There's an interesting story today in the OC Register: Ladera loses some luster in mortgage crisis. Early on, we read:
"As the housing market has dived, so, too, has Ladera's luster. Its status as one of the county's newest, most desirable places to buy has been replaced by its standing as one of the hardest hit by the market's meltdown."
We're then introduced to three sets of owners on Bedstraw Loop - a street we last mentioned in August when one of the properties that sold for $870,000 in 2005 went back to the bank. Here's a sample of what they had to say:
Homeowner No. 1:
"Sheila suspects that Ladera home prices inflated more than other local ZIP codes. In some cases, she says, homes purchased for $600,000 in 2004 were valued at $1 million by 2006.
'People borrowed on fake equity,' said Sheila.
Andy adds that he knew Ladera homeowners who kept trading up for bigger, more expensive homes and flipping homes as prices continued to inflate."
Homeowner No. 2:"Gibson recalls having conversations with her husband about ballooning home prices.
'I can't imagine that this can last,' Gibson said she remembered thinking.
Homeowner No. 3:
"Howard said he thinks some Ladera homeowners may have gotten caught up with trying to keep up with the Joneses.
He explains that some of his neighbors are so busy working that he only sees them as they pull in and out of their garages for work.
'A lot of people live paycheck to paycheck,' he said.
Side note: This couple, a nurse and a life coach, were able to buy a $784,000 house in 2004. One would conservatively need to be making $196,000 per year to legitimately afford that.
Thanks to the beauty of hindsight, all these homeowners can claim they knew better, or that they were the ones questioning soaring prices at the time. So then why did they get caught up in the mania?
9 comments:
I like the LR area. The prices are still very high in orange county and people are still buying houses, and most of them are thinking that prices will start going up soon(mid 2009). They need to realize that we haven't hit the bottom yet. Alot of peoples bought their house in 2005 and 2006, and they are still paying very low monthly, once their rate will change, they will feel the pinch too. Anyway, mortgages must not exceed 40% of your take home income. Let the prices to come down more, around 2000 to 2001 level
I have to hope people aren't that stupid to think prices are going to go up in 2009.
Say it ain't so.
Prices will continue to fall well beyond 2000-2001 prices. More like pre-1997 prices; watch and see. Ladera is a poser's paradise. I know a guy, and his wife with big fake ta-tas, who bought an overprices POS for $2.24M at the peak. With only $100k down!!! LOL. Now he's foreclosing on it and another home they "own". The best part of the story? They are both mortgage brokers. How ironic, and fitting. Ladera will see 60-70% off the peak before this is over.
Ladera is a case study in Real Estate greed. The land owner who sold to developers at peak prices (the true winner here), the developers who didn't want to pay for infrastructure so they mello roosed the thing to death, the city who wanted the tax base so they had a golf course considered as open space, then finally the homedebtors who were marketed the "Ladera Lifestyle" that masked a 1.9 tax rate plus two HOA dues in some communities for the privalege of living 20 miles from the ocean. Hey, at least you got free internet service!
haha, I was going to write a comment here about Ladera Ranch but then I read what Soylent Green wrote. How can I follow that?! (I guess I just did). Anyways, couldn't agree more SG, well said!
I love how all of you love to rip on the "Ladera Lifestyle." Where exactly should families want to live in OC? Crapholes like Anaheim and Santa Ana? Yeah, I agree that the HOA fines are way too high...but I'd choose nice parks and pools, fake boobs and Escalades any day over the crime, filth and illegals found in most other cities in OC.
Anon 8:42 sounds like you are a little POed because Fraudera Ranch caused your home to go down in value. Yes I agree its a nice area but suck it up nobody forced you to let your over-inflated home value to go to your head, sign for the HELOC and ARM, etc.
My wife and I attended a friend's BBQ in Ladera back in 2005 at the peak of the madness. We were both amazed at several things:
High end cars in every driveway (Range Rovers, AMG MBs, BMWs, etc)
Stay at home trophy wives/moms
Most people in the "real estate/mortgage biz" making obscene amounts of money
Everybody was working on big families with lots of kids with one bread winner probably making 150 to 200K
The many unnecessary luxuries: golf carts for driving around the neighborhood, gawdy jewelry, guys talking about their $5000 Bar-B-Qs.
We left shaking our heads and saying this couldn't go on much longer. I haven't been back to this neighborhood, but I imagine the tune has changed drastically. I was ashamed at the amount of stupidity and greed...it was mind boggling.
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