WEST IRVINE

House prices are rising due to restricted inventory, not increased demand

Nov 142012

In late 2011, the valuation metrics in the OC Housing News Report became very bullish. Due to low interest rates and slowly deflating prices, the cost of home ownership relative to rent fell far below historic norms. In other words, it was much cheaper to own than is usually is. Despite the falling prices, the valuations were attractive, and this report began issuing strong buy signals. Those that trusted that advice bought at what appears to be the bottom of the market. Only time will tell if the spring 2012 bottom is durable. In spring 2012, lenders dramatically slowed their foreclosure processing and disposition in order to create a shortage of properties on the MLS and stop the decline in [Read More...]

September delinquencies skyrocket 7.72% as shadow inventory grows

Nov 012012

The golden age of delinquent mortgage squatting continues. Those who aren’t paying their mortgage today can expect their free ride to continue indefinitely. We know from the report released by ForeclosureRadar.com that MLS inventory is NOT coming as foreclosure filings dry up. In California, the number of NODs declined 20.4% last month signaling that lenders are in no hurry to process their bad loans and push out the squatters. This slow processing creates a strong incentive for borrowers to strategically default because if they quit paying, they get to live for free, probably for a very long time. Rising prices will prompt many to keep paying, and delinquent mortgage squatters will miss the recovery rally, but despite these incentives to stay [Read More...]

Mortgage not a birthright: some creditworthy families will always be denied

Sep 182012

When you were in high school, did your parents ever caution you about the company you keep? The people you share common interests with can be either a positive or a negative influence on your decision making. They can lead to to success, or they can lead you astray. When lenders want to evaluate a potential borrower, they don’t interview friends, but they do examine the financial characteristics of a borrower’s life, and they make determinations based on the historical behavior of others with the same characteristics. That’s the whole point of a FICO score. The Fair Isaac Corporation built a successful business around classifying and categorizing large groups of people based on similar financial characteristics. If people in your [Read More...]

Orange County housing market ratings and historic city values

Sep 142012

California has a long history of real estate bubbles. Cycles of boom and bust range back to the gold rush in the nineteenth century. Over the last forty years, California has experienced three major real estate bubbles. Each of them had different causes and sprung forth from different circumstances, but they all shared the common cycle of irrational exuberance leading to a boom followed by a crash back to fundamental values of rental parity. Historic Valuations by city Over the last month, I commissioned Brian Nadel (thanks, Brian) to download MLS rental data back to 2000. From other sources, I extrapolated rental rates back to 1988. I also purchased the resale data back to 1988 from DataQuick. From these various [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...]

New study contends renting is better than owning for most Americans

Aug 192012

Despite being an outspoken renter over the last five years (I’ve actually been a renter since 2001), I still believe there are virtues to home ownership. The emotional benefits are palpable, and there are financial reasons to own. The main financial reason I plan to own again soon is to lock in a cost of ownership lower than the cost of a comparable rental. A secondary reason is to obtain the “forced savings” benefit of a conventionally amortized mortgage. I know a lender would give me a HELOC if I asked, but I have no intention of it. At some point, I want to pay off a mortgage and live truly free. Renting has been good to me, particularly over [Read More...]

West Irvine prices still falling, now $290/SF

Jul 102012

Irvine: West Irvine Overview Median home price is $453,000. Based on a rental parity value of $608,000, this market is under valued. Monthly payment affordability has been improving over the last 4 month(s). Momentum suggests improving affordability. Resale prices on a $/SF basis declined from $291/SF to $290/SF. Resale prices have been falling for 12 month(s). Price momentum suggests falling prices over the next three months. Median rental rates increased $25 last month from $2,457 to $2,482. Rents have been slowly rising for 12 month(s). Price momentum suggests slowly rising rents over the next three months. Market rating = 4 Proprietary Irvine Housing News home purchase analysis 11 RED COAT Pl Irvine, CA 92602 $699,000 …….. Asking Price $485,000 ………. [Read More...]

West Irvine affordability on the rise

Jun 192012

Irvine: West Irvine Overview Median home price is $457,000. Based on a rental parity value of $592,000, this market is fairly valued. Monthly payment affordability has been improving over the last 3 month(s). Momentum suggests improving affordability. Resale prices on a $/SF basis declined from $291/SF to $291/SF. Resale prices have been falling for 12 month(s). Price momentum suggests falling prices over the next three months. Median rental rates increased $131 last month from $2,325 to $2,457. Rents have been slowly rising for 12 month(s). Price momentum suggests slowly rising rents over the next three months. Market rating = 3 Proprietary Irvine Housing News home purchase analysis 53 DECLARATION Pl Irvine, CA 92602 $739,000 …….. Asking Price $255,000 ………. Purchase [Read More...]

West Irvine rents weakening

Jun 082012

Irvine: West Irvine Overview Median home price is $479,000. Based on a rental parity value of $588,000, this market is under valued. Monthly payment affordability has been improving over the last 3 month(s). Momentum suggests improving affordability. Resale prices on a $/SF basis increased to $283/SF to $287/SF. Resale prices have been falling for 12 month(s). Price momentum suggests falling prices over the next three months. Median rental rates increased $0 last month from $2,468 to $2,468. Rents have been falling for 1 month(s). Price momentum suggests falling rents over the next three months. Market rating = 3 Proprietary Irvine Housing News home purchase analysis 31 ARDMORE Irvine, CA 92602 $525,000 …….. Asking Price $533,000 ………. Purchase Price 1/20/2010 ………. [Read More...]

West Irvine rents are weakening, rating drops

May 162012

Irvine: West Irvine Overview Median home price is $479,000. Based on a rental parity value of $588,000, this market is under valued. Monthly payment affordability has been improving over the last 3 month(s). Momentum suggests improving affordability. Resale prices on a $/SF basis increased to $283/SF to $287/SF. Resale prices have been falling for 12 month(s). Price momentum suggests falling prices over the next three months. Median rental rates increased $0 last month from $2,468 to $2,468. Rents have been falling for 1 month(s). Price momentum suggests falling rents over the next three months. Market rating = 3 Proprietary Irvine Housing News home purchase analysis 149 TOPAZ #13 Irvine, CA 92602 $374,900 …….. Asking Price $570,000 ………. Purchase Price 5/26/2006 [Read More...]

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