What's going into escrow - Irvine and maybe some Tustin too

NEW -> Contingent Buyer Assistance Program
"By the end of 2008, I expect there will be normal buyers under normal real estate conditions."



Why? Any particular reason?



"Personally, I know of 4 people who avoided buying in 05, 06, and 07."



Well, I know we aren't personal, but you kinda know me and I am did not buy in 05,06, and 07, so maybe you know of 5 people?



"And they are definitely buying in 08 or 09."



Not me.
 
IR- your profile on 20 Edgestone #17, Irvine, CA 92606 for 449k has already accepted offer at full price and enter escrow. listing agent also said that they have multiple back up offer. i think if the house/townhouse is price right in this market there will be buyer. i think the foreclosure problem isn't as great here in irvine vs corona or fresno. The bottom for the desirable area such as irvine might recover faster then some other area.
 
<em>"</em>your profile on 20 Edgestone #17, Irvine, CA 92606 for 449k has already accepted offer at full price and enter escrow.<em>"





</em>Cool. It was a very good price in today's market. I still think it will decline, but 30% off the peak is nearing the 40% off I think we will see. Of course, when the median is 40% off, we will be profiling individual properties at even greater discounts.<em>





"think the foreclosure problem isn't as great here in irvine vs corona or fresno." </em>





That is true, those markets may see declines of 60% or more.


<em>


"The bottom for the desirable area such as irvine might recover faster then some other area."</em>





Also true, but the bottom will still be 40% or more off the peak.
 
<p>"I think it will actually become fashionable to walk."</p>

<p>I agree with you lawyerliz. Just as the heard jumped off the abyss into insane mortgages, so will they start to just walk away - "insanely" in the sense that these were obligations that they promised to keep and in other times would have been unfathomable to break. That's the way a herd can move though. Just ask any holocaust survivor.</p>

<p>[Edited for spelling: Spelled "herd", "heard" - LOL]</p>
 
HS_Teacher



You refer to folks who purchased in the 2005-2007 time period. I feel that a part of the problem that you are leaving out are the HELOCs and REFIs for people who may have ought as far back as 1999 and should have tons of equity.



Keep in mind that I am somewhat of a resident bear here but the "freeing of equity" types may be a larger number than the number of sales in those years.



These people have already taken out the profits, spent them, and now have exemption from 1099's, so what do they have to lose? The MLS seems to have at least as many short or REO sales as non distressed. I think that the most negative effects will come from the REFI and HELOC folks rather than the people who purchased at the top.



Regards
 
"Cool. It was a very good price in today's market. I still think it will decline, but 30% off the peak is nearing the 40% off I think we will see. Of course, when the median is 40% off, we will be profiling individual properties at even greater discounts."



I agree. Good times will be had when all the people still trying to sell their houses at PEAK realize how low they have to go to move it. :-)
 
<em>"I think that the most negative effects will come from the REFI and HELOC folks rather than the people who purchased at the top."</em>





I think this will prove to be the case in Irvine. I have already profiled a number of people who HELOCed out all their equity. I believe it was Lendingmaestro who pointed out that most Option ARMs were refis and not purchase money mortgages.
 
<em>All the current foreclosures are coming from those who bought in 2005 or 2006 - people who really couldn't afford their house.





</em>No, no, no... sorry, this is just wrong, very wrong. Yes, the majority of foreclosures last year were from these years. However, currently they are coming from all years. Hell, I saw a $100k loan from 1988 that got their NTS two weeks ago. It is spreading really fast, and it is getting really bad. As Cramer would say... you have no idea how bad it is out there, you have no idea.





Put the kool-aid down, and take off the rose colored glasses, this foreclosure sh*t storm has just begun.
 
The bears are running wild. Ask yourself how many people do you personally know in real life who has real estate problems. I know of exactly two. And I know four who will buy within the year. I think paying 3k a month for a mortgage is very reasonable. That comes out to a 500k loan. And personally, I think the median will be 500k by the end of 2008. Thus people will buy. 2004 was the last decent year to have bought real estate. 2005, 2006, and 2007 were bad years. 2009 and on should be fine. Maybe I just don't know as many people who used the equity in their house foolishly.
 
<em>"The bears are running wild."</em>





Everyone really jumped on you, didn't they? We bears mean well, we are just trying to save people from harming themselves financially. So far, we have been more right than wrong. Most bears here are of the opinion that 2004 was the top of what should have been a bubble like the early 90s. Things were greatly overpriced relative to value in 2004. Who knows, we might be proven wrong, or then again, we could be right, and a 2008 purchaser could be underwater for 5-10 years...
 
<p>What's the option ARM minimum payments vs. the rent equivalent spreads look like? If one assumed people will choose the cheapest option (ie. what the cheapest I can occupy this place for), that might change the timing of if and when they walk away.</p>
 
Check the foreclosure thread, 2100+ people forgot to pay their mortgage, if you don't know any of them, then you don't have many friends.





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