So I buckled myself up, and sat in front of the computer for a few hours to extrapolate some of the data from the Multiple Listing Service (MLS).  For a numbers geek like me, it’s pretty interesting stuff. And if you’re not a numbers geek…you might be surprised to find, it’s not entirely boring.  Work with me here…

The Good

There is no doubt that certain communities have been more resilient over the course of this housing crisis than others.  In my recent post discussing the  product profile for new residential construction in Orange County, I discussed the uniqueness of the Irvine market.  It has some of the lowest distress numbers in South County and a buyer demand that is consistently selling out the newest construction projects.  Year-to-date they have had less than 7% of all closings listed as bank owned (foreclosed) property and 22% short sales.  With less than a combined total of 29% for properties closed that were ‘distress’ so far this year, Irvine is one of the strongest cities in the county.

The strength of the Irvine buyer demand may be attributed to the nationally renowned schools, the proximity to Chapman University and University of Irvine, and the attractive commute to many Orange County employers.

My suspicion is also that the buyer profile may have been stronger.  I’d need to do further research, but given the large amount of new construction sold during the boom years, I’m a little surprised to still see a relatively low default rate, or distress market, as compared to other areas in South County that grew up in the boom.

The Bad…Or At Least ‘Not So Good’

Some of the other cities have seen significantly higher numbers of distress sales – bank owned properties and short sales closed.

Lake Forest has seen some fairly dismal numbers at nearly 60% of their closings either bank owned or short sales, with a slight improvement this year so far at 55.9%.  It’s also interesting to note that while some cities (Mission Viejo and Rancho Santa Margarita) seem to be seeing a slight improvement in the percentage of equity sales (owners can sell for a price that covers mortgages and costs of sale) this year, Laguna Niguel and Aliso Viejo have seen decreases. Why?

We’ve seen that some of the higher price points have been stronger for longer.  In other words, it’s only been more recently that we’ve seen short sales or bank foreclosures to any great extent in the higher price points.  These neighborhoods may now be feeling that pinch.

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The Really Ugly

It’s interesting to examine the nature of the neighborhoods that have the highest number of distress inventories.  Upon examining a couple of the neighborhoods, it’s clear to me there are some very real reasons for the challenges some of these neighborhoods are facing.

CLICK TO ENLARGE

It’s important to know the following about the this chart – Ladera Ranch numbers include their gated community of Covenant Hills, and San Clemente’s overall numbers include their newest addition of Talega in their calculations.  For discussion, I’ve pulled out the specifics for both Covenant Hills and Talega.

It’s hard to ignore, out of the cities I profiled, the only one that didn’t have a lower percentage of bank owned homes (foreclosures) was Lake Forest, and certainly Lake Forest has really struggled with high numbers of distress throughout this market as well.

Growing Up In The Boom

I’m particularly interested in the makeup of Ladera Ranch, Covenant Hills, and Talega in this crisis, however.  These are neighborhoods that experienced unprecedented demand, and in the early years, unprecedented appreciation.  The product was new, architecture was unique, planning was exceptional, and it was highly appealing to the buyer profile of the day.  But the one commonality these neighborhoods also face is the fact that they literally grew up in the boom.

And in the case of Covenant Hills (which I intend to explore further in a future post) you have a community, a luxury one at that, that was just in the beginning stages of it’s launch.  And while the construction of the planned community, high-end tract homes, has nearly completed at this point, the high number of available empty lots slated for luxury custom builds, remains vast.

And when you have entire communities that are built in a boom, the overall impact of that bust can be devastating.    For a small community like Covenant Hills – the high end of Ladera Ranch – to see nearly 64% of it’s year-to-date sales as distress, the impact cannot be overstated. With Talega suffering over 60% of it’s closed inventory year-to-date as distress sales, there can be no question that this has dramatic impact on value.

Is There a ‘Good Deal’ for a Buyer Here?

Without a doubt, there are opportunities to get a ‘good deal’ in these neighborhoods.  In some of the hardest hit neighborhoods, prices have fallen and distress inventory is high.  So if a ‘deal’ is the goal, they are certainly here.

But I’m curious about your perspective as a buyer – and I’m interested in your feedback.  If you find a property that is 50% off it’s peak in Covenant how do you respond to that?  Do you feel like it’s a better deal than the property that is only 30% off the peak in another neighborhood – some parts of Irvine for example.

It’s an interesting concept to consider.  Every buyer I talk to has one request in common – a good deal.  I think that’s an important thing to define in your search for a home.  Is the ‘deal’ the predominant factor, really?  Is the long term value of the community a consideration?  Do the amenities impact your decision?

However, one may consider the long term prospective recovery in Covenant Hills as a real opportunity.

It really begs the question – from a buyer perspective, what do you consider a ‘good deal’ in this environment?

Short Sales and Volume

Some things to note from the above numbers, in 2008 the foreclosed/bank owned homes were the more common distressed property available.  In 2009 the tide shifted and short sales played a much more significant role, one which grew further this year.

Also, it’s interesting to note volume.  Nearly across the board, the number of sales increased from 2008 to 2009.  Jury is out for 2010 – but my personal opinion, given the expiration of the Housing Tax Credit, things may be fairly quiet for the 4th quarter of this year.

Jon Lanser with the Orange County Register recently did a post breaking down the number of sales and the change in median price per zip code that might be interesting to check out.

I’ve been somewhat reluctant to participate so I’ll start with this disclosure:  Until recently, I have followed politics superficially at best, I have limited understanding of how housing policy is decided upon, and I generally think Hahn derives some pleasure from his consistent ‘sky is falling’ outlook.  That being said, I will credit Hahn with a breadth of understanding on the topic, and a careful consideration of the political underpinnings.  He inspires me to become significantly more aware of the way the political environment impacts the industry and overall economy.  Clearly, in today’s environment, a superficial understanding falls far short.

And while I try to avoid politics here, the current market environment makes it unavoidable.  The current administration policies have pushed us closer to Socialism than we’ve seen before in our history -  whether it’s Wall Street, the automobile industry, or health care.  The housing market appears to be next.

Much of what I deal with on this blog tends to be local market considerations.  Yet, there is no question that the changes that are clearly coming down the pike have the potential to have a massive impact on the housing market – nationally, and locally, so I feel like it certainly has a home here.

Housing Policy Changes in the Air

July’s housing numbers rocked the nation.  They had been expected to be low given the expiration of the home buyer tax credit, but sales down 27%…that was a little steeper than had been anticipated.  In the days following, it created a tidal wave of response. I saw articles come out on, and offline, both indicating this was nothing to worry too much about, as well as those that would make one decide not to get out of bed again…ever.

There’s no question, housing policy is one of the most important matters impacting our economy today.  And certainly significant change is coming.  As Treasury Secretary Timothy Geithner states, “This administration will side with those who want fundamental change. It is not tenable to leave in place the system we have today.“  It’s the specifics of that change that are of interest and of concern to me.

‘Fundamental change’ is too ambiguous at this stage.  I’m interested in seeing change that reflects a solution to the existing problems.  What parts of the ‘system’ that got us here – are not ‘tenable’?  Let’s come from the three C’s of home ownership perspective:

1. Capacity – the ability to repay the loan (employment history, salary)
2. Credit – the history of how one has paid back debt
3. Collateral – the value of your home (recently justified by overbloated appraisals brought about by easy lending practices)

What if we simply embrace these simple tenants:  make quality loans, with credit worthy individuals, on quality property.  In the past decade, had we not swayed from that simple idea, it’s highly likely, we wouldn’t be here.

No More Mortgage Interest Deduction?

Since Hahn has one more of the dismal outlooks, I think it’s interesting to examine it from his ‘worst case scenario’ environment.  In a recent post, he speculated on some of the possibilities:

1- The mortgage interest deduction will be eliminated, or at least sharply scaled back
2 – Fannie/Freddie will wind down participation in the single family residential market, and raise participation in multifamily housing (aka, rentals)
3- The 30-year fixed rate mortgage is headed to the ash bin of history; I rather expect the “new normal” will be something closer to a 10-15 year adjustable rate mortgages that adjust every year or even every quarter.
4 – Down payments are headed up, up, up from its current levels (some FHA loans are still requiring only 2-3% down); Bill Gross of PIMCO has said that if he were funding mortgages, he’d require a minimum of 30% down payment.  I think that’s where we’re headed.
5 – Some form of national regulation for rentals, in order to (a) encourage rentals by those who would otherwise be first-time homebuyers, and (b) protect renters from eeeeevil landlordz.  It may be as heavy handed as a national rent control regime, or (more likely) an expansion of Section 8 to include far more “middle-income” units.

Are These the Changes That Repair Housing?

There are some valid arguments for some of the preceding speculations.  As  Hahn states, “…the overall impact is to decrease the pool of buyers, drive housing prices lower, and have fewer transactions.“  This may in fact be a requirement of the overall recovery.  There were less buyers, lower prices, and less transactions when stronger lending practices were in place.

However, when the Housing Policy changes are considered I wonder about this simple statement of fact from Mark Zandi, Chief Economist for Moody’s Analytics, “…when housing values are falling, nothing really works all that well in our economy.“  Our economy cannot possible heal with a crippled housing market.  And some of these speculations from Hahn only seem to me as the types of things that can only further cripple the housing market, in an extreme way.

While Hahn is rather fluent in politics and rather adept at speculation, one area of expertise I have is in understanding the profile of today’s distressed homeowner.  I know what it’s like to sit across the kitchen table from someone that is faced with these very real and personal set of circumstances.

Lest the Pendulum Swing Too Far in the Other Direction

I will grant you, in the early days of this crisis, those faced with short sale scenarios or potential foreclosure, might have been the higher risk buyer profile.  They may have been the 100% down buyer.  They may have had the ‘Neg-am loan’ or some other questionable loan program.  They may have been the buyer that had borderline qualifications coming into this game.

However, the Orange County homeowner of today that sits across from me at the kitchen table is often the one that put a fair amount of money down, they may have been highly qualified, excellent credit, documented income sources, and yet, with the decline in values, personal circumstances (divorce, long term unemployment, relocation) they are forced into a financially devastating course they couldn’t have anticipated.  And these homeowners ask the same question nearly every time:  ‘How long do you think it will be before I will recover enough to be able to buy a home again?‘  They ask this because they value home ownership.  Remember, they were not in this market for a quick turn on their money.  While some bought houses, the short sale/foreclosures we are seeing today are the buyers that bought homes.

These individuals consider home ownership as part of their claim to middle class.  They certainly consider it part of their ‘American Dream’ and they fully anticipate their ability to reestablish that claim.   They are voters.  They have historically been high income earners.  And I highly doubt they will be interested in satisfying themselves with long term rentals as their housing solution.

And why, in the course of establishing a National Housing Policy, would we take measures that serve to cripple the ability for those individuals to own again, cripple the potential recovery, and cripple our ability to recover some economic stability – because clearly, they go hand-in-hand.

The Meaning of Home Ownership in The United States

It’s interesting to look at the psychology of home ownership in this country.  The big land rushes of the late 1800′s illustrate the deeply ingrained desire to own a chunk of dirt to call your own.  That desire is something you can’t simply legislate away, and I really believe voters’ voices will be heard when you start hacking away at their long term ability to grab that golden ring once again.  I think it will take more than a Time Magazine article to convince them that home ownership is not all it’s cracked up to be.

There was a time when home ownership was valued for the sake of owning a home, and not much more.  Then came the profit taking in the later 80′s as home prices soared with the onslaught of dual income families.  The late 90′s and early 2000′s brought easy money and get-rich-quick buying, leading to our current collapse.

But I still believe, most folks want to own their home, they will take a mortgage to buy it – maybe even without a mortgage interest deduction.  Prices may fall.  Maybe we’ll adjust our expectations.  Maybe we’ll begin to be satisfied with a slow appreciation over the life of a homeowner, rather than the promise of a lifetimes wages in a year or two of owning a home.

Kicking the Dog While It’s Down…

Some of the things Hahn is speculating may indeed come to pass, in one form or another.  But, I think there is value in considering the fact that kicking the proverbial dog while it’s down, may not be the answer.  Bill Gross, with PIMCO, states, “Policymakers should quickly re-engineer a refinancing opportunity for all mortgagees that are current on payments and are included in GSE securitized mortgages.“  There are some solutions that could be examined that help sustain those that are currently impacted and in turn further housing and economic recovery.

The pendulum may have swung too far in encouraging home ownership, but it would seem a mistake to me to have it swing so far the other way that we eliminate the ability for our middle class to recover and reclaim their ability to own once again.

BTW Rob – it may satisfy you to know, this may be one of the longest posts I’ve ever written.

Friends know that I think one of the great gifts of South Orange County is Saddleback Mountain.  Growing up in Southern Oregon, surrounded by hills, mountains and lush trees, I have often struggled with the Southern California transition.   Part of the reason we chose to live in the Rancho Santa Margarita area, was the solace I find in living with that mountain as the backdrop.

Robinson Ranch is a community served well by the varied elevation, affording residents spectacular city light and Saddleback Mountain views.  With just shy of about 1500 homes, it’s got an intimate feel in the vastness of Orange County.

Property taxes are relatively low.   Original period of construction varies from late 80′s to early 90′s.  Beautifully planned with large greenbelts, tennis courts, trails for hiking or horseback riding, this community is one that continues to appeal to buyers attracted to close-knit communities, cul-de-sacs and views.

Robinson Ranch is served by the Saddleback Valley Unified School District.

Here are a list of the current homes for sale in Robinson Ranch

[listingsearch type="layers" layerid="29" hqid="115" orderby="price" order="ASC" lp="200" ptype="Single Family"]

Guess I’m not entirely surprised to see that the interest in relocating to Orange County, during one of the worst housing crisis’s we’ve seen, was not particularly high.

As I’ve said before, there are several things that have me concerned about the housing market in Orange County.

1. The large number of negative equity homeowners
2. The disproportionate number of homeowners that qualified for their loans with adherence to minimal guidelines
3. The number of homeowners that have negotiated short term solutions to long term loans problems
4. The lack of solid and accessible financing for current buyer demand
5. The long process for handling the abundance of short sale inventory

Some of those concerns, and others, are voiced by Stan Humphries, Zillow’s Chief Economist, in this recent article in the Orange County Register.  According to Humphries, we are looking at 3rd quarter for the ‘bottom’ of this year and a long, flat recovery that will take us into 2013.  His view was one of a national market, and given the magnitude of our housing crisis, I believe it may very well take at least that long.

If you are a seller: consider your options carefully.  Can you hold on for the next few years?  Can you lease the property?  And if you are hanging on to it, think seriously about that decision if you are holding out for growth – that won’t be happening any time soon.

If you are a buyer: Lending will be one of your primary concerns.  Investigate your options carefully and know what you can qualify for before you shop.  Opportunities will be out there, but don’t buy unless you plan on owning for at least 5 years right now.

The real estate market is a strange world right now.  It’s plagued by distress sales, foreclosures, a challenging lending environment, and economic uncertainties, and yet there are certain price points where inventory is so low that sellers are receiving multiple offers within days of listing.  If the home is priced right and it’s under $500,000 – it will sell – fast.

Many investors and fence sitters feel like with the steep declines in values, it’s time to jump back into the Orange County real estate market.  And guess what?  They have cash.  This video done by Tyler Wood - my go-to-guy for all Big Bear real estate needs – illustrates a similar dynamic in their market and raises some important questions for cash buyers to consider.

So what is the value of an all cash offer?

Are YOU one of those cash buyers?

There is no question that coming into a multiple offer situation with cash will give you an advantage if the other offers have to secure financing.  But as Wood points out, you may be finding that you aren’t the only cash buyer.

But even if you are the only cash buyer in a multiple offer situation – what advantage does that give you in your negotiation?  Let’s look at the potential benefits that the seller has when they have an interested, all cash buyer:

1. The question of the buyer’s ability to secure financing goes away.
2. A possible quick escrow period.
3. Less contingencies to contend with.  No loan contingency.  No need  to appraise.

So what is the value of those things to a seller?  What monetary value do you place on that?  Clearly, the answer will vary depending on a seller’s circumstances and how important a sure and quick close is for them.

I know in theory that ‘Cash is King’.  But, I think you’ll find that a seller, if given a choice via multiple offers, will go with a buyer that requires a loan at full price rather than a buyer that is offering 10% off asking just because they have cash.

It’s important to note that at the end of a transaction – whether it’s a cash buyer, or a bank that funds a buyer’s loan, – IT’S ALL CASH.  Either way, the money is the same in the final analysis.

This post is LONG, but if you are thinking of buying a short sale (or if you’re an agent looking for an outlet for your short sale frustrations),  PLEASE read.  Understanding this information is a must.

I completely understand the allure of the short sales when you are a buyer.  The prices are attractive and there are SO many of them.  They have become a  necessary evil of the Orange County real estate market.  I get it.

If you really want to pursue a short sale, be forewarned.  Know what you are getting into, understand the risks, the pitfalls, and what is  required to make them happen from a buyer perspective.  They may, or may not, be worth it.

What is a Short Sale?

The seller’s obligations in a sale (loans, encumbrances, and closing costs), exceed the value of the property.  The seller must prove a hardship (job loss, wage reduction, divorce, health crisis, lack of assets) to qualify for a short sale.

A Few Realities

• There is no Standard Operating Procedures for the banking industry to handle short sales.  Every bank has different guidelines and manages them differently; even negotiators within the same bank manage them differently.

• This is important:  Nearly across the board, a banking institution will not consider a seller’s hardship application until they submit an offer with a short sale.  What does this mean to a buyer?  Your offer is used to see if they qualify in the first place.  You may sit in escrow for weeks while the bank considers not your offer, but the seller’s circumstances.

• There is no Standard Operating Procedures for how agents handle their short sale listings.  Frankly, I think there is a lot of irresponsibility in this area.

• Many agents leave their listings ACTIVE in the MLS even though they have an offer submitted to the bank.  Once an agent has a good offer with a solid buyer, it should go in Backup position.  The bank will only look at ONE offer – highest and best – anyway.  Why waste an agent’s time, a buyer’s time and emotion, showing a property that is not really available?

• Even Banks will ask the listing to remain Active after an offer is submitted.  Note the conversation with this agent on Twitter.

• The SoCalMLS has a Special Condition field where agents are required to specify that the short sale has an offer submitted to the bank.  Unfortunately, most agents don’t use it.

• An ‘Approved Short Sale‘ does not necessarily mean that the process will go any faster.  See Countrywide’s response on my short sale last year.

• A short sale process will take as little as 60 days (very rare) or as much as 4 to 6 months (common).

• The list price is not a reflection of what the bank will, or will not, take. The listing price is positioned to generate offers.  Remember, the bank hasn’t even looked at these seller’s situation yet, let alone evaluate the the market value of the home.

• There may be past due HOA fees, property taxes, or other expenses, that the bank will ask for a buyer to cover.

• If the seller declares bankruptcy during the process, your deposit becomes a frozen asset that you likely wait a fair amount of time to recover – if you do.

• Many short sales ultimately foreclose.  Why?  If you find out please tell me.  There is often NO LOGIC in the way banks (and investors) approve, or disapprove these.

• More banks are trying to do loan modifications for sellers rather than approve short sales and in some instances, they are incentivized by the government to do so.

Real Life Examples

The following are scenarios that have been experienced by me, my agents, colleagues, and my buyers.

• My Listing last May:  I had 8 offers in 3 days.  The highest was $580,000 and it took 4 months to get an approval from Countrywide.  By the time it was approved, the market value had fallen precipitously and the buyer was no longer interested.  When I asked Countrywide if the process would go more quickly with a new buyer given the hardship had been approved, their response was that the each buyer was a new file and they couldn’t provide better than a 4 to 6 month time frame.  The home sold for $490,000 4 1/2 months later.

• An agent within my company, had a short sale in escrow with a solid buyer for 90 days.  The bank asked the insolvent seller to come to the table with $3,500 on the $165,000 sale.  When the seller was unable to, the bank refused the short sale.  The home is currently vacant and worth about $145,000 6 months later.  Currently, it’s not in foreclosure and the seller hasn’t made a payment in about a year.

• This week alone, I’ve shown 2 different short sales, marketed on the MLS as Active, that already had offers submitted to the bank without notation in the listing.  When I called expressing my buyer’s interest in one of the properties, the agent subsequently told me, ‘the deal is done’.  When asked, “Then why is it active?”, his response was, “Don’t tell me how to run my business, sweetheart.”  BTW – Don’t call me sweetheart unless you’re loving me or you’re my husband. 

• One of my recent short sale listings was in escrow 60 days with a qualified, ready-to-go buyer.  In that time, the bank reviewed the seller’s hardship, denied it, and offered a very poor loan modification.  Buyers lost 60 days and their offer was never considered.

• I currently have an investor buyer in escrow on an ‘approved short sale’. We’ve been in escrow 90 days on a property that had an Notice of Default filed in March 2007!  Not only has there been no news, the listing agent has told me essentially – don’t call us, we’ll call you if there is an update.  Not very reassuring to my buyer.

This is the tip of a massive iceberg.  So if you want to buy a short sale, you certainly have my blessings.  Just be armed with patience, don’t become emotionally attached to the property, and be prepared to potentially go through the process more than once.

If you have questions, if you think I’ve gotten any of this wrong, or if I’ve just scared the hell out of you – leave a comment or give me a call.  Happy to chat with you.  If you want to create a strategy to buy in Orange County – whether it’s a short sale, bank owned, or an equity seller, just let me know and I’m happy to help.

Happy House Hunting!

Today the microscope is on Mission Viejo.

So many of the media numbers focus on Orange County performance, but real estate performance can vary dramatically within our large county and particularly at various price points.

I’m going to spend the next several posts breaking down each of the South Orange County cities to give you an idea of local performance.  Whether you are buying, selling, or just keeping an eye on your local market, these numbers tell the story.

BTW Dear Friends/Readers, if you find this number crunching downright boring – stay tuned.  I always come back to the conversations that are much more fun than this! 

Homes Under $500,000

I think one of the revealing things about the under $500,000 market is the fact that while nearly 68% of the active inventory are short sales, they make up less than 28% of the homes that closed in the last 30 days. Demand also is high for bank owned product but very little currently exists – only 6.2% in this price range.

Homes $500,000 to $750,000

Again, very little inventory in the bank owned market, but significant demand.  There were very few sales in $500,000 to $750,000 market, as well as the $750,000 market as shown below.

It’s important to note where the demand is: of the closed sales in the last 30 days 81.1% have been in the under $500,000 market.

Homes Over $750,001

Interestingly, there are significantly less short sales in this price point. The bad news – sales are slow and with current buying trends, it would take 12.25 months to exhaust the current inventory of homes if nothing else were to come on the market.

However in the under $500,000 market, it would only take 4.12 months to exhaust all the inventory at the current rate of consumption. As I have mentioned many times here, the short sale listings takes months to close and skew the numbers dramatically. With current inventory, it would only take 1.9 months to consume the equity seller and bank owned listings under $500,000.  This sector of the market is no longer a buyers market.

1. “I just have to return this one phone call.”  Translation: 30 minutes and several phone calls.
2. “I just have to run down to my office and shoot out a quick email.”  Translation: 20 + minutes in the office.
3. “I’ll be in my office catching up for just a bit.”  Sadly the translation: I’ll be in bed about an hour after you.

Consequently, he has affectionately referred to my home office as, ‘The Black Hole.’  I have three children so he certainly appreciates the fact that I get things done when I have time and unfortunately, that isn’t always 9 to 5.

This week, something fun came out of ‘The Black Hole’ that I’m excited to launch:  My Las Flores hyperlocal community blog.

After working in the Orange County community of Las Flores for several years, I began to rethink the methods for marketing.  Since the launch of OC Real EstateVoice, I knew my business was headed in a profoundly new direction.  I knew that consumers were looking for information about a community (listings, trends, values) not just another, ‘Look what I sold!’ marketing piece from an agent.  Hence, the birth of the My Las Flores site.

I’ve got a couple tweeks to make as of yet – the video has to be redone.  It’s excruciatingly long and I made the video on garbage day with garbage cans out on every street.   Bad news, so this will be my project for the coming weekend.  But overall, I like the direction it’s heading in.

Every now and then I emerge from ‘The Black Hole’ and something satisfyingly ‘tangible’ is born.  This is one of those weeks. 

Near the end of December last year I posted the article about about the top 10 worst housing markets in the country, according to CNN.  Unfortunately, 8 out of 10 were in the state of California.  Now keep in mind, California is a massive factor in our national economy.  Our Gross Domestic Product is larger than all but 8 countries in the world.   You will not fix this housing crisis if you don’t address the state of California.

The plan that came out has one elemental problem (there are others but this one is a deal breaker) – it only applies to Fannie Mae/Freddie Mac backed loans.  Translation:  if the loan is over $417,000, no deal.

Let’s examine this just a bit.  In most parts of Orange County, in 2004,  2005, 2006, and 2007, you couldn’t get much more than a very small condo for $417,000.  You couldn’t buy a single family home in most parts of Orange County for under $600,000.   The people that are most at risk are the people that purchased during that period of time- and the big Affordability Plan – doesn’t apply to them.

Look at the numbers for the big California markets – Los Angeles, San Diego, the Bay Area – it doesn’t change.

So call me crazy, but I don’t get it.  Hell, I’m happy for the folks in the midwest that this has an impact on.  I’m happy for the people that will benefit from it.  But I’m not sure this solves the problem at hand.

You can solve this for the folks in Kansas, but if you leave out 8 out of 10 of the worst housing markets in the country, are you really addressing core of the problem?  Just sayin’.