[no_such_reality]

Hang tough, those cruddy 2/1 apartments will probably be $100K when it’s done.

You don’t buy those to live in them, you buy them to cashflow. The condos HOA fees and the new developments mello-roos crash cash flow in a hurry.

As a rental, these old units can’t compete with the new soaring average rent. Rent increases have been driven by new units with larger floorplan, more functional space, greater amenities, garages and updated/upgraded accoutriments.

This is dated, worn, has a carport, lacks amenities and I suspect the floorplan is classic wasted space with hallways common in the late 70s/early 80s.

In other words, these will be tough rents going forward and they will need to compete on price for a price sensitive tenant.

[no_such_reality]

I think that we are still some time away from seeing reel price reductions

The Irvine Housing Blog is covering Woodbridge village this week. Today’s post features a probable REO as a small 3/2 condo below $400K at $343/sq ft, when other similar properties are holding out for $500+/sf and $500K+

[no_such_reality]

I think that we are still some time away from seeing reel price reductions

The Irvine Housing Blog is covering Woodbridge village this week. Today’s post features a probable REO as a small 3/2 condo below $400K at $343/sq ft, when other similar properties are holding out for $500+/sf and $500K+

[no_such_reality]

Where are you getting your income stats, NSR?

2005 U.S. Census Bureau American Factfinder. Family income, not household income.

[no_such_reality]

Where are you getting your income stats, NSR?

2005 U.S. Census Bureau American Factfinder. Family income, not household income.

[no_such_reality]

The issue in retrospect is very simple.

You are living above median spending $800/month on groceries at Whole foods, you comment on unsavory areas for $1500/month rent and hence choose Rancho Bernardo at $2000/month.

The reality is that your income is average and you’re living above median. Median family income in SD county is $66K. Averge family income in SD County is $85K. Since you tithe, you are below that.

For San Diego City, it’s slightly higher at $67K and $87K.
I’d suspect Rancho Bernardo is even higher.

The crux of the issue, given the area you’re choosing to live in, you’re actual near or below median income and highly likely to be below average family income and already living above that in a few aspects of your life.

Or in a nutshell, you’re suffering from keeping up with the Joneses

[no_such_reality]

The issue in retrospect is very simple.

You are living above median spending $800/month on groceries at Whole foods, you comment on unsavory areas for $1500/month rent and hence choose Rancho Bernardo at $2000/month.

The reality is that your income is average and you’re living above median. Median family income in SD county is $66K. Averge family income in SD County is $85K. Since you tithe, you are below that.

For San Diego City, it’s slightly higher at $67K and $87K.
I’d suspect Rancho Bernardo is even higher.

The crux of the issue, given the area you’re choosing to live in, you’re actual near or below median income and highly likely to be below average family income and already living above that in a few aspects of your life.

Or in a nutshell, you’re suffering from keeping up with the Joneses

[no_such_reality]

Hey, can someone verify what is included in each of these categories?

The bottom row is Alt-A ARMs. That would be Stated Income, low-doc A-credit ARMs, straights ARMs, nothing fancy. Does that include high LTV?

The next bottom is Sub-prime. We’ve heard loads. Low-credit, high-LTV, stated income, etc.

Then red. Prime ARMs. looking to be predominately 3 year ARMs. Straight ARMs, no options, no neg-am. Etc. normal LTV, DTI and documentation. correct?

Then white. Agency ARM. Not sure, is this VA, FHA funded ARM loans?

the light blue. Option ARMs. These are the Neg-AM, option ARM loans. Targeted resets on paper starting in 5 years so float activites in years 3,4,5. I say on paper, because if the neg-AM has been used, that date gets pulled in the on the equity cap, typically fires on a minimum payment user around month 29.

If the Neg-Am trips an early reset for the majority of people with the Option ARM loans, that may move the light blue section forward two years to begin this fall/winter. Right on top of the sub-prime peak. Am I think about that wrong?

The last is unsecuritized ARMs. Are these the ARMs that banks kept for themselves?

[no_such_reality]

Hey, can someone verify what is included in each of these categories?

The bottom row is Alt-A ARMs. That would be Stated Income, low-doc A-credit ARMs, straights ARMs, nothing fancy. Does that include high LTV?

The next bottom is Sub-prime. We’ve heard loads. Low-credit, high-LTV, stated income, etc.

Then red. Prime ARMs. looking to be predominately 3 year ARMs. Straight ARMs, no options, no neg-am. Etc. normal LTV, DTI and documentation. correct?

Then white. Agency ARM. Not sure, is this VA, FHA funded ARM loans?

the light blue. Option ARMs. These are the Neg-AM, option ARM loans. Targeted resets on paper starting in 5 years so float activites in years 3,4,5. I say on paper, because if the neg-AM has been used, that date gets pulled in the on the equity cap, typically fires on a minimum payment user around month 29.

If the Neg-Am trips an early reset for the majority of people with the Option ARM loans, that may move the light blue section forward two years to begin this fall/winter. Right on top of the sub-prime peak. Am I think about that wrong?

The last is unsecuritized ARMs. Are these the ARMs that banks kept for themselves?

[no_such_reality]

I always start with gross and work down. If you look at your big five expenses:

Taxes – $2500
Rent – $2000
Groceries – $800
Loans – $600
Tithe – $500

Taxes seem high at 33% for base line withholding on a one earner family of three. Self-employed doubles the FICA withholding, but you should be writing off lots more.

Rent doesn’t seem bad, however, as a couple with one child, can you rent a 2/2 cheaper in an area with the schools you need? Do you need to spend $2000 on rent? If you rent differently is it possible to save on rent and gas?

Groceries, that’s roughly $200/week for three people. Does this include eating lunches out? That’s seems a little high for three people, one a little growing child.

Loans. $600/month on $15,000. Can that be refinanced? Or are you tracking to pay it off in just over two years?

Tithe. $500/month. That’s a personal choice that only you know is right or not.

Here’s the thing, I didn’t see your retirement plan. Nor extra savings for the future house down payment and closing costs. I also noted that the wife has student loans but is taking care of the child. Is this a permenant plan or a temporary plan? Or semi-perm until the children are into elementary school? If it’s temporary, is it possible to scale back the tithe until you return to normal income?

If you are paying $2000/month in rent, you can buy a place around $300,000. Rent until something in the $300,000 range is comparable to what you are renting.

Also, with a family of three income of $90,000, you may qualify for First Time Home Buyer Mortgage Tax Credits. See San Diego Housing Commission . In SoCal, many programs go to the 80/90/100K point of income based on City/County.

[no_such_reality]

I always start with gross and work down. If you look at your big five expenses:

Taxes – $2500
Rent – $2000
Groceries – $800
Loans – $600
Tithe – $500

Taxes seem high at 33% for base line withholding on a one earner family of three. Self-employed doubles the FICA withholding, but you should be writing off lots more.

Rent doesn’t seem bad, however, as a couple with one child, can you rent a 2/2 cheaper in an area with the schools you need? Do you need to spend $2000 on rent? If you rent differently is it possible to save on rent and gas?

Groceries, that’s roughly $200/week for three people. Does this include eating lunches out? That’s seems a little high for three people, one a little growing child.

Loans. $600/month on $15,000. Can that be refinanced? Or are you tracking to pay it off in just over two years?

Tithe. $500/month. That’s a personal choice that only you know is right or not.

Here’s the thing, I didn’t see your retirement plan. Nor extra savings for the future house down payment and closing costs. I also noted that the wife has student loans but is taking care of the child. Is this a permenant plan or a temporary plan? Or semi-perm until the children are into elementary school? If it’s temporary, is it possible to scale back the tithe until you return to normal income?

If you are paying $2000/month in rent, you can buy a place around $300,000. Rent until something in the $300,000 range is comparable to what you are renting.

Also, with a family of three income of $90,000, you may qualify for First Time Home Buyer Mortgage Tax Credits. See San Diego Housing Commission . In SoCal, many programs go to the 80/90/100K point of income based on City/County.

[no_such_reality]

It varies. when renting is as expensive as owning is my real trigger. At the moment, I’d like to say that’s 50% with my target area being going back to Eastside Costa Mesa or into an older Irvine community like University Park, Woodbridge, The Ranch.

However, times change and as my living needs change pushing towards SFRs and more bedrooms, the percentage will become smaller.

[no_such_reality]

It varies. when renting is as expensive as owning is my real trigger. At the moment, I’d like to say that’s 50% with my target area being going back to Eastside Costa Mesa or into an older Irvine community like University Park, Woodbridge, The Ranch.

However, times change and as my living needs change pushing towards SFRs and more bedrooms, the percentage will become smaller.

[no_such_reality]

Dribbling them out is what they are doing. selling 50 a month with 650 a month are piling up, leads for a long long backlog to be dribbled out. Years worth. Empty houses with no power, no running water, no ventilation, don’t age well.

It’ll be interesting, in general, housing across a broad swath of American isn’t nearly as over extended as SoCal. SoCal and Cali in is one of few island of housing psychosis.

Will the Fed come riding to the housing rescue of California and Florida? Or will the excesses and fraud in the California and Florida be painted as the root of the problem?

The problem Cali has coming has already come to the rust belt in Ohio and Michigan. I see lip service, but I don’t any traction.

In the end, this is a credit bubble, and their only two solutions, the credit bubble inflated assets have to return to fundamental values or fundamental value have to rise to the bubble.

[no_such_reality]

Dribbling them out is what they are doing. selling 50 a month with 650 a month are piling up, leads for a long long backlog to be dribbled out. Years worth. Empty houses with no power, no running water, no ventilation, don’t age well.

It’ll be interesting, in general, housing across a broad swath of American isn’t nearly as over extended as SoCal. SoCal and Cali in is one of few island of housing psychosis.

Will the Fed come riding to the housing rescue of California and Florida? Or will the excesses and fraud in the California and Florida be painted as the root of the problem?

The problem Cali has coming has already come to the rust belt in Ohio and Michigan. I see lip service, but I don’t any traction.

In the end, this is a credit bubble, and their only two solutions, the credit bubble inflated assets have to return to fundamental values or fundamental value have to rise to the bubble.

[Author]

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