.
Thomas Jefferson believed “Financiers, bankers and industrialists make cities the cesspools of corruption, and should be avoided.” It is hard to argue with him given it is the actions of lenders that enabled the Great Housing Bubble.
Today’s property illustrates why something needs to be done to prevent irrational exuberance from creating volatility in our real estate markets. The family that bought this property put 25% down, and although they started with an Option ARM, they refinanced in 2006 into a fixed-rate mortgage. They tasted the kool aid and did not find it palatable. Families like this should not get screwed based on the timing of their purchases due to life’s circumstances. From the photos, it appears they have young children. They probably bought this as a family house. People should be able to do this without losing their life savings. If lenders did not enable people to overborrow, prices would rise about 4.5% a year, and people wouldn’t have to worry about when they bought or sold. Housing bubbles are not created with equity; they are created with borrowed money. People blow bubbles; lenders provide the air.
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Asking Price: $739,900
Income Requirement: $184,975
Downpayment Needed: $147,980
Monthly Equity Burn: $6,165
Purchase Price: $800,000
Purchase Date: 5/10/2005
Address: 11 Jefferson Ave., Irvine, CA 92620
| Beds: | 3 |
| Baths: | 3 |
| Sq. Ft.: | 2,233 |
| $/Sq. Ft.: | $331 |
| Lot Size: | 4,465
Sq. Ft. |
| Property Type | Detached, Single Family Residence |
| Property Style: | Traditional |
| Year Built: | 1985 |
| Stories: | 2 Level |
| Area: | Out of Area |
| County: | Orange |
| MLS#: | K08042062 |
| Status: | Active |
| On Redfin: | 17 days |
This well maintained home is nicely situated on a well manicured
cul-de-sac. An elegant entryway, that includes a curved staircase,
leads to the formal living room and dining room. The large front window
in the living room adds extra charm and sunshine. The kitchen is well
designed, including a breakfast bar, walk in pantry and plenty of
cabinets. A breakfast nook is convenitently located between the kitchen
and spacious family room. A large firplace adds to the beauty of the
family room, making it the perfect gathering spot. Two upstairs
bedrooms open onto the Bonus Room, making the Bonus Room a great spot
for a toy room, excersize room or library. The backyard is beautifully
landscaped including a patio, large shade trees, flowers and grass.
This home is very close to schools, shopping and freeway access. This
Northwood HOA includes 2 Tot Lots & Swimming Pool.
Anyone want to comment on the decorative tastes of the owners?
.
.
If the sellers get their asking price (it seems about 10% too high), and if they pay a 6% commission, they stand to lose $104,494 — over half of their $200,000 downpayment. Realistically, they are going to lose almost all of it.
Just to provide a reminder of how overpriced homes still are, this property would probably rent for about $2,800 a month. A 160 GRM puts the value at $448,000. I you look back at the sale history, this property sold for $390,000 in 2001. Prices in 2001 were inflated, but not in bubble territory yet. A value of $448,000 is about where this house should be; it is where it would be if there was not a bubble, and it is about where it will be in 3-5 years…
BTW, the featured song today wasn’t written about real estate bubbles, but the lyrics offer that interpretation.
.
The summer had inhaled
And held its breath too long.
The winter looked the same,
As if it had never gone,
And through an open window,
Where no curtain hung,
I saw you, I saw you,
Coming back to me.
A transparent dream
Beneath an occasional sigh…
Most of the time,
I just let it go by.
Now I wish it hadn’t begun.
Comin’ Back to Me — Jefferson Airplane
I won’t say a lot about their taste, though that red auto bed is a little creepy. It seems they have purchased a lot of trendy stuff that actually doesn’t go together at all. But what most struck me was that chintzy metal railing on the curved staircase; it looks like something that should be outside. It suggests that a lot of the builder’s finishing is actually pretty cheap stuff. I would want it checked out very carefully.
Does anyone in Irvine use a regular TV or do they all hang flat panels on their walls?
It’s like the first thing every new home “owner” does is run up to Walmart and buy a flat panel to hang on a wall.
Walmart? Gasp… There are not very many Walmarts in OC, and none in Irvine. Conspicuous consumption requires overpaying, plus Walmart is for the lower classes beneath your typical Irvine resident, so all the flat panels in Irvine were not just purchased for top dollar, each one was professionally installed which adds another 25%-50% to the price.
Did the sarcasm come through?
You are right.
It looks like the closest Walmart to this house is about 5 miles away in some place called “Foothill Ranch”.
I pimped my Walmart television with some chrome buttons that spin around when you press them.
I figure that has to add a 50K value to the house.
“Did the sarcasm come through?”
Yep, the sarcasm comes through loud and clear.
I can only imagine it must be frustrating to have to navigate daily life through the sea of “typical Irvine residents” for which you seem to have such an unwavering disdain…
Yeah, that was one of the things I thought was funny about Irvine. We would have to drive all the way to Foothill to shop Walmart. Low end retailers like that were not allowed in upscale Irvine it seemed. Whatever. đ
Nice catch, IrvineRenter.
CK shops at Walmart apparantly.
Smokin ’em out!
I shop at the Foothill Ranch Walmart. Bought my boy his John Deere riding tractor… It was 20% cheaper than I could find it anywhere else!
Wrong, AZ. No Walmart for me. But not because I’m one of the “typical OC spenders” as suggested. More along the lines of I refuse to support an organization which takes advantage of less fortunate Americans, in addition to promoting near slave labor conditions in the countries which manufacture its goods — just to save myself a buck.
But the prevailing stereotype on this blog boils it down to “typical Irvine residents” don’t shop at Walmart because they are too fancy.
My disdain is for the habit of conspicuous consumption and the attitude many people have of elevating themselves above others in their own minds based on their possessions. This speaks to a significant sub-culture in Irvine. I have no problem with people wanting to enjoy nice things; however, it saddens and annoys me when people think their stuff in any way reflects their value as human beings. It saddens me because people who live this way are so empty. It annoys me when these judgments of others form social barriers for myself or my family. One of the things I enjoy about the community that comes to this blog is that they are not “typical Irvine residents.”
That’s a good reason to not shop Walmart, CK.
The comment should be re-phrased to “the typical OC resident cares more about the common man and children in sweatshops than they care about saving a buck”
IR — I can appreciate your thoughts, and it might surprise you to know that my wife and I follow the same teachings as you seem to. That said, I disagree that the glass is half empty on Irvine residents. Since reading this blog I have started scrutinizing my neighbors much more, and my observations are that by and large they are good people — and it’s the conspicous consumption types in the true minority. Maybe I have a glass is half full view, but I think the “typical” residents are just regular folks. It’s just that you notice the big-timers more, because they make a spectacle of themselves.
Sorry to get all political on it, AZ. We should probably get back to our normal Friday back and forth…That’s more fun than politics, anyway, right? đ
“Itâs just that you notice the big-timers more, because they make a spectacle of themselves.”
That it probably true. It may also be a function of some of the people I have run into in life. Anecdotes do not make for a good sample set for broad generalizations.
There is one thing that has affirmed my belief in the goodness of people: I have met two families in OC who are very, very wealthy (well over $100,000,000 net worth.) They are very good people. The times I have visited their houses, they seem genuinely interested in sharing the beauty of their art collections and the wonder of their properties, not because they were showing off, but because they liked to see the joy these things brought to other people. I never once got the impression these people wanted me to be jealous or think they were superior. I suppose when you really do have that kind of wealth, you don’t need to impress anyone…
I’d like to put the horse in front of the cart.
People who have a need to impress will never accumulate $100M in networth. This is because they will spend everything that they make to impress and never achieve critical mass.
It’s probably cheaper to get a flatscreen, than to pay for an extra 10 sq. ft. of house to hold the tube TV…
As funny as anon’s point is I want add something somewhat tangential to the brief digression on flat panels.
Az, If you think a flat panel is sign of conspicuous consumption as opposed to a “regular tv” I’d have to wonder where you live. Well, I would wonder if your handle here didn’t include the location (as well as your frequent comparisons of AZ to every other place discussed here).
It’s 2008. A flat panel *is* a regular tv. If you think otherwise you don’t get out much.
There’s one TV in our house. It’s a 23″ flat panel.
Am I rich?
Anything but.
Am I showing off?
With a 23″ (tv)? You’ve got to be kidding.
All that said, I share IR’s disdain for conspicuous consumption.
One final aside to IR, I think I have to do something I seldom do here namely, disagree with you. IR wrote,
“If lenders did not enable people to overborrow, prices would rise about 4.5% a year, and people wouldn’t have to worry about when they bought or sold.”
I bought a home in 2003 using a no doc loan. It was the only way I could buy at the time. I could have borrowed more. The mortgage whore worked my wife pretty hard to do so but we said, quite simply and firmly, no. So we bought our little townhouse downtown and we’ve never been late on a payment.
Yes, lenders, real estate brokers, the whole lot of real estate industry whores and their sidekicks fueled the bubble. Yes, it was totally unnecessary. Yes, many of these people deserved some kind of penalty for borderline to outright illegal and almost certainly unethical behavior. That said, the consumer can always say no. The consumer also has some small amount of power and can say, “No, I want a loan for this amount not something more.” Problem was, a lot of people didn’t.
I am, by no means, reduced what the blame to put on lenders and agents. But to now at least acknowledge the home buyers complicity in the scheme is to absolve them of guilt they deserve.
In the end, this family may or may not “deserve” to lose their home. I don’t know and frankly it’s none of my business. But using the quaint house, somewhat littered with children’s toys to make the case that the buyer is always a victim is not a true portrayal of the events of the last ten years.
I lived in Newport Beach for 9 years. I have seen pretentious. People in Irvine aren’t pretentious.
I don’t have a flat-screen TV at my house. I’m still using an “old” Mitsubishi 48″ rear-projection HDTV, floor-standing type, with no HDMI inputs (just component and S-video).
There’s really no reason to drive all the way to Walmart to buy a TV. You can go to Costco and get one. The Vizio brand flat-screen TV’s are cheap and their HQ is right here in Irvine.
People hate Walmart because they’re big and successful. Victoria’s Secret buys lingerie from Bangladesh sweat shops and you rarely hear people bash them, or any other “boutique shop”. It’s kind of like guys going to a party and seeing some rich stud pull up in a Ferrari, and they feel like keying the car doors out of resentment.
Walmart is successful because, instead of sitting on a high horse of political correctness, selling eco-friendly, sweatshop-free, & organic goods w/inflated profit margins to South OC yuppies, they push hard and do whatever it takes to lower prices for the working poor, which accounts for 15% – 42% of a state’s population, like the guy who’s mowing your lawn on weekends.
Momopi, have you ever considered that the Walmart practice of going into small towns across the US and undercutting all of the local mom and pop places — driving them and their jobs out of business — actually serves to CREATE the very working poor you applaud Walmart for serving? I guess its a brilliant business plan, and one you appear to admire. Clearly we see things differently. Just when I think I am getting more conservative in my late 30’s, someone goes and says something like “Walmart is good for America” or “CEO’s deserve 400 times the salary of their employees”, and then I realize I am still just a populist…
CK – Totally agree. It’s not that only the “dirt people” shop at Walmart, it’s that they’re basically an evil company. Did everyone not read the story of how they sued a former employee who was brain damaged in an accident to recoup the compensation she was given by the at-fault driver’s insurance company? Jeez – This woman was living with permanent brain damage and needed the money for medical care, and Walmart sued her to recoup a portion of the medical bills she incurred when injured that the Walmart insurance paid.
I’ll go get my cheap stuff at Target or Costco, even if I have to pay 3 cents more for my toilet paper.
And the fact that there is a Walmart in Foothill Ranch — what does that say about the “new community” posers in Foothill Ranch? They spent so much on bubble housing and SUVs that they NEED A WALMART!
CK: The conditions that you describe is no different than chain supermarkets or 7-11’s whacking the local co-up or mom & pop stores. People bash Walmart and Microsoft for their success and being the biggest target.
I’ve lived in BFE areas with crappy local shops, and when the first chain supermarket opened it was like arriving at civilization. There are reasons why people shop at big-box stores, and South Park puts it best (it’s in us!).
A company’s first and foremost responsibility is to generate profit for its shareholders, within legal bounds. It’s why we buy their stocks. From strict moralist perspective, all merchants profit at the expense of someone else’s labor, and the buyer’s ignorance. Walmart, IMO, can at least claim net profit margin of only 3.5%.
I have started to see ads for apartments stating they come with a flat screen on the wall, they have become that necessary in OC, it’s as common as a refrigerator.
“…though that red auto bed is a little creepy.”
Oh man, when I was a kid I used to think those beds were SO COOL. And today I drive a red sports car. Hmmmmmm…
Anyhow, most of the homes featured on IHB were “purchased” with very little down payment. This post is interesting because of the incredible amount of skin in the game–and yet it still wasn’t enough to prevent a significant loss.
It’s sad. They seemingly did everything right: Responsibly saved a large down payment, bought a family home in a nice neighborhood with good schools, mitigated risk by getting out of an ARM and into a fixed rate mortgage…and yet we still have a financial meltdown.
Getting out of the ARM was smart, but it serves to highlight that oftentimes creative financing is the ONLY way some people can afford a home in SoCal.
After all, you can get a 100-year, interest-only loan on a Bugatti Veyron, but that doesn’t mean you’ll be able to afford the monthly payment.
Whenever I see a property like this where the people did the right thing and still lost, I can’t help feeling something is very wrong. Even the fiscally conservative are getting pummeled by the market due to the fools all around them. The general public are not real estate experts (contrary to popular belief.) This family likely did not possess the expertise to evaluate whether or not the property was overvalued. Most people just assume the market is the market and prices must be rational if enough people are paying market prices. I have a hard time imagining what it must feel like to do everything right (or seemingly so) and still lose $100K or more.
I think you are giving them too much credit.
They drank the kool aid like everyone else and decided to trade up while the times were good.
I am sure that their 200K down payment was the product of a bubbly previous-house sale.
A normal person would see an 800K price tag, do the math and realize that even if you are putting down 20% – 600K remaining is still A LOT of debt.
To me it looks no different than someone buying a 600K house with 0% down.
This is where a realtor should be advising prospective homebuyers or homesellers, though.
The realtor should say, “You know, if you can hold off, you’ll get a better deal on this house at some point in the future. Unless you absolutely have to buy right now, don’t.”
And to a homeowner/seller, they should have been saying, “Prices have run up a lot. You should think about selling your house and renting for a few years.”
The first situation would be more common (few would sell, then rent, I think), but it should be the role of the realtor to be an advisor, should it not?
A realtor advising a client to do anything other than buy now and buy quick
=
hungry
I don’t know – if a realtor told me “now is a great time to buy” at the top of the market (late 2006/early 2007), I would never use them again. I would make sure all of my real estate discussions (with friends/neighbors/relatives) included a discussion of why that realtor should never be trusted. That certainly wouldn’t be good for their business.
I would say that the realtor who actually advises correctly might have less business in boom times, but would have more business for longer over a 10-20 year period.
Of course, a Realtor is just thinking about the next paycheck so that they can pay the HELOC they took out to flip homes, then a “recommendation” to a client might change…
My sister in Oakland did just that. They had a 2 bedroom old condo that they had bought to comply with foster care requirements while in the process of adopting through the state system, and then moved out and rented for over a year, saving up real money to put on a small house. Too bad that house was still overpriced at 600k and bought in 2006. But seriously renting a 2 bedroom 707 sq ft place was not tenable in the long run.
If ‘people doing the right thing’ like this didn’t feed the frenzy, prices wouldn’t be out of control to the point that they couldn’t afford it
Life is short but its not THAT short that you can’t wait a few years renting or living in a smaller house you can afford.
“Whenever I see a property like this where the people did the right thing and still lost”
IR I have to wonder about this statement. To me part of “doing the right thing” when it comes to buying a home is making sure you end up with affordable monthly payments and making sure you have a sufficient “rainy day fund.” We don’t know what this seller’s income\savings circumstances were when they first purchased but I just have a hard time imagining that most of the folks who purchased during the bubble could really afford, long term what the monthly payment was\would have been on a 30 year fixed.
It looks like a pretty nice home, however for the average working class stiff this price is still out of reach so it still has a ways to go down. Unfornately for them they invested unwisely. Can’t win’em all.
What are you talking about? Premium land people. Think of the PREMIUM that everyone else is willing to pay!
Assuming we get a nice couple in there that brings the full 147,980$ down payment to the table, they are only looking at a mortgage payment of about 3500.00 a month.
Just make the wife get a second job, start donating blood weekly, and don’t bother with clothes and food for the kids.
You can make it work if you get your priorities straightened out.
Is it a premium because it’s a scant 300 yards from the 5 Freeway? Hmmm…that constant drone of traffic faintly resembles the ocean waves. And the stench of diesel wafting on the ocean breezes, why that’s just tropical jasmine.
Hurrah, nesting is back!
The line of type still goes over too far to the right; hard to read. Any hope for all thread visible?
So they like bright red and blue. At least it isn’t beige. And most of the colored stuff won’t stay. Shows they decorated to suit themselves, not some hypothetically buyer.
What I find offensive is the tiled countertop.
Who can keep grout clean? Not I. If the grout were a dark color that would be better.
If you don’t clean it then the grout won’t be white. We had this kind of old 70’s counter in our Irvine home. It was a pain to keep clean.
lawyerliz,
I apologize for the frustration you are feeling with the new format on the blog and in the forums. The “upgrade” is still a work in progress.
lawyerliz,
I’m not sure what you mean by “The line of type still goes over too far to the right; hard to read.”
If you could send me a screen shot or something that would really help me understand what is going on.
Zovall are you able to change it so the type size is not fixed? No matter what I change the font size to in IE 7 it stays the same, and is too small for these 50 year-old eyes. Thanks.
In Internet Explorer
Click on The Tools butotn on the top right
Pick Internet Options
Click on the Accessibility button on the lower right
Check the “Ignore Font Sizes specified on Webpages” checkbox
my god. I just spent time on a post and it disappeared b/c I didnt type in the word to the submit box. grr
Is there a way to remove that dumb box that requires you to type in a word before you can submit a post?
I am still a little cranky about my last contribution being lost >:-(
This system doesn’t have a spam filter like on WordPress – so the Captcha is used to keep spam out.
If you create an account and log in, it will not prompt with a Captcha.
[url=https://www.irvinehousingblog.com/forums/member/register/]Register here[/url]
at least the house isn’t full of high end (equity line purchased) furniture and decorations like some of the homes profiled on this blog –
looks like a normal family who tried to do things right and got burned. People should be able to buy a house without worrying about bubbles – great post today IR!!
Thanks for putting back the nesting.
One more request. Can you make it so each comment has a square black line border around it (like the old style). It makes it a lot easier on the eyes to read.
We’ll see what we can do đ
IR:
>>
Just to provide a reminder of how overpriced homes still are, this property would probably rent for about $2,800 a month. A 160 GRM puts the value at $448,000. I you look back at the sale history, this property sold for $390,000 in 2001. Prices in 2001 were inflated, but not in bubble territory yet. A value of $448,000 is about where this house should be; it is where it would be if there was not a bubble, and it is about where it will be in 3-5 years…
<< You have it covered 100%. I hope the owners can hang in there for 20 years.
“Families like this should not get screwed based on the timing of their purchases due to life’s circumstances”.
So take my take dollars to bail them out? Absolutely not! Greedy âpredatory borrowersâ who didnât want to miss the financial windfall of the Southern California real estate market skyrocketing are getting exactly what they deserve. After all, they were part of the irrational exuberance that drove the market sky high. Had the so called âfiscally conservativeâ home buyers who âdumped their live savingsâ into way overpriced properties such as this one not been so stinking greedy, perhaps they would be bankrupt today. Pigs get fat, hogs get slaughtered.
Furthermore, I lost a pot load of money in Global Crossing. What about my bail out? I worked hard for that money and had no idea they were lying to shareholders. I want my money back! I hope congress, at the same time they pass a bail out program for home ownerâs passes a bailout for bad stock market decisions. What about the poor people who lost so much money betting on the Patriots? Who on earth could have predicted the Giants would win? How about a bail out for them too?
Bail outs are like term limits. They are designed to protect people from their own stupidity. What a sick country we live in when we need to pass laws to protect ourselves from ourselves.
“So take my take dollars to bail them out?”
No, I would prefer to see policies and systems in place that prevent bubbles from inflating in the first place, then nobody would need to be bailed out.
Hey, you can feel for people without thinking they need a government bailout. I do.
I’m not going to say anything about their taste. We let our kids pick their room colors and they picked purple and pink. Kids like *colors*.
http://www.washingtonpost.com/wp-dyn/content/article/2008/04/04/AR2008040401886.html
Just wanted to bring to your attention more irresponsible reporting on the part of the news media. This guy posits an “economists formula” for rent versus buy. And what is it? A factor of 200 times monthly rent comps if I’m doing the math right. 200!!! With no mention whatsoever to better online calculators like those at Ginnae Mae which will lead to numbers more like your own (120-160 depending on time owned and assumed appreciation). Just a potentially malicious attempt to keep home prices sky high as far as I can tell. Makes the blood boil in the morning.
OK, its one thing to say they overstretched to buy the house, but why you have to attach their taste? Isn’t it bad enough they are losing their house? Why does it always get personal
It is personal.
Lot’s of people have been priced out of buying their own home because people like this were outbidding them with their limitless credit lines.
Part of it stems from the facade of wealth and upper class “nouveau riche” attitude that has emanated from house owners playing rich and living high on the hog while calling the bubble theorists things like “chicken littles”.
As the house prices tank and the emperors all start getting de-clothed, it is fun to throw a tomato or two. Blow off some steam.
It also makes good reading for the rest of us.
I could not have possibly said it better.
It wasn’t that long ago where the only losses people were taking on homes were from the commissions. We’ve come a long way, and we’re just getting started.
How it be personal, when it is the case across the entire nation. Doesn’t it just become a trend or even statistics. What has this particular seller done that makes you not be able to afford a house?
Though, I’ll buy the good reading argument
I have sympathy for these folks in that it would appear they are going to lose their entire 200k down payment.
Were these folks greedy speculators? It would appear they were not. Did they make a poor decision to buy this house for 800k when they did? Yes. Does excerising poor judgement entitle them to a bailout? No.
I can’t think of any circumstance where I think offering a government bailout is appropriate to folks who made poor real estate purchase decisions. If they are going to bailout folks who paid too much for their homes and thus artificially prop up home prices then they should offer equivalent payments to people like me so that I can get out of my little 1 br apartment and buy one of these overpriced homes just like they did.
What makes poor real estate purchase decisions any different than any other investment that goes bad?
I agree 100%!
Do I feel bad for them? Yes.
Does that mean I want to hand them any of my life savings? No.
If the government wants to start a charity to bailout underwater homeowners, then by all means, go ahead. I probably wouldn’t dontate to it, but I’m sure some people would (and those donors deserve the tax write off attributed to normal charity donations).
If they want to forcibly extract my hard earned dollars via taxation for any kind of a bail-out, I will oppose it fervently.
Decor says “we have kids and they are the most important thing in our lives”.
I really feel for these folks, and some of my friends are in the same boat, bought in 2005. Fear of being priced out forever, really wanting stability and a good neighborhood for the kids. People with a baby often have very short term horizons, it is hard to have the wisdom to wait maybe 5 years for the market to return to reasonable values when you can’t get a single family rental because you have very young kids that will – maybe – trash it. ( I’ve been a landlord, by the way.)
I am not for a bailout, I think even these people who have lost their equity will be better off if this home could be bought for maybe $450,000 so monthly payments were around $2400. and there was a probability of slow equity accrual. The payments and property tax on the current “value” probably pin them to the wall financially.
These people have better taste than the owners of most of the other Irvine houses that we’ve seen.
Earth tones and sectional sofas are in poor taste. It is pretentious nouveau crap designed to appeal to the aspirations of the masses.
Functional, colorful furniture is in good taste. This looks like a house owned by a family with children. That’s something to be proud of.
A bunch of greenish-tan sofas and curvy wrought-iron candle holders, plus a coffee table with too much glass in it is in poor taste. It looks like “designer” furniture owned by socially climbing Real Housewives of OC.
Yes, this means that 99% of furniture is in poor taste. We went to that giant furniture store in the IE a few weeks ago — I think it’s called Mathis Brothers — and there wasn’t a single acceptable piece of furniture in the whole store. A couple of the winged chairs looked nice enough, but the rest of it was a Hummer driver’s fantasy of how “the rich” must decorate their “custom” homes.
Anyway, these homeowners have good taste. I don’t feel sorry for them — we have kids, too, and we’re renting — but I do admire the decor.
“…because people like this were outbidding them with their limitless credit lines.”
I don’t have a problem getting outbid by someone with a 25% cash down payment. Its the ones with less than 20% down payments I should not have to compete against.
When I was a teenager, happened to see an investment risk pyramid. Surprised me then to see real estates as a middle level of risk rather than at the bottom. Surprised also to discuss this with some relatives shortly thereafter that had seen their overseas (London?) flat plunge 50%. Never forgot it though…
http://i.investopedia.com/inv/articles/site/investment_pyramid.gif
I know it’s late, and nesting isn’t working for me right now because I’m on vacation, but Re: grout — they have this great stain free silicone grout that works great. Doubt they used it hear, but it’s fab.
Yeah, this is one of the first houses I’ve seen on IHB that wasn’t purchased with a 2nd mortgage pretending to be a down payment. I did the exact same thing as this family, but I was fortunate enough to buy in 1993 instead of 2005. Like them, I got out the adjustable mortgage into the fixed, kept paying them down.
If anyone “deserves” a bail-out, it’s folks like these. And yeah, you can make a case that no one should be bailed out. But anyone who bought a house on nothing down or interest only mortgages… too flippin’ bad.
If anyone âdeservesâ a bail-out, itâs folks like these. And yeah, you can make a case that no one should be bailed out. But anyone who bought a house on nothing down or interest only mortgages⌠too flippinâ bad.
why do they deserve a bail out? they could have rented like some of us (me). they could have bought a condo for $350k.
instead, they speculated that despite their income being inadequate to support the note on this $800k house, prices would rise and they could refi.
btw, when am i going to get that bail-out for that pets.com stock that i purchased on margin?
I have seen this house. Downstairs is good, with a decent backyard. The second floor is a bit different from the standard plan. the entrance to the childrens bedrooms are through a play room or a common area. One bedroom is very small. Master is good. Its its a kid friendly house, well kept and probably well suited for people with small kids. Older kids might not like the plan.
The owners are relocating, hence the sale.
Several people have claimed that these folks cannot afford this house. Is there any evidence of that? IR isn’t reporting this as a foreclosure — just that they are trying to sell.
Why can’t these people have a household income of $200K, being able to afford both the downpayment and monthly payments? Maybe they are selling now because they have a new job elsewhere. For the right job, I’d sell in this market.
These people are relocating because of a sale.
Yes, they lost some money here in Kalifornia but look, when they go to buy their next property, it will be that much cheaper because real estate is down everywhere.
So although they are losing some equity and their down, the fact is they will probably purchase another house that will cost them 1/2 as much as this one and their monthly payments will be lower.
See, markets have a way of correcting without requiring bailouts to make people better.
These people put $200K down. Big deal. They could have bought a house for $350K in 2001 (with a minimal down payment.) Sold it for $600K in 2005 and moved up the “ladder” with their equity. The equity would be disappearing whether they had moved or not. It’s just that they wouldn’t have actually “realized” the gain along the way.
I don’t see any reason to feel sorry for them. It’s highly unlikely they actually saved up $200K over a period of many years and with much sacrifice. They just happened to be benefiting from the “positive” effects of the bubble when they sold a previous residence. Now they are suffering the negative effects of the bubble. Life happens.
P.S. What happened to the nesting? It was back yesterday, but gone today. Oh well, I’m sure Zovall is working on it and will have everything looking and working better than before in no time at all.
It’s also the militant anti-worker attitude of WallyWorld. They would buy life insurance on employees where they were the beneficiary, they’d lock the cleaning crew in the store overnight, and anywhere their workers have voted for a union, they shut down the store. When the meatcutters at one store organized, they totally reorganized their meatcutting system and centralized it at one place. They deliberately keep employee hours low so they don’t qualify for benefits and counsel lower income employees to apply for state aid first.
They tell their suppliers the price they’re going to buy at, and if their suppliers can’t or won’t drop their prices, tough luck. No wonder all their crap ends up being made in China.
the new format is terrible. very hard to read. wont be back.
Hello crystal chandelier, I’m home.
Grandma used to live in this room…