“Sluggish, Problematic Market For Years”: Orange County
The Orange County Register reports from California. “Talk about bad timing. Just as homebuilders start on three of the most ambitious redevelopment projects in Orange County’s history, the housing market deflates.”
“What’s a builder to do? The answer could have big implications for cities such as Irvine, Santa Ana and Anaheim, which need more housing for their workers. In a worst-case scenario, builders could abandon or delay projects.”
“On the other hand, what’s bad for builders could be good for homebuyers. A glut of homes hitting the market amid a slump could mean bargain-basement prices. The first big wave of homes from redevelopments should hit the market in 2008, builders say.”
“Lennar Corp. is spending more than $1 billion to redevelop the former El Toro Marine base and is redeveloping large sites in Tustin and Anaheim. ‘I can’t speak to the housing shift,’ CIO Emile Haddad said. ‘I don’t know how deep or long it’s going to go.’”
“Builders such as Irvine’s Standard Pacific Corp. said in releases that they are cutting back on their land holdings for future development. But so far no one expects builders to scrap major projects in Orange County.”
“Lennar and other builders have a lot riding on the fate of the three biggest redevelopment projects: El Toro, the former Tustin Marine base, and the Platinum Triangle in Anaheim. They’re investing billions of dollars on plans to build 19,582 houses, condos and apartments, including a few hundred for sale now in Anaheim.”
“That’s in addition to about 2,000 homes Lennar and William Lyon Homes are developing in Tustin, with some for sale now. They’ve offered incentives to entice buyers.”
“There’s a 50-50 chance the market will still be in the doldrums in 2008, said Edward Leamer, director of the UCLA Anderson School. ‘We expect to see a sluggish, problematic market for a considerable number of years,’ Leamer said.”
“There is another key issue with redevelopment projects, experts say. To make sense financially in an area of high land prices like Orange County, developers pack as many homes in the projects as the market will bear. Translation: condos.”
“Plans for the Platinum Triangle, for example, are dominated by condos and apartments, including high-rises. Orange County may already have more condos than buyers, said economist Jack Kyser.”
“‘The Orange County condo market has been fingered as one of the areas where there have been speculators,’ Kyser said. ‘With some of these projects where construction has started, there may be some disappointments.’”
“He said condos are the last type of home to take off in a rising market and the first type to tank. Indeed, there is some evidence of condo softening. Condo sales were down 40 percent for the 22 business days ending Oct. 12, compared with a year earlier, market tracker DataQuick said. The median condo price slipped 3.3 percent to $445,000.”
“Irvine-based developer Sares-Regis Group recently held an auction for its condominiums in Aliso Viejo. The company converted them from apartments and sold them for less than originally planned.”
“Veronica Hicks, a broker in Irvine, said buyers today are reluctant to pay the deposits housing developers want to start construction. ‘When people were buying much of the new housing that is being completed today, it was a very different market,’ she said.”
“She said owners of existing condos could face the real difficulty selling when new homes hit the market. Owners with older condos will ‘have to dump a lot of money into the condos just to sell them,’ Hicks said.”
I never saw the attraction of Orange County other than isolated places like Dana Point and San Clemente. It seemed like the worst part of the rest of the U.S. jammed into one small area.
I hear ya. My brother lived there for a while. I do recall when visiting that I could sometimes smell the sea while sitting stuck in traffic. I suppose that is the draw?
You musta been stuck on PCH. There’s no seas to be smelt when you are on the interstates like the 405, 55, 5, 57, etc. More likely you smelt the “C” as in “Car exhaust”.
San Clemente is nice if you dont mind the occasional testing of the San Onofre emergency meltdown alerts or if you dont mind the very audible sound of Camp Pendleton live fire training and finally if you dont mind that downtown at night because one big Marine Corp party central. Other than that, I love San Clemente.
What about Disneyland?
Right smack in the middle of Anaheim. How many times can someone go to places like that?
Disneyland and the surrounding tourist facilities must employ a fair number of people, no? But probably at low wages.
Trust me, you don’t want to live near Disneyland. You get the fallout from the Mickey Mouse Artillery (nightly fireworks shows). Plus, what happens if Disneyland decides to expand (again!) and your house is in the way?
And Newport Beach, Huntington Beach, San Juan Capistrano’s historic district, Irvine’s clean and wide streets, South Coast Plaza, Laguna Beach, Garden Grove’s Koreatown, Westminster’s Little Saigon… I could go on and on about interesting places within OC. Fact of the matter is that every place has their high and low points, but having lived in 7 metro areas around the country and visited countless more, I say OC is about as good as a region can get in the U.S.
I take it you don’t commute very far to work?
I live in Dana Point and commute to North San Diego. Traffic sucks comparatively, but not nearly as bad as L.A. obviously, and better than worst parts of Boston, DC, Chicago. What I have observed after living in Washington D.C., Las Vegas, St. Louis, Boston, San Diego, Columbus OH, and L.A. is that OC is actually a very nice place to live. They have bad neighborhoods just like any other metro areas, but the worst of OC – Santa Ana, parts of Costa Mesa, Fullerton, Anaheim – are not nearly as bad as South Central, East St. Louis, SW Boston, old parts of N Las Vegas, nor NW DC. And OC offers all the advantages of LA, beaches, perfect drives, great weather, and ethnic diversity, which cannot be found in many of the other cities. It certainly is not the worst part of U.S. jammed into an area, not even close. Now whether I’d pay $600K+ for a 20-year old townhouse to have that? That would be a different story altogether.
I meant NE DC. NW DC is awesome.
I used to live in Anaheim. Not nearly as nice as the coastal areas. Traffic was bad there on the 55, 57 and 91.
My grimmest commute for awhile was the Pasadena Freeway/Downtown/Harbor/Santa Monica/San Deigo from Pasadena to El Segundo - but I was young and stupid then. That was from ‘77-’80, and to this day I still cannot believe I did it.
I think I have you beat!
1985 - I10 from Yucaipa to downtown L.A. Going in wasn’t bad, ‘only’ 90 minutes (leaving at 5:30 am). It would take me 2-1/2 hours to get home every night.
Ditto on the young and stupid. I only lasted 2 months.
I used to commute from Ladera Heights (off La Tijera and 405) to Santa Monica (10 & Cloverfield). That friggin commute was awful. It’s only around 12-15 miles, but it took 30-45 minutes in the morning and typically over an hour coming home.
Hey I used to go from Glendale to Torrance for 2.5 years. It wasnt too bad. Maybe about 1.5 hours for about 20miles going in early and leaving early. Now I go from Glendale to Pasadena. Well one guy at work comes in from Irvine to Pasadena. He tries to get me to look more in the OC because I went to the UC there. I couldnt imagine a daily commute from Irvine to anywhere in LA. Anywhere from LA to LA is truly awful during anytime anyone else is going or coming from work.
I really liked the OC area. I would say its more for raising a family then for a younger person. I dont think its very diverse though. irvine seems composed of 2 races and the outer cities like santa ana are basically 1. It was pretty much a joke at my school how not diverse the campus was as well. And many graduates from there ended up working in the OC as well.
Geptetoh, I agree with you, OC has many problems, but compared to many other metro areas, it is much better in my opinion. Plus, South Orange County is the safest region in the country. Go to http://www.morganquitno.com and look at the crime stats/safest areas. South OC ranks right at the top.
Got to go with the wide streets, well maintained city environments. Rancho Santa Margarita was mentioned as the best city in the west coast to raise a family and was Money magazines 2005 best pick
It isn’t for everyone, but for me, other than the extreme cost, it is much nicer than most other overpriced communities.
Safest and Most Dangerous places to live
South Orange county ranks near the top.
Irvine, Mission Viejo, Lake Forest - smaller communities such as RSM, Ladera Ranch, Foothill ranch were not included due to their size, the crime rate for places like RSM is less than Mission Viejo, the number 2 safest place in the US.
I’ll try this again
Safest and Most Dangerous Places to live
Dana point and Laguna beach are still probably the two best OC tourist/destination/weekend getaway spots for Scenic coastal beach outings. Dana point was better decade ago when there was few developments. Laguna beach gets crushed with crowds and traffic on summer days.
South OC resdential communities such as Aliso Viejo, Laguna nigel,RSM, SJ Capistrano,Dana pt,Lag hills,ect are indeed ideal greenbelted garden suburbs, with housing pricetags to match. These areas abound with superb bike/pedestrian paths.
I’ve lived in Tempe, Pittsburgh, Richmond, Muskoka, Houston, Santa Cruz and Costa Mesa. I have also spent reasonable periods of time in Austin, Chicago, Denver, Sacramento, NYC, Paris and Nice/Antibe. I live in Costa Mesa today and like all of the rest there are highs and lows here. I work at home so commuting is not an issue for me, but I know it is for many as traffic is simply insane during the rush hours. If I had my druthers I think I would choose to live outside of Austin on a 10+ acre parcel with live water rights. The beach cities here in OC are nice weather wise and due to the proximity to the sea. But summer time is not fun simply because everyone and their mother comes down to the sea. I guess for me it boils down to access to the power and beauty of nature. The artifice of man is less appealing here. In other places the artifice is quite appealing, but here it is a commercial enterprise and rarely art in any form. Hell, in Paris even the subway entrances are exquisite. While here we have Toll Stations that are at least interesting in their design. None of this justfies the current wishing prices for SFHs. IMHO.
“There’s a 50-50 chance the market will still be in the doldrums in 2008, said Edward Leamer, director of the UCLA Anderson School. ‘We expect to see a sluggish, problematic market for a considerable number of years,’ Leamer said.”
So not all economists agree with David Lereah’s hopeful scenario for a shallow dip in 2007 followed by a resumption of “normal” price inflation?
“There’s a 50-50 chance the market will still be in the doldrums in 2008, said Edward Leamer, director of the UCLA Anderson School”
What kind of education do you need to become an economist at UCLA, when you can project a 50/50 chance housing will be bad in 2008? Why not say there is a 50/50 chance the world might come to an end in 2008? Can’t anybody get some kind of economic report with meaningful insight at how they arrivived at their conclusions?
LOL!
AMEN.
50/50 Chance - You may as well say absolutely NOTHING! Go out on a limb Mr. Economist - 51/49% chance. JEZZ!
you need to write a book that no one reads
what was he saying in 05
everyone here was predicting tank city
Fair coin toss?
That reminds me of my wife’s ultrasound test when she was pregnant, the doctor asked if we wanted to know the sex of the child and we said yes. He responded, “It’s a girl, I’m 50% sure of it.” Althoug unlike Leamer, the doctor was joking.
If “economists” could really make worthwhile predictions, they would not be economists anymore…
Yep,…
They’d be rich and retired.
Dave posts the “50-50″
This the killer! Dude I whish I could I could have earned a living telling my bosses that!
Good God…. that boys Daddy should get his money back from da school what learned him…. Even hobos know that much…. and I do not have anything against Hobos.
Well, it either will or it won’t right? There are two outcomes - thus each is a 50% chance - right? right?
nah, you guys missed his point. 50% chance it will be in the doldrums in ‘08. 50% chance that it will still be screaming toward the ground uncontrollably at supersonic speed. 0% chance that it will be springing upward like ‘04.
“Talk about bad timing. Just as homebuilders start on three of the most ambitious redevelopment projects in Orange County’s history, the housing market deflates.”
The timing mistake is easily understood in light of the extremely upbeat outlook that the industry cheerleaders keep providing in the face of contradictory evidence.
‘When people were buying much of the new housing that is being completed today, it was a very different market,’ she said’
And that timing was being gamed by speculators that probably never expected to move-in, much less actually pay for the units.
I know! I have had some “timing” disasters in my life but it wasn’t b/c I couldn’t read! Or in this case read the writing on the wall. As Ben notes below it’s not so much that actual end user demand was so badly gauged, it was speculative demand (or lack thereof) they failed so miserably to gauge!
RE:the Platinum Triangle of Anaheim.
City has gigantic Ambitions and has already leveled large swathes of land in this somewhat empty/lifeless/barren district west of Anaheimn Stadium. It is a grim barren region of Rows of tile warehouses, expanses of concrete pavement, and some nearby office parks. One completed project is the Stadium lofts on Katella/State College blvd. A completely dismal location for muli-units. Another batch of units which is 95 % ready for occupancy is the massive complex of apts/condos at 3000 w chapman bewtween the 57 and 5 fwys. Can you imagine living in apts crammed between two busy Scal fwys along a busy main ave.
The Platinum Traiangle will be the ugly duckling of the OC redevelopments, a mis-hatched goose egg IMHO.
‘I can’t speak to the housing shift,’ CIO Emile Haddad said. ‘I don’t know how deep or long it’s going to go.’
If you’re the CEO of a company spending over $1 billion on new developments, isn’t it your job to know these things?
He’s the CIO not CEO. Chief Idiot Officer(TM)(C)
I think he does his job damn well.
(TM)
&#TOM8482;
Are you playing footie with me??? You better be female, that’s all I have to say
(TM)
I don’t think “luvs” is female. I think he “luvs” what we Americans mistakenly refer to as “soccer.”
No female here………..Not soccer either….
There ya go……
http://en.wikipedia.org/wiki/Rugby_league
just keep hugging that spheriod luvs while you run like hell … i’m sure it takes your mind off of these housing issues
The first big wave of homes from redevelopments should hit the market in 2008, builders say.
We are going to have multiple waves of homes being built, only starting to hit the market in ‘08? Wow, that’s just going to further accelerate the decline in house prices and push the bottom even farther into the future as these guys unload with their incentives and ability to cut prices.
There are a lot of large projects in the pipeline in Orange County: El Toro Base, Tustin Base, Central Park West, all the high rises near South Coast, Portola Springs, Orchard Hills, East Orange, and don’t forget the ‘next Ladera Ranch’ which is on its way.
Hopefully all this product will lower prices.
“There are a lot of large projects in the pipeline in Orange County: El Toro Base, Tustin Base, Central Park West, all the high rises near South Coast, Portola Springs, Orchard Hills, East Orange, and don’t forget the ‘next Ladera Ranch’ which is on its way”
They are putting up a 1 mil sq ft shopping center on SEeaste corner of the old Tustin Base(Barranca/Jamboree) It is called the District at Tustin Legacy and advertised as an entertainment shopping district. Furious Construction activity going on at the this base, and all up and down jamboree road.
Hopefully it will make housing values higher in the area…I live across the street…however, I don’t know if that will make up for the additional traffic the new development will generate.
Isn’t The Sale/Purchase last year Of Ranch Mission Viejo Supposed to add an additional 14,000 homes as well?
yup, but they haven’t begun construction (infrastructure stuff) yet as far as I know. Whereas I’ve been taking periodic strolls thru the Tustin airbase stuff, and it looks like they’re going like a bat out of hell.
About 3 weeks back went into the new part off of Harvard, on Saturday morning. It had rained late Fri nite, and was grey, overcast, with a chance of rain. SURPRISE, the subs were out painting the trim on a number of houses. About 3 blocks south there were half a dozen foundations poured or ready to pour. This weekend, took a look & the rough framing’s in on 12-15 of these 2500-4000sqft places.
What’s even scarier is that FB’s are paying $1mil+ for homes on zero-lot lines on infill development.
Yes, the first homes should be available for sale by 2008.
In the articel it mentions that OC population growth rate was down to .2 percent, about 6,000 people for last year.
This is the little factoid the OCREIC does not like to talk about.
Hmm.. anyone have numbers on how much new housing was built in OC last year?
how many of them were day laborers
That’s the official population growth. With all the illegal aliens strolling into CA and having mucho babies, that population growth has got to be higher not lower.
btw, OT for the housing bubble but very important for understanding just how big of a disaster we’re moving into. The housing bubble collapse (with the corresponding MBS collapse) should flush a lot of these worms out into the open. And when that happens…
http://www.businessjive.com/nss/darkside.html
btw, set aside some time for this, its 60minutes for the base presentation and 90minutes for the full meal deal
(but well worth it, I’m just sorry I didn’t post it a couple of days ago to get you in the mood for halloween)
Where did you find this and who is the progenator? Very interesting and well worth the time spent. I have often wondered what the hedge fund was all about, but now I feel I have a better understanding.
Thanks.
hope you’re still reading this but this presentation is by Patrick Byrne, CEO of Overstock.com which is believed to have been taken down by an Naked Short attack
The main site of the presentation
http://www.businessjive.com/
has many more articles on this topic
As a 27 year resident of Irvine, I am absolutely baffled wondering
where the household cash flow is going to come from to support
all these overpriced developments.
Even if the builders started giving away these places for free, the
cost of living around here is so high, I think the median family
would still be short of cash.
Sure, Orange County has some good jobs. But it’s not *that* great.
Census median household income figures aren’t much different than
many other areas of SoCal.
Side note:
A neighbor of mine works in construction. For *years* I never saw
him, as he was working 7 days a week.
Even on Christmas day 2005.
Starting about 2 months ago, I noticed his auto is parked outside
practically every day. No Work. Nada, except for an occasional job.
Whats really startling to me is how *fast* his situation reversed
180 degrees. Like flipping a switch to “off”.
Have you seen him near any freeway off-ramps holding a sign yet?
If he is living in Irvine, he just needs to sell his house worth probably close to a million and he could live off of that wealth for many many years…..As long as he bought before 2003.
He just needs a For Sale sign on his lawn.
I just have problems with this whole statement.
I’m not that familiar w/Irvine but this is firstly, the slow time of the year. Secondly to my knowledge there have been decreases in sales pretty much from coast to coast. Additionally we don’t know the guy’s personal situation, how much he paid, what he borrowed against it etc. Besides even if he sold it for a mil. there may be some tax consequences depending on how he files? College, debt etc. There’s just too many variables to outright proclaim that if anybody in X area prior to X time they should be made in the shade. If this was early 2005 you might be able to say a lawn sign “might” solve all his problems, but now?
No the market in Irvine has defintely slowed down although prices went up until summer. I’ve seen inventory standing and price reductions.
I think a very small percentage of construction workers actually made the boo coo bucks that most people think they did over the last few years. There’s a big difference between the guy swinging the hammer and the guy in the sales office with the fake tan and bleached teeth. Most were dragged along for the ride and now will be totally screwed. Construction has its sleazebags just like every industry, but a lot of these guys are extremely hard working family guys.
“I am absolutely baffled wondering where the household cash flow is going to come from to support all these overpriced developments.”
Join the club octal77! I guess they all thought they would pay interest only, or neg-am, and then move up after a couple of years. That works for the first few years, but then the Ponzi scheme exhausts itself when the influx of new buyers runs out. Then it all comes tumbling down. Too bad for those left holding the bag! Just kidding.
No joke! Renting here, I’ve looked around and wondered what in the hell is going on. Mid level position, decent (6 dig) salary, and there ain’t no way I can buy. Then I started doing my own informal survey, asking friends/coworkers whether they could buy their place again in today’s market……. Figure 25 sample size—– 1 yes (single, no kids, 50, rental prop’s bought in the last slaughter).
Everyone else, from salesmen, programmers, HS teacher/principal…..no way.
Which begs the question: To whom will these people sell?
“Sure, Orange County has some good jobs. But it’s not *that* great.”
I have driven out to a lot of fabulously constructed spanking new Corporate parks in Irvine, Lake Forest,Aiso Viejo, ect. There are lots of big-time hot-growing firms out in the S OC such as fluor, Parker Hannafin, allergan, Q Logic,ect. But i also notice many corp parks and businesses with barely filled parking lots, and lease signs. Also, there are quite a bit of RE Lending firms in S OC. This is not exactly a depressed industrial belt, and the SOC is probably the best location for a corp to locate in( outstanding transport access). SOC is just too unaffordable to attract all but super hi-tech hi-pay industries at this point.
A wee bit off topic and totally anecdotal, but I went trick-or-treating last night with my young ‘uns and saw something at 3 different houses (out of the 50 or 60 we hit up) that was kind of interesting.
My area of LA (Silver Lake) has undergone insane appreciation levels over the past 3-5 years. We’re talking $900K-$1.3 million for very modest houses (average house would be 1930s construction, 1400 sq ft, 2-3 bedrooms, 1-2 baths, 4000-6000 sq ft lots). Three houses we visited had sold since ‘05 for top dollar. We were greeted by young, attractive professionals clearly delighted at the trick-or-treaters. At two of these houses, I was amazed to see how sparsely furnished their living rooms were. At one house, they basically had one old ratty couch and two 4×6s propped up on milk crates to make a coffee table. And the third house’s living room was completely empty. This is only a few blocks away and I remembered when sign went from “For Sale” to “In Escrow” to “Sold.” It was a young gay couple, very attractive and well-groomed, but the living room still had old carpeting and the walls looked like they hadn’t been painted in 40 years, which makes sense because they bought the house out of probate when the little old lady who lived there died last year.
This is purely anecdotal, I know, but to me, seemed to be a sure sign of strapped homeowners. Heck, these people are paying anywhere from $5000 - $7000 a month for these houses. If I were paying that, I wouldn’t have money for food, much less furniture.
Furniture, smurniture, just do what my friends did!
Buy a condo with an I.O. 5-year fixed 1st loan, a 20% 2nd ARM, put no money down, and pull money out every time you have to refinance your way out of an interest hike so that you can decorate your house in more overpriced Pottery Barn stuff.
Did I mention that they have a child on the way? Let’s hope Madonna or Angelina is in the market for another one!
jj: these kinds of stories never cease to amaze me. At what point will these households finally succumb to their insane debt levels?? I hope it is soon, for if this is how Americans will be living from now on, count me out. What are some good options, immigration wise??
I would guess that the next time they try to refinance, they are going to get smacked in the face. Not only is the ATM closed, but they are going to have to start paying much higher payments with the ARM and the principal kicking in soon.
As for immigration, head to Mexico. Most of their criminals are now living here, so it should be pretty safe. And cheap!
There may be hope for Silverlake yet. I’ve been watching a house on Murray Circle I lived across the street from last year. The “owner” paid $929,009 on 06/23/2005. It was originally listed at 1.09 million on 4/25/06. It entered some stage of foreclosure and last week was relisted (scam) with new photos at $839K.
Here are the zip links for the old and new listings if you’re interested.
http://tinyurl.com/vjtq7
http://tinyurl.com/yyy4nz
vioviv,
There may be hope for Silverlake yet. I’ve been watching a house on Murray Circle I lived across the street from last year. The “owner” paid $929,009 on 06/23/2005. It was originally listed at 1.09 million on 4/25/06. It entered some stage of foreclosure and last week was relisted (scam) with new photos at $839K. Too high, but it’s nice to see a price falling.
Here are the zip links for the old and new listings if you’re interested.
http://tinyurl.com/vjtq7
http://tinyurl.com/yyy4nz
Maybe they are just “minimalist”
Condos! God, that is funny. We do work for a large company that does housing, usually apartments, throughout the entire US. One project was redesigned to make them condos. Well, earlier this year, we got the call that they were not going to be condos after all, since according to their marketing analysis, that market was gone. I guess you have a lot of other builders who dont examine their markets at all.
Just because you build it, it doesnt mean they will come.
I wish the homebuilders could be OPEC, that way they would keep pumping more oil and prices would drop.
The homebuilders clearly are a latter-day version of OPEC.
On further reflection, the builders (at least in the present-day housing industry) are worse than OPEC.
1) Like OPEC, the market power is very concentrated into the hands of a few large players (oligopolists). This results in a temptation for builders to overbuild when prices are abnormally high, even if it has the effect of collectively killing off high profit margins.
2) Like OPEC, the homebuilding industry underwent a massive expansion during the boom phase of the cycle, with increased purchases of construction equipment (builders’ capital) analogous to purchases of oil drilling equipment (oilmens’ capital), and massive entry of labor into the housing sector also analogous to labor expansion into the oil industry during, say, the 1970s.
3) The key difference, it would seem, is in the product of the two industries. OPEC produces oil, a commodity which can be stored indefinitely at reasonably low cost if necessary with little change in its quality, and which can be consumed at a lower price for a while to draw down oversupply. But homebuilders produce a consumer durable good which depreciates rapidly in value if not steadfastly maintained at high cost to the owners (not to mention the tax, finance and insurance costs which the owner bears as well). Thus when the supply of housing massively exceeds demand, the resulting imbalance is persistent, potentially creating a drag on the economy for years to come as the excess is gradually absorbed at progressively lower price levels, and the owners try to reckon with falling prices added on top of PITI.
Ben, I think you need to get on MySpace. Many kids are unaware of the housing bubble and the problems it creates because too many of them are d**king around on MySpace. If we had TheHousingBubbleBlog MySpace page, you could load it up with YouTube Videos with some cartoons and some boy band, teeny bopper music and they might actually “get it.”
He could also tell them to keep off your lawn.
Gaud man, let the kids be kids! Leave them to their foolishness, while they can still enjoy it. Consider them lucky.
“The trouble with youth is, it’s wasted on the young”
Who said that?
everyone over 30.
I have lived in Fullerton, Brea, La Habra (North OC) and spent a lot of time in Costa Mesa and Newport, all over the last 10 years. Never saw the big draw. Other than good schools in Irvine, OC has the same problems as any other major metro area (immigration, crime, overcrowding, outrageous traffic) all for a much higher cost of living. Not to mention the racist element of the right wing Republican political machine that sends out fliers to Mexicans discouraging them from voting or placing guards at polling stations. No thanks.
“…racist element of the right wing Republican political machine …”
These extremes, on both sides, drive me nuts. I can’t stand listening to Sean Hand-job anymore. I never liked him, but found him somewhat entertaining.
From this point forward - I will vote against all new bonds/taxes and vote out all incumbents no matter what party!
crispy: I see that we are following the same strategy! It really is a pathetic state of affairs here in Cal. What this state (and nation) needs is a complete political purge. Can all of them and start fresh. Well, perhaps Ron Paul could stay.
“From this point forward - I will vote against all new bonds/taxes and vote out all incumbents no matter what party!”
that sends out fliers to Mexicans discouraging them from voting
I was under the impression we didn’t want foreign nationals voting in our election.
My bad. I don’t vote anymore anyways so I guess I could be wrong.
Yes, feepness, there has been a minor change. Only the racist element of the right wing Republican political machine is opposed to allowing foreigners to vote.
Paul posts “Yes, feepness, there has been a minor change. Only the racist element of the right wing Republican political machine is opposed to allowing foreigners to vote.
I am a Dem. from the word go…. but come on! I stand with the law of the land….. and please don’t blame Clinton but…… the MAN GWBush has been in office 6 full years long enough to do something if he cared to.
First if they did not belong here… toss em’ out ….But let them vote????? hell no!
Last I checked foreigners (non-citizens) cannot vote. Why the need for the flier? That’s like sending a bunch of fliers to medical students saying “non-doctors cannot practice medicine” except much more political and racist.
Political? Yes. Racist? Not so much.
I think it’s to prevent taxpayers from paying for a recount to weed out the ineligible votes. But it’s a waste of time since many if not most Hispanics don’t vote anyway.
The sooner Democrats and Republicans kill each other or die the better off this country would be.
Posted by rj “The sooner Democrats and Republicans kill each other or die the better off this country would be.”
I have voted for both over the years…. but in fact I have come to beleive we have a one party nation…. 1 big part Big Biz… 1 part tax cuts etc…. 1 part free money for being lazy…. 10 parts having a killer Army.
I found the commentary by talking heads as offensive as any flier, it was stupid, but nothing it said was actually wrong. All it said was “ILLEGAL IMMIGRANTS” are not allowed to vote or the risk deportation. We all know it was stupid and laughable because 500,000 of them could wave Mexican flags in downtown LA with no fear of deportation, or tear down U.S. flags off of federal buildings without fear of any reprisal, so I doubt a few silly fliers would scare them off.
U.S. flag being torn down off of a federal building in Maywood CA
Imagine the response if people from Guatemala tore down a Mexican flag at a Mexican post office, what do you think would have happened?!?!!?
OC Metro,
I just love Michelle Malkin. This tiny gal has had death threats every where she’s worked. Can’t say as I agree w/everything she says but generally she’s on the money and brings to light that which others won’t even touch. At 4′ something, hell I wouldn’t mess with her! You go girl!
malkin is a complete nut.
And Michelle is the daughter of immigrants. Legal immigrants who proudly became American citizens.
nope. the flier said *immigrants*. it didn’t mentioned illegal. and it was sent to registered latino dems (who are most likely naturalized citizen). the irony is that the *sender* was himself an immigrant.
That’s the way I understood the flier. It was in Spanish, and the word in question was “emigrado.” And the first part of the flier opened with something like “if you are a citizen we encourage you to participate in the election process.” But these circle jerk Republicans will march to the polls and give the Last Action Hero a majority victory by 15 points, even though he has done and said nothing about stopping illegal immigration, and in all likelihood will pass drivers licenses for illegals, while the libertarian candidate, Art Olivier’s single statement in the voter guide is “STOP ILLEGAL IMMIGRATION.”
So now you live in the IE? What’s the big draw there?
ockurt posts “So now you live in the IE? What’s the big draw there? ”
It is southern fryed palmcaster.
No big draw. Same big house, same school scores, lots cheaper.
Dude, c’mon…you rag on the OC saying it has all this crime, immigration, and traffic problems and then you tell me you live in the IE? For a minute I thought you were going to tell me you moved to Carmel or something and then I would understand! I bet all those issues you’ve mentioned are 10x worse in the IE…plus your lungs will rot from all that smog or that crack you’ve been smokin’!
The OC might have its faults, but it sure beats that arm-pit in the IE.
Take care.
All I said was that it has the SAME PROBLEMS as other areas of So Cal, which is true. Try not to get so defensive and immature “dude.” There are very nice parts of SB County (Chino Hills, Rancho Cucamonga) that have extremely low crime, great schools, lots of open space, etc. I’ve lived in Chino Hills (made a nice profit on a home there) and currently live in Rancho Cucamonga, one of Money Magazine’s top 100 cities to live in the USA (one of only 6 cities from CA to make the list). Give credit where credit is due. And those of you defending the racist Republicans in the OC, come on man, racism is racism, don’t use immigration as your excuse (”used to be a great place to live before all them Mexicans came here.”) Just come out and say you don’t like Mexicans. This is SoCal man, get used to it or move to a red state.
You make fun of me for saying “dude” but you sure say “man” alot. Anyway, I’m not going to argue with you if you love the IE then I’m happy for you. Keep in mind, those two IE cities you’ve mentioned are the only decent places out there…everywhere else is marginal at best.
And don’t get so defensive about the politics, dude. I didn’t even bring it up. People like to voice their opinions here so try to be mature about the whole thing, okay?
Deep breaths…take a Xanax…have a beer…
When I lived in Fullerton I could smell the cow manure floating in from Chino Hills…
OK, I just had a beer. Feel better now. I don’t want to argue politics here either (not the forum) but I was surprised by the number of posts seemingly defending what I find to be rather offensive, but enough about that. Yes, CH and RC are the only nice places in the IE at the moment. But if you live there as I do, then it’s great. The OC has a lot of very marginal areas as well, thus my comparison.
Ha ha..okay…point taken. Don’t get too offended by what you read here…life is too short
I’m planning on doing my Christmas shopping this December at the Victoria Gardens outdoor mall. What skin products do you recommend so that my lips and face don’t get ripped off in that bitter freeze?
It’s a cheap way to get high from the ozone contamination and wind dust, and closer to the meth lab. J/K!
Orange County was a great place to grow up in the 60′ and 70’s. There is a reason that the flyers concerning illegal aliens and the laws against them voting was sent out in that district. Loretta Sanchez won a very close election a few years ago over Bob Dornan with less than a thousand vote margin, I believe. The OC Register found that several hundred Mexicans that were in a position to get citizenship but had not yet received it were registered and had voted in that election. Do a web search if you want the details.
so how do you explain what happened in 96, 98, 00, 02, 04, and 06? She won her first election in 1994, where did all those illegals come from? It must have been those two years of Bill Clinton.
Relax killer, I didn’t mention anything about Bill Clinton.
Idiot!
Don’t developers get it! We had that thread yesterday about the condo towers in Santa Ana or Anaheim with that 25 year old buying the penthouse. All I can say is that when this thing unwinds it is going to be catastrophic for the whole country. Very few will escape completely unscathed. No matter what the fed does or the gov’t does this economy is going to get burned. Too many people are in debt past their eyeballs and too many people exposed to investments that are going to go down with housing. And if anyone thinks the OC is any different, think again. We may get to the party a little later, but we will still get there. Anecdotally, guy I work with is now into 3rd week trying to unload albatross so he can flat out buy in the some remote place in Washington state. HAHAHAHAHAHAHA, good luck with that! Not at 625K, which is what he wants! Also, more and more open houses are popping up each week around Rancho Santa Maragarita. This is going to get ugly. In the weekly freebie mailer I have been noticing a few more homes that are coming in under 500K. Haven’t called any to see what they look like, but the party is a startin’.
Let’s get the PARTY STARTED…oooh..la la…..
It won’t be until end of 2007 and early 2008 before more housing prices start dumping…..
Irvine isn’t all that great…having been living there for years….all I can say is more traffic is on the way…..with all of the building…it is incredible….going to be like LA…within 3 years time.
That is exactly what I think every time I drive in Irvine or Tustin. It is such a lovely drive now with long hilly streets and no other traffic…but how long can it last?
Ok now and enough with this Irvine place. It’s overrated as a city when you factor in the cost of housing. I tried so hard last 9/05 when I warned my BEST friend and his wife not to buy there. They put $25k deposit for a $950k house after having sold their home in Chino Hills and pocketing about $650k in profit. The Irvine house is about 2300sf on a lot less than 5000sf and with association dues. My friend told me the move-in date was 3/06 and I told him to just walk away.
He said he did some research and RE in OC will always go up. I immediately stopped when his wife said “we are just not renters.” Fast forward to today, 6 months after they moved in. I think they would be lucky to sell that place for $850k less another $40k-$50k selling cost.
I ask myself why would anyone pay $300k down + pay $5200k-5500k for a 5 yr ARM for a house with hardly any parking space and a decent backyard, and an association that would not even allow you to have your own freaking garage door opened at your pleasure. It’s insane!
$350k in profit and not $650k.
“….but the party is a startin’.”
I think I read it here yesterday, but it was a good one.
Soon we will be partying like it’s 1929.
OC Dan,
I think that’s just what the REIC wants everybody to believe! If housing goes down the tubes we’re all going down the tubes! Sure, I agree none of us are going to get out “unscathed” but seriously if you don’t work at Home Depot, CountryWide or as a realtor don’t sweat it. It seems as bears we’re more worried about it than they are? Most of these people will simply move on to the “next big thing” and forget about. There WILL be a lot of FB regret but that ain’t everybody. New economic leaders will emerge and RE will get left where it belongs, in the dust.
November 1 2006: 11:09 AM EST
NEW YORK (Reuters) — U.S. homeowners took cash out of their homes in the third quarter at the highest rate in 16 years, spurred by high costs on other types of loans, according to home finance company Freddie Mac (Charts) .
In the quarter, 89 percent of Freddie Mac-owned loans that refinanced got mortgages that were at least 5 percent higher than the original balances.
“High demand for cash extraction through refinance is being driven by the high cost of home improvement loans and home-equity lines of credit — that is, the cost of alternative financing — and still-strong demand for home improvements,” Amy Crews Cutts, Freddie Mac deputy chief economist, said in a release.
Also, a huge wave of adjustable-rate mortgages created in the past few years are facing their first reset, giving borrowers the incentive to refinance and take additional cash, Freddie Mac said.
The third quarter share of cash-out refinancing is up from 88 percent in the second quarter.”
This oughta help the situation…
Good lord, I had not seen that article yet! It would appear that people are just intent on digging a deeper grave. Isn’t our banking system great!!
Wow, that is even a little surprising. Wonder what the median percentage cash-out is?
Made me curious, and I found the following: By contrast, in 1993, 69 per cent who refinanced paid DOWN their mortgage balances.
http://query.nytimes.com/gst/fullpage.html?res=9D0CE3DD1438F93AA35751C0A962958260
“U.S. homeowners took cash out of their homes in the third quarter at the highest rate in 16 years”
But if refinance applications are way down, wouldn’t 89% of a much smaller number be smaller than 88% of a much bigger number? I think that story is a little misleading.
The total amount refinanced, however, fell in the third quarter.
…
Homeowners tapped into their home equity for $82.8 billion in cash in the third quarter, compared with a revised $90.6 billion in the prior quarter. The amount could slide below $65 billion in the fourth quarter, according to Freddie Mac.
Homeowners taking less advantage of home equity wealth could have a significant ripple effect on the economy, if consumers borrower and spend less, analysts have said.
http://tinyurl.com/y6k3c6
Either high inflation will materialize to make these negative savers look smart (which would drive the current savings rate further in the negative direction), or consumption is soon going to crash when no further equity is available for withdrawal. Which evil seems lessor from a central banking standpoint?
High inflation, but only after they’ve been scared into it by a deflation.
So first the savers will look smart, and then everyone will start saving, and then the spenders will look smart. It’s just how it goes.
That is my best guess about how this plays out, and the bond market seems to concur. The advantage of this plan is that the folks with deepest pockets don’t get hurt much by deflation — in fact, the value of their money in the bank goes up, and they are positioned to be the strong hands in the ensuing firesale.
Coincidently, these folks also have the most political influence and make the biggest campaign contributions. Where is the downside?
BTW, you spelled “lesser” as “lessor”, as in “one who grants a lease.”
Freudian slip maybe?
Maybe it was just a brain slip…
I agree that initially there will be a recession along with a deflation, but as the pain becomes too intense (job losses, higher rate of foreclosures), my guess is that the government’s policy will become very inflationary. I think the Ka-Poom theory on http://www.itulip.com is a pretty good conjecture about the outcome of this mess.
“There’s a 50-50 chance the market will still be in the doldrums in 2008, said Edward Leamer, director of the UCLA Anderson School”.
———————————————————————————-
I’ve learned to not take anything the UCLA Business says seriously! They are truly clueless when it comes to economics and the housing market in particular…especially in the OC. What kind of prediction is “50/50 Chance”? If I offered up this type of statistical argument in grad school, I’d have been laughed out of the class.
Having said that, I’ve lived in Orange County for the last 12 years and it is a very nice place indeed. However, I also travel extensively around the good ole US and can’t help but note that there are very many very nice places around this country where one can live at a fraction of the cost of the OC.
I thought I read something from Leamer yesterday where he said he didn’t see any cracks in the housing market.
Just to add my two cents, I think the positives greatly outweigh the few negatives in South OC.
While we’re talking about Orange County… In the paper version of the Orange County Register today, Lansner printed selected quotes from bloggers. I liked seeing the kind of comments I read every day right there for people like my mom (and others trying to sell an overpriced boring little house) to read.
ah ha
“She said owners of existing condos could face the real difficulty selling when new homes hit the market. Owners with older condos will ‘have to dump a lot of money into the condos just to sell them,’ Hicks said.”
Mortgage fraud slip ?
From what she is saying, condo sellers should leave $100K cash inside the condos , then buyers will pay the asking prices.
This last weekend we were in San Clemente near the Walmart when we happened upon something that really brought light to much of the distress in the area. A huge section of the parking lot was taped off for a holiday event that was being sponsored by a well known real esate company (colors are red and white). All of these agents were getting the booths set up for the free pumpkins, cotton candy, kettle corn, ride on the golf cart disguised as a train (people were seriously waiting in line to ride around the Walmart parking lot), cake walks and so forth. One side of the fenced off area housed all of their signs, about 30 of them. These agents put out a chunk of change to get people to visit them. We never went in but spent a good hour watching in amusement from afar.
What is they say about bread and circuses?
now thats a dog and pony show!!!
Which is worse… waiting in line to ride around the Wal-Mart parking lot or watching people wait in line to ride around the Wal-Mart parking lot?
I would have participated!!…Sometimes these people can bake some goodies that will melt in your mouth…You can eat
them while riding that awsome train!!…Note: Dont take the
juice on the train, unless you want a tide dye looking shirt.
“Plans for the Platinum Triangle, for example, are dominated by condos and apartments, including high-rises. Orange County may already have more condos than buyers, said economist Jack Kyser.”
They have extremely overloaded the market.
No Shit.
The “Platinum Triangle” (State College & Katella, near Anaheim Stadium) looks like the Norks tested their nuke there. Everything west of State College has been completely razed to bare dirt and replaced by construction fences touting CONDOS! CONDOS! CONDOS!
Only consolation is that Anaheim allows mixed-use zoning; judging from near-completed condo projects in the area, the first floor will be almost entirely retail establishments, returning to the classic urban arrangement of “shops below, living above”. The retail portions might spread the risk a little.
Speaking of desperate…
There is a home that i have been watching in the White Marsh area of Baltimore. It is your typical 2000 sq ft colonial built in 2006. Tax records show purchsed in 2/06 for 410k. Owner tried selling for 60k profit for several months and is now trying to rent for $1800/month. I keep checking the listing on the Remax website and everyweekend, he advertised an open house. $1800 is acutally a very reasonable rate for this affluent area and for a very nice home. It just goes to show you the state of the market. High income earners are not your typical renters and there are very few of them for these flippers to market to.
Not the OC but there are some slight price declines in LA. My wife and I are looking a few blocks on either side of Melrose west of La Brea. Seems to be at least one “for sale” sign per block and often more. Zillow quotes @ $1.5 million for the area. Asking prices just shy of $1 million on a few I called about today, which is an improvement (over the summer asking prices were all Zillow territory).
But it’s the sales history that kills me. Nice 3/2 on Martel (quiet street off trendy Melrose) asking $949k. Sold for $629k in 2003 and a shocking $280k in 2000. More than 300% appreciation in just five years!
What’s the consensus on where property like this will end up? Will we ever see central LA prices tumble below $500k again or are we looking at just shaving $100k or so from current levels?
As long as the economy holds steady, I just see a 5-10% decline from current levels. But, who the hell really knows…nobody has a crystal ball.
Done. Bid/Ask spread is easily 5-10% now.
‘nobody has a crystal ball’
But those of us who were around during the 1980 and 1989 bubble implosions can remember 40-50% price drops in bubbly areas. Those were much smaller bubbles, by the way.
As long as the [real estate-based] economy holds steady..
“I just see a 5-10% decline from current levels”
So do you think the median price/median income multiple, that has historically ALWAYS corrected to 2-3 in normal areas and 4-5 in CA, will only correct from 11 to 10.5 or do you expect incomes to quadrouple soon?
I did a flooring restoration job in 1998 off Melrose and Martel, a patch-up really PO lock their dog in the round foyer at the front door, replacing piss stained floors. I was doing the job more as a favor for the girl friends boss, who bought it for 200K. The idiot said he was going to tear out the Batchelder fireplaces, so I spent 4 extra days there delicately pulling the both fireplaces (the tiles were worth between 3K and 6K). The are some beautiful homes in that area, I love the 1920s craftsman, in 1997 I saw a few nice homes go for around $150K.
I did a flooring restoration job in 1998 off Melrose and Martel, a patch-up really PO lock their dog in the round foyer at the front door, replacing piss stained floors. I was doing the job more as a favor for the girl friends boss, who bought it for 200K. The idiot said he was going to tear out the Batchelder fireplaces, so I spent 4 extra days there delicately pulling the both fireplaces (the tiles were worth between 3K and 6K). The are some beautiful homes in that area, I love the 1920s craftsman, in 1997 I saw a few nice homes go for around $150K.
No reason we shouldn’t see them going at $150k + inflation in 2010 or 2012.
What about the 14,000 homes that are supposed to go up at Rancho Mission Viejo?
A former ex-pate from So Cal watching this from afar. I really keep in touch with friends from back home.They all assure me that the thing that made me leave rediculous cost of living and home prices may well change. I’m on a few HB blog sites all pointing to the same opinion california is going to crash big time. I took my mid 700’s fico and nest egg to south carolina if things drop sharply enough I’ll be calling the movers. Crossing my fingers….
A bit more on the Irvine/Tustin developments– have wandered thru the http://www.villagesofcolumbus.com stuff on the old Tustin Marine base several times (see above). These places start at mid 400k for a 1000s ft condo to 1M+ for SFH.
In the Kensington Court Townhomes–Most of 60 units look done or almost done…..Saw a 1/2 dozen with signs of occupancy. Same thing 3 weeks prior. Maybe folks are choking on the 700k start price?
Same trip, several streets over, there were 6 houses with curbside signs “I’m Available..Ask at the sales office”. All on one cul-de-sac. Saturday– no signs. Er…wait! Looks like they pulled them, and put a discrete one in the window! Don’t want to depress the two actual owners on the street.
Lastly– they’ve got 3 of their apparently original SFR models for sale..Side by side, by 3 different realtors. Went thru on the open house this weekend and YUCK! sums it up. They’ve taken a 5000sqft lot and put a 3500 -4000sqft house on it. Two car garage if you like the Mini! Floorplan looks like it was drawn by a 1st grader– one of em, it was like pods joined together. Another had a bizarre upstairs hallway…weird jog, one oddball offset b/r. Windows— Now I know why everyone wants plasma tv’s. to put up fake scenery!. Look out the window, and into the neighbor’s (remember, same size house, same size lot, so it’s pretty much to the property line!). My wife and I were joking about that TV commercial with the old couple waiting for the “show” next door—remember to save money for window coverings!. A couple of the b/r’s had windows on one side that were 7 feet up….took me a moment to realize it was cause all you’d see was the neighbor’s wall.
And according to the flyer, all this can be yours today for the low low price of $1,269,000. If you don’t puke first.
Funny how it’s changed so fast. I live across the street and visited their development last summer and it was pretty packed. I couldn’t believe all these people were in line to look at houses that started at $900k…like that’s no big deal…plus, like you said they are all on zero-lot-lines, next to a Waste Mgmt facility (reeks in the summer), and right next to major roads.
Oh, did I mention prices for the SFR start at $900k? I think they were all sold out last summer…lol
Hi OCKurt, you must live in Westpark. Off Warner? I live in Santa Rosa Apartments, and on the weekends when my ex has my son I go for walks through the Columbus Grove developments to see how sales are going. It is so amusing, I haven’t grown tired of it yet. I know exactly the three houses you’re describing - took a pic of them two weeks ago to try to post on my blog (but couldn’t figure out how to get my software to work, duh). I really like the Kensington Court townhomes and had a nice chat with a nice sales guy there; told him I was sorry but I was not part of his target clientele as I only make 120k. Said he was looking for rich people, and that’s not me.
And yeah, the cul de sac in the very back of the development, with the nice, detached SF homes, is like 75% or more vacant. Creepy stuff.
oops, guess I should have replied to asuwest2 about the comments on the empty houses…
no worries– & I’m just over in Deerfield. Been here a while too. Ya know, when you compare the older areas (The Ranch/Woodbridge/TurtleRock, even parts of Deerfield), the new ones SUCK! My wife & I used to joke about the stuff that they built on the SW corner of Irvine Center & Culver… kinda tight….Then they built Westpark…3 floors….I’m getting claustrophobic….. then Tustin Fields….OMG! 1300SQ on 3 floors!… and now VoC stuff…GAG. ps– no offense to anyone intended. It’s just that house ain’t everything. I may rent, but I’ve got a front patio area larger than those 600k condos. And a huge greenspace out my front door.
BTW–irvinesinglemom– I saw & meant to reply to one of your postings about the development off the 133 & Portola. I agree w/your sentiments about the $, but if you’ve got one or more rugrats/curtain climbers/etc. I’d have to say that the older more established will be SO much nicer for them. House might not be as big, but a YARD!.
OCKurt– Thanks, forgot all about the lovely smells in that neighborhood!
Yup. Right off Warner and Paseo Westpark.
I would have liked to see the look on that sales guy’s face…they must be hurtin’ right now…
Hi neighboors,
I’m in Corte Bella at San Juan and Harvard.
The current Villages of Columbus are on the outskirts of the old Tustin Air Base. I don’t think I would want to live in the old core that is starting up in 2008.
The biggest problem we have today is the intensity of corruption in USA. All what is happening to our real estate market is as result of corruption. Public are becoming stupid and selfish. Some believe this country got so corrupt which no force can reverse it back.I always disagreed with that until I got involved in the family court in Orange County ,California. When I witnessed the corruption in the courtroom I could not be quiet. I expressed my opinion. The Judge punished me even more. He basically ignored the facts and the law to entertain his attorney friends with excessive legal cost. I am here steadfast trying to fight corruption while I am coached by my attorney. My former attorney wanted me to be appeasing to the judge. The Judge is the King, a cruel king , who has the ability to destroy anybody’s life.The Judge is only interested to enrich the attorneys at the cost of devastating the families life . No one has the power to challenge the judge’s motives or his decisions. Do I have to care for my country and speak out when there is corruption in our justice system or just become corrupt myself ?