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Old 11-11-2010, 09:34 PM
 
5,113 posts, read 5,969,784 times
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Quote:
Originally Posted by Charles View Post
Prices did drop (2006-2009) but it seem like it has flattened out over the past couple years.

Median Sales Price/sqft, SFR in Irvine
That's correct and in 2009 the government started propping up the market with lower interest rates, 1st time home buyers program and offering subprime loans to people who could not afford it. Many of the people who participated in the program have already started foreclosure.
The government also changed the bank rules for mark to market and how they account for all the toxic loans on/off the books (creative accounting). The government has thrown road block after road block to postpone the foreclosure process which allowed the people who defaulted to remain in the home rent free.
A lot of this has ramped down recently and the government has allowed the banks to proceed with foreclosures. The combined REO (Real Estate Owned) inventory for Fannie, Freddie and the FHA increased by 24% at the end of Q3 2010 compared to Q2 2010. The REO inventory increased 92% compared to Q3 2009 (year-over-year comparison).
[SIZE=3] [/SIZE]
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Old 11-11-2010, 09:43 PM
 
4 posts, read 10,038 times
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Quote:
Originally Posted by pacific2 View Post
What I'm wondering is, how is it possible for median family income in Irvine to be $94,895, while a median house value is $679,500?

It’s insane to buy so much house at such a low income, and you are right to be concerned. You are not being “silly.” While Irvine is a very nice city with good schools, it does seem like there is a bubble in the making. I suspect that a lot of people are buying more “house” than they can afford, even though the economy is still in trouble, in part due to speculative beliefs that prices will continue to climb.

Other factors contribute. Surely, clever marketing has much to do with this trend. For example, it’s almost comical when you hear that some people MUST move to Irvine because it is the “safest (large) city.” It’s not as if they are really any more likely to be mugged in Laguna Niguel, Ladera Ranch, Newport Beach or Mission Viejo, but they buy into the hype.

Builders benefit by charging more for homes; realtors stay employed; homeowners pay more and feel “safe;” home-buyers believe they will be able to sell their “investments,” not homes, at a substantial profit in the future; and everybody is happy.

Forget about the fact that the family only making $94,895 will have to pay hefty taxes on the $679,000 home; no matter how much they initially put down ( the average down payment of nearly 40% is skewed upward by the millions laid out by the few rich home-buyers, and the median is actually much lower and more telling, since the average person in Irvine is not rich).

NextExile, you are not at all silly, but you do remind me of the fabled kid who said, “The Emperor has no clothes;” while all of the townspeople who complemented the nearly naked Emperor on his splendid wardrobe, wanted the kid to just shut-up.
Thanks for such a nice breakdown. I greatly appreciate it.
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Old 11-12-2010, 02:31 AM
 
Location: Everywhere and Nowhere
14,129 posts, read 31,238,974 times
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Quote:
Originally Posted by EscapeCalifornia View Post
If they're counted at all. UCI is a big commuter school so lots of students live elsewhere in OC.
I was one of them before I grew up and went away to a real school.
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Old 11-12-2010, 02:50 AM
 
Location: Declezville, CA
16,806 posts, read 39,928,986 times
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Snob.
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Old 11-12-2010, 03:34 AM
 
Location: Everywhere and Nowhere
14,129 posts, read 31,238,974 times
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Quote:
Originally Posted by Fontucky View Post
Snob.
Going to school in the middle of cow pastures just didn't quite provide that full college experience.
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Old 11-22-2010, 11:39 AM
 
Location: Las Flores, Orange County, CA
26,329 posts, read 93,729,143 times
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O.C. homes: 4th costliest vs. income - Lansner on Real Estate : The Orange County Register
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Old 11-22-2010, 05:52 PM
 
Location: Everywhere and Nowhere
14,129 posts, read 31,238,974 times
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Again, irrelevant data. Does not say Orange County homes are out of line with homebuyer incomes. Picture the guy who represents the median income as an older dude who made $50K at the peak of his earning power and bought a $125K home 30 years ago. House is now paid off and he's living in it comfortably on a $40K pension. What would his income have to do with the 35 year old whose income is $150K and whose wife pulls in another $75K who buys the house next door for $600K?
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Old 11-22-2010, 08:44 PM
 
5,113 posts, read 5,969,784 times
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Quote:
Originally Posted by CAVA1990 View Post
Again, irrelevant data. Does not say Orange County homes are out of line with homebuyer incomes. Picture the guy who represents the median income as an older dude who made $50K at the peak of his earning power and bought a $125K home 30 years ago. House is now paid off and he's living in it comfortably on a $40K pension. What would his income have to do with the 35 year old whose income is $150K and whose wife pulls in another $75K who buys the house next door for $600K?
A 50K income buying a 125K home would be a 2.5 ratio and well within the affordability range for that income.

A person making 150K plus 75K (wife) is 225K buying a 600K home would be a 2.6 ratio, again well within the affordability range.

The article says the median income for Orange County is 83.6K and the median home is 530K with a 6.3 ratio, that's twice the affordability range.

The Register also had this article ... Forecast: O.C. home prices to fall 9%

This article talks about a predicted 9.1% drop in Orange country median home value by June 2011 (7 months). This is realistic and probably won't stop at 9.1%.
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Old 11-22-2010, 08:59 PM
 
Location: Las Flores, Orange County, CA
26,329 posts, read 93,729,143 times
Reputation: 17831
Quote:
Originally Posted by CAVA1990 View Post
Again, irrelevant data. Does not say Orange County homes are out of line with homebuyer incomes. Picture the guy who represents the median income as an older dude who made $50K at the peak of his earning power and bought a $125K home 30 years ago. House is now paid off and he's living in it comfortably on a $40K pension. What would his income have to do with the 35 year old whose income is $150K and whose wife pulls in another $75K who buys the house next door for $600K?

Read the sixth comment in comments below the article. Notice anything interesting?
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Old 11-22-2010, 09:13 PM
 
11,715 posts, read 40,438,984 times
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Its funny how other parts of the country have reasonable median income to median house cost ratios. The average family can afford the average house. Poorer people buy houses in the ghetto or they rent. Wealthier people buy nicer houses.

Yet in OC, the concept that the average family should be able to afford the average house is dismissed as unrealistic nonsense not reflecting the market.
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