Always enjoy a cartoon on the weekend 🙂 . I have been reading this website since March 07, thank you for all the work you put in here, it takes a lot of effort. I am a patient renter and I’ve been to a few open houses at Woodbridge lately. It seems that the association fees that the agents told me varies a lot. The one on Chenile St. said $46, and the agent on Yale loop said there are two association fees, totaling close to $300. Both agents said access to all Woodbridge ammenitites is included. The asking price for both houses are about the same. If anyone knows why this discrepancy, please advise. Any help and info. is appreciated.Thank you!
—–
Chuck
The $46 fee is for the general Woodbridge association, which maintains tha parks, pools, etc. If you have a house that is not part of another association then that is all that you pay, but you have to cover your own insurance and exterior upkeep, etc. If you are an attached home and/or belong to another association then you pay a second fee that is higher. This covers your insurance, the exterior painting, a new roof when it is needed, etc. I pay $46 plus $184 for the second association. This can seem high, but it isn’t too bad if you think of it as putting money aside for defered maintenance of your home, etc.
Colorado Real Estate Agent
Very funny, given the market’s current situation, I just had to share this joke with you and all of your readers:
“I have to have a raise in my commission,” the real estate agent said to his managing broker. “There are three other companies after me.”
“Is that so?” asked the manager. “What other companies are after you?”
“The electric company, the telephone company, and the gas company.”
IrvineHousewife
Chuck,
I am surprised that at this current market, the agents did not even bother to do their homework, hence could not answer my question. Thank you for the detailed info.
Most of the experts said that housing was going thru a minor correction and that troubles in the financial sector were limited.
Well, the other legs of the stool are being cut and now housing is in a free-fall. Jobs are being cut and now the stock market is tanking. Nothing will save housing prices now.
I am seing short sale after short sale and foreclosure after foreclosure in areas that I thought would hold up – Diamond Bar, Walnut, Hacienda Heights, Rowland Heights etc.
I like the quote I read in the LA Times – “This is not a sub prime problem, this is a stated income problem”.
Heres the deal. Most of the stated income loans have not even begun to fail. Jobs and stock market gains helped keep them going. That has all changed now.
Anyone thinking of buying a house now is fricken crazy. What, you want to be someones savior or something who is trying to dump their house? Is that what you really want to do? You want to help the people who you have been making fun of for years?
Keep saving and wait a couple more years.
NoWow!way
We lived in the Alders (condos cnr Alton & Culver) and paid two association fees. The largest association fee is for your particular development – so it is important for you to find out what pools and other facilities are open to you for use.
I agree w/Chuck in that the larger fee covered painting, stair replacement, porch resurfacing, roof repair, wasp nest removal, landscaping, fence and carport painting/repair/replacement. They were very responsive to all issues, too.
The CCR’s are pretty strictly enforced. In the Alders you could not have say…. blue mini blinds in your home that would show blue to the outside. It might sound kind of restrictive for those kinds of rules, but the overall presentation of the neighborhood remained high by making everything look neat and orderly.
I don’t think that the Ranch has any association at all – which means no fees. But it is also subject to the guy who has a ham radio station eminating from every part of his property as well as the “Castle” thingy you can see from the street. It is kind of the wild west there – but I don’t think there are any purple and orange homes like you can find in Santa Ana 😉
Anyone remember all the Drama over the Kron Castle? The city was getting ready to raze it when strippers and construction workers came to the rescue and caught the “work in progress” up to safety and city codes.
doug r
So….you pay half a million dollars to “own” a place and you can’t have blue blinds?
Sigh.
Listed at sub $300/sf. Two other smaller (1900sf) units on the same block are currently priced at $649K.
weichi
This was bought for 620k two months ago, and now they are asking 700k? Can that be right?
Alan
I thought I was just bearish before but the slaughter on wall street this week has me depressed.
Auto sales are in free fall, the new Ford Exec (ex airplane industry) plans on aggressively cutting manufactering jobs, Chinese cars are poised to hit the US next year, there are too many dollars so the dollar is to weak, meaning interest rates can’t be pushed too low and Boomers are about to retire and start downsizing…meaning excess of sellars to buyers for years to come, retailers will be cutting back.
I can see housing now in a perpetual slump for the next 5-10 years, not just 3-5 years like I had previously thought.
NoWow!way
I remember a couple who bought two bikes at a garage sale. The bikes worked, but were rusty. They bought some paint and painted the bikes in the street. Someone called the police and sure, enough, the red paint had dripped on the black street.
The cop suggested that they go get black spray paint to cover the red marks. The couple complied.
Graham
Anyone have stories about agents that have been creative with their commissions? Are there any restrictions on how little you can charge for a commission?
Maybe there are just to few sales yet to get a feeling to where things are headed.
SawItComing
I cant wait to see your site once sales prices are in. Thanks for the effort.
Major Schadenfreude
LOL!!!!!!!!!!!
ex-tangelo
A friend and coworker of mine when I was in Irvine explained this strict enforcement as “Beige County” … Beige houses, beige sky, beige people.
Well, I guess it could be worse. At the same time as when I lived in Irvine, another friend laughed at me when I pointed at a map and said What about living there (Hemet? Lake Elsinore? I forgot). He laughed and said “They don’t like black people coming to live there.”
The home I live in now had a CC&R with one vile rule: No blacks, except for daytime domestic help.
Needless to say, it’s no longer in effect…
IrvineRenter
Nice 2003 Rollback. I may profile this one.
ex-tangelo
I disagree that “there are too many dollars so the dollar is to weak, meaning interest rates can’t be pushed too low” — too many dollars means higher inflation, and the power of the Fed is greatest when they can undercut the rate of inflation, and what you’re saying is the inflation bar is higher. The Fed can easily set the funds rate below the rate of inflation; but that stimulus will reinforce an already high rate of inflation (relatively speaking, that is. We’re still far from 1980’s double-digit inflation)
The virtuous 1990’s cycle of low inflation and high growth has been replaced with the vicious cycle of both inflation and low growth.
Stagflation party! Everyone bring your bell bottoms.
ipoplaya
The transaction two months ago was the property going back to the bank.
ipoplaya
I’ll try to go back a month or so and build the list. We’ll start seeing sales prices sooner on the December escrow starts. Need more web storage space though if I’m going to keep the redfin profiles…
25w100k+
if it makes you feel better Alan, I lost a little over two grand yesterday in the market. *sigh*
Stupid
5-10 would look a lot better than the Japan scenario….
lawyerliz
That’s why I had a lot of trouble trying to buy a house on the space coast 10 years ago. We didn’t want people to tell us what color our blinds were, or whether we could paint our house any color as long as it was beige.
Unfortunately ALL the subdivisions had these restrictions. There was not one single new subdivision that didn’t have them. So we bought acreage. I was looking foreward to having a new house built, since it went so well the first time.
I like variety. I like a little chaos and chance. This area isn’t friendly either. Strangely enough, Miami/Hialeah, etc, is far more friendly. Even if you don’t speak the native language, namely Cuban. When I tell people here it isn’t friendly here, they are just shocked. People we ask for dinner virtually never ask us back–never happened in Miami. I’ve given up trying to socialize. And with the big lots here, I virtually never see the neighbors, except when they are on their noisy riding mowers.
The thing is, in a dense planned community, it seems that it is really possible to design things so that the neighbors run into each other naturally, and yet don’t feel that the neighbors can stare directly in their windows, but apparently that hasn’t been done.
Sounds like a better job could have been done.
lawyerliz
And I think tho there may well be a “dead cat bounce” next week,
the stock market is due to dip below 10,000 in the near future.
I just don’t see what is going to save us.
By the time the next imbecile is elected, it will be too late. And the Shrub certainly doesn’t have any thoughts on the matter. he may not have any thoughts on any matter.
I haven’t heard any thoughts from anybody which would cause me to think that there won’t be immense pain.
And this $800 apiece thing, has got to be the most moronic idea in the world.
The hub reminds me we have to buy a new tv, so we can use if for that.
And speaking of moronic, nothing to do with housing, but amusing. . .
There is a city in Spain called Moron, accent on the 2nd syllable. The Air Force had to communicate with them for some launch, and the emails simply wouldn’t so thru. Seems that the word moron was deemed verbotten by the filters which were installed to allegedly keep people from using the net for personal correspondence. So now the people involved have to get some kind of special waiver to use the word.
Now it is true that hackers are perpetually trying to hack into NASA and the Air Force, but really!! I think that somebody doesn’t want to be called a moron. And it seems that this shows they actually are morons. . .
lawyerliz
There is a generic service in Fla (and maybe elsewhere) called buyowner. Based on a phone call I got last week, they have come way down in price.
ipoplaya
Just got back from checking out neighborhood I hadn’t seen very much of, Northwood II.
The home was quite nice, not for my own personal wants, but not a bad value at $322/sf. High $900s put it as late 2004 pricing, which appears consistent with or a smidge better than other areas in Irvine. Downstairs has no living room (a plus in my book), bedroom and full bathroom, large kitchen and dining area, and smallish family room. The cars going by on Trabuco can be heard even through closed windows. There is no backyard. It’s pretty much only a patio with nice stonework, built in BBQ, etc.. Lot sizes in NW II appear to be just as bad or worse than Woodbury.
Upstairs was nice, with a huge master suite, closest to the stairs, and two decent-sized bedrooms that branch off a shared hallway. There is a funky large room, probably best used as a home office, that is accessed either from the backyard via stairs or a breezeway/patio that the master bedroom and upstairs hallway open to. This could be good for guests as well.
These houses are not layed out well for young kids IMHO. No good areas downstairs for toys or to play in. The funky back bedroom would be good as media/entertainment room for older children though. It’s interesting that with a list of $1.089M, an offer 10% lower in the $980K range would very likely be accepted. I’d think they’d just drop the list to $999K, more of a market price, to attract even more potential offers, but maybe that doesn’t make sense in realtor world…
furious sugar
Thought you all would like this one- seen on Craigslist:
(for the Non Locals- Leisure World is a 55+ community that borders the southern end of Irvine)
******
$1 Studio unit at Leisure World — REALLY just $1.00!
I have been attempting to sell my mother’s studio unit at Leisure World for 6 months and have had no luck. The homeowner’s dues are $1500. per month regardless of whether or not someone is living there. That amount covers utilities, and dinner. This would be a great place to live if you are 55+ or, you could recarpet, repaint and put it on the market for a higher price. I just need not to own this unit anymore. Paying the homeowners dues without anyone living there has become a real burden to me. I will give you the realtor’s phone number and you can truly own it for $1.!!!!! 24055 Paseo Del Lago West at Irvine Center
google map yahoo map
• Location: Laguna Woods
• it’s NOT ok to contact this poster with services or other commercial interests
PostingID: 543839765
$1500 HOA dues are really high for LW- but it looks like it is for their “manor towers” which include some assisted living services.
Pretty soon, they will have to pay the buyer to take it off their hands!
IrvineRenter
I suppose I should welcome all of you to the gloomy outlook I have seen coming for a while now, although there is little that is welcoming about it. As I explored this issue and saw how each domino would fall, it was very depressing for me for a while. Part of my “therapy” was to write it all down and express it on this blog. I don’t revel in doom and gloom, but the truth needed to be told. The general public is still eons behind the readers on this board, but the main stream media is finally starting to portray the reality of the situation.
Realistically, the events set in motion during the bubble are too big for anyone to do anything about it. The situation is going to play itself out, and it will be very ugly. All you can really do is prepare yourself as best you can and ride the storm out.
I can’t emphasize enough how bad it is going to be locally. Our local economy was so inflated by mortgage brokerage commissions, real estate commissions, local builder’s profits, and of course HELOC spending. All of these sources of artificial demand and consumer spending are going to evaporate. The next few years in particular are going to be very depressing in OC.
Save money, pay down debt, and don’t take any financial risks, and hope your company stays in business and you keep a job. It is all you can do.
OCsocialist
Question about property taxes in Orange County:
If you buy a house for $600K now, that was purchased at the peak for $800K are you going to be taxed as if it was worth $800K?
Hmmmmm
My sister was in the Navy and was posted in Rota Spain. Her boss was a big golfer and had won a local tournament but he wouldn’t put the trophy out. When she asked him why..he brought it out. It was engraved #1 Moron
Hmmmmm
Hey! We have Leisure World here in Va too. I thought it was a local thing. Very high end.
I hate to ask why his mom is using the unit anymore….
BerthaJean
No. You will likely be assessed at $600K and go up from there based on prop13 limits. Or, more likely, you can ask for reassessment in 2009 for 500K.
tonye
Thank God not all of Irvine is like that.
tonye
Our 401Ks are on bond funds.
Also, theres’ a big check on the money I borrowed that will go into CDs. I will pay myself 7.5%.
My wife is also gonna borrow a big chunk and then put that into CDs.
After the crash, then we’ll pay off our 401K loans and move the funds into growth funds.
Now, who was it there that was preaching to us that no one should borrow from their 401K?
I figure this week my wife and I saved like 10K by not being in equities.
tonye
Moron de la Frontera. It has an accent on the second ‘O’.
Google it. I guess we have an AF base over there. Amazing. I thought we only had it in Torrejon nowadays.
It sort of out of the way from Rota and Jerez. Those are in the province of Cadiz while I think that Moron de la Frontera is in the province of Seville.
It pronounced as mohRON. Not as MOron…..
Did you really get along with Los Cubanos? They must be long suffering souls. Ay!
😉
tonye
And maybe move to Moron de la Frontera for a while and take a job with the USAF.
I don’t think their RE market was so moronic after all. ;-D
Major Schadenfreude
Ahem. Excuse me Mr. Tonye, could you please explain how you borrowed from your 401K again?
Thanks!
ipoplaya
I think it was ex-Tan that thrashed on the idea tonye.
ex-tangelo
That would be me, and I said it was extremely risky for a beginner (who never had a 401k before) to use his 401k as a downpayment savings vehicle. Your response was some non-sequitur about C programming.
(www.irvinehousingblog.com/2008/01/08/seron-aid/, comment by 25w100k+, 2008-01-08 13:49:52 “Is it worth it to max the contributions, *knowing* for sure i’ll take them all out with the when I buy? (and taking the penalty or whatnot). Or am I better forgetting the 401k for now and keep putting my excess cash in a money market?”
When you borrow from your 401k:
* Some plans prohibit contributions until the loan is repaid.
* Failure to make payments or being laid-off causes the balance to come due immediately, +fed and state tax, +10% penalty.
* CD rates are 4%. Also, CDs tie up your principal for the duration of the term; you’re repaying the loan principal out of taxable wages or selling other investments, potentially triggering capital gains taxes and incurring opportunity costs.
* Repayments are made with aftertax income.
* Paying yourself interest loan from your 401k is not a gain. You are just transferring your own money from one vehicle to another. It is a zero-sum process. Actually, a less-than-zero, since you are putting aftertax money to restore your tax-sheltered account. Paying back a $10,000 loan with a 0% interest rate means you’ve actually spent $12,800 if you’re in the 28% federal income tax rate (include more for your California income tax bracket.)
* When you retire, you owe tax on withdrawals. You get no break if the money you withdrew is from a loan repayment made with aftertax money. You are getting taxed twice.
* 401k loan interest is also not tax deductible. If the interest rate isn’t zero, you get hit again.
If your 401k has a cash or cash-equivalent option, why wouldn’t you transfer your funds into those, risk-free? If your plan is so restrictive it has no such option, I can’t imagine the plan would allow you to continue to contribute while a loan is outstanding.
Anyway I don’t see why someone would be so proud of their day-to-day financial maneuverings that they feel the need to club people over the head with their perceived victory. Those numbers on a balance sheet do not give you hugs at bedtime or draw pretty pictures or shriek with glee on a swing.
ex-tangelo
I just made a small fortune in real estate.
How?
… I started with a large one
ipoplaya
“Failure to make payments or being laid-off causes the balance to come due immediately, +fed and state tax, +10% penalty”
Not quite true ex-Tan. If you lose your job, yes the balance is due immediately. If you pay it back, there is no taxing or penalty. If you don’t pay it back, either after a termination (you normally get 60 days) or via your regular loan repayments, the loan is considered in default that’s when you would get hit with taxes, penalty, etc.
I can tell you that Fidelity’s (#1 in terms of 401k plans managed) boilerplate plan does NOT prohibit contributions during a period with an outstanding loan. I am paying back my loan and contributing $750 per paycheck.
I do agree with you that rebalancing into cash or cash-equivalent is the best option if its available in the plan and has a good rate. I’m lucky that I have a money market fund option in my plan that is earning north of 4%.
George8
This house was purchased new in 2005 at $998k. Is this where you truly think market is today?
Why would a house be in a short sale position and also be listed for 232 days? Is this an error? Or it the bank also wishing for a buyer at these prices?
ex-tangelo
Not quite true ex-Tan. If you lose your job, yes the balance is due immediately. If you pay it back, there is no taxing or penalty.
You’re right, sloppy editing on my part.
irvinesinglemom
Testify, IR!
ipoplaya
Perk up IR, OC ain’t all that bad… Statewide unemployment is up 13.5% since June, from 5.2 to 5.9% as of December numbers. OC unemployment is only up 10% over that same time period, from 3.9 to 4.3%.
If OC was so dominated by high paying mortgage jobs, exorbitant real estate commissions, massive construction spending, etc. how has our unemployment held up better than the rest of the state? Shouldn’t we be outpacing the rest of the state in terms of job losses? The many thousands that used to be at New Century, Option One, etc. hit the unemployment rolls many many months ago… Can the builders slow down residential construction any more than they have? Where the heck are they building houses in OC right now?
I too agree that we are in for a hell of a ride over the next year or two, but think it will be more the result of a number of large national/international economic problems (weak dollar, climbing inflation, climbing energy costs, etc.), not just a local residential housing recession issue. We’d probably be in for a recession sooner rather than later even without the housing correction…
Or to summarize all of the above – It’s gonna suck everywhere but at least you have great weather, good schools, and a nice safe city to live in… Could be a lot worse. You could be living in Detroit while the economy goes into the crapper.
IrvineRenter
It probably did not start as a short sale, but after enough price reductions chasing the market, it may have become one.
I love the quote “SHORT SALE is APPROVED at $995000.” BFD! If the market will only offer $800K, who cares what the bank will approve?
ipoplaya
Yes George, I do. A September 2005 close date on a new place in NW II was likely contracted for in late 2004 or early 2005. It takes time to build houses, and when they were selling them easily, the phase releases were coming 6-12 months before construction completion.
If it sells for less than $998K today, especially considering it had no landscaping, plantation shutters, etc. when it came new for $1M, that puts the price firmly into 2004 territory. They probably paid $1.05M all-in and did that based on late 2004 or early 2005 market dynamics.
ipoplaya
More and more, lenders are allowing owners to stave off foreclosure proceedings if they can get some offer flow on the house. I’ve been to two recent open houses on shorts, and both of those realtors talked about needing to get an offer above $X or the bank might start proceedings…
The foreclosure process is expensive and time consuming for already overworked banks. Shorts are gaining in popularity as a result.
Joe
It’s my impression (and direct observation) that a large chunk of high paying mortgage jobs, realtors, and related parties are considered self-employed and would not reflect accurately in those numbers. And my buddies who own and run manufacturing businesses say business is super slow right now as well …
BD
Thanks guys. Your explanations make sense. I’m wondering out loud here but, tens or hundreds of thousands of dollars in loss is incredible. Speaking from my own experience here – but, it is tough to save $100K. If 20% down does become the norm, it will likely bring values down considerably.
Snip~~~~~Humbled homesellers
The slowest housing market in two decades takes emotional and financial tolls on owners.~~~~~
More at the link. Divorce, house on market for multiple years, huge discounts, chasing down the market pricing. One guy is going to try and create his own auction for his multimillion dollar so. county property.
Good article, imo.
SawItComing
This IS sad, but somehow I cant stop laughing at these one liners:
“…Beyer, 52, a contractor and owner of a glass block manufacturing business in Buena Park…..If I had more offers, I could have adjusted. I was in a vacuum.”
What was he expecting, some low ball offers to help him price it right? He would have just scoffed!
The other idiots in the article:
“They put $70,000 down – all that remained from their $180,000 profit from the Las Flores house after taxes and paying off debts. ”
“After a year, they were ready to move out. Bill didn’t like living in Tustin, parking on their street was too tight and they didn’t like the school district.”
Very well planned move huh? We researched our exodus from California for over a year!
Best line of all:
“They put the home up for sale for $789,000….They got an offer for $750,000. Acting on their agent’s advice, they rejected it”
BRILLIANT!!!!!
Alan
“The hub reminds me we have to buy a new tv, so we can use if for that”
Awesome…
The fed prints free money and hands it out to citizens who use it import cheap TV’s from China..
How does sending more money China help the economy?
MacInTheBox
Location of this property is a big no-no in Chinese Feng Shui, as the street points at the property directly. That probably makes the buyer pool even smaller.
NoWow!way
Consistently, posters point out all the funky/insulting/WRONG/weird stuff that gets into the MLS descriptions for properties. The comments usually are good for a laugh or two.
However, I’d like to point out how broken down and inept the system is. Not only did the Agent get the text of the description past the sellers, but that blurb also passed by the BROKER and the MLS people responsible for recording it. You’d think that at least ONE of the Agent’s colleagues would be courteous enough to point out the most obvious of errors for correction so that the WHOLE OFFICE/AGENCY isn’t tainted by such obvious sloppiness.
My friend’s 20 y/o son just got a listing for a Seal Beach property for $1.5 million. He’s pretty bright, but I’d like to see for myself if a 20 y/o can match or beat most of what we’ve been reading in the MLS lately.
BD
What does the board think will happen with long term price moves in SoCal? After this “correction” is over do people feel that we will return to the trend growth / appreciation in housing prices? I’m concerned that we may see a long term rising rate cycle do to global demand and inflation. If this is true, then we be in for many many years of flat pricing from the point of correction. When will see the high prices again? 2020?
ipoplaya
I know a couple of guys that work at larger mortgage companies and they have never been 1099 types. They get a small base salary + commissions. One of them used to be at Option One, and he was employee there, not an IC. He’s lucky he left…
Most realtors are indeed independent contractors. The lion share of jobs in mortgage and realted industries come from inside/outside sales, loan processors, underwriters, analysts, customer service people, title processors, etc. The vast majority of these people are/were employees, not ICs.
All that being said, business does feel slow. My company is in the professional services sector and we started seeing things slow in the late summer.
25w100k+
I’m nowhere near an expert, but while I can see why SoCal and OC *land* values would demand a higher premium, I can’t for the life of me see why it would appreciate at a faster rate then most other places in the country. Appreciation is tied to inflation, which isn’t ever a local phenomenon, no?
ex-tangelo
There is the perennial California housing shortfall. We never build as many homes as would be needed to accommodate the increasing population.
CrashHappy
Wow… You’re a genius Tonye… Keep timing the market and you’ll be rich … Not to mention borrowing from your 401K, pay 10% penalty and tax, to get 7.5% on a CD 🙁
BTW, I hope you’re just bluffing to see what people’s reaction will be, and not serious about this!
Mr Vincent
“What does the board think will happen with long term price moves in SoCal?”
Real estate as an investment is dead for many many years. Prices will come back in line with incomes and stay that way.
It’s always the same after every bubble – people wonder when the glory days will come back. They dont! Some new bubble will emerge in some new or different asset class.
The country and the world is aging. Invest accordingly.
Shannon
Hard numbers?
Best educated guess,
Garden Grove, Stanton, Westminster, Anaheim, Cypress
Starter Houses 225k-300k
Santa Ana 200k-250k
Huntington Beach, Fountain Valley, parts of Costa Mesa
Starter Houses 300k-450k
Irvine and most of South County
starter houses 399k-475k
based on inventory, desirability, schools, income
CapitalismWorks
Housing values are tied to many things.
1) Proximity to employment
2) proximity to recreation
3) traffic
4) weather
5) population pressure
6) Crime rates
7) Quality of education
8) Expectations for the future
All these factors are favorable for Southern California, particularly South OC, Real Estate.
The specifics are about the Bay Area, but “Surreal Estate” has always been a great feature of the SF Chronicle, and Carol Lloyd’s articles were always buried somewhere weird until the real estate market stopped behaving like a monkey on steroids.
The specifics are about the Bay Area, but “Surreal Estate” has always been a great feature of the SF Chronicle, and Carol Lloyd’s articles were always buried somewhere weird until the real estate market stopped behaving like a monkey on steroids.
soapboxpolitico
Article from LA Times website. Preaching to the choir here but nonetheless an object study in simple wisdom and being one’s own person. He didn’t drink the kool-aid AND managed to convince his wife it was time to get out. Brave soul but a wise one too. And it paid off for him too.
Just finished reading thru the comments. Some great comments tonite and better still, they all seemed to have a relaxed feel to them, not the sometimes contentious tone these things can adopt.
IR – I was just thinking of your comment about “the dominoes” falling and the gloominess one can feel when thinking thru it. I couldn’t agree more. Over a year ago I was telling my friends about these things and how depressed I was thinking about what I felt sure was coming. I don’t feel any better now. Sometimes it’s no fun to be right. I think my reservoir of schadenfreude is all tapped out. Up until about two weeks ago I was buoyed by the fact that it seemed that the job market was holding. Clearly after Q4 earnings were posted the last crutch has been kicked out. This country is in serious trouble and I fear it’s going to be painful for us all for more than a couple of years. Fortunately many of the nice things we have available to us here in OC are free. We do have some very nice public parks, a walk on the beach is still free (last I checked) and some very nice state parks are all easily reachable.
On a related note, I took the fiance out for dinner the past two weekends. Nice places, not terrible expensive ($80 – $90 for us both). I’ve begun to notice that the restaurants aren’t as full and we’ve not had to wait at all to get a table. Maybe means nothing but I have to figure the RE collapse is filtering down thru the service economy. I’m in sales for a large telecom (you know the one) and the past few meetings I’ve had with C-Level execs haven’t been encouraging. Top 10 priority lists for the year are listing “cost containment” either number one or number two. Not a good portent either.
I wonder if any of my fellow posters have noticed anything like this too.
ipoplaya
Hey C-Dub, how goes the home listing experience? Getting any traffic? As I suspect I’ll be listing sometime this year as well, would love to hear how things are going…
tealeaf
ipop: get a simple account at 1and1.com. there are a bazillion hosting companies, but these guys work great, are cheap, and have very few issues.
ipoplaya
I went to GoDaddy and fired up some hosting with them. Seems cheap, $3.50/month for 5 gigs.
You should include original list, too. Instructive to see the full range of price drop necessary to get a home into escrow.
Glenn
Lots of people try to time the market. Very few are successful. Long term mutual fund investing has been proven to be the best strategy. Good luck playing with CDs. What happens if the market bottoms and has a huge recovery while your are tied up in CD. And, please let us all know when we hit the absolute bottom.
Always enjoy a cartoon on the weekend 🙂 . I have been reading this website since March 07, thank you for all the work you put in here, it takes a lot of effort. I am a patient renter and I’ve been to a few open houses at Woodbridge lately. It seems that the association fees that the agents told me varies a lot. The one on Chenile St. said $46, and the agent on Yale loop said there are two association fees, totaling close to $300. Both agents said access to all Woodbridge ammenitites is included. The asking price for both houses are about the same. If anyone knows why this discrepancy, please advise. Any help and info. is appreciated.Thank you!
—–
The $46 fee is for the general Woodbridge association, which maintains tha parks, pools, etc. If you have a house that is not part of another association then that is all that you pay, but you have to cover your own insurance and exterior upkeep, etc. If you are an attached home and/or belong to another association then you pay a second fee that is higher. This covers your insurance, the exterior painting, a new roof when it is needed, etc. I pay $46 plus $184 for the second association. This can seem high, but it isn’t too bad if you think of it as putting money aside for defered maintenance of your home, etc.
Very funny, given the market’s current situation, I just had to share this joke with you and all of your readers:
“I have to have a raise in my commission,” the real estate agent said to his managing broker. “There are three other companies after me.”
“Is that so?” asked the manager. “What other companies are after you?”
“The electric company, the telephone company, and the gas company.”
Chuck,
I am surprised that at this current market, the agents did not even bother to do their homework, hence could not answer my question. Thank you for the detailed info.
Two new escrows I found:
http://members.cox.net/ipoplaya/
Most of the experts said that housing was going thru a minor correction and that troubles in the financial sector were limited.
Well, the other legs of the stool are being cut and now housing is in a free-fall. Jobs are being cut and now the stock market is tanking. Nothing will save housing prices now.
I am seing short sale after short sale and foreclosure after foreclosure in areas that I thought would hold up – Diamond Bar, Walnut, Hacienda Heights, Rowland Heights etc.
I like the quote I read in the LA Times – “This is not a sub prime problem, this is a stated income problem”.
Heres the deal. Most of the stated income loans have not even begun to fail. Jobs and stock market gains helped keep them going. That has all changed now.
Anyone thinking of buying a house now is fricken crazy. What, you want to be someones savior or something who is trying to dump their house? Is that what you really want to do? You want to help the people who you have been making fun of for years?
Keep saving and wait a couple more years.
We lived in the Alders (condos cnr Alton & Culver) and paid two association fees. The largest association fee is for your particular development – so it is important for you to find out what pools and other facilities are open to you for use.
I agree w/Chuck in that the larger fee covered painting, stair replacement, porch resurfacing, roof repair, wasp nest removal, landscaping, fence and carport painting/repair/replacement. They were very responsive to all issues, too.
The CCR’s are pretty strictly enforced. In the Alders you could not have say…. blue mini blinds in your home that would show blue to the outside. It might sound kind of restrictive for those kinds of rules, but the overall presentation of the neighborhood remained high by making everything look neat and orderly.
I don’t think that the Ranch has any association at all – which means no fees. But it is also subject to the guy who has a ham radio station eminating from every part of his property as well as the “Castle” thingy you can see from the street. It is kind of the wild west there – but I don’t think there are any purple and orange homes like you can find in Santa Ana 😉
Anyone remember all the Drama over the Kron Castle? The city was getting ready to raze it when strippers and construction workers came to the rescue and caught the “work in progress” up to safety and city codes.
So….you pay half a million dollars to “own” a place and you can’t have blue blinds?
Sigh.
This is what REOs will do to comps:
http://www.redfin.com/stingray/do/printable-listing?listing-id=1414563
Listed at sub $300/sf. Two other smaller (1900sf) units on the same block are currently priced at $649K.
This was bought for 620k two months ago, and now they are asking 700k? Can that be right?
I thought I was just bearish before but the slaughter on wall street this week has me depressed.
Auto sales are in free fall, the new Ford Exec (ex airplane industry) plans on aggressively cutting manufactering jobs, Chinese cars are poised to hit the US next year, there are too many dollars so the dollar is to weak, meaning interest rates can’t be pushed too low and Boomers are about to retire and start downsizing…meaning excess of sellars to buyers for years to come, retailers will be cutting back.
I can see housing now in a perpetual slump for the next 5-10 years, not just 3-5 years like I had previously thought.
I remember a couple who bought two bikes at a garage sale. The bikes worked, but were rusty. They bought some paint and painted the bikes in the street. Someone called the police and sure, enough, the red paint had dripped on the black street.
The cop suggested that they go get black spray paint to cover the red marks. The couple complied.
Anyone have stories about agents that have been creative with their commissions? Are there any restrictions on how little you can charge for a commission?
Maybe there are just to few sales yet to get a feeling to where things are headed.
I cant wait to see your site once sales prices are in. Thanks for the effort.
LOL!!!!!!!!!!!
A friend and coworker of mine when I was in Irvine explained this strict enforcement as “Beige County” … Beige houses, beige sky, beige people.
Well, I guess it could be worse. At the same time as when I lived in Irvine, another friend laughed at me when I pointed at a map and said What about living there (Hemet? Lake Elsinore? I forgot). He laughed and said “They don’t like black people coming to live there.”
The home I live in now had a CC&R with one vile rule: No blacks, except for daytime domestic help.
Needless to say, it’s no longer in effect…
Nice 2003 Rollback. I may profile this one.
I disagree that “there are too many dollars so the dollar is to weak, meaning interest rates can’t be pushed too low” — too many dollars means higher inflation, and the power of the Fed is greatest when they can undercut the rate of inflation, and what you’re saying is the inflation bar is higher. The Fed can easily set the funds rate below the rate of inflation; but that stimulus will reinforce an already high rate of inflation (relatively speaking, that is. We’re still far from 1980’s double-digit inflation)
The virtuous 1990’s cycle of low inflation and high growth has been replaced with the vicious cycle of both inflation and low growth.
Stagflation party! Everyone bring your bell bottoms.
The transaction two months ago was the property going back to the bank.
I’ll try to go back a month or so and build the list. We’ll start seeing sales prices sooner on the December escrow starts. Need more web storage space though if I’m going to keep the redfin profiles…
if it makes you feel better Alan, I lost a little over two grand yesterday in the market. *sigh*
5-10 would look a lot better than the Japan scenario….
That’s why I had a lot of trouble trying to buy a house on the space coast 10 years ago. We didn’t want people to tell us what color our blinds were, or whether we could paint our house any color as long as it was beige.
Unfortunately ALL the subdivisions had these restrictions. There was not one single new subdivision that didn’t have them. So we bought acreage. I was looking foreward to having a new house built, since it went so well the first time.
I like variety. I like a little chaos and chance. This area isn’t friendly either. Strangely enough, Miami/Hialeah, etc, is far more friendly. Even if you don’t speak the native language, namely Cuban. When I tell people here it isn’t friendly here, they are just shocked. People we ask for dinner virtually never ask us back–never happened in Miami. I’ve given up trying to socialize. And with the big lots here, I virtually never see the neighbors, except when they are on their noisy riding mowers.
The thing is, in a dense planned community, it seems that it is really possible to design things so that the neighbors run into each other naturally, and yet don’t feel that the neighbors can stare directly in their windows, but apparently that hasn’t been done.
Sounds like a better job could have been done.
And I think tho there may well be a “dead cat bounce” next week,
the stock market is due to dip below 10,000 in the near future.
I just don’t see what is going to save us.
By the time the next imbecile is elected, it will be too late. And the Shrub certainly doesn’t have any thoughts on the matter. he may not have any thoughts on any matter.
I haven’t heard any thoughts from anybody which would cause me to think that there won’t be immense pain.
And this $800 apiece thing, has got to be the most moronic idea in the world.
The hub reminds me we have to buy a new tv, so we can use if for that.
And speaking of moronic, nothing to do with housing, but amusing. . .
There is a city in Spain called Moron, accent on the 2nd syllable. The Air Force had to communicate with them for some launch, and the emails simply wouldn’t so thru. Seems that the word moron was deemed verbotten by the filters which were installed to allegedly keep people from using the net for personal correspondence. So now the people involved have to get some kind of special waiver to use the word.
Now it is true that hackers are perpetually trying to hack into NASA and the Air Force, but really!! I think that somebody doesn’t want to be called a moron. And it seems that this shows they actually are morons. . .
There is a generic service in Fla (and maybe elsewhere) called buyowner. Based on a phone call I got last week, they have come way down in price.
Just got back from checking out neighborhood I hadn’t seen very much of, Northwood II.
Stopped by the showing at this house:
http://www.redfin.com/stingray/do/printable-listing?listing-id=1157927
Realtor was very nice. Not pushy at all. She indicated that a competing house down the street, http://www.redfin.com/stingray/do/printable-listing?listing-id=1142199, is close to going into escrow for probably around $950-975K. It is a distressed sale. She thought the 2300sf place across the street, http://www.redfin.com/stingray/do/printable-listing?listing-id=1341646, also a distressed sale, probably went into escrow for close to $900K.
The home was quite nice, not for my own personal wants, but not a bad value at $322/sf. High $900s put it as late 2004 pricing, which appears consistent with or a smidge better than other areas in Irvine. Downstairs has no living room (a plus in my book), bedroom and full bathroom, large kitchen and dining area, and smallish family room. The cars going by on Trabuco can be heard even through closed windows. There is no backyard. It’s pretty much only a patio with nice stonework, built in BBQ, etc.. Lot sizes in NW II appear to be just as bad or worse than Woodbury.
Upstairs was nice, with a huge master suite, closest to the stairs, and two decent-sized bedrooms that branch off a shared hallway. There is a funky large room, probably best used as a home office, that is accessed either from the backyard via stairs or a breezeway/patio that the master bedroom and upstairs hallway open to. This could be good for guests as well.
These houses are not layed out well for young kids IMHO. No good areas downstairs for toys or to play in. The funky back bedroom would be good as media/entertainment room for older children though. It’s interesting that with a list of $1.089M, an offer 10% lower in the $980K range would very likely be accepted. I’d think they’d just drop the list to $999K, more of a market price, to attract even more potential offers, but maybe that doesn’t make sense in realtor world…
Thought you all would like this one- seen on Craigslist:
(for the Non Locals- Leisure World is a 55+ community that borders the southern end of Irvine)
******
$1 Studio unit at Leisure World — REALLY just $1.00!
Reply to: hous-543839765@craigslist.org
Date: 2008-01-18, 4:41PM PST
I have been attempting to sell my mother’s studio unit at Leisure World for 6 months and have had no luck. The homeowner’s dues are $1500. per month regardless of whether or not someone is living there. That amount covers utilities, and dinner. This would be a great place to live if you are 55+ or, you could recarpet, repaint and put it on the market for a higher price. I just need not to own this unit anymore. Paying the homeowners dues without anyone living there has become a real burden to me. I will give you the realtor’s phone number and you can truly own it for $1.!!!!! 24055 Paseo Del Lago West at Irvine Center
google map yahoo map
• Location: Laguna Woods
• it’s NOT ok to contact this poster with services or other commercial interests
PostingID: 543839765
$1500 HOA dues are really high for LW- but it looks like it is for their “manor towers” which include some assisted living services.
Pretty soon, they will have to pay the buyer to take it off their hands!
I suppose I should welcome all of you to the gloomy outlook I have seen coming for a while now, although there is little that is welcoming about it. As I explored this issue and saw how each domino would fall, it was very depressing for me for a while. Part of my “therapy” was to write it all down and express it on this blog. I don’t revel in doom and gloom, but the truth needed to be told. The general public is still eons behind the readers on this board, but the main stream media is finally starting to portray the reality of the situation.
Realistically, the events set in motion during the bubble are too big for anyone to do anything about it. The situation is going to play itself out, and it will be very ugly. All you can really do is prepare yourself as best you can and ride the storm out.
I can’t emphasize enough how bad it is going to be locally. Our local economy was so inflated by mortgage brokerage commissions, real estate commissions, local builder’s profits, and of course HELOC spending. All of these sources of artificial demand and consumer spending are going to evaporate. The next few years in particular are going to be very depressing in OC.
Save money, pay down debt, and don’t take any financial risks, and hope your company stays in business and you keep a job. It is all you can do.
Question about property taxes in Orange County:
If you buy a house for $600K now, that was purchased at the peak for $800K are you going to be taxed as if it was worth $800K?
My sister was in the Navy and was posted in Rota Spain. Her boss was a big golfer and had won a local tournament but he wouldn’t put the trophy out. When she asked him why..he brought it out. It was engraved #1 Moron
Hey! We have Leisure World here in Va too. I thought it was a local thing. Very high end.
I hate to ask why his mom is using the unit anymore….
No. You will likely be assessed at $600K and go up from there based on prop13 limits. Or, more likely, you can ask for reassessment in 2009 for 500K.
Thank God not all of Irvine is like that.
Our 401Ks are on bond funds.
Also, theres’ a big check on the money I borrowed that will go into CDs. I will pay myself 7.5%.
My wife is also gonna borrow a big chunk and then put that into CDs.
After the crash, then we’ll pay off our 401K loans and move the funds into growth funds.
Now, who was it there that was preaching to us that no one should borrow from their 401K?
I figure this week my wife and I saved like 10K by not being in equities.
Moron de la Frontera. It has an accent on the second ‘O’.
Google it. I guess we have an AF base over there. Amazing. I thought we only had it in Torrejon nowadays.
It sort of out of the way from Rota and Jerez. Those are in the province of Cadiz while I think that Moron de la Frontera is in the province of Seville.
It pronounced as mohRON. Not as MOron…..
Did you really get along with Los Cubanos? They must be long suffering souls. Ay!
😉
And maybe move to Moron de la Frontera for a while and take a job with the USAF.
I don’t think their RE market was so moronic after all. ;-D
Ahem. Excuse me Mr. Tonye, could you please explain how you borrowed from your 401K again?
Thanks!
I think it was ex-Tan that thrashed on the idea tonye.
That would be me, and I said it was extremely risky for a beginner (who never had a 401k before) to use his 401k as a downpayment savings vehicle. Your response was some non-sequitur about C programming.
(www.irvinehousingblog.com/2008/01/08/seron-aid/, comment by 25w100k+, 2008-01-08 13:49:52 “Is it worth it to max the contributions, *knowing* for sure i’ll take them all out with the when I buy? (and taking the penalty or whatnot). Or am I better forgetting the 401k for now and keep putting my excess cash in a money market?”
When you borrow from your 401k:
* Some plans prohibit contributions until the loan is repaid.
* Failure to make payments or being laid-off causes the balance to come due immediately, +fed and state tax, +10% penalty.
* CD rates are 4%. Also, CDs tie up your principal for the duration of the term; you’re repaying the loan principal out of taxable wages or selling other investments, potentially triggering capital gains taxes and incurring opportunity costs.
* Repayments are made with aftertax income.
* Paying yourself interest loan from your 401k is not a gain. You are just transferring your own money from one vehicle to another. It is a zero-sum process. Actually, a less-than-zero, since you are putting aftertax money to restore your tax-sheltered account. Paying back a $10,000 loan with a 0% interest rate means you’ve actually spent $12,800 if you’re in the 28% federal income tax rate (include more for your California income tax bracket.)
* When you retire, you owe tax on withdrawals. You get no break if the money you withdrew is from a loan repayment made with aftertax money. You are getting taxed twice.
* 401k loan interest is also not tax deductible. If the interest rate isn’t zero, you get hit again.
If your 401k has a cash or cash-equivalent option, why wouldn’t you transfer your funds into those, risk-free? If your plan is so restrictive it has no such option, I can’t imagine the plan would allow you to continue to contribute while a loan is outstanding.
Anyway I don’t see why someone would be so proud of their day-to-day financial maneuverings that they feel the need to club people over the head with their perceived victory. Those numbers on a balance sheet do not give you hugs at bedtime or draw pretty pictures or shriek with glee on a swing.
I just made a small fortune in real estate.
How?
… I started with a large one
“Failure to make payments or being laid-off causes the balance to come due immediately, +fed and state tax, +10% penalty”
Not quite true ex-Tan. If you lose your job, yes the balance is due immediately. If you pay it back, there is no taxing or penalty. If you don’t pay it back, either after a termination (you normally get 60 days) or via your regular loan repayments, the loan is considered in default that’s when you would get hit with taxes, penalty, etc.
I can tell you that Fidelity’s (#1 in terms of 401k plans managed) boilerplate plan does NOT prohibit contributions during a period with an outstanding loan. I am paying back my loan and contributing $750 per paycheck.
I do agree with you that rebalancing into cash or cash-equivalent is the best option if its available in the plan and has a good rate. I’m lucky that I have a money market fund option in my plan that is earning north of 4%.
This house was purchased new in 2005 at $998k. Is this where you truly think market is today?
Hi IR –
I’m confused… about this listing
http://www.redfin.com/stingray/do/printable-listing?listing-id=799662
Why would a house be in a short sale position and also be listed for 232 days? Is this an error? Or it the bank also wishing for a buyer at these prices?
Not quite true ex-Tan. If you lose your job, yes the balance is due immediately. If you pay it back, there is no taxing or penalty.
You’re right, sloppy editing on my part.
Testify, IR!
Perk up IR, OC ain’t all that bad… Statewide unemployment is up 13.5% since June, from 5.2 to 5.9% as of December numbers. OC unemployment is only up 10% over that same time period, from 3.9 to 4.3%.
If OC was so dominated by high paying mortgage jobs, exorbitant real estate commissions, massive construction spending, etc. how has our unemployment held up better than the rest of the state? Shouldn’t we be outpacing the rest of the state in terms of job losses? The many thousands that used to be at New Century, Option One, etc. hit the unemployment rolls many many months ago… Can the builders slow down residential construction any more than they have? Where the heck are they building houses in OC right now?
I too agree that we are in for a hell of a ride over the next year or two, but think it will be more the result of a number of large national/international economic problems (weak dollar, climbing inflation, climbing energy costs, etc.), not just a local residential housing recession issue. We’d probably be in for a recession sooner rather than later even without the housing correction…
Or to summarize all of the above – It’s gonna suck everywhere but at least you have great weather, good schools, and a nice safe city to live in… Could be a lot worse. You could be living in Detroit while the economy goes into the crapper.
It probably did not start as a short sale, but after enough price reductions chasing the market, it may have become one.
I love the quote “SHORT SALE is APPROVED at $995000.” BFD! If the market will only offer $800K, who cares what the bank will approve?
Yes George, I do. A September 2005 close date on a new place in NW II was likely contracted for in late 2004 or early 2005. It takes time to build houses, and when they were selling them easily, the phase releases were coming 6-12 months before construction completion.
If it sells for less than $998K today, especially considering it had no landscaping, plantation shutters, etc. when it came new for $1M, that puts the price firmly into 2004 territory. They probably paid $1.05M all-in and did that based on late 2004 or early 2005 market dynamics.
More and more, lenders are allowing owners to stave off foreclosure proceedings if they can get some offer flow on the house. I’ve been to two recent open houses on shorts, and both of those realtors talked about needing to get an offer above $X or the bank might start proceedings…
The foreclosure process is expensive and time consuming for already overworked banks. Shorts are gaining in popularity as a result.
It’s my impression (and direct observation) that a large chunk of high paying mortgage jobs, realtors, and related parties are considered self-employed and would not reflect accurately in those numbers. And my buddies who own and run manufacturing businesses say business is super slow right now as well …
Thanks guys. Your explanations make sense. I’m wondering out loud here but, tens or hundreds of thousands of dollars in loss is incredible. Speaking from my own experience here – but, it is tough to save $100K. If 20% down does become the norm, it will likely bring values down considerably.
http://www.ocregister.com/ocregister/homepage/abox/article_1962150.php
Snip~~~~~Humbled homesellers
The slowest housing market in two decades takes emotional and financial tolls on owners.~~~~~
More at the link. Divorce, house on market for multiple years, huge discounts, chasing down the market pricing. One guy is going to try and create his own auction for his multimillion dollar so. county property.
Good article, imo.
This IS sad, but somehow I cant stop laughing at these one liners:
“…Beyer, 52, a contractor and owner of a glass block manufacturing business in Buena Park…..If I had more offers, I could have adjusted. I was in a vacuum.”
What was he expecting, some low ball offers to help him price it right? He would have just scoffed!
The other idiots in the article:
“They put $70,000 down – all that remained from their $180,000 profit from the Las Flores house after taxes and paying off debts. ”
“After a year, they were ready to move out. Bill didn’t like living in Tustin, parking on their street was too tight and they didn’t like the school district.”
Very well planned move huh? We researched our exodus from California for over a year!
Best line of all:
“They put the home up for sale for $789,000….They got an offer for $750,000. Acting on their agent’s advice, they rejected it”
BRILLIANT!!!!!
“The hub reminds me we have to buy a new tv, so we can use if for that”
Awesome…
The fed prints free money and hands it out to citizens who use it import cheap TV’s from China..
How does sending more money China help the economy?
Location of this property is a big no-no in Chinese Feng Shui, as the street points at the property directly. That probably makes the buyer pool even smaller.
Consistently, posters point out all the funky/insulting/WRONG/weird stuff that gets into the MLS descriptions for properties. The comments usually are good for a laugh or two.
However, I’d like to point out how broken down and inept the system is. Not only did the Agent get the text of the description past the sellers, but that blurb also passed by the BROKER and the MLS people responsible for recording it. You’d think that at least ONE of the Agent’s colleagues would be courteous enough to point out the most obvious of errors for correction so that the WHOLE OFFICE/AGENCY isn’t tainted by such obvious sloppiness.
My friend’s 20 y/o son just got a listing for a Seal Beach property for $1.5 million. He’s pretty bright, but I’d like to see for myself if a 20 y/o can match or beat most of what we’ve been reading in the MLS lately.
What does the board think will happen with long term price moves in SoCal? After this “correction” is over do people feel that we will return to the trend growth / appreciation in housing prices? I’m concerned that we may see a long term rising rate cycle do to global demand and inflation. If this is true, then we be in for many many years of flat pricing from the point of correction. When will see the high prices again? 2020?
I know a couple of guys that work at larger mortgage companies and they have never been 1099 types. They get a small base salary + commissions. One of them used to be at Option One, and he was employee there, not an IC. He’s lucky he left…
Most realtors are indeed independent contractors. The lion share of jobs in mortgage and realted industries come from inside/outside sales, loan processors, underwriters, analysts, customer service people, title processors, etc. The vast majority of these people are/were employees, not ICs.
All that being said, business does feel slow. My company is in the professional services sector and we started seeing things slow in the late summer.
I’m nowhere near an expert, but while I can see why SoCal and OC *land* values would demand a higher premium, I can’t for the life of me see why it would appreciate at a faster rate then most other places in the country. Appreciation is tied to inflation, which isn’t ever a local phenomenon, no?
There is the perennial California housing shortfall. We never build as many homes as would be needed to accommodate the increasing population.
Wow… You’re a genius Tonye… Keep timing the market and you’ll be rich … Not to mention borrowing from your 401K, pay 10% penalty and tax, to get 7.5% on a CD 🙁
BTW, I hope you’re just bluffing to see what people’s reaction will be, and not serious about this!
“What does the board think will happen with long term price moves in SoCal?”
Real estate as an investment is dead for many many years. Prices will come back in line with incomes and stay that way.
It’s always the same after every bubble – people wonder when the glory days will come back. They dont! Some new bubble will emerge in some new or different asset class.
The country and the world is aging. Invest accordingly.
Hard numbers?
Best educated guess,
Garden Grove, Stanton, Westminster, Anaheim, Cypress
Starter Houses 225k-300k
Santa Ana 200k-250k
Huntington Beach, Fountain Valley, parts of Costa Mesa
Starter Houses 300k-450k
Irvine and most of South County
starter houses 399k-475k
based on inventory, desirability, schools, income
Housing values are tied to many things.
1) Proximity to employment
2) proximity to recreation
3) traffic
4) weather
5) population pressure
6) Crime rates
7) Quality of education
8) Expectations for the future
All these factors are favorable for Southern California, particularly South OC, Real Estate.
the sunglasses were intended as an 8.
Some media for today:
Why are new homes selling for less than the equivalent existing homes?
The specifics are about the Bay Area, but “Surreal Estate” has always been a great feature of the SF Chronicle, and Carol Lloyd’s articles were always buried somewhere weird until the real estate market stopped behaving like a monkey on steroids.
The New American Gentry: Wealthy folks are colonizing rural areas, bringing cash, culture — and controversy
Some media for today:
Why are new homes selling for less than the equivalent existing homes?
The specifics are about the Bay Area, but “Surreal Estate” has always been a great feature of the SF Chronicle, and Carol Lloyd’s articles were always buried somewhere weird until the real estate market stopped behaving like a monkey on steroids.
Article from LA Times website. Preaching to the choir here but nonetheless an object study in simple wisdom and being one’s own person. He didn’t drink the kool-aid AND managed to convince his wife it was time to get out. Brave soul but a wise one too. And it paid off for him too.
http://www.latimes.com/business/la-fi-shortsell20jan20,0,1815515.story?page=1&track=mostviewed-storylevel
Take care all. See you soon.
Just finished reading thru the comments. Some great comments tonite and better still, they all seemed to have a relaxed feel to them, not the sometimes contentious tone these things can adopt.
IR – I was just thinking of your comment about “the dominoes” falling and the gloominess one can feel when thinking thru it. I couldn’t agree more. Over a year ago I was telling my friends about these things and how depressed I was thinking about what I felt sure was coming. I don’t feel any better now. Sometimes it’s no fun to be right. I think my reservoir of schadenfreude is all tapped out. Up until about two weeks ago I was buoyed by the fact that it seemed that the job market was holding. Clearly after Q4 earnings were posted the last crutch has been kicked out. This country is in serious trouble and I fear it’s going to be painful for us all for more than a couple of years. Fortunately many of the nice things we have available to us here in OC are free. We do have some very nice public parks, a walk on the beach is still free (last I checked) and some very nice state parks are all easily reachable.
On a related note, I took the fiance out for dinner the past two weekends. Nice places, not terrible expensive ($80 – $90 for us both). I’ve begun to notice that the restaurants aren’t as full and we’ve not had to wait at all to get a table. Maybe means nothing but I have to figure the RE collapse is filtering down thru the service economy. I’m in sales for a large telecom (you know the one) and the past few meetings I’ve had with C-Level execs haven’t been encouraging. Top 10 priority lists for the year are listing “cost containment” either number one or number two. Not a good portent either.
I wonder if any of my fellow posters have noticed anything like this too.
Hey C-Dub, how goes the home listing experience? Getting any traffic? As I suspect I’ll be listing sometime this year as well, would love to hear how things are going…
ipop: get a simple account at 1and1.com. there are a bazillion hosting companies, but these guys work great, are cheap, and have very few issues.
I went to GoDaddy and fired up some hosting with them. Seems cheap, $3.50/month for 5 gigs.
http://www.ipoplaya.com
Updated escrows going back into December… Sorry it’s only 2000+ sf places. That’s all I am personally interested in.
Yeah, but the question is how. Looking at Japan with it’s shrinking population and large elderly population, not much to invest in if you lived there…
Yep
http://forums.irvinehousingblog.com/discussion/922/1/local-business-slowdown-stories/
You should include original list, too. Instructive to see the full range of price drop necessary to get a home into escrow.
Lots of people try to time the market. Very few are successful. Long term mutual fund investing has been proven to be the best strategy. Good luck playing with CDs. What happens if the market bottoms and has a huge recovery while your are tied up in CD. And, please let us all know when we hit the absolute bottom.
Thanks.