Why should we wait to buy in OC until 2010?

NEW -> Contingent Buyer Assistance Program
[quote author="optimusprime" date=1245457208]California Unemployment at 11.5% .... yes leveling off .....to record territories</blockquote>
Green shots, the bottom is in, V-shaped recovery, huge consumer spending increase coming, etc
 
Orange County gains 300 jobs over the month, loses 71,100 jobs over the year



The unemployment rate in the Orange County was 8.6 percent in May 2009, up from a revised

8.4 percent in April 2009, and above the year-ago estimate of 4.7 percent. This compares with

an unadjusted unemployment rate of 11.2 percent for California and 9.1 percent for the nation

during the same period.



Between April 2009 and May 2009, total nonfarm wage and salary employment grew from

1,426,000 to 1,426,300, a gain of 300 jobs.



? Professional and business services <strong>posted the largest month-over decrease with an

overall loss of 700 jobs</strong>. An overall gain of 600 jobs in administrative and support

services, which includes temporary help firms, was offset <strong>by a loss of 1,100 jobs in

professional, scientific and technical services.</strong>



? Manufacturing lost 500 jobs overall, led by cutbacks in fabricated metal products.

Scattered job gains were offset by larger job losses in durable goods, while nondurable

goods reported no change over the month.



? Government employment also declined by 500 jobs overall during the month. Scattered

employment gains in state and local government were offset largely by a reduction of

1,300 jobs in federal government.



? Leisure and hospitality <strong>added 1,100 payroll employment jobs over the month as

employers continued to bolster staffing for the summer tourist season.</strong>



Between May 2008 and May 2009, total nonfarm wage and salary employment declined by

71,100, or 4.7 percent.



? Trade, transportation, and utilities reported the largest year-over decrease with an

overall loss of 19,200 jobs. Over 54 percent of the decline was reported in retail trade

(down 10,400 jobs), 40 percent was in wholesale trade (down 7,700 jobs) and nearly

6 percent in transportation, warehousing, and utilities (down 1,100 job).



? Construction payrolls declined by 13,100 jobs over the year. While cutbacks occurred in

every sector, 79 percent of the job losses were in the specialty trade contractors sector.



? Professional and business services posted an overall loss of 12,700 jobs, with 62

percent of the decline in administrative and support services, which includes temporary

help firms.



Considering that the labor force shrank by 17,000 from last month, the MOM jobs are a lot worse than the 300 jobs gained as they say. Combine that factor with the fact that OC needs to be adding over 1,000 jobs a month just for population growth, then it really means there were about 18,000 less people working that could be working in OC. That, is not stabilizing, that is f'ing awful and makes the 90s recession pale in comparison to this one. We are at the same job levels as we were in May of <strong>2003</strong>. We desperately need to be growing jobs, not flattening out to be considered stabilizing.
 
Graph, what do the stars mean? Someone asked it above, but just wanted to make sure you didn't miss it. It seems to only appear on the ones at the botton of the picture.
 
[quote author="graphrix" date=1245459073]



Considering that the labor force shrank by 17,000 from last month, the MOM jobs are a lot worse than the 300 jobs gained as they say. Combine that factor with the fact that OC needs to be adding over 1,000 jobs a month just for population growth, then it really means there were about 18,000 less people working that could be working in OC. That, is not stabilizing, that is f'ing awful and makes the 90s recession pale in comparison to this one. We are at the same job levels as we were in May of <strong>2003</strong>. We desperately need to be growing jobs, not flattening out to be considered stabilizing.</blockquote>


When the OC starts creating a few thousand jobs for a few months in a row...I'll say the bottom in RE is in.



Sorry but you're an idiot if you buy now.
 
[quote author="tkaratz" date=1245413002]The 800K and below market has bottomed, there's no denying this IHB, please just accept it</blockquote>6 or 7 <strong>years</strong> elapsed between the 1989/1990ish Orange County peak to the 1996/1997 bottom.



One might argue that the collapse of the defense industry, the Northridge quake, and the LA riots extended that trough. But one might equally argue that the greatest credit crisis since the Great Depression would create at least an equal trough.



The recent RE peak was basically late 2006, some parts early 2007.
 
[quote author="graphrix" date=1245459073]





? Professional and business services <strong>posted the largest month-over decrease with an

overall loss of 700 jobs</strong>.



<strong>by a loss of 1,100 jobs in

professional, scientific and technical services.</strong>



? Manufacturing lost 500 jobs overall,



? Government employment also declined by 500 jobs



? Leisure and hospitality <strong>added 1,100 payroll employment jobs over the month as

employers continued to bolster staffing for the summer tourist season.</strong>



</blockquote>




Just imagine what wages/income changes those jobs represent!



a loss of 2100 good paying jobs, with a gain of 1100 minimum wage jobs.



plus, how many people are taking pay cuts/losing hours or having fewer clients?





<strong>Will the median household income drop 20% this year?</strong>
 
<img src="http://i43.tinypic.com/t0qfsl.jpg" alt="" />



The green dots are good. They are actually the tree forest in Irvine counted toward the claimed 5 miles x 5 miles of pure open space and park lands within a city that is only 7 miles x 7 miles.



The stars are the actual homes that is not a cookie cutter like this one:



<img src="http://p.rdcpix.com/v01/l3a4fa541-m0m.jpg" alt="" />
 
I think you people are still struggling with the experience of having some people live the high life off their home equity and flaunting it in your faces while you sat home on a Friday night watching reruns of Nash Bridges. You won, we all know your prudent financial planning was better off in the long run, get over it.



I'm not in the market right now, and I don't think you should be unless you really need a place to live due to a change in lifestyle.



All I'm just saying that if you buy now, you aren't likely to lose your down payment. Irvine's bottomed.



It's now on the bears to provide the tangible evidence as to why homes in Irvine are overpriced. Low supply, high demand, strict lending standards, and incomes that qualify are the status quo. Sure, job numbers look terrible but at least they aren't as bad as 4 months ago, what do we not know that's going to unleash a second wave of unemployment?



In a city of, i'm guessing at least 25,000 homes (i'm sure that's low), an increase in foreclosures by an average of 40 per month is meaningless, it's statistically insignificant.



"Find me a post in the 4500 plus posts of mine where I was wrong about the RE market or jobs, seriously , I challenge you to find it. "

I probably won't find it. Just like it's not hard to be a financial wizard in an up market, it's just as easy to be a world class I told you so in a down market, I think you should write a book that compiles are your blog posts.
 
Irvine might of bottomed [/hysterical laughter] but my neighborhood certainly hasn't. It's down down down and down some more.



Frankly I don?t think Irvine?s even gotten started yet.
 
[quote author="no_vaseline" date=1245490113]Irvine might of bottomed [/hysterical laughter] but my neighborhood certainly hasn't. It's down down down and down some more.



Frankly I don?t think Irvine?s even gotten started yet.</blockquote>


While the above is true, it has a corollary.



You probably can't buy something in that hood that is decent.



The above has nothing to do with one's ability to pay for it. It has to do with the competition to buy it. Granted, if you want one of the WTF priced ones, they're there for the taking. But if it isn't, it's pending by the time you've read this note.



And that's not a good market to go buying in.
 
That's a good point. I would agree that the entry level buyer is starting to feel frantic in their quest to find a home and the first time buyer is likely to make a big mistake (either buy to much house, or too much of a fixer). My advice to first time buyers is to stay out of the fray because i do think things will cool down, but that doesn't mean prices will drop anymore.



Certainly, some neighborhoods in irvine are still priced to drop (i.e. shady cnyn, turtle, IBC), and maybe the combined value of the upper market homes in irvine is over 50% of the total market value of irvine homes, but still, my argument is, the 800K and below has bottomed. I still think it's high, and I sympathize with you vulture renters, but the fundamental evidence is there. And if you are waiting for rental pairity, well, that's not going to happen, the majority of new rentals are the low rise apartment buildings, those people renting there would probably pay a 50% premium to have their own home. And though we want to believe that unemployment has hurt Irvine hard, evictions are a rare occurence in any of the apartment property in irvine.
 
You can own this one for less than many IAC properties rent for:



<a href="http://www.redfin.com/CA/Santa-Ana/2034-Valencia-Ave-92706/home/3054426">http://www.redfin.com/CA/Santa-Ana/2034-Valencia-Ave-92706/home/3054426</a>



BTW USC, here you go - a neat little house in Park Santiago FTW and half what your condo sold for.
 
I don't think you understand what a dead cat bounce is, and you certainly do not understand the implications of the foreclosure numbers.



First, the foreclosure numbers represent the last 120 days. Therefore there are REOs that are still not on the market, and there are plenty, and the NODs and NTSs that have been postponed month after month after month are not included in those numbers. Plus, just six months ago that number was below 500 vs. nearly 800. As long as it is increasing while sales are happening and inventory remains low, it remains a great pressure on the market. It doesn't matter what percentage of the housing stock it is, it matters what percentage of what is for sale, and more importantly what needs to sell. Many of which are not on the market. There are 402 homes in Irvine for sale for $800k or less, but there are 580 in some stage of foreclosure with a loan amount less than $650k, and 644 with a loan amount of $800k or less. That means there are more in foreclosure that essentially could be sold for under $800k than there are for sale.



I laugh at your bottom call is in for the low end of Irvine. You do understand the same exact thing happened in 93 and prices still came down despite having job growth. There was a flurry of buying in the low end because prices and rates came down, and many of them ended up in foreclosure in 95 and 96. They had high underwriting standards then too. Now, we do not even have job growth. If Irvine was immune, then why do the foreclosures keep increasing? Because people in Irvine are losing their jobs, and they are being evicted by their lenders at an ever increasing rate. With prime mortgage defaults soaring, and re-defaults on loan mods at 60% after six months, then you would have to be Steve Thomas or Gary Watts to call a bottom now.



What you call fundamentals are not fundamental, nor does it account for historical fundamentals. It's not different this time, it never was, and it never will be, it is history repeating itself.
 
[quote author="No_Such_Reality" date=1245531452]I laugh at $800K being a delineation point for low end.</blockquote>


Only 8x the median income in Irvine, 11x the median income in Orange.
 
[quote author="tkaratz" date=1245502204]That's a good point. I would agree that the entry level buyer is starting to feel frantic in their quest to find a home and the first time buyer is likely to make a big mistake (either buy to much house, or too much of a fixer). My advice to first time buyers is to stay out of the fray because i do think things will cool down, but that doesn't mean prices will drop anymore.



Certainly, some neighborhoods in irvine are still priced to drop (i.e. shady cnyn, turtle, IBC), and maybe the combined value of the upper market homes in irvine is over 50% of the total market value of irvine homes, but still, my argument is, the 800K and below has bottomed. I still think it's high, and I sympathize with you vulture renters, but the fundamental evidence is there. And if you are waiting for rental pairity, well, that's not going to happen, the majority of new rentals are the low rise apartment buildings, those people renting there would probably pay a 50% premium to have their own home. And though we want to believe that unemployment has hurt Irvine hard, evictions are a rare occurence in any of the apartment property in irvine.</blockquote>


<img src="http://www.irvinehousingblog.com/wp-content/uploads/2007/06/kool_aid_man_waving.jpg" alt="" />



Did you buy recently, or did you just suffer from a kool aid overdose? When I read your comment, I thought you were joking.



I suppose anything is possible....
 
[quote author="No_Such_Reality" date=1245531452]I laugh at $800K being a delineation point for low end.</blockquote>




didn't you hear? Irvine has been relocated to 90210, or was it the upper east side?
 
[quote author="No_Such_Reality" date=1245531452]I laugh at $800K being a delineation point for low end.</blockquote>


Let's look at some low end properties...



<a href="http://www.redfin.com/CA/Riverside/5463-Sierra-Vista-Ave-92505/home/4764263">5463 Sierra Vista Ave</a>



5463 Sierra Vista Ave

Riverside, CA 92505

Price: $739,000

Beds: 4

Baths: 3.5

Sq. Ft.: 4,610

$/Sq. Ft.: $160

Lot Size: 1.57 Acres

Property Type: Attached<strong>[sic]</strong>, Single Family Residence

Style: Contemporary, Craftsman

Stories: 1

View: Canyon, City Lights, Hills, Panoramic, Pool

Year Built: 1968

Community: Riverside

County: Riverside

MLS#: C09054990

Source: MRMLS

Status: Active

On Redfin: 33 days



One of the most exclusive, private, secluded residences in the La Sierra area of west Riverside. 1.57 acre lot, fenced, located on a quiet cul-de-sac (end of Sierra Vista Ave) with a long, private driveway. Million Dollar, 270 degree View(s) from Living Room, Family Room, Dining Room, Kitchen, Master Bedroom, and 1 front bedroom. 4 Bedrooms, 3.5 Bathrooms. 4610 sq. ft. (per builder's plans, includ. porch/entryway and garage, BUYER TO VERIFY!!!) Custom inground pool and jacuzzi, with new pump and filter. 1100 sq. ft. custom wood patio cover in backyard. Very mature landscaping, including many palm trees. Complete automated irrigation and exterior lighting. Wide hallways and large rooms, including formal dining, living, family rooms, and large entryway. Recently remodeled Master Bathroom. Walk-in His and Her's Master Bedroom closets. New carpet. Dual HVAC Systems. Inside laundry room. 3 car garage, which is drywalled, has built in cabinets, and newer rollup garage doors.



Something newer, perhaps...



<a href="http://www.redfin.com/CA/Riverside/1070-Talcey-Ter-92506/home/5019609">1070 Talcey</a>



1070 Talcey

Riverside, CA 92506

Price: $770,000

Beds: 5

Baths: 4.5

Sq. Ft.: 4,723

$/Sq. Ft.: $163

Lot Size: 1.85 Acres

Property Type: Detached, Single Family Residence

Style: Contemporary

Stories: 2

View: City Lights

Year Built: 2000

Community: Riverside

County: Riverside

MLS#: I09062494

Source: MRMLS

Status: Active

On Redfin: 12 days



BEAUTIFUL HOME FEATURES POOL AND SPA, LARGE BACK YARD, 4 CAR GARAGE, TILE AND CARPET THROUGHOUT. HUGE KITCHEN, WITH GRANITE COUNTERTOPS AND ALL APPLIANCES INCLUDING TRASH COMPACTOR! THIS HOME WILL NOT LAST! MUST SEE!!



My point, basically, is that there are absolutely NO low end properties in Irvine, except maybe a few studio or one bedroom condos.
 
[quote author="Geotpf" date=1245568064]

My point, basically, is that there are absolutely NO low end properties in Irvine, except maybe a few studio or one bedroom condos.</blockquote>


Irvine started as a middle class suburban neighborhood.



Irvine still is a middle class suburban neighborhood.



Middle class neighborhoods don't sustain $800K being low end.
 
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