Real Estate Advice Column

Liar Loan

Liar Loan

Well-known member
It's time we at TI started using our collective wisdom and knowledge to advise the unfortunate victims of the most recent housing bubble. And conversely, we should use our knowledge to help first time buyers looking for when they should jump into the market in a way that helps them avoid similar losses. So this thread will serve as an advice column of sorts to help others who are reading but may be too shy or embarrassed to speak up.

This week's question comes via MarketWatch:

www.marketwatch.com

My wife and I live ‘an average life’ in the Bay Area making $320K. Last year, we bought a house for $200K over asking — now we don’t want to live in it. Should we get professional help?

Have an issue with your financial adviser or looking for a new one? Email picks@marketwatch.com.
www.marketwatch.com www.marketwatch.com

My wife and I live ‘an average life’ in the Bay Area making $320K. Last year, we bought a house for $200K over asking — now we don’t want to live in it. Should we get professional help?​

Question: I was a victim of FOMO during the housing market craziness and bought a house for $200,000 over the asking price. Now house prices are coming back to reality, and I feel like I lost my hard-earned money. I don’t know what to do as I am living with constant stress thinking that I made a big financial mistake, and I’m not sure if I should consult a financing adviser for better decision-making and long-term investment planning.

After coming back from vacation, we didn’t end up relocating to the new house, because I wasn’t sure that I would be able to go that far from my job’s location and from our current friend circle. We decided to continue our stay at the condo we bought in 2016, and we rented our the house we bought this year (monthly mortgage is $4,450 inclusive of everything, however we’re only getting $3,250 in rent). I feel like I made a very bad financial decision and am doubting my skills to manage finances/investments effectively. What should we do?

OK TI it's your turn! How would you advise these unfortunate victims of FOMO to handle a peak bubble purchase which they have no intention of occupying?
 
But seriously... what is "professional help" going to do for them? Sounds like they are locked into a rental contract (unless they are renting it out month-to-month) so their options may be limited.

There are a few red flags with their purchase... they did not consider location (far from work and friends) and depending on the purchase price, paid way over asking (if indeed in the Bay area, could be 10% over or more).

I don't think financial advice is going to fix this... if the loss on rent and whatever they are paying for the condo is less than $4450, they are better off sticking with what they are doing. Seems like financially they are ok as take home after taxes is around $15k but there is no indication of what their other expenses are.

Ride out the rental contract, see where prices are at and either sell depending on the loss gap, re-rent or move in.

It's too ambiguous a question... no purchase price, how much did they put down... what type of financing are they using (if any).
 
Following as a person who would love to be told when to jump into the Irvine market as first time home buyers after having been renters for the last 22 years...

Let me know when we can get a 4br home for under a million dollars. Has to be in Irvine Unified due to special needs kids currently utilizing the special education services in HS and the adult transition program over the next 6 years.
 
brergnat said:
Let me know when we can get a 4br home for under a million dollars.
Click to expand...
This may be the closest you can get to a detached home:

www.redfin.com

121 Alhambra, Irvine, CA 92620 - 4 beds/3 baths

(CRMLS) Sold: 4 beds, 3 baths, 1479 sq. ft. condo located at 121 Alhambra, Irvine, CA 92620 sold for $1,050,000 on Feb 16, 2023. MLS# OC23000173. Highly Desirable Home in Woodbury, no common wall with neig...
www.redfin.com www.redfin.com

It's $1.1m and I'm not sure if that's a low list price or not.
 
irvinehomeowner said:
This may be the closest you can get to a detached home:

www.redfin.com

121 Alhambra, Irvine, CA 92620 - 4 beds/3 baths

(CRMLS) Sold: 4 beds, 3 baths, 1479 sq. ft. condo located at 121 Alhambra, Irvine, CA 92620 sold for $1,050,000 on Feb 16, 2023. MLS# OC23000173. Highly Desirable Home in Woodbury, no common wall with neig...
www.redfin.com www.redfin.com

It's $1.1m and I'm not sure if that's a low list price or not.
Click to expand...
Way too small. We need more than a shoebox. 1750sq ft+ only. Doesn't need to be detached.
 
brergnat said:
Way too small. We need more than a shoebox. 1750sq ft+ only. Doesn't need to be detached.
Click to expand...
Have you tried the Lennar homes in the Great Park? Lennar has been lowering prices and they have a 4 br 3 story on redfin for slightly over a million. Includes "everything" so you won't be paying a lot for upgrades.

www.redfin.com

173 Biome, Irvine, CA

Multi-family (2-4 unit) located at 173 Biome, Irvine, CA 92618. View sales history, tax history, home value estimates, and overhead views.
www.redfin.com www.redfin.com
 
irvinehomeowner said:
Doesn't need to be detached may help, here's another townhome:

www.redfin.com

21 Salton, Irvine, CA 92602 - 4 beds/3 baths

(CRMLS) Sold: 4 beds, 3 baths, 2004 sq. ft. townhouse located at 21 Salton, Irvine, CA 92602 sold for $1,140,000 on Feb 14, 2023. MLS# OC23000069. Premium location with walking distance to Northpark Plaza,...
www.redfin.com www.redfin.com
Click to expand...
TUSD though. IUSD is a requirement for brergnat
 
Ready2Downsize said:
Have you tried the Lennar homes in the Great Park? Lennar has been lowering prices and they have a 4 br 3 story on redfin for slightly over a million. Includes "everything" so you won't be paying a lot for upgrades.

www.redfin.com

173 Biome, Irvine, CA

Multi-family (2-4 unit) located at 173 Biome, Irvine, CA 92618. View sales history, tax history, home value estimates, and overhead views.
www.redfin.com www.redfin.com
Click to expand...
3 story, attached, paying perpetual Mello-Roos for “Great” Park facilities that everyone and their mother can utilize? nice.
 
The Motor Court Company said:
3 story, attached, paying perpetual Mello-Roos for “Great” Park facilities that everyone and their mother can utilize? nice.
Click to expand...
I tried to tell him/her the negatives of those three story units and he/she promptly told me they love them and want to buy one. As for mello.......... you can't have everything in Irvine. That's why when u buy elsewhere and get all the boxes checked except for being in Irvine, you will always and forever hear................. "but it's not Irvine".
 
just FYI, for every stairs in the house, you are taking away around 90 sqft of usable space (sqft of stair, landing etc)

A 1750 sqft 3 story place is almost as big as a 1550 single floor in actual usage.
 
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Ready2Downsize said:
I tried to tell him/her the negatives of those three story units and he/she promptly told me they love them and want to buy one. As for mello.......... you can't have everything in Irvine. That's why when u buy elsewhere and get all the boxes checked except for being in Irvine, you will always and forever hear................. "but it's not Irvine".
Click to expand...
Correction, you can't have "everything" unless you have $$ ;)

You'll also hear people not in Irvine say "but I don't play mello roos..."
 
sleepy5136 said:
Correction, you can't have "everything" unless you have $$ ;)

You'll also hear people not in Irvine say "but I don't play mello roos..."
Click to expand...
Alot of houses don't pay mello in Irvine now. You'll always have people who look at "value" and they will be more likely to buy somewhere with no mello and the lowest price per sq foot. When things go back up, value lags in gains.
 
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