Lenders hope they can solve all their problems by making the housing market hit bottom. If prices bottom, people who bought at the bottom gain equity with rising prices, and they in turn reignite the move-up market which will allow the banks to sell their high-end shadow inventory. Further, rising prices makes for fewer short sales and fewer foreclosures and distressed sellers become equity sales. Rising prices would be a panacea for lenders, which is why the full weight of [Read More...]
People read this blog for a variety of reasons. Some like the in-depth coverage of housing issues unfettered by bias and bullshit. Some like the entertaining cartoons and HELOC abuse stories of woe. Some like the market information and cogent analysis of current trends in the OC market. This last group usually has one question in mind: is it a good time to buy a house? The answer to that question is an unequivocal maybe. There is no perfect time [Read More...]
Statistics across most markets show rents are going up. The monthly OC Housing market report has shown steadily declining prices and steadily increasing rents over the last two years. Resale prices are falling because loan owners are being forced out of homes they can’t afford, and the resulting REOs and short sales are deflating the housing bubble. These same former loan owners end up becoming renters which increases demand for rental houses. Ordinarily, if loan owners were becoming renters, prices [Read More...]
John McMonigle fully embraced the California housing Ponzi scheme. He claims to have represented $2.1 billion in real estate transactions during the housing bubble. If he made 3% of that figure, that’s $63,000,000 in real estate commissions. In a game of financial football, that is a powerful offense. Unfortunately, his defense wasn’t quite as good. Falling from housing peak: John McMonigle’s ride According to bankruptcy court papers, McMonigle, 46, has amassed some $50 million in debts. His assets – even [Read More...]
President Obama has lost his mind. I guess I shouldn’t be too surprised that Obama would embrace HELOC abuse as a good idea. After all, Obama HELOCed his home in Illinios before he became president. Personally, I find this outrageous. Our commander-in-chief, the leader of our nation, has embraced HELOC abuse as a noble behavior that should be encouraged by a taxpayer bailout. The dipshits who lose their home from excessive borrowing should be given a pass, and everyone who [Read More...]
Stonegate is an Irvine Company Village located northeast of Woodbury bounded by Sand Canyon Avenue, Portola Parkway, Jeffrey Road, and Irvine Boulevard. Stonegate has easy access to Highway 133 which provides speedy access to I-5 and I-405. The entire Village is far enough from the major freeways to be very quiet, particularly locations distal from the bounding arterial streets. The only problems with traffic or noise comes from the steady stream to garbage trucks driving up Sand Canyon [Read More...]
The OC Housing News profiles properties for sale each day and presents current market data on each city in Orange County. If you really want to know what’s happening in the OC Housing market, you need to read the OC Housing news and subscribe to the our monthly newsletter. Redfin is the most popular real estate search site in Southern California. They track the most popular listings based on the number of views each receives. Below are some of the [Read More...]
As the author of The Great Housing Bubble, I am an authority on the housing bubble. As someone who has written daily about the myriad of circumstances and consequences of the bubble, I have examined this phenomenon from every conceivable perspective. One of the great features of blogging is the constant exposure to other points of view on these issues. If there is something I miss, a reader usually points it out. The astute observations have greatly increased my understanding [Read More...]
For those planning on a long term of ownership, interest rates below 4% have made payment affordability the best its been in years, perhaps ever. The prices still seem ridiculously inflated, but record low interest rates make borrowing such large sums possible. Those low rates even drive the cost of ownership below the cost of comparable rentals, in some markets substantially below. It should be no surprise that many of the bubble-era communities and the less desirable older communities have [Read More...]
David Richard Sparks is going to prison. I first wrote about this realtor last June in Orange County realtor lied to clients, stole their money, and admitted to massive Ponzi scheme. According to his confession, he forged bank documents, used non-existent escrow companies, provided bogus status updates and falsely reported significant profits. Victims said if they did not want to reinvest their money with him, Sparks made up excuses for why he could not give it back. He’s quite a piece [Read More...]
I have enjoyed being a renter over the last five years. I moved several times being a renter, and I never felt anchored or chained to any housing situation. I rarely stressed about paying my rent, and I never once fretted about the decline in the value of my property. Further, I never worried about my prosperity being hindered by some bank refusing to extend me a Ponzi loan. Being a renter has caused me to pass many of my [Read More...]
Timing the housing market is important. Pundits make predictions all the time, and mostly they are wrong. It’s rare to find an analyst who has the foresight to see a change in the market and the courage to act on their insights. Mark R. Kiesel, a Pimco fund manager, is one such analyst. Back in 2006, he posted For Sale and Still Renting on Pimco’s site (no longer there), a detailed analysis of the housing bubble and the reason for [Read More...]
Last week I profiled the Stonegate community of Santa Maria. This week we take a look at the photos, floorplans, and costs of the Stonegate community of Santa Clara. Stonegate is an Irvine Company Village located northeast of Woodbury bounded by Sand Canyon Avenue, Portola Parkway, Jeffrey Road, and Irvine Boulevard. Stonegate has easy access to Highway 133 which provides speedy access to I-5 and I-405. The entire Village is far enough from the major freeways to be very [Read More...]
The OC Housing News profiles properties for sale each day and presents current market data on each city in Orange County. If you really want to know what’s happening in the OC Housing market, you need to read the OC Housing news and subscribe to the our monthly newsletter. Redfin is the most popular real estate search site in Southern California. They track the most popular listings based on the number of views each receives. Below are some of the [Read More...]
One of the more esoteric debates on the fundamental value of houses centers on whether or not houses appreciate faster than the overall rate of inflation. Nobody who isn’t kool aid intoxicated believes house prices rise much more than the level of inflation because intelligent people understand trees cannot grow to the sky. If house prices consistently went up in value faster than price or wage inflation, over time, people would lose their ability to afford to buy houses because [Read More...]
Economists particularly enjoy calling the inflection points in the market. Much fanfare surrounded Calculated Risk’s calling the bottom back in March. He may or may not be proven correct. The data on falling inventory certainly suggested a bottom was in the making, and even if he is later proven wrong, I doubt the real bottom will much farther down. Further with the delays in reporting on Case-Shiller, it won’t be known until more than a year from now when the [Read More...]
I have long contended that rental parity is the fundamental value of houses. Whenever values differ significantly from rental parity, up or down, reversion to the mean is inevitable. Buyers should be aware of rental parity because paying more than rental parity significantly limits a buyers options. First, such a buyer cannot rent the property to cover the bills, so if they had to move, they either must sell the property or endure an indefinite period of negative cashflow. Since [Read More...]
Through a combination of falling prices and low down payment mortgages, many buyers of the bear rally of 2009 find themselves underwater. When you figure in the transaction costs of selling a home, the numbers are really grim. Despite the negative circumstances, few of this buyer cohort will strategically default. Most are only slightly underwater, and since most also have a cost of ownership at or below rental parity, it’s more costly for them to rent, so most will stay [Read More...]
Lenders are withholding inventory across the Southwestern United States in hopes of creating a shortage of supply to reverse the downward spiral in home prices. Lenders constantly try to balance two competing forces. First, lenders need to get their money back. Dead money tied up in non-performing assets does not contribute positively to their bottom line. Further, this money also cannot be used to fund ongoing operations. This puts enormous pressure on lenders to liquidate and put their capital toward [Read More...]
Stonegate is an Irvine Company Village located northeast of Woodbury bounded by Sand Canyon Avenue, Portola Parkway, Jeffrey Road, and Irvine Boulevard. Stonegate has easy access to Highway 133 which provides speedy access to I-5 and I-405. The entire Village is far enough from the major freeways to be very quiet, particularly locations distal from the bounding arterial streets. The only problems with traffic or noise comes from the steady stream to garbage trucks driving up Sand Canyon and down [Read More...]
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