Remember when $500k would only buy 1000sq ft in Westpark?

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effenheimer_IHB

effenheimer_IHB

New member
<p>Now it'll get you 1350!</p>

<p><img alt="" src="http://www.ziprealty.com/images_mls/SOCALMLS/S/47/92/10/_P/S479210_P04.jpg" /> </p>

<p><strong>Address</strong>: 3 CRIVELLI AISLE, Irvine, CA 92606</p>

<p><strong>Plan</strong>: 2/2 1350sq ft Condo</p>

<p><strong>MLS</strong>: S479210 </p>

<strong>Days on Market</strong>: 99 (<a href="http://en.wikipedia.org/wiki/99_Luftballons">luftballons</a>)

<p><strong>Sale History</strong>: 03/04/93: $184,000 </p>

<p><strong>Price Reduced</strong>: 04/03/07 -- $539,000 to $534,000</p>

<p><strong>Price Reduced</strong>: 04/12/07 -- $534,000 to $529,900</p>

<p><strong>Price Reduced</strong>: 05/01/07 -- $529,900 to $519,000</p>

<p><strong>Price Reduced</strong>: 05/24/07 -- $519,000 to $509,000</p>

<p><strong>Price Reduced</strong>: 06/04/07 -- $509,000 to $499,900 </p>

<p><strong>Current Price</strong>: $499,900 </p>

<p><strong>Ziplink</strong>: <a href="http://www.ziprealty.com/buy_a_home/logged_in/search/home_detail.jsp?listing_num=S479210&page=1&mls=mls_so_cal&source=SOCALMLS">Here</a> </p>

<p><em>Enjoy mediteranean architecture, italian statues & courtyard. Light & bright floorplan w/high 10ft ceilings. Cozy living room with fireplace. Master suite and bath w/dual vanities, large roman tub and seperate shower. Ceramic tile in entry, kitchen & baths. Sunny deck off living room. Laundry in garage. Quiet location in corte bella. 2 car garage w/direct access. Gated community. Large regional park across the street w/many amenities, sports court, play areas, gardens and gymnasium. New carpet!</em></p>

<p>I do love that a half-mil will get me 35% more square feet than it would've a year ago. NIR, what say you?</p>
 
<p>oc_flip,</p>

<p>Glad to see you get more room; however, factor in the new high interest rate, your payment is equivalently higher. Hope you like my comment!</p>

<p>I am all for home ownership, I do wish either price and/or interest rate drop, or increase in income, so we can all afford nice houses.</p>
 
<p>High rate loans can be refi'd down (eventually). Too bad I can't make a few calls and lower the pricipal on a (too) big mortgage. </p>

<p> </p>
 
<p>Yes it is good to see oc_fliptrack posting the wonders of Westpark. Anyone remember Christian Slater skateboarding through the desolate construction zone of Westpark in the movie Gleaming the Cube?</p>

<p>Sorry NIR I know I have been nice to you lately but I get to call BS on this one. You forget I still have access to rate sheets and the archives. Assuming a miracle that someone had 20% down and wanted an evil 30 year fixed rate on 6/20/07 the payment would be $2561 and on 6/20/06 the payment would be $2528. OMG $33! When adjusted for inflation that is $43 a month cheaper than last year. Today that is $1.90 per sqft per month and last year it was $2.53 per month per sqft. for a nice 25% discount. Today a 30 year fixed is 6.625% no points and last year it was 6.5% no points. </p>

<p>Interest rates have nothing to do with home prices it is Realtor fantasy. In 1993 rates were lower than today, it didn't help the crash continued. </p>

<p>Ok I am done being mean. Why didn't you comment on my rental property diatribe? Sounds like you have commercial experience as well as residential. Do you know what the per sqft prices are for medical office space? I have never done a commercial deal but if I were willing to play with that kind of money right now I might be bullish on medical office space. </p>
 
<p>graphrix,</p>

<p>You did great on your rental property diatribe! Thanks. </p>

<p>Thank you for being nice to me lately. That's the way everyone should be.</p>

<p>Believe it or not, commercial deal is a lot easier, at least for agents as very little emotion involves. Your are smart to think about medical building, I am shopping for a few doctors myself. The rental market for office building is very hot right now and I expect that to continue as the baby boomers are falling apart.</p>

<p>Best to go for brand new if you are new in the market (no building renovation for a long time). In Irvine, expect to pay $600 - $650/sq. ft. Building size ranges from 1,000 - 13,000 sq. ft. Many are under $1M. Expect minium rent of $3/sq.ft. for brand new building. You will not be allow to manage because it's under association, which is a good thing, IMO.</p>
 
<p>NIR,</p>

<p>I appreciate you addressing my questions but you did avoid the interest rate part. I am really curious on your take on this. Rates are essentially the same as they were a year ago and actually on the secondary market they are better. But the lenders need to make a profit so they are capitalizing on the press of it. So please address this since last year it wasn't a problem. Be forwarned the recent improvement in rates the last few days looks like a dead cat bounce and could get worse from here. The trendlines do not look good at all and look for near 7% by the end of the month.</p>

<p>On the commercial side I will run the numbers and see if it makes sense. It is not just the baby boomers that I like medical office space but the job growth in medical that I like. I may be too late. New construction can be good but what about recent buildings and as an example Jamboree and Barranca? I wouldn't want to manage a commercial prop and since it is under association is that fee included in the purchase price or a separate fee? See I said that I would learn from you. Thanks again and I will try to be nice but if I feel what you say contridicts the truth I will call you on it. I will try to be nice about it but I do have fun with it and as long as you know I am being sarcastic you shouldn't take me too seriously. </p>
 
<p>I don't think that disputing what someone says or writes is being mean or not nice, unless a personal comment is made. It is very nice to expose the truth.</p>

<p>Home prices do not correlate with interest rates, but they do correlate with the availability of credit. In a general sense, folks are willing to borrow any amount of money at any interest rate, no matter how unaffordable or stupid the deal is if they think home prices are appreciating.</p>
 
It just occured to me that I've owned couple of properties in different cities with the same (or very similar) kitchen floor-plan. The "updated" version has the cabnet to left side of fridge instead of right. Geez even the temp control panel is in same spot. LoL.



 
<p>Dear graphrix,</p>

<p>It must a an Asian thing. My wonderful mom trained us to say things in a nice way but still get the point across. Example, instead of saying "you are BS", it can be said as "I disagree with your number". You would never know if the other person is not telling the truth or just being ignorance. My clever mom always said "You catch more bees with honey". Also, my mom always reminded me to learn from everyone and be very humble. I think my mom is the best! OK, so much about my mom.</p>

<p>If you notice, I avoid confrontation at any cost.; especially when I see no point of continuing. Time limitation is also a factor.</p>

<p>OK, on the interest rate. I do track rate movement on a daily basis for years. I could be off however, here is my calculation.</p>

<p>July 2006, 2-bedroom condo went for $550K, interest rate on 30-yr jumbo was 6.25%, 0 pt. </p>

<p>July 2007, 2-bedroom condo dropped 10% to $500K, interest rate on 30-yr jumbo is currently at 6.875%, 0pt.</p>

<p>For simplicity of calculation, I/0, full amount </p>

<p><strong>2006 monthly payment = $550K*.0625/12=$2,864</strong></p>

<p><strong>2007 monthly payment= $500K*.06875/12=$2,864</strong></p>

<p>We can discuss more about the medical buildings. </p>

<p>Could someone in the mortgage field comment on my numbers?</p>

<p> </p>
 
<p>I'm beginning to look REALLY hard at medical buildings.... could somebody please start a thread about it?</p>

<p>As i've always stated, "...you never really get away, the prices may have changed, but the payment has not...." It may drop in time, but in this transitionary time it will not. What this really means is that down payment will mean more as the price drops (and interest rate goes up, but not quite equal to....). Anyway</p>

<p>good luck and don't work too hard</p>

<p>-bix</p>
 
<p>NIR,</p>

<p>Your mom and my mom said many of the same things. So we both have great moms! But she also said you can't sugarcoat everything otherwise people will not always take you seriously. </p>

<p>So with that being said and staying with the food product analogies lets try our best to compare apples to apples. I assume that the prices you used above means that this condo on Crivelli Aisle would have sold for $550 in June of 2006 and today it is for sale for $500k. I am using rates from Greenpoint because A. I have access and B. they have their rate sheets achived so I am able to use rates from 6/20/06 and 6/20/07. </p>

<p>Lets start with the 2006 price of $550k with two different examples. </p>

<p>First example 20% down $110k loan amount $440k. Since this would be a jumbo size loan I will now use a 30 year fixed jumbo loan rate of 6.875% and if I were still in the business this would be a family or friend deal at no points.</p>

<p>Payment = $2890 a month mortgage, $250 HOA, 1.25% property taxes $573 a month = $3712 total monthly nut.</p>

<p>Example two $100k down 1st loan amount of $417k to make it a 30 year fixed conforming loan amount and a 2nd loan amount of $33k with a 30 year due in 15 fixed rate. The rate on the first would be 6.5% making about the same money as the previous example and the second would be 8.25%.</p>

<p>Payment = $2636 1st mtg $248 2nd mtg total mtg payment $2884 = $3708 total monthly nut.</p>

<p>Fast forward to today with a $500k purchase price. We only need $100k for 20% down giving us a loan amount of $400k putting them into a conforming mortgage rate of 6.75% making a little bit more money. </p>

<p>Payment = $2594 HOA $250 and 1.25% property tax $521 a month = $3365 total monthly nut.</p>

<p>That is a savings of $343 a month from the best case scenario from last year. That would mean if you bought this place last year you paid $4116 more than this year plus you lost $50k in "equity". This would make the best case from last year at 90% loan to value. </p>

<p>This isn't meant to be confrontational but to be informative. If you would like I could email you the rate sheets so you can see that I am not making the rates up. The reality is rates are about the same and no offence but this is also the reason why you should talk to a loan officer about mortgages and rates and not the Realtor. Here is the mortgage bond chart that closed on 6/11/07 and they have improved slightly since then but are getting worse today. If I decide to purchase the snagit software I will snag a picture of the bond chart for the last year and then you will be able to see they were the same. So like I said before I am curious about your take on this. </p>

<p><img alt="" src="http://img103.mytextgraphics.com/photolava/2007/06/21/fnma30yr611-46w58ib6v.jpg" /> </p>
 
ns2524 - I don't remember reading about your situation, but I am thinking like you: credit contracts, money gets tight, folks can't qualify, prices come down, I buy for cash.
 
<p>I agree with Nirvinerealtor that rates and housing prices are related. We might not see it right away. But over time, the 2 do affect each other. </p>

<p>When rates were lower a few years back. It allowed monthly payments to be lowered. Allowing consumers to buy homes. As a result, there was a demand for housing. Causing home prices to increase. </p>

<p>Currently, as rates have increased. Potential homebuyers get jittery and decide to wait on the sideline. Lowering the demand for home. Hence, more houses are on the market longer. Causing price to lower. Yes, the argument could be. "Well, the rates are not that much different compares to a year ago." It's not so much that but rather the fear that rates will increase even higher. Thus, lower prices even more allowing buyers to buy at an even more reduced price. </p>

<p>I suppose, it's all market timing. If you're able to buy a home with lowered price along with lower rates. That would be perfect. But as time goes on. Price stays low but rates will certainly be higher. Which as we know, the monthly mortgage price will be higher. </p>

<p>Rates affect the supply and demand of good and products including real estate. The adjustment of rates made by the Fed. might not be the only factor that affect the economy. But it is a very big factor.</p>
 
<p>Furthermore, we keep blaming the flippers. Flippers this flippers that. They're to blame for all this mess. Or at least, most of it. Even flippers are affected by rates. Had the rates stayed low. This would have fueled more buyers. Flippers wouldn't have to flip. Most likely, they would have hung onto their investments for more than 2 yrs. And according to everyone here. Keeping the property for more than 2 years. They're no longer consider flippers? =) Getting late. zzzzzz</p>
 
<p>And for those of you who are going to blame the lousy lenders. Well, they also thought that the rates would stay the same. Fueling this madness we call real estate appreciation. Everyone including lenders thought they could predict the future. So we all predicted wrong. But hey that's business. You win some, you lose some. Life goes on. </p>

<p>And by the way, for every flippers that are mentioned here whom are "hurting". There are thousand and thousand of flippers of years past, that have made billions. Anyways, it's getting late. This is getting too addicting to post. I think I am going to quit this. Thanks to all. May we all catch the next wave. Be happy. </p>
 
<p>There are some great responses here. I think reason has kicked it up a notch and made some good points.</p>

<p>I will respond when I am not so tired with more but I am still waiting for nirvinerealtor's response. I know she means well and adds to the forums because she is on the otherside. The fact remains though that she said the payments would be the same at the lesser price. I don't like to be the one who says see I told you so but she is either getting bad info from her loan officer or just using Realtor spin. I think it is the latter. If she wanted to she could say well use a 5yr or 7yr I/O loan and see what happens. I didn't check but since I know she likes to support the I/O loans and with the changes in the secondary market she could prove me wrong.</p>

<p>NIR - Please do respond on this as I feel if you had a good loan officer they could help you do an even better job than you already do. Don't let interest rate psychology lose a sale and use it to your advantage.</p>
 
Does anyone know how to post a graph? I don't. The graph would be home prices vs. interest rates. I have seen this graph many times and it would seem to be valuable to those who have "opinions".
 
<p>graphrix,</p>

<p>Yesterday was a fun day for me. I attended a graduation celebration and party until late. During the ceremony, I kept thinking these young people are at the important turning point of their lives - I wish they will all stay happy for years to come.</p>

<p>You might be right about me not having a good loan officer. Could you recommend one? You are also correct about the I/O product as I am a big fan of the 10 I/0 for their flexibility of payment plans. Don't get me wrong, I do put my money where it pays most. The principle payment accumulation for the first 5 years is very minimal and boring for me.</p>

<p>I see nothing unusual about your example above, it is a very impressive analysis, thank you, I will use your method as an explaining tool. The interest rate gap you use was only .25%, and combining of conform+2nd is a very good idea. </p>

<p>I admit, it was a realtor spin, to prove a point (honest). I was trying to compare appple to apple and kept the variables down to minimum. Financing is a maze of information and it could be that or could be this. Having a good loan officer is critical. Not my field; but I can not afford not to be in tune with the financing part, and able fill the void of the loan officers, reluctantly trying my best. As you know, human tends to go after the low hanging fruits, therefore, the high hanging fruits get served last. OK, enough about food.</p>

<p>I understand the chart you posted. The cost of borrowing had a "steep" increase in just last 3 weeks. Yuck! , that translated to at least .5% intererest raise in the last 3 weeks. I hope this is temporary as one more rate hike will kill the market, IMO.</p>
 
<p>Graphrix - good job of calling NIR out. You stopped the spin.</p>

<p>NIR, I'll have to admit, you were pretty smooth in your last response.</p>
 
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