August 2012 Archives » Irvine Housing News

An entire generation of buyers is underwater

Aug 312012

Pwned. A term originally coined by mistake when the word “owned” was misspelled by a video game programmer. The word has come to symbolize domination of one party over another, and it’s a particularly appropriate term for loanowners who bought a house hoping to “own” it, and instead they find themselves being “pwned” by the house. I first wrote about this phenomenon in 2008: Generation Y began buying starter homes in earnest during the Great Housing Bubble. Generation X is just now coming into their prime earning years, and many of them bought move-up homes at inflated bubble prices. The Baby Boomers took their equity and bought multiple properties during the bubble. They all have one thing in common: they [Read More...]

The housing market is subject to government policy manipulation

Aug 302012

The housing market is anything but stable. Decisions by banks, government regulators, the federal reserve, congress, and Treasury department officials have tremendous impact on house prices. For example, decisions at the federal reserve regarding interest rates have imbued the market with such high payment affordability that buyers can finance the still-inflated prices of the previous bubble. Banks decided early this year to slow the rate they took back properties at foreclose auctions thus reducing MLS inventory of REO significantly. Government regulators changed accounting rules in 2009 to allow banks to keep delinquent mortgage squatters in place with delayed millions of foreclosures for many years. The GSEs, now run by the Department of Treasury, are liquidating their portfolios and changing the [Read More...]

Don’t overpay for a home and regret your decision. Let our reports guide you to a better deal.

Aug 292012

Don’t bid on a house until you see our report! It’s that important. Are house prices inflated or undervalued? What should house prices be in your search area? Are the neighborhoods and cities you are looking in overvalued? Are you missing opportunities in nearby communities? Our report has those answers. Are you better off renting instead of buying? Will your cost of ownership be more or less than a comparable rental? Is it currently cheaper to own or rent? Has it always been that way? Our report has those answers too. Save thousands on your next home. Be smarter than bubble era sheeple who overpaid and lost their homes. Get the OCHN newsletter right now. You can’t afford to wait. [Read More...]

The housing market recovery will be rocky

Aug 282012

With the acute shortage of resale inventory across the Southwest, it’s hard to imagine prices going down, and in the short term, they won’t. Of course, circumstances could change quickly as they did this spring, so anything is possible. However, if the federal reserve can keep interest rates at record lows, and if the lending cartel can process the backlog of distressed loans without causing resale inventories to spike, then prices will not go down in the future. But is it realistic to think both of these circumstances will come to pass? Mortgage interest rates hit all-time lows because the federal reserve took short-term treasury rates to zero and began buying 10-year treasuries and mortgage-backed securities to drive mortgage interest [Read More...]

Delinquent mortgage squatters depress property values: Fed study

Aug 272012

There are many myths about housing markets perpetuated by banks and the financial press. Two of these myths include (1) keeping people in a house keeps up the values, and (2) foreclosures reduce neighborhood values. Many believe that allowing delinquent mortgage squatters to stay in place improves the condition of a property. Perhaps in rough neighborhoods prone to property crime, occupancy is better than abandonment, but in most neighborhoods, when delinquent mortgage squatters stay on, they property gets run down. Why would anyone spend any money to improve or even maintain a property in which they have no financial interest? If people were prone to do this, then landlords wouldn’t need to spend money maintaining rentals. Delinquent mortgage squatters have [Read More...]

The GSEs admit withholding inventory to prop up house prices

Aug 262012

As strange as it sounds, most REO shouldn’t be listed for sale. REOs being processed for sale — the REO pipeline — is all banks are supposed to have. Once they finish processing, they are supposed to put them for sale and liquidate. It’s not unusual for a high percentage of REOs to be held by the banks. What is more telling about their policies is how long it takes them to sell a property, and how they classify the properties they hold. If all their properties are undergoing preparations for sale, and if sales are happening quickly, there is no problem. However, if it takes them a very long time to process, and if many properties are being held [Read More...]

Smart buyers find undervalued neighborhoods. Our report shows you how.

Aug 252012

California lawmakers lack ethics when their real estate deals go bad

Aug 242012

The people we elect to public office should set a higher standard for conduct than ordinary citizens. If we are to trust them to make laws governing the rest of us, we should be able to rely on them to follow the rules rather than gaming the system to their advantage. Unfortunately, that’s not the world we live in. Many California lawmakers got caught up in the mania of the housing bubble, and when their faith in ever-increasing house prices was shaken, their ethics went on sabbatical. Real estate bubble bursts for California lawmakers too In the boom years, several California legislators bought homes but are now having trouble keeping up with mortgages or avoiding big losses. By Patrick McGreevy, [Read More...]

Foreclosures don’t harm neighborhood values, distressed properties do

Aug 232012

Conventional wisdom is that foreclosures reduce neighborhood values. It turns out, that isn’t the case. It’s easy to see why people come to this erroneous conclusion. Properties that go through foreclosure often sell for less than recent comparable sales, particularly after the peak of the housing bubble when values were grossly inflated and ripe for a serious correction. However, it wasn’t the foreclosure that caused the discount, it was a motivated seller dealing with a property in poor condition that ultimately caused prices to fall. You wouldn’t know it by the huge inventories they currently manage, but lenders are not in the real estate business. They don’t profit from the real estate they own. They only obtain real estate when [Read More...]

Don’t suffer the pain of an underwater mortgage. Get this report before it’s too late.

Aug 222012

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