Well, I can see no reason,
You’re living on your nerves.
When someone drops a cup and I submerge.
I’m swimming in a circle.
I feel I’m going down.
There has to be a fool to play my part.
Show Me the Way — Peter Frampton
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Today I want to show you how to chase the market down. Sometimes I feel sorry for all the FBs. Their nerves must be frayed as they drop deeper and deeper underwater. If only they could find a greater fool to bail them out…
Today’s property was first featured and updated New Century Condo – 2005 Flip ** Update 1 **. It appears the new year has given new resolve to the seller who relisted with a significant reduction in price.
Asking Price: $449,000
Income Requirement: $112,250
Downpayment Needed: $89,800
Purchase Price: $565,000
Purchase Date: 5/26/2005
Address: 1 Montgomery #46, Irvine, CA 92604
First Mortgage $452,000
Second Mortgage $113,000
Downpayment $0
| Beds: | 3 |
| Baths: | 2.5 |
| Sq. Ft.: | 1,639 |
| $/Sq. Ft.: | $274 |
| Lot Size: | – |
| Type: | Condominium |
| Style: | Townhouse |
| Year Built: | 1977 |
| Stories: | Two Levels |
| View(s): | Hills |
| Area: | Walnut |
| County: | Orange |
| MLS#: | P615271 |
| Status: | Active |
| On Redfin: | 12 days |
GREAT VALUE IN IRVINE. TWO STORY TOWNHOUSE WITH 3 BEDROOMS AND 2.5 BATHS, 2 GARAGE IN DESIRABLE HERITAGE PARK. OPEN FLOOR PLAN WITH LARGE ROOMS. BLUE RIBBON SCHOOLS. CLOSE TO SCHOOLS SHOPPING AND FREEWAYS. NICE ASSOCTAION WITH ASSOCIATION POOL, SPA, PARKS, AND WALKS. LOW HOA DUES $175.00 AND NO MELLO-ROOS.
ALL CAPS…
DESIRABLE HERITAGE PARK? I suppose it is also I-5 proximate.
LOW HOA DUES $175.00. Low compared to what?
ASSOCTAION? Ass tachyons? The Tachyonics Society of America
.
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New Century issued these loans, so who is going to lose the money? Despite its bankruptcy, the business plan for New Century was basically a good one: build an unsustainable business, take out as much in fees and stock sales as you can, and disappear letting others hold the bag. Since the loan issuer is no longer in business, the investor has nobody to sue to repurchase the bad loan. These shell companies make a great way to compartmentalize losses. Anyway, some CDO or SIV somewhere is going to lose $142,940 after a 6% commission. That is an amazingly large loss on a such a small unit. The asking price is 20% under the most recent sale which was a full year before the peak. Are you getting a sense of how bad this is becoming for lenders and investors?
So how does one chase the market down? Do what this seller did. First, you list a property for $610,000 which would cover your commissions and make you a few bucks. You keep this listing price far beyond 90 days when the market is telling you, “it is priced too high.” Then you reduce the price to something approximating the market at the time, and keep it there for another several months while the market deteriorates. When it finally dawns on you that you have missed the market, you lower your price in a panic and hope to find a knife catcher. At this point a market chaser would wait 3 to 6 months before lowering the price again. A real seller would lower the price every 30 days by a significant amount until they got out. What do you think this seller will do?
Whose school colors is that condo painted in? Not that it matters, unless another alum decides they want to live in it I suppose.
This condo has some serious drawbacks and is grossly overpriced. In some small defense of the FB here, I’m not sure what pricing this condo aggressively would even be. $275k? I don’t know the area, maybe it’s in one of those “special areas” I keep hearing about it, should it be $350K?
All that said, this condo is another example of why you really don’t want to be chasing the market down and why the market is doomed, in the short term. How could the seller possibly price the home anywhere near low enough without admitted they were total idiots? And how many other people are like this seller (or bank) are in a position that won’t allow them to reduce the price enough to sell so they, along with all their spirit brethren, will clog up the market with these fairly ugly (in many ways) properties, overpriced, and just sitting there, filling the market with the stench of their rotting corpses.
Oh the humanity.
—–
610K PFFF
550K PFFF
450K PFFF
A 90K down payment now gets you “in” to a 30 year old condo.
That’s awesome. I’ll take two! Where do I initial?
Oh, it’s not THAT bad. It’s grey. I don’t like grey, but it’s not horrible.
If they took 20 % off now, a family with the median income in your area could qualify for it.
Of course the seller, whether bank or family would have to acknowledge a 243,000 loss, more or less, rather than a 143,000 loss.
Gosh, at some point they’re gonna get so shell-shocked it won’t make a difference.
Even after the big price reduction, this seller is not the low price leader in the neighborhood…
http://www.redfin.com/stingray/do/printable-listing?listing-id=1232974
“Gosh, at some point they’re gonna get so shell-shocked it won’t make a difference.”
That is market capitulation. We will see that in 2009 and 2010.
I kinda like this place. Maybe its because the 70s is my favorite decade. I mean, if you hate this townhome then you must hate the Brady Bunch, Happy Days and Saturday Night Fever.
My only concern would be the freeway. Not just the noise but the pollution as well.
Its an end unit which is another plus.
315 – 350k
IR,
Is there a way you can track all the properties you have listed all along.
I’m sure some have eventually sold.
Maybe not from Sept06, but starting 07, it would be great to have a exhaustive table on what has happened.
I think at the beginning, we’ll be surprised that beyond all comments, even owners asking for crazy prices found someone (knife catcher or rich immigrant). But overtime, I wouldnt be surprised if most of the properties you have listed are still for sale.
Do you think you can have this listed, as a table available from home page ? Maybe you are already doing it ?
The choice of paint is definitely on the…”eclectic” side.
You’d think that the first thing a flipper would do would be to repaint it to a more generally appealing state.
I guess they figured that 20 year olds with no job, no down payment, no credit would be able to score a loan for 610,000 and would repaint it themselves. The flipper got lazy.
Bad move.
That would be fantastic.
I enjoy going back and looking at the old posts to see if they are still listed.
It’s a little tedious to have to iterate them one by one though; continuously clicking the “Older Posts” link.
I think overtime, looking at all this properties you showed, mostly for sale due to FC, we’ll see that price/sqft of final price will drop continuously.
Maybe ~370-430$ psqft for early 07 for a 1700-2300 house. (800k$)
likely 350 in Q407 (700k), getting lower than 300 from now on.
At 220$ psqft, a 2000sqft house is ~ 450k. Another almost 40% to go. I guess this kind of house would rent today in the 2500-2700$ (based on how long the renter has been leaving in there). So … 170 GRM !
But 20% per year drop is a big reduction, that maybe achievable only with wide spread of FC. But not all house for sale are short sale or FC. There are still a lot of people (more ?) in Irvine saling their house without being foreclosed.
So before we actually reach the 220$ per sqft or the ~160/170 GRM, we may be in 2012/13. A
In a bull market, all the shortcomings somehow got ignored. In a normal market, shortcomings are evaluated. In a bear market, shortcomings become unbearable.
This unit is so outdated (old), and next to I5, and etc. It is simply unbearable at any price near what they are asking.
Lawyerliz,
I thought the same thing: “Meh, the grey is pretty revolting, but it’s a condo.”
But then you click through the Redfin link.
Rods. Cones. Disintegrating.
They should be the low price leader that close to the 5…
Their price does seem close to what market should be now. It’s just a matter of luck going forward. They are a good bit under the Denver unit and the places are quite comparable. If I owned this puppy, I’d definitely be under-cutting the Helena unit on list and accepting the first over over $400K I got.
This place should be torn down.
Inside paint colors people… Inside. It’s UCLA Bruin Blue & Gold:
We are Sons of Westwood
And we hail to Blue and Gold
True to thee our hearts will be
Our love will not grow old,
FIGHT! FIGHT! FIGHT!
Bruins roam the hills of Westwood
By the blue Pacific shores
And if we chance to see
A man from USC
Every Bruin starts to roar.
U…C…L…A…
UCLA, fight, fight, fight!
(repeat verse)
“Mighty Bruins”
(played after a score)
We are the mighty Bruins
The best team in the west!
We’re fighting on to victory
To conquer all the rest.
We are the mighty Bruins,
Triumphant ever more,
And you can hear
From far and near
The mighty Bruins roar!
Hmmm, it’s empty. Why would anyone jump on it when they know money is being lost every day… week… month?
At least it is below 300/Sq ft. I don’t know if the picture of the dirty kiddie wading pool is really helpful to getting this thing sold.
A friend of mine was in Northwood over the weekend and saw a housing auction sign. She decided to swing by and see what was going on. The place was jammed and there was no where to park. There still seems to be a lot of enthusiasm fueled by dilusion out there.
Graphic is great.
This is what used to be an affordable home. Maybe not the best neighborhood, but certainly not Compton. It is pretty large and good for a small family. No granite anything.
The price is not a starter price. It should never have sold that high and an affordable price would be maybe high 200’s.
I agree with the comment that when prices go up, flaws are meaningless, when prices go down flaws are huge.
Starting a jingle mail pool here….I predict 6 months before this guy walks away completely and some financial entity, who knows at this point, ends up with it.
I agree. What a rathole! I would rather live in a homeless shelter.
$175/month association fee? HAHAHA!!!
Ten years ago, I say places nicer than this going for $50k.
Not in any decent part of SoCal you didn’t.
I don’t know… Maybe I’m just not cool or whatever, but painting your walls blue and gold in honor of your school seems a little corny and immature. I would expect to see this kind of stuff going on in a sorority house, but not in a home that someone dropped a half-million on.
I’m all for being proud of your Alma mater, but let’s keep it real.
If I bought my kid a condo and he/she nuked the walls like that; I’d be livid.
Lots of alums there – it’s *all* the UC’s. Even so, youch, too bright for me. I like rooms in overall color balance – if not in neutrals, then red/green or blue/brown. Other two-tone balances are too garish for me (yellow/purple, blue/orange). Yellow/red/blue works, so I suppose you could have a bruin theme with red furniture, but only if you mix yellow and blue in the same room. The blue room isn’t too bad but those STRONG yellow walls in a room with cathedral ceilings over a tan floor – gasp – i need air –
Was this intended as a flip? (minimum tax-avoidance residency, hmmm). Who would paint a flip such idiosyncratic colors?
For that Helena property:
Using the 1988 sale price and 4% annual increases, you get $335k.
If you use 4.6% appreciation (the appreciation b/t the 1991 sale and the 2002 sale–still a not unreasonable number) from the 1988 sale price you get $375k.
Using the 4.6% to carry forward from the 2002 sale, it’s $432k.
So, if the last few years had been reasonably stable, the current asking price isn’t nuts. Given that everyone is expecting further declines, $375k wouldn’t be unexpected.
Of course, I think of condos (without something special, like an ocean view) as depreciating assets rather than appreciating assets, because you don’t really own any land which is the part of a house that actually increases in value over time. Ordinary condo purchases should always be made as rental apartment substitutions with no expectation of equity gain above inflation.
If there weren’t a blue room, I’d just think that the owner is colorblind (red-green, I think, w/o checking) and wanted walls in a color he (most likely) could “see”. I know people who have an all yellow kitchen (not the appliances–they aren’t crazy) for that reason.
Breakeven GRM is influenced by interest rates. With the current very low interest rates, the GRM will be higher. This property is very close to, or perhaps even at, interest rent-saver.
I predict it sells in the very low $400s. Banks are starting to wise up to allowing shorts. The foreclosure process is expensive and time consuming. A number of banks will hold off auction if any halfway reasonable offers are coming there way on a property.
Red-green color-blind people *could* see both yellow and blue. It’s an interesting idea – colorblind people do have completely different perception of color and my color-neutral preference would be totally meaningless to them. Strong colors work IMO in half-baths (because you’re not there much) or kitchens (because there’s not usually much wall space).
I checked out a bunch of open houses this weekend for fun and there was quite a bit of traffic at all of them. Back in the late summer, I’d be the only guy walking a house sometimes. This past weekend, I’d be one of 3-4 interested parties in the house at the same time.
You are not alone.
I’m in Spain right now on business. The same size unit is selling around 2 million us dollars. The eurodollar is kicking the $$$$ out of our money back home. Irvine is 10 nicer than Spain.
This place is a total starter home, right?
An 80K to 90K down payment seems tough (to me) to come up with as a first time buyer with no existing equity.
I could see someone trying to catch it for low 400K, but have a hard time seeing someone willing ante up 80K to 90K of their savings account for this place in the current market.
Who knows. Will be interesting to see.
I agree FE. It’s a BE if maintenance reserves are at around $150-250 per month. I calc after tax spend on interest + prop taxes + HOA + insurance at around $1950 per month assuming 20% down.
I think it would probably rent for $2000-2200.
Two units in the same complex have sold in the mid $400s within the past couple of months. Neither appears to be REO based on the transaction amount. Some people are anteing up on these in the $400s.
Little bit further to fall on the 10-year and it will be in 2003 territory. Conventional 30-years will see 5.25-5.50 range by then…
I am positively loving my gold and bonds right now.
What strikes me about the Montgomery and Helena properties is the strange details in the photos.
Between the the stuffed animals, the faux fur comforter, and the blue tint (?) on the sliding glass door at Helena, and Montgomery’s crap-filled kitchen counter and random pieces of furniture strewn about, these are some pretty half-assed staging attempts (although I recently saw a posting in Long Beach with a photo of the front of the house–complete with workers cleaning the place out. Really? You didn’t have 30 seconds to ask them to move?).
I think staging and MLS photos can tell you a lot about the level of desperation, the confidence in ability to sell, and how overwhelmed realtors and banks are with new properties and REOs coming on to market.
If your greatest statement about yourself is the school you attended, you are not nearly mature enough to buy anything.
Also, you probably need to get a life ’cause you’re still living in your college days and have nothing better to say about yourself than you attended XYZ University. And if you still remember your fight song, well……… enough said.
Is there any way to see how much they are actually putting down on these units that have sold?
Ipop,
Can’t believe you lowered your value posting that garbage.
The Bruin fight song, what a contradiction
C’mon man, the only thing playing at UCLA games was cricket sounds.
What score, they hardly ever made it into the end zone.
Too bad, you seemed like a very knowledgeable guy, should have gone to a real school like SC
Fight On!
And volumes are down and prices are down.
But the showrooms are packed?
Lets recap:
Sales Volumes = DOWN
Sales Prices = DOWN
Sales Crowds = UP
To me, that adds up to a bunch of folks sightseeing a train wreck. I’d bet it’s 1/2 neighbors and 1/2 curious getting thier fill of schandenfreud.
This weekend, a home on Mt. Vernon in Orange had a “Bank Repo” open house. It got a great deal of foot traffic based on the drive by survey I did. Too bad the non repo SFR across the street is nicer and listed at $40K less.
Both properties have been on the market for more than 360 days.
I know you like your adjustable rate mortgage, but you really should consider refinancing into a 30-year fixed while the rates are this low. If for some reason you do not move in a few years, you will be really liking the lower payments. Once the FED goes through this easing cycle, interest rates will rise, and they may rise a great deal because inflation is getting pretty bad. I don’t see the FED rate topping out at 5.25% in the next cycle.
Tachyon?
Tachyons?
lol tachyonaments!
(I think I’ve been outed as a closet physics geek/degenerate gambler)
This place will not hold it’s value and will continue to fall.
You should only buy when you find a place you want to live in.
I wouldn’t want to live here.
The only reason to buy this property is to not rent and build up equity for a trade up.
Therefore, in the long run the price of this place will be highly dependent on local rental rates, the state of the economy and the number of renters willing to make a near term commitment to build up some equity. I predict the later factors will tank, the number of similar units will rise.
+1: great idea.
Given that ‘market corrections’ tend to overshoot on the downside in the same way they overshoot to the upside (fear vs. greed), where do people believe the price will eventually bottom on a $$/sq ft. basis? It looks like we have a perfect storm looming – high energy prices, declining home values, a rapidly weakening consumer and the largest YOY increase in inflation in 26 yrs! See the comment below from CNBC –
http://www.cnbc.com/id/22663966
“In another report, the Labor Department said wholesale prices dipped 0.1 percent in December, but were up 6.3 percent for all of 2007, the biggest annual gain in 26 years, mostly reflecting higher energy costs”.
IR how bad have we overshot in previous housing busts?
Except for the location (right up against the I-5), I like the fact that these have 2 car garages and more than 2 baths for a 3 bed unit. There’s also what appears to be a small courtyard, which may be suitable for a dog. Tiles on the ground floor is also nice, I just wish it had a full bed/bath on the ground floor, but for these floor plans it’d be too difficult to ask.
If the unit was, say, close to UC Irvine and selling for
IPOP
CFC now trading at $5.94!
How bout shorting CFC now..
Downside… Loss of difference between $5.94 and $7.15 + 0.18 x apprecation (deprecation) in BOA stock price if sale goes thru projected to be minimal.
Upside… Deal tanks after BOA does due dilagence on CFC and finds billions more in losses. CFC delare bankrupcy and stock drops to pennys. Only question, will Feds let CFC go bankrupt
Interest rates are nice and low, yeah! I got a call from my bank mortgage lady saying they went down this week. Can now get a 15-year fixed conventional at 4.875%. Wassup. Come on baby, how low can you go!
I agree. This is a stellar time to refi. 2-3 Fed drops and probably a heck of a tightening cycle down the line.
My ARM is due up in August, but there isn’t any way we’ll in the house for more than a couple of years. I’ll be sad to see my 3.75% rate disappear. I have no interest in being a landlord so a 30-year isn’t a product I’d use…
If we were sure that we weren’t buying in 2008, I’d refi into a 3/1 I/O sometime over the next couple of months. It’s at 5.25% or so now and should dip below 5%. As its possible we might find a property we like for a price we can afford sometime this year, I don’t want to dent the FICOs with a refi unless absolutely necessary.
Or vaseline, the sales crowds up could be a precursor to a little bounce on sales volume… We’ll know in a couple of months.
IR was too young to have lived thru the last bust in the early 90’s.
My recollection was the overshoot was about 20% but it was really variable. If you were in the right place at the right time you could snap up properties for a song. I did. I don’t know how to tell you to put yourself in the right place, it’s still too early yet in this downturn.
LOL ten. I didn’t even go to UCLA. I do love Bruin basketball though. Always have.
We’ll see this weekend when Love and company put some smackdown on OJ and the boys. Mayo represents everything that has gone wrong with hoops. He’s about flash, street cred, endorsement deals, gettin’ paid, etc. Now Love is a throw-back guy. Great fundamentals. Passes the rock. Hits the glass. That’s something and someone to root for…
How about a market board where we can all make predictions on what the final sale price will be? See who does the best (loses the least) over the year.
Greater than 360 days? WTF?!? Why even bother having something listed that long? That just calls for knocking a large % of the asking price right there. If the price is too high, no bites at all.
Reminds me of this property here in TN in a nearby town. Decent sized 2000+ sq ft home, looks beautiful, and also has an adjoining forested lot behind it. They’re asking waaay too much for it, $219,900 I believe. It’s been on the market for quite a while, possibly 6+ months and I don’t think I’ve seen the price budge one bit. Median household income is ~$26,500 and median family income is ~$39,600. So I’m thinking this is a WTF price for the area. But bad thing is that the little real estate sales booklets are full of properties in this price range. I just don’t get it.
Thanks Alan… so if the fundamental equilibrium is somewhere down 30-40% as suggested by Golden Slacks and we had an overshoot of up to 20% does this mean that we might find areas down 50%+ (peak to trough)? I’m just trying to test my understanding and get positioned appropriately. From my perspective here, the most difficult thing for new buyer is the downpayment. It is really difficult to SAVE $100K+ to get into ‘entry level’.
Love it!
I’m not an economist, but from my reading I think the limiting factor on sales will be the availiblity of buyers and the amount of down required by lenders. Assuming lenders go back to 20% down requirements, that means family’s have to pony up 80-100k to get into party, that will put a crimp on the buyer pool. Add to that a regional downturn in jobs… Layoff’s haven’t near peaked yet… 10% of OC jobs are state/local government now facing 10% cutback, another 15% realestate related (7-8% construction alone facing projected layoff’s of 20%, at least 1/2 of real estate agents will leave the field)
And you have the perfect storm for a price collapse.
An $80k to $90k down payment is nigh impossible for the crowd they’re aiming for. I’m guessing they’re aiming for median folks here. My wife and I combined make close to the median household figure for Irvine, but we own our tiny single-wide outright and have no debt, and it would still take us a good three years saving a little more than 50% of our take home. I’m sure we could pump up the savings a little bit more, but that’s still qutie a bit of time. It’s scary to think how somebody is gonna save up in irvine paying those rents.
I went to UCLA. My oldest daughter goes there now. I could care less about their football or basketball teams. It is one of the best colleges in the world, and for the money, it is the best. Nothing in our home is painted blue and gold.
They should let it go bankrupt. Somebody will get their assets on the cheap and maybe somebody will learn something from this. I don’t like the idea of the guvment doing anything about this whole mortgage mess. Let the poor suckers pay their dues and let the market move along.
I’m wondering how many more lawsuits will be popping up by individuals and cities against CFC.
Perhaps rental prices need to come down too…
Regarding downturn in jobs,
Also consider that many CA companies are over-paying their employees to subsidize the cost of living since houses and rents are so expensive.
As the prices come down, is it unreasonable to think that companies are going to take note and reduce salary offers to new employees?
If salaries reduce then you would think prices would be impacted as well.
The hard part seems to be finding a comp for any property listed these days. I see huge price reductions and still nothing is selling. Part of me would like to see where the market is right now but most of me hopes we keep free falling for a while.
I moved to TN for work several years ago and am now being transferred back to the OC this year. I’m watching the market and this blog closely to get an understanding of what is happening back there. I am somewhat new to this and don’t udnerstand 100% of the terms used on this site. Can someone help me out here?
I understand what a short sale is. I am a regular Redfin user and receive updates from them. I see several homes go from “active” to “contingent” only to shortly thereafter go back to “active”. Why is this? Does the bank not accept the purchase price? Or does the buyer not qualify?
And don’t overlook the velvet Elvis painting that is prominently and proudly displayed at the Helena property.
IR,
I am not convinced why banks will raise downpayment requirements to 20 percent considering the fact that banks are makind the CDOs the bag holders. Unless the international investors put down strict conditions on US banks before buying debt from them, I do not see banks self correcting the requirements.
PH
Salaries are more dependent on the difficulty finding qualified workers and union contracts. Companies will not arbirtarily cut salaries based on housing costs but if they post help wanted adds and 100 people qualified people apply, then they know they have some leaway with salaries.
“Unless the international investors put down strict conditions on US banks before buying debt from them, I do not see banks self correcting the requirements.”
That’s exactly what will happen. “Fool me once, shame on you. Fool me twice…”
How in the world can you afford to move from TN to here?
Whenever I hear about the salary differences between CA and others places – the absolute #1 justification that immediately follows is “well housing is so expensive in CA”.
Should this work both ways if housing prices were to dramatically fall in CA?
The buyer of 3 Pierre (model match) in 10/07 purchased for $450,000 with loan amount of $360,000. $90,000 down payment.
The buyer of 18 Sacramento (smaller unit) in 10/07 purchased for $450,000 with a 1st loan amount of $360,000 and a 2nd of $44,500. $45,500 down payment.
Yea, just make it 5% and let PMI hold the bag.
1 out of 2 isn’t bad I guess. Both have balls of steel though as those down payments will most likely be evaporated by the end of the year.
The second buyer with the 45,500 down is paying around 2800.00 a month including HOAs assuming the loan is 30 fixed.
EEK!
That’s going to be one unhappy condohold in another year.
You two foaming at the mouth wishing for 50% declines reminds me of watching bubble-buyers fantasizing about double-digit appreciation.
That’s what I think will start happening. 5-10% will be the norm downpayment requirement and PMI will just be more expensive. Maybe Congress will expand the deductability of PMI?
I’ve seen a few programs for first time buyers (like myself) that don’t charge PMI even if you put down 10%.
I don’t think i’d be able to afford the monthly payments comfortably without putting down 20% though, so I doubt i’ll take advantage of it. (I’m looking to get a newer place for 500 in the fall of 08!)
10-20% used to be the norm with PMI required on anything less than 20%.
I don’t see why that will not be the norm again given the massive losses the financial firms are going thru now.
Don’t kid yourselves, this is bad…
Heck, I’m just watching the forrest fire buring the hills wondering how big it’s going to get before they put it out.
Citibank cuts dividend and lays off 20,000 people..
Fantasy????
What planet are you on…
I was just sharing an observation… I like your fire analogy; that’s certainly what it feels like right now.
I was curious to when comparison between US/CA/soCa vs rest of the world would happen.
Yes , $ is week. But when comparing RE from different countries, you need to make buying power adjustement. Right now, 1 – 1 buying power would put the euro=1.11$.
So this unit you are talking about in spain would be not 2M$ but less…
Anyway, I spent some time in France in different area (south, Bretagne, Normandie, Paris) over the holiday and looked at the RE.
It sucks as well. Paris especially, where a 50m2 appartement downtan would have a GRM >350 ! Crazy. and not in best areas.
But waht shocked me the most were in places in Bretagne and Normandie, where average income is much lower than Paris and much much lower than in OC. Then you can find houses at almost similar prices (ok, they are in concrete and not wood).
Maybe as usual, Europe will follow US and they’ll see a collapse someday.
C’mon now, don’t get me wrong;
I’m not completely against UCLA.
During college I spent a lot of time in Westwood.
The girls were 10x more approachable and receptive than their counterparts at SC.
I felt like Tom Brady when I was at Strattons.
SC on the other hand, was more of a challenge.
The girls were hotter and I had to compete for them against Carson Palmer and Charles Schwab’s son.
I don’t recall posting a wish for 50% declines.
You are just building up a straw man so everyone can watch you knock it over.
Just make it 0% and charge even more for PMI. Start the music. Good times are back.
I was 17 years old when Peter Frampton arrived on the scene. Every female in Wisconsin was crazy for his long, curly, blonde hair. It was hard to decide who was hotter, Frampton or William Katt in “Carrie” (although we did not use the term “hot” then…I think we preferred “cool”, but maybe that was a Wisconsin thing).
Having now seen the video linked to today’s posting, and the goofy faces Frampton made during the special sound effects portions, I think all memories of my adolescent angst about the fact that he was not my boyfriend are no longer retrievable.
I think what’s shocking about this property is not that the colors and general look of the place are bad, but they haven’t been improved in the 300+ days this place has been on the market (assuming the pictures are recent) Amazing.
This seller should immediately paint the interior to a neutral color, and work on the general look of this place a little.
However, I seriously doubt they’ll get an offer anywhere near this price, regardless of what cosmetic changes are made.
Excuse me, my bad, I was looking at another properties on market. This property just got on redfin. Nevertheless, this place still needs some help.
I wish I was too young to remember the bust of the early 90s. I wasn’t living in California at the time, so I have no first-hand experience of California’s problems.
“I am not convinced why banks will raise downpayment requirements to 20 percent considering the fact that banks are making the CDOs the bag holders.”
How much longer do you think bagholders will line up to be bagholders? At some point, people stop risking money when they are losing. That is why we are having a credit crunch.
I moved to Utah just at the end of the real downturn there, in ’89. There were a ton of abandoned houses for us to chose from. Of course, we picked up a really nice house for $95k that would go for a lot more now. The funny thing was, there was a boom as we were leaving in ’94, which died just as we listed our house. We got an offer right away, which was low-ball so we didn’t take it, and we ended up taking less after dumping a few thousand in mortgage payments. We still made over 30k. The boss’ wife had been warning anyone that moved into the area not to buy a house, but for some reason we didn’t get that warning, which was a good thing.
There is a transition now as the amateur speculators get out of RE, and the banks figure out if they are going to stay open. The full market dynamic isn’t defined. Of course I never understood the RE market in Irvine, and I probably never will. The rest of us in the U.S. will hopefully never have to deal with housing prices that are such a high percentage of our income.
Exactly IR… the ‘shadow banking system’ created by all of this ‘innovation’ has been completely obliterated. Hundreds of billions of dollars already written off on bad / ludicrous lending in housing. What would you ask for if someone wanted to borrow $500K of your money to buy a house in the OC? How much would you want down?
And, BTW, the consumer spending that was fueled by the refinancing of the american home / ATM over the last few years is now drying up…people have been spending on their credit cards to keep up their payments in other areas. Now we have rising defaults on credit cards. This is going to get much worse before it gets better IMHO. This is why I believe we could see year 2000 prices at the very bottom.
The condos in TRidge are painted in Cardinal and Gold. I dunno, but I think SC played a great Rose Bowl… what did UCLA do?
Once upon a time I worked in Westwood. Driving through Westwood Village I saw this attorney looking guy driving a big SEL Benz with two bumper stickers:
“USC”
“My maid went to UCLA”
That was awesome. And, no, I didn’t go to USC, I actually went to a more expensive private school myself.
Given the current volumes, I’d venture to say your volume bounce is in the bag.
If you don’t get a meaningful and sustained increase in prices, it won’t be a datapoint meaningful of anything than some people who are forced to buy or sell for one reason or another (corporate relocation, divorce, estate sale, ect) either have to sell or cannot wait any longer.
Yeah, I have never seen a CONDO staged like that. You have to wonder who they plan on apprealing to.
In the early 90s, places like Moreno Valley lost 50% of their value.
Weren’t the Clampetts from Tenessee too?
Mabbe he found himself some gold in dar hills while hunting.
“Come and listen to a story about a man named Jed
A poor mountaineer, barely kept his family fed,
Then one day he was shootin at some food,
And up through the ground came a bubblin’ crude.
Oil that is, black gold, Texas tea.”
But, Mr. Moving Back.. I thought you should be moving to the 90310…
“Well the first thing you know ol’ Jed’s a millionaire,
Kinfolk said Jed move away from there
Said Californy is the place you ought to be
So they loaded up the truck and moved to Beverly.
Hills, that is.
Swimmin pools, movie stars.”
“Golden Brown” by The Stranglers came to mind.
I think they call it, what was that again… THE FINAL FOUR! Bowl games are for chumps. The BCS is whacked.
Purity is March Madness. Win or go home, game after game, until someone can truly say they are the best. SC had a nice little run there too, but they’ll be lucky to even get invited to the Big Dance this year…
our family room is blue, I think it might photograph that dark, but really it’s quite a bit lighter. I really like it, but I’m fighting any more strong colors in our house. I lost on the master bath too, that one would have you people in stitches. My wife and daughter like colors. I’m going to buy any color they want, as long as it’s eggshell.
+1
My current home was built in 1950. My previous home was built in the 1890’s. When I mentioned these “old” homes to a European co-worker, he laughed and explained that nothing in this country counts as ‘old’ yet…
Banks are getting creamed because of bad loans (with low or no DPs) that they can’t sell or are being forced to buy back.
Banks are like a manufacturer. We, the Joe Blows of America, are the factory, the fuel, the machines, the materials, etc. Banks assemble us into big loans of various kinds (cars, jewelry, credit cards, mortgages). Once assembled into loan product clusters, the banks then attempt to sell them to their customers, much as Best Buy might try to sell you an iPod. Only their customers aren’t us, they’re the overseas banks, investors, hedge funds, pension funds, yadda yadda.
So they’re experiencing a classic recessionary inventory cycle. They’ve got too much of their product (you and me assembled into loan products) but declining demand (from funds, foreigners, etc.). This puts them into a deflationary spiral. They know their best hope is to cull their inventory (you and me and our debt), take the tax write-off, and move on. Lather, gargle, repeat (or something like that).
Hey, at least LOANS are still made in the USA!
Actually I was thinking maybe a better analogy is the fishing industry. The banks lure us with shiny objects like cars and houses, and capture us with giant credit nets, so we can be sold off in bulk at a Japanese fish market. The smart ones escape before ending up as nigiri and hand rolls.
Could be the loan didn’t go through, or inspection showed a rat infestation, bad wiring, asbestos, who knows. Or as you imply, it could be the bank balking at the offer.
That said, I wouldn’t make any “rash” decisions when you come back to OC, as regards to real estate. Just watch the debacle. Easy does it!
Aww, c’mon, the 5 is only 12 lanes there. Not noisy at all. I’m sure someone will mention a soundwall now….
My house in the space coast had screaming orange Gator orange as a rug in the master bedroom, with not too bad dark blue wall paper. He was a high school football coach. Luckily, the rug had faded some since he had had it installed 16 years before we bought it.
All carpets pulled up and replaced with colors I like. But it is fun discussing their extremely bad taste.