Charming detached condo on a quiet street. Warm home with peaceful sun
soaked back landscaped courtyard. Wood flooring and custom paint.
Within walking distance to Alderwood elementary. Resort style pools,
spas, gym and parks all part of the association. Near the 405/5/133
FWYs. Close by entertainment includes the Irvine Spectrum and Laguna
Beach.
sun soaked? Look at the surrounding walls and buildings. That courtyard will feel more like a cave than an open patio.
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Paid peak prices past the peak. Check…
Watched prices drop 20% since then. Check…
Asking for a profit despite market conditions. Check…
Praying for a greater fool to come along. Check…
Preparing for a short sale. Check…
Feeling stupid. Check…
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I know I stand in line until you think You have the time to spend an evening with me And if we go someplace to dance I know that there’s a chance you won’t be leaving with me And afterwards we drop into a quiet little place And have a drink or two…… And then I go and spoil it all by saying Something stupid like I love you
I can see it in your eyes that you despise The same old lines you heard the night before…… And though it’s just a line to you for me it’s true…… And never seemed so right before I practice everyday to find some clever lines To say to make the meaning come true…… But then I think I’ll wait until the evening gets late And I’m alone with you The time is right your perfume fills my head…… The stars get red and on the nights so blue…… And then I go and spoil it all by saying Something stupid like I love you
Perhaps the best illustration of the problem with the housing market is the simplest one. Speculators with access to 100% financing did not have to worry about losing money, so they went out and bought every property available and bid prices up to very high levels. Now that prices are falling, they are simply walking away and letting the lender absorb the loss. The big lesson lenders are learning is that 100% financing brings in more business, it just isn’t the kind of business you want. The new housing bailout bill passed by Congress and signed by the President has a provision in it eliminating downpayment assistance programs. From this day forward everyone will need a downpayment. With all the losses lenders are absorbing due to the defaults of 100% financing purchases and refinances, you will not see them bringing those programs back any time soon.
When I first started putting downpayment requirements on posts, people were incredulous. I was repeatedly told 20% downpayments will never be required again. Zero down financing was here to stay. Perhaps it will rise to 5% or maybe 10%, but 20% is from a bygone era. Well, go try to get a loan from anyone other than the FHA and see what they tell you. There will always be programs allowing you to put less than 20% down, but good luck qualifying for one of them. From this day forward — until we build the next bubble — a minimum of 3% down through the FHA will be the primary avenue of first-time buyers. Everyone else better have 20% down, or you will not be buying.
One of the overlooked features of the bottom of the market is the difficulty in qualifying for a loan. Prices drop because buyers cannot get loans. When prices look relatively cheap, very few people will qualify for loans to take advantage of the low prices. That is why prices are low. If everyone could qualify for a loan, they would bid prices up like we saw in the bubble rally. The future of Irvine’s housing market is going to be a lot of loans at the conforming limit — currently $417,000 — plus whatever downpayment people have saved. The median will probably be supported at around $430,000 because that is the conforming limit plus 3%. If you have saved 20% or more, you will be one of the few buyers who can bid higher, and you will likely find some outstanding deals at the bottom. Those $900,000 homes at the peak will be going for $500,000 for the conforming limit borrower with 20% down.
Quiet end unit location that backs to greenbelt. Three bedrooms, 3
baths, 2 car attached garage. One bedroom and full bath down. Wood
laminate floors. Granite counters in kitchen.
Yes, there is a garage, and inside, there is a wall…
As I mentioned in the introduction, this is a simple transaction. The former owner bought this property at the peak with 100% financing. The first mortgage was $552,000. The owner made some payments, but then stopped. The total outstanding balance was $555,044 at the time of foreclosure, so that is what the lender bought it back for. The second mortgage was a complete loss (JP Morgan Chase Bank is hating life.) If this property sells for its asking price, and if they pay a 6% commission, the total loss on the property will be $144,894. The bank is trying to get a few bucks back but they are over market, and they will need to reduce price to find a knife catcher. Expect to see this same, simple story over and over again as this crash drags on.
I hope you have enjoyed 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.
🙂
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God gave me travelling shoes, God gave me the wanderer’s eye, God gave me a few gold coins to help me to the other side. Looked around and said: be careful how small things grow, God gave me travelling shoes and I knew that it was time to go.
Sent in the ship at night to take me to the hidden port. Found me the key at last to open up the prison door. Brought down the blackbird’s wings, gifted me with beggar’s eyes. Sent in the jackals to tell me I should say bye, bye, bye.
I’m home, home, Home, home, home And I’m home, home, home, home, home But I’m miles and miles and miles and miles and miles away Where can I hide?
God gave me one last chance, gave me one last reprieve. Jah gave me hunger, gave me the air to breathe. Gave me one suitcase, gave me one last goodbye Gave me travelling shoes, without them I would surely die, die, die
Home, home Home, home, home (2x)
Miles and miles and miles and miles and miles away Where can i go? Where can I hide?
New Listing (24 hours)
