Laguna Altura homes

[IndieDev]

This is the most amateurish counter-bet I have seen. At least propose a widely accepted source for medium price that can be mutually agreed upon and define how much lower. You can easily have statistical fluctuations of +/- 3%.

I am a bear when it comes to Irvine, and I will accept your wager ($100 to $100,000, whatever cash you have after escrow), but the wager I will counter with is that the median Irvine sold prices YOY will be lower in February 2013 than they are now in February 2012.

I don't know any sources for "medium price", nor would I use such a metric. Maybe I'm too amateur.

Considering you think going to small claims court is not about the money, but about the principal...let's go easy on someone who mixes up "median" and "medium."

My iPhone 4GS made that auto-correction. It's a limitation of the technology.

Right. Of course it did.

Let's be honest trace, I make this thread exciting which is why you're here following me around.

I'll follow you to the end of the earth, baby. Keep it coming!

I'm not going to lie, I get this kind of attention from ladies regularly.

 

[IndieDev]

i am fine with you thinking its a dumb move to lose $75k as well.  i think i am pretty analytical and not making the decision lightly.  of course you think you are smarter and probably dont think you can get any insight from others so i am wasting energy explaining my logic but here goes nonetheless.  between moving an extra time and renting a 4b in WB to wait for that WB house, i would spend over $70K so if that property falls $75K, did I really gain anything?  yes my prop tax basis is lower but from a total $$$ POV, what big thing changed?  not to mention, we would have to move twice instead of once and with expanding family, we really want to feel settled but thats all the emotional part of the equation.

I'm not going to tell you what to do with your family, but you just admitted there is a big emotional aspect to this purchase, when has an emotional purchase ever been a great financial decision? Rarely, I find. Additionally, I will say that your assumption that 75k is the total downside, and that rents won't correct seems very optimistic.

But if you believe you have thought this decision out thoroughly, and are comfortable, then why does my opinion matter? It seems you're getting angry because I'm causing you to second guess yourself, unless you're insulted that I call TIC products "stucco boxes", and I don't take you as a TIC fan boy. My opinion, though highly informed and respected, is just an opinion. Don't get hurt feelings over me, or anyone else here. That's pointless.

 

[IndieDev]

IHS actually clarifies when pressed on why the build quality is bad or what to look for so he is at least helpful.

IHS > indie

i used to like indie, i still do actually. seems like a smart guy.  does make the threads more interesting. my only problem with him is he talks a big game then when challenged does not back it up and uses his "principals" as an excuse - which adds an element of fakeness to his online persona.  reminds me of a school yard bully who is finally challenged and then backs down.

Step your game up indie.

I don't know if you're serious, but I did consider akim's bet, and didn't run away. I think I've explained (as well as others), why the bet is ludicrous at best and even akim himself admitted fully that the bet is constructed to heavily favor him, over anyone who would take that bet, and it wasn't me who backed down once a reasonable "coin toss" bet was put on the table.

[quote author=akim997]haha.. of course i had my chest out when the bet was in my favor.[/quote]

That being said, I'm glad you still like me qwerty, and you know why you like me? It's because I don't pull any punches or spout BS. I'll never say things like "TIC will stop construction of homes to stabilize prices" or explain a market by calling it "different" because that is the opinion of the uninformed. Whether you like it or not, you, and others like rkp, read my posts because you find something of value. Otherwise, why would you even bother? I'm certainly not the most ignored person on TI.

 

[IndieDev]

Regardless of what *you* interpret IHS as saying... he's said the same thing before (way before you came along)... but won't confirm it now (even though I've caught it in quotes) because he wants to continue to stay your buddy. In fact, how do you interpret this?

IHO, you simply don't know what you're talking about. I've tried goading you into educating yourself by friendly discussion, personally insulting you, nothing works but I've tried many avenues, I really have, but you refuse to even do the most basic research as to why you have an uninformed opinion because you simply believe you're right. So I'm going to make it really simple for you, and force feed you some basic macro/micro knowledge.

Companies don't stop making product to "constrict supply" in some vain effort to maintain prices, unless the product they are selling is an extremely precious commodity for which they control the supply (take diamonds or oil for example). TIC doesn't sell a precious commodity, nor do they even control the housing supply in Irvine completely. So what you're saying is uninformed and any IVC student taking a freshman economics class would know how uninformed you sound when you say that. If what you're saying is true, why didn't Bren stop building the 2010 collection since TIC most likely did its market analysis and planning in 2007-2009, possibly some of the worst price depreciation in market history. Why didn't they pull the chains and halt production? It's because what you're saying is sh*t.

The reason why normal profit seeking companies stop building or making or manufacturing product is because they can't make money by selling it. Let me clarify that, they can't make a profit by selling it. Therefore, if TIC were to stop building homes, it's because they can't make any profit doing it, plain and simple, the end.

If TIC did what you claim, they would have left a lot of money on the table (there is an actual commonly used equation to calculate this amount) in 2010, because 2012's Irvine housing market is certainly not as lush as 2010s. A lot of TIC analyst would have been fired (or eaten alive by Bren). But TIC isn't uninformed like you are, and they know how to make money.

This is a clear example of Correlation does not imply Causation, which is a commonly used term in business, engineering, and numerous sciences. Correlation between two variables, in your case the amount of homes TIC makes, and the price of homes in Irvine, is simply you misunderstanding a basic economic concept when it comes to the behavior of companies/profit seeking firms.

There. I've done my best, and you can go on continuing to think that TIC will constrict the supply of homes to control prices, and even if you discount my opinion (even though I have an advanced degree from a respected institution), at least go out to your public library and read about guys like William Stanley Jevons, or Antoine Augustin Cournot, who wrote great books of which my opinion is based upon. 

Have a nice day.

 

[irvinehomeowner]

@Indie:

You always go back to that "leave the money on the table" argument which sounds exactly like water cooler logic.

There is no money to be left on the table if no one is buying at the prices you are selling. Like I explained before with the widget, sell 10 homes a year for 3 years at $1mil a piece through a middle man or sell 100 homes for $800k yourself in just 1 year 3 years later... doesn't sound like that money ever left the table. That sounds very much like this:

The reason why normal profit seeking companies stop building or making or manufacturing product is because they can't make money by selling it. Let me clarify that, they can't make a profit by selling it. Therefore, if TIC were to stop building homes, it's because they can't make any profit doing it, plain and simple, the end.

There you go with semantics again... how is that different from what I said other than you think it is? Let me see... credit is tightening, bubble is deflating... we can't make enough profit so let's stop building until we can figure out a way to make money. When I talk about price preservation... isn't that referring to profitability for TIC? I guess now you are *finally* understanding what I'm saying.

And I've never said the SOLE purpose of TIC's reduction in new home construction was to preserve pricing... I said that is one of the things they could do (among the many others that IHS has mentioned). The focus was on the fact that they COULD stop new construction if they wanted to because they were the land owner... your argument was they never have stopped new construction (and you won't admit that because Indie can NEVER be wrong... not even on Antioch). Everything else is theory... so I don't even really care if I'm right or not... only *you* have that problem.

Now my turn to be Indie:

What respected institution? What advanced degree? For all we know you're just some old guy who gets kicks out of calling people names on the Internet.

You claim to be so rich... so why waste your time here? Most rich guys I know don't bother with such trivial things as a real estate forum (or stalk people who they don't agree with)... at least not to the point of obsession you do.

Still waiting for you to follow through on your accusation that I'm not an Irvine home owner too (typical Indie style... never addresses the things he can't answer to).

And what I really find funny... how much you and IHS are into each other. I didn't want to mention this out of respect for IHS, but for all the time I've known IHS, I've never seen him so far into someone's jock... talking about being separated at birth and how you are so smart and well off. Either you have something on him or you must be really as rich as you claim and he's trying to bid on a contract for you. I've only seen him act like that with certain posters but those were his friends. And it's reciprocal... you're in this thread asking for his help... "IHS... please help me!"... the mighty Indie calling out for support from IHS because he's feeling piled on... poor you.

And thank you... my day is starting off rather nice.

 

[rkp]

I'm not going to tell you what to do with your family, but you just admitted there is a big emotional aspect to this purchase, when has an emotional purchase ever been a great financial decision? Rarely, I find. Additionally, I will say that your assumption that 75k is the total downside, and that rents won't correct seems very optimistic.

But if you believe you have thought this decision out thoroughly, and are comfortable, then why does my opinion matter? It seems you're getting angry because I'm causing you to second guess yourself, unless you're insulted that I call TIC products "stucco boxes", and I don't take you as a TIC fan boy. My opinion, though highly informed and respected, is just an opinion. Don't get hurt feelings over me, or anyone else here. That's pointless.

I am not stubborn or think that I know everything and actually appreciate second guessing myself.  When you occasionally post intelligently, you do add value so your opinion is yet another point that gets mixed into all the variables to help me make the most informed decision possible. 

I do realize that calculating the total rent and saying that amount is one and the same as the possible loss isnt accurate.  I really have to look at what my outlay in interest payments, prop tax, opportunity cost of down payment, etc and add that in.  In any case, the point is that there is a cost for shelter over ones head and at a certain point, that cost can be greater than the possible decline of the property.

Instead of simply saying that I am being optimistic with a 7% decline for WB and rents holding, give me some of that Indie knowledge on what you see happening.  You bought in CDM and as IR always noted, there is a substitution effect.  If TIC drops substantially, it will also impact CDM, yet you bought and no one has called you foolish or ignorant. 

 

[IndieDev]

There is no money to be left on the table if no one is buying at the prices you are selling. Like I explained before with the widget, sell 10 homes a year for 3 years at $1mil a piece through a middle man or sell 100 homes for $800k yourself in just 1 year 3 years later...

See, now you're learning. I taught you well son. Push and dig a little deeper, you're almost there, but not quite.

And I've never said the SOLE purpose of TIC's reduction in new home construction was to preserve pricing... I said that is one of the things they could do (among the many others that IHS has mentioned).

Yikes, spoke to soon. Like I said IHO, read a few books from the authors I suggested, it would help you gain more understanding.

And what I really find funny... how much you and IHS are into each other. I didn't want to mention this out of respect for IHS, but for all the time I've known IHS, I've never seen him so far into someone's jock... talking about being separated at birth and how you are so smart and well off. Either you have something on him or you must be really as rich as you claim and he's trying to bid on a contract for you. I've only seen him act like that with certain posters but those were his friends. And it's reciprocal... you're in this thread asking for his help... "IHS... please help me!"... the mighty Indie calling out for support from IHS because he's feeling piled on... poor you.

We have a special relationship. I think of IHS as a brother from another mother, and our friendship is pure, no money involved. I don't intend to take him away from you, as you have a great respect and desire for his friendship. No need to be jealous. We just click in many ways. I'm sure IHS still cherishes your friendship even if sometimes he doesn't outright say it. He's a great guy.

 

[rkp]

I have to wonder if IHS is actually making fun of Indie this whole time like Colbert with republicans...

 

[IndieDev]

I'm not going to tell you what to do with your family, but you just admitted there is a big emotional aspect to this purchase, when has an emotional purchase ever been a great financial decision? Rarely, I find. Additionally, I will say that your assumption that 75k is the total downside, and that rents won't correct seems very optimistic.

But if you believe you have thought this decision out thoroughly, and are comfortable, then why does my opinion matter? It seems you're getting angry because I'm causing you to second guess yourself, unless you're insulted that I call TIC products "stucco boxes", and I don't take you as a TIC fan boy. My opinion, though highly informed and respected, is just an opinion. Don't get hurt feelings over me, or anyone else here. That's pointless.

I am not stubborn or think that I know everything and actually appreciate second guessing myself.  When you occasionally post intelligently, you do add value so your opinion is yet another point that gets mixed into all the variables to help me make the most informed decision possible. 

I do realize that calculating the total rent and saying that amount is one and the same as the possible loss isnt accurate.  I really have to look at what my outlay in interest payments, prop tax, opportunity cost of down payment, etc and add that in.  In any case, the point is that there is a cost for shelter over ones head and at a certain point, that cost can be greater than the possible decline of the property.

rkp, I have no doubt you have done your due diligence. I'm not calling you foolish or ignorant, I'm not sure where you got that from. I'm simply pointing out that your anger is being misdirected. If you're mad at me, you have to ask yourself why? Is it because of your frustration with Irvine pricing, or is it because I'm trashing Irvine products. If you're frustrated with pricing, you should direct that anger at numerous other places besides myself, banking conglomerates, government housing agencies, TIC, the list is long. If you're mad because I think TIC products are overpriced and crappy, you're mad at my opinion. If you think my opinion is causing you to second guess yourself, that could be true, but I think you're intelligent enough to know what I offer isn't gospel. In that case my opinion may be stoking the fires of your own self doubt that is already inside of you. That's important to distinguish.

Instead of simply saying that I am being optimistic with a 7% decline for WB and rents holding, give me some of that Indie knowledge on what you see happening.  You bought in CDM and as IR always noted, there is a substitution effect.  If TIC drops substantially, it will also impact CDM, yet you bought and no one has called you foolish or ignorant.

I see obvious weakness in Woodbury product as a whole, resale or new. Since prices peaked at around $360/sqft in 2010, the median is down over 17% (but I'm sure you knew this because you did your due diligence). People attack the median because of the housing mix, etc, but for nearly a 100 years, any financial institution worth its weight has used median pricing as a reliable measure of market trends, and market strength. Because of this, I feel 7% is a bit optimistic on your part, during an election year, rising commodity prices, and many other factors that can cause true inflation, I see housing prices suffering, but that's just an opinion.

As for my situation, you have to realize there are a few factors with my decision that are not common for most buyers who are shopping for TIC products:

- I'm not a first time home buyer, I've seen the market rise and fall, I'm fully aware of what usually happens during these cycles.
- I'm not financing, so my outlay is slightly different than someone with a 30 fixed.
- CDM hasn't been at rental parity for a long time, even before the last bubble began. CDM is actually prime real estate in the truest sense of the word, unlike Irvine which is a great hood, but prices over the past 6-7 years are mostly based on a manufactured image driven by TIC's marketing gurus.
- You're right, substitution is a valid factor to consider, but I'd venture to say buyers of Irvine TIC products do not usually cross-shop with products in CDM. They are different cities that attract different demographics. Laguna Beach, Newport Coast, Huntington, Dana Point at Monarch Beach, San Clemente coastal, most of West LA, and other similar communities would be better substitutions.

That being said, people are free to call me foolish at their whim, I've been called worse. I'll try to live with being called names as I gaze at the Avalon bound ferries, and fishing boats from my backyard. 

 

[irvinehomeshopper]

To clear the air I have respect for Indie for his economic insight. Unlike many of you your objectives are tainted with an emotional factor and especially for IHO. As a result the conclusion drawn often were skewed. Indie on the otherhand isolates his sentiment from his Irvine pricing analysis as an outsider doing an audit for what is the face value of the products.

I see this on the Pawn Star show a lot when someone brought in his childhood toys and he asked for several thousand dollars when in fact the toy is really worth 20 bucks market value. The sentimental value to him may worth several thousand dollars but it is still a crappy toy. Irvine is no different. The unicorn is in the eye of the beholder willing to pay thousands of dollars for a $20 crappy toy. This crappy toy owner may be all of you. Indie and I know that crappy toy's going rate is $20 and many of you are willing to pay thousands for it. That sentiment is the power of marketing in convincing you that $20 toy is worth thousands.

To IHO, TIC can't stop building period. Land pimping is the only way TIC can make money. Suspending construction is not preserving prices. By constricting supply meant to build up demand for that big bang grand opening absorption that TIC could press release to build consumers "sentiment".  Consumers dictate the final selling price and not TIC. If the projects don't sell resale homeowners can't use the new home benchmark price as the comp. TIC has to watch 2 factors. Consumers willingness and resale competitions.

To wipe out resale competitions TIC must convince the buyers that resales have dated floor plans and undesirable elements not suitable for today's lifestyle.

The only way to convince consumer willingness is to create hype and imaginary demand. One technique is to imply traffic such as 5,000 hits on the website which could be implied as inquiries or interests. Another could be 9,000 freeloaders for burgers and ice creams deemed as interested buyers walking the model homes on opening day. Inquiries made on the website by leaving a email address could be construed as priority registrations. There are hundreds of technique the PR expert can use to create this imaginary demand to trick the consumers paying the asking price. The message is "if you don't pay full price then someone else will and you will miss your chance."

A smart consumers like Indie and me of course won't fall for this type of kindergardener PR technique tailored to you. Why are we so sharp at what we do because we are well educated, analytical and experienced. We are leaders and not followers. The rest of you will be afraid that if you don't buy now someone else will take away your favorite choice lot or house. Let me clarify this. What ever you fall in love with there be thousands that will be made from the same cookie cutter. There is no such thing as one of a kind or special in a tract home. Every third house down the street is your house on the same rectangular postage stamp plot. Here you go. If you missed your chance then you will have many more unlimited chance to buy the same and exact layout. The model home sales people are just like a used car salesman. You never want to display your enthusiasm.

Consumers banning together as a whole control prices and not the home resellers or TIC. TIC will redesign or offer free incentive to move products. You figure if you want to pay full price you should deserve to have everything you want like a driveway, yard, the 3rd car, that formal dining or the extra room down that save you from a home tour embarrassment. TIC will have to put all those thing back in order to sell homes.

Seriously, this blog has a lot of amateurs that without me or Indie the echo chamber will explode.


 

 

[rkp]

Irvine is no different. The unicorn is in the eye of the beholder willing to pay thousands of dollars for a $20 crappy toy. This crappy toy owner may be all of you. Indie and I know that crappy toy's going rate is $20 and many of you are willing to pay thousands for it. That sentiment is the power of marketing in convincing you that $20 toy is worth thousands.

You are completely right that these are cookie cutter houses on small lots and most of us feel they are overpriced.  But your sentiment above is the problem.  You make it seem like people are paying 10 times or more than they should when reality is that its more like 10-30% more than they should.  And you continue to insist its crappy which is challenging as this is something people are putting their life savings or major part of their savings into.  Are they being sensitive or are you being insensitive?  And esp with your knowledge and background, you probably do mean crappy in terms of build quality but I also assume that most people looking for a new single family home between the various builders in SoCal will get similar product.  You know this industry better than us so your input would be helpful.  I have no idea if New Home Company, Lennar, Toll Brothers, etc do better than Irvine Pacific or not or even what to look for.

You might be sharp at what you do but I imagine many of the forum members are sharp at what they do.  I drive major negotiations with world wide governments and on an average year, I personally work with 10 or Prime Ministers or Presidents of developing countries.  Respect that others are intelligent as well.  Indie screams for respect by repeating how smart and rich he is but he rarely demonstrates that he deserves it.

 

[irvinehomeowner]

To clear the air I have respect for Indie for his economic insight. Unlike many of you your objectives are tainted with an emotional factor and especially for IHO. As a result the conclusion drawn often were skewed. Indie on the otherhand isolates his sentiment from his Irvine pricing analysis as an outsider doing an audit for what is the face value of the products.

Funny enough... I have no emotional ties to Irvine... it's more ties of convenience. I would straight up move to South OC or Porter Ranch if my situation allowed it. If what you're saying is true... I would have bought in the New Home Collection, at Las Ventanas or Laguna Altura.

And I don't think you can really discount emotional factor... I'm pretty sure your purchase in 2006 wasn't for economic insight (despite your claim that you "knew" you would be bailed out). Everyone has their weaknesses... including you.

CDM is probably still over-priced too... but the reasons to pay that premium means more to others.

To IHO, TIC can't stop building period.

Again... you misread. Never said TIC stopped building "period"... just stopped building new home construction. So moving to build apartments still means they stopped building new homes.

A smart consumers like Indie and me of course won't fall for this type of kindergardener PR technique tailored to you. Why are we so sharp at what we do because we are well educated, analytical and experienced. We are leaders and not followers.

Yet you own an iPhone? Don't believe your own hype... there are many people on this forum just as educated, analytical and experienced... who are probably better leaders than you guys are. Just because you think it's that way... does NOT mean it's true.

The moral is... no one is perfect or infallible... and that's probably what irritates you most about me... that I will challenge you and not be a sheeple to your own "PR techniques". It doesn't mean I don't respect you... totally the opposite... but just because you hold someone in high regard does not mean they can not be questioned. It doesn't take the smartest or richest man in the world to figure out a mistake in a simple math problem, or to observe freeway traffic patterns, or to understand zombie physiology .

Seriously, this blog has a lot of amateurs that without me or Indie the echo chamber will explode.

What's wrong with amateurs? As far as I know... that's why TI has continued to remain active. It's the mix of all types of people that makes this forum work... not sure what you mean about an "echo chamber"... this forum did fine when you or Indie weren't here... I'd rather have lots of "amateurs" discussing ideas and opinions than a few "smart consumers" telling everyone what their ideas and opinions *should* be. And I disagree with your assessment of the majority of the members here... I feel many of them have and will make great decisions on what they do in regards to real estate because they each have their own reasons why they want to buy.

For me... it doesn't *have* to be Irvine... but a 3-car wide garage is a different story.  :-*

 

[kalbi]

I'm not going to tell you what to do with your family, but you just admitted there is a big emotional aspect to this purchase, when has an emotional purchase ever been a great financial decision? Rarely, I find. Additionally, I will say that your assumption that 75k is the total downside, and that rents won't correct seems very optimistic.

But if you believe you have thought this decision out thoroughly, and are comfortable, then why does my opinion matter? It seems you're getting angry because I'm causing you to second guess yourself, unless you're insulted that I call TIC products "stucco boxes", and I don't take you as a TIC fan boy. My opinion, though highly informed and respected, is just an opinion. Don't get hurt feelings over me, or anyone else here. That's pointless.

I am not stubborn or think that I know everything and actually appreciate second guessing myself.  When you occasionally post intelligently, you do add value so your opinion is yet another point that gets mixed into all the variables to help me make the most informed decision possible. 

I do realize that calculating the total rent and saying that amount is one and the same as the possible loss isnt accurate.  I really have to look at what my outlay in interest payments, prop tax, opportunity cost of down payment, etc and add that in.  In any case, the point is that there is a cost for shelter over ones head and at a certain point, that cost can be greater than the possible decline of the property.

rkp, I have no doubt you have done your due diligence. I'm not calling you foolish or ignorant, I'm not sure where you got that from. I'm simply pointing out that your anger is being misdirected. If you're mad at me, you have to ask yourself why? Is it because of your frustration with Irvine pricing, or is it because I'm trashing Irvine products. If you're frustrated with pricing, you should direct that anger at numerous other places besides myself, banking conglomerates, government housing agencies, TIC, the list is long. If you're mad because I think TIC products are overpriced and crappy, you're mad at my opinion. If you think my opinion is causing you to second guess yourself, that could be true, but I think you're intelligent enough to know what I offer isn't gospel. In that case my opinion may be stoking the fires of your own self doubt that is already inside of you. That's important to distinguish.

Instead of simply saying that I am being optimistic with a 7% decline for WB and rents holding, give me some of that Indie knowledge on what you see happening.  You bought in CDM and as IR always noted, there is a substitution effect.  If TIC drops substantially, it will also impact CDM, yet you bought and no one has called you foolish or ignorant.

I see obvious weakness in Woodbury product as a whole, resale or new. Since prices peaked at around $360/sqft in 2010, the median is down over 17% (but I'm sure you knew this because you did your due diligence). People attack the median because of the housing mix, etc, but for nearly a 100 years, any financial institution worth its weight has used median pricing as a reliable measure of market trends, and market strength. Because of this, I feel 7% is a bit optimistic on your part, during an election year, rising commodity prices, and many other factors that can cause true inflation, I see housing prices suffering, but that's just an opinion.

As for my situation, you have to realize there are a few factors with my decision that are not common for most buyers who are shopping for TIC products:

- I'm not a first time home buyer, I've seen the market rise and fall, I'm fully aware of what usually happens during these cycles.
- I'm not financing, so my outlay is slightly different than someone with a 30 fixed.
- CDM hasn't been at rental parity for a long time, even before the last bubble began. CDM is actually prime real estate in the truest sense of the word, unlike Irvine which is a great hood, but prices over the past 6-7 years are mostly based on a manufactured image driven by TIC's marketing gurus.
- You're right, substitution is a valid factor to consider, but I'd venture to say buyers of Irvine TIC products do not usually cross-shop with products in CDM. They are different cities that attract different demographics. Laguna Beach, Newport Coast, Huntington, Dana Point at Monarch Beach, San Clemente coastal, most of West LA, and other similar communities would be better substitutions.

That being said, people are free to call me foolish at their whim, I've been called worse. I'll try to live with being called names as I gaze at the Avalon bound ferries, and fishing boats from my backyard. 

Gazing at the Avalon bound ferries and fishing boats? It seems more like you spend your entire day, every day, gazing at TI on your computer. 

 

[irvinehomeshopper]

I'm not going to tell you what to do with your family, but you just admitted there is a big emotional aspect to this purchase, when has an emotional purchase ever been a great financial decision? Rarely, I find. Additionally, I will say that your assumption that 75k is the total downside, and that rents won't correct seems very optimistic.

But if you believe you have thought this decision out thoroughly, and are comfortable, then why does my opinion matter? It seems you're getting angry because I'm causing you to second guess yourself, unless you're insulted that I call TIC products "stucco boxes", and I don't take you as a TIC fan boy. My opinion, though highly informed and respected, is just an opinion. Don't get hurt feelings over me, or anyone else here. That's pointless.

I am not stubborn or think that I know everything and actually appreciate second guessing myself.  When you occasionally post intelligently, you do add value so your opinion is yet another point that gets mixed into all the variables to help me make the most informed decision possible. 

I do realize that calculating the total rent and saying that amount is one and the same as the possible loss isnt accurate.  I really have to look at what my outlay in interest payments, prop tax, opportunity cost of down payment, etc and add that in.  In any case, the point is that there is a cost for shelter over ones head and at a certain point, that cost can be greater than the possible decline of the property.

rkp, I have no doubt you have done your due diligence. I'm not calling you foolish or ignorant, I'm not sure where you got that from. I'm simply pointing out that your anger is being misdirected. If you're mad at me, you have to ask yourself why? Is it because of your frustration with Irvine pricing, or is it because I'm trashing Irvine products. If you're frustrated with pricing, you should direct that anger at numerous other places besides myself, banking conglomerates, government housing agencies, TIC, the list is long. If you're mad because I think TIC products are overpriced and crappy, you're mad at my opinion. If you think my opinion is causing you to second guess yourself, that could be true, but I think you're intelligent enough to know what I offer isn't gospel. In that case my opinion may be stoking the fires of your own self doubt that is already inside of you. That's important to distinguish.

Instead of simply saying that I am being optimistic with a 7% decline for WB and rents holding, give me some of that Indie knowledge on what you see happening.  You bought in CDM and as IR always noted, there is a substitution effect.  If TIC drops substantially, it will also impact CDM, yet you bought and no one has called you foolish or ignorant.

I see obvious weakness in Woodbury product as a whole, resale or new. Since prices peaked at around $360/sqft in 2010, the median is down over 17% (but I'm sure you knew this because you did your due diligence). People attack the median because of the housing mix, etc, but for nearly a 100 years, any financial institution worth its weight has used median pricing as a reliable measure of market trends, and market strength. Because of this, I feel 7% is a bit optimistic on your part, during an election year, rising commodity prices, and many other factors that can cause true inflation, I see housing prices suffering, but that's just an opinion.

As for my situation, you have to realize there are a few factors with my decision that are not common for most buyers who are shopping for TIC products:

- I'm not a first time home buyer, I've seen the market rise and fall, I'm fully aware of what usually happens during these cycles.
- I'm not financing, so my outlay is slightly different than someone with a 30 fixed.
- CDM hasn't been at rental parity for a long time, even before the last bubble began. CDM is actually prime real estate in the truest sense of the word, unlike Irvine which is a great hood, but prices over the past 6-7 years are mostly based on a manufactured image driven by TIC's marketing gurus.
- You're right, substitution is a valid factor to consider, but I'd venture to say buyers of Irvine TIC products do not usually cross-shop with products in CDM. They are different cities that attract different demographics. Laguna Beach, Newport Coast, Huntington, Dana Point at Monarch Beach, San Clemente coastal, most of West LA, and other similar communities would be better substitutions.

That being said, people are free to call me foolish at their whim, I've been called worse. I'll try to live with being called names as I gaze at the Avalon bound ferries, and fishing boats from my backyard. 

Gazing at the Avalon bound ferries and fishing boats? It seems more like you spend your entire day, every day, gazing at TI on your computer. 

Didn't he already disclosed he post from his IPhone or IPad. In his backyard are 2 palm trees with a hammock suspended in between. He literally gazes at boats, ferries, and TI all at the same time. His yard is the private beach.

 

[ahbrownell]

Trolls are trolls. Don't waste your breath.

 

[IndieDev]

Gazing at the Avalon bound ferries and fishing boats? It seems more like you spend your entire day, every day, gazing at TI on your computer.

Which implies you are right there "gazing" at my posts to notice them everyday.

I'm flattered but what would your overbearing Korean husband think about that? 

 

[shadax]

Ugh...as soon as someone in this forum starts to talk about how smart or rich or this or that they are, they lose all credibility and respect.  And that list is growing around here.  I enjoy the information and insight many people here contribute, but it's a shame to have to wade through the boisterous, self-congratulatory BS to get to it.  It's polluting this forum.  That's just my opinion as a reader, take it for what you will.

 

[kalbi]

Gazing at the Avalon bound ferries and fishing boats? It seems more like you spend your entire day, every day, gazing at TI on your computer.

Which implies you are right there "gazing" at my posts to notice them everyday.

I'm flattered but what would your overbearing Korean husband think about that? 

don't flatter yourself douche lord. 

 

[irvinehomeshopper]

Let me teach you something about collecting art. Just a couple of pieces on my wall will just about pay for the motorcourt homes most of you salivate over. I am at a point not really looking for a habitat to shelter my family from the rain. A rare piece that has been in a family heirloom get snapped up really quick regardless of economy. My home is considered a very rare piece and not like those assembly line homes. If the Louvre ever decides to sell the Mona Lisa do you think buyers would pass this opportunity because of the economic climate. Most collectors would not but if it is just a Mona Lisa poster like masse produced Irvine boxes then I would just wait or just pass. By owning a fake would just be shameful among my art collector peers.

To clear the air I have respect for Indie for his economic insight. Unlike many of you your objectives are tainted with an emotional factor and especially for IHO. As a result the conclusion drawn often were skewed. Indie on the otherhand isolates his sentiment from his Irvine pricing analysis as an outsider doing an audit for what is the face value of the products.

Funny enough... I have no emotional ties to Irvine... it's more ties of convenience. I would straight up move to South OC or Porter Ranch if my situation allowed it. If what you're saying is true... I would have bought in the New Home Collection, at Las Ventanas or Laguna Altura.

And I don't think you can really discount emotional factor... I'm pretty sure your purchase in 2006 wasn't for economic insight (despite your claim that you "knew" you would be bailed out). Everyone has their weaknesses... including you.

CDM is probably still over-priced too... but the reasons to pay that premium means more to others.

To IHO, TIC can't stop building period.

Again... you misread. Never said TIC stopped building "period"... just stopped building new home construction. So moving to build apartments still means they stopped building new homes.

A smart consumers like Indie and me of course won't fall for this type of kindergardener PR technique tailored to you. Why are we so sharp at what we do because we are well educated, analytical and experienced. We are leaders and not followers.

Yet you own an iPhone? Don't believe your own hype... there are many people on this forum just as educated, analytical and experienced... who are probably better leaders than you guys are. Just because you think it's that way... does NOT mean it's true.

The moral is... no one is perfect or infallible... and that's probably what irritates you most about me... that I will challenge you and not be a sheeple to your own "PR techniques". It doesn't mean I don't respect you... totally the opposite... but just because you hold someone in high regard does not mean they can not be questioned. It doesn't take the smartest or richest man in the world to figure out a mistake in a simple math problem, or to observe freeway traffic patterns, or to understand zombie physiology .

Seriously, this blog has a lot of amateurs that without me or Indie the echo chamber will explode.

What's wrong with amateurs? As far as I know... that's why TI has continued to remain active. It's the mix of all types of people that makes this forum work... not sure what you mean about an "echo chamber"... this forum did fine when you or Indie weren't here... I'd rather have lots of "amateurs" discussing ideas and opinions than a few "smart consumers" telling everyone what their ideas and opinions *should* be. And I disagree with your assessment of the majority of the members here... I feel many of them have and will make great decisions on what they do in regards to real estate because they each have their own reasons why they want to buy.

For me... it doesn't *have* to be Irvine... but a 3-car wide garage is a different story.  :-*

 

[irvinehomeowner]

Let me teach you something about collecting art. Just a couple of pieces on my wall will just about pay for the motorcourt homes most of you salivate over. I am at a point not really looking for a habitat to shelter my family from the rain. A rare piece that has been in a family heirloom get snapped up really quick regardless of economy. My home is considered a very rare piece and not like those assembly line homes. If the Louvre ever decides to sell the Mona Lisa do you think buyers would pass this opportunity because of the economic climate. Most collectors would not but if it is just a Mona Lisa poster like masse produced Irvine boxes then I would just wait or just pass. By owning a fake would just be shameful among my art collector peers.

So you *did* buy based on emotion?

How did you get a loan mod if works of art don't go down in value?

Hippo + Kriss + eee = ?

(okay... I'm sorry... I'll stop now)