California is the land of free money in real estate. Are we doomed to repeat the cycle? or is the free money gone for good?
Irvine Home Address … 52 Freeland Irvine, CA 92602
Resale Home Price …… $589,000
{book1}
I want to break free
I want to break free
I want to break free from your lies
You’re so self-satisfied I don’t need you
I got to to break free
God knows, God knows I want to break free
I Want To Break Free — Queen
Are any of you getting away to Las Vegas this weekend? Perhaps you might want to speculate in their housing market. Others have done so well recently… not!
If there is any market in the country that is the textbook example of a bubble it is Las Vegas. Take a good look at the Case-Shiller price chart for Las Vegas and the graphic for the psychological stages of a bubble market, and you see reality matches the concept perfectly.
CityCenter Las Vegas Cuts Condo Prices 30% for Existing Buyers
There is a friend of my wife’s who is a lifelong Las Vegas resident. The condo she bought in 1994 has recently had comps in the same complex sell for 5% less than she paid in 1994.
That is an overshoot of fundamentals signalling market despair.
Psychological Stages of Bubble Market
I am turning bullish on Las Vegas….
Irvine Home Address … 52 Freeland Irvine, CA 92602
Resale Home Price … $589,000
Income Requirement ……. $108,407
Downpayment Needed … $117,800
Home Purchase Price … $487,500
Home Purchase Date …. 8/28/2009
Net Gain (Loss) ………. $66,160
Percent Change ………. 20.8%
Annual Appreciation … 181.1%
Monthly Mortgage Payment … $2,530
Monthly Cash Outlays ………… $3,310
Monthly Cost of Ownership … $2,480
Redfin Property Details for 52 Freeland Irvine, CA 92602
Beds 3
Baths 3 baths
Size 1,904 sq ft
($309 / sq ft)
Lot Size n/a
Year Built 2001
Days on Market 3
Listing Updated 10/7/2009
MLS Number P706106
Property Type Condominium, Residential
Community West Irvine
Tract Othr
According to the listing agent, this listing is a bank owned (foreclosed) property.
Beautiful open floor plan with plenty of upgrades including built in entertainment center. Granite countertops throughout, Jet spa tub, Large Master Bedroom with Master retreat large enough for office. Window shutters throughout. Great schoold district. Close to shopping, entertainment and freeways.
Today’s featured property was originally purchased for $679,000 on 12/3/2004. The owner used a $543,200 first mortgage and a $135,800 downpayment. On 10/28/2005 he opened a HELOC for $107,000, but it isn’t clear that he took it out and spent it. He probably wishes he did.
Foreclosure Record
Recording Date: 07/22/2009
Document Type: Notice of Sale (aka Notice of Trustee’s Sale)
Document #: 2009000391119
Foreclosure Record
Recording Date: 04/10/2009
Document Type: Notice of Default
Document #: 2009000177255
Downey Savings — or now the FDIC — owns the property. They are hoping to make a few bucks back on the flip. This poor guy has all the damage of a foreclosure, but he didn’t extract his equity and have any fun. Too bad.
And so concludes another week at the Irvine Housing Blog, chronicling the Irvine home market since September of 2006.
Have a great weekend.
🙂
What schools does that feed into? It says IUSD on the listing, but I can’t find the street on http://iusd.org/asp-bin/whichschool/
I think it’s Tustin, with Beckman as the high school.
TUSD — Myford/Pioneer/Beckman.
Las Vegas had more second home and “investor” purchases than Irvine. That leads to a faster drop in prices. Same thing in Palm Springs.
I am here to make an announcement! Pizza party at AZ’s! AZDavidPhx is buying a house! A deal arrived in the mail that could not be refused!
http://www.crackthecode.us/images/AmTrust_Deal.jpg
Patience pays off, folks! I’m off to get Tim on the line so I can “LOCK IN”!
$100 won’t pay for much of a party David.
They used to give you a little bit off your rate if you signed up for direct payments at closing.
🙂
Las Vegas looks a lot like a real estate bottom to me. I don’t think it’ll get this bad in Orange County, but one thing is for sure, LV is gonna recover much quicker than The OC.
Cash Flow investors & real estate speculators take note.
This from Diana Olick at CNBC:
Published: Wednesday, 14 Oct 2009 | 11:15 AM ET
But back to Katie. Her Realtor, who is also an old friend, emailed Katie the following warnings before her arrival on the Vegas strip:
This market is crazy and many things are just not going to make any sense.
I can guarantee you 99.99% of the listings emailed to you will no longer be available by the time you get here.
Properties are selling in the blink of an eye.
Properties are getting multiple offers within a few days of being on the market, the most offers I’ve heard a house had recently was 44 offers (I know, crazy).
This market is crazy and many things are just not going to make any sense.
40% of all transactions are cash purchases, which makes it harder for the buyers who are financing to get their offers accepted.
We have 1/2 the inventory we had a year ago and 4 times as many buyers as we did a year ago.
Chances are we will have to submit several offers to have the chance of getting 1 accepted.
This market is crazy and many things are just not going to make any sense.
You will probably leave not knowing if you have a house or not because banks take 2 to 3 weeks to respond, because this market is crazy… you know the rest.
Yeah, crazy. Let’s see how long this will last.
I still remember Nasdaq index hitting above 5k. It has nowhere to go but up. Better get your fix quickly because that price won’t last long.
Yeah, crazy.
I am working on a post for next week looking at the impact of high interest rates on affordability. When you factor in sub 5% interest rates, house prices are more affordable on a payment basis than any time in the last 30 years. We all know prices are too high, but with super low interest rates, the payments are pushing prices below rental parity, and in markets like Las Vegas, all the way down to cashflow investor levels.
California equity locusts supplied much of the air that inflated Las Vegas’s real estate market. It will take another equity infusion from California to buy up all these cashflow properties, put tenants in them, and either keep them or sell them for a flip.
“When you factor in sub 5% interest rates, house prices are more affordable on a payment basis than any time in the last 30 years.”
I agree with on a payment basis, but it really sucks if one’s goal is to pay the place off because the principle is still too high.
Exactly why I do not want to buy.
You need to factor in both the affordability and the future loss in value. I suspect what you will find is that people do OK if they are on a 7 yr+ horizon. However, they are stuck if they try to get out before that.
So you think City Center will sell out within two years?
U.S. Foreclosure Filings Jump 23% to Record in Third Quarter
http://www.crackthecode.us/images/Wall_Street_Rally_1918.jpg
By Dan Levy
Oct. 15 (Bloomberg) — U.S. foreclosure filings climbed to a record in the third quarter as lenders seized more properties from delinquent borrowers, according to RealtyTrac Inc.
A total of 937,840 homes received a default or auction notice or were repossessed by banks, a 23 percent increase from a year earlier, the Irvine, California-based seller of default data said today in a report. One out of every 136 U.S. households received a filing, the highest quarterly rate in records dating to January 2005.
“The problem is prime loans going into foreclosure and people being underwater and losing their jobs,” Richard Green, director of the Lusk Center for Real Estate at the University of Southern California in Los Angeles, said in an interview. “It’s a really bad number.”
http://www.crackthecode.us/images/Wall Street Traders.jpg
Mounting foreclosures mean U.S. home prices probably will resume falling, analysts from Amherst Securities Group LP in New York said Sept. 23. A “shadow inventory” of 7 million properties are in the foreclosure process or likely to be seized, up from 1.27 million in 2005, they said.
The pace of prime and so-called alt-A loan defaults is accelerating as subprime defaults slow, Standard & Poor’s analysts led by Diane Westerback said yesterday in a report.
http://www.crackthecode.us/images/wall_st_traders_celebrate.jpg
The delinquency rate for prime loans rose to 6.41 percent in the second quarter from 6.06 percent, the Washington-based Mortgage Bankers Association said Aug. 20. The share of prime loans in foreclosure increased to 3 percent from 2.49 percent, the MBA said.
“The number of people who can’t pay their mortgages, we haven’t seen the peak of that,” David Lowman, head of JPMorgan Chase & Co.’s mortgage unit, said this week. “That’s going to weigh on us for some time to come.”
Actually, Downey was sold to US Bank by FDIC.
i know bunch of people who worked @ Downey. All of them were in IT and are now out of work for over a year. Lot of the people took loans from Downey to buy homes at WTF price.
I can’t even imagine what they must be going thru now.
By IEVA M. AUGSTUMS, AP Business Writer Ieva M. Augstums, Ap Business Writer – 18 mins ago
CHARLOTTE, N.C. – Bank of America Corp. said Friday it lost more than $2.2 billion in the third quarter as loan losses kept rising, providing further evidence that consumers are still struggling to pay their bills.
The nation’s second-largest bank said it wrote down loans on its books by almost $10 billion during the July-September period, up almost $1 billion from the second quarter. The bank also added $2.1 billion to its reserves to cover bad loans, bringing its provision for credit losses to $11.7 billion. The bank’s total allowance for loan and lease losses now totals $35.83 billion.
Let’s see the media put a positive spin on this.
maybe:
BoA near completion on removing deliquent loans.
BoA decreases rate of troubled loans.
BoA beefs up reserves for home loans.
BTW: Irvine Home Address … 52 Freeland Irvine, CA 92602 looks more like a SFDU than your typical condo.
What no picture of a jumping dolphin on IHB for this one?
The LV housing chart price vs. time is great. Let’s see a similar chart for Irvine.
IR: “It will take another equity infusion from California to buy up all these cashflow properties, put tenants in them, and either keep them or sell them for a flip.”
Well, where exactly are these “tenants” going to come from? Who are these “tenants” going to work for, now that UE is 25% in LV? How much below “fundamentals” are you going to have to discount the rent to attract and keep the employed “tenants”?
And who are you going to FILP them to?
All very good questions.
Las Vegas saw nearly continuous expansion for decades before this recession. Once people have money again, they will go lose it in Las Vegas, and the economy there will pick up — unless you think gambling may go out of style. The same cannot be said for Lancaster or Beaumont. The Las Vegas market is one I would look at even with the short-term instability. In fact, the dangerous instability is what creates this opportunity. They go hand-in-hand.
Can someone explain the first graph in this page. How can $/sq.ft fluctuate like this.
Wild Fluctuation for $/sq.ft
Bring back the redfin link. BOOOoo..
You should post both the IHB link as well as the redfin link. You’re appearing overly self-serving at the expense of your readers.
While I don’t agree with being rude, I do like the redfin page. It’s easier on the eyes and well-organized. Some helpful suggestions: Change the background color to white, move the search sidebar to the top. It feels like everything is too centered and vertical on the page and the space could be used better.
“Bring back the redfin link. BOOOoo..”
STFU you little communist cry baby. Exercise your Red/White/Blue Glory, Glory, Hallelujah – freedom of choice and type your ass over to Redfin, and stroke yourself.
“You should post both the IHB link as well as the redfin link.”
STFU you little redundant communist cry baby. I get it – you like the Redfin link. Apparantly that was the point of the first sentence of the brilliant thought-provoking thesis. Further clarification is not necessary. We all speak English here.
“You’re appearing overly self-serving at the expense of your readers”
OOOooooooOOOO The readers! Save the readers! The helpless readers Oh my! No reader left ba-hained! Moo Moo Moo!
Mind your business, loser, and let others mind theirs. Would you rather that IrvineRenter dress up in a chicken suit and spin a sign on your street corner the way they do it in the barrio? Oh no, you would not like that.
At least coming here is completely voluntary and if the captive audience disturbs you so much then you are under no obligation to return.
Consider yourself saluted.
http://www.crackthecode.us/images/birdflip.jpg
IrvineRenter, do not listen to these hippies.
They don’t feel like Americans unless that have the right to exercise their meaningless choices between Coke or Pepsi or Redfin or IHB.
They think that they are “rebels” and fighting “the system” by doing nothing more than surfing to Redfin when in fact they are just donkeys who are too lazy to leave their houses that would be required make any real change.
They instead enjoy the comfort of their armchair rebellion and criticize all business as self serving even though they all get up, go to work, and run on the hamster wheel, while refusing to take oaths of poverty themselves and expecting others to serve them freely. Many of these rebels even have 401Ks with institutions that they ought despise, but those business are cool with them because it cuts them a piece of the action.
They should be cheering you, but they are instead acting like spoiled brats who are jealous that their friend just got a shinier brand new bicycle.
Small business like this is what used to make this country awesome and the land of opportunity.
ROTFLMAO!
😆
“Small business like this is what used to make this country awesome and the land of opportunity.”
Pffft what? How the hell did “the country” get in this rant?
Ah yes. Nothing like good old patriotism to serve as the best excuse to give your american neighbor the finger.
My God! What an over-reaction! (Have another double espresso…)
It’s disturbing to know that we have people with this amount of pent-up anger walking among us…
The rant above was in response to constructive criticism from a reader, something that was once appreciated as a guideline for continued improvement. But these are modern times, and “if you don’t like it, take your business somewhere else!” certainly seems to be the motto of many businesses. And in this case complete with the finger! Unbelievable!
mother of all bear market real estate rallies. people are delusional – paying cash out of pocket over what the lender will lend on appraised value.
hike rates and bring on capitulation.
“hike rates and bring on capitulation. ”
I may use that as a title for a blog post next week. It succinctly states exactly what we are all waiting for.
If lenders are sufficiently afraid, this might actually make sense. If lenders believe a house is worth $500k, but will only lend $350k, paying $450k cash might make sense.
I really wish the conforming limits would drop back down. That’s what would bring capitulation to the ones I want.
What lenders believe a house is worth is rarely accurate, imho. More often they – or their appraisers – are well off the mark, particularly in the current market.
I think rising interest rates will be the single biggest influence bringing the housing market back to reality. But what’s going to cause the Fed to start the upswing?
What will happen to the medium and high-end properties when rates go much higher??
Do we have another 20% down?? I can’t imagine what will happen to prices when rates go from 5% to 8% or higher?? These properties will crash…IMO. Only, a week dollar and rich foreigners will be able to buy…
B
A *week* dollar????
I’d like a *month* peso, thank you very much.