Author Archives: IrvineRenter

IHB News 11-14-2009

I hope you are enjoying your weekend. I have a Northpark condo for you to look at.

77 OLIVEHURST Irvine, CA 92602 kitchen

Irvine Home Address … 77 OLIVEHURST Irvine, CA 92602
Resale Home Price …… $455,000

{book1}

Heart of stone
I tried to reach you
Of the altar stone
I tried to warn you
But you were not alone
You wouldn’t take the call
You wear brimstone
I tried to warm you
Always the same desire

Sign of Fire — The Fixx

Housing Bubble News

Realtors: home prices to rise 4 percent in 2010

The Associated Press – Alex Veiga – ‎6 hours ago‎

However, some housing analysts said the NAR’s forecast was overly optimistic, as it was during the housing bubble. Economists like Patrick Newport argue the …

Congress reinflates the housing bubble

Crain’s New York Business – ‎17 hours ago‎

Others say it’s senseless for the government to inflate housing prices, given that a housing bubble largely precipitated the recession in the first place. …

Home Sales Rise As Prices Continue To Plummet

CBS 4 – ‎Nov 10, 2009‎

Prices in Fort Myers, Florida, one of the nation’s hardest hit areas during the housing bubble implosion, saw median prices fall 40 percent to $98000 from …

Las Vegas home sales on the rise KTNV Las Vegas

NAR Quarterly: Home Prices Falling, Sales Rising Wall Street Journal (blog)

all 540 news articles »

The Latest On Rates, The Fed, Asset Inflation, And More

istockAnalyst.com (press release) – ‎13 hours ago‎

Result: The biggest housing bubble and bust in the history of the US And yet … and YET … former Fed governor Frederic Mishkin had the nerve to write this …

Lunatic Bubble Warning for US Treasuries Seeking Alpha (blog)

Mishkin still blowing economic bubbles StarPhoenix

Attack of the Home Buyers’ Tax Credit

New York Times – Edward L. Glaeser – ‎Nov 10, 2009‎

I believe that our government bears some responsibility for the housing bubble because it encouraged Americans to leverage themselves to the hilt to buy …

News Flash! The Latest Scoop On The New And Improved Homebuyer’s Tax Credit … Carolina Newswire (press release)

The Scouting Report Web Chat: Extending the Homebuyer Tax Credit Brookings Institution

Fed Signals “All Systems Go” for More Inflation

Jutia Group – ‎Nov 9, 2009‎

Then the Fed ignored the 2003-2006 housing bubble until it ruined the lives of millions of homeowners. The Fed just told the markets to let the good times …

Implications of The Dollar Carry Trade Seeking Alpha (blog)

US dollar as funding currency to boost volatility, high yielding assets Malaysia Star

Bailing out GMAC Los Angeles Times

Housing Bubble News from Patrick.net

U.S. Foreclosure Filings Surpass 300,000 for 8th Straight Month (bloomberg.com)

FHA Reserve Ratio Falls to 0.53%, Lowest in History (bloomberg.com)

Orange County foreclosure notices hit record 8,800 (mortgage.freedomblogging.com)

The Truth: Dollar Drop Gives U.S. Exporters Gains (bloomberg.com)

Housing market still faces a big glut (money.cnn.com)

Widening gap between gov’t data and reality (nytimes.com)

Looming foreclosure wave will derail recession recovery in California (centralvalleybusinesstimes.com)

This Just In… More Borrowers Behind in San Diego (voiceofsandiego.org)

Even the Rich Are Treating Their Houses Like Piggy Banks (online.wsj.com)

Default notices rising in upper echelon ZIPs (sfgate.com)

77 OLIVEHURST Irvine, CA 92602 kitchen

Irvine Home Address … 77 OLIVEHURST Irvine, CA 92602

Resale Home Price … $455,000

Income Requirement ……. $85,661
Downpayment Needed … $91,000

Home Purchase Price … $609,000
Home Purchase Date …. 5/18/2005

Net Gain (Loss) ………. $(181,300)
Percent Change ………. -25.3%
Annual Appreciation … -5.7%

Mortgage Interest Rate ………. 5.20%
Monthly Mortgage Payment … $1,999
Monthly Cash Outlays ………… $2,830
Monthly Cost of Ownership … $2,200

Property Details for 77 OLIVEHURST Irvine, CA 92602

Beds 3
Baths 2 baths
Size 1,547 sq ft
($294 / sq ft)
Lot Size n/a
Year Built 2002
Days on Market 9
Listing Updated 10/29/2009
MLS Number P708979
Property Type Condominium, Residential
Community Northpark
Tract Aubr

According to the listing agent, this listing is a bank owned (foreclosed) property.

Welcome to Northpark. Guard Gated Community with resort like style living. Community pool, spa, tennis & basketball courts, clubhouse, parks & playground. Open floor plan with high ceilings with lots of window and plenty of sunlight. Very cozy balcony for enjoying the morning breeze. Huge Master bedroom with separate standing shower and a separate oval soaking tub. 3rd bedroom can be used as a den or an office or formal dining area. Separate Laundry room. 2 car attached garage with direct access into house. ALL CONTRACTS/OFFERS ARE SUBJECT TO SELLER SENIOR MANAGEMENT APPROVAL AND ANY OFFERS OR COUNTER OFFERS BY SELLER ARE NOT BINDING UNLESS THE ENTIRE AGREEMENT IS RATIFIED BY ALL PARTIES. ALL OFFERS ARE SUBJECT TO AND CONTINGENT UPON FINAL REVIEW AND ACCEPTANCE BY THE INVESTOR AND OR MORTGAGE INSURER. THERE IS A $75 DOC FEE PAID BY BUYER AT CLOSING.

A Little Bit

Do you have a little bit of time to review another losing Irvine property?

108 SPANISH LACE Irvine, CA 92620 kitchen

Irvine Home Address … 108 SPANISH LACE Irvine, CA 92620
Resale Home Price …… $875,000

{book1}

I’ll give a little bit
I’ll give a little bit of my life for you
So give a little bit
Oh give a little bit of your time to me

Give a Little Bit — Supertramp

Have you ever pondered the interesting relationship we have? I give up a little bit of my time each day to observe the real estate market and ramble on about it, and you give up a little bit of your time each day to read it.

When I started writing, I did not think about readership. I wanted my voice to be heard, but like any concerned citizen shouting when there is an emergency, it wasn’t the voice, it was the message. As you tuned in each day to read, we have formed this relationship.

Writing and having a readership creates a responsibility. I like images and ideas for posts that are edgy, and sometimes I do cross the line for some people, but that comes with the territory if posts are going to be interesting (and fun for me to write). I have to carefully measure and manage this edge, and if I suddenly and without warning cross the line — start posting inflammatory speech and images — I would deservedly lose readers.

Writing is an enjoyable responsibility. Gaining readership is addicting. I had lunch with a fellow blogger a couple of months ago, and he was very excited about having readers. He printed out charts and talked about the various ways to measure readership (it isn’t very easy), and he was elated about traffic spikes when he was linked by a larger blog. It was easy for me to relate. He knows the heartfelt the joy of his voice being heard. I was excited for him because I know that joy in my own life. Thank you for reading each day.

I have been examining this relationship in my own terms. Have I become attached to having readers? Am I now a slave to a new master? These are issues I will wrestle with on my own. As long as I have a little bit to give, I will.

Back to our regularly scheduled losing property in Irvine….

108 SPANISH LACE Irvine, CA 92620 kitchen

Irvine Home Address … 108 SPANISH LACE Irvine, CA 92620

Resale Home Price … $875,000

Income Requirement ……. $164,733
Downpayment Needed … $175,000

Home Purchase Price … $958,500
Home Purchase Date …. 4/12/2006

Net Gain (Loss) ………. $(136,000)
Percent Change ………. -8.7%
Annual Appreciation … -2.4%

Mortgage Interest Rate ………. 5.20%
Monthly Mortgage Payment … $3,844
Monthly Cash Outlays ………… $5,270
Monthly Cost of Ownership … $4,060

Property Details for 108 SPANISH LACE Irvine, CA 92620

Beds 4
Baths 3 full 1 part baths
Size 2,300 sq ft
($380 / sq ft)
Lot Size n/a
Year Built 2005
Days on Market 4
Listing Updated 11/4/2009
MLS Number S594878
Property Type Condominium, Residential
Community Woodbury
Tract Wdst

Fantastic Model 3 on Spanish Lace right across the street from the park. Large Gourmet Kitchen with Stainless Steel Appliances, Upgraded Cabinets, Center Island and Double Oven. Caesar Stone tiles in all bathrooms. Crown Molding and Can lights along with a built-in Surround Sound speaker system throughout the house. Custom Media Niche in living room. Enclosed patio area great for entertaining comes with a fountain and built-in Lynx BBQ. Master suite is very large and includes built-in dressers. Woodbury amenities include pool, tennis courts, sport courts and many parks.

When I was filling in the cost details for this property, I noted about $4,400 in special levies, taxes and fees.

*** SPECIAL ASSESSMENT USER FEES***
BA MOSQ,FIRE ANT ASSMT (800)273-5167 $3.04
B3 VECTOR CONTROL CHG (800)273-5167 $0.67
C7 MWD WATER STDBY CHG (866)807-6864 $10.08
E0 IRVINE USD-ASMT (949)250-8300 $54.19
MY 1915 AD BOND MY (866)807-6864 $2,214.86
N1 LNDSCP & LTG #1 (866)807-6864 $89.98
R2 MELLO-ROOS R2 (800)858-8233 $622.45
R6 MELLO-ROOS R6 (800)858-8233 $1,410.12

The combined HOA expense is $230 per month as well. Despite these high costs, low interest rates have pushed affordability up to 5.3 times income. The historic norm at the bottom is 4.0 for several years.

This property was purchased for $958,500 on 4/12/2006. The owners used a $766,443 first mortgage and a $192,057 downpayment. If they get their asking price, they will recover a little bit over $50,000 of their downpayment.

The owners are pleading with the market for their downpayment money, “So give a little bit… Oh give a little bit…“

Irvine Housing Blog No Kool Aid

I hope you have enjoyed this week, and thank you for reading the Irvine Housing Blog: astutely observing
the Irvine home market and combating California Kool-Aid since
September 2006.

Have a great weekend,

Irvine Renter

Knives Out

Today’s featured property is a wisely motivated seller. He will take a loss on this 2004 purchase.

50 MAGELLAN AISLE Irvine, CA 92620 kitchen

Irvine Home Address … 50 MAGELLAN AISLE Irvine, CA 92620
Resale Home Price …… $458,000

{book1}

I want you to know
He’s not coming back
Look into my eyes
I’m not coming back

So knives out
Catch the m(h)ouse
Don’t look down

Knives Out — Radiohead

This owner should not be selling. Prices are well off the peak, and the knife-catching bulls are chanting in bloody unison, “Prices have bottomed. Buy now or be priced out forever.”

Apparently, this owner does not believe the bullish tale, or perhaps he has other reasons for selling, but here he is priced to take a loss five years after buying.

50 MAGELLAN AISLE Irvine, CA 92620 kitchen

Irvine Home Address … 50 MAGELLAN AISLE Irvine, CA 92620

Resale Home Price … $458,000

Income Requirement ……. $86,226
Downpayment Needed … $91,600

Home Purchase Price … $468,000
Home Purchase Date …. 12/2/2004

Net Gain (Loss) ………. $(37,480)
Percent Change ………. -2.1%
Annual Appreciation … -0.4%

Mortgage Interest Rate ………. 5.20%
Monthly Mortgage Payment … $2,012
Monthly Cash Outlays ………… $2,690
Monthly Cost of Ownership … $2,050

Property Details for 50 MAGELLAN AISLE Irvine, CA 92620

Beds 3
Baths 2 baths
Size 1,425 sq ft
($321 / sq ft)
Lot Size n/a
Year Built 1989
Days on Market 4
Listing Updated 11/3/2009
MLS Number P709645
Property Type Condominium, Residential
Community Northwood
Tract Nv

Wonderful Northwood Villa’s main level home boasts a very functional floor plan. Third bedroom is currently used as a office. Home was been recently updated & upgraded. Living room is extra spacious with a cozy fireplace. Designer kitchen is complete with upgraded cabinets, granite counter tops, and tile floors. Dining area is adjacent to kitchen with sliding doors that lead you out to the back patio. Tasetefully upgraded floors is gorgeous wood. Enjoy designer tone paint & crown molding. Nice size back patio is perfect for entertaining & BBQ’s. Enjoy the convinience of 2 garages; 1 car attached and 1 car detached. Attend award winning Northwood Schools. Home is conviniently located near dining, shopping, & much more.

Tasetefully? convinience? conviniently?

This property was purchased on 12/2/2004 for $468,000. The owner used a $374,400 first mortgage, a $93,600 second mortgage, and a $0 downpayment. The owner refinanced in 2007, but did not take out any money. Now he will likely be shorting the second mortgage. With the beating his credit is going to take, he should have maxed out the HELOC back in 2006. The responsible do not get rewarded.

Long-Term Appreciation

Most people vastly overestimate the actual long-term appreciation of real estate. Today, we will look at a condo purchased originally in 1990 that has appreciated at 4% per year to reach today’s still-inflated pricing.

Irvine Home Address … 90 LAKEPINES Unit 5b Irvine, CA 92620
Resale Home Price …… $195,000

{book1}

Looking out at the road rushing under my wheels
I don’t know how to tell you all just how crazy this life feels
I look around for the friends that I used to turn to to pull me through
Looking into their eyes I see them running too

Running on – running on empty
Running on – running blind
Running on – running into the sun
But I’m running behind

Running on Empty — Jackson Browne

Appreciation seems to be running on empty, or has the Federal Reserve permanently refilled our tank?

{book4}

I covered the various methods of predicting where prices would bottom in The Great Housing Bubble. The chart below comes from Future House Prices – Part 1:

Figure 37: Irvine, CA, Projections from Historic Appreciation Rates, 1984-2026

The story for the most inflated markets such as Irvine, California,
is much the same as the national forecast. If the 4.4% rate of
appreciation seen from 1984-1998 is repeated, then prices will decline
45% from the peak, bottom in 2011 and return to the peak in 2023. Since
prices peaked in 2006, this method of price projection shows an 18 year
peak-to-peak waiting time: not a comforting forecast for Irvine
homeowners.

Most people assume California real estate appreciates 6%-10% per year with some years being even better. This fuzzy thinking becomes an obvious absurdity when projecting large rates of appreciation because the prices quickly become so large that people could not make payments with a 100% DTI. Trees cannot grow to the sky, and prices cannot exceed income growth in the long term.

Of course, most people don’t really analyze the implications of what they say or think, they just accept the conventional wisdom of the masses even when this information is wrong. Worse yet, people then act on this information, buy overpriced property, and end up losing money or waiting a very long time for prices to come back. Knowledge is power.

IHB Library

For those of you who have not discovered our library, we have all the analysis posts I have written for this blog in one organized location:

And for those who missed the announcement, I have uploaded the full content of the Great Housing Bubble to the IHB:

Irvine Home Address … 90 LAKEPINES Unit 5b Irvine, CA 92620

Resale Home Price … $195,000

Income Requirement ……. $36,712
Downpayment Needed … $39,000

Home Purchase Price … $110,500
Home Purchase Date …. 1/25/1990

Net Gain (Loss) ………. $72,800
Percent Change ………. 76.5%
Annual Appreciation … 4.0%

Mortgage Interest Rate ………. 5.20%
Monthly Mortgage Payment … $857
Monthly Cash Outlays ………… $1,320
Monthly Cost of Ownership … $1,050

Property Details for 90 LAKEPINES Unit 5b Irvine, CA 92620

Beds 1
Baths 1 bath
Size 710 sq ft
($275 / sq ft)
Lot Size n/a
Year Built 1978
Days on Market 5
Listing Updated 11/2/2009
MLS Number S594735
Property Type Condominium, Residential
Community Northwood
Tract Lk

GREAT UPPER UNIT WITH LAKES VIEWFROM YOUR LIVING ROOM .ONE BEDROOM,ONE BATH CONDO WITH FIRE PLACE,BALCONY,INSIDE LAUNDRYWITH STACKABLEWASHER/DRYER AND GOOD WALKING CLOSET.

ALL CAP

This property records for this post show the 1990 purchase to illustrate the long-term rate of appreciation. The property was most recently purchased from a lender on 9/30/2009 for $160,000. This is a quick flip to make about $30,000.

The owners who were foreclosed on had a more interesting story. They purchased this property on 4/17/2003 for $183,000. They used a $173,850 first mortgage and a $9,150 downpayment. Then the fun begins….

On 11/30/2004 they refinanced the first mortgage for $213,750.

On 11/7/2005 they refinanced again for $260,000.

On 3/31/2007 they refinanced again with a $244,000 Option ARM and a $30,500 HELOC.

Total property debt is $274,500.

Total mortgage equity withdrawal is $100,650.

This borrower gave up in late 2008…

Foreclosure Record
Recording Date: 07/10/2009
Document Type: Notice of Sale (aka Notice of Trustee’s Sale)

Foreclosure Record
Recording Date: 04/03/2009
Document Type: Notice of Default

One hundred thousand dollars is a good HELOC take from this property.

In case you missed this great post over at Housing Doom yesterday…

Where have all the bubble bloggers gone?

Bubble bloggers were for the most part, regular folks who saw an insane real estate market and said, “It’s going to crash, and someone should say something“. Some, like HousingPanic, Ben Jones and Patrick had inspired a national audience, others were smaller and more local.
There was a lot of comradery in those days. We’d check each others
posts, and add each other to the blogroll. We had fun taking potshots
at the likes of Lereah and Mozillo and watched the data in our local
markets.

This morning I read Chuck Ponzi’s Top 10 signs you’ve been following the housing bubble too long. Chuck, we’re you writing about me?

10. You kinda miss the days when everyone was still on blogspot. Uh… except for that Ritholtz guy.

9. Everything looks like a bubble now. Even bubbles.

8. Oompa Loompas and “The Tan Man” evoke feelings of intense disgust.

7. You know who Tanta and the Mortgage Pig are and you miss them.

6. You KNOW Neil has got popcorn.

5. The inflation vs. deflation argument was sooo 2007.

4. You wonder if Schiller has a time machine.

3. You know the rental multiplier for your neighborhood.

2. You think the Flying Monkey Warriors vs. Greg Swann battle was epic and you totally know who won.

1. Hoodoodanode?

Frustrated with trying to buy a home? (funny)

Shout at the Market

Today we have a big equity seller — or equity loser. The bubble was been unkind to banks and heavy-cash buyers from the bubble years.

821 YORKSHIRE Irvine, CA 92620 kitchen

Irvine Home Address … 821 YORKSHIRE Irvine, CA 92620
Resale Home Price …… $538,800

{book1}

Sure you’ve heard it all before
He’ll be the risk in the kiss
Might be anger on your lips
Might run scared for the door
But in seasons of wither
We’ll stand and deliver
Be strong and laugh and

Shout shout shout
Shout at the devil

Shout at the Devil — Motley Crue

This owner should have known they were in trouble when the purchase price of the property was $666,000. It contains the Number of the Beast. It was certainly beastly to these owners. They are going to lose over $150,000 of their own money.

821 YORKSHIRE Irvine, CA 92620 kitchen

Irvine Home Address … 821 YORKSHIRE Irvine, CA 92620

Resale Home Price … $538,800

Income Requirement ……. $101,438
Downpayment Needed … $107,760

Home Purchase Price … $666,000
Home Purchase Date …. 9/7/2005

Net Gain (Loss) ………. $(159,528)
Percent Change ………. -19.1%
Annual Appreciation … -4.2%

Mortgage Interest Rate ………. 5.20%
Monthly Mortgage Payment … $2,367
Monthly Cash Outlays ………… $3,230
Monthly Cost of Ownership … $2,480

Property Details for 821 YORKSHIRE Irvine, CA 92620

Beds 3
Baths 2 full 1 part baths
Size 1,481 sq ft
($364 / sq ft)
Lot Size n/a
Year Built 1999
Days on Market 9
Listing Updated 11/3/2009
MLS Number P709388
Property Type Condominium, Townhouse, Residential
Community Northwood
Tract Grvl

Beautiful 3 bedroom townhome in a gated community. Extra Large corner lot with wooden deck for entertaining & grassy area for gardening. Open floor plan and south facing windows gives lots of light through-out the house. Generous size kitchen with granite counters and tile floors. Formal dinning room looks out to back patio,gorgeous wood floors in living & dinning room. Upgraded berber carpet covering stairs and upstairs. Charming master bedroom with celing fan. Spacious master bath with dual sinks. Travertine in all bathrooms and entryway. Extra features include recessed lights, designer paint and more.

When this property was purchased on 9/7/2005, the current owner paid $666,000. She took out a $170,000 first mortgage and a $496,000 downpayment. There was a refinance later for $320,000, and the husband was later added to title, but this property still have significant equity. As it stands, they are going to lose about $160,000.

I imagine they wished they had abused their HELOC….