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

NEW -> Contingent Buyer Assistance Program
[quote author="lendingmaestro" date=1211006551]Are you serious? Please tell me you are kidding. I guess there are people with nothing better to do than complain about anonymous people's avatars on FREE non-commercial websites huh?</blockquote>




I have to confess that I was finding it very difficult to read his posts while trying to not see the avatar. It bugged me so much that I started holding a folder over that part of my screen so that I could read and not see it.





In regards to affordability, there are plenty of homes that people can afford. The problem is that many people don't have a clue as to what and where they should be living based on their income. Too many people think they should be able to start in a 2500 Sq/ft SFR in a nice neighborhood. What happened to the old days when you began with a starter home and saved and saved and saved to move up? Instead, people want to lease Lexus' and Mercedes' and own a house that is out of their league for where they are in life.



A low to medium six figure dual income in TODAY's doesn't entitle one to start with the kind of houses you guys are talking about, especially when one hasn't been able to save a good downpayment because one likes to just spend, spend, spend. I think all these loans over the past few years affected the psyche of people's expectations. People need to humble themselves a bit and deal with the issues that are drving them to play the keep up with the Jones' game. It's gotten so out of hand these past few years.



I know you guys are not in that category, but a lot of others are. They're not on this board because they're out to dinner or at the mall.
 
[quote author="Masterofdamoney" date=1211007587][quote author="ipoplaya" date=1211007183][quote author="lendingmaestro" date=1211005611]Ipop,



How do you get that there is only 6 months inventory. You are posting that there are 4 entering escrow every day. If 4 sales close a day, that is 120 in a month. There are currently nearly 1,151 units for sale as of yesterday's MLS which puts months of inventory over 9.5 months.



Even if 150 homes sell a month, that puts the months of inventory over 7.5 months. This is just using the MLS listed properties which doesn't take into account many foreclosures.</blockquote>


I only track larger homes in Irvine (2000sf+) and condos in 92602. My site only has a portion of what is going into escrow each day in Irvine.



For inventory, I use the data from the Zip Realty graph that IHB links to. That one indicates around 900 Irvine units available now... I have no idea which data source is correct. I am tracking mostly to see trend so as long as the data source are consistent, the trend information is useful.



For sales, I use the monthly DQ figures. Maybe we have 7-8 months on the market, maybe its around 6... Either way, the figure has been level or decreaing slightly over the past few months.</blockquote>


I am showing about 12 months inventory right now... I'm using MLS to identify all current condos/homes on the market in the city of Irvine, and I'm seeing almost 1200 currently 'on market' in some stage (primarily active status). I do not have a reliable source for true 'sales' that exclude auction/REO purchases. But figuring maybe 100? real sales per month vs a 1200 inventory (for the last few months) gives me around a 12 month supply currently.</blockquote>


I figure IR2's recent analysis is probably a better reference for sales, since that data is mined from MLS and would be more "real", i.e. no auction results, no new homes, etc. His spreadsheet has 125 sales in March and 138 in April. Homeseekers currently indicates there are 1026 Irvine listings, realtor.com says 1016 when looking at Irvine SFRs and condo/townhomes. There is some Irvine land and some mobile homes on MLS.



Based on those figures, there is probably around 7-8 months on the market in Irvine today. That is about the same as last month (listing volume hasn't changed much since March and sales between March and April were similar), and a good bit lower than January and February.



For the awgee's of the world, all I am saying is that months inventory has come down since earlier in the year and definitely since late last year. IMO this has very recently lessened the speed of descent on prices andt that is one of the reasons the median has been holding up for the past 5-6 weeks. I make no claim or prediction with regards to future prices as a result of this information!
 
[quote author="awgee" date=1211008219]For those who think that decreasing inventories lead to higher home prices, you may want to check out the inventory levels from 1991 through 1995 on Chart 6 from this report from Paul Kasriel of Northern Trust.



http://www.northerntrust.com/popups/popup_noprint.html?http://web-xp2a-pws.ntrs.com/content//media/attachment/data/econ_research/0805/document/us0508.pdf</blockquote>


Thanks for the link awgee, interesting data.



The start of the 90's recession appears to roughly coincide with the months inventory peak in late '90/early '91. Inventories and prices fell until months inventory got down to 5-6 months in 1994. Our most recent bubble was during a period of sub 5-month inventory. It appears our bubble peak roughly coincides with the movement above 5 months inventory in 2006.



Decreasing inventories themselves don't lead to anything except lower inventories. At least back through '90, this looks like months inventory below 6 or so should portend flat or rising prices. It will be interesting to see if that holds true if and when Irvine and OC get to a six months inventory in the near term...
 
[quote author="Masterofdamoney" date=1211006192][quote author="IrvineRenter" date=1210992593][quote author="Masterofdamoney" date=1210987131][quote author="graphrix" date=1210984992][quote author="Masterofdamoney" date=1210886468]Oh, and FNMA just released their new guidelines yesterday, which are effective June 1st, 2008. The new guidelines clip out about 1/3 or the people who can currenlty qualify for a loan. They are much stricter - lower LTV's and CLTV's, they have imposed steep credit score requirements, etc.... that should make it even more fun for Joe and Jane consumer!</blockquote>


I am not trying to high jack this thread, <a href="http://www.housingwire.com/2008/05/16/fannie-nixes-declining-market-ltv-restrictions/">but FNMA said they are dropping the regional declining market LTV reduction</a>. <em>



Starting June 1, Fannie Mae said it will accept up to 97 percent loan-to-value ratios for conventional, conforming mortgages processed through its automated underwriting system, and 95 percent loan-to-value ratios for loans manually underwritten, in all geographic locations in the United States. The LTV requirements will apply only to single-family, primary residences; other properties will face different underwriting restrictions.</em>



So, my question, because I am too lazy to search FNMA right now, is what other guidelines did they change to compensate for this increased risk? I mean, I know they will change the LTV, but even they are not stupid enough to not change something else in the guidelines to make it just as difficult to qualify for as before.</blockquote>


Effective June 1st, 2008 all new FNMA submitted loans must adhere to brand new FNMA guidelines. The new guidelines are far sweeping, across all product lines.



They are implementing STEEP credit score minimums on conforming loans. They have reduced the LTV and CLTV's allowed ON ALL LOAN PRODUCTS, across the board. They implemented a new DU version that everything will have to run through that incorporates these guidelines.



I have read the new guidelines about 5 times now, my estimation is that it effectively removes 1/4-1/3rd of the current pool of 'qualified' people from that category... just what we need. :)</blockquote>


Funny, It is not being spun that way by the bulls...



Are they still allowing 45% DTIs? IMO, That will be the last shoe to drop. Prices can still be supported by a few knife catchers if they are allowed to borrow huge sums with the combination of low interest rates and high DTIs. The GSEs must know that high DTIs will have high default rates. When they begin tightening the DTIs, the amounts borrowed will plummet and prices will plummet along with it.</blockquote>




45% max backend for conforming Jumbo ($417K-$729K)



There is NOT a set # for the backend on regular FNMA conforming, DU will determine the characteristics of the file and decide... I have seen very strong files go as high as 65%... if they have great credit, reserves, and lowwww LTV (not always... need very strong other factors) (under $417,000 Loan amounts)



31/43 for FHA (31 front, 43 back)



There are no changes beign made to the DTI requirements listed in the changes taking place June 1st.



Those numbers might seem 'easy' to hit, but almost no one can hit that trifecta. People just don't make the money/have the credit/have the reserves/hav the down payment or equity...</blockquote>


Would you be of the opinion that these DTIs will continue to display high default rates? Or have they tightened the other criteria to the point that those high default rates will not translate into big losses on the loans?



Do you think the new loan standards are going to kill the feeble rally underway?
 
[quote author="Masterofdamoney" date=1211006419][quote author="lendingmaestro" date=1211006157]Master,



I see you changed your Avatar, what gives? The other one was hilarious!!</blockquote>


Too many people said they were offended by the mere sight of George Bush... man his popularity must really be in toilet! :)</blockquote>


That wasn't my issue with it. It was humorous, but a brush 'inappropriate'. Not the picture of Bush either (I could care less), the 'moneyshot'.
 
[quote author="IrvineRenter" date=1211022323][quote author="Masterofdamoney" date=1211006192][quote author="IrvineRenter" date=1210992593][quote author="Masterofdamoney" date=1210987131][quote author="graphrix" date=1210984992][quote author="Masterofdamoney" date=1210886468]Oh, and FNMA just released their new guidelines yesterday, which are effective June 1st, 2008. The new guidelines clip out about 1/3 or the people who can currenlty qualify for a loan. They are much stricter - lower LTV's and CLTV's, they have imposed steep credit score requirements, etc.... that should make it even more fun for Joe and Jane consumer!</blockquote>


I am not trying to high jack this thread, <a href="http://www.housingwire.com/2008/05/16/fannie-nixes-declining-market-ltv-restrictions/">but FNMA said they are dropping the regional declining market LTV reduction</a>. <em>



Starting June 1, Fannie Mae said it will accept up to 97 percent loan-to-value ratios for conventional, conforming mortgages processed through its automated underwriting system, and 95 percent loan-to-value ratios for loans manually underwritten, in all geographic locations in the United States. The LTV requirements will apply only to single-family, primary residences; other properties will face different underwriting restrictions.</em>



So, my question, because I am too lazy to search FNMA right now, is what other guidelines did they change to compensate for this increased risk? I mean, I know they will change the LTV, but even they are not stupid enough to not change something else in the guidelines to make it just as difficult to qualify for as before.</blockquote>


Effective June 1st, 2008 all new FNMA submitted loans must adhere to brand new FNMA guidelines. The new guidelines are far sweeping, across all product lines.



They are implementing STEEP credit score minimums on conforming loans. They have reduced the LTV and CLTV's allowed ON ALL LOAN PRODUCTS, across the board. They implemented a new DU version that everything will have to run through that incorporates these guidelines.



I have read the new guidelines about 5 times now, my estimation is that it effectively removes 1/4-1/3rd of the current pool of 'qualified' people from that category... just what we need. :)</blockquote>


Funny, It is not being spun that way by the bulls...



Are they still allowing 45% DTIs? IMO, That will be the last shoe to drop. Prices can still be supported by a few knife catchers if they are allowed to borrow huge sums with the combination of low interest rates and high DTIs. The GSEs must know that high DTIs will have high default rates. When they begin tightening the DTIs, the amounts borrowed will plummet and prices will plummet along with it.</blockquote>




45% max backend for conforming Jumbo ($417K-$729K)



There is NOT a set # for the backend on regular FNMA conforming, DU will determine the characteristics of the file and decide... I have seen very strong files go as high as 65%... if they have great credit, reserves, and lowwww LTV (not always... need very strong other factors) (under $417,000 Loan amounts)



31/43 for FHA (31 front, 43 back)



There are no changes beign made to the DTI requirements listed in the changes taking place June 1st.



Those numbers might seem 'easy' to hit, but almost no one can hit that trifecta. People just don't make the money/have the credit/have the reserves/hav the down payment or equity...</blockquote>


Would you be of the opinion that these DTIs will continue to display high default rates? Or have they tightened the other criteria to the point that those high default rates will not translate into big losses on the loans?



Do you think the new loan standards are going to kill the feeble rally underway?</blockquote>


The problem lies in the fact that these DTIs were never used or enforced with the vast majority of loan products that people currently have on their homes.



Almost every single loan done in the previous 5-6 years was a stated/stated or 'no doc' loan. The income was always lied about. Most of the time, to the tune of double, triple, or more.



The banks were offering (litteraly) dozens of different 'documentation types' that would pretty much accomidate anyone, with any income level.



The vast majority of people simply cannot afford $500,000+ dollar houses. It's just silly. For comparision, imagine if people making ~$70 - 100K a year for their total household incomes were all driving around in brand new Ferraris. It's the EXACT SAME THING. But if Ferrari gave out loans to anyone, at any income level, and structured the payments so that they were very low for at least the first few years... you'd see a lot of people driving around in them.... who would all eventually get them repo'd.



It is very telling that now, when you have to prove everything, almost no one can qualify... wow, right? :)
 
[quote author="Masterofdamoney" date=1211066361]It is very telling that now, when you have to prove everything, almost no one can qualify... wow, right? :)</blockquote>


I also found it interesting above when you noted the people qualifying for $200,000 to $300,000 loans have the same income as people trying to refinance their $700,000 to $1,000,000 mortgages. Good luck with that.



If you would like to write a post for the main blog describing the new standards and what will happen, let me know. We can work together on drafting it.
 
[quote author="IrvineRealtor" date=1210985646][quote author="fromluotian" date=1210984353]I put an offer on 3 Rains, Irvine, CA 92602 property (an approved short sell) two months ago. My agent told me the seller submitted my offer with other five to the bank. A few days later my agent said a higher offer went into escrow. However, I never found any information about that sell in Ipoplaya's site. Anybody knows what happened to that one? Thanks.</blockquote>


This is still listed as "Pending" with the agent from outside the area. I called and she said that they are not approved yet with the bank, and that they have 3 offers in (not 5) with the top being $800K. If that is still something you would consider, resubmit with your agent.



P.S. It's not listed in the local MLS (SocalMLS), only in the MRMLS (Inland Empire). That limits exposure dramatically.



P.P.S. There's $1.04M in loans against it, 100% financing in '06.</blockquote>


IrvineRealtor, thank you very much. I am definetely not the the top offer. I guess my offer is still within one of the three unless my agent lied to me.
 
Went to an open house in NW Pointe today. Still being shown, but they had two offers within the first week they are in counter offer with already. The sale price will probably only be 10-12% off peak.
 
<blockquote>Went to an open house in NW Pointe today. Still being shown, but they had two offers within the first week they are in counter offer with already. The sale price will probably only be 10-12% off peak.</blockquote>


Are you talking about the property on <a href="http://www.redfin.com/CA/IRVINE/20-FOXCREST-92620/home/4788983">Foxcrest</a>?
 
[quote author="IACRenter" date=1211198864]<blockquote>Went to an open house in NW Pointe today. Still being shown, but they had two offers within the first week they are in counter offer with already. The sale price will probably only be 10-12% off peak.</blockquote>


Are you talking about the property on <a href="http://www.redfin.com/CA/IRVINE/20-FOXCREST-92620/home/4788983">Foxcrest</a>?</blockquote>


Yup... Very nice house. Great design choices. Love the upstairs layout. Downstairs was a little smallish and a bit impractical, but I'd still live there happily. I had a long chat with Roula. She kindly suggested that if I wasn't prepared to offer more than $1M, I probably shouldn't waste my time. She did give me some nice feedback on some of the other areas I have been considering. Never had occassion to meet her before. She's the real deal...



Updated site with yesterday's escrow finds:



<a href="http://www.ipoplaya.com">IPO</a>
 
[quote author="ipoplaya" date=1211206565]

Yup... Very nice house. Great design choices. Love the upstairs layout. Downstairs was a little smallish and a bit impractical, but I'd still live there happily. I had a long chat with Roula. She kindly suggested that if I wasn't prepared to offer more than $1M, I probably shouldn't waste my time. She did give me some nice feedback on some of the other areas I have been considering. Never had occassion to meet her before. She's the real deal...</blockquote>


Heh. I just noticed the other day that she has revised the tag line on her advertising from "Runs the extra mile for you" to "Tells it like it is." Apparently so.
 
<blockquote>Yup? Very nice house. Great design choices. Love the upstairs layout. Downstairs was a little smallish and a bit impractical, but I?d still live there happily. I had a long chat with Roula. She kindly suggested that if I wasn?t prepared to offer more than $1M, I probably shouldn?t waste my time.</blockquote>


Haven't seen the place yet myself but the photos look nice but the price point is a tad too high for me. I too have been watching Northwood Pointe--nice mix of relatively newer homes, traditional SFR, gated, association amenities, low mello-roos, and IUSD. I need to be more patient and let the market do its work :-)
 
"She kindly suggested that if I wasn?t prepared to offer more than $1M, I probably shouldn?t waste my time."



Yeesh, so what's she's saying is that NWP is still selling at over $363/sq ft. :P
 
[quote author="Irvine Allergy Dr" date=1211247674]"She kindly suggested that if I wasn?t prepared to offer more than $1M, I probably shouldn?t waste my time."



Yeesh, so what's she's saying is that NWP is still selling at over $363/sq ft. :P</blockquote>


Nicely upgraded it is doc. I think Green Hollow, which is 2650sf, will go for around $340 per sf, but it needs some money put into it. I think the one on Wedgewood in escrow now, which is 2900sf, will close for $370-375 per sf.
 
[quote author="ipoplaya" date=1211206565]I had a long chat with Roula. She kindly suggested that if I wasn't prepared to offer more than $1M, I probably shouldn't waste my time. She did give me some nice feedback on some of the other areas I have been considering. Never had occassion to meet her before. She's the real deal...</blockquote>


In all seriousness, she makes a great salad too. You gotta go to one of her broker previews to see what I mean. Ask IR2, her salad is the real deal. BTW, broker previews are a great way to get a free lunch. I'm surprised awgee isn't all over that. I mean, free food plus free comedy with some of those still drinking the Kool-Aid, good times, good times.
 
[quote author="graphrix" date=1211248693]In all seriousness, she makes a great salad too. You gotta go to one of her broker previews to see what I mean. Ask IR2, her salad is the real deal. BTW, broker previews are a great way to get a free lunch. I'm surprised awgee isn't all over that. I mean, free food plus free comedy with some of those still drinking the Kool-Aid, good times, good times.</blockquote>


Salad? WTF... are you still trying to slim down in time for bikini season? Give it up, you're not a size 2 any more.



Personally I hold out for the Jalapeno's at the 1st Team digs.
 
There are definitely more homes going into escrow this summer selling season. I just watched one go pending after only 10 DOM (with a new realtor) new my place. Of course, the new realtor offered a 4% buyer agent commission and cut the price another 8%... If it goes it will be a $600K+ at peak condo sale for $399K.



Seeing a lot more movement tho!
 
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