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Housing threat looms in South County
November 23rd, 2009, 1:00 am · 101 Comments · posted by Mathew Padilla
Banks started the foreclosure process on hundreds of homeowners in South Orange County in the third quarter of this year, in a sign cities there could see more actual foreclosures in the months ahead.
The ZIP with the highest concentration of homeowners in distress was 92694 in Ladera Ranch — lenders filed 167 notices of default (NOD) during the three months ending in September, down a tad from the second quarter but up 69% from a year ago, reports MDA DataQuick.
The total of 167 NODs equates to 25 default notices per 1,000 homes, the highest such ratio in the county. By that measure, Ladera Ranch saw a greater concentration of housing stress than heavily impacted areas further north, including Santa Ana and Anaheim. Three ZIPs in Santa Ana had a ratio of 19 notices per 1,000 homes.
Rounding out the top five was Rancho Santa Margarita’s 92688, another South County ZIP, with a ratio of 17 default notices per 1,000. Banks filed 228 NODs in that ZIP, up 9% from Q2 and 84% from a year earlier.
Banks typically file a notice of default, which starts the foreclosure process, after a borrower misses three or more monthly payments.
Here’s a table showing NODs in Q3 by ZIP, with percentage gain from a year ago, and NODs per 1,000 homes.
| ZIP | CITY | NODs Q3 | Yvs.Y | NOD/1,000H |
|---|---|---|---|---|
| 92694 | Ladera Ranch | 167 | 68.7% | 25 |
| 92703 | Santa Ana | 142 | -9.0% | 19 |
| 92701 | Santa Ana | 107 | -31.0% | 19 |
| 92707 | Santa Ana | 183 | -6.6% | 19 |
| 92688 | Rancho Santa Margarita | 228 | 83.9% | 17 |
| 92704 | Santa Ana | 216 | -0.9% | 16 |
| 92801 | Anaheim | 119 | 12.3% | 16 |
| 92675 | San Juan Capistrano | 164 | 141.2% | 16 |
| 92804 | Anaheim | 213 | 6.0% | 16 |
| 92843 | Garden Grove | 108 | 2.9% | 16 |
| 92805 | Anaheim | 137 | -10.5% | 15 |
| 92841 | Garden Grove | 88 | 39.7% | 14 |
| 92780 | Tustin | 140 | 48.9% | 14 |
| 92655 | Midway City | 18 | 125.0% | 14 |
| 92844 | Garden Grove | 58 | 18.4% | 14 |
| 92610 | Foothill Ranch | 59 | 31.1% | 14 |
| 92706 | Santa Ana | 100 | 23.5% | 13 |
| 92656 | Aliso Viejo | 198 | 45.6% | 13 |
| 92806 | Anaheim | 75 | 4.2% | 13 |
| 90621 | Buena Park | 69 | 15.0% | 13 |
| 92679 | Trabuco/Coto | 148 | 124.2% | 13 |
| 92840 | Garden Grove | 135 | -3.6% | 13 |
| 90680 | Stanton | 64 | -8.6% | 13 |
| 92653 | Laguna Hills | 115 | 42.0% | 13 |
| 92868 | Orange | 47 | 51.6% | 13 |
| 92782 | Tustin | 91 | 106.8% | 12 |
| 92802 | Anaheim | 65 | -11.0% | 12 |
| 92808 | Anaheim | 80 | 142.4% | 12 |
| 92833 | Fullerton | 150 | 28.2% | 12 |
| 90631 | La Habra | 186 | 59.0% | 11 |
| 92832 | Fullerton | 44 | 37.5% | 11 |
| 92673 | San Clemente | 108 | 120.4% | 11 |
| 92676 | Silverado | 10 | 400.0% | 11 |
| 92630 | Lake Forest | 192 | 8.5% | 11 |
| 92677 | Laguna Niguel | 239 | 51.3% | 11 |
| 92657 | Newport Coast | 46 | 283.3% | 10 |
| 92683 | Westminster | 178 | 16.3% | 10 |
| 92691 | Mission Viejo | 158 | 38.6% | 10 |
| 90620 | Buena Park | 112 | 3.7% | 10 |
| 92823 | Brea | 11 | 37.5% | 10 |
| 92627 | Costa Mesa | 90 | 12.5% | 9 |
| 92626 | Costa Mesa | 95 | 39.7% | 9 |
| 92869 | Orange | 100 | 31.6% | 9 |
| 92603 | Irvine | 56 | 107.4% | 9 |
| 92861 | Villa Park | 18 | 63.6% | 9 |
| 92602 | Irvine | 43 | 38.7% | 9 |
| 92831 | Fullerton | 57 | 46.2% | 8 |
| 92867 | Orange | 87 | 17.6% | 8 |
| 92705 | Santa Ana | 94 | 10.6% | 8 |
| 92870 | Placentia | 110 | 37.5% | 8 |
| 92865 | Orange | 41 | -4.7% | 8 |
| 92887 | Yorba Linda | 54 | 42.1% | 8 |
| 92692 | Mission Viejo | 137 | 93.0% | 8 |
| 92807 | Anaheim | 96 | 18.5% | 8 |
| 92620 | Irvine | 86 | 36.5% | 8 |
| 92612 | Irvine | 49 | 28.9% | 8 |
| 92629 | Dana Point | 79 | 172.4% | 8 |
| 92835 | Fullerton | 56 | 86.7% | 8 |
| 92648 | Huntington Beach | 91 | 68.5% | 8 |
| 92886 | Yorba Linda | 109 | 60.3% | 7 |
| 92606 | Irvine | 32 | 113.3% | 7 |
| 92821 | Brea | 63 | 12.5% | 7 |
| 92647 | Huntington Beach | 84 | 121.1% | 7 |
| 92614 | Irvine | 47 | 104.3% | 7 |
| 92604 | Irvine | 56 | 93.1% | 7 |
| 92663 | Newport Beach | 43 | 126.3% | 7 |
| 92618 | Irvine | 22 | -4.3% | 7 |
| 92866 | Orange | 17 | 88.9% | 6 |
| 92708 | Fountain Valley | 103 | 56.1% | 6 |
| 92845 | Garden Grove | 34 | 126.7% | 6 |
| 92660 | Newport Beach | 62 | 169.6% | 6 |
| 92624 | Dana Point | 25 | 257.1% | 6 |
| 90630 | Cypress | 75 | 31.6% | 6 |
| 90623 | La Palma | 23 | 4.5% | 6 |
| 92672 | San Clemente | 84 | 50.0% | 5 |
| 92651 | Laguna Beach | 58 | 87.1% | 5 |
| 92646 | Huntington Beach | 93 | 29.2% | 5 |
| 92649 | Huntington Beach | 48 | 20.0% | 5 |
| 90720 | Los Alamitos | 23 | 43.8% | 4 |
| 92625 | Corona del Mar | 18 | 157.1% | 4 |
| 90740 | Seal Beach | 16 | -15.8% | 3 |
| 92662 | Newport Beach | 2 | 0.0% | 3 |
| 92637 | Laguna Woods | 20 | 42.9% | 3 |
| 92661 | Newport Beach | 4 | n/a | 2 |
More from this blog…
- Reader with cash weighs home buying options
- These homes are about to be foreclosed
- Republicans want hearings on FHA
- Regulator calls for ban on liar loans
- Mortgage volume to tank 30% next year
- Regulators tap Pimco to assess mortgage bonds
- Banks start foreclosure on 2,100 mortgages
- A failed prosecution
- Fed to continue supporting mortgage market
- More foreclosures and short sales hit the market
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Nice post Matt- 1:00 AM on Monday morning.
I feel bad for the fools who are buying now thinking this is the bottom.
The reality is that we are going to have the biggest redistribution of wealth (read: salaries and compensation) as a result of globalization. The middle class over the next 20 years will be very different then the middle class of the past 20 years.
@O C Bandit
Your post is SPOT ON, but millions of Americans dont get it yet. Thomas Friedman has been saying this for years & it’s finally coming true. The days of eating good food like meats & milk will be gone in the coming years. The U.S. MUST lower it’s standard of living to compete with the global economy.
Not necessary. See my post below for more details. Don’t fall into the Freidman/Goldman Sachs/US Chamber trap.
I have to agree with Sunnsea. I refuse to consider potentially third world conditions to be the norm for myself and my potential children in the next 20 years in the US.
It all depends on how hard people are willing to work and how much “overhead” or cost drag we allow the government to be on our economy…
http://www.beyondthemargin.net/2009/11/new-era-of-feudalism.html
Here’s a quote by Robert Heinlein that sums up this argument:
“Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty. This is known as ‘bad luck.’”
Kind of depressing for a Monday morning. LOL.
On a positive note though, it looks as if home sales surged 10% in the last month according to Fox News. And the Dow is up over 100 pts so far this morning.
All of this is going against what actually should happen for some reason.
i am not really smart but i do think that stock is going up at this time does not mean anything…
Not!
Those green number are artificial, and all because the treasury is trashing the dollar.
a 10% increase in EXISTING HOME SALES means nothing good for the housing market. A whole lot of renters became home owners/debtors leaving record rental vacancies. This will bring housing prices down. It is new home sales and household formation which is important for long term housing market growth, neither of which will happen with present unemployment levels.
you are right, but as long as our ‘hero’ Mr. Obama keeps throwing in money to try to save these sinking ships, we are not going to see a bottom any time soon. It is very unfortunate.
Good, we need the inventory to meet demand!
OC Bandit is absolutely right - middle class is changing.
How can we maintain our middle class globally when:
1. Our middle class is living beyond its means, and now on credit from China whose middle class in the last 7 to 10 years has grown substantially thanks to us living beyond our means (I’ve been there and I have relatives there - it’s eyeopening to see the shift).
2. We have so many “me me me” entitlement demands from those who don’t deserve or have not earned them. But whine no more! Our liberal president wants your “me me me” votes in 2012, and is pushing for new laws to mandate your expensive entitlements! (Didn’t a prior California governor try this before?)
3. Our labor costs are 2 to 5 times greater than other parts of the world. How can we compete with overpriced products? I know, let’s legalize more entitlements AND raise taxes. Those few rich foreigners who few who already buy our overpriced products at 5X will not bat an eye when the cost doubles to 10X.
4. Our education system is falling apart, is more expensive than ever, and in 2009/2010 is only available to a smaller group of new enrollees (% wise) than 10 years ago. I don’t understand why the President is steadfast to bankrupt by mandating healthcare entitlement that’s already 75% just fine. How exactly will that help us maintain or recapture our global influences? If only that effort was directed instead to fixing our education system and making UC-class education an entitlement. That would probably cost less than healthcare and put us back on top of education. At least high-education makes us more competitive than low or no education.
Ocobserver has it part right with the 55+ generation. It’s a blessing for them, but how can they rest in peace worrying about future generations become indentured slaves to the rest of the world because of our country’s overwhelming debt and falling competitive edge.
Great points but I still don’t get how higher education is going to make a difference when so many of our Professional Schools are educating as many or more foreign students as our own. Are we not just educating our competitors? I understand the arguments for a reasonable number of foreign students, ten or 20 percent, perhaps but that should be it.
Also, how much endless and mostly general education should the property owner be forced to pay? If you own property in this state you know public education is the largest part of your tax bill.
Specific, professional training is one thing to invest in. However, tenured professors at state schools are approaching $200,000 a year (7-8 months) after 20 or so years for teaching general education/social science courses. Yudoff gets $600,000 a year at the UC system we get to pay for and he has no solutions except cuts.
Bottom line is that property owners are being duped by this system and it is a myth that rote education makes us competitive.ie. Bill Gates and Steven Spielberg. We make ourselves competitive not professional state educators.
Sure it’s a blessing for the 55+. It is them, their generation that has put us into this bind. This group felt they are entitled to the good life and hence, their out of control spending both at the government level and individual level. A large portion of the state and local legislatures are pretty much of this age group. They take from the future generation so that they could live a happy life. Such a selfish group.
I think you are missing a few things here with your comments fullerton.
Spending fueled growth, although you are right about out of control spending leading to the bust. But the spending at the govt level was largely on social programs for others.
And talk about taking from future generations, our President is the leader at that. When he entered office our national debt was at record levels. Instead of taking a sensible course and doing something about that, he instead has pushed through his programs with massive costs that have greatly increased the deficit and national debt just in the short time he has been in office.
A sensible family, if they already have obligations that are due to become unmanageable, if they are wise or sensible at all will give attention to the obligations they already have before taking on massive new ones. Same thing for co’s and govt.
Oh, but that doesn’t seem to apply to Obama. Most President’s coming into office with the debt as high as it is and the economy as bad as it is would realize that they would need to scale back the programs that they wanted to push in the interest of not worsening the economy or driving the debt up even higher.
Obama seems to be oblivious to that. And so he has already run the debt way up in a short period of time. In addition he is still pushing a couple of massive new programs that will be quite costly and will likely make things worse for many Americans as they lose the freedom they are used to in making choices about health care and health insurance coverage.
In case you haven’t noticed, Obama is well under 55. And reportedly is was especially younger people who voted for him and still like his proposals. They, for the most part, haven’t realized yet that they will be stuck paying for all this.
It already is bad enough and that is without cap and trade and the massive govt takeover of health insurance coverage.
Because the baby boomer generation is much bigger than the generations that follow the numbers, even several years ago, were not looking good. As the baby boomers age, they will need increasing amounts of medical care. The costs of Medicare, Social Security and Medicaid will dramatically rise as those receiving benefits will be more than those paying into the system. The figures for the rising costs of long term care–largely paid for by Medicaid–as the baby boomers start getting older and start getting to the age where they will be needing care already is staggering.
Of course it was the younger generations that are going to be bearing the brunt of this burden. As more and more baby boomers age and start needing care, these costs were already going to be rising as the large baby boom generation moves from paying in to drawing benefits.
And all that was before the massive new debt that Obama has already increased just in his short time in office. But he’s not done yet. Well, hopefully people will wake up and maybe stop cap and trade and this massive health care entitlement program with the costs deceptively manipulated so that they only show about 6 years of costs spread over 10 yrs (since much of the costs are put off until about 2013–lull the people along, especially the younger ones–so it takes longer for them to realize what is going to hit them in the future).
So unless Obama is stopped, all this will only get worse and he is well under 55!
Where is that article?
And it would be interesting to see that, even though they started the process on these homes, how many more homes have are delinquent. How many homes have not paid in several months that the process has not started yet.
I know people are buying now, the normal mentality of OC people: this is the lowest it ever will be- sales have picked up- must buy now. I , too, feel that they will all be underwater soon.
All these folks who own a small business and have been able to afford NB, CDM homes- are going to be paying more money to the government. Doctors will be forced to take lower pay. How will all of these government changes affect the local wealthy?
Usually a borrower misses at least three payments before a bank files an NOD. California passed a law last year saying banks had to talk with borrowers, or try to talk, at least 30 days before filing an NOD and discuss options to avoid foreclosure. The law impacts loans made in the final years of the housing boom. It likely adds at least one month more to the process.
However, less than half of NODs have been going all the way to foreclosure since CA and the federal government began interfering with the process and changing the accounting rules for bad assets starting last year.
As the Obama program fails to result in permanent modifications, I expect a rise in both short sales and foreclosures but possibly not a big rise in foreclosures or the banks will get slapped around again by Congress or California Legislature. It’s crazy out there.
I say they should have let it all just play out by itself, no stimulus or propping up of banks, we’d all been better off in the long run.
We sold my Dad’s house in July–it went very quickly after we fixed it up nice following our realtor’s guidance. As we were talking to realtors before deciding, one mentioned that there are a bunch of balloon payments notes coming due in the next 18 mo or so, so he forsees another round of foreclosures as many are unable to re-fi out of the balloon payment.
Getoveryourself said:”I know people are buying now, the normal mentality of OC people: this is the lowest it ever will be- sales have picked up- must buy now”
———————–
I know the same type of people. They read the OCR feel good real estate stories and think, “By God OCR is the written word of the Real Estate God himself”. “If they say the market is good, I must go out and buy!”
Reminds of a guy names Cesear.
Or they don’t care so much about timing the market as buying a home to live in for a long time.
These is nothing like the warm fuzzy feeling you get from buying your own home having the value of it fall and lossing your 20% downpayment in a year or 2.
We’re all Santa Ana now.
Frightening
Is this the same Ladera Ranch that Steve Thomas just reported as the most difficult place to buy a home? Not surprising that you can’t buy a home there when the seller is defaulting and owes a lot more than it’s worth. I’m sure they’ll all get gobbled up quickly though, right suckg?
Don’t get so fancy using the “RE Professional” term “gobble up”. Those words should only be used by professionals.
Are these all truly residential? The article does say “homeowners”. But the chart simply states NOD’s. Are commercial properties being included? Are any mobiles? If these are just single family residential then there’s still a big problem. I’m seeing a large number of “For Sales” in the commercial sector right now and I wouldn’t be surprised if they are included in this tally.
DataQuick provides NODs to us on houses and condos only. Sometimes a duplex might slip in — a property likely to be a rental. But commercial properties should not be included. It’s not perfect though.
Lots of condos and townhomes are rentals now. In the complex I live in, in Aliso Viejo not sure overall, but in my building with 5 units only 2 are owner occupied. The rest are rented.
My unit was previously rented out but then I moved in and later inherited it.
I found out not long ago that the unit next door which is rented is going to head into foreclosure in the not too distant future. The owners only bought a little over 2 yrs ago and then moved out maybe 6 mo ago and then are renting it to the current occupant who apparently works with the owner.
Another unit was foreclosed during the summer. And those are just the ones I know of right near me.
A lot of people start out in condos or townhomes and then move up but retain the property as a rental. Of course some were bought as investment properties.
There’s no reason to lower our standard of living. Thomas Friedman is not correct. Japan and the EU have not lowered theirs, especially, Germany, France, Italy, why should we? Take a close look at their VAT, high taxes and their high wages, national health care systems. Result: not like you think. The VAT provides protection against low-cost goods from low wage countries, read China. The other high taxes are like “saving for a rainy day” which we have now. The national health care systems make the employers more competitive.
They are much more export oriented than we and provide China with many value-added products which we no longer make like machine tools.
Don’t sit back and accept this turn of events. But you’ll have to take off your ideological blinders and get educated in detail on what other advanced industrial countries do to maintain or raise standards, not lower them as Friedman and Goldman Sachs and the US Chamber of Commerce have had us been doing for the past 30 years in a never ending race to the bottom. Those BMWs, Porsches and Mercedes we like to drive in the OC don’t come out of Third World countries.
That is a dreamland account of what it is actually like in those countries. You are also omitting several other facts, such as their dwindling populations, the fact that they do not have to deal with millions and millions of illiterate immigrants every year, their populations are as little as 1/10th the size of ours (size complicates everything), the fact that they too are looking at the largesse of their social programs and see that without any population base to back it up, they will soon not be able to afford any of it, that when you live in one of these countries you have to accept your lot in life because there is NO upward mobility, if you have drive and ambition to start a company you have already left for the United States where, until recently, that was still a possibility.
well put Michele. I think sunnsea has a bit of an oversimplified view. everything’s so rosy “over there”, the grass sure is greener isn’t it. live there for a while and let me know how the Swedes are enjoying their 59% personal income tax rate. Denmark is 63% at the upper end.
Those used to be our tax rates when we had a great education system and top notch infrastructure. Unlike most OC Register readers, I have been to Europe. Taxes are not the obsession over there as they are for loony conservatives here…Europeans love their lives just fine.
We used to be a can-do country that could achieve anything. We sent a man to the moon with the computing power of an IPOD. Reading the whiners on these boards just shows me how far we have fallen as a people. We are just like the cruise ship passengers in the movie WALLE. Fat and happy and without the strength to do anything about a little struggle. Equating cave dwelling terrorists to the level of Nazism.
Speaking as someone who has many friends in the Scandinavian and other western European nations, they do, in fact, not mind the high tax rate. Why? They do not have medical insurance to pay. They do not have educational bills to pay. They do not have to worry about transportation expenses as much (their public transit systems funded through that tax rate ensure that they can get around cheaply unless they have enough to afford the expense of owning a car).
Yes, they pay large tax rates, but overall enjoy a higher quality of life because they have a real safety net that doesn’t let people slip through the cracks.
Well said Michelle. The system sunnsea espouses is socialism. Not only is there no upward mobility but ambition and hard work are discouraged.
Higher taxes never resulted in a sustained higher standard of living. Never.
But for some people that’s ok. But it means a fundamental change in this country that was founded with an idealogy that is at odds with what is being supported by our current crop of “leaders”.
Very simple. the europeans are NOT in such deep debt like USA.
They have the discipline, and the good education. We don’t
and finally… The Europeans went into wars in their own soil, and they know sacrifice.
they keep the principles intact, with less corruption in government, and the citizen are NOT Individualist.
JC wrote: they keep the principles intact, with less corruption in government.
—————————–
Corruption in Government. You have got to be kidding yourself. 50% of my family heritage is French dating back hundreds of years. They have one of the most corrupt goverments around. I have had family members in Goverment over there and its a joke.
Mr.
So…? still is less than here.
But at the same time you agree from all of the above on that line.
thank you
Yeah I have to agree with Michele on this one.
First, there is not a country in the EU that has an open immigration policy. You can’t just walk into France or Germany and get citizienship. Also they don’t hand out money to anyone that asks for it, ie illegal immigrants.
and that’s how it should be here in the U.S.!!!
Mr.
The Europeans are more serious. period
Well that’s not quite true, but they have a different problem than we do–their former colonies.
Many of the countries do have an immigration problem with many immigrants from former colonies in N Africa as well as elsewhere in Africa.
And in case you haven’t read, they also have illegal immigrant problems much like a few years ago and possibly still with the Haitians trying to get to FL by boat. And like the Haitians many die trying from poor boats and storms or whatever apparently.
so they do have immigration problems.
Also in some ways they are worse than ours. While you may look down on Latinos, still their culture and values are closer to ours than many of the poor, uneducated Muslim immigrants that are flooding into Europe and living in ghetto type conditions. In many cases they are somewhat simliar to here as far as them having their own communities and not being integrated into society.
Also they have strife about Islam with France being officially secular–unlike the US which has religious freedom. So they pass laws against obvious religious displays. Things like women wearing head scarfs or someone wearing a very large cross or maybe a Jew wearing a yarmulke.
And from what I understand, many of these immigrants are like many of the latinos here–poor and maybe not well educated. But with the difference that they are Muslims and not like the ones in CA who seem to be more well off and who seem to be assimilating and blending in.
In some places there, they are even using Sharia law to settle some disputes in Muslim communities. I think this is happening in England and maybe other countries.
Nobody is saying ‘lower your standards’…You can buy whatever you want; you can live the life you want IF YOU CAN AFFORD! Just be realistic… Buying BMWs, Porches, million dollar homes with min wage is (was) only in US and those good days are over. Reality bites!
Waaaaay too many people in California live beyond their means. They have to have all the big toys, BMWs, big homes, blah, blah, blah. When there is an economic downturn, or when a freekin Marxist president and Congress takes over, the gravy train stalls and all the margin players look at each other and say WTF happened? I didn’t know THIS was going to happen. Try living within your means and planning for occasional hard times.
Hope & Change are here but we can still fix this mess by voting the liberal socialists out of both houses of Congress. Liberals don’t have a clue about economics or what it takes to defend this country. It’s not too late. We can stop the bleeding and turn things around. We don’t need to become Mexico.
Conservatives and Libertarians want to destroy the lower class to enrich their corporate masters in the hopes that they will feel pity and let some of those ill-gained profits trickle down. It’s one thing when you’re rich and advocate for lower tax rates, but a completely different thing when you’re only making 50-60k a year on a family of 6 and practically begging for tax cuts on the top 5% when you will never make it to that level.
It’s a completely new level of cognitive dissonance, to accept all sorts of punishment from the private sector (complaining about people receiving pensions or “free” health care) because you believe that, without those very government regulations that protect you from the utter brutality of an unrestrained free market, you would be free to become one of the top 5%.
Then again, I shouldn’t be surprised. America is running the most effective propaganda machine in the history of humanity. From our birth, we are bombarded with messages about how being a consumer is good and how we should keep lowering taxes on the rich because we owe them for bestowing us with their economy and how we’re not doing enough to praise their holy free market by wanting to keep government programs that help the needy in place. If the worst dictators of the world were alive today, they only wish they could have kept their populations in line like our corporations do today.
Baloney!
No one that I know of wants to destroy the lower class. But your very use of that terminology speaks of class warfare. Sort of like Edwards when he was running for Pres, talking about the 2 Americas as though there was a wall separating people. Maybe mentally, but we do have the opportunity here to move from poverty or working class to middle class and even wealthy.
Remember Edwards talking about 2 Americas but he gave the lie to that. He came from a working class background that I guess was lower middle class or maybe lower lower middle class. But he went to school and law school and became very wealthy.
Aren’t both of the Obama’s from somewhat humble backgrounds and yet they were making pretty good money.
BTW, you talk about the brutality of the free market and yes humans can be selfish. But what about the brutality of govt? Sure the govt has a lot of money but then they rack up all the excessive debt as CA has and now the Feds are really doing it–of course the feds can print money. The state has to do a shell game or something. they have made cuts.
And the proposed health care “reform” will make big cuts in Medicare and the choices that people have.
Do you think that you can’t become part of the top 5%? There are opportunities out there for anyone who wants to work hard to rise and raise their standard of living.
BTW, those tax cuts for the rich that we keep hearing about from the Dems were part of tax cuts for everyone that Bush instituted. So many ignore that taxes were cut for all, so much that some on the lower end fell off the bottom so that they no longer owed fed income tax.
The tax cuts that the top income earners did get were a small percentage. They are paying well out of the proportion for their numbers. But people expect a return for their labors whether that labor is working for wages or building and running a business whether large or small. A wage earner expects his wages. A business owner who has worked hard to first start a co and then develop it also expects a return on his labor. And many a business owner is working 80 plus hr weeks to get things going and keep them going.
He works hard though because he expects the rewards of his labor. When govt increases the tax burden too much though the rich may decide not to bother working so hard to create and build companies that employ many people. If the govt is going to confiscate too high a percentage of his earnings, why should he work so hard?
And if he decides to not work so hard, he may not bother creating a new business or expanding his current one which gives job opportunities to many people. Remember, it is not the poor people who are creating jobs–it is those who build business large and small who employ others.
Look what happened under the socialism the communists had. There wasn’t any incentive to work hard and be productive so they weren’t. There were famines that killed millions, scarcity of goods, etc.
Oh and another point. Your post seems to assume that corporate leaders are greedy and uncaring and that the poor are virtuous.
we have been victims of CA law that seems to take this attitude toward landlords and tenants. Those making the laws seemed to think that landlords were greedy, abusive landlords and that tenents needed to be protected against them. They ignored the facts of human nature and that virtue does not rest with rich or poor. Oh, they also overlooked the fact that there are many individual landlords. Many people started in condos or duplexes and kept them as a rental when they moved up. Or they may have purchased a property for a family member to live in and it later became a rental.
But the laws make it too hard to recover damages and unpaid rent from deadbeat tenants. And those of us who were not hard nosed and didn’t give notice when rent was a day or 5 late get really hurt by the system. We lost thousands of dollars on the last 3 tenants, each of whom moved out owing us money which they have never paid. It is too hard to evict them and they can just stay on–even if they are not actually even living on the property but only have some of their stuff still there. They can damage things, getting a brand new carpet very soiled in just a few mo, breaking things, doing all kinds of other damage which a security deposit only begins to cover.
The last one seemed to invent new ways to damage things that I had never seen before. Things like making a hole in the floor upstairs under the carpet (I don’t mean the size of a coin, i mean about a foot across. Maybe they were trying to run the cable downstairs? The whole carpet in the master bedroom was loose so it had to be restretched to be put back down. The cable was cut off so short that the cable installer lost it in the wall. back screen door bent so it couldn’t be fixed. Front screen door missing, cap for the fire sprinkler missing and I’m not even sure where to find a replacement. etc. Oh, and the place had been mostly refurbished 2 yrs before with new screen doors, etc.
And yet the law favors tenants so it is very dificult, especially for individual landlords to recover damages from a deadbeat who wrecks the place.
So there are greedy, self serving people among the rich and among the less rich and even among the poor.
Very well said.
The republicans are just as bad as the Democrats. All they care about is Wall st.
I frequently visit a fitness club in Ladera Ranch, but I grew up in a south county beach town that had more of a hippie feel than a planned community feel - one thing that strikes me in Ladera Ranch is that people seem to so obviously live beyond their real income - I’m sure many residents of LR are hurting now, upside down on their homes and not earning as much money as they were 3 or 4 years ago - but many of them still seem to try to live the upper income bracket life
One thing I haven’t seen mentioned here that I’m sure is a big huge factor in the high figures for Ladera Ranch which is that it is a newer community. So all the homes were purchased within the last few years unlike more established communities where you have more people with more equity in their homes.
And probably many of them were purchased at or near a high point in the RE market. That coupled with the fact that home prices were such a high percentage of income that many homes in the last few years used “creative” financing so that people could afford to buy. And of course many were lulled by the hot markets and that it seemed like it would go on forever. In fact some were talking about a new economy that would just keep going up.
those of us who are older have seen several different downturns and can remember some stagnant periods where houses did not sell.
I’m not sure but Ladera seems like not only a newer community, but I imagine that it is also a younger community than many with maybe less people who can remember the lessons of the past about the market going down as well as up.
I don’t remember the exact year when they started Ladera, but it wasn’t that long ago. Mission Viejo, Laguna Hills and other S County cities have been around and have homes that are 30 yrs old or more. Some of the owners likely did not keep taking cash out re-fis so there are homes that are paid off and homes with a good amount of equity
In Ladera, I would imagine that the # of homes that are paid off is fairly small and there hasn’t been enough time to build much if any equity. In fact, unless they put down a good amount, many are likely upside down.
And Santa Margarita is also a newer community although not as new as Ladera.
It would be interesting to look at the age of the homes with the NOD. I suspect that they may be newer than the ones without that overall.
Wow - those are some scary numbers.
Thanks to Matt for actually reporting data rather than sponsored CAR/NAR spin like other bloggers.
The realtor promised me equity. In fact, the name of the tract was Equity Ridge.
Isn’t that part of Prosperity Village Community Association locaated in the City of Hope?
yeah I heard it’s right next to Leisure World
Time to take the kids out of soccer, and have them sell candy along Oso Pkwy.
and lemonade
Chicklets anyone?
NIce warning sign article, but the OC dumbfounded will continue on…
Nothing has changed over the past 20 years except that people are finally realizing they must kive within their means. Credit has been far too easy to obtain and we all know that we are living from paycheck to paycheck without putting anything away for hard times. So, obviously, if jobs are lost, we have to face the grim reaper and cut our lifestyles back-Well back!
Our manufacturing business has been in Asia for years, but we still are as innovative as we have been in the past. No one is more creative than Americans and I am confident that, as economic fears subside, we will start to hire people and spend money again.
It’s the gloom and doom that many subscribe to here, that holds up our progress toward putting this recession behind us. This is still the land of opportunity and if you don’t realize it or take advantage of it, you deserve what you get! Stop whining and get creative!
Any of you who are over the age of 55, consider it a blessing. The future of america looks very, very bleak. And don’t blame it on our global neighbors. Put the blame where it belongs…..on the ones who are managing the business of the nation. They don’t even listen to you anymore. They look at you like you’re village idiots. They know best. hah. You can see how that attitude has bettered the country in the last 10 years, eh??? Those of you who have young children, I feel sorry for you and them.
oh no the sky is falling ohhhhhhhhhhhhhhhhhhh nooooooooooooooo it will never get better—- what a dull normal post— christ we survived the great depression– we will survive this—
Exactly, I don’t get this whining from Americans about how we are doomed. Really? We defeated the greatest evil the world has ever known, put a man on the moon and have a $15 trillion dollar economy.
And yet somehow this is the end times. If that is the fatalistic attitude we have now then by all means sink into the abyss where you belong. Just slit your wrists and call it a day. The rest of us will fight on and continue to improve our country.
“defeated the greatest evil that the world has ever known”???????
HAHAHAH!
Communist China is running circles around us!!! THEY OWN US!!!! What the heck are you talking about??? Are you THAT brainwashed??
And what good did putting a man on the moon do us??? Did it make you any richer??? NOPE. It just contributed to our insolvency!!!!
Man, you bait swallowers amaze me. Goebbels would have had a heyday with ya!!!
“Man, you bait swallowers amaze me. Goebbels would have had a heyday with ya!!!”
Goebbels only wishes he had the propaganda capabilities our media has today. You don’t need a “1984-like” state to brainwash a nation when it’s far more effective to make people believe they’re free and actively fight against people trying to help them and call out the true evils in this nation. Corporations completely control all discourse in this nation, and shut anyone who disagrees with their pillaging of the population as a “traitor” and “communist” by siccing a bunch of ignorant followers on them (”Teabagging” protests against health care, for example). The Nazis had a fair amount of people actively fighting against them and disagreeing with their methods. America’s public is completely pacified by unsustainably cheap consumer goods and a forced consumption mindset, combined with a near-godlike reverence for the founding fathers (who were only human, and giant hypocrites at that).
“What good did putting a man on the moon do us?”
Oh, I don’t know…maybe accelerating the pace of science and innovation and helping us learn more about our world along with the rest of the universe? Yes, the primary function of the moon landings was a political race against the USSR. That’s not to say it didn’t give us many innovations that both directly and indirectly spun off from the program.
Actually, we really didn’t put anyone on the moon. It was all a farce. In the 60’s we didn’t have the technology to get to the moon. Think about it and do some hard research. We would have known there was water on the surface (which they just found out in the last couple of weeks), and we would have gone back by now. The problems are with the barriers preventing us.
If we had a REAL 15 trillion dollar economy- we wouldn’t be in so much debt- we could actually pay our bills.
This may seem simplistic, but vacant property is never a good thing especially when it is happening literally everywhere. Banks aren’t getting any money anyway so why can’t banks allow a “stability stay” as it were until people get back to work?
Most every industry is tanking under our current administrations, (mostly Federal, but State too) so I expect the property under the bank will no doubt deteriorate or be damaged by the otherwise good, but now bitter homeowner. Refi when families are back on their feet. No houses are selling unless they are the hidden jewel a turn-key property. Sometimes it is not about the money, it is about solving the problem. Banks should be calling the White House and asking “where are the jobs?” because your investors are losing more money, on top of higher taxation at every level. The bank thinks someone is going to buy these properties and fix them up, but the bank isn’t selling at “fire sale” prices.
So how do you get more taxes from a homeless, jobless person? It is called wealth redistribution and person won’t have incentive to work anymore, just let it fall to the rest of us? You may want to rethink how you will vote next time. Everyone knows someone who has been touched by this depression.
Well some may not be selling but others sure are. We sold my Dad’s house in Mission Viejo in July. It went after just over a weekend on the MLS and we got our asking price. Of course we did put a lot into it fixing it up so it looked really nice. And it had a view, etc.
I hear some homes are selling. My cousin’s wife is a realtor in the Escondido area and she is selling homes.
Going, going, going down folks!!! Like I said it’s only going to get worse before it gets better… and for all you stock market people that think you’re numbers are going up….watch out cause its going to tank soon too!
correst– it will tank again as it always does and then it will go back up as it always does— relax– stay diverse– ride it out—- America is worth betting on…
Why is it that Japan, Germany, France and Italy have taken great pains to NOT de-industrialize them selves but we have let 87% of our industry leave over the last 23 years? The person that mentioned the VAT tax was right on. I normally don’t support more or higher taxes but this tax system we have is bad and getting worse, and it can’t continue on it’s present course. More companies move operations overseas and can’t be taxed in the states because they show profits in another country and only show a loss here on the books. Abolish the corporate income tax and replace it with a VAT tax on companies. Abolish the personal income tax and replace it with a flat tax. Revenue would explode and are economy would be healthier.
I agree with you greatly, thomas. the only way to reduce this country’s deficits are through manufacturing. now, you can use a very loose definition of manufacturing, but essentially it should be thought of as any kind of goods (that can include things like computer software).
nobody else (except ourselves) are going to buy our services like consulting. but where would the funds, when we are buying endless supply of goods from outside our borders.
this should be obvious to the “powers that be” but they just don’t seem to get it. the fastest way is to stop being an industrialized nation due to high taxation, extortion by unionized labor, NIMBYs, and environmental wackos.
Well this is a great idea to start manufacturing something in this country besides always relying on smoke up your arse dot com crap or fake real estate ponzi schemes.
the picture is appropriate. “owned” alright.
This was an excellent article.
Just the truth
This is a product of the emergency legislation reqiuring lenders to notify borrowers 90 days before filing forclosure . This was supposed to allow them time to figure out another ploy to stave off the inevitable . Wake up ! Economics 101 IF YOU WANT SOMETHING YOU’RE GOING TO HAVE TO PAY FOR IT !!!
As scarry as it sounds, the news is actually good. The way I look at it: As more houses are being foreclosed, the banks will have to eventually dump them in the market at affordable prices. Responsible “HOME” owners can and will purchase them with intents to live (not as ATM’s) in these houses (I do know quite a few people with cash on hand waiting for the madness to settle before they will purchase their HOMES). Construction jobs will then starting to make a come back since repairs will be required (I haven’t seen a REO property that did not require substantial repairs yet)…
Wrong. When the banks foreclose them they will be FORCE to use ‘mark to market’ accounting methods instead of using the ‘hide off the balance sheets’ method. Many banks would consequently go bankrupt. The FDIC is already pretty much insolvent. It would need a HUGE bailout from the gobblement which is already underwater. And all the foreclosures on the market would drive down property values another 30% making 65% of homes with a mortgage having a larger loan balance than the value of their property!
And that is actually “good news”?
Are you joking???
Maybe we’ll finally realize how ridiculous our system of “free market capitalism” is, and take steps to change it. This “market correction” would have been far worse without government regulation (and indeed, the only reason why we’re discussing this problem in the first place was the repeal of the Depression-era regulations on banks investment strategies and the emerging derivatives markets in the late 90s).
The reason our “free market capitalism” didn’t work this time was because it wasn’t free market capitalism. It was an unholy combination of government coercion, theft, graft, and regulators asleep at the switch that led to the housing bubble. What do you suggest, anyway? Communism? That has never worked, and each time it’s been implemented it’s caused untold suffering and death, and required an active police state to maintain. Hello!?!! If the only way your population will accept your government is to force it down their throats with guns and bayonets, is it a good system? Perhaps you think so. If so, I can’t help you. You’re just too far gone.
Actually who knows. It might have not been as bad if the govt had stayed out. Starting with when Bush announced the first bailouts it seemed to scare the markets. Sure people knew things weren’t good, but when he said they needed to be bailed out it was like he said, the sky is falling so the govt has to rescue it.
when peope are scared, they cut back and don’t spend. Individually that is wise ,being frugal and living within your means and for co’s as well. But for the economy it depends on spending. Also when people are scared, they are less likely to start a business or expand an existing one.
And then the repeated attempts to rescue the markets and people may just be prolonging things by interferring with the needed correction.
Housing had gotten too unaffordable so while painful for those who it put upside down in their homes, falling prices have moved home ownership within reach of more people again.
But some of the efforts to rescue people have just slowed the correction and we read about those who got a loan modification who then had to get another and still may have lost their homes. And yet others may not have been offered any help.
And the threat of more govt intervention and the fear of onerous, anti-business regulations may also be prolonging the downturn and slowing recovery. With uncertainty over what the govt is going to do, individuals and co’s have likely held off hiring or expanding or making major purchases. That has led to a downward spiral as slowed hiring means those people don’t have jobs or it takes longer to find one. And so they can’t buy as much which means retail and those who make and import goods aren’t making as much, etc.
What’s wrong with a realistic “mark to market”?
If it these idiots had to mark to market, it would reset the real estate prices and stop the perpetual lying!
There always be glimmer of hopes and opportunities even the darkest of time. I just don’t see the point of beating the doom and gloom drum day in and day out. I am not even close to retiring age; but, still feel that this country has lots to offer. My children will be just fine understanding that they need to be flexible and adaptable to survive and succeed in life (anywhere, anytime). Unfortunately, some of us did not grow out of the 5 year old “It’s not fair” mentality. Most would recognize the situation as it is and figure out ways to overcome the hardship to achieve our goals.
So what if foreclosures are flooding the market driving pricing further down? There will be people with cash on hands ready to jump in (me included) when the price is right. People who lost their houses will need available rental properties; hence, investors will be most welcome to “gobble up” the foreclosed properties and turn them into rental income… Hey, I choose to see the glass half-full not half-empty.
With so many people underwater on their mortgages and high unemployment property value will continue to decline for sometime to come. With that said, the government’s $6500 tax credit isn’t an enough of an incentive to purcahse at this time.
ACtually I read the other day that much of it is going to people who would have bought anyway. and I read that they are planning to expand it to more people making more money, etc. That is just wealth transfer that and the cash for clunkers. Oh yeah they can sound good, but while they are supposed to stimulate the economy, they bascially help out those who happen to be in the market for a car or home or are ready to enter the market.
Now I know my nephew and wife are hoping to be able to buy and get that credit, using part of their inheritance. They are waiting to hear from the lender about a short sale they made an offer on. Otherwise they may build. But for them not sure how much difference the credit made as far as an incentive to buy. The main thing was the larger amount of their inheritance which enabled them to be able to afford to take that step now at a time in their lives with a growing family.
Hey Mike,
read, http://www.csmonitor.com/2008/1022/p09s01-coop.html
regarding government regulations on the economy
Hey 2.5% of the housing stock will sell to closer of its real value. No big deal!
I have a few friends in South OC that have finally figured out that there $5K a month mortgage payment (I/O), $1K in mello-roos, $500 HOA, and 1.9% property tax is for another 27 years while Illegals live in an apartments right down the street and enjoy the same schools, parks, and so forth. The Illegals seem to have it figured it out..
Bingo you have the correct answer! Why do so few people understand this. Anyone with that high of a payment was delusional. I have had it with the poser rich in Ladera and Talega. If not for them and many others like them in the new communities throughout CA we wouldn’t have had the drastic influx of illegals for their cheap homebuilding, house cleaning, nanny labor. These posers made their beds, but now our whole state is having to lie in it.
We’re all in trouble when we have obama, pelosi and reid in charge. I can’t wait until 2010 and 2012. Until then spend, spend, spend. These politicians have no clue. You and I could do a better job. You don’t spend what you don’t have. They don’t know what this means or maybe they don’t care! They certainly don’t care about america.
A lot of the negativity sounds famaliar- I think I heard it when Carter was president.
So, how does it feel, now that the so-called “middle class” (read: white people) are now suffering along with “those people who should have never been given home loans” (read: brown people)?
The last people will be the rich people. They are not immune, they will be the last, but they will suffer too.
In the past it may have been seen and may have even been racist not to write loans in low income minority neighborhoods. However, I think now it will be seen as common sense. To me it is not about race, but about income and ability to repay the loan. That is something no one was considering the last few years. We shouldn’t have been doing jumbo loans in Compton, Santa Ana or Pico Rivera. We also shouldn’t have been writing those loans to poor whites in Barstow, Victorville, Laughlin or Appalacia for that matter.
Btw, it was Bill Clinton who changed that law and the law about being able to make up to $500K tax free on the sale of your primary residence if you had lived in it 2 years out of the prior 5. These changes are what started the ball rolling on the housing boom. The delusion, greed and fraud blossomed from there.
Note that about 70% of these NOD will end up as bank owned for sale. That is a whole lot of houses.
I feel bad for a lot of the people here. You mostly seem like well meaning folks. Neighbors etc. The very sad part of this is that 30 year fixed mortgages aren’t such a good deal. Number one, the terms are very bad. Number two, you don’t know if you will have a job and not loose your house. I understand housing inside and out.
I can tell you. A whole lot of you never added up how much you had to pay back. You can blame a debt based banking system that includes the government. That is geared to selling nothing but loans and houses.
Here is an example of debt based banking salesmanship. 3 days before “Black Friday” a miracle happens. Housing sales have gone up the highest in 3 years. See it serves credit cards and housing. You will always go with them and agree. Why? it’s you way of surviving. When everything is borrowed. Your house poor and don’t really own much.
I wouldn’t however blame them. You are family men most of you. You should have read the paperwork and the terms. To this very day you don’t understand what’s going on. I have never bought a house. I will not be made a fool of and get soaked like that. Now with the job losses you are looking to see if your going to get thrown out the front door.
Remember this is your responsibility. No one forces you in most cases anyway. So if you do loose your house. Just remember don’t get into a very bad deal again. Work, save. It may not be a famed Beverly Hills mansion. But at least you will own what you have.
But I am hearing every day that OC housing can never go down. I am confused.
Ladera wouldn’t be number one if they would get rid of that ridiculous mello roos and property tax rate. Instead of biting the bullet, they will risk the numerous foreclousers..anyhow..i’m looking out there for family reasons, but i’m bnot paying 550,000 for 2300 sq ft, and 4100 sq ft lot. I will pay 400 for it, but not 550,000. with the tax rate and everything else, your looking at 4,000 a month..
If someone knows of a good deal, please spread it on here.. I will take away one of those NOD’s just give me 4 br, 2 or 3 bath, and at least 2300 sq ft..a lot of least 4300 or more.. I want to pay a max of 520,000
My wife and I have cash on hand to buy and when we do we will be in equity land from day one of our new mortgage. We are in this position because we bought a foreclosed 889 square foot condo in Lake Forest in 1999 for $130K, then sold it in August of this year. Even though the market had suffered a 50% decline in home values since it’s 2006 peak, we still walked away with over $100k in cash after our condo had been on the MLS for just 6 days.
We were (correctly) advised to sell in 2005-2006, but we didn’t because our complex hadn’t gone to hell yet. A costly mistake, yet we are still about to move up to a MUCH better property. Even after the huge decline in property values, our place sold for $100K more than we paid for it. Yes, property values go up and go down, but we’re proof that as long as you don’t buy in a crazy, inflated market like the mid 2000’s, you can generally get off the roller coaster 10 years later and benefit from your investment.
You can’t tell us buying low doesn’t work, because we bought low, then sold in the “low” market of 2009. And we’ll still be moving up from a declining, 20 year old condo in Lake Forest to a five year old, 50% larger home in Ladera Ranch. My monthly nut will be all of $300 more than my old condo. And yes, that includes mortgage, HOA and all taxes. Any of you real estate geniuses care to guess what the monthly payment for a $130K condo was in 1999?
I have no idea if March, 1999 was a bottom point in the market, but that’s when we bought and we came out ahead. This moment may not be the bottom of the market, but it’s low enough to dive in and make a few bucks down the road.
Until then, we’re gonna be movin’ on up.