Tuesday, November 15, 2011

Irvine Housing Blog

Irvine Housing Blog

Link to Irvine Housing Blog

The real state of Irvine and Orange County real estate: October 2011

Posted: 15 Nov 2011 02:30 AM PST

Today we have the monthly update for the Orange County housing market for October 2011.

Irvine Home Address ... 12 MILLBRAE Irvine, CA 92602
Resale Home Price ......  $615,000


We are the nothing grating against the norm
We are the something that will not conform
No one understands what we've been given

Nevermore -- Enemies of Reality

Back in March, I wrote a post titled The future of IHB news and real estate analysis. In that post, I made a commitment to accurate reporting:

I have no agenda to spin the data. Let's see what is really going on. I want to be accurate. People can make their own decisions and draw their own conclusions from accurate data. If approached without the built-in bias of a realtor, data analysis can be revealing rather than deceiving.

I will still have a dog in this hunt. I do run a business that makes money from real estate transactions. I am subject to the same biases as any other human being. I sell real estate, but I am not a realtor. The truth needs no salesman. I will present data as accurately as I can. If reality motivates you to buy or rent, the IHB can help you. I have no desire to manipulate data in order to make a quick buck. This is a part-time hobby for me, not my livelihood.

I now have accurate data which is updated each month. I have been presenting this data at our monthly IHB presentations. Now, I have created the first IHB monthly newsletter which presents this data in a format anyone can download and read at their leisure.

This is a work in progress, but I am pleased with what we have so far. Take a look for yourself and tell me what you think in the comments. Constructive criticism will be greatly appreciated. Any questions about the data or its presentation will help me improve future newsletters.

IHB Newsletter - 10-2011

Just for giggles, let's read Lawrence Yun admitting to the housing bubble yet calling the bottom. Bullshitter...

“Moderate’ housing recovery forecast for next year

November 11th, 2011, 11:02 am by

National Association of Realtors Chief Economist Lawrence Yun forecast Friday that U.S. home prices will go up from 2% in 2012, part of a gradual improvement that will continue through 2014.

In addition, Yun told reporters at the NAR annual conference in Anaheim that he now pegs the probability of a new recession at 10% to 15% — down from his estimate six months ago of a 30% probability of renewed recession.

Although he believes the U.S. economy would “be teetering on a recession” if the Euro debt crisis expands, he said he doubts that will happen and predicted that the crisis will be contained in Italy.

“The market has been tough, but there are some developing positive signs,” Yun told a mid-day news conference at the Anaheim Convention Center. “As a result, there will be a recovery occurring next year, and it will continue in 2013 and 2014. It is not a great robust expansion. … But it is a moderate recovery.”

Yun also forecast that rents will rise for the next five years.

Specifically, Yun said:

  • U.S. home prices will rise 2% to 3% next year, 3% in 2013 and 4% in 2014.
  • Existing home sales will increase 4% to 5% in 2012. This year’s sales are projected to be up 1% to 4.96 million housing units.
  • Rent will increase 3% in 2012 and 3.5% in 2013 and 2014.

There you have it. House prices will rise next year. Therefore, we are at the bottom. It would be laughable if were printed in the Onion. But Yun actually pretends to have credibility, and some potential buyers actually believe him.

Yun noted that people buy a home today will see some price appreciation in future years. But the recovery will be too slow for people who bought homes at the peak of the market bubble and may not see prices back to what they paid for 10 years or more.

It will be quite a long time for people who bought right at the peak to gain recovery,” he said.

Yun noted that distressed properties – foreclosed homes and underwater homes – now make up a third of all housing transactions in the U.S. That will remain unchanged next year, and will be only slightly better in 2013, he said.

“Distressed property sales will be with us for the next two years. The question is, will the buyers be there to sop up sales?” he said.

Also speaking Friday was Richard Peach, senior vice president at the Federal Reserve Board of New York, who was less optimistic about prospects for housing.

Citing a host of economic data from income ratios and savings rates to bond yield spreads, Peach concluded that the U.S. economy continues to operate well below its potential. He said also that the bulk of foreclosures and mortgage defaults lie ahead.

“I’m not as sanguine about the future prospects of home prices,” Peach said.

So where would you rather get your real estate market information, the IHB or the NAr?

Short-Sale and REO Workshop

Shevy Akason and Larry Roberts will host a short sale and REO workshop at 6:30 PM Wednesday, November 16, 2011, at the offices of Intercap Lending (9401 Jeronimo, Suite 200, Irvine, CA 92618).

Peak buyer got two years of squatting

The former owner of today's featured REO paid $835,000 on 3/13/2006. They used a $636,000 first mortgage, a $64,000 HELOC, and a $135,000 down payment. The down payment money is now gone. They did manage to obtain two years of squatting before the auction.

Foreclosure Record
Recording Date: 10/20/2010 
Document Type: Notice of Sale  

Foreclosure Record
Recording Date: 08/13/2009 
Document Type: Notice of Sale   

Foreclosure Record
Recording Date: 05/12/2009 
Document Type: Notice of Default

This property is available for sale via the MLS.
Please contact Shevy Akason, #01836707 

Irvine House Address ...  12 MILLBRAE Irvine, CA 92602
Resale House Price ......  $615,000

Beds:  3
Baths:  2
Sq. Ft.:  1966
Property Type: Residential, Single Family
Style: Two Level, Spanish
Year Built:  2001
Community:  Northpark
County:  Orange
MLS#:  S663808
Source:  CRMLS
Status:  Active
On Redfin:  141 days
Beautiful, spacious and bright property within a gated community! House offers vaulted ceilings, new carpet, 3 bedrooms, and 2.5 baths! The master suite has walk in closet and jacuzzi tub. Enjoy granite kitchen counters with a breakfast bar, and a cozy fireplace in the living room! This property has so much to offer- must see! Highly desired Evergreen complex with pools, parks, clubhouse, tennis court and tot lot. Popular schools nearby. 
Proprietary IHB commentary and analysis 

Resale Home Price ......  $615,000
House Purchase Price … $835,000
House Purchase Date .... 3/13/2006

Net Gain (Loss) .......... ($256,900)
Percent Change .......... -30.8%
Annual Appreciation … -5.3%

Cost of Home Ownership
$615,000 .......... Asking Price
$123,000 .......... 20% Down Conventional
4.06% ............... Mortgage Interest Rate
$492,000 .......... 30-Year Mortgage
$133,757 .......... Income Requirement 

$2,366 .......... Monthly Mortgage Payment 
$533 .......... Property Tax (@1.04%)
$133 .......... Special Taxes and Levies (Mello Roos)
$128 .......... Homeowners Insurance (@ 0.25%)
$0 .......... Private Mortgage Insurance
$295 .......... Homeowners Association Fees
$3,455 .......... Monthly Cash Outlays

-$385 .......... Tax Savings (% of Interest and Property Tax)
-$701 .......... Equity Hidden in Payment (Amortization)
$175 .......... Lost Income to Down Payment (net of taxes)
$97 .......... Maintenance and Replacement Reserves
$2,641 .......... Monthly Cost of Ownership 

Cash Acquisition Demands
$6,150 .......... Furnishing and Move In @1%
$6,150 .......... Closing Costs @1%
$4,920 .......... Interest Points
$123,000 .......... Down Payment
$140,220 .......... Total Cash Costs
$40,400 ............ Emergency Cash Reserves
$180,620 .......... Total Savings Needed

real estate home sales


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