Quiet week at the IHB. The housing market is facing supply shortages, low volumes and high prices. When will this change?
Irvine Home Address … 7 Heritage Irvine, CA 92604
Resale Home Price …… $359,000
{book1}
You may be an ambassador to England or France
You may like to gamble, you might like to dance
You may be the heavyweight champion of the world
You may be a socialite with a long string of pearls.
But you’re gonna have to serve somebody, yes indeed
You’re gonna have to serve somebody,
It may be the devil or it may be the Lord
But you’re gonna have to serve somebody.
Gotta Serve Somebody — Bob Dylan
Irvine Company News
ICDC New Home Collection Press Release — Irvine Company — Fall 2009.pdf
New Home Neighborhood Fact Sheet — Irvine Company — Fall 2009.pdf
New Home Builder Profile Fact Sheet — Irvine Company — Fall 2009.pdf
Housing Bubble News
Since this is a weekend, and you may have more time, I want to call your attention to a 45-minute presentation by John Burns on the real estate market. He is probably the best and most knowledgeable financial forecaster working today.
Webcast: US Housing – Recovery on Government Life Support?
Why the Housing Bubble Was Local, Not National
national policy but local regulation: “restrictive growth management
was a necessary condition for the housing bubble. …
Home prices fall 0.3% in August, FHFA says
Email this story
Housing prices forecast to fall in 2010 — and could keep falling for years
Guess What: The Housing Bubble Is Already Back
A new housing bubble
Our Subprime Federal Goverment
{book2}
Today I want to feature a couple of Irvine condos with designs based on a prison cell-block.
2105 Apricot Dr #2105 Irvine, CA 92618
Irvine Home Address … 7 Heritage Irvine, CA 92604
Resale Home Price … $359,000
Income Requirement ……. $66,075
Downpayment Needed … $71,800
Home Purchase Price … $207,000
Home Purchase Date …. 8/2/2001
Net Gain (Loss) ………. $130,460
Percent Change ………. 73.4%
Annual Appreciation … 7.1%
Monthly Mortgage Payment … $1,542
Monthly Cash Outlays ………… $2,230
Monthly Cost of Ownership … $1,720
Redfin Property Details for 7 Heritage Irvine, CA 92604
Beds 3
Baths 1 full 1 part baths
Size 1,200 sq ft
($299 / sq ft)
Lot Size n/a
Year Built 1977
Days on Market 5
Listing Updated 10/13/2009
MLS Number S592421
Property Type Condominium, Townhouse, Residential
Community El Camino Real
Tract Hv
What a showplace! Beautifully remodeled kitchen featuring hardwood cabinets, granite counters, and brand new stainless steel appliances. Luxurious, high quality and stunning hardwood and travertine floors topped off with custom baseboards. Classically elegant 2-tone paint decor with crown molding. All three bedrooms are upstairs and quite large. Downstairs is a huge living room, a remodeled 1/2 bathroom, and a versatile country kitchen that leads to your private patio. Association facilities include a pool area and a large park. Next door is the Heritage Park complex with a world class aquatic center, acres and acres of parks, lagoons, tennis courts, library, recreation clubhouse, and a fine arts center. Unlimited places to shop are just seconds away from Trader Joes to sushi and everything else in between.
Can this ugly condo credibly be called a “showplace?”
Ugh. Modernist, if not Brutalist, architecture at work.
7 Heritage…ok ugly outside. But, they did a good job inside. They did the basic work to help sell it. I’m sure it was crap inside before. The only thing I think they missed were new windows.
BTW…we just got new, beautiful windows installed yesterday. We did the back of the place(patio side) 3 years ago, and yesterday we did the 6 windows on the front and side. I’m a happy lady today 🙂
Yes, they did fix up the inside on that one. I hope you enjoy your new home improvements.
You will find next week’s posts interesting. I am profiling short sales and REO in Woodbridge exclusively next week.
Cara,
If you are reading today, per your request from last weekend, I am planning on adding an amortization table to the calculator that includes the time-to-payoff feature. When I am done, you can see the impact of increasing payments with periodic increases in pay. I was hoping to have done it this last week, but it didn’t happen.
Shape of the Housing Recovery
There have been many signs of optimism on the housing front in recent weeks, with the Case-Shiller Home Price Index showing an unprecedented reversal from negative to positive growth in the summer months.
We’ll also be getting a string of data on the home front this week, with housing starts and existing home sales for September due tomorrow and Friday respectively.
On Friday, “Closing Bell Access” got up close with Robert Shiller is Professor of Economics at Yale University and Chief Economist and Co-founder of MacroMarkets LLC. Shiller is also the other half behind the Case-Shiller U.S. Home Price Indices. (Watch video for full interview).
Maria Bartiromo asked if this uptick was a result of the first time home buyer credit. Shiller replied that he wasn’t sure, given that “we’re seeing other signs around the same time.” Those signs include the record turnaround in the stock market and a major reversal of confidence.
And while many commentators may be concerned of another housing bubble forming. Shiller had this to say, “I look at the data and think it might be happening because it’s such a sudden turnaround. But my instincts say no.”
Shiller also said that when you look across the country, in cities like Las Vegas or Phoenix, that were the most overheated, these parts have yet to see a rebound.
Finally on the important question on mortgage rates and how much longer they can remain this low. Shiller ended by saying that “the Fed is still buying up mortgage… and they said they’ll extend that into next year, but when that stops, if it does stop, that’s when we might see a major change in the market.”
That is the big unknown, isn’t it?
(1) Three bedrooms with only one shower is non starter.
(2) The midrise one might make a good rental. 2 bedrooms, 2 baths near IVC and reasonably close to UCI. 300 bucks a month HOA plus 1500 payment, assuming a 20% down or so…. What would be the rental on that one?
tonye,
For non-owner occupied, i.e., rental, the interest rate is about 1 to 1.5% higher than owner occupied. I got stuck with a non-owner occupied rate because of an existing lease. Refinanced a half year later as owner occupied, but had to pay for title insurance, recorder, points, etc.
say:
At 6.35% interest that would cost $2300 just for interest,tax and HOA. Then add opportunity cost on the 20%, vacancies, repairs, fees, a depreciation (replacement expenses). Also lower prices for the property in the future. It’s not likely a good rental investment. It only makes sense if the property value is going up.
I like your Cato link that says that the bubble was fostered by “restrictive growth management”. So sprawling overbuilding in Nevada and Arizona was not caused by free government money channeled into the housing market by Wall Street?
Thanks IHB, I learn something new every day.
The thesis of their report doesn’t explain the Nevada and Arizona experience, does it?
There is a kernel of truth in the paper’s conclusions. The restrictive growth management does cause short term supply shortages that can serve as a precipitating factor to a housing bubble; however, just as a spark does not necessarily cause a fire, restrictive growth management does not necessarily case a bubble. Without free money, a bubble is not going to inflate.
Have you seen the construction they did in LV and Phoenix?
Heck, down in Henderson and boulder City I saw developments IN THE MIDDLE OF THE DESERT with a huge 12/15 foot wall surrounding the whole thing and the houses crammed inside as bad as in Irvine.
I guess the walls were there to cut down on sand storms or maybe create a private Idaho sort of state of mind where plenty of irrigation created their own oasis in the middle of NOWHERE.
However, it wasn’t like they were building homes like around Lake Los Angeles east of Palmdale… there you pretty much see homes in the middle of their own 5/10/100 acres of desert.
The developers in Nevada and Arizona tried to rebuld OC in the middle of the desert. They crammed homes together in the middle of nowhere.
Odd, huh?
I guess it’ll make it easier to bulldoze them all and return the place back to the desert.
NV is mostly owned by the US govt. especially near LV. How many sand storms occur per year and how many feet of sand is accumulated against the walls? Why even bulldoze them. Let the sand cover them and in 100 years they will be considered historical ruins. :}
A condo near a college is good if your child or yourself will be moving in (owner occupied) for the lower rates and money you will spend anyways. But this one will not generate enough free cash flow for a non-owner occupied loan.
The land lease is listed as “fee.” When is the lease up and what will be the new monthly payment?
Is the land still owned by the Irvine Company?
I think “fee” means “fee simple” which is (from american heritage dictionary) means: “Private ownership of real estate in which the owner has the right to control, use, and transfer the property at will.”. This is to say it’s owned – not leased.