is all about wannabe’s that want a place on the water with a boat, but don’t have enough money to live on Mercer Island. Kind of like going further south down the coast from Irvine/Newport.

  57. south county

    No, both the lender of the 1st and the 2nd have to agree to the short sale. The holder of the 2nd is going to look to recoop 50% of the debt. These deals become very difficult and involved, it’s no slam dunk. As time passes and reality sets in we should see more cooperation from lenders.

  58. Stupid

    … so go to Spectrum center and get some new clothes. And lease a new car. And go get the biggest, nicest house you can swing on a crazy loan ….

  59. awgee

    Oh my Gosh! I was laughing so hard, my daughter came out of the bathroom and asked if I was crying. That is hilarious.

  60. doug r

    As opposed to shaking all the time, we like to save up our quakes:
    The geological record reveals that “great earthquakes” (those with magnitude 8 or higher) occur in the Cascadia subduction zone about every 500 years on average, often accompanied by tsunamis. There is evidence for at least 13 events at intervals of from 300 to 900 years, with an average of 590 years. Previous earthquakes are estimated to have occurred in 1310 AD, 810 AD, and 170 BC.
    From 1700 Cascadia earthquake
    So we got about 283 years to go, plus or minus about 300 years
    πŸ™‚

  61. tonye

    Actually, we get some real humongous storms. Our big storms drop more water per hour than in the Puget Sound.

    This is because OC is exposed directly to the ocean and when a storm hits, we get the full brunt of it.

    The Puget Sound, OTOH, is behind the Olympics, so that the main brunt of the storm is leashed on LaPush and so on… and as the storm moves east it gets drawn out.

    Consequently, in OC we get brief but furious storms. In SeaTac they get milder but longer episodes.

    Neither place gets much in the way of thunderstorms. For that you have to go inland where it gets drier. Ie: Riverside and Eastern Washington.

  62. Stupid

    Yes, they have rain allergies.

    Used to live in Seattle, any given day after lunch in the winter, 1/2 boys come back to class, pants soaking wet. No one cares.

    One day in Irvine, we walked to school under a light drizzle which, amazingly, turned into a downpour. Son’s pants got soaked.

    Got home, 2 phone messages from teachers saying I need to come to school with dry pants.

    They don’t even let them play outside if it drizzles – they hole up inside.

    Umbrellas are all colorful and fashionable – they are for sun. No one goes out (even driving to grocery store) in the rain.

    Go figure.

  63. Stupid

    I know several parents who sent their kids to private Elementary and middle schools as at that age, the test performance is better in those schools.

    But when it was time to go to high school, those same parents ponied up the bucks to buy a place on Mercer Island as Mercer High gets the best state scores.

    Public/private – doesn’t mean much in my book. There’s a lot more varience within each category between them. It’s all about the individual school itself, not which category it’s in.

  64. tonye

    I went to UPS… heck of a lot better than Udub and better than PLU and SU.

    Sometimes it pays to go private. Took me a few years to pay the loans but -besides a very fine education- I get to confuse the 99% of the world that don’t know about the real UPS

    http://www.ups.edu

    And yes… the Tacoma Aroma in those days was pretty bad…. On normal days it all went to Fife… but when the wind reversed… Ay!

  65. lawyerliz

    Bernake’s speech:

    Shutting the barn door after the horse has escaped?

    Fighting the last war?

    Some of the ideas are ok, would have done something if
    they had been imposed a year or 2 ago. Too little too late
    now.

    By the time any of this is passed the 2nd or 3rd wave of foreclosures will be upon us.

    I’m thinking losses of more than 50% in equity, in the worst areas.

  66. Dano

    Maybe they were talking about the UCI extension campus on the old El Toro Marine Base – no wait – that’s Cal State Fullerton not UCI…..
    I guess it’s not really close to UCI – gasp! A realtor must have lied!

    How can you tell when a realtor is lying?

    His lips are moving……

    Dano

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