Irvine Home Improvements Show No Bounds

Today we have another over-improved property bought at the peak. Properties like these will rival the North Korea towers for the most foolish investments during the bubble.

15332 MONTPELLIER Ave Irvine, CA 92604 front 2

Irvine Home Address … 15332 MONTPELLIER Ave Irvine, CA 92604
Resale Home Price …… $1,250,000



I know you’re still just a dream
Your eyes migth be green
Or the bluest that I’ve ever seen
Anyway you’ll be blessed

And you, you’ll be blessed
You’ll have the best
I promise you that
I’ll pick a star form the sky
Pull your name from a hat
I promise you that
I promise you that
Promise you that
You’ll be blessed

Blessed — Elton John

California real estate is truly blessed; you can spend unlimited amounts on acquiring and improving houses, and someone will always come along and pay enough for the owner to recoup all their foolish spending and then some. Back in October of 2009, I covered the topic of Superadequacy and looked back on a number over-improved homes littering the Irvine landscape.

Castle 1

Do you remember the
Castle at Kron and Ecclestone Circle? Or perhaps the monstrosity at Angell and Michelson? Or the Joke on Karen Ann Lane? The trend in over-improvement during the bubble is most noticeable in the omnipresence of pergraniteel.

During the bubble, the more you spent, the more you made. People
actually believed that adding common improvements — something anyone
could do to their own taste — would add more value than the
improvement cost. Flippers made money because they were there; breathing was the only prerequisite to success. Skill
and financial acumen had nothing to do with it, as evidenced by the losses they took when they were left holding the bag.

2 Angell Front

4931 Karen Ann Ln front

Home improvement and flipping shows became so common, they developed
their own channel. Like moths to a flame, fools flocked to flip houses.
The infamous flops are profiled here.

Today’s featured property is another one where you have to ask yourself, why?

Why did someone take an ordinary house — overpay for it — then
proceed to demolish it in favor of something that is vastly
over-improved for the area. This makes no sense. If this made sense, we
could drive our entire economy on building and rebuilding homes…
wait, we tried that once, didn’t we?

Yesterday’s featured property was another in the superadequacy genre.

111 HILLCREST   Irvine, CA 92603  inside111 HILLCREST   Irvine, CA 92603  kitchen

Over the last year or so, WTF asking prices have been somewhat less common as sellers simply did not bother. Now with a hint of stability in prices sellers are behaving as if the bubble never happened, the decline was a aberration, and prices have already surpassed the peak on their way to the moon.

15332 MONTPELLIER Ave Irvine, CA 92604 front 2

Irvine Home Address … 15332 MONTPELLIER Ave Irvine, CA 92604

Resale Home Price … $1,250,000

Income Requirement ……. $262,076
Downpayment Needed … $250,000
20% Down Conventional


Home Purchase Price … $770,000
Home Purchase Date …. 2/2/2006

Net Gain (Loss) ………. $405,000
Percent Change ………. 62.3%
Annual Appreciation … 12.3%

Mortgage Interest Rate ………. 5.11%
Monthly Mortgage Payment … $5,436
Monthly Cash Outlays ………… $6,630
Monthly Cost of Ownership … $4,620

Property Details for 15332 MONTPELLIER Ave Irvine, CA 92604 Superadequacy

Beds 5
Baths 5 baths
Home Size 3,800 sq ft
($329 / sq ft)
Lot Size 6,000 sq ft
Year Built 2007
Days on Market 10
Listing Updated 1/22/2010
MLS Number P718464
Property Type Single Family, Residential
Community El Camino Real
Tract Rc

Located in the heart of Irvine, spectacular and magnificent home custom designed by a renowned architect and completely remodeled in 2007, with spacious living room, dining room, family room, den, office, and 5 spacious bedrooms upstairs, each with attached full baths and built-in closet organizers. Top-notch materials, including imported travertine, wood, and bamboo flooring, iron-wrought stairway, upgraded crown molding, baseboards, and window treatments, all new electrical, plumbing, dual-pane windows, enhanced insulation, dual central AC/heating, and so much more to impress your guests. Gourmet kitchen with upgraded dark cabinetry, stainless steel appliances, and granite countertops. Upstairs laundry, large driveway, 3-car direct access garage, close to nearby park, schools, shopping & freeways. Great Irvine school district. Don’t miss this rare opportunity to own this incredible home! * Seller bought another home. * Not a short sale. * Please call to schedule a showing.

Gourmet Kitchen Award

Not a short sale. Sure at this ridiculous asking price, it will not be a short, but when it rolls back to comparable value, it might end up a short.

The owner bought the original house at the peak, and demolished the value that was there, and spent hundreds of thousands rebuilding while comparable values were tanking. If he is lucky, the improvements may have brought the house back up to his purchase price, but recouping the renovation costs and making a profit?– I don’t think so.

60 thoughts on “Irvine Home Improvements Show No Bounds

  1. DarthFerret

    They want $1.25 Mil for a home that backs onto Jeffrey? WTF, indeed! And while things will get better for the condos to the NE once the underpass is completed and the train doesn’t have to blow its horn in passing anymore, that will actually be a downer for this house, because traffic on Jeffrey will speed up and traffic noise will increase. As it is now, they’re probably too far away to hear the train or nearly so.


    1. AZDavidPhx

      Don’t be fooled – none of these screwed debtor’s want a piddly temporary payment cut. They all want the same thing: Principal Reduction. The majority of them are just too proud to say it after years of preeching free-market laissez faire during the boom and now suddenly ready to head down the Socialist way as the cold unforgiving hand of Capitalism slaps them across the face.

      ‘Loan Mod’ is just the code language they use to romance the rest of us – that’s why it is always followed by a wink and a grin.

      They want the income taxes removed from AZDavidPhx’s paycheck to be transferred their way instead of something else that AZDavidPhx would rather see it spent on – and rightfully so, it’s all his fault!

      It’s because of the moral hazard that the government created with their bailouts – but Obama is now on the record as of last night that he ‘hated the bailout’. Well that’s nice thanks for telling us how you feel – what’s your take on Simon leaving American Idol Mr. President?

      Weak leadership, weak people.

      1. Jwinston2

        I agree,

        I find it ridiculous that Obama made these comments yesterday:

        “We can’t afford another so-called economic “expansion” like the one from the last decade…, where prosperity was built on a housing bubble and financial speculation.”

        Only to then state

        “That’s why we’re working to lift the value of a family’s single largest investment — their home. The steps we took last year to shore up the housing market have allowed millions of Americans to take out new loans and save an average of $1,500 on mortgage payments.”

        These statements conflict with each other. If we cannot afford another housing bubble why is Obama supporting policies to increase the value of family homes, homes which he admitted where overvalued.

        1. AZDavidPhx

          I completely agree – the statements are not compatible. What he is really doing is selling inflation to the masses. They are shoring up housing by debasing the currency.

          I hope everyone took special notice of the big job programs being planned – this is when the rising prices is going to begin as all the newly counterfeit money starts flowing in.

          They are going to claim that rising prices is the result of the improving economy – just watch.

  2. AZDavidPhx

    Our culture has this problem where we confuse ‘activity’ with ‘productivity’. We have a love for makework.

    The housing pornography shows just reflect our stupidity.

    Taking a perfectly functional 1.00 countertop and replacing it with a trendier but equally productive 2.00 countertop and claiming that something of value is the result.

    You watch the Property Virgin show and they depict the lemming of a first time buyer making a mad dash for the kitchen to make sure all the pergraniteel is there like they have been brainwashed to expect.

    So now we get all this malinvestment and wasteful spending on cosmetic ‘upgrades’ that ultimately ends up on the lemming buyers loan balance plus a few grand to pay for the ‘investors’ time spent doing the makework.

    What’s going to happen when granite is no longer the minimum countertop? Are going to go on another spending binge to upgrade all the houses again?

    I am amazed that the housing shows are still even running after such a craptacular implosion – but they are still at it, running the propaganda daily and manipulating away indoctrinating new generations of house buyers into hopeless debt and a lifetime of servitude to financial institutions.

  3. winstongator

    Let’s say we have a couple that makes 312.5k – above the income required. Let’s say that they had a much lower income before and don’t have a huge savings built up – just finished graduate school or physician residency training. It will take them 8 years to save up the $250k down payment saving 10%/yr into the DP savings. They’d also put money into retirement or college savings.

    I believe very few people today get their down payments through savings and nearly all through capital appreciation – either RE or stock. What you end up with is people with potentially more to put down, but shakier income prospects – is that 55 or 60 year old really going to be working 30 years from now? The cap appreciation available for DP’s is pretty much gone, and I see that having a big impact on loans that will need >= 20% down.

    1. AZDavidPhx

      This is exactly what I have said is the elephant sitting on the couch that the housing bulls are pretending is not there when they point to large down payments in Irvine as evidence that the market has bottomed.

      When you ask them what the odds are that these down payments were saved the hard way, you get a bunch of hot air – my favorite so far is the ‘401K loan’ assuming that the average buyer is sitting on a huge 401K.

      I painfully laid out the arithmetic and not one person challenged the obviously impossible conclusion that Irvine has some off the charts abundance of savers who live below their means for 10 years to scrounge together these payments.

      It’s obvious that when the bottom is kicked out from underneath the first time buyer, all this Irvine immigration is going to hit a brick wall.

      1. AZDavidPhx

        Large bonuses now!


        The arithmetic only accounted for median income – not median bonuses!

        1. Planet Reality

          Maybe you don’t know anyone young and successful who makes this kind of money. I can tell you first hand thier bonus would be 50-100k a year. You can count that in the 300k I don’t care, they can save money much faster than your gross pay rate.

          1. AZDavidPhx

            This is my new favorite hot air excuse – way better than the 401K loan.

            What should we call it, Planet? I am thinking we can call it the ‘Hidden Turnip Blood’ theory.

            You do see how stupid your argument is don’t you?

            You have substituted ‘median income’ with ‘median base salary’. I am pretty sure that measures of median income would reflect a household’s aggregate W2 which would include bonuses. Every bonus I have ever received has been taxed by the IRS and reported on my earnings statements.

            I suppose you could always go turn some tricks on the corner to score some cash bonuses underneath the IRS radar screen, but I’d hedge my bet Irvine keeps it’s streets fairly clean.

          2. Planet Reality

            You are off planet strawman again.

            I made a simple point that is correct for high income earners. I made no generalization on the median income. You always hear what you want to hear.

          3. AZDavidPhx

            If you ignored the median income then your entire point is invalid because the original argument was a conclusion based upon a comparison between median household income, median down payment, and median sales price.

            You came in and attempted to refute the claim by cherry picking a special case or as I like to call it ‘blow smoke’.

          4. Planet Reality

            Do you have a problem in reading comprehension.

            The thread begins: “let’s say we have a couple making 312.5k” and them makes outlandish claims that it would take 8 years to save 250k.

            The reality is that said couple gets a lump sum payment each year in a bonus that totals an IT analyst gross income.

          5. AZDavidPhx

            OK, I see where we have gone off track here.

            I was making a point using median income assumptions and assumed that your response was to my observation when you were actually responding to Winstongator’s example assuming a 312K income – in which case I actually have no real problem with your response since it’s difficult to analyze where a 300K income is on the wage distribution scale for Irvine. You could be right – I don’t know.

            So I’ll take back what I said; you were not trying to substitute 300K as the norm – 401K loan is my favorite again.

        2. JustHadToPost


          Or – a couple can save every penny they make for 2 years and not spend at all. In southern California.

          What bizarre delusions will spring next from the mouth of bulls?

          Im actually still laughing about it…

      2. wheresthebeef

        Not if they are the typical OC keep up with the Joneses…luxury car leases, vacations, latest gadgets, the trendiest clothing, dinner and drinks out a few times per week, $100/month gym memberships. Add kids into this equation and the savings go out the window.

        Most of these large down payments are from bubble equity from a previous home sale. Most people made little if any return in the stock market for the last decade (S&P 500 returned a nice -24%).

        1. Planet Reality

          Do you really think the people making over 300k are the phony OC debt trash. You probably wouldn’t even know they made over 300k.

          1. wheresthebeef

            I know many people making this kind of coin…and let’s just say they aren’t drivng beater Hondas and saving money by renting cheap in Santa Ana. Welcome to Orange County my friend, join the club or be cast out (there is too much pressure around here to fit in). Just because you make XXXK per year, does not mean you live a frugal financial life.

          2. IrvineRenter

            I have to agree with wheresthebeef on this one.

            Planet Reality, you reason and think like a recent move from the Midwest. You still believe in frugality, and the people around you model it. (I may be wrong, but the thinking is consistent.)

            Once people come to Orange County, they often get caught up in competition for status, fun experiences and coveted playthings. They don’t save and they spend to excess out of a sense of entitlement; they obtain the finest things in life because they deserve it not because they earned it or can pay for it.

            If you and your circle of friends are making $300K plus and spending like a pauper, welcome to the blog, you will appreciate the message of frugality and paying down debt.

          3. BeachRenter

            We (my wife and I) make over $350K per year and fit the example above of recently coming out of physician residency. we have managed to save close to $200K in the past 18 months. We rent an amazing house in South OC that is 50 yards from the ocean (with a white water view). We spend wisely, but do not horde all we make. The savings scenario presented by Planet Reality exists but the problem is that the houses we would like to buy are $1.25K-1.8K and these require a significant amount at 20% down plus adequate reserves. If it take us 3 years to save these reserves in our unusual situation, imagine what it takes the average wage earner. I am very happy renting and laugh when I see people sacrificing all to own a home that saps them of the joy of life that they purchased it to achieve.

          4. wheresthebeef

            Beachrenter…I applaud your willing to save and be financially responsible. Trust me, you are definitely not the norm for this area. Most people are not willing to sacrifice and save a huge downpayment. This only gets more difficult if there are massive student loans to pay off, if kids are in the picture, and if mom/dad wants to stay at home to raise the kids. Saving then gets extremely tough.

            Bank as much money as you can and enjoy life.

          5. winstongator

            To Beachrenter, I am happy for you and you need to post after you end up buying. But to my point, to get the DP & reserves for the house you want will probably take almost 5 years. Savings rates like that will not sustain the rates of sales that were going on during the bubble.

            I’m sure you know people from residency that jumped right in, buying…18 months ago puts them done in summer 2008. Pre-Lehman, so loans were much easier to get than even 3 months after that. Prices not nearly as bad as 06/07, but still higher than today. They might have gotten 100% physician financing, and thus any savings since then would be brought to the closing table if they needed to move.

            I also think that people are more cautious with earned savings rather than capital appreciation ‘savings’. Especially because the history of cap appreciation tends to build the belief of future cap appreciation.

            Congrats again! Are you both docs? What specialty?

          6. burner

            I’m a notch down in the z-score from Beachrenter’s income. But just to give more texture to the picture of those of us in other areas of the curve, I present my case:

            I made around 180K in ’09 (single income, my wife stays at home). I make the max contribution to my 401k in order to receive my company’s 100% match as well as the added tax benefits. In addition I contribute $500/month to my daughter’s 529 plan as well as pay $1000/month for her private school. We own both of our cars and currently rent a small 2bd apt. Through the help of to track expenses, we’re able to sock away around $4000/month.

            We’re currently in the market for a 1.0 – 1.3mil home. Had we not made a lucky play by buying in Irvine prior to the bubble, it would take many years of ‘delayed gratification’ in order to save up for a 20% DP. I’d tend to agree with AZDavid that these large DPs (sans an equity sale) are an anomaly and not in line with current income levels.

          7. BeachRenter

            I totally agree with your take on Cap appreciation. We bought a house and totally remodeled during residency and sold right before the bottom fell out of the local R.E. Market (Not CA) so we also have that profit but when you are trying to raise capital for a future down payment, you become very cautious with this cash.

            Lots of 100% deals were floating around in 2008 as signing incentives but have not revisited lately to see what is currently out there. I know a few who jumped right in and they are, obviously, none too happy

            The bottom line is there is still such a fever (in So Cal especially) that you are nothing without ownership of a great house. It is very strange and causes people to do things that any and all logic tells them they shouldn’t. We are not yet far enough removed from this housing bubble to be able to see clearly and recognize that there are many ways to save for retirement (whatever that is). Home appreciation was never what my parents talked about or counted on, they bought a house to live in.

            TO Wheresthebeef – 1 kid already, 1 on the way. It isn’t that hard, we are not sacrificing anything – Except the 2 Range Rovers in the driveway!

          8. burner

            I agree with you, 4 years isn’t very long (although that would push my wife’s tolerance 😉

            That being said, making 180K a year is probably 70K/yr more than the average Irvine family…and I only have the expense of one child. Just a WAG, but I’d think an average Irvine family (with say, 2 kids) would struggle to put away more than $2000/month. What’s the median Irvine home price for a 2000-2500sq ft SFR?….700K? Now you’re talking 7-8 years of frugality; doable – yes, plausible – unfortunately in our consumption society, no.

        2. Walter

          There is a middle ground here.

          I have family members making ~$200,000. They live in a condo bought back in 2000, never refied and have lots of equity. They drive nice cars, but they are 5+ years old and are paid off. They have kids and take very good care of them, but that does not cost a kings ransom. And they save, A LOT. They will be buying in Newport or Irvine in a few years and a down payment will not be a problem.

          How many people like this are out there, I have no idea. But not every is on the two extremes these conversations tend to end up at.

          1. winstongator

            So they’ve been saving for 10 years, and will also have some cap appr. That was my point – for the income listed, it takes a fairly long time with reasonable savings rates, and even a couple years with very aggressive savings. This = # of DP’ers from savings only is pretty small.

          2. Marc

            I wonder how much longer they will have “lots of equity” in a condo bought in 2000 with a lot of property prices reverting back to these levels…

          3. Walter

            Heaven help us if that happens, you would be looking at 60% – 70% off the peak. Although I would not complain, I am waiting to buy and I could pay cash if prices go down that much.

      3. winstongator

        OK, 300k includes bonus. You’re saying they would save $125k/yr. Take 10% off to 401k + college savings. Take another 30% off for taxes. You’re left with $180k. To save $125k, they have $55k to play with.

        PR – can you say that you fall in that category and have saved that…easily? My wife and I are in that category, and it has been somewhat of a challenge to save an extra 40-50k over the past 6 months.

        I did not say it was impossible, but it is definitely not ‘easy’. I expected IR to chime in that he had saved at least that much, to which I’d say that he wasn’t ordinary. What I said was that most people with those DP’s did not save them, and the number of people able to save that DP at that income is pretty small.

        1. Perspective

          That’s the kicker! When you’re talking about Obama’s defined “rich,” (> $250k) you need to lop-off the top one third for taxes.

        2. AZDavidPhx

          312K salary is equivalent to about 15K per month take home pay.

          If you saved 100% of that you have 180K in savings after one year. Probably not a very likely scenario.

          To hit 125K you would have to sock away 70% of that 180 take home pay.

          Spread that remaining 55K over 12 months leaves you 4600.00 a month to cover your expenses.

          It seems doable over all but the whole scenario seems to be a huge corner case when your local median family income (a smaller sample than household) is alleged to be about 111K which is nowhere near 300K and uses a sample likely to be higher wage earners.

    2. Geotpf

      $312.5k is a lot of money. Let’s say they rent now for $3k a month. Two luxury cars at $1k a month each. $1k a month each on clothes and entertainment and stuff. $1k a month each on insurance and utilities and food. 50% net income paid in taxes. All of these are very high estimates, but they should still have $48,250 a year left over. If they do better with their taxes, and skip a little bit here and there (two cars at $500 a month instead of $1k each), they probably could save $75-100k a year or more.

      Now, the real question is, how many couples actually make $312.5k a year?

      1. winstongator

        It can be done, or at least get close, but for 2 or 3 years. Even beyond the how many $312.5k earners, how many of those people can stomach the aggressive savings?

        1. Walter

          “how many of those people can stomach the aggressive savings?”

          The life described above does not sound too miserable. I think many could stomach it.

      2. Perspective

        “…Now, the real question is, how many couples actually make $312.5k a year?…”

        People tend to marry others “like them.” This is one reason for the disparity in income levels: College grads marry other college grads; MBAs marry lawyers; Dr.s marry dentists, etc.

        This answers more “who they are” than “how many there are” though, huh?

      3. christian

        From the 2006-2008 American Community Survey 3-Year Estimates for the OC= 9.6% of households make more than 200,000.

        So the answer is less than 9.6% . It is not that many people period.

  4. lowrydr310

    IR, I tried to register so I could log in, hopefully preventing akismet from flagging every single post of mine as spam, but I get “New membership accounts are not accepted at this time.” Oh well, the only downside is that you have to approve every post, and none of my replies ever nest properly.

    AZDave said:

    “Our culture has this problem where we confuse ‘activity’ with ‘productivity’. We have a love for makework.

    The housing pornography shows just reflect our stupidity.

    Taking a perfectly functional 1.00 countertop and replacing it with a trendier but equally productive 2.00 countertop and claiming that something of value is the result.”

    I used to live in “The Ranch” right next to Deerfield. The elderly couple next door hadn’t made any upgrades to their home since they purchased it new in the early 1970s. I’ve been in the home before; while the countertops along with everything else were ‘perfectly functional’ they weren’t very appealing (well sort of, in a cool retro ‘mid-century modern’ way). This is one case where upgrading isn’t necessarily a bad thing.

    I do know the point you’re trying to make, however. We’ve seen too many examples where flippers install PerGranitEel and a fresh coat of paint and expect a $100K profit.

    (BTW Thanks to Prop 13, the owners of that old house in the ranch paid less than $1000 in property tax last year!!!!)

    1. IrvineRenter

      Zovall will look in to your problem and see if he can correct it. I don’t know why our software singles out certain people. We have banned very few IP addresses, so it shouldn’t be that.

  5. Perspective

    Creditors are going after strategic defaulters (when and where recovery is available):

    “…Amid a crisis that stripped $6.4 trillion, or 28 percent, from the value of U.S. residential real estate since the 2006 peak, lenders are exercising their rights to pursue unpaid mortgage balances. To get their money, they can seize wages, tap bank accounts and put liens on other assets held by debtors…”

  6. Swiller

    Principal reductions NEED to be made, either to the homeowner, or by foreclosure and selling the home. Banksters and government don’t want the market to correct itself so they throw money at the problem, lower interest rates to zero (what’s next…paying people to keep a loan that is $200,000 underwater?).
    Whether david from AZ likes it or not, principal reductions need to happen. The difference between his bitter spew about homeowners being given principal reduction or the bank repossessing it are of little consequence other than the fact a foreclosure will hurt much more than principal reductions.

    1. Planet Reality

      Principal reductions are needed so that Obama and GWB alike can realize their dream of keeping home prices elevated to save our banking overlords.

    2. AZDavidPhx

      Oh but they don’t need to be given – as you can see the banks are more than willing to foreclose and let the houses sit empty.

      Reducing the principal is just another hit to the balance sheet – why do that when you can foreclose and wait for inflation?

  7. newbie2008

    I knew lots of Ph.D. and M.D. immigrants and some not so educated ones who were able to save 30% of their fellowship money, $50,000 per year or students even making less. But once they get get the second house and higher pay the savings rate when way down. Some still are saving at 20-25%, but the pull is hard with the wife and kids to spend more. It seems to me that the ability to save is lost upon the third or fouth generation, but also is part learned/trained and inborn.

    I’ve also know many making over $200,000 per year that have only saved in their 401k and not much else. Some times not even into their 401k or IRA.

    BTY: tax deferred 401k contributions are capped out in dollar terms (maybe ~22,500 for over 50, 17500 under 50). So the percentage allowed varies depending on age and salary. Check with your CPA or company.

    Saving for downpayment asided, the typical person buys via a loan and sells on average in 7 years. So buying high results in large month debt service, selling expense and high risk with any downturn which results in large loss for the homeowner. High prices also drive up rents to the point of ~30% income. The problem is not the lack of home appreciation or down market, but the prices were over inflated. GWB, Feds, Banks, BHO and John Q. Public have the notion that deflation in housing is the issue.

    It’s like the drunk saying his problem is a hangover and he needs more drink to cure it.

  8. Swiller

    @ Perpesctive Not only should banks be prosecuted by law and the ringleaders sentenced to prison or death, the american people need protection from the corporate rapists that have been sodomizing the general citizens since Reagan started the massive stripping of regulatory compliance.
    Banana Republicans seems to think smaller government is stripping the protection for average citizens and handing them the keys to the U.S. Treasury.

    1. bohica

      Just imagine what the corporations can do now that they can spend unlimited amounts of money to their favorite candidate.

      1. Jwinston2

        Nothing stopped them from doing this before. They just had to be more creative in the ways to spend/contribute the money. The same goes for Unions, which are a bigger issue in California than the Corporations.

      2. AZDavidPhx

        I was glad that Obama called them out on that last night. Populist as it was – it at least shined a light on them in front of a few million people.

    2. Jwinston2

      what? All I can say is you sound like someone who believes in the least plausible hypothsis, ignoring all of the most reasonable explanations for our current economic situation. Please continue with making a desired explanation into the only one. For example I would compare your statement above to saying the following “I left a saucer of milk outside overnight. In the morning, the milk was gone. Clearly, my yard was visited by fairies.”

  9. Sac_Boomer

    I worry that some of my age peers are dumping their inheritance into this cesspool. While it is a form of bubble earnings (our parents’) it will represent a significant loss of future security.

    I was able to work out a viable principle reduction plan for myself, after becoming a daily reader. It didn’t even require bank approval or a waiting period. I’m paying down a fifteen year mortgage in eight years. As it turn out this my most viable plan to be able to retire. It has become so important, that we are continuing to pay it down despite the effects of furloughs and deferred COLAs, to the tune of 9%. No complaints, I know we have it better than most.

  10. nefron

    Two items: 1. I believe that Ben Bernanke was quietly approved for another tenure by the Senate today. 2. Anybody heard about Darrell Issa pushing for more investigation into what happened to the TARP money? I didn’t get the entire story, but it sounds like he’s not letting the story quietly die away. Hurray!!

    1. WhyShouldI

      In the last 10 years I saved 50% of my salary and I’ve saved up about 650k$ – on a small income at first to the substantial income I have now. There’s no capital gains from ANYTHING in there. The recession, the timing of cash inflows, life events the stock market crash – all of this insured I have a negative dollar return over ten years of investing (though, not a ten-year negative % return). In fact the crash vaporized a good 60k$ of what I saved.

      I could sink this all in a house… and now I wonder… Why should I? Did I dedicate ten years of my life just to buy a place to stay? Should I hand over cash I’ve earned, hour per hour, to some dude who bought that house for no money down at 200k$ ten years ago and now expects to get all the money I’ve saved in that time just because of that.

      I’d say FUCK this!

      650k$ is a shit ton of money. OC homeowners throw these numbers about on houses as if it’s just a walk in the park, but the reality is when you earn it one buck at a time it’s not a walk in the park. You can buy a lot of stuff for 650k$, and a lot of stuff that’s going to be a hell of a lot ore enriching to your life than a home address – or establish a business, or travel the world… The world is quite literaly your oyster for the kind of money people spend on homes here.

      In two years, if armageddon doesn’t hit again, I fully plan to have a million stashed away – and I sure ain’t gonna hand it over to some guy for a place to stay.

      It baffles me the enormous quantity of life energy Californians spend on acquiring and maintaining houses.

      1. newbie2008

        The current econ package was used in the great depression, inflate your way out of it. Problem is that the prices were already inflated before the house prices started to go south. The problem is not house price slump and loan defaults — they are the symptoms. People are defaulting because the prices were too high to support on one’s salary or the lack of salary. The govt and bailout cure, inflate try to inflate housing cost more, so it will be worth continuing to make the payments or pass the buck (sell the inflated house price) to your neighbor’s children and grandchildren.

        The drunks are calling for more drinking to cure hangovers and liver pain.

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