A new escrow thread for a new housing market...

Graphix - Would you buy in March, seen the jan, feb, march, april, may, june data and bet that Irvine home prices be down another 15-20% down from now? I'm confused by this. Maybe you can hope it to be so because of your stance and views on things, but for someone that bought in March? why would you BET on it?



As for IPO, he sold and was hoping/betting for home prices to go down. Why would he intentionally post a rosy picture of home prices in IRVINE going up? He doesnt like it but he said he accepts that it was a mistake for him to sell. That's the extent of his history that I've read.



[quote author="graphrix" date=1246283945]



I'm confused by this remark. Ipo sold, <strong>rents</strong> a bigger place, and hopes for said bigger place to come down in price, so that it would be more affordable for him to buy vs. rent. As far as I can tell, Ipo would welcome another 15-20% drop with open arms.



Am I not understanding your point, or do hbguybill and I follow the blog more than you do? Because from these comments of yours, either you are not following the blog, or you are not conveying your point very well.</blockquote>
 
Some around here do not understand what a dead cat bounce is, nor do they remember the same dead cat bounce of 93. <a href="http://www.ritholtz.com/blog/2009/06/street-signs-housing-recovery-stalling/">They sound like Lawrence Yun, and like Barry, I think he is totally clueless.</a>
 
[quote author="graphrix" date=1246376233]Some around here do not understand what a dead cat bounce is, nor do they remember the same dead cat bounce of 93. <a href="http://www.ritholtz.com/blog/2009/06/street-signs-housing-recovery-stalling/">They sound like Lawrence Yun, and like Barry, I think he is totally clueless.</a></blockquote>


I agree it is a dead cat bounce and things will turn worse from here over the next 12+months. But isn't Irvine inventory pretty low right now? (Not counting our favorite shadow inventory). That would probably give people the impression they can put up WTF prices with impunity.
 
[quote author="IACRenter" date=1246406040][quote author="graphrix" date=1246376233]Some around here do not understand what a dead cat bounce is, nor do they remember the same dead cat bounce of 93. <a href="http://www.ritholtz.com/blog/2009/06/street-signs-housing-recovery-stalling/">They sound like Lawrence Yun, and like Barry, I think he is totally clueless.</a></blockquote>


I agree it is a dead cat bounce and things will turn worse from here over the next 12+months. But isn't Irvine inventory pretty low right now? (Not counting our favorite shadow inventory). That would probably give people the impression they can put up WTF prices with impunity.</blockquote>
It is WTF low to be honest. One of the main reasons for that is that there aren't many organic sellers out there because many of them don't have much equity in their homes. The majority of active listings in Irvine are short sales. It's a very weird market to say the least. I'd be willing to bet that there are many folks who are riding the "free rent" gravy train in Irvine. To give you an example, one of my friends has stopped paying his mortgage back in Nov 2008 and through this weekend has not even received a Notice of Default. The bank was calling them every few days and sending a few letters a month but that has actually pretty much stopped since March/April...it's like Bank of America doesn't care about their loan and foreclosing on their property. haha
 
[quote author="usctrojanman29" date=1246408766][quote author="IACRenter" date=1246406040][quote author="graphrix" date=1246376233]Some around here do not understand what a dead cat bounce is, nor do they remember the same dead cat bounce of 93. <a href="http://www.ritholtz.com/blog/2009/06/street-signs-housing-recovery-stalling/">They sound like Lawrence Yun, and like Barry, I think he is totally clueless.</a></blockquote>


I agree it is a dead cat bounce and things will turn worse from here over the next 12+months. But isn't Irvine inventory pretty low right now? (Not counting our favorite shadow inventory). That would probably give people the impression they can put up WTF prices with impunity.</blockquote>
It is WTF low to be honest. One of the main reasons for that is that there aren't many organic sellers out there because many of them don't have much equity in their homes. The majority of active listings in Irvine are short sales. It's a very weird market to say the least. I'd be willing to bet that there are many folks who are riding the "free rent" gravy train in Irvine. To give you an example, one of my friends has stopped paying his mortgage back in Nov 2008 and through this weekend has not even received a Notice of Default. The bank was calling them every few days and sending a few letters a month but that has actually pretty much stopped since March/April...it's like Bank of America doesn't care about their loan and foreclosing on their property. haha</blockquote>


I think its also the fact that people have a sense of entitlement to profits when they sell their house now. Even if they have equity and aren't underwater, they figure they'll just wait 5 more years until they can sell at the next peak.



I also know more then a few people who *are* underwater, but have no plans of walking away. The only thing that will kill them is if interest rates go up a lot on the adjustables and they can't refinance.
 
[quote author="26w100k+" date=1246411140]I think its also the fact that people have a sense of entitlement to profits when they sell their house now. Even if they have equity and aren't underwater, they figure they'll just wait 5 more years until they can sell at the next peak.



I also know more then a few people who *are* underwater, but have no plans of walking away. The only thing that will kill them is if interest rates go up a lot on the adjustables and they can't refinance.</blockquote>


What you are describing is a group of delusional people who don't realize they are going to be foreclosure statistics.
 
[quote author="IrvineRenter" date=1246411965][quote author="26w100k+" date=1246411140]I think its also the fact that people have a sense of entitlement to profits when they sell their house now. Even if they have equity and aren't underwater, they figure they'll just wait 5 more years until they can sell at the next peak.



I also know more then a few people who *are* underwater, but have no plans of walking away. The only thing that will kill them is if interest rates go up a lot on the adjustables and they can't refinance.</blockquote>


What you are describing is a group of delusional people who don't realize they are going to be foreclosure statistics.</blockquote>


These people are all saying "I'll just lease it out for a few years and sell when the market comes back"



CR had a funny video driving around CDM a few months ago showing all the "for lease" signs there.
 
Yes but the people with fixed rate loans aren't going to be foreclosure stats, they will simply be keeping the inventory low.
 
[quote author="usctrojanman29" date=1246408766][quote author="IACRenter" date=1246406040][quote author="graphrix" date=1246376233]Some around here do not understand what a dead cat bounce is, nor do they remember the same dead cat bounce of 93. <a href="http://www.ritholtz.com/blog/2009/06/street-signs-housing-recovery-stalling/">They sound like Lawrence Yun, and like Barry, I think he is totally clueless.</a></blockquote>


I agree it is a dead cat bounce and things will turn worse from here over the next 12+months. But isn't Irvine inventory pretty low right now? (Not counting our favorite shadow inventory). That would probably give people the impression they can put up WTF prices with impunity.</blockquote>
It is WTF low to be honest. One of the main reasons for that is that there aren't many organic sellers out there because many of them don't have much equity in their homes. The majority of active listings in Irvine are short sales. It's a very weird market to say the least. I'd be willing to bet that there are many folks who are riding the "free rent" gravy train in Irvine. To give you an example, one of my friends has stopped paying his mortgage back in Nov 2008 and through this weekend has not even received a Notice of Default. The bank was calling them every few days and sending a few letters a month but that has actually pretty much stopped since March/April...it's like Bank of America doesn't care about their loan and foreclosing on their property. haha</blockquote>


This is going to be a very painfully drawn out recovery for RE. I hope Obama is not counting on this leg to prop up our economy soon. It is a sad commentary that it is such a good deal right now to be an over leveraged home owner. You stop paying for the mortgage and live rent free for 12+ months and/or keep collecting rent. Plus they get to keep their HELOC money too after the foreclosure. The only penalty will be a poor credit score for ~4-5 yrs. They can rent for several years and get back in the market later. I do have sympathy if you lost your job, health problems, or personal issues (i.e. divorce etc...).
 
[quote author="IACRenter" date=1246421219][quote author="usctrojanman29" date=1246408766][quote author="IACRenter" date=1246406040][quote author="graphrix" date=1246376233]Some around here do not understand what a dead cat bounce is, nor do they remember the same dead cat bounce of 93. <a href="http://www.ritholtz.com/blog/2009/06/street-signs-housing-recovery-stalling/">They sound like Lawrence Yun, and like Barry, I think he is totally clueless.</a></blockquote>


I agree it is a dead cat bounce and things will turn worse from here over the next 12+months. But isn't Irvine inventory pretty low right now? (Not counting our favorite shadow inventory). That would probably give people the impression they can put up WTF prices with impunity.</blockquote>
It is WTF low to be honest. One of the main reasons for that is that there aren't many organic sellers out there because many of them don't have much equity in their homes. The majority of active listings in Irvine are short sales. It's a very weird market to say the least. I'd be willing to bet that there are many folks who are riding the "free rent" gravy train in Irvine. To give you an example, one of my friends has stopped paying his mortgage back in Nov 2008 and through this weekend has not even received a Notice of Default. The bank was calling them every few days and sending a few letters a month but that has actually pretty much stopped since March/April...it's like Bank of America doesn't care about their loan and foreclosing on their property. haha</blockquote>


This is going to be a very painfully drawn out recovery for RE. I hope Obama is not counting on this leg to prop up our economy soon. It is a sad commentary that it is such a good deal right now to be an over leveraged home owner. You stop paying for the mortgage and live rent free for 12+ months and/or keep collecting rent. Plus they get to keep their HELOC money too after the foreclosure. The only penalty will be a poor credit score for ~4-5 yrs. They can rent for several years and get back in the market later. I do have sympathy if you lost your job, health problems, or personal issues (i.e. divorce etc...).</blockquote>
There were several reasons for my friends stopping their mortgage payments...1) the wife lost her job so they would have to dig into their savings to pay the mortgage (they have 2 kids) 2) They bought back in 2005 with only 5% down 3) They have an interest only loan and 4) They are at least 10-15% underwater. I'm just glad that they are able to increase their savings during this time. The banks and wall street got their bailout, there is there form of a bailout. I'm sure people may have various opinions about them and what they are doing, but I would have made the same decision to stop paying the mortgage if I were in their situation.
 
[quote author="usctrojanman29" date=1246434350]

I'm sure people may have various opinions about them and what they are doing, but I would have made the same decision to stop paying the mortgage if I were in their situation.</blockquote>


I would have as well assuming the mortgage debt was non-recourse...



I wish I had a mortgage to stop paying today. I'd love some free rent. I just filed my UI claim. As of today, I am no longer officially employed.
 
[quote author="ipoplaya" date=1246436570][quote author="usctrojanman29" date=1246434350]

I'm sure people may have various opinions about them and what they are doing, but I would have made the same decision to stop paying the mortgage if I were in their situation.</blockquote>


I would have as well assuming the mortgage debt was non-recourse...



I wish I had a mortgage to stop paying today. I'd love some free rent. I just filed my UI claim. As of today, I am no longer officially employed.</blockquote>
Sorry to hear that IPO. Let me know if you want me to give you the contact info to my consulting firm. Their debt is non-recourse, it was the original first and second mortgage to purchase the property.
 
[quote author="ipoplaya" date=1246436570]I would have as well assuming the mortgage debt was non-recourse...



I wish I had a mortgage to stop paying today. I'd love some free rent. I just filed my UI claim. As of today, I am no longer officially employed.</blockquote>


All debt is non-recourse unless the bank goes through the judicial foreclosure process, which almost never happens. I saw my first NTS in the paper today for one, and we all know how long I have been following this.



Ipo, I am truly sorry to here about your job loss. I was always afraid high quality employees, like yourself, would lose their jobs, but I never thought that you would. I wish there was something I could do to hook you up with a real job, but in the mean time maybe I can help you pay a few bills. Of course we will make sure it doesn't effect your UI.



I always worried that the economy would suck this bad, now it sucks more to hear it happening in real time and to people I know.
 
Just to clarify I did buy in March. I tried to put a link but it wasn't working. If you want to see it go to Zillow and type in 33771 Robles Dr 92629. I bought for so many reasons. I rented for 11 years and when I saw my now house my wife and I were blown away. We had decided on Irvine but the places we were interested in were still a little out of my range. We have never seen anything in South OC like our house for anywhere near the price. The house is very modern and my wife and I both have the same taste. I was able to get a 30 year fixed at 5 1/8 with no points which I thought was great for a non conforming. But I sill firmly believe we will see more of a drop in Irvine and most of the desirable areas including where I live. I know alot of people who are sitting in their high end homes not paying their mortgage. Some for over 1 year and their bank hasn't even called. I know alot of people that are losing their jobs. I know alot of people who are self employed who have seen their incomes drop well over 50%. The banks are still not lending. The only reason we were able to get our house is because we put almost 300K down and we have no debt. Our debt ration was about 30 over 30. And the bank was still making us write our life stories. Alt A's are just beginning to re-set. Interest rates will eventually start going up. It is really scary in California now. No companies are hiring. The economy will eventually get better but boy it is going to be painful in the process. Good Luck to everybody and Ipop sorry to hear about you. I hope you find something real soon.
 
[quote author="graphrix" date=1246457287][quote author="ipoplaya" date=1246436570]I would have as well assuming the mortgage debt was non-recourse...



I wish I had a mortgage to stop paying today. I'd love some free rent. I just filed my UI claim. As of today, I am no longer officially employed.</blockquote>


All debt is non-recourse unless the bank goes through the judicial foreclosure process, which almost never happens.

</blockquote>


I thought non purchase money 2nds wiped out in foreclosure or paid short in a short sale have 4 years to sue for deficiency. Is that incorrect?
 
July's early closes are coming in quite high price-wise. They are a bit of a departure as many our lower-end, which has been keeping the averages down recently, vs. the smaller discounting on higher end properties.



<img src="http://www.ipoplaya.com/070509.jpg" alt="" />
 
Seems that the average discount from the peak is only 15-16% and only one property in Turtle Rock (20 Silver Crescent ) was sold for 40% off peak. Man.... this is taking way too long, I was atleast hoping to see an average discount of 25% discount in Irvine by this time. Anyone else here starting to feel very impatient like me? Now Laguna Crossing and Orchard Hills start date has moved to 2013... what the heck?



OK, I admit it. I am little discouraged.
 
[quote author="PANDA" date=1246846021]Seems that the average discount from the peak is only 15-16% and only one property in Turtle Rock (20 Silver Crescent ) was sold for 40% off peak. Man.... this is taking way too long, I was atleast hoping to see an average discount of 25% discount in Irvine by this time. Anyone else here starting to feel very impatient like me? Now Laguna Crossing and Orchard Hills start date has moved to 2013... what the heck?



OK, I admit it. I am little discouraged.</blockquote>


I bought my place for 30% off its previous sale price. I think there are good buys here and there if you are willing to look and do a little fixup work yourself.
 
[quote author="26w100k+" date=1246857517][quote author="PANDA" date=1246846021]Seems that the average discount from the peak is only 15-16% and only one property in Turtle Rock (20 Silver Crescent ) was sold for 40% off peak. Man.... this is taking way too long, I was atleast hoping to see an average discount of 25% discount in Irvine by this time. Anyone else here starting to feel very impatient like me? Now Laguna Crossing and Orchard Hills start date has moved to 2013... what the heck?



OK, I admit it. I am little discouraged.</blockquote>


I bought my place for 30% off its previous sale price. I think there are good buys here and there if you are willing to look and do a little fixup work yourself.</blockquote>


Thanks 26 and congratulations on your new purchase. It appears that only 1.5% of the closings in Irvine from IPO's list sold for 30% or greater discount than the previous sale price. Definitely the sweeter deals exist in VoC. It seems very clear to me that renting in Irvine for two more years and buying in 2012 is the right move. 26, was your property a short sale or a fixer upper? Seeing that OH and LC has recently moved to 2013, does that mean that TIC sees a true turn around in real estate by 2012-2013?
 
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