You Never Give Me Your Money — The Beatles
When I first started researching the property records for my daily posts, I was astounded by all the mortgage equity withdrawal. I still am. At first I was surprised that borrowers would do it. It would have never occurred to me to actually increase my mortgage indebtedness (yes, I have had a mortgage before). I can understand taking out a loan for home improvements, but never for consumer spending. Then, the more I pondered the issue; I came to realize that borrowers are like drug addicts: if you make money available to them, they will take it. Combine that tendency with a drug as addictive as kool aid, and you get people who truly believe their house is providing them with free money, so it is OK to borrow this money. Once the fear of debt is gone, even fiscally conservative people get into the act.
Finally I came to realize it was the lenders who were the stupid ones. Rational lenders want to make sure they are going to get their money back with interest. They are supposed to be the experts at determining the creditworthiness of a borrower because they are the ones ultimately taking on all the risk. Lenders started drinking the kool aid and began giving out any amount of money to just about anyone. They also believed they had no risk because they believed house prices would always go up. Even if people defaulted, they would not experience any default losses. It is the stupidity of lenders and investors in mortgage-backed securities that is truly mind-boggling.
You never give me your money
You only give me your funny paper
Most of the houses for sale today have some amount of mortgage equity withdrawal. The conservative ones only added a little, but the average Irvine homeowner who bought before 2001, and who is selling today, doubled their mortgage. That’s right, most of them doubled their mortgages. However, some people really got carried away. Some people borrowed every penny of equity as it accumulated and spent it.
Usually when people go on an irresponsible borrowing and spending spree, there are consequences for this action. People get burned, and they learn not to repeat their mistakes. However, those people who were the most egregious HELOC abusers, are the ones being punished the least. Borrowers who took out all their equity have transferred 100% of the loss in value to the lenders (remember Mortgages as Options?) What have these people learned? And what lesson is being taught to everyone else?
The worst HELOC abusers have learned there are few consequences for their behavior. Yes, they will lose their homes and face bad credit issues, but they still got to spend all the money. Perhaps they will suffer the loss of their lifestyles as the free money dries up, but I imagine they will be first in line to buy another home and start the process all over again when their credit clears up. The rest of us witnessing this behavior have to be asking ourselves, “Why won’t we max out or debt during the next cycle and pass the losses on to the lenders?” Based on what we are seeing, perhaps the fiscally conservative ones were the fools.
Out of college, money spent
See no future, pay no rent
All the money’s gone, nowhere to go
Any jobber got the sack
Today’s featured property is a particularly bad case of HELOC abuse enabled by Stearns Lending Inc. (Bears Stearns?). The peak appraised value of this property based on the loans attached was $1,138,500. The asking price is 40% off this figure. I have profiled this property before, but since the discount is so large, it is worth revisiting.
Asking Price: $684,900
Income Requirement: $171,225
Downpayment Needed: $136,980
Purchase Price: $397,000
Purchase Date: 7/20/2001
Address: 9 Soaring Hawk, Irvine, CA 92614
| Beds: | 4 |
| Baths: | 3 |
| Sq. Ft.: | 2,960 |
| $/Sq. Ft.: | $231 |
| Lot Size: | 4,462
Sq. Ft. |
| Property Type: | Single Family Residence |
| Style: | Traditional |
| Year Built: | 1984 |
| Stories: | 2 |
| Floor: | 2 |
| Area: | Woodbridge |
| County: | Orange |
| MLS#: | S555757 |
| Source: | SoCalMLS |
| Status: | Active |
| On Redfin: | 2 days |
kitchen overlooks great room, cozy living room and down stairs bath.
Spacious master suite with new master bath. Three spacious secondary
bedrooms plus two and one half baths. Private location
So lets walk through the mortgage history of this property and see just how bad HELOC abuse can get…
- 7-20-2001 The house was purchased for $397,000 with a first mortgage of $317,600 and a downpayment of $79,400.
- 11-07-2001 HELOC for $48,000 taking out over half of downpayment.
- 8-26-2002 Refinance for $360,000.
- 11-26-2002 HELOC for $29,000
- 11-26-2002 HELOC for $71,000
- 6-18-2003 HELOC for $56,000
- 6-18-2003 HELOC for $100,000
- 6-1-2004 Refinance for 517,500 –probably paid off HELOCs at this point.
- 10-22-1004 HELOC for 89,900.
- 4-21-2005 Refinance first mortgage of $624,000
- 4-21-2005 Refinance second mortgage of $156,000. Total debt of $780,000 at this point.
- 9-12-2006 Refinance first mortgage of $948,750.
- 9-12-2006 Refinance second mortgage of $189,750. Total debt of $1,138,500. No HELOCs
So there you have it. This homeowner went to the housing ATM 8 times over a 5 year period and pulled out $820,900.
I first wrote about these people back in January of 2008, and I am still amazed. Can you imagine being the knife catcher who might have paid them their $1,195,000 asking price back then? Talk about major equity burn…
If this property sells for its current asking price, and if a 6% commission is paid, the total loss to the ABS pool stuck with this crappy loan will be $494,694.
I also want to note the timeline here. This property first showed up as a distressed sale in January of 2008. It is now December, and it is finally available as REO complete with is 45% reduction in asking price. What do you think December of 2009 will bring?
{book}
You never give me your money
You only give me your funny paper
and in the middle of negotiations
you break down
I never give you my number
I only give you my situation
and in the middle of investigation
I break down
Out of college, money spent
See no future, pay no rent
All the money’s gone, nowhere to go
Any jobber got the sack
Monday morning, turning back
Yellow lorry slow, nowhere to go
But oh, that magic feeling, nowhere to go
Oh, that magic feeling
Nowhere to go
One sweet dream
Pick up the bags and get in the limousine
Soon we’ll be away from here
Step on the gas and wipe that tear away
One sweet dream came true today
Came true today
Came true today (yes it did)
One two three four five six seven,
All good children go to Heaven
You Never Give Me Your Money — The Beatles
Why do I waste my time playing the lotto, I should have been doing this. Not!! My morals haven’t dropped this low yet.
http://www.glennstearns.com/
Glenn Stearns was profiled recently on a rich and famous type TV show. We all got to look at all his stuff,but I suspect there was a lot more to the story left untold.
Glen Stearns married Mindi Burbano, the former entertainment reporter on KTLA. This guy became enormously wealthy during the boom, but I guess he keeps a low profile.
My wife and I were looking at a house for lease that was backed up to Culver in Woodbridge recently. When I opened the door to the backyard the noise was deafening. Culver is a very busy street. My wife practically ran to the car to get away from it.
The owner ran after us and started to drop the price. It didn’t matter. No amount of “home improvement” can erase that noise.
I think I’d rather live near a freeway than some spots of Culver. The noise is deafening.
$684k is still a WTF price.
we have friends almost directly across from this place (also right on Culver). the street noise on their patio is really deafening, particularly as buses and trucks rumble by. And this hearing loss can be all yours for just 684K!
I bet…probably tough to have summer bbq’s over there…
Hearing loss and extra pollution for $700k?
Where do I sign?
Even off of Yale is terrible–
Irvine did not do berms like in Florida where you have sufficient space in-between roads. Grass, sidewalks, raised hillsides, walls, yards and then houses. Now I know in some areas you have this but not with our postage size yards. A 5k sq. foot house is going to be on top of any road.
The raised hillsides before the walls really help with the noise factor. (and most of Fla. is flat)
Again Lack of quality of life–planning and zoning didn’t care they get paid big bucks to do what? Oh right lets build a Giant Park that no one will visit–you need space in your yard to enjoy a yard, pool space—NOT a place to visit–New Irvine sucks
Words that come to mind:
Shocking
Criminal
Egregious
Deplorable
Heinous
Preposterous
Absurd
Thieves
No, SMART.
They got to live like millionares, and now all they have to do is wait for The Big Bailout.
It’s even a better deal than being a welfare bum!
These people should have a large sign posted in their front yard summarizing the heist they are pulling off. Additionally, they should be tarred and feathered in public…maybe at the Irvine Spectrum in front of the theaters during peak time. All of us are paying dearly due to the actions of morons like this.
I’m going to print posters of these trolls and march in protest in front of the Irvine Spectrum movie theaters. I wonder how many seconds before I get tackled by security and hauled off by the Irvine PD for trespassing? LOL…
That $820,900.00 was tax free money, right?
Honestly I don’t think I would even know how to spend $820,900 cash??? Would you?
Lots of hookers and blow with a few vacations and a Lambo thrown in for good measure…
Yup. Buy a house in the midwest, Costa Rica or Belize, retire early, and call it a life.
Nope. The income tax exclusion from mortgage forgiveness does NOT apply to HELOCs. Only to “purchase money mortgages,” or mortgages taken out to purchase the property.
They got a whopper of a tax bill coming. Hopefully they’ll get tagged in 2009 when Obama’s tax increase goes through – at least there’s justice in that!
The 2001 price is still too much for this place.
IR, I think you’re onto something: “I imagine they will be first in line to buy another home and start the process all over again when their credit clears up. The rest of us witnessing this behavior have to be asking ourselves, “Why won’t we max out or debt during the next cycle and pass the losses on to the lenders?“ ”
I think part of any bailout proposal should include stiffer penalties to those who walk away, or at least something to discourage borrowers and lenders from doing it again. The moral hazard is really a problem; the TARP bailout funds going to lenders just reassures banks they can continue to do stupid things without much consequence. Even the CEOs of the banks and mortgage companies who allowed this crap to happen are getting off too easily; sure their names might be shamed or they might get ousted, but how much does that matter when you’ve received tens of millions of dollars in compensation?
As for the borrowers, seven years of bad credit is not much of a consequence especially when you’ve screwed someone out of half a million dollars. These borrowers could easily take the profits they make from equity extraction and live an more-than-decent lifestyle for the next seven years until their credit clears up allowing them to repeat the cycle if the market conditions are favorable.
Seven years of bad credit isn’t really any consequence at all when you consider many (most?) of the borrowers who are losing their homes had poor credit when they bought.
Great point Perspective. To think that the greedy perpetrators of the former owner of today’s property are going to be punished is simply wishful thinking. They had their fun, now its society’s turn to pick up the bill (you and me).
I just finished my tax estimate for ’08 and I know where my huge sum of tax dollars will be spent by the federal government next April 15…I will be paying off this poor fool’s Hummer with 30″s and his seven lavish trips to the Caribbean.
With all the job losses that will hit Irvine you wonder if the city planners will just sit by and still believe in their bubble plans. I wrote them and told them of building decent pricing homes so our young workers could buy but they don’t care. They are consumed with high end boxes with high end prices for mello roos taxes. But what happens when you don’t have young people moving into a area–IT totally dries UP. Because you will not having those move up buyers. College grads turn away from this area because they cannot afford anything–and why because some IAC is not cheap and spending a few K a month is what they make after taxes. I know I was paying $3400 for one 3 bedroom last year. And they said they were raising it. LOL
This area will price themselves right out of growth.
Companies will just outsource IT to India or somewhere equally cheap. Actually it’s been happening that way for over 10 yrs…
100% tax free.
And they probably got to write off the interest too?
Only for lack of enforcement.
This kind of thing makes me so sad. I am a 30 year old guy who works his but off making 150-200K a year. It would be tuff to live comfortably if I were to buy a house and start a family. How is my generation every supposed to live the live of our parents. Meaning house, kids, vacations, and putting little Billy in Little League. Perhaps we do a mass boycott of Socal, and start a new paradise in Wyoming? I am seriously considering moving to Vegas or Phoenix just too eventually buy a home. A home that is not a two bedroom condo with 1000K dues monthly.
All you have to do is wait 2-3 years. If you get married and have $250k of combined earnings, you could buy a condo in Irvine for cash in a couple of years. The house pictured today will be under $500k, probably more like $400k.
That’s assuming that the high paying jobs, or just the jobs in general are still available. Our economy has gone through a lot, but many things are different this time. It’ll be interesting to see if a speedy recovery can be pulled off.
The scary thing is that even with that high income, you’d still be struggling. Not many 30 year olds, let along 40 and 50 year olds earn that level of income. Do you happen to work in the banking or real estate industry?
When prices are so out of sync with reality, there’s only one solution. No attempt to rescue the housing market can succeed; prices must inevitably fall. There’s no need to boycott SoCal; get your finances under control, pay off your debt, and save up some money. You will find affordable houses in the future.
Steve if you don’t mind me asking, what do you do for a living?
150-200K is alot of money, very few people make that much, even in SoCal. This is the average household, usuallly mean two people, incomes by community in 2005.
1. Villa Park: $203,091
2. Anaheim Hills: $157,938
3. Coto de Caza: $153,118
4. Laguna Beach: $141,916
5. Yorba Linda: $138,910
6. Newport Beach: $137,226
7. Tustin Foothills: $122,685
8. Laguna Niguel: $112,241
9. Laguna Hills: $103,419
10. Ladera Ranch: $99,537
11. Dana Point: $97,615
12. San Clemente: $94,576
13. Rossmoor: $93,972
14. Rancho Santa Margarita: $92,671
15. Irvine: $91,114
16. Mission Viejo: $84,934
17. Aliso Viejo: $83,002
18. San Juan Capistrano: $78,638
19. West Garden Grove: $78,112
20. La Palma: $77,177
21. Cypress: $76,312
22. Huntington Beach: $75,900
23. Fountain Valley: $73,504
24. Lake Forest: $73,293
25. Los Alamitos: $71,112
26. Brea: $70,009
27. Costa Mesa: $69,918
28. Seal Beach: $66,131
29. Placentia: $66,083
30. Orange: $62,760
31. Fullerton: $61,462
32. Anaheim: $60,881
33. Tustin: $60,319
34. Buena Park: $57,695
35. Westminster: $57,172
36. Garden Grove: $50,038
37. La Habra: $49,612
38. Santa Ana: $44,505
39. Stanton: $37,840
40. Laguna Woods: $31,212
Data Source: Wikipedia
A 30-year old attorney working many hours in an Irvine-area firm can easily make $150k.
Good Point. I would guess around 80 hours then which is around 75K for a 40 hour work week.
At any big firm in OC attorneys start out at $160k plus bonus ($15-35k). By their fourth year (which is totally doable by 30) such an attorney would make $210 plus bonus ($25-45k). Anyhow, I am almost certain OP is not an attorney.
The big firms start there, but even small firms pay well after you’ve had a few years’ experience (partners don’t have to spend too much time training/editing and you become a cash machine to them that they’re unwilling to lose).
160K to start sounds good but these kids are pulling a 100K+ student debt load. UCLA used to be just 3K a year in tuition (15 years ago). Now the law school is over 25K a year so there are no bargains left for these youngins. And so few of them will get a brass ring (to the extent you consider a partnership such), instead they will eventually have to go in-house, whereupon their incomes stagnate and/or decline. Yes, you can make a lot of money but at great cost in terms of stress and worries. But what can you do, I would not want to go back to a corporate cubicle: as much as law sucks, that lifestyle sucked far worse. You sell your soul to live in that dump for $684K? Hell no, this recession has so far to go.
Many of my coworkers are $250k+ in the educational debt hole. The sad reality of big frim life is, even if they don’t want to work for a big firm (and most of them don’t), they have to earn that much money to make ends meet. What’s even scarier is that the economy is resulting in significant layoffs at law firms. Imagine losing your job with all the debt plus having to support a family… it’s not like a nonrecourse mortgage. Getting a new job in this economy will not be easy.
I would love to know what these parents did with their helco’s didn’t they use these to pay for their kids college?
I didn’t even take out any loans and managed to pay for two kids in college here–one at ucla–LOL
I think people were living off their homes. What a huge farce this area is. Unreal must like all the fake body parts–LOL
http://www.ocregister.com/articles/home-gibson-ladera-2246308-howard-sheila
“The Fishers say they owe more on the mortgage than their home is worth. Part of the reason the couple is now underwater on their home loan is because they wrapped about $230,000 in law school loans into the mortgage, pushing it to around $750,000.“
Interesting twist. You cannot bankrupt out of a student loan, but if you wrap it into a home mortgage, you can walk away with no problem.
Wow, wow, wow…come on, people…stop trashing attorneys and the law firm life…especially if you never worked in a law firm yourself. 🙂 First, Steve is not an attorney – too many spelling mistakes…Second, now that the economy is slow, most attorney actually enjoy 9-5 lifestyle, while still pulling 160+K…
I may work less, but a 9-5 day is a rarity. I still have billables to meet and the specter of lay offs is palpable.
Not complaining, just stating the obvious. Big frim life is no cake walk.
Precisely, three sheets. Less billable work does not necessarily equal less time in the office. I, and plenty of my coworkers, will sit around all day until we get assignments at 4 or 5 and then end up staying late or coming in early the next day to make up for the time we weren’t working (and to avoid a lay off). The thought of having no job when required to pay almost $2K a month just in student loans is enough to make any lawyer pretty miserable these days.
This is all the more reason plenty of lawyers I know are planning their escape from Southern California. You may give up the great weather and access to the beach, but the value of that declines substantially when you never step foot out of your air-conditioned office during the daylight anyway.
the joke about these incomes is the tax rate–take off taxes and you will see much less real income!! Throw in CA state tax and pay roll tax and the average person working in CA has very little money left over. Pay for two kids in college and there you go. California needs a huge fix starting with public jobs and their very high pay!!
I hear you Steve. I am slighly younger, pulling the same salary but feel overwhelmed by the expense of living in this area. It’s sad to make more than your parents yet not be able to afford living in the place you grew up. Many people I work with feel the same and are contemplating moves to cheaper places to improve their standard of living. Making that salary is always a compromise and you start to wonder why you pay so much to live here when you have no real time to enjoy it and your family.
My wife and I, combined, are also at this pay grade, and have also spent the last few years dismayed that we cannot afford to live in the homes we grew up in.
With the price slide, we can finally “afford” a starter home, but I’m not buying into this racket yet. We just signed another year lease in a very pleasant 3 bedroom condo in Foothill, avoiding equity burn and, I think, speaking with our checkbooks.
It’s threads like this one that give me faith that prices MUST continue to correct. If two young professionals have to resort to Ramen to get into a tiny home, prices are not fair and it’s just not worth it.
I am with you, Mel, and Taylor.
Here’s a good example of not being able to afford where you grew up:
Houses identical to the one I grew up in at Dana Point are still listed at 1.2-1.4M over a year and a half after the bubble popped.
There is no HOA/Mello Roos and they are duplexes, but could probably only rent for 5K match (upstairs and down at 2.5 each). All are 2 bedrooms.
Even if I brought 20% to the table and rented the downstairs 12/mo out of the year, my mortgage payment would look like this:
Results Sans Koolaid
$1,300,000.00 Purchase Price
$260,000.00 Downpayment of 20%
$1,040,000.00 Mortgage Principle
$1,204,717.17 Interest Paid Over 30 years
Monthly Cost Breakdown
$6,235.33 Monthly Mortgage Payment @ 6%
$1,083.33 Property Taxes @ 1%
$270.83 Homeowners Insurance @ 0.25%
$0.00 Private Mortgage Insurance @ 0%
$0.00 Special Taxes and Levies @ 0%
$0.00 Homeowners Associate Dues or Fees
$1,083.33 Maintenance and Replacement Reserves @ 1%
$8,672.83 Total Monthly Cash Outflow
SO 8.6-2.5K/mo is $6,100K I would have to come up with out of pocket. Keep in mind my rent was just lowered $215/mo to $1400/mo in Irvine for a 1 bed + loft.
So for “owning” this home I’m paying an “owner” premium of $6,100-$1,400, or $4700. Laughable considering these houses were originally built in the 60s as owner-occupied investments. Not only did you get a new house but it had positive cash flow.
Also keep in mind the house is over 30 years old, so a 1% maintenance reserve might not be adequate.
The funny part is this street had drug users and alcoholics on it. Now its a fancy neighborhood with HELOCed BMWs in the driveways. However, all the existing houses look the same in my eyes. The only difference is a few of the dirt lots I used to BMX in have been built out.
Oh and I guarantee you I’m one of the more financially successful kids to come out of that neighborhood. ‘Where are all these rich people coming from?’, I used to wonder.
As the world turns…
You are better off renting an older home because the owner is paying lower taxes and can give you a rate far lower than any mortgage you can find. Having to downgrade like this is better financially than buying a smaller newer home with less space, quality of life and chance of it ever going up in price. Take the difference and invest it in stocks high quality paying a dividend, biomedical is a good bet right now. A house is an investment you have to think of what you will get out of it in the end because you are putting money into it every month. I am doing it now for 3 years. And I can afford to live in this insane area but I refuse to buy so over priced assets. Even the second in line at Pimco sold his Newport house 3 years ago. They all knew what was coming. (he was on cnbc)
The parents already spent it. That’s they the national debt has grown so much.
Pay it backwards…
You make a great point Steve Taylor; the boomers have really screwed us GenXs, especially in the area of government debt.
Apres moi, le Deluge…
(And we got to screw all those stoned hippie chicks at Woodstock and YOU DIDN’T!)
Remember it is exceptionally easy to look back in time a say, if I had brought here, sold there, borrowed then, I could have made a killing.
As the events are unfolding however, it is exceptionally difficult to time markets.
If it was easy, we would all be worth a few billion from trading some option contracts.
I have a question IR. If a potential employer runs a credit report on a massive HELOC abuser who gave the house back to the bank, will anything more than a foreclosure be evident? The prior loans will show up as paid off.
It seems to me that hardcore heloc abuse should make certain types of employers very worried, and they should be able to get to that public data conveniently.
I am not sure how the closure of the loan would show up on a credit report. I imagine there would be a series of late payments (90+ days) showing serious delinquency followed by some kind of discharge notice. I would think this would be noted in a credit report from any of the three bureaus.
The bail out of C is a shame, C is a thief.
Two years ago, I need to wire $50K to my family oversea for some emergency reason, I was charged around $5K for the transaction by C.
The mistake all because I asked directly to convert US$ to the destination country $ and the rate was so poor, all most %8 difference them. The discourse info is using very small font, and I was in a hurry and especially I was so trusted C as best bank before. I found out about one hour later and there is no hope after that.
IMO, C is a thief and now Gov helping the thief without sending them to sentence first.
“Then, the more I pondered the issue; I came to realize that borrowers are like drug addicts: if you make money available to them, they will take it.”
I would make a quibble and change “borrowers” to “consumers”. I don’t think many people are driven by the urge to borrow or the thrill that gives them. Borrowing is just the easiest, quickest and most lucrative means for them to get the money to feed their consumation habit. I was taught that it is a risky and foolish strategy to borrow fomr making stock or bond market investments. To borrow for pure consumption seems to me to be considerably worse.
On the lending side, what seems to have enabled this folly is the mortgage brokers and banks who had no intention of holding onto the loan. The whole concept was that they sell the loan on and someone else has the problem of collecting on it.
I can’t believe that this could be allowed to happen again in the lifetimes of anyone of adult age today to see it. On the other hand, I’m obviously stupid since I did not manage to learn and grab my share while the bubble was inflating, so perhaps it will indeed start again in 5 or 10 years.
Oops, should be “consumption”, but “consummation” would have a certain sense too. 😉
“To borrow for pure consumption seems to me to be considerably worse.”
Which the better purpose for borrowing for is is also a question of values: I don’t like risk, which makes me less likely to invest in stocks and bonds regardless of the source of the funds. Consumption has highly predictable results; at least I’d have happy memories and/or bling to console me during my debt service.
Note that I don’t think either one is a good reason to borrow, my answer was in a “lesser of two evils” mode.
“…It is the stupidity of lenders and investors in mortgage-backed securities that is truly mind-boggling…”
Agreed. When assigning culpability for the stupidity of the crisis’ cause, I give mortgage sellers/investors the lion’s share. They’re supposed to be the sophisticated parties investing their capital wisely and prudently (as Greenspan would expect).
I would guess 90%+ of mortgage borrowers don’t really understand how interest is calculated on a simple fixed rate mortgage (and 99% didn’t understand ARMs with teaser rate, interest-only, & neg-am features).
I think IR meant to say “mind bottling”, you know, like when your mind is in a bottle…
// Blades of Glory
ha ha ha
that’s great
i still need to see Step Brothers
I’ve read that there are around $35 – $45 worth of mortgage backed securities, credit default swaps, and other derivatives for every $1 of bad mortgages.
The lender lost $494,694 on this home. But the derivatives market likely lost between 17.3 and 22.3 million dollars because of this home!
I wonder what these poor people are doing now that they are living minus $50-100K/year? That’s quite an income reduction. What on earth did they spend the money on? I guess you don’t have to win the lottery anymore to live like a lottery winner. Correction: that should be “didn’t have to,” because the well has run dry. The level of greed displayed during this boom leaves me just nodding me head. What does this tell you about human nature? That people will do anything to satisfy their urges, and get what they want, and that’s with socialization! Where would the human race be without socialization? We wouldn’t care about anything or anyone but ourselves. It would be all about ME ME ME. We are, at worst, simply primal. I guess I shouldn’t be too surprised.
Somebody paid over a million for this dump? I thought that you had once profiled this place, but you never know in Irvine, since they all look the same!
You have to take into account the fact that Irvine (and California in general) goes by a different currency than most of the rest of the country.
That house cost WHAT?! Oh, you paid with Cali-dollars (inflated I.O.Us).
I thought you paid with those peso-dollars (called “cash”) that are popular in other states.
IrvineRenter, Most listings are showing some whacky high $$ (15% or more raised) recently, I think Realtors are jacking up the numbers to cause panic buying due to Govt’s plan to force mortgage rates down to 4.5%. It appears that there will be a period of dead cat bounce in home values now!
Gov to lower mortages rates to 4.5%?
Hey, I better refinance from our 6.1%!!!
Question, how do I find out how much a house sold for?
reading these day after day… the sterility of all of these “homes” is off-putting in the extreme… how much money are you willing to pay to live in a place that looks exactly like an extended stay hotel. Does this appeal to anybody? Can somebody explain to me why blandness was enforced in designing “irvine”? The bean fields were much more compellingly interesting than this.
Blandness is because they built these homes with such cheap standards. Make them look good inside but do a very cheap outside. Drains anyone? Overhang?? keeps out the cold/heat. They are boxes! Someone got a lot of money?
The real problem is, in my mind, Irvine itself. Master planned gives you cookie-cutter. Developers come in and develop whole neighborhoods. And then, strict HOAs bind new homeowners.
You want the counterargument, though? My mom lives in Pacific Palisades. Used to be that every house was different and whatever. Yes, when someone bought, they’d bring in an architect and spend another 100K on the place (if not more). But, in the Palisades, it’s just money. However, increasingly, a number of streets look like McMansion central. What happened? Developers came in and bought individual properties and made 1 or 2 houses at a time. So, what you end up with are houses that go the exact same distance from the street, with fully flat vertical elevations, crammed in with no space between their neighbors. So, I’m not sure that individual ownership is the real solution.
So, the more I think about it, the more I think the problem is: profit. Those who are improving a house to fit THEIR needs and tastes do so individually. Developers are not individuals. They are in it to maximize profit, and that means getting as much sqft out of the lot as possible.
I think the answer to the question what about the lenders is that with the current setup there are no lenders. In other words, the person making the loan gets paid fees for making loans, not for making good loans, the person buying the loan gets paid fees for securitizing, packaging and selling bunched up loans and doesn’t care about the quality of the loans if he can get them sold. The people rating the bunched up loans get paid for rating and if they low rate get fewer rating jobs. The people buying the securitized loans get paid for the advertised rate of return and are subject to a barrage of 99% bad advice from the financial press, advertising, and high pressure sales efforts.
For example, how many of us actually shorted financial stocks in 2007 ?