Check it out here:

http://www.irvinehousingblog.c.....it-bubble/

and here:

http://www.irvinehousingblog.c.....d-bad-get/

What’s the housing situation in Irvine itself looking like? Where can I find out more information regarding how far prices are expected to fall / have already fallen for Irvine in particular?

Thanks!

I think we all agree 100K in profit on a housing transaction is nothing to sneeze at.

I don’t hate lawyers or RE agents. That would be crazy. When you need a good one of either group, they can be exceptionally helpful.

RE agents are in a precarious position as their motivations are both for and against their clients simultaneously if you think about it. A high sales price both helps their own bottom line, and “hurts” the client, for example. I would find it difficult to work in that situation.

For the past several years, the REIC has effectively waged a war against sane buyers and catered to the financially illiterate in the marketplace. Well, now that game is up and you have congress out there wanting for those of us who sat out the nonsense to pay for the excesses.

NO FU**ING WAY!!!!

Is that clear enough for you???

***** Profanity Edited by Chuck Ponzi*****

Help-U-Buy Guy: I don’t “hate” realtors. I’m a lawyer so I understand the concept of being in a hated profession. My only concern about my realtor is whether he will advocate for my interests, given his viewpoint that my price expectations are unrealistic. When he approaches the seller with my offer, is he going to take the “your house is a dump so you’re lucky to be getting this offer” approach, or is he going to approach the seller with an attitude of “sorry the offer so low, but my client is unreasonable — make a counteroffer and I’ll try to reason with her”? My realtor and I may have different views about how much property should cost — and I don’t care what he says to me in private — but I hope that when he talks to the seller, he’s out there negotiating hard for me to get the lowest price.

So you are telling me that walking away with over 100k after having a house for 2 years is not good enough….so much so that you’ll laugh out loud about it? Wow.

Stick to teaching…but please don’t teach finances.

I’ve found that most of the readers of bubble blogs don’t hate real estate agents. They hate liars. Unfortunately, there are too many agents who are allowed to opine about things they know nothing about.

Good negotiating tactics: yes, good agents have these, and this is critical in dealing with a specific property at a specific price.
Good forecasting abilities with respect to the real estate market: If any, usually only limited to near-term and in a specific microcosm. Not good for determining the direction of a region as large as the Southern California over the next 3 to 5 years.

Unfortuntately for many readers, their anger is misplaced. The better question is, why is the CNN news channel or the LA times pitting Gary Watts against Robert Schiller? That’s a mental giant compared with a toadstool (if you don’t know which is which, you need to research more). Watts makes up his figures; Robert Schiller works on nobel-prize worthy economics theory based on original research. The fact remains that there are incompetent people in every profession. Their profession alone does not qualify them to be quotable. In fact, if the media had a healthy dose of skepticism, they might ask if there is some motivation to see the market in a specific light.

The ignorant media is who people should be taking on. A cause that OCRenter has taken up at bubbletracking.blogspot.com by researching the “man on the street” background stories that the LA Times and its ilk are creating headlines about.

Newspapers can write anything their publishers will allow. It doesn’t mean it’s right.

I think you’re right. I think the market is still moving… albeit a lot slower and slightly lower. Time will only tell if I am right. I’m probably about as confident about my prediction as Watts’ was about his, though. The difference is that I have a healthy level of skepticism, he is slanted in a most inobscure way.

Chuck Ponzi

I know a lot of you hate real estate agents but it’s a balancing act. I make low ball offers and encourage my clients to be agressive. However, I’ve lost more than one client that didn’t get a house they wanted because we came in low and someone else ended up getting the property. It sucks for me to lose an $800K sale because I was trying to save my client $50K and then I also lose the client.

Throw out a 500-525K offer with a short fuse.

Even if there is a huge drop; you will probably be OK over the long haul.

Give them some time frame like 2 Months.

After a month of nothing happening they might crack and dramatically lower their price.

Help-U-Buy Guy, you sound just like my Realtor! He is saying the same things, trying to convince me to offer more. Everyone is *asking* for over $600K in this neighborhood, but I have seen no evidence that any buyer has actually paid those prices any time recently. People paid between $550K-$625K between spring and November of 2006, but that was LAST YEAR, before all the subprime stuff hit the fan. Also, I’ve seen 2 houses in pre-foreclosure and one short sale in this very neighborhood, within a few blocks of each other, and although those people are still listing their properties for high prices, their Realtors say they are “very flexible.” So I think there are some sellers who might be willing to deal.

Although other sellers may have no urgency to sell, I also have no urgency to buy, since I rent a wonderful rent-controlled duplex which is nicer than half the stuff people are trying to sell for $500K. If I make an offer and the seller says no, what have I lost? I’ll just try again next year when the foreclosure rates are higher. There will always be another house.

Why? There is no desperation amongst sellers. Plenty of homes are still selling and the properties that are priced well sell quickly. No one is walking away from $100K in equity. If it is a neighborhood of $600K homes you can sell fast at $550K. Why take $500K?

I have clients who think they can steal a bank owned property. Banks don’t give away money. They sell at market value. All the bank owned homes you see listed (and I see new ones listed almost daily) are all priced at the low end of market value. They don’t want to hold these properties but know that they are still selling. Hence, banks reject low ball offers. Banks have a formula whereby if a property doesn’t sell at the asking price in a certain number of days, they will lower the price incrementally (2% to 3%) until they hit the price at which it will sell.

If you are hoping for 20% off, you are going to have to wait. It’s not going to happen all at once (if at all).

Both my wife are in high-tech, late 20’s and together, we earn $225K+. I know this isn’t common but most of my friends who work at high-tech companies in OC make similar amounts and we are all about the same age.

What really surprises me are all the people who bought these inflated houses with much less household income when I can not rationalize putting so much of my gross towards the mortgage.

You are right, there is nothing lost in a rejected offer with no counter back. Just have to do it to find out how anxious/desperate the seller is.

I continue to wonder, however, where the big builders sit in all of this. How will they move inventories when there is so much existing product on the market? I’m confused as to why they haven’t lowered prices significantly. I think it is because they don’t have to—they are big corporations with different pressures than those of us individual home owners. Also, they still “sell” a lot of homes. It remains to be seen if those that are “sold” (read: they have a deposit) actually close in the way we are accustomed to using the term “sold”.

Chuck, I have my income because I stayed in school a very long time. There was no magic in it. I am blessed with my current employment situation. I also know I know very little about real estate: it is a different language. I like reading these posts because you all have taught me so much. My wife, thankfully, is also very patient, but the information I get here helps to reduce her anxiety over not owning our own home yet. I think it will be well into 2008 before we pull the trigger, but maybe Joanovarq has a point, low ball some people and just see what happens.

I am facing a similar situation; I want to buy an existing home for around $500K, but everyone is asking over $600K in the neighborhood I want. I intend to make some offers at the price I think is fair — if they say no, nothing lost. I am torn between whether to start lowballing now or wait a year or so until lenders and borrowers are really hurting due to the mountain of impending foreclosures…

I expect prices to go down 20% over the next few years, so I am factoring that into my offering price. With more houses on the market due to foreclosures, and fewer buyers available since people with weak credit will no longer qualify for $600K mortgages, prices have to come down — simple supply & demand. The only question is how much?

this was before the tidal wave of bad new over the past 3 weeks.

for those who make 250k that means you take home around 12-13k. rent for 2500(in rancho that would get a very nice house), put the difference between rent and morg payment (about 2k) in a CD. in a year or two you will have more money.

houses will have stayed the same (dont think so) or much lower (with credit tightening) so you get a bigger house for your money.

thats what I’m doing. GOOD LUCK

You are a presumptuous, arrogant and ignorant all at the same time. It would please me to learn you are a recent home buyer. If not, you should go out and buy one. Come back in two or three years and let us know how it is working out for you.

Reselling one is a nightmare. They cost about 50K to build, and sell for 120K new. Then, you can resell them for 50K. The depreciation on them is absurd.

With that said, I’m not in your position, so I can’t really give good advice. What I would do and what you would do are 2 different things. I can say that housing will get cheaper, and that condos will suffer more than houses.

Chuck Ponzi

This housing bubble has made affordability impossible for the good people called to teaching.

Prices will eventually realign so that you can get a place. Otherwise we will also have to deal with rising wages to attract teachers soon.

So either prices drop or wages will go up sharply in the future. Have hope.