Will I ever be able to buy?

gepetoh_IHB · Jun 14, 2007

Reason,

I see that most on the posters do not believe that you actually have "made" money on your '05 purchase, despite your insistence. To dispel the doubters, may be you should give us the stats on your purchase: how much, sq ft, where, etc. That should give everyone a good idea of how much that home should be worth, and whether you "are screwed", or just "didn't gain much". Yes, I am aware that most here will low ball you, but we should at least be able to check the comps.

And do the same for your bro-in-law's house that he bought in '04. We should be able to get to the bottom of this yet!

reason_IHB · Jun 14, 2007

gepetoh,

=) without being specific. Comps for my unit for the last 6 mos. are: 560k; 580k; 569k; 588k; and, the latest "pending" 618K. And believe it or not. Most of the aforementioned prices are from people whom have dumped their properties. I purchased mine at 510k. Now, that's not a whole lot of gain, I must admit. But that's certainly not the 20% ...30%....or 40% drop that I have been reading. But then again, it just might drop to 300k if I hold on to it for another 4 years?

By the way, I wasn't kidding when I said I make far less than 100k a year. I would love to make that much so that I can save up for a big down payment like most have advised here. But based on my meager income, I was unable to save up fast enough. I saved and I saved to have 10% on a 300k condo. But when I was able to reach my goal, the same condo went up to 400k. Then I kept saving so I can reach 10% for the 400k price. Then the condo went up to 460k. At any rate, I dove into the market when it peaked. Silly me. But just the luck of the draw, I now have more in equity than I could have ever saved. 

And before I stop posting, I honestly think that this is suppose to be an open forum where we share our experiences and ideas. Learn from one another. Unfortunately, it's a one-sided view that most bloggers here hold. And more power to you. But in doing so, you have limited your view and knowledge. Good luck and be happy.

skeptic_IHB · Jun 14, 2007

reason,

I sincerely wish you good luck on the '05 purchase. It sounds like you may have used creative financing to get in the market, did you? If so, have you refinanced or do you plan to?

Please don't let the hostility drive you away. We need open forums and divergent viewpoints.

My personal reaction was based on your advice to 4walls4me that he/she should buy now and use appreciation to move-up in 4 to 5 years. That is a VERY implausible scenario these days.

reason_IHB · Jun 14, 2007

skeptic,

I really don't know if I should say anything. I can just see the vultures sitting behind their computer ready to jump on my throat...hahaha. And that's where we're not going to learn new ideas. Be happy.

awgee_IHB · Jun 14, 2007

Reason and Skeptic - I will try to tell my story as relevant to this thread with as few coherent words as possible. In approx. 1987 I was saving as much as I could for a down payment, but the prices were moving up faster than I could save for the down. My father saw my effort, asked a few questions about how much I needed for a starter home down payment, and gave me the bit more I needed to make the down. I got two roomates who made most of my monthly payment and re was appreciating. Cool, huh?

After a couple of years of appreciation, one of my roommates wanted to equity share, so I sold my home and my roommate and I bought a more expensive 2 bd, 1 ba home together in 1990. We added another bedroom and bathroom ourselves, but things change and he wanted out when the market had turned down. By 1995 I was sole owner of a 3 bd, 2 ba, 1500 sq ft gorgeous home for which I owed more than I could sell it for because re had been depreciating for the last 5 years. Being upside down on a mortgage is painful, even when you can afford to make the payments.

I got married and my wife and I decided to sell our home in 2000 and extend ourselves greatly by buying a home on Naples Island. RE prices jacked up from 2000 to 2005, but I remembered what it was like to be upside down, even though I knew we had enough equity that it was quite unlikely that we would ever be upside down again. For two years I talked with my wife and convinced her that the summer of 2005 was a good time to sell and start leasing for as long as it was financially advantageous. She loved our home, but she believed that I knew what I was talking about. I was born in So Cal and have lived here for 49 years, so I have seen the re cycles and heard all the spew and nonsense. So Cal re does periodically depreciate and it does not take a genius to recognize the up and down cycle. It is highly unlikely that the bottom of the re market is here after only one or two years of depreciation. The last top to bottom took five years and the last bottom to top took ten years. And neither of the last couple cycles included the preposterous amount of creative financing that has been perpetrated during this mania. It is more likely that this top to bottom will take somewhere between five to ten years, and mortgage/derivative industry will be shaken to it's core. I will guess that 20% down payments, 28% DTI, and 15 year mortgages will again be the norm and re prices will reflect mortgage affordability, and that is how you will know the bottom is in.

Good luck to both of you.

gepetoh_IHB · Jun 14, 2007

Reason,

So now I’m confused… I have been studying the Irvine & OC market since early ’04, and back in 2005, the $510K typically got you a 2+2, 1000-1100sf condo in Irvine. The homes in the high $500K-low $600K range today are typically a 1600-1700sf townhomes that were going for high $600’s back in ’05. The 1300-1600 sf homes are what I have been in the market for, so I am quite familiar with the price movements on these homes. You did not give much details so I don’t know which, but either way it seems implausible that either 1) you bought a home that was going for $650K+ at the time for just $510K, or 2) people today are buying a 1100sf condo in Irvine for $600K these days.

Can you give more details? I don’t think you’ll convince anyone that either one of these happened without seeing some relevant data. And the $600K in ‘04 for $1.2m seems just as implausible, since homes that were going for that price in ’04 (well-worn but clean 3+2, 1500sf with a decent yard, 7,000sf or so for Orange) are comp’ing at around $525K-$550 now. If you said $600K in ’01, that might be more reasonable, but you’d have to give more data for anyone to assume you are not joking or fibbing.

reason_IHB · Jun 14, 2007

Gepe,

You're right on the money! I have to commend you on your tracking of prices and sq. ft. I purchased mine on a 1st phase. To be exact, the price was 495k, I added upgrades to mine so it ended up to be 510k. My unit is approx. 1300 sq. ft. 2 + 2.5. 

And I like to say this also. At the time, my wife and I went to....umm....I forgot the development. It's on Sand Canyon near the hills. We looked at 2 + 2 for 1100 sq. ft , 200 sq. ft smaller than ours. And they were going for 750k. So believe it or not back in 2005, we thought ours was a bargain. 

And please before you jump the gun and say what a fool I am. I am just like anyone else, I would love to have been able to afford a SFR. So as much as I hate these smaller units. It's a starting point. I think everyone has to look at their own situation and figure out their path. Mine was to start with a smaller unit. Have it for 5 to 6 years and move onto a bigger unit.

reason_IHB · Jun 14, 2007

gepe, 

Sorry, didn't see your 2nd paragraph re: Orange home. I have nothing to gain by lying. After my wedding, my wife and I didnt have a place so we stayed at my bro in law's new home. We saw his loan paperworks, It's 600k. Lately, his neighborhood are listing at 1.1 to 1.2 million. Sure, it's a tough market and buyer might make offers of 900k ...800k. But that's not a bad return since he only bought it in late 2004.

reason_IHB · Jun 14, 2007

awgee, 

I have always been taught to listen and respect my elders. I thank you for the advise. I believe you're right. I did use one of those "creative" loan and I must say, at least, in my situation it worked. But I can't imagine these loans working now that the market is not so "hot" with price depreciating. And with all these borrowers defaulting, that will have a lingering effect on the market as a whole. 

But do please add more comments when the time comes. I have to admit it has been a roller coaster ride. And advise from someone who have live it will surely help someone like myself. Thank you, sir.

bigmoneysalsa_IHB · Jun 14, 2007

"The appreciation will allow you to upgrade to the home..."

reason, I don't think this strategy is going to work very well. Maybe I am missing something?

If the condo appreciates, won't SFRs be appreciating too, keeping them <a href="http://pricedoutforever.com/">forever out of reach</a>?

Let's say that in a neighboorhood you like, condos are $500K and SFRs are $800K. You can afford the $500K, so you buy a condo. A few years later, the market has gone up 20%. Now, your condo is worth $600K and the house you want costs $960K. So even if you sell and bank a profit of $100K, you are still behind, because the house has gone up $160K! You have are actually now further away from being able to buy a house than before.

The only way I can see your plan working is if the condo is appreciating much faster than the house you ultimately want to buy.

Trooper_IHB · Jun 14, 2007

Some of reason's comments from another post....

"But here's the thing. Since I purchase my home back in the 80's. I am sure there were market corrections since then, right? So why is it my 70k house back in the 80's is still 600k today?" 

ok, he's not truthful... but for arguments sake....he admits to obtaining "exotic" funding to purchase his 2005 condo. To me that screams RESET coming up in the next year or so. If that's the case reason, I hope you've been saving $ since buying that box, because you're going to need it to pay off the bank on your impending short sale.

and he said where he lives in another thread. I'll find it.

Trooper_IHB · Jun 14, 2007

Found it. reason's hood. Comp away Gepetoh...

"I live at Garland Park and the noise level is rare. When we first moved in, the neighbor's kid was running next door and you can hear his foot steps. I think he's alittle older now and we hardly hear a peep. 

I must add this. I have a tandem garage and once my car battery went out. I had to connect 2 jump cables to reach my car battery to my wife's battery =). I would rev my engine for over 40 minutes. Not realizing that my neighbor's living room shared the same wall as my tandem garage. So I am sure he heard my loud engine. Hahahaha.... U know how I know he was hearing my car engine?...cause that week, when I was in my garage. The neighbor politely let me know by blasting his TV. I went up to my wife and said, "Oh <a href="mailto:cr@p">cr@p</a>!! All that time I was revving the engine. The neighbor must have heard it all.".....we both laughed. Needless to say, like good neighbors we stop doing that....hahaha.

Other than that, I think my unit is built pretty clever. Although, we share 2 walls. One wall is mainly the bathrooms and washer/dryer room. Which mean we hardly hear anything from the neighbors".

Trooper_IHB · Jun 14, 2007

ok, I just did a web search for Garland Park. Zovall actually had a post on this on Nov 26, 2006. I've cut and pasted some of the nuggets below. Seems to me that 7 months later, these prices would be a lot lower ...... Um, you were saying reason .....?

In Garland Park, there are currently SIX plan 1’s listed for sale in MLS. 4 of them are listed by flippers:

Address: 199 Wild Lilac, Irvine, CA 92620 (Woodbury)

<a class="kLink" oncontextmenu="return false;" id="KonaLink1" onmouseover="adlinkMouseOver(event,this,1);" style="POSITION: static; TEXT-DECORATION: underline! important" onclick="adlinkMouseClick(event,this,1);" onmouseout="adlinkMouseOut(event,this,1);" target="_top" href="http://www.irvinehousingblog.com/tag/garland-park#">MLS</a>: S463131 DOM: 39

Price Reduced: 11/24/06 — $579,900 to $565,000

Price Reduced: 11/25/06 — $565,000 to $554,900

Current Price: $554,900

Address: 126 Chantilly, Irvine, CA 92620 (Woodbury)

MLS: S464403 DOM: 28

Current Price: $559,000

Address: 124 Chantilly, <a class="kLink" oncontextmenu="return false;" id="KonaLink2" onmouseover="adlinkMouseOver(event,this,2);" style="POSITION: static; TEXT-DECORATION: underline! important" onclick="adlinkMouseClick(event,this,2);" onmouseout="adlinkMouseOut(event,this,2);" target="_top" href="http://www.irvinehousingblog.com/tag/garland-park#">Irvine</a>, CA 92620 (Woodbury)

MLS: S464852 DOM: 30

Current Price: $579,500

Address: 181 Groveland, Irvine, CA 92620 (Woodbury)

MLS: S444308 DOM: 172

Price Reduced: 07/17/06 — $604,900 to $589,900

Current Price: $589,900

Adding to this inventory is the <a class="kLink" oncontextmenu="return false;" id="KonaLink3" onmouseover="adlinkMouseOver(event,this,3);" style="POSITION: static; TEXT-DECORATION: underline! important" onclick="adlinkMouseClick(event,this,3);" onmouseout="adlinkMouseOut(event,this,3);" target="_top" href="http://www.irvinehousingblog.com/tag/garland-park#">builder</a> who is trying to unload 2 more of the same plan:

Address: 188 Guinevere, Irvine, CA 92620 (Woodbury)

MLS: S464397 DOM: 28

Prior Listing: $580,990 - 41 DOM

Current Price: $574,990

Address: 180 Guinevere, Irvine, CA 92620 (Woodbury)

MLS: S464399 DOM: 28

Prior Listing: $619,990 - 27 DOM

Current Price: $599,990

It looks like the flippers for the most part are lowering prices ahead of the builder. But the scenario could quickly change into one similar to that at <a opkor="0" o62hd="0" href="http://www.irvinehousingblog.com/tag/avenue-one">Avenue One</a>.

graphrix_IHB · Jun 14, 2007

124 Chantilly is currently priced at $559,900 DOM 107

Some other good finds:

3 Iceberg Rose $519,900 DOM 88

132 Vintage $499,900 DOM 148

61 Long Meadow $519,000 DOM 253

39 Spanish Lace $479,500 DOM 106

Knives hurt when you try to catch them!

Trooper_IHB · Jun 14, 2007

So he's pulling comps out of his *ss ! this guy is full of it.

Trooper_IHB · Jun 14, 2007

reason said of Garland Park.... 

" without being specific. Comps for my unit for the last 6 mos. are: 560k; 580k; 569k; 588k; and, the latest "pending" 618K. And believe it or not. Most of the aforementioned prices are from people whom have dumped their properties. I purchased mine at 510k. Now, that's not a whole lot of gain, I must admit. But that's certainly not the 20% ...30%....or 40% drop that I have been reading". 

LOL. Thanks Graphrix. I guess this will quiet him down a bit....

graphrix_IHB · Jun 14, 2007

181 Groveland sold for $575k

182 Groveland sold for $462k

184 Groveland sold for $434k

198 Wild Lilac sold for $550k

188 Guinevere sold for $530k

I wish I could find more but really nothing has sold in the area lately.

reason_IHB · Jun 14, 2007

Like I have said. I am here to share my experience. And you can doubt me if you want. Oh by the way, the listing by Zovall is 100 % correct.. But the listings by graphix, is not accurate by a long shot. Please the next time you try to win a debate, don't lie and make up your own numbers. And when you talk about comps. Compare apples to apples and not to oranges. Thanks. 

181 groveland <-- correct address and pricing

182 groveland <-- no such address

184 groveland <-- no such address

198 wild lilac <---correct address and pricing

188 guinevere <---correct, but guess why it was sold so low. There's literally nothing in the unit. It was a builder's unit . The flooring was plain concrete. 

3 iceberg rose <--- this is not the same comparison. Different project in this community, different sq. ft.

132 vintage <--- this is not the same comparison. Differente project in this community, different sq. ft. 

61 long meadow <--- this is not the same comparison. Different project in this community, different sq. ft

30 spanish lace <--- this is not the same comparison. Different project in this community, different sq. ft.

Trooper_IHB · Jun 14, 2007

yeah, but Zovall's prices were from November of 2006, 7 months ago.

And I doubt Graphrix is wrong with his research. If he's wrong, it's because some document was recorded wrong, not because he's a liar (as you have already proven yourself to be).

graphrix_IHB · Jun 14, 2007

Wow someone is a bit defensive. I guess I would be too if I bought at the top of the market too. The addresses were what showed up on ziprealty and looks like they might be wrong or maybe not. There seems to be a problem with the addresses between TIC and the county and they may have an issue with zoning and how they recorded them. Or knowing the county they are just a bit slow.

For example if you look up 178 Groveland the title shows that CalPac sold it three times to three different buyers at three different times. Interesting how one of the buyers of 178 Groveland has a mailing address of 180 Groveland which doesn't exist either. What makes it really interesting is the APN for 178 is completely different from all the other addresses of Groveland which all of them follow a typical pattern for an APN. Now if you look up the addresses like 182 and 184 on the tax collector's site it has the same APN for 178, 180, 182 and 184. I have feeling these addresses do exist and there just has been an issue with recording or the zoning. Do you really live there? I have no problem checking the neighborhood out myself to fact check properly and tomorrow I will double check the info on the MLS to see if those addresses are true.

Even if the others were not good comps they are lower and what is for sale isn't selling.

188 guinevere <---correct, but guess why it was sold so low. There's literally nothing in the unit. It was a builder's unit . The flooring was plain concrete. This can't be true since a lender wouldn't accept an appraisal without flooring. On new homes an appraiser will go out and do the appraisal before it is done and maybe this is what you are thinking of. Then once it is completed the appraiser will go out again and take some pictures to add to the 442 form that they send to the lender to prove completion. Otherwise the lender wouldn't fund the loan.

Like I said not much is selling so by saying something is worth X when X isn't selling doesn't hold any validity. With that being said I did find was 81 Chantilly sold for $605k last month. The buyer has an interesting name though Washington Mutual. I wonder what they will sell it for?

137 Sanctuary sold for $516k but let me guess it isn't a good comp.

49 Chantilly is up for auction on 6/26 for $561k but it will probably get postponed since they filed for BK.

You said it yourself that you are not the smartest guy and you have proved that just by walking into our bear cave. You might want to careful since many of us bears have a lot of industry knowledge and access to info that most of the general public doesn't. While we welcome bulls like nirvinerealtor she has learned really quickly that most of us are smarter than the average bear. Good luck with your purchase and I hope that the foreclosures do not keep increasing.

Will I ever be able to buy?

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