Already Gone

Well, I heard some people talkin’ just the other day

And they said you were gonna put me on a shelf

But let me tell you I got some news for you

And you’ll soon find out it’s true

And then you’ll have to eat your lunch all by yourself

’cause I’m already gone

And I’m feelin’ strong

I will sing this vict’ry song, woo, hoo,hoo,woo,hoo,hoo

The letter that you wrote me made me stop and wonder why

But I guess you felt like you had to set things right

Just remember this, my girl, when you look up in the sky

You can see the stars and still not see the light (that’s right)

And I’m already gone

And I’m feelin’ strong

I will sing this vict’ry song, woo, hoo,hoo,woo, hoo,hoo

Well I know it wasn’t you who held me down

Heaven knows it wasn’t you who set me free

So often times it happens that we live our lives in chains

And we never even know we have the key

Already Gone — The Eagles



Today’s post is another in a series of properties where the owners refinanced at the peak taking all their equity and now they are short selling and walking away. In a sense, it has already been sold to the bank. It was sold the day they refinanced, the bank just didn’t realize it at the time. I had the Eagles’s song above pop into my head when I was researching the property. It is an ode to the lenders out there from all their short-selling borrowers. They don’t care anymore. They are already gone…

9 Utah Front9 Utah Kitchen

Asking Price: $799,000IrvineRenter

Income Requirement: $159,800

Downpayment Needed: $199,750

Purchase Price: $770,000

Purchase Date: 9/1/2004

Address: 9 Utah, Irvine, CA 92606

First Mortgage $651,000

Second Mortgage $279,000

Total Debt $930,000

Short Sale

Beds: 5

Baths: 3

Sq. Ft.: 2,240

$/Sq. Ft.: $357

Lot Size: 4,200 sq. ft.

Type: Single Family Residence

Style: Contemporary

Year Built: 1999

Stories: Two Levels

Area: Walnut

County: Orange

MLS#: P614401

Status: Active

On Redfin: 14 days

From Redfin, “Beautiful Newer Home At Cul-De-Sec Location W/ Friendly Neighbors. Tons Of Upgrades, plantation Shutters, window Frame, crown Molding, security System, Custom Painting, 2.5 Car Garagew/ Blt In Storage Rack, huge Master W/ Walk In Closet, main Fl. Bedroom Can Be Used As Office Home does need a carpet cleaning.”

Can anyone figure out what rule or rules guided the realtor’s use of capital letters? Perhaps the random cap approach?

Do you like the new short sale graphic?

I don’t know where the refinance money went, but it doesn’t appear to have been spent on the property. The white tile and cheap cabinetry might be original construction.



If the short sale goes through at the asking price, and the lender pays a 6% commission, they stand to lose $178,940.

Is this where I launch into a diatribe on why downpayments are going back to 20% because no lender will issue a second mortgage? Total losses on second mortgage loans like this one will have that effect.

Is this where I rant on the foolishness of lenders doing 100% CLTV cash-out refinancing? I must admit, after watching the S&L disaster, I never thought I would see equity requirements eliminated again. Back then it was commercial properties getting the wacky financing, but the lessons learned were universal. I guess each generation of lenders must make the same mistakes in the name of “innovation.”

(Note to self: refinance at peak of next bubble and rip off the lender…) Isn’t it just a bit too easy? Aren’t the consequences just a bit too light? (If there are any consequences at all.) It doesn’t keep the honest man honest when the lenders are just giving it away.

I would like to finish this week with a laugh (Warning four letter word ahead.) Does everyone remember David Lereah, the former economist for the National Association of Realtors? He wrote a book at the height of the bubble claiming there wasn’t one.

David Lereah

He came out with a new book now that the bubble has burst.

David Lereah’s new book

Thank you for joining us this week at the Irvine Housing Blog. Come back next week as we continue chronicling ‘the seventh circle of real estate hell.’ Have a great weekend.


135 thoughts on “Already Gone

  1. FairEconomist

    m1Xed uP CaPs is L33t, d00D! It’s a sophisticated play to the hacker market by scrambling the caps around but not so much as to freak out the general populace. (/joke)

    Oh, and the short sale graphic is a hoot.

  2. George8

    Is the 2nd mortgage always a recourse loan? If yes, the owner may not be off the hook this easily.

  3. Hmmmm

    What no picture of the 2.5 car gararage? WTF is .5 of a car?

    A severe lack of pictures of the FANTASTIC UPGRADES.

    If it sells for $550k it wil be a miracle. This property is a poster child for the boom and idiocy of the pricing.

  4. mav

    Awesome song for this whole mess.

    The banks already own most of the bubble homes. Do they realize this, or are they hoping for a gov’mnt miracle?

    Ahhh, the pride of ownership.

    The HELOCed Escalade / Suburban exodus to Texas is in the 3rd inning.

    We will know we are at a bottom when half of the Escalades in the OC are gone. That’s my metric for 08′.

  5. zornundo

    After looking at the rest of the photos on redfin, it just looks like some run of the mill house. That is such a tiny, cheap-looking kitchen. Definitely not gourmet 😉 And the towel?? Don’t you just love that towel so lovingly draped over the shower stall?

    “does need a carpet cleaning” – WTF is this supposed to mean?? This realtor is listing a home with dirty carpets? Aye dios mio! I’m guessing s/he just doesn’t give a fook right now.

    I am not very impressed by this home. It looks like some pos tract house.

    Sold in 1999 for $312k. And some poor schmuck bought it for $770k? Where’s my ROFLcopter.

    As to where the cash-out second mortgage went, who knows? They could possibly have had a lot of other debts they wanted to pay off. They had a down payment of at least $120k so maybe that wanted that back, too. If they were smart, they would have off-shored the money for after the short-sale.

  6. zornundo

    Is “Baghdad Bob” the endearment for that Iraqi who was saying “all is well” or some stuff when the U.S. was invading?

  7. former_irvine_resident

    Is the .5 is for a small car or a big lawnmower? Oh, that’s right – you don’t need one of those in Irvine….

  8. zornundo

    I thought Irvine was ‘planned’ and you wouldn’t need a car to get around, much less a wonderful gas-guzzling deal. [/sarcasm]

  9. Mr Vincent

    Taxes paid in 2006: $10,764

    I would walk away too.

    Most of those props that ipop listed yesterday on Backup Status will have the same problem. People getting in oveer their heads.

    Check todays headlines. Slow growth, slow jobs, slow wage gains.

  10. Stoic

    Good lord, can that garage be any more prominent in the front? Or is that the back? I grew up in Chicago where all the garages are accessed through the back alley and all the houses had at least some relationship to the street. Maybe I should submit this to Jim Kunstler’s site ( for the “Eyesore of the Month”.


  11. r€nato

    Maybe Lereah and that tool who wrote Dow 36,000 should get together and compare their relative assholishness.

  12. r€nato

    That ‘asshole’ is James Glassman, and he is (surprise, surprise) Karen Hughes’ successor at State as chief “rah-rah-America” promoter.

  13. Repack Rider

    Gee, with the $160,000 or so profit from the refi they’ll be able to afford the 20% down payment they’ll need for their next McMansion.

  14. ochomehunter

    If I had cashed out $200,000 with $0 downpayment, I would walk away in a heart beat, specially when Bush Administration announced that IRS will not assess any taxes on people who went into Foreclosure.

    One thing that I am not clear on is whether they will consider people who cashed out equity to fall into this category and get tax break? Does anyone know?

    One thing is there for sure, Bush’s plan gives all the more reason for people to walk away as they are actually saving taxes that they dont have to pay now.

  15. zoiks

    Bwahahahaha! Riiiight.

    Like the lender has 2 million lawyers to go after all the folks bailing on their 2nd mortgages.

  16. ipoplaya

    I’ve been in one of these models previously (Harvard Square is an area we’d consider buying in) and the kitchen is small and poorly laid out. It feels like a small apartment kitchen.

    Actually everything feels small in this particular model given the number of rooms they squeezed into 2200 sf. This is on the “bad” side of Harvard Square, very close to the 5, where the lot sizes got small. Based on the pictures, pretty much everything appears to be from the original builder. White Daltile went in across that whole development I think… Harvard Square has a great circular park in the middle of the tract and on the other side of the park, the lot sizes got much bigger. You can find 6000+ sf lot on a 2400sf home there.

    There isn’t much turnover in Harvard Square so few transactions have gone through recently. Based off the transactions this summer, which would have had this property in the low $800K range, it is probably worth $700-725K in today’s market. A larger (3100sf) nicer home on the “good” side of the development has been on the market for quite some time with no takers at a list in the mid $900K range.

  17. ipoplaya

    Now all we need are corporate earnings warnings to start coming out… That’ll hammer the market. I would very much enjoy a nice 1,000 pt. Dow drop right about now.

  18. Formerbanker

    good question, OC Homehunter…I was wondering the same and did not find definitive answers…historically, a bank could go after the homeowner for nonpurchase mortgage $’s and pursue a judgement that it may/may not ever collect on, but would only send the 1099 reporting amount of debt forgiveness for debt negotiated as forgiven – unless the statutory collection period after nonpayment was up (that’s several years) after which case they 1099 them.

    I hope there are a few in the banking industry today that will remember this debacle. I was never in the home mortgage biz, but as one who remembers the last banking crisis caused by RE in the late ’80’s/early 90’s, I always considered one’s prior short sales as a huge negative in my lending decisions, be it residential or commercial properties…and in the last few years, a lot of lenders could have cared less. Because stockholders look quarter to quarter, not long term at stock as ‘investments’ and want maximum earnings growth in the good times. And the comp structure for people making loans had no incentive for credit quality, only $ volume of loan originations.

    It’s amazing how much greed results in people justifying their decisions (bankers and homeowners alike).

    But what’s that saying ? “Be scared when they are greedy, but be greedy when they are scared”… so when those who have conservatively saved their $$ and housing drops 40%, you might get that house of your dreams…the banks that have enough capital to survive will, eventually, be clamoring for your low ball offers down the road…

  19. tenmagnet

    I agree the lay out does look horrible. The 5 bedrooms and 3 baths is nice but squeezed into 2,240 sq.feet, it’s definitely a shoebox. The back yard looks nice and seems somewhat spacious.

  20. NanoWest

    This is the first time I’ve seen a real estate agent offer up friendly neighbors as part of the package. I am wondering how friendly the neighbors will be after this home sells for $450,000.

  21. Purplehaze

    Love the connection built by IR between the run away borrowers and the lenders via this great Eagles song. You ROCK, IR!

  22. Mr Vincent

    “I am wondering how friendly the neighbors will be after this home sells for $450,000.”


    I am thinking that the “friendly neighbor” comment was made to offset the fact that the homes are so close to each other. Ample side yards are obsolete in Irvine.

  23. maureen

    You gave me a great laugh this morning IR – Thank You. These jackholes like David Lereah should be ashamed of themselves. He should be receiving a lot of hate mail right about now from the fools that followed his dumb advise. The best decision I made in 2007 was NOT to buy a condo.

    Thank you for the continuing sound advice and education that you provide for us all. I have read several housing blogs in the last several months, and the people that log onto this one are more classy and professional than the rest.

    I hope everyone here is taking a good look at Ron Paul.

    Google the “Ron Paul – House of Cards” video – Makes you think…

  24. tealeaf

    Exactly — the guy who said “we have the Americans surrounded!” a few hours before the thing was all over.

    There are some choice quotes from this guy that are so far from the truth, the similarities to the NAR’s spokesHOLEs is amazing.

  25. tonye

    “The Americans are being routed right now by our Glorious Army back to their barracks. Our Navy has sunk a great number of aircraft carriers and surface ships and our Air Force has shut down many stealth bombers.

    What? That booming noise? Those are fireworks being set to glorify The Mother of all Victories.”

  26. Law_Student

    That place is another overpriced piece of crap. It really blows my mind that someone would pay over $700k for a glorified townhome in the middle of nowhere.

    I wonder how loud the freeway is when they open a window.

    $400k tops.

  27. John

    Yes, the backyard does appear the one redeeming quality this property has. It even has trees blocking what would otherwise be a birds eye view for the Friendly Neighbors into the home and yard.

  28. Diane

    The bill also includes forgiveness for debt incurred in the “substantial improvement” of the primary home, which will be (dishonestly) used by homedebtors to get tax forgiveness on the 2nd or HELOC.

    Trust me, many of these homedebtors will get phony receipts and contracts drawn up to document the so-called “substantial improvement” to their homes, although we all know the money was spent on a blinged out SUV, hookers, trips to Cancun and plastic surgery.

    The tax forgiveness bill was too broadly worded, and pretty much allows homedebtors to walk tax free, if they can rationalize lying to the IRS. My guess is that many will be able to given our “victim mentality” society.

  29. Mike

    If you throw the address into google maps, you can see it is very close to the railroad tracks. That will be a nice sound to hear at 5-am.

  30. 25w100k+

    Really? Where do you guys all keep your down payment money? A 1000 point drop would really suck for me. 😛

  31. graphrix

    We get linked to quite a bit, but I think it is pretty cool, when Barry at the Big Picture posts about and links to IHB.

    Hat tip to Effenheimer for the .jpg.

  32. shiny

    got the same deal minus 100 sq ft. except for the master, the bedrooms are smallish. But they must be bragging size compared to this baby. is this considered “west” irvine? i note it is next to the 5/tollroad intersection. ipop tells me it’s real special out there.

  33. ipoplaya

    I keep my down payment fund liquid. $99K at Countrywide Bank (great rates on their Savingslink, just stay below the FDIC insurance level) and the rest at

    I’m not shorting equities, but I went very heavy on bonds in early December and added good-sized GLD investments to all the IRAs a few weeks back when it pulled back to 78. Also rebalanced my entire 401k into Fidelity’s Prime Fund. All new 401k contributions are going into Prime Fund as well.

    If everyone here is right about recession and inflation, bonds and gold are good places to be.

  34. tonye

    Dude….. we got lots of money in our 401Ks. No way to short. At least we moved our stuff into international and nothing into “market rates”.

    I’d love to be into gold right now.

  35. ipoplaya

    Amazingly, the freeway isn’t very loud at that location. There is a monster-sized soundwall protecting that area of Harvard Square from the 5, so it’s actually not that bad. The 5 noise is actually worse in parts of HS further from the freeway since there is no super tall wall blocking the sound.

  36. tonye

    Oddly, the bedrooms are tiny also when you go to those 4000 sq foot monstrosities in Portola and Newport Coast.

    In those McMansions you get a huge master bedroom suite… almost an apartment. Lots of wasted space in hallways and baths. Four tiny (10 by 10 ) bedrooms. A relatively large den/kitchen and a vestigial front living room.

    I dunno… but with reasonable design, you can have 4b/2ba in 1800 square feet and not feel cramped. My house used to be like that. Now it’s 2700 sq feet with 5b/3ba and it feels larger than those 4000 sq foot mcMansions.

  37. Mr Vincent

    IMO, downpayment money should never be held in anything other than cash. (Money market, CD, passbook etc)

  38. zornundo

    It’s the train whistle that’ll wake you up! The train itself isn’t too bad. I moved into an apartment about a mile or so from the tracks and the trains blow their whistles like mad! The first night I woke up every dang time a train ran through and blew its whistle, almost every hour. By the end of the week, though, it didn’t bother me one bit. Now, after 15 months, I don’t even notice it anymore.

  39. 25w100k+

    How about shorting the homebuilder stocks? While I’m not as much of a bear as some others here, I think all these crappy courtyard homes they are trying to pawn off for half a million around here are going to tank.

    Anyone else thinks the homebuilders who kept trying to cram as many units as close together as possible are going to eat it hard(er)?

  40. tonye

    I think they have a basement at High Time Liquor in Costa Mesa. That’s where they keep the California white wines and the imported stuff.

  41. lee in irvine

    Irvine Renter and all that contribute to IHB,

    It’s nice to get some PUB from a guy (Barry Ritholtz) who operates the best economic / market driven blog on the net! The Best and Smartest, Bar None!

  42. lawyerliz

    My Fla house has 4 bedroom in 2850 square feel and is nice and cozy. The rooms are nicely sized, not too big, not too small.

  43. ipoplaya

    A convenient way to reduce your exposure to equities if 401k options are limited is to take out a loan. You pay yourself interest as you make payments back. Park the loan proceeds into a money market somewhere. When and if you decide equities are healthy to go back in to, you pay back the loan.

    When we thought we were buying a house this summer, I pulled $50K out of 401k to increase my down so I could buy non-contingent up to $1M. Although we decided not to buy, I didn’t pay back the loan yet as the general direction in equities has been down and could go down quite a bit further. The loan processing fee was $150, but that $50K has been earning 3.5% after tax while the Dow has fallen 1200 pts over that span.

    I think I am going to add a precious metals fund to our 401k lineup so people can get exposure there if they desire. Metal is a good inflation hedge…

  44. tonye

    That’s very interesting.

    Do you have to keep those loan funds segregated or can you commingle them?

  45. ipoplaya

    I did some shorts on XHB earlier in the year (homebuilders ETF) but personally wouldn’t do any today. In my view the homebuilders reacted quickly to taking the pain on their financials in terms of writing down inventory values. The group has lost 60% of its value since earlier in the year so much bads news is already baked in to homebuilder share prices.

    Any signs of stability in the housing market will bring the bulls back into the sector IMO. As a matter of fact, if I saw XHB break below current support levels (around 16-17) and then trough, I might think about buying. Remember, equities are typically a good leading indicator. 3-6 months before the rest of the world figures out that housing has stabilized, homebuilder stocks will probably begin moving upward.

    This is just a personal opinion, not investment advice. Do your own research…

  46. ipoplaya

    It all depends on your 401k plan documents. Technically, I was supposed to use the loan proceeds only for a home purchase and should return them. I built my companies plan to offer a loan for home purchases at an 8% rate, and a loan for any purpose at 9%. The general purpose loan funds can be used for any purpose and co-mingled I believe.

  47. sunnyview

    hi, you guys got narrow scope in term of room size.

    my argument is weather the market would come back foundational, the normalization process may or may not happen during next two to five year.
    why? American mentality!!!

    we had teach bubble, house bubble, next wave will generate into gold, emerge market( China, India), or commodity (wheat, corn, sugar)
    There are multiple dimensions in globe economy,

    one side, Wall street need to be survive in any case, they have our 401k or other pension fund to play. another side most average American can not save hard, third foreign new richer put on the cash on table.

    In the turbulence environment as today, base on the rational or theoretical, could we judge there is a foundational in near future?
    oh, boy, It’s American, we have to take risk somehow, otherwise, you lost and miss that foundational( sure, i think there is, but when and how much, the art of state, only looking back u know,) .

  48. ipoplaya

    VoC is west of the 5 and they have basements in at least one of those developments. Not in CG, in Columbus Square on the Tustin side. You need the basement to hide in when they decide to blow up one of the blimp hangers…

  49. bring_back_debtor_prison!

    Everyone market promoter is an asshole. The Dow could get to 36,000 in nominal terms if inflation takes over and the dollar goes to hell. It’s called melting up. Afterall, stocks are an asset priced in US dollars. However, a 175% increase in the Dow will be considered a “crash” because gold will be up 10,000%. It’s all relative and the dollar is designed to fool people and distort their view of value. The dollar has consistently been devalued for 30 years as official government and Federal Reserve policy. Get ready for civil unrest.

  50. ipoplaya

    It’s kind of its own little area. If anything, I’d call it Walnut or College Park, but the houses here are much newer than the normal place in those areas. “West” Irvine is served by TUSD. The area this house is in is served by IUSD, with College Park Elementary and Vendano (sp?) Intermediate. They are older schools with so-so APIs as compared to many other IUSD peers.

  51. shiny

    if west irvine is TUSD, there goes another reason to live in westpark. My immigrant neighbors eyes glaze over when they tell me their high school kids attend “uni.” It plainly has considerable meaning to them. You would think their kids are in medical school or something.

  52. Alan

    A basement is a dry pool waiting to fill with the next storm.

    You wouldnt find any tract homes in So Ca w basements, it would have to be a custom home, too expensive to dig.

    My condo has a large basement garage… holds about 65 cars w central elevator and it’s flooded 3 or 4 times since it was built in 90. The first time it flooded in the storms in 92 or 93 when the developer was having an open house, some unsuspecting couple parked in the garage, took the elevator up to the open house units and by the time they went down the garage there was already 3 feet of water in it. I don’t believe they bought.

  53. bring_back_debtor_prison!

    What ever happened to debtor’s prison? Back in ancient times if you couldn’t pay your debt, you were put in jail or sold into slavery to pay it back. Your wife and family were sold as slaves, too. Consequences like that kept people out of trouble.

    What was to stop someone from getting a 2nd mortgage at the bubble top for more than their equity was ever worth (and do it on multiple properties)? Then take that money, liquify all their assets, put it in overseas banks and walk away? You didn’t break a law, so they can’t arrest you. Your credit is ruined, but if you take enough cash out, you don’t need credit? The IRS may come after you, I guess, but stealing loan proceeds from a stupid banker is not a taxable event! I kinda feel stupid for not buying a couple homes with zero down, cashing out a ton of fake equity, and handing over the keys. Damn!

  54. shiny

    and don’t gimme this shit that the word “immigrant” is racist. In fact, the most hardcore racists I have ever encountered are the original white residents of Orange County. I recall years back in my single days dating this beautiful blond 20 yr old from OC. She was adorable, I was very infatuated. But she was a product of OC so she was racist to the core. The cute thing about her is that she wasn’t really aware of it, she had just been raised that way. She was telling me some story and she goes “and then this sand [the n word] goes..” She must have seen my look so she responds: “oh, I don’t mean that in a prejudiced way, I just don’t know what else to call them.” (picture a doe-eyed young blonde batting her eyes at this point).

    I dated another blondie from OC. We were in line at “chester draws” (yes it was some years ago). She sees two rather large african americans in line. She asks me (too loudly) “they aren’t going to let them [the n word plural] in, are they?” These guys were Shaquile O’Neal sized individuals so I cringed, figuring a beatdown was coming. But luckily they were out of earshot. I was curious as to the origin of her mindset so i asked her: did you have some sort of bad experience with them.” So she tells me the following: OK, look our high school (Valencia) was playing one of the schools with them but I still went to auditorium (like she was giving them an open mind). These two were sitting there and they say “hey baby, slide on my rod.” So then she looks at me and says “can you believe it?”

    anyhow, I have met others and so i can tell that Orange County might has well have been the Confederacy back in the 80s.

  55. Alan

    Not only that, but the realtors-developers have special small furnature designed just for these small spaces for the open houses just to trick you into thinking the space is larger than it is. (like hollyweed) Then you buy the palce, put in your Queen size bed and look around and there’s no space left in the room. Wonder where it went?

  56. shiny

    I recall going to a kids restaurant with the one blondie: it was dominated by non-whites. So she looks around and tells me: too many black heads! (referring to hair color). I am telling you, OC was like the deep South at one time.

  57. CK

    I just stopped by the Gables last week for the heck of it because I wanted to see the Plan 4 with the basement.
    To say that downstairs would be every guy’s paradise would be an understatement. I’d probably never go upstairs if I lived there. With the EI (everythings included) deal it comes with a built in kitchen and everything down there. The model has a full on movie theater plus billiard room in the basement. Too bad the place is in Columbus Square. If you like checking out cool home plans, however, I recommend stopping by this one.

  58. ipoplaya

    IR, I petition that you sanction reverend shiny. He has potty mouth and makes absolutely no useful point that I can discern outside of a long time ago there were racists in OC. Whoa there, what a news flash that was…

    At least we didn’t have to hear about how much he makes again though. As I was reading I was waiting for him to work it in, but joyfully, the post concluded with no reference.

    Shinyhead – it’s not the word immigrant that is racist, its the fact that it’s practically all you post about.

  59. ipoplaya

    Alan says there are no basements in So Cal tract homes so there is no basement there CK. You must be lying. Take it back.


  60. Genius

    SRS and SKF (ultrashort ETFs) have made me lots of money lately. I’m not sure how much longer that party will last, but it was really nice over the past few months with the volatility.

    I agree that homebuilder stocks will stabilize before housing.

  61. Alan

    Boys, boys, boys…

    way too much koolaide.

    since when are million dollar homes considered tract homes.

    sure it’s a development that looks it could be a tract home but I would define anything designed to sell at 1M+ a custom home development.

  62. ipoplaya

    WTF? Tract homes are homes built in tracts, just like the Gables are. You know, Plan 1, Plan 2, etc. Phase 1, Phase 2, etc.

    How can they be custom homes when #1, the come in pre-determined floorplans, and #2, they are Lennar Everything Included which means you have very few options you can pay the builder to include? EI basically means pick your flooring and you are done…

    Villa Rosa at Woodbury, Mille Fleurs at Woodbury, Westbournce at VoC, Alexandria at VoC, Ciara at VoC, just to name a few, all larger TRACT homes designed to sell at $1M+. Your insano logic would make them all “custom”.

    Sometimes Alan, you can just say, “Hey there, whaddya know, I was wrong. Thanks for the enlightenment.” Whippin’ out some utter BS just serves to undermine the value in some of your more intelligent posts.

  63. Alan

    ok, i’ll admit that technically you are correct, identical homes in a single development are tract homes.

    There, feel better about yourself.

    I just don’t think the average American (not average Irvenite) thinks of million dollar homes when they think of tract houses.

    Wikipedia defines tract housing as “multiple identical, or nearly-identical, homes are built to create a community. Tract housing may encompass dozens of square miles of areas”

    Are there dozens of square miles of million dollar homes in Irvine? To afford one of these palaces your income needs to be 200K/yr +. According to the census data, there are about 60 households per zip code in Irvine with incomes that would qualify them to buy these homes, that’s a pretty small part of the market. Exceptions can usually be found to any generalization. I’ll change my statement to basements will not be found in tract homes in So Cal priced under $1M

    Happy Now.

  64. Formerbanker

    thanks for the info Qwerty and Diane…

    I’m sure the government won’t mind calculating the average $ amount of debt forgiven per walkaway mortgagee – let’s say $50,000 – and giving me an equivalent tax deduction ?

  65. ipoplaya

    I was running out to do just that but saw that Alan admitted he was wrong basements in So Cal and I had a slight coronary. Need to rest now, can’t make offer…

  66. 25w100k+

    Wrong. You’d have to make over 200k to afford one of these places NOW. I’d bet the good majority of million dollar Irvine homes weren’t sold at a million bucks.

    Still, even in a year, there will be a lot of homes at a million. There are plenty of houses in Irvine ‘worth’ (I use that term lightly) 2 million right now, so even if the market takes a huge hit (100%)…. well, I don’t think million dollar tract homes are going away anytime soon.

    I don’t think *anyone* here is bearish enough to assume you’ll one day be able to pick up a nice estate on an acre sized lot with a tennis court for a million bucks.

  67. IrvineRenter

    Sorry ipolaya, I don’t censure for content unless it is defamatory or way over the line.

  68. ipoplaya

    Yeah, I was just joshing anyway IR. If you were censuring for pointless posts, it could consume your whole day…

  69. tonye

    You’ve given a very good idea. I’d be better off taking out most of my 401K and burying it in the ground this year. After all, even if I paid 8% on it, it’d be money I’d be paying myself.

    We will be looking into borrowing from our 401Ks next week.


  70. ipoplaya

    I was born in the deep South shineola, and there’s no way old OC can even compare. The Klan was like the friggin’ Rotary Club there and instead of going to another restaurant in your example, that girl would have called her brothers and friends who would either A) wait outside to throw some full beer cans at those “black heads” or B) come inside to start a ruckus and roust them out.

  71. Graham

    My thought as well. Another thought was how many neighbourhoods have been affected by the empty bubble syndrome, knock knock nobody home. And just maybe the “friendly neighbour ” is the start of a truly positive equity builder, good neighbours equal good value, to help get realestate back on track and away from all of this negative talk and karma. That’s it we need positive real estate karma, how can we do that? Ok, Ive got it lets get a realtor on to a high profile media show with the likes of Peter Schiff and then……………………….!

  72. hb

    765K for a house with dirty carpets! Maybe they should borrow a carpet cleaner from one of the friendly neighbors and raise the price.

  73. ipoplaya

    One caveat Tonye, just in case you had not considered. You will likely be taxed twice on the earnings for any loan you take out. Let’s say you park it in a money market at BOFA. You get taxed on the interest you earn, paying back the loan with after-tax dollars, and then get taxed on the distribution down the line. If the capital preservation far outpaces the extra taxation, it’s a win of course.

    If your 401k doesn’t have good short-term investment options, it might make good sense. Mine is at Fidelity, and the Fidelity Prime Fund is currently paying over 4%. In my case, if I weren’t using the cash to shore up my down payment reserves, I’d park it all there and earn 4+% while the market tanks.

  74. Alan


    If something I write cases one of your posters (IPOP) to die from a coronary, did I commit murder?

    IPOP… is your life insurance policy paid up? I’ll have to try harder next time.

  75. lawyerliz

    This is in Brevard not Miami, no Cubanos here. Or, very few. They are drifting north.

    Why would I want to keep them at Bay?

  76. tonye

    OTOH, it would work fine for pure cash preservation.

    Given that my 401K does not allow me for a pure cash or gold position I think it’d be better to put my money to work for me. I don’t care if the 8% comes from taxable income, at least I guarantee myself a 5% (asssuming top tax bracket) on my own funds.

    And I could use the cash to pay off 5K in a credit card.

    The more I think about it, the more sense it makes to tap into my 401K.

    I suppose that it makes so much sense that the news media (tool of the economic polity) keeps harping its bad. They keep saying that tapping into a 401K is for financially desperate people, but it makes a lot of sense as part of an intelligent investment plan.

    Like most things… in an appreciating market it doesn’t make sense but in a declining market it makes tons of sense.

    I better do this before the Gov. realizes that people are understanding this and the IRS makes it more difficult.

  77. ex-tangelo

    Please please please think twice or twenty times before you take money out of a 401k for any reason. IF YOU MAKE A MISTAKE; like not making repayments on time, or withdrawing for an unapproved reason or get laid off, you immediately owe tax on the withdrawn amount + a 10% penalty.

    In related news, companies are now allowed to offer a “Roth” 401k in their retirement plan as well as the traditional 401k. (You may also contribute to a Roth outside of a company defined contribution plan, but you don’t get the company match, etc)

    Roths are more advantageous that 401k/IRA plans. The contributions are taxed, but the withdrawals aren’t. (Raise your hands: who thinks taxes will be lower in your retirement?) Another really good non-obvious benefit: Withdrawals of your contributions are not taxed or penalized. At all. For any reason.

    (Notice I said you can withdraw your contributions, not your entire balance. If you contribute $4,000 a year for 3 years, you can withdraw up to $12,000)

  78. ex-tangelo

    Please please please think twice or twenty times before you take money out of a 401k for any reason. IF YOU MAKE A MISTAKE; like not making repayments on time, or withdrawing for an unapproved reason or get laid off, you immediately owe tax on the withdrawn amount + a 10% penalty.

    In related news, companies are now allowed to offer a “Roth” 401k in their retirement plan as well as the traditional 401k. (You may also contribute to a Roth outside of a company defined contribution plan, but you don’t get the company match, etc)

    Roths are more advantageous that 401k/IRA plans. The contributions are taxed, but the withdrawals aren’t. (Raise your hands: who thinks taxes will be lower in your retirement?) Another really good non-obvious benefit: Withdrawals of your contributions are not taxed or penalized. At all. For any reason.

    (Notice I said you can withdraw your contributions, not your entire balance. If you contribute $4,000 a year for 3 years, you can withdraw up to $12,000)

    (apologies if I double posted. The posting thing is acting weird)

  79. ipoplaya

    Indeed, they are paid. I am worth much more to my wife deceased than I am living and breathing. If I keel over, she’ll have enough to pay off the mortgage and have a few hundred thousand left over with which to either educate the kiddies with or take some exotic vacations on… As she could probably call herself a “millionaire” if such an unfortunate thing were to happen, I’m sure she’d have no problems finding a suitable substitute to take care of my husbandly duties as well!

  80. ipoplaya

    Hitting your 401k is most often for desperate or needy people but also for enlightened and fairly sophisticated investors that understand the ramifications, risk, etc.

    For uninformed or undisciplined Joe Saver, I think mainstream media is right and it’s probably a bad idea. For someone such as yourself, it’s a simple portfolio re-allocation tool to use during market swings.

  81. BD

    Question for the bog: If we assumed that 2004 was the peak of the fundamental support crisis for housing in the US and CA and Irvine, why do we believe that prices will decline to 2004 values?

    I would say that we may be in for declines to 2000 levels. This is based on the research I’ve done here and elsewhere. Many or most people in the market for a new home have been “pressed” to see the value in 2004 prices. What happens if we see a genuine recession in OC? Many of the high dollar jobs supplied by the RE folk are now gone and we are left with what “real people” can afford. This is what IR is saying with the numbers on each post (downpayment, income requirement, etc). What if this cycle of RE prices took all of the downpayment out of the average guy? And, it takes 10 years for that guy to SAVE the downpayment to satisfy the lender on that new home?

    What if we are in for what Japan experienced in RE over the last 20 yrs (declining values)?

    I know this sounds silly, but I could buy a 5000 sqft house outside of Chicago and afford to fly weekly to OC for a job for what it costs to live here and still be ‘a head’ for what it costs to live in Irvine and still put 300K in my bank account. What do you think?

    The arbitrage opportunity does exist. People in Denver still complain about all of the CA people who moved to Denver to “live” (but worked else where) and pushed housing up (which subsequently declined)?

    Just some thoughts…


  82. zoiks

    “And I could use the cash to pay off 5K in a credit card.

    The more I think about it, the more sense it makes to tap into my 401K.”

    Hmm. Maybe a few months ago you should have been saying “The more I think about it the more it DOESN’T make sense to tap into my CREDIT CARDS.

  83. ipoplaya

    My opinion on this topic is pretty well documented here and I am one of the less bearish blog regulars. I don’t think its possible to return to 2000 pricing in nominal terms as that would dismiss the effect of many years of inflation.

    For example, in 2000 I contracted to purchase my home from the builder, for approximately $206 per sf. Will my 1622sf 3/2 return to that price? Highly doubtful. It very well could fall to $260-270 per sf by 2009, which would essentially be the same price as 2000 in real dollars. That price would be $440K and it is very close to the 160 GRM that IR uses. That would be another drop of 25-27% on my particular property. Personally I think places will come down another 15-20% at bottom.

    Or if you look at it another way, and this might not come out right since its late, but falling to 2000 price levels in nominal dollars by 2009 would be equivalent to falling to mid 90’s pricing in terms of real dollars. Does that seem possible? We’ve had a recession between then and now. Why would another recession send us back to property values that pre-date the last recession’s values in real terms?

  84. tonye

    (1) Credit card wise… after Xmas we normally take two months to pay off the bills as they come in. We like to keep a minimum amount of cash around. So, why should I keep a huge stash in a 401K and watch it go down while I keep payment Citibank that money? I might as well go to the Bank of Tony and borrow from myself.

    (2) Also, I can park money in a very safe haven of my own control. Our employers do not give us so many options.

    (3) I have no clue what your comment about the “many months ago” means. I think perhaps you think differently but we find credit cards to be very useful and handy. Handy because every one takes them and we buy a lot over the Internet. Useful because I can complain to the Credit Card company if a merchant fools with me. It’s a convenience I could not do without. Besides, we don’t have the high rates on our accounts.

  85. lorrieambrosino

    I have some friends who bought a decent 3bdrm/2bth home near University High School for $185 in the mid-nineties. Does anyone think we will get back in that price range-or is that unrealistic?

  86. No_Such_Reality

    Inflation adjusted? At bottom, potentially. The hangover from our excesses will be worse than the 1990s. If rents don’t soften, it’s unlikely. If rents soften, the bottom merely gets lower. Inflation adjusted, the price would be around $250K which depending on condition, size and location and HOA, will put it pretty close to cashflow for an investor.

    Also, cities are starting to wake up to the foreclosure problem and dragging the lien holders/title holders into housing court to fine and force repairs and maintenance. In other words, the cities have figured out they can hang the bank with maintenance and repairs while the bank holds the REO to prevent blight.

    If the cities and counties get aggressive with making banks maintain properties to community standards, I think we’ll see even more aggressive pricing to clear them from the books, particularly in the cities where the bank is getting handed fines and repair bills.

  87. SeattleGameboy

    Hitting your 401k is most often for desperate or needy people but also for enlightened and fairly sophisticated investors that understand the ramifications, risk, etc.

    Hmmm… I swear I’ve heard that before….

    Oh yeah, that’s right, that is the SAME EXACT reasoning people used to HELOC their houses to the moon and bought more real estate!!!

    This may be the single most irresponsible advice given on this board, and very ironic since today’s feature is all about how irresponsible the advice from the chief economist for NAR was.

    If anyone else is thinking about doing this, don’t. First, it is illegal since you are taking out 401k for non-approved reasons. Second, it only works if EVERYTHING goes well. If you get hurt, you lose your job, your money market fund collapses (happening right now), or ANYTHING, you will be in a serious financial hurt. All for very little benefit.

    401k is for your retirement and the way social security is going, you will need every cent of that fund, so leave it there and don’t touch it. If you are afraid that the market will tank, move the funds to overseas funds or commodity funds.

    And tonye, credit card should only be used for convenience, not to live beyond your means. You may disagree with the notion that you are living beyond your means, but if you cannot pay the credit card bill in full at the end of the month, every month, you are living beyond your means. You are doing the exact same thing that homedebtors who took out HELOC’s to pay off credit card debts and cars.

    If you say that “but I always pay it off in few months”, than you should have enough discipline to save the money you need for Christmas BEFORE Christmas. In which case you get a double benefit of GETTING interest instead of paying interest.

    If you don’t even have enough discipline to save money for a couple of months, why do you believe that you will be able to pay back the money you take out on 401k?

    I think if we have learned anything over this real estate crash is that people should avoid risk whenever they can. That lesson should be applied everywhere else where money is concern, not just real estate.

  88. SawItComing

    “Grilling their stomachs in hell”

    I have a BBQ apron with his picture and this quote.

  89. Jake

    Million dollar tract homes in Irvine (nevermind the 2 million dollar ones) only appeared for the first time in any significant way during the bubble years. So I think it’s safe to say that these homes will be sub-million after the bust. It could take a few years, but it’ll happen.

  90. Laura Louzader

    One of our Founding Fathers’ favorite bette noirs was debtors’ prisons, and when we broke from England, these were abolished forever and are unconstitutional.

    A ‘virtual’ debtor’s prison works better-at least a credit abuser is shut down for a few years after a bankruptcy or foreclosure. And I don’t care how cavelier some people are about money, when you walk away from a mortgage and a massive deficiency judgement, you are ruined for a long time. Your credit will be trashed, which will not only keep you from buying a home again, but will prevent you from obtaining decent employment or renting a desirable apartment. It means ten years (at least) out of your life. It is NOT fun, and it is a massive comedown from living in a large, new home and owning expensive new cars. You will be living in substandard housing in a much lesser neighborhood and have to deal with incredible obstacles in your everyday life, like not being able to order a pizza or buy anything online, because you need a credit card for that.

    For most people, that will be sufficient punishment. Given that one third of all homeowners took cash out of their houses to the limits of their equity, we are going to see massive suffering out there for quite a few years hence.

    Additionally, there might be criminal penalties for borrowers who grossly overstated their incomes on their mortgage applications. Last I heard, lying on a loan app to obtain a loan you wouldn’t qualify for if the facts of your situation were known, was considered to be BANK FRAUD. A former CBOT trader here in Chicago, having blown through his grubstake, netted himself a 5-year term for lying on a loan app in order to get a large, unsecured loan to trade with. He lost the money, and when he couldn’t pay it back, the bank very easily discovered that he lied on the app and prosecuted.

    That was about 10 years ago. Now there are so many Liar’s Loans out there, you’d have to turn the country into a gulag to imprison all the lying borrowers who grossly overstated their incomes. We couldn’t afford all the prisons we’d need.

  91. Laura Louzader

    I’m setting up to do DIA puts. Little risk because they are cheap, and lots of liquidity.

  92. Laura Louzader

    Ah, another Chicagoan who reads Kunstler! You are a soulmate.

    I rid myself of my car in 1987 and moved to Chicago, so I could lead a real city life in a classic northern city, from a city that had been trashed by cars.

    Then, in 1995, I read Kuntler’s GEOGRAPHY OF NOWHERE. It said everything I had been thinking about my native St. Louis for most of my life.

    There need to be more of us. Do you live on the north lakefront? Do you have a blog?

  93. Laura Louzader

    BD, you’d have to go pretty far outside of Chicago to get a 5000 sq ft house cheaper than the ones featured on this site. You can get them in places like Woodstock or Matteson, but at the cost of a hellish commute and stratospheric fuel costs, plus the loss of the urban amenities of Chicago and the near suburbs.

    I’d compare Irvine with Naperville, where the prices are comparable and the taxes are death-duties. So Irvine just might be a better deal for the money, and I think both places have quite a distance to drop.

    I’m in the Rogers Park-Edgewater area, and a newly-built 3-flat condo right behind me has the units priced at about $600K. These are units with about 1600 sq ft. The only thing that justifies the price is the really high quality of the construction and the wonderful architecture- it is a 1920s-style bldg with incredible brickwork and details, such as fine, expensive mullioned windows, instead of cheap windows with plastic muntins as most developers use. I believe the seller had to make a considerable concession in the price to sell the one occupied unit.

    It looks pretty bubbly here to me. The prices are way out of parity with rents for comparable units, and nothing is selling.

  94. ipoplaya

    “I think if we have learned anything over this real estate crash is that people should avoid risk whenever they can. That lesson should be applied everywhere else where money is concern, not just real estate.”

    Higher risk is keeping your valuable retirement nest egg in equities right now. Less risk is pulling part of the balance out and leaving it cash. I’ve preserved $4-5K of capital as a result of my 401k loan since the summer as the market has fallen. If I paid back the funds today, that capital preservation will likely mean I’d have $30-35K more to live on when I retired.

    I am the fidiciuary and plan administrator for a $5M 401k plan with Fidelity. I have not been made aware of any laws with regards to LOAN purpose. Fidelity allows general purpose loans as a matter of practice to be included in 401k plans they administer should the plan sponsors, i.e. the employer, elect to offer them.

    ERISA and various IRS regs. define the conditions surrounding hardship withdrawals, which avoid the excise penalty for early withdrawal, and IRS regs I believe prescribe loan repayment terms, typically 5 years for convenience loans and longer for loans related to home purchase. I don’t even believe the DOL, which regulates plans, requires information regarding loans to be reported…

  95. BD

    This is a great blog! I nearly always read well thought out posts!

    I’m wondering can anyone explain what happend to Japan and their RE crisis? Why did / has their decline lasted so long? It seems they have had near decades of declining prices. Why hasn’t low interest rates (0%) and inflation kept their prices from falling? This is my concern for us here. We appeared to be overbought at 2004 prices much less late 2005/06.

    Thanks for any and all insight!


  96. Jake

    The Japanese real estate bubble, like most bubbles, resulted from rampant speculation. The spark for the speculation was decades of official government policy that encouraged savings, combined with huge trade surpluses. The money had to go somewhere, and the scarce resource of real estate, particularly in Tokyo, was a natural sink.

    The current bubble in the US real estate market is similar to Japan’s in several ways, but the causes are different. Yes, there’s a lot of speculation involved, but the availability of capital is not due to large pools of idle capital, as was the case in Japan. Rather, it’s due to so-called financial innovation (e.g., neg-am loans, CDOs, etc.), a lack of proper regulatory oversight, and the easy availability of credit spurred by monetary policy after the bursting of the tech bubble.

  97. tonye

    (1) I don’t need a lesson in financial responsibility! We are not HELOC to death and even if the RE market were to crater 60% we’d still have gobs of equity, so there. Nor am I proposing to borrow from my 401K to lease a Bimmer. Jeez…

    (2) We maximize our 401K contributions because otherwise we get hit with MUCHO tax. Capisce? We put a gob of money on those accounts, plus our employers add to it. IF this means that I may carry a credit card balance at 12% it actually makes a lot of sense. AFTER TAX we come out ahead by putting as much into the 401K. We pay ourselves first and Citibank last.

    (3) I’m very concerned that the options that are being offered us in the 401Ks are not good investments for the next two years. Thus, in the interest of capital preservation, I think it’s a great idea to withdraw a chunk of cash, put it into CDs and then pay myself the interest back. I can guarantee myself the 9% rate of return. The way I look at it, it may net me 4% a year after tax but that’s much better than the potential loss in the market. This is a way to DIVERSIFY and PRESERVE my retirement investments….. How could the Feds complain about this? If anything, it’s a very proactive and intelligent way to manage our investments.

    (4) The bottom line is that many people have been brainwashed to think that borrowing from a 401K is only for financially irresponsible or desperate people. This is not the case at all. It is actually a very good idea for people with financial forethought and discipline. So, bug off with that criticism! And stop telling me that I’m living beyond my means when my portofilo is worth quite a bit. Hell. I’m driving Hondas and Acuras instead of Benzes and Land Rovers.

  98. BD

    The drivers of the bubble are clearly there. I’ve heard folks on CNBC call it the ‘shadow banking system’ – the SIV, CDO, collateralization and securitization of big packages of mortgages that were created by many other than the traditional banks and thrifts.

    My question still is what will keep prices from falling to 2000 or earlier prices? It’s been suggested that inflation and rising rents and falling rates will create a floor somewhere near 2003 prices but, I’m still not conviced. If the housing market works like any other market it will fall past / overshoot the natural equilibrium point before settling to a true fundamental equilibrium based on traditional affordability. This may be because now that the ‘shadow banking system’ has been obliterated the remaining players will and have tighten credit standards dramatically. If as IR says we are moving quickly to 20% down and 30 yr fixed market place many people will have trouble saving anything paying nearly half their income on rent. What do you think?

  99. SeattleGameboy

    I am the fidiciuary and plan administrator for a $5M 401k plan with Fidelity.


    Is $5 million figure supposed to impress me? Excuse me while I yawn. So, just because you hand out some 401k brochure for a local small business, I am supposed to be impressed?

    If you were my 401k plan guy, I would pull my money out tomorrow as I would have some serious questions about your fiduciary judgements.

    It is hard enough to get people to save as is (thus the HELOC disaster), to encourage people to pull it out for whatever reason is just idiotic. Especially when there are bond funds and treasury funds where it is good as keeping cash.

    Tonye, if you cannot pay your credit card in full at the end of every month, then by definition you are living beyond your means. Does not matter if you drive a Honda or BMW.

    I am done preaching. I just hope that no one else around here believes that taking money out (or even borrowing against) of 401k is a good idea (except for emergencies).

  100. tonye

    Listen… just because you can’t figure out how to manage your money and live in a cash environment it doesn’t mean the rest of us have no idea.

    The cost of money is pretty low right now. So carrying a credit card at 12% when you are getting an after tax on a 401K return of 70% BEFORE any returns on that amount is obvious.

    From the sounds of what you are saying you are not contributing to a 401K nor are you in the top tax bracket. Being in Seattle you do not have a state income tax either.

    So please, if you have no intelligent comments to add, do not.

    Oh… the Seattle RE market ain’t doing too good regardless of what the NAR may be saying. My sister’s house has been on the market for months despite having been well prices months ago ( below comps ), a prime location and my sister’s ability to deal because of their very large equity stake. The problem is that there are no buyers.

  101. tonye

    What the geography over in Chicago? Over in Southern California everything is measured by distance from the ocean. Obviously the ocean is a very hard barrier since you can’t build on it, and it’s very hard to live in a boat… so that distorts the pricing schema over here.

    Typically, as RE prices drop, buyer move west closer to the Pacific. The converse is also truth. Thus there is safety net of sorts.

    You can see this now by the decimation of RE in the Inland Empire. Riverside, Moreno Valley, Victorville, Palmdale, etc.. are dropping like rocks. Meanwhile there is more resistance near the coast.

    This is not to say that prices are not out of kilter everywhere and that they are not correcting, but from a percentage point of view the Inland Empire will drop more.

    Naturally, from an absolute point of view, in terms of actual cash, the coastal RE will drop more since it’s always priced higher.

    In Chicago you may have somewhat of a different take. The City is central and hence you have a North, West and East option. In SoCal there is no real City, hence mostly you have an East-West line from the SF valley down to the El Toro Y.

  102. BD

    Another quick question for the group: this housing bubble seemed to also create ‘spin off’ bubbles. What I mean is that as folks went to their homes as an ATM to spend beyond their incomes we got addtiional bubbles in lots of other areas. Contractors could charge a fortune for home remodels, car dealers got sticker price on $80K BMWs and Benzes, restaurants sold more high-end booze and champagne than ever before – everyone was rich (or played as if they were). Is it possible that this also drove rent prices up past their normal equilibrium point as well? And what will happen to rents and home prices if we do end up with a serious local recession?

  103. ipoplaya

    Gameboy, I don’t care a bit about your uninformed opinion. Doesn’t matter to me one bit if you are impressed or if you walk off the curb tomorrow and get creamed by a bus… It appears you have reversed course on such a loan being illegal. Hum, maybe the guy who gets paid to deal with ERISA, plan design, the DOL, etc. (me) does indeed know a bit more about what people can or can not do with their 401k funds than ole Gameboy…

    If you had such responsbility, education, and experience, I’m sure you’d have indicated as such. Personally, I’d be much more comfortable with the knowledge put forth by someone that has a personal liability with regards to the health of $5M of others money vs. someone with zero stake in such matters. Maybe that is just me… Just because you don’t have the discipline to extract funds, park them in cash without touching them, and return them when the market improves, does not mean the rest of us are similarly undisciplined.

  104. tonye

    Just let him be.

    It’s been raining in the NW for almost a whole month now. My mother came down with a severe case of arthritic rheumatism and it has taken her two weeks down here to almost get over it. I just with she’d sell her house and move down here where we have dry weather.

    She’s owned her house for more than 30 years and it’s free and clear so she could dump it and still walk out with beaucoup bucks. More than she could spend anyhow.

    It’s clear that the weather up there really screws up people. Who knows, maybe this “gameBoy” actually lives in East Tacoma, Fife, Puyallup or Federal Way and is waiting for the market to crash so he can afford a condo in South Seattle. ;-D

    Lots of single wide homes up in that part of town… East of Tacoma that is… 😛

  105. Laura Louzader

    Here we have Lake Michigan,and the best suburbs are the north lakefront suburbs like Winnetka, Braeside, Highland Park, Lake Forest , Glencoe, Kenilworth.

    The north lakefront neighborhoods command a substantial premium over other city neighborhoods, except for anomolies like Rogers Park ( my nabe) which is reasonable because it has a major pocket of blight and problems. I’ m on a good street a block from the beach.

    But our beach is not usable year round, and we don’t have the Pacific Ocean.

    All homes in all areas are steeply overpriced in relation to both area incomes, and to comparable rentals.

  106. furious sugar

    Update- this property goes to auction this week (public notice posted in the Irvine World News). As you said IR- it was already gone.

  107. Alan

    Oh absolutely.

    Current thinking is not if there will be a recession but if it will be mild, moderate or severe and how many jobs will be lost.

    Construction will take a big hit with job losses up to 1M.
    Manufacturing should be stable because we have already lost a lot of manufacturing jobs.
    Auto sales will slow, I think it was last week the Chrisler anounced they were closing dealerships.
    Mortgage brokers and real estate agents will have to look to new lines of work.

    Apartment rents will depend on vacancy rates, if vacancy’s rise, rents will fall to keep units full. With a recession, expect vacancies to rise so rates should fall. The fall will occur in the least desireable units first so you may have to make a little longer commute to get a better deal.

  108. momopi

    Is this house really 5 bedrooms? Looks like 2 car garage + drive way, I thought for 5 bedrooms you’d need 3 car garage for build permit? Perhaps it’s 4 bedrooms + loft conversion?

  109. cc

    Our friendly neighbors called us and advised of the 4Sale of 9 Utah ….formerly our home and original owners. They’d love 4 us to move back. This house though was right for two people. We retired, sold at the right time, & moved home to Texas.
    Here are some facts: Regarding the 2.5 garage, the .5 was an oversized garage. We utilized the .5 by building from one end to the other a “platform” and used the space as you would overhead bins. On the platform, we stored holiday items and under the platform, we stored tools & equipment.
    Upgrades: We actually placed the shutters, the crown molding, painted some rooms, planted all the trees, lawn, flowers, etc.
    Small space utilization: the master bdrm and the one over the garage were the largest. We had kingsize furniture in the master and queen in the other. The 3rd had a full size and the other room was an office. The room downstair served as an additional bedroom with a sofa bed. We had quite a few visitors and this house was very accommodating. One time we had 11 (adults & teenagers combo) for a week of summer fun. We loved our spring/summer visitors. Yep, kitchen was indeed small but cooking in shifts & a few BBQs were our answer. You should see the Texas kitchen we now have!
    Reference the friendly neighbors…I still remember all the block parties we had, yes it was a great neighborhood.
    Reference current status of house: I have to agree, it needs updating.
    Lastly, we would love to move back but as they say, “can’t afford my old house in California”. My 4,425 sq ft home in Texas will do for now. Great neighbors here as well.

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