Potential home buyers are aware of the resumption of falling prices, and many are wisely choosing to wait and see what fall and winter brings. Will affordability bring out the contrarians?
Irvine Home Address … 4591 KIMBERWICK Cir Irvine, CA 92604
Resale Home Price …… $549,000
You've got a lot of money
but you can’t afford the freeway
The road to Orange Country
leaves an awful lot of leeway
Where everyone’s a doctor
or a specialist in retail (realtor)
You got a lot of money
but you can't afford the freeway
Aimee Mann — Freeway
Up until this summer, I had not seen any evidence of kool aid intoxication wearing off. The masses were still overly eager to buy houses from fear of being priced-out or from greed to get the free HELOC money. With the economy no longer officially in recession and unemployment declining, there was a slim possibility of a spring rally picking up where the tax credits left off. Unfortunately for sellers, that isn't what happened.
Credit is still tightening because lenders have not stopped losing money or underwriting bad loans. With each tightening standard, more potential buyers are either eliminated from the buyer pool or forced to lower their bids and their expectations. However, it isn't tightening credit and inflated prices that seem to be stopping the kool aid from flowing. It looks like buyers simply stopped drinking the stuff.
Buyers have stopped buying by choice.
People realize that prices are too high, credit will continue to tighten, and if they wait, they will get a better home at a lower price. There is little other explanation for the dismal spring rally and the dramatic decline in sales volumes when sales should be rising. This slowdown has hit every sector of the housing market, but it has been particularly brutal on homes selling for over $500,000. This really shouldn't be a surprise. Buyers can't afford them.
I have heard from multiple sources, including a report from a local company that tracks sales, that the Irvine Company has experienced a dramatic decline in sales from May 15 onward. Rumor is that many outside experts and consultants have been brought in, and nobody can figure out what the problem is.
Is it product design? Is it marketing? Is it the economy? Is it financing? The truth is actually pretty simple: the prices are too high. Local wages don't support them. Attempts to elicit a herd-following response from clueless foreign cash buyers have failed. I even heard that one buyer backed out of a sale based on what they read on this blog, not that the source of truth matters much. Don't be shocked if the Irvine Company mothballs Laguna Altura like they did Orchard Hills. Further, their plan to build several thousand rentals will blunt any potential rental rate increases, keep rental parity calculations down, and further weaken housing demand.
Without the lure of mortgage equity withdrawal, buyers are reconsidering the value of home ownership. Buyers are no longer willing to stretch to absurd extremes to buy properties they can't afford, and even if buyers were willing, lenders are not ready to play along. The result is a continuing slump in sales and a full-scale buyer revolt with many choosing to sit on the sidelines.
In the long term, this is a good and necessary step for the market. When the housing bubble popped, the market needed to make a psychological adjustment to reality and abandon the fantasies of unlimited free spending money coming from their house. This psychological adjustment would correspond to a pricing adjustment as people stopped stretching.
When the market finds its new equilibrium, it will be back on a stable footing and ready to appreciate again. But this time, the appreciation will be slow and measured by the growth in local incomes. And until unemployment abates, that growth in income will be very tepid.
We aren't out of the woods yet, but when the double dip starts to wane, prices below rental parity will be common, and I will become much more bullish, albeit in a different way than the lunatics from the housing bubble.
Southland housing market warms up in June
The number of sales of new and previously owned homes in rises 11.6% from May, and the median price increases 1.8% to $285,000.
By Alejandro Lazo, Los Angeles Times — July 13, 2011
First-time buyers and investors looking for deals helped the Southland's housing market gain ground from May to June as it struggles to overcome the effects of stubborn joblessness and a large share of borrowers who owe more than their homes than they're worth.
Sales rose 11.6% last month from May, nearly twice what is typical for a June, with a total of 20,532 newly built and previously owned homes changing hands, according to San Diego research firm DataQuick. Housing has fought to recover from the expiration of popular tax credits for buyers last year, which temporarily boosted the market out of the worst downturn since the Great Depression.
That sounds really bullish. Unfortunately, May was one of the worst on record, and June was still well below historic norms. This was a statistical blip.
Although declining home prices and low mortgage rates have made homes much more affordable than during the boom years, potential buyers are still worried that buying a home is a poor short-term investment, said John J. Blank, deputy chief economist for the Los Angeles County Economic Development Corp. Many people who are in a position to buy are waiting out the market, he said.
“The stadium is filled with people watching this game, and nobody wants to play,” he said. “There are always buyers, sellers and people in the stands, and right now it is filling up with more and more spectators.”
People have good reason to wait. Prices still haven't fallen below rental parity in many locations, and with little reason to fear being priced out, many prudent buyers are waiting for prices to fall further. And prices will fall further. 
While June is typically one of the strongest months for home sales, last month's tally nevertheless represented a 14% decline from June 2010, the last month that buyers could qualify for the popular federal tax credit that had been driving sales. After that government stimulus ended, Southland sales plunged and have remained weak.
The median sales price for the region followed a similar pattern. The median, the point at which half the homes sold for more and half for less, was $285,000 last month, a 1.8% increase from May, although it was still down 5% from June 2010.
Notice the order in which data is being presented. The minor good news is followed, and downplayed, by more serious bad news. This presentation was very common at the beginning of the housing collapse.
The closely watched measure, which can vary depending on the type and location of homes that are sold, was 15.4% above the most recent bottom of $247,000, hit in April 2009 during the throes of the financial crisis. A separate measure, the Standard & Poor's Case-Shiller index, also showed that home prices in Los Angeles and Orange counties remain above their recession-era lows.
“The housing market remains dysfunctional and lopsided, just somewhat less so than it was a few months or a year ago,” DataQuick President John Walsh said. “The market mix indicates that a lot of potential buyers are either stuck, for lack of equity, or spooked and are waiting things out.“
John Walsh embraces his perceived role as market cheerleader. How does the market look less dysfunctional that it did a year ago? Everyone was cheering the rally a year ago. It wasn't until the tax credits expired and prices resumed their downward momentum that market cheerleaders suspected anything was wrong.
Typically a rising housing market helps propel the economy out of a recession. But this time, the high unemployment rate and large numbers of borrowers “underwater,” or owing more on their homes than what they could get for selling them, is holding back the market.
Los Angeles County led the state in job losses in May, shedding a net 11,400 jobs, while the county's unemployment rate stood at 11.9% in May, the most recent numbers released. And 23.8% of all properties in the L.A. metro area with a mortgage, or 365,128, were in negative equity at the end of the first quarter, according to Santa Ana research firm CoreLogic.
Sales of so-called distressed properties — those whose owners are in some state of default — made up more than half of the Southland resales last month, DataQuick said. Roughly 1 in 3 homes resold was a foreclosure, while almost 1 in 5 was a short sale, in which the mortgage holder accepts a sale price that is less than the outstanding debt on the property.
Sales of foreclosed homes — properties foreclosed on in the previous 12 months — accounted for 33% of resales last month, down from 33.2% in May, but up from 32.8% in June 2010.
Notice how well the lenders are managing their inventory. Despite the fact they have an enormous shadow inventory, they foreclose on and resell nearly 33% of resales every month, and they rarely deviate from that percentage even by a fraction of a percent.
The number of foreclosure filings has dropped in recent months in the region and statewide, as well as nationally. Analysts attribute the declines to major banks slowing down the process as they try to negotiate a settlement with state and federal regulators over foreclosure practices.
Analysts who believe any slowdown in foreclosures is related to any news event are wrong. Lenders are managing the percentage of sales of foreclosed home. They know if they push through any more than a third of the total sales, prices drop. They are trying to liquidate while protecting the value of their assets.
Short sales in June , made up an estimated 17.7% of the market last month, the same as in May but down from 20.5% in June 2010.
Kathryn Davis, a real estate agent in Corona, said that short sales were becoming more streamlined, and many homeowners, now facing long stretches of unemployment, were becoming increasingly willing to cut their losses and submit themselves to such sales.
Another realtor who doesn't know what's going on. There is nothing streamlined about the short sale process. Short sales are extended negotiations between the second lien holder and the seller. The second mortgage holder has nothing of value, but they have learned to play chicken with borrowers to try to get them to sign side agreements to pay at least part of the debt.
Borrowers are not becoming more amiable to short sales because they are unemployed. Borrowers are trying short sales because it is the only way to sell their homes. Many others simply walk away. At least those who short sell have some limited control over when they leave their houses. Those that drag out the process can get free housing for quite a while.
“They don't qualify for a modification — and a modification is a joke anyway,” she said.
She is right about modifications being a joke.
“The homeowners who are short-selling are becoming a little easier to work with, whereas before they were so bitter it was tough to get the bank-required documents in time from them. Now that we are almost three or four years into it, people are aware, so it's not like pulling teeth.”
New home sales continue to struggle, with only 1,395 transactions throughout the region last month, a 36% drop from June 2010 and the lowest new-home total for a June since DataQuick began tracking sales in 1988.
See comments on the Irvine Company above.
Michael Novak-Smith, a real estate agent specializing in selling foreclosed homes in the Inland Empire, said that prices were also being dragged down by a lack of buyers as well as tougher financing criteria. These days a home has to be in good shape in order for a bank to make a loan, and many credit-worthy buyers can't get financing.
realtors are now experts on who is creditworthy? If people can't get financing, then by definition, they are not creditworthy. Anyone who was breathing was considered creditworthy five years ago, and now people need real income and proven ability to make payments.
“It is very difficult to get a loan,” he said. “There is no end in sight to how bad it is and how long it is going to take to get out of this. It seems like it could be years.”
There is end in sight. The market will drag along the bottom for another three years. The lowest tier of the market will strengthen first, then the chain of move ups will finally give strength to the upper tier last. The window of opportunity for affordability is starting to open now in Orange County, and it will remain open for the next three to five years.
Single family detached below rental parity in Irvine
We have seen many undesirable condos trading at or below rental parity, but finding single family detached homes at those price levels has been elusive. As one might expect, these prices levels will be seen first in the least desirable neighborhoods with low HOA or Mello Roos. Today's featured property is in El Camino Real which has no HOA or Mello Roos.
In my opinion, the front elevation on this house is remarkably ugly. However, the inside is well done (although that center island is completely out of place). What jumped out at me about this property was the low cost of ownership. For a buyer putting 20$% down and avoiding private mortgage insurance, this property only costs $2,200 per month to own. There aren't many four-bedroom homes in Irvine renting for $2,200 or less, and none with a nice interior like this one.
Someone will buy this property even knowing prices are likely to go down because owning this one is less expensive than a comparable rental, particularly if they know they are going to stay put for five years or more.
Renting should cost a premium over ownership. Renters have freedom to move and no maintenance responsibility. Only kool aid intoxication makes people pay a premium to own. Once the premium for renting gets high, many will opt to purchase to save money even in a declining market. Such is the power of rental parity. Contrarians who buy because it's cheaper to own than to rent will buy and cause prices to bottom.
The owner's of this property bought it back in the 1980s. I estimated their purchase price from their tax bill, but it may be a bit less than I show. They have doubled their mortgage to $417,000, but they didn't go so overboard as to make this a short sale.
——————————————————————————————————————————————-
This property is available for sale via the MLS.
Please contact Shevy Akason, #01836707
949.769.1599
sales@idealhomebrokers.com
Irvine House Address … 4591 KIMBERWICK Cir Irvine, CA 92604
Resale House Price …… $549,000
Beds: 4
Baths: 2
Sq. Ft.: 1623
$338/SF
Property Type: Residential, Single Family
Style: One Level, Bungalow
Year Built: 1972
Community: El Camino Real
County: Orange
MLS#: S666246
Source: SoCalMLS
Status: Active
On Redfin: 2 days
——————————————————————————
Irvine living with no HOA and no Mello-Roos? Here it is. Beautiful single story home within walking distance to schools on quiet cul-de-sac. Lovely 3 or 4 bedroom tastefully enlarged from original to 1605 sq ft with permits. Huge open kitchen/family room area, living room with fireplace, 4th bedroom converted to office. Relaxing rear yard and front patio. Large decorative and retractable awning over the front patio. Large lot. Close to shopping, Freeways, Airport.
——————————————————————————————————————————————-
Proprietary IHB commentary and analysis 
Resale Home Price …… $549,000
House Purchase Price … $200,000
House Purchase Date …. 10/20/1986
Net Gain (Loss) ………. $316,060
Percent Change ………. 158.0%
Annual Appreciation … 4.1%
Cost of Home Ownership
————————————————-
$549,000 ………. Asking Price
$109,800 ………. 20% Down Conventional
4.48% …………… Mortgage Interest Rate
$439,200 ………. 30-Year Mortgage
$95,149 ………. Income Requirement
$2,220 ………. Monthly Mortgage Payment
$476 ………. Property Tax (@1.04%)
$0 ………. Special Taxes and Levies (Mello Roos)
$114 ………. Homeowners Insurance (@ 0.25%)
$0 ………. Private Mortgage Insurance
$0 ………. Homeowners Association Fees
============================================
$2,810 ………. Monthly Cash Outlays
-$370 ………. Tax Savings (% of Interest and Property Tax)
-$580 ………. Equity Hidden in Payment (Amortization)
$182 ………. Lost Income to Down Payment (net of taxes)
$157 ………. Maintenance and Replacement Reserves
============================================
$2,199 ………. Monthly Cost of Ownership
Cash Acquisition Demands
——————————————————————————
$5,490 ………. Furnishing and Move In @1%
$5,490 ………. Closing Costs @1%
$4,392 ………… Interest Points @1% of Loan
$109,800 ………. Down Payment
============================================
$125,172 ………. Total Cash Costs
$33,700 ………… Emergency Cash Reserves
============================================
$158,872 ………. Total Savings Needed
——————————————————————————————————————————————————-
Interesting article on corporate relocation trends:
msnbc: Looking for relocation expenses? Don’t expect much
“In the past, many firms were willing to help employees who had to sell their homes for slight losses. Today so many people expect losses and the losses are often so big, employers haven’t been willing to pay, said Mike Gonzales, CEO of Armstrong Relocation, a relocation company and major hauler for United Van Lines. “Companies now place the burden on the transferee,” he maintained.”
My favorite blow-off line that I read about earlier was from an HR shill to a candidate about moving expenses.
Candidate: We could use some help with moving expenses.
HR: You’ll manage. 🙂
Companies can take this high-handed attitude because the job market is definitely a Buyer’s Market right now. I personally know of three formerly highly paid professionals, 2 men and 1 woman, over age 40 who have been unemployed for over a year.
These people know that they are most unlikely to win salaries anything like what they were paid previously, and they would literally crawl on their hands and knees over ground glass to be offered half their old salaries.
And the HR people know it. So they’re attitude is: if you can’t relocate without assistance, we’ll find someone who can.
When do you guys think the bottom will hit in south OC Christmas 2012 or Christmas 2013? 8 months ago I put all of my money into a 2 year CD expecting Q4 2012 to be the bottom, I hope I am right.
The rule is that while it’s nearly impossible to call the bottom until after the fact, as long as you buy near the bottom and for the right reasons you will be fine. If you still think prices have another 20% to fall, then buy when they hit that strike point. If prices fall only 10% you may miss out but so what. If prices fall 30% you beat yourself up for no reason. It’s only money.
“I even heard that one buyer backed out of a sale based on what they read on this blog”
saving one potential buyer at a time – thanks IrvineRenter. we appreciate your efforts.
I know I am one buyer who is waiting because of reading blogs like this. I always thought prices were insane in socal and blogs like this with their analysis confirms my belief. Unfortunately, I am thinking of buying soon. I’d rather wait till 2013 but my situation is one where I would like to own a house soon. Looking to buy in a pricier area in Irvine and I do believe I’ll probably take a 15% loss if I buy this year (much worst since it’s gonna be a 700k+ house). It’s gonna be painful, but my consolidation is that it’s probably not gonna be a 30% loss or more.
“Unfortunately, I am thinking of buying soon.”
Is that code for “My wife really wants to buy a house…?”
Stay strong!
That’s exactly what it means! That’s why I bought in 2007.
No deal! O.C. rent heads higher
http://www.ocregister.com/articles/percent-308638-landlords-rents.html
Consumer Price Index … rents were rising at a 1.7 percent annual rate.
RealFacts, which surveys rents at large apartment complexes, had Orange County rents rising at 2.2 percent a year in the first quarter
MPF Research’s survey of large apartment owners found rents up 2.7 percent in a year.
OMFG!!! 1.7 to 2.7%. Whatever are us poor renters going to do? /s
“Whatever are us poor renters going to do?”
I don’t know, maybe buy at rental parity? Rents up 2.7% and interest rates are still low. Low rates and higher rents don’t bode well for huge price drops.
A few years of 3-5% rent increases will make you sing a new tune.
My rent, in a premium irvine zip is down over the past 4 years.
Yes we are all well aware that your rent never goes up, only down.
@CapWorks:
That’s interesting. Is it a private rental or an apartment complex?
I’ve been reading comments by other renters that TIC is raising rents on everyone who is up for renewal.
The best data available seems to indicate that rents are going up in OC, at a rate that is similar to overall inflation. It would be weird if TIC was not raising their own prices to reflect that.
I do know one TIC renter that just got a renewal offer. It’s an increase over last year, but still lower than the price when he moved in in 2008.
PR, as usual your comments are throw away statements.
IHO, it is a private SFR rental. From speaking with the landlord, his primary concern is maintaining the property and minimizing upkeep. Having a renter with solid credit and strong ability to pay it paramount.
Perhaps the uptick in rental rates reflects a surge of lower quality renters (foreclosed former owners), and the related credit premium.
Again, I have been able to negotiate favorable rental terms.
I do NOT think I am unique.
My rent went down also since we started renting.
To carry your thoughts a bit further: perhaps the uptick in rental rates reflects a surge of former homeowners who lost their homes through foreclosure or short sale and now have awful credit histories.
It sounds more plausible than broad based landlord pricing power in the face of rising unemployment and anemic economic growth.
Further, developers are planning a large number of apartment units in Orange County to take advantage of the rising rents. This will, of course, oversaturate the market and prevent the rent increases they were looking to capture.
awgee, that makes sense, your rent *should* be going down. Since you moved in the paint has faded, the Carpets are no longer as new as they were, the Place is generaly getting older, hence, not as desirable as the Day you moved in.
“I don’t know, maybe buy at rental parity?”
A tiny minority of Irvine homes are transacting anywhere near rental parity even with todays low rates. If someone is lucky enough to find one they like, then I wouldn’t blame them for buying.
“Low rates and higher rents don’t bode well for huge price drops.”
LMAO. We had low rates and higher rents in 2006, too. How’d that work out?
“A few years of 3-5% rent increases will make you sing a new tune.”
First of all, who’s talking about 3-5%? But yes, if rents went up and prices didn’t, more properties would be at/near rental parity, and buying would make more sense. When the facts change, I change my mind. What do you do, sir?
I doubt that there has been one detached SFR in Coto that has transacted at rental parity in the last 7 or more years.
If you use Planet Reality math where you put 30 or 40% down, then we might have rental parity!
Unless you can find that perfect house at rental parity place or you are getting ultimatums to buy now or else, waiting another year or two seems like the smart thing to do. Real estate prices aren’t going up and chances are pretty high that there is still some declines on the way. If you can get a reasonably priced rental and save money…it’s a win win situation (lower purchase price and more money down)!
http://online.wsj.com/article/SB10001424052702304223804576446042270052566.html
Big Mortgages Are Back
The jumbo market is gearing up to pick up the slack from Freddie, Fannie and the FHA.
I had seen this locally in my area, but the spread is small. I posted as a counterpoint to the idea that jumbo priced markets will see a crash when the GSE limits change.
The other thing coming back is piggyback seconds. If you’re doing a high-priced property, you might have a little more in the 2nd than the conforming 1st after the limits lower.
I would have tweaked you for using “illicit” instead of “elicit” here, but you’re discussing the actions of the IRC, so you chose the correct verb.
Today’s prospective buyers are responsible heads of families who wish to build family communities atop the rubble left behind by HELOC-addicted Ponzi scum.
These non-producing debtors, being the shady, beady-eyed irresponsible squatters that they are, stand in the way of patriotic and responsible families. Our great nation will only be rebuilt when prices drop to a level which will allow hard-working families to: (a) purchase these homes in which to raise their children; and (b) leave enough hard-earned cash to allow clean-up of meth-lab residue in most of these HELOC-abuser homes.
Which do you want, America: wheeler-dealer speculator transients or patriotic families? Shouldn’t our neighborhoods be built on money from productive work and not HELOC cash used to fund gambling, prostitutes, and illegal drugs?
When can we make our neighborhoods about the children again?
“illicit” instead of “elicit”
I changed the post. I wonder if my subconscious was leaking through.
I totally understand the anger directed at the “HELOC-addicted Ponzi scum” and using the house as an ATM.
I guess I don’t really care if the new buyers (who have been waiting patiently in Irvine and elsewhere for too long) are single individuals or married families (e.g. Mr. and Ms. Jones with 2 kids, a dog and a minivan). I don’t care if they are dyed in the wool red, white and blue Americans either. I also don’t really care if the new homeowners are “patriotic Americans”, recluses or bonified communists.
As long as people don’t evade federal, state and local taxes and don’t break any other U.S. laws, then the Thomas Jefferson in me says I don’t give a damn about what they believe or do behind closed doors.
I think American patriotism is important and has value. It also has it’s place. Neither Patriotism nor “family values” appears to mean anything at the lender counter. Now more than ever, they just want to be shown the money.
I don’t care who the prospective buyers are, either. But I’m so sick of the abuse heaped on renters, as opposed to current owners, who are always tagged with the term “family”, that I’m spewing pure sarcastic venom.
It’s sad that the shabby rhetorical abuse of renters is so prevalent that my post doesn’t appear to be outrageously over the top.
10-4.
And I cracked up at your line about the “meth-lab residue”. It’s twisted and cynical, but we have to have a sense of humor don’t we, while things all around us got to hell in a happy picnic basket!
With a scarcity of buyers I’m already seeing capitulation in west LA. Listings are going from $599k in Nov 2010, then down to $550k, now $468k in one Mar Vista example. The days of selling 3/2 stucco boxes on postage stamp-sized lots for upwards of $800k are like a waking dream for today’s homesellers as they see their “investments” wither on the vines. This fall/winter should be interesting…
There is definitely capitulation in the Bluff Heights neighborhood of Long Beach. Down the street from me a lovely home went from over $500 grand to now $450,000 grand. I went in to take a look and the realtor told me they are just “trying to find the right price”. Then, two amazingly upgraded craftsman homes are each taking a loss, sadly. In both of them they seem like great, creative people. One of them purchased over $800,000 and are now asking $695,000 after all the upgrades. The other purchased, just last year at around $650,000 and now has lowered it to $609,000. Selling without an agent to save money. Just last year they purchased!
Two things: My rent has declined by 8.8% on our 2 + 2 1/2 TIC Townhouse since we moved in 4 1/2 years ago.
Also…We are sitting on the Fence waiting to buy, we will be cash Buyers. We broke down and paid Laguna Altura a visit a few weeks ago, $1.1MM for the Tuscana? Haha!! I sat in the Kitchen and worked out the Tax and HOA to be +/- $1850 pm so even if I wrote a check I would still have to go out and earn nearly $3000 every month (Gross) just to live in it.
This explains why we are all still poor and will have to work until we die.
You’re welcome.
Hey Larry, what happened to the some what aggressive comments about the Irvine Company?
Did you get spanked by Dan Young or the legal departmet?
How about some full disclosure here?
“I have heard from multiple sources, including a report from a local company that tracks sales, that the Irvine Company has experienced a dramatic decline in sales from May 15 onward. Rumor is that many outside experts and consultants have been brought in, and nobody can figure out what the problem is.
Is it product design? Is it marketing? Is it the economy? Is it financing? The truth is actually pretty simple: the prices are too high. Local wages don’t support them. Attempts to elicit a herd-following response from clueless foreign cash buyers have failed. I even heard that one buyer backed out of a sale based on what they read on this blog, not that the source of truth matters much. Don’t be shocked if the Irvine Company mothballs Laguna Altura like they did Orchard Hills. Further, their plan to build several thousand rentals will blunt any potential rental rate increases, keep rental parity calculations down, and further weaken housing demand.”
My observation is home pricing has fallen since last year. What people want is price stability, but prices will never be like they were before, get over it, We’re in it for the long hall in 10 yrs you will see the same costs for housing. Inflation (government.created) has erroded our spending power enough to flatted prices on homes indirectly. The real bugger is that there is at least 3yrs of short sale REO inventory to sell and it’s probably double that number.
“The truth is actually pretty simple: the prices are too high. Local wages don’t support them.”
Uh-duh! It’s pretty simple, people can’t afford to buy at the current prices. They never could afford them! I can’t believe that people were stupid enough to believe they could ever afford them.
“Hmmm….what am I going to do in _ years when my mortgage payment goes up, and I can’t pay the interest only? Hmmmm…where will I get the extra money? A raise? No, I’ll have to get a huge raise to pay for the difference, and I can’t count on that. Hmmm…I know! The price of my home will go up and I can resell if I need to? Yeah, equity, that’s it!”
Stupid, stupid, stupid! It’s basic math, and people chose to ignore the simple facts. The put their blinders on, and dove right in!
It drives me bonkers when people speculate as to why we are in the current mess we’re in, wondering why homes aren’t selling. Hello people, it’s simple logic! We don’t make enough money to make the mortgage payments. Unless they come up with more crap mortgages, or bring the prices down to some level of affordability, we will never be able to afford them!
It’s the same thing here in Burbank. Many of us are sitting, waiting, for prices to come down to earth. I honestly think that you’re a fool to buy a home in Burbank right now. Unless, you’re wealthy, and money doesn’t mean a thing to you, otherwise, it’s best to stay away. Still, I hate to see good money thrown away.
Kelly
Home values are going to continue to drop. The economy is still insecure. I bought my 1238 sq. ft. townhome in May,1996 for $140,000, lower than when the home was built in ’84. That’s still expensive compared to Oregon. We’ve dug ourselves in so deep that it’s time for the crane to level us at affordable prices. Let’s get realistic and
stop playing these games of raise the home prices.
No price, no dice, no nice.