IHB News 5-15-2010

I hope you are enjoying this beautiful weekend. I have a nice middle-class overpriced Irvine property for you to look at.

Irvine Home Address … 34 DEER Spg Irvine, CA 92604

Resale Home Price …… $699,000


It was 1989 my thoughts were short my hair was long

Caught somewhere between a boy and man,

She was 17 and she was far from in-between

It was summertime in Northern Michigan

Splashing through the sandbar, talking by the campfire,

It's the simple things in life like when and where

We didn't have no Internet but man I never will forget

The way the moon light shined upon her hair

Kid Rock — All Summer Long

Writer's Corner

I am planning a vacation to Central Wisconsin in late June. It got me thinking about my life and times there, and Kid Rock came quickly to mind.

After writing about real estate for more than three years, I have covered much ground (pun intended). What I find as I build a library layer upon layer is that I find new richness and new connections within the subject matter. I have half a dozen or more ideas for posts floating around in my mind at one time or another. I rarely run out of ideas.

I have become attuned to my own writing process. The posts where I am reacting to a news story or commentary can be written as a train of thought, but I have to think about more complex posts for a few days before I start writing it. I have a major post in my mind on Las Vegas that I hope to birth this week. I am never quite sure when I will get it done. The more complex posts take more time to write, and they take some time to age.

Lately, I have been enjoying the time I spend with images and comics the most. I still enjoy writing the posts, but I am most entertained when I am working on a silly graphic. Don't know why, that's just the way it is.

I get a great deal of creative release from writing this blog. I get to explore funny ideas and interesting themes more completely than I would ever do on my own if others didn't read it. The fact that so many of you stop by each day to read is very motivating. Nobody wants to leave the stage.

During the week, often while I am driving, I have these profoundly meaningless insights that I want to share in the writer's corner. I lose most of these ideas, and many are better off lost. I may share a few more next week as I plan to do a better job at capturing them.

Strange encounter

Friday night I was walking with my son through the Irvine Spectrum. We were following twenty feet behind two women talking. I saw some papers fall out of one woman's pocket, so I called out to her. She didn't hear me, so I sped up, still holding hands with my son, and as I closed in on the papers on the ground, I was still ten feet behind these women who didn't acknowledge me.

When I was almost there, I realized the papers were cash. I grabbed the cash and raised my voice enough to get the women's attention, and I gave her the money — But for a moment, I didn't want to. The thought goes through my mind, "are you stupid? This is cash. It's found money. If you wouldn't have seen her drop the money, you would keep it. Forget what you saw!" Funny how the mind works, isn't it? She's lucky she didn't drop any big bills….

And now for some great satire:

Have No Fear, More Bailouts Are Here

By Ron Coby May 10, 2010

Monday morning, President Obama makes his way to the podium to give a very important message to citizens everywhere after last week's mini market crash. It will probably go something like this:

My Fellow Americans, as you know, my administration inherited an economy on the brink of an economic depression. And we took quick and decisive action to repair a global financial system that was on the verge of collapse. After spending trillions of dollars getting this economy going, it appears that a new crisis is developing in Europe with Greece leading the way. Unfortunately, this crisis is now spreading to Portugal, Ireland, Italy, and Spain (the PIIGS). Unlike the previous administration, my administration will take speedy steps to prevent another financial crisis like that of 2008. In order to prevent this new economic disease from spreading to our markets, I've sent an urgent request to Congress. A new law should immediately be passed by both the house and the Senate: Prices of stocks and homes will no longer be allowed to fall, they can only rise.

My fellow Americans, let me make this clear so there's no confusion: It's okay if the stock market goes sideways as long as stocks don't fall. We're going to set 10,000 Dow Jones as our new floor. I want Americans to feel very confident that they can invest their money into the stock market without ever losing another dime again. Also, every 1,000-point rise in the DJIA will become a new floor so that all investors will be protected and feel confident that they can secure their retirement by investing in the market.

My fellow Americans, I want to make something very clear. This country, along with all major industrial countries around the world, are fighting a debilitating war. This is an economic war and the enemy is deflation. As you know, I reappointed Ben Bernanke to be the commander and chief to fight this war. Mr. Bernanke not only has an unlimited supply of ammunition (dollars) to fight this war but also to win it. He has the willingness along with the full backing of my administration to deploy all monetary ammunition against this very powerful and dangerous enemy. I'm highly confident that Mr. Bernanke will create as much money, out of thin air, to defeat falling prices. My administration will no longer tolerate falling prices and I believe I have the right man at the right time to win this historic battle. And remember, they don’t call him “helicopter Ben” for nothing.

Next, I have also urged Congress to lift the debt ceiling of the United States from 14 trillion to infinity. I will no longer put up with any hindrances to fighting this war on deflation. This will provide my administration an unlimited amount of fiscal ammunition to continue battling falling prices. To stop the decline of falling prices of homes everywhere, we'll buy 95% of the remaining supply of homes to stabilize the very weak housing market. The US government is already backing 95% of all mortgages from our first phase in this economic war. Make no mistake, this administration — and really every administration — is built upon one word: BAILOUT.

I want every person and every company to know that there's no such thing as “too big too fail." I also want every country around the globe to know that their will be no nation “too big to bail” and that, of course, includes Greece and the other PIIG nations that will soon get slaughtered. I've instructed my commander and chief to immediately deploy a fleet of government helicopters filled with bales of newly minted $100 bills. We'll soon have thousands of those government helicopters dropping dollar bills all over the globe, so please don't worry. Greece, Portugal, Ireland, Italy, and Spain — we'll be there to bail you out right along with California and all the other bankrupt US states. This great nation has an arsenal of unlimited amount of dollar bills so there are plenty of them to go around.

In summary, I know that many of you will worry that a victory in this global battle will bring on a new enemy — inflation. I want to reassure any detractors of my new plan that we've already taken decisive actions to make sure inflation doesn’t result in rising interest rates. The Federal Reserve has been ordered “to keep rates low for an extended period of time,” and that extended period of time is forever. Any government bonds that aren't purchased by investors or nations will simply be bought by my great Fed Chairman. Don't for a second doubt that this great and powerful nation will use all means at its disposal to win this global war on deflation. My mission is clear: This country — in fact, no country — should ever tolerate falling asset prices again.

May God continue to bless America.

Housing Bubble News from Patrick.net

Fri May 14 2010

U.S. House Seizures Reach Record as Recovery is, uh, "Delayed" (bloomberg.com)

Recovery? Show me the Money (Mish)

41 percent of Minneapolis area single-family houses believed 'underwater' (minnpost.com)

Hawaii foreclosures way up again (google.com)

Houseowner left with big bill, trashed credit, after rejection for federal loan modification (nctimes.com)

A bank that only lends to walk-aways? (snl.com)

Banks Ignore Delinquent Borrowers (cnbc.com)

Perfect Quarter at 4 Banks After Fed Shovels Them Full Of Counterfeit Cash (bloomberg.com)

Senate votes to ban certain screw-the-customer mortgage broker bonuses (articles.latimes.com)

Do Americans Spend Enough Time Researching Mortgages? (bucks.blogs.nytimes.com)

Tax credit's end to hit house prices? (azcentral.com)

Housing Begins to Fade Without Taxpayer Blood Donations (online.barrons.com)

Why California Is The Next Greece (businessinsider.com)

The Cash Value of Real Estate Explained (irvinehousingblog.com)

Millions of Jobs That Were Cut Won't Likely Return (nytimes.com)

Food-stamp tally nears 40 million, sets record (reuters.com)

The Twilight of the Welfare State? (roomfordebate.blogs.nytimes.com)

OMG 3.8% tax on all house sales in Obamacare bill! Really? No. (patrick.net)

Thank You Daniel B. ($100) for your kind donation.

Free Trial of the Landlord's Bargain Finder

Thu May 13 2010

Housing bulls "not paying attention" to facts (finance.yahoo.com)

House prices fall, but news spin rises (bankrate.com)

Behind upbeat data are inflation facts pointing to crisis in 2012 (marketwatch.com)

Housing never really improved (doctorhousingbubble.com)

Gold hits all-time high as investors seek haven (edition.cnn.com)

Gold Climbs to Record as Investors Seek Alternative to Currency (bloomberg.com)

Furious Real Estate Decline Coming; Beijing House Prices Plunge 31.4% (Mish)

The Chinese Real Estate Bubble (businessinsider.com)

Roubini Says Greece May Lead Euro Exodus, China Faces Slowdown (bloomberg.com)

Bank Bailout Protesters Storm Ireland's Parliament (dailybail.com)

Volcker just saved Wall Street's bankers, and now he owns them (tnr.com)

Little counterfeiter flees country, Big One across street still forging (latimesblogs.latimes.com)

How to profit from volatility, chaos and misery (theautomaticearth.blogspot.com)

Ammiano carries bill to amend California's Prop. 13 rules (sfgate.com)

Democrats Reject 5% Down Payment Rule (blogs.investors.com)

How to turn Congress Inc. back to just Congress (washingtonpost.com)

Gov't corruption means Americans pay most in world for cell service (informationweek.com)

I escaped ATT DSL hell! (patrick.net)

Free Trial of the Landlord's Bargain Finder

Wed May 12 2010

Mortgages: Strategic Defaults Are On the Rise (news.yahoo.com)

Anger, Fear Driving Many Mortgage Defaults (online.wsj.com)

JPMorgan Chase Warns Investors About Homedebtors Walking Away (huffingtonpost.com)

Government's Zero Down-payment Mortgages (old but good – bullionbullscanada.com)

Latest Mega-Case Against Housing And The Housebuilders (businessinsider.com)

A Lost Decade Ahead for Housing (smirkingchimp.com)

Repeating the housing bubble mistakes (mybudget360.com)

Senate Backs Weak, One-Time Partial Sort-of Audit of Fed's Bailout Role (nytimes.com)

Ron Paul Says It's NOT Too Late To Call Senator About Watered-down Fed Audit (Mish)

Artificially low interest rates bad for economy (detnews.com)

In bed with Fannie and Freddie (washingtontimes.com)

Have No Fear, More Bailouts Are Here (minyanville.com)

Union City landlords blast rental tax (contracostatimes.com)

Poor guy has to lower price from $22.9 million to $18.9 million (patrick.net)

Patrick's Australian relatives save the family farm from developers (illawarramercury.com.au)

Tue May 11 2010

Luxury houses not immune to short sales (azcentral.com)

Newport house foreclosed at $7.8 million (mortgage.freedomblogging.com)

Frank Lloyd Wright's Ennis House Now Half-Price (huffingtonpost.com)

Mortgage Holders Owing More Than Houses Are Worth Rise to 23% (bloomberg.com)

FL house sellers take it on the chin (weblogs.sun-sentinel.com)

Home Values Continue To Fall, More Owners 'Underwater' (cnbc.com)

Strategic defaults up in March; professor says risk of contagion remains (snl.com)

Strategic Default: Walking Away from Mortgages (cbsnews.com)

Hope you enjoyed the housing recovery, because it's history (finance.yahoo.com)

Tax-Credit Hangover Begins? (blogs.wsj.com)

American Taxpayers Looted To Bail Out The Euro (propagandamatrix.com)

The Financial Oligarchy Reigns: Democracy's Death Spiral (ampedstatus.com)

Why an Extended Bear Market is Likely (finance.yahoo.com)

Fannie Mae seeks $8.4B in gifts after 1Q loss (news.yahoo.com)

An Ill-Timed Request for Aid By Fannie Mae (nytimes.com)

Ignoring the Elephant in the Bailout (finance.yahoo.com)

Let Fannie and Freddie die! (patrick.net)

A Radical Plan to Reform the Financial System (newsweek.com)

Interest Rates Surge as Europe Launches Bailout (nytimes.com)

The Case Against Goldman Sachs (theonion.com)

Mon May 10 2010

High-end pain and suffering (csbj.com)

Expensive houses are falling prey to foreclosure (usatoday.com)

Housing Prices Are Falling Again (newobservations.net)

Shiller: "Renting is very attractive right now" (capitalgainsandgames.com)

L.A. cities still in housing bubbles (doctorhousingbubble.com)

4 biggest lies in real estate (finance.yahoo.com)

White House Should Support Three Critical Banking Reforms (robertreich.org)

Is Your Senator A Member Of The Bankster Party? (dailybail.com)

Freddie Mac's Loss Is Ignored in Washington (nytimes.com)

Sen Shelby: Bank bill should include Fannie and Freddie (news.ino.com)

Roubini Urges Goldman Sachs Breakup, Possible CDO Ban (bloomberg.com)

Greenspan Arrogance Set Up U.S. for Big Fall (bloomberg.com)

Why is the Federal Reserve so afraid of openness and accountability? (slate.com)

Iceland arrests ex-chief of collapsed bank (news.bbc.co.uk)

What goes around comes around for banks (finance.yahoo.com)

U.S. Market-fraud Enters New Era (benzinga.com)

Harvard study of interest and housing finds mortgage deduction worse (patrick.net)

The Subprime Rhyme with U.S. Debt Debacle (prudentbear.com)

U.S. Debt Shock May Hit In 2018, Maybe As Soon As 2013 (investors.com)

Fighting the Deficit By Selling Military Land (nytimes.com)

Irvine Home Address … 34 DEER Spg Irvine, CA 92604

Resale Home Price … $699,000

Home Purchase Price … $250,000

Home Purchase Date …. 12/31/1997

Net Gain (Loss) ………. $407,060

Percent Change ………. 179.6%

Annual Appreciation … 8.2%

Cost of Ownership


$699,000 ………. Asking Price

$139,800 ………. 20% Down Conventional

5.01% …………… Mortgage Interest Rate

$559,200 ………. 30-Year Mortgage

$144,900 ………. Income Requirement

$3,005 ………. Monthly Mortgage Payment

$606 ………. Property Tax

$0 ………. Special Taxes and Levies (Mello Roos)

$58 ………. Homeowners Insurance

$47 ………. Homeowners Association Fees


$3,716 ………. Monthly Cash Outlays

-$735 ………. Tax Savings (% of Interest and Property Tax)

-$671 ………. Equity Hidden in Payment

$273 ………. Lost Income to Down Payment (net of taxes)

$87 ………. Maintenance and Replacement Reserves


$2,671 ………. Monthly Cost of Ownership

Cash Acquisition Demands


$6,990 ………. Furnishing and Move In @1%

$6,990 ………. Closing Costs @1%

$5,592 ………… Interest Points @1% of Loan

$139,800 ………. Down Payment


$159,372 ………. Total Cash Costs

$40,900 ………… Emergency Cash Reserves


$200,272 ………. Total Savings Needed

Property Details for 34 DEER Spg Irvine, CA 92604


Beds: 4

Baths: 1 full 2 part baths

Home size: 2,800 sq ft

($250 / sq ft)

Lot Size: 5,015 sq ft

Year Built: 1977

Days on Market: 98

Listing Updated: 40308

MLS Number: P720813

Property Type: Single Family, Residential

Tract: Dc


Remodeled Plan 4 with extra large floorplan. Custom kitchen features: Large granite island with gas stove, kitchen dining area viewing the back garden, solarium, huge double-doored walk-in pantry. Wet bar off the kitchen overlooking the family room. Gorgeous hardwood flooring throughout most of downstairs. Formal dining and living rooms. Large custom indoor laundry room. Two water heaters. Located at end of cul-de-sac… and much more! Must see!

It is a shame this property earned the gorgeous graphic. I really do like it. I am partial to Deerfield anyway, and the kitchen in this place is awesome. That atrium effect is really cool.

23 thoughts on “IHB News 5-15-2010

  1. Planet Reality

    This Property + Irvine = Middle Class ?

    WTF – X –

    That’s a nice fantasy.

    1. OrangeRenter


      A 4bdrm 30yr old home with a $2600 monthly cost of ownership, which is about 1/3 of a $100k income, in a good school district and safe city.

      How is that *not* a “middle class” home, Planet?

      PS Am I the only one that loves the Saturday morning news round-up? Never very many comments on the Saturday post 🙂

    2. avobserver

      What are you saying – the typical Irvine resident is not part of American Middle Class? That linking Irvine property buyers to middle class is too insulting?

      You don’t often hear “proximity to work” or “good public school” being the strong selling points in Beverly Hill, do you?

    3. Phillip

      In 1997, $250,000 for a home was absolutely middle class–even in Midwestern, non-Chicago towns, $250,000 in 1997 was upper-middle class, at most. In Irvine, $250K homes in 1997 were most certainly middle class.

      So did this home’s value nearly triple in 13 years? I’m thinking no. It’s still a middle class home, just a bit shabbier. And overpriced.

  2. Sue in Irvine

    I kind of like this house for a family. And, since David might not be reading this today, I like the price. That’s if the buyer had a larger down payment.

    IR..you’re an honest guy and you set a great example for your young son. I miss the days of holding hands with my son. Enjoy it. Believe me, it goes by way too fast.

    1. Expensive but it is what is is

      I look at the 2,800 square footage and say that’s a a rather large house in Irvine. The price for the size is pretty good even if it may need some updates or fixing.

      I would say people who can afford it would have to be at least upper middle class as far as income. The house itself is middle class though.

      1. Planet Reality

        That’s fine but you might as well profile a “lower middle class” shack in Tokyo that only a mid level executive can afford even after 20 years of deflation.

        1. Why Tokyo

          Why comapre it to Tokyo? Why not compare it to New Delhi for example? We should compare houses in Irvine to houses in Irvine and the surrounding areas.

  3. Walter

    “If you wouldn’t have seen her drop the money, you would keep it. Forget what you saw!”

    But what about what you son would see? Did your son being with you influence you? I think when you when your kids are watching you, it amplifies your decisions.

    Some may grab the money proud of the unexpected windfall in front of the kids. Others will give the money back proud of the example they are setting.

  4. Soylent Green Is People

    That atrium effect is going to superheat the kitchen during the summer, and leak like nothing else during the rainy season. Most homeowners go through glass panels and leak stopping fixes every year with no end in sight. Ask anyone who has a sunroom / atrium / greenhouse window scheme like this.

    My .02c

    Soylent Green Is People.

  5. newbie2008

    Remember c.a. 2000, if you earn $50,000 per year you’re a millionaire, cause in 20 years you would of earned 1 million dollars. Millionaire should be paying higher taxes.

    Now $100,000 per year is middle class?

    Gorgeous, awesome, over used terms losing their meaning.

    1. tonye

      100K per household is not even middle class anymore in most of coastal LA/OC. Who are you kidding?

      1. newbie2008

        Your observation on $100K income is no longer middle class. Middle class was defined as the 50% tile income. $100K income is well over 70% in most of the country, but will not buy much in SoCal. SoCal medium household income is likely $60K.

        Conclusions: For most people, real incomes have been decreasing over the last 30 years. Cost of consumer technology has been decreasing, but how many TV’s, computer, stereo’s, cell phones can one use? Hourly workers have turned into exempt salaried employee who now work 50 plus hours per week without overtime.

        1. middle class is relative to...

          You have the definition correct. Middle class is relative to the country or as comapred to a region. If you live on the low end of a high end area (such as Newport Beach…), you’re most likely at least middle class to be able to afford even renting… you’re low class relative to Newport beach but probably upper middle class overall.

  6. Perspective on Irvine

    No one should stereotype Irvine (as far as residents’ income) as either rich, middle class, lower middle class…etc. Why? Because Irvine has these INCOME classes of people. It had Shady Canyon for the supposed ubber rich, Turtle Rock and Ridge for the upper middle class, then Woodbridge… to Orange Tree area on the lower rungs. No one should expect a city of more than 210,000 residents to be all of the same income class. Only small enclaves throughout the country (similar to Beverly Hills, Hampton’s, some areas of Newport Coast, Crystal Cove) could be classified as really all rich. What Irvine does well is to provide (more or less) equal safety and good schools to all of its residents and therein lies its overall appeal.

    1. Chris

      Great description of Irvine.

      Some people, however, would like to buy an Irvine house at a Compton price 🙂

  7. Chris

    IR, this house is situated in probably one of the prime locations within Irvine. If you think $700k is too high for this house, what would be the right price for you, in your honest opinion?

    Would $600k be right? Or perhaps 1/2 mill?

    1. Chris

      Let me take that back….it’s situated in a **not so** prime locations within Irvine.

      Should have checked the property in greater details before hitting that submit button.

      Still, what’s your price, IR?

      1. IrvineRenter

        This house is not grossly overpriced relative to today’s market. Someone will raise the money to buy this property near enough to its asking price to make it reasonable. Five percent interest rates, restricted supply, and residual kool aid intoxication make this price possible. Although, just because people can borrow so much doesn’t mean they should.

        1. Chris

          Thanks IR for your response.

          I would probably buy this if they knock off another $100k but that would be too optimistic in today’s market.

          Oh well 🙁

  8. Joseph

    In 1997, $250,000 for a home was absolutely middle class–even in Midwestern, non-Chicago towns, $250,000 in 1997 was upper-middle class, at most. In Irvine, $250K homes in 1997 were most certainly middle class.

    So did this home’s value nearly triple in 13 years? Hmm, I’m thinking no. It’s still a middle class home, just a bit shabbier. And overpriced.

Comments are closed.