Would-be homebuyers in the U.S. will have to save up for an extra year before taking the plunge, thanks to pandemic-era price gains.
For the typical American, it would take eight years of stashing away 10% of monthly income to build up enough for a 20% down payment — up from seven years before COVID-19 ignited a homebuying frenzy, according to a study by Tomo, a real estate startup.
For many renters hoping to become buyers, scraping together a down payment has always been a challenge. Now the hurdles have gotten higher as bidding wars for a tight supply of listings push prices even further out of reach. The share of existing home purchases by first-time buyers declined to 29% last month, the lowest level since 2019, the National Association of Realtors said last week.
The people who save for a down payment “are the people who can,” Skylar Olsen, principal economist at Tomo, said in an interview. “Folks who have a lot of rent burdens tend to save nothing, and there’s always a fairly sizable share of the population who have a pretty substantial rent burden.”
The areas with the highest years-to-save timelines are Los Angeles, with 19.2, San Francisco, with 17.9 and San Jose, with 18.2, according to the Tomo study.
In Seattle and New York, it would take 12.3 years and 11.9 years, respectively, to save for a down payment.
85°C Bakery Cafe is growing, this time leasing an industrial building in Buena Park where the Taiwanese chain will expand production.
The building at 7101 Cate Ave. is an extension of the popular chain’s bakery and distribution center in nearby Brea. The company plans to build out 2,000 square feet of coolers and 12,000 square feet of freezers, according to The Klabin Company/CORFAC International.
As an employee brings out more fresh bread, customers line up to pay for their bread and pastries at 85ºC Bakery in the Diamond Jamboree shopping center in Irvine. (File photo: PAUL RODRIGUEZ, ORANGE COUNTY REGISTER)
Customers at 85ºC Bakery wait anxiously as an employee restocks bins with pastries at the popular bakery in the Diamond Jamboree shopping center in Irvine. (File photo: PAUL RODRIGUEZ, ORANGE COUNTY REGISTER)
A boy checks out the pastries and bread at 85ºC Bakery in the Diamond Jamboree shopping center in Irvine. (File photo: PAUL RODRIGUEZ, ORANGE COUNTY REGISTER)
85ºC Bakery Cafe is one of the reasons the Diamond Jamboree shopping center is so popular and known internationally. (File photo: PAUL RODRIGUEZ, ORANGE COUNTY REGISTER)
A steady stream of fresh bread and pastries are brought out to refill the bins at 85ºC Bakery in the Diamond Jamboree shopping center in Irvine. (File photo: PAUL RODRIGUEZ, ORANGE COUNTY REGISTER)
Klabin said the 10-year lease with landlord Oltmans Construction Co. was valued at $11 million.
The chain, founded in Taiwan in 2003 and launched in 2008 in the U.S. at Irvine’s Diamond Jamboree shopping center, has grown to 1,000 locations worldwide and has at least 30 locations in Southern California.
When it first landed in Orange County, long lines were often found in the morning as customers waited to buy the bakery’s sweet bread and unique coffee combinations. 85°C serves up to 50 types of sweet and savory pastries and bread that are baked in-store hourly. It also offers a variety of specialty cakes.
The Sea Salt Iced Coffee is one of the chain’s most requested drinks. Its made with cold coffee and sugar syrup topped with a lightly salted sweet cream. A plastic film is sealed over the cup so customers can shake the cream into the coffee. Tea combinations range from rose to green to black, served hot or cold with boba and egg pudding add-ons.
The most popular drink order at 85°C Bakery Cafe is the Sea Salt Iced Coffee, seen here. The company is expanding production, leasing a 66,000-square-foot industrial facility in Buena Park. (Samantha Gowen / SCNG)
85°C Bakery Cafe has put each of its pastries into plastic bags to ward off contamination in light of COVID-19. Customers walk a line of baked goods in cases using a tray and tongs. The company is expanding production, leasing a 66,000-square-foot industrial facility in Buena Park. (Samantha Gowen / SCNG)
85°C Bakery Cafe sells a variety of specialty cakes and small desserts. The company is expanding production, leasing a 66,000-square-foot industrial facility in Buena Park. (Samantha Gowen / SCNG)
85°C Bakery Cafe customers can get large milk tea jugs to go. The company is expanding production, leasing a 66,000-square-foot industrial facility in Buena Park. (Samantha Gowen / SCNG)
85°C Bakery Cafe has a desserts case filled with cakes and small gourmet treats. The company is expanding production, leasing a 66,000-square-foot industrial facility in Buena Park. (Samantha Gowen / SCNG)
The name 85ºC is derived from what the founder believes is the ideal temperature for hot coffee.
Klabin’s Zach Middleton, Max Farkas and Todd Taugner represented 85°C in the lease for 66,510 square feet. Oltmans Construction Co. was represented by Kevin Romano and Joe Maiolo of INCO Commercial Brokerage. Randall Dawson of CCP Real Estate Advisors referred 85°
Foothill Ranch-based LoanDepot, one of the mortgage industry’s biggest nonbank lenders, was riding a boom.
Historically low interest rates last year sent residential loan refinancings to their highest level in well over a decade. And thanks to an aggressive sales push, loanDepot made $100 billion in loans, a company record.
But in its eagerness to grow before an initial public offering early this year, loanDepot illegally cut corners and processed thousands of loans without required documents such as employment and income verifications, according to a lawsuit filed Wednesday by one of its former top executives.
The allegations by Tammy Richards, loanDepot’s former chief operations officer, echo some of the abuses that fueled the mortgage meltdown in 2008, which led to extensive new industry regulations. Richards, who was a midlevel executive at one of the most notorious firms during the crisis, said in her suit that she had been forced out of her job at loanDepot for refusing to break the rules.
“I reported this to everyone I could internally, and I was retaliated against,” Richards, 56, said.
Tammy Richards, loanDepotÕs former chief operations officer, at home in Highland, Utah, Sept. 19, 2021. Ahead of a planned initial public offering, loanDepot illegally cut corners and processed thousands of loans without required documents like employment and income verifications, according to a lawsuit filed by Richards on Wednesday, September 22. (Kim Raff/The New York Times)
Her lawsuit, filed in California Superior Court in Orange County, accuses Anthony Hsieh, loanDepot’s chief executive, of leading a scheme to increase sales by flouting regulations and taking on risky loans, some of which, the suit said, were intentionally excluded from the company’s standard underwriting process. The suit — which cites copies of corporate emails, internal messages and company documents that describe the plan — said employees were offered bonuses to process the loans fast and without asking questions.
In a statement, loanDepot said that it took the claims in the lawsuit seriously, but that an outside investigation — conducted by two law firms hired by the company — had previously found them to be without merit.
“We intend to defend ourselves vigorously against these outlandish allegations and will respond as appropriate during the legal process,” the company said.
LoanDepot was founded in 2009 by Hsieh, who had created and sold two previous online lending companies. The first, LoansDirect, was bought in 2001 by E-Trade; the second, HomeLoanCenter, was acquired in 2004 by LendingTree.
Those deals made Hsieh rich, but loanDepot catapulted him to a new stratosphere of wealth. Hsieh — by far its largest individual shareholder — became a billionaire on paper when the firm went public in February. LoanDepot’s shares debuted at $14; they have since dropped to about half that price, leaving the company with a valuation of around $2.2 billion.
The planned initial public offering was a motive for the company’s executives to cover up Hsieh’s increasingly reckless behavior, Richards said in her suit. In 2020, as the offering approached, loanDepot paid what it described in regulatory filings as “a special one-time discretionary bonus” to its leaders. Hsieh received $42.5 million, and other top executives took home cash bonuses ranging from $9 million to more than $12 million.
Richards, who said she was demoted in November and left out of that special bonus round, resigned in March. Her lawsuit seeks compensation for unpaid bonuses and forfeited stock that she estimates would have been worth at least $35 million.
LoanDepot is in the vanguard of a group of online upstarts that use technology to speed up and simplify mortgage loans. Last year, it originated nearly 300,000 — twice the number it did a year earlier — and was the nation’s fourth-largest mortgage provider in dollars lent, according to iEmergent, which tracks industry data.
A lawsuit, filed in California Superior Court in Orange County, accuses Anthony Hsieh, loanDepot’s chief executive, of leading a scheme to increase sales by flouting regulations and taking on risky loans, some of which, the suit says, were intentionally excluded from the company’s standard underwriting process.
Hsieh has long put a priority on growth and regularly adds new incentives and products to his firm’s lineup. “We will never be a company that is satisfied or one that rests on our laurels,” he told analysts on an earnings call last month. Some workers have said they appreciate the intensity and opportunities for big paychecks, but complaints about crushing workloads, high turnover and burnout are common among former employees.
Richards’ complaint describes the company, which she joined in 2018, as having a “misogynistic ‘frat house’ culture,” where harassment was commonplace and top sellers were feted at wild parties that sometimes involved drugs and prostitutes.
In 2019, a high-ranking woman at loanDepot accused a male executive of sexually assaulting her at a company party on Hsieh’s boat; Richards, who was not at the event, was asked to run the investigation because the company’s male officials, including its head of human resources, did not want to, her suit said. (She said she had learned that both employees were drunk and disagreed about whether the encounter had been consensual.)
But the company’s lending was always done by the book, Richards said — until August last year, when Hsieh began complaining that loanDepot’s loan volume was lagging behind Quicken Loans’ Rocket Mortgage, the industry’s largest refinancing lender. At a sales meeting that month that she attended, Hsieh told employees to move faster and “immediately close loans regardless of documentation,” Richards said in her complaint.
Allegations by Tammy Richards, loanDepot’s former chief operations officer, echo some of the abuses that fueled the mortgage meltdown in 2008, which led to extensive new industry regulations. Richards, who was a midlevel executive at one of the most notorious firms during the crisis, said in her suit that she had been forced out of her job at loanDepot for refusing to break the rules. (File photo Paul Rodriguez, Orange County Register)
As loanDepot’s head of operations, overseeing more than 4,000 employees, Richards managed the process of completing its loans. She said she had refused to allow loans to be finalized until all the required vetting was complete, but Hsieh saw that as unacceptably slow. By early November, Richards said in her lawsuit, he had stripped her of her decision-making responsibilities, and the company pressured her to accept the newly created, lower-paid position of chief mortgage officer — effectively a demotion.
Later that month, Richards said, she learned from other employees about an initiative called Project Alpha. Hsieh personally selected 8,000 loans and told employees to process them without the required documentation, according to emails and internal spreadsheets that she cited in her complaint; those loans were then deliberately excluded from the company’s standard post-closing internal audits.
Richards, who once worked at Countrywide Financial, one of the most notorious subprime lenders of the mortgage crisis, said loanDepot’s actions reminded her of the misdeeds she had helped untangle after Bank of America bought the collapsed firm in 2008.
“The job was going to put me right in the middle of the inappropriate activity, of talking to regulatory agencies and certifying that the loans we give them are correct,” said Richards, who added that she had started having panic attacks.
She soon went on unpaid medical leave; her usual $1.2 million salary and bonus were cut off. Four months later, she resigned.
Other, lower-level workers who recently left loanDepot also describe a pressure-cooker culture. Several former employees, who asked not to be identified to protect their job prospects, said they were unaware of Project Alpha and had never been explicitly told to flout requirements, but each said the company’s blistering work pace had led to sloppiness and mistakes.
One loan officer who left last year said the company had set unreasonably high sales targets that forced employees to originate low-quality loans, many of which were likely to be rejected, just to meet their quotas. A loan processor who quit a few months ago said that she had often been assigned dozens of loans in a single day, and that customers had frequently received closing documents with inaccuracies. She added that Hsieh had threatened — at large company meetings — to personally fire those who could not keep up.
Hsieh makes few apologies about his brash management techniques. When an employee survey of loan officers found that nearly half were unhappy in their jobs, Hsieh told them to “stop whining” and quit, according to an email that was forwarded to HousingWire, a trade news source.
On LinkedIn, where Hsieh maintains a chatty stream of posts, he once scoffed at the “top 10 rumors” about loanDepot, including “we work too hard” and “we play too hard.” Another item on the rumor list: “Regulators are shutting us down.”This article originally appeared in The New York Times.
The pandemic era’s homebuying binge has created six-figure price gains in 56 of Orange County’s 83 ZIP codes.
My trusty spreadsheet, filled with Orange County homebuying stats at the neighborhood level from DQNews/CoreLogic, found in the 12 months ended in August prices rose in 77 of 83 ZIPs — 56 with gains of $100,000 or more.
The countywide median for the month of $900,000 was up 12.5% in a year. That’s a $100,000 price gain 12 months. The buying binge resulted in 3,708 closed sales of all residences — existing and new, single-family houses and condos — countywide. That’s up 5% in a year and the busiest August in four years.
The feeding frenzy added up to the number of million-dollar Orange County neighborhoods growing by 11 to 29 in the year ending in August. Yes, 35% of ZIPs countywide have seven-figure medians. There were 10 seven-figure ZIPs in August 2019.
In those seven-figure communities, 1,489 purchases were completed last month, equaling 40% of all homes sold countywide. In August of last year, 686 residences were sold in ZIPs with $1 million-plus medians, or 19% of all transactions.
At the other end of the pricing spectrum, there are only eight neighborhoods remaining with pricing below what I defined as benchmark for “reasonable” value: a median under $666,667. Yes, that’s a lot of money. But at the start of 2017, $666,667 bought you a median-priced home in Orange County.
Orange County’s “bargain” communities are down from 26 in August 2020 and 30 in August 2019.
August’s sales in these “affordable” ZIPs totaled 205 — making “bargains” 5.5% of all purchases. In August of 2020 there were 821 purchases in “bargain” ZIPs — or 23.1% of all sales.
Note: Monthly sales data for individual ZIPs can be volatile, so price data may reflect a different mix of homes that sold — not changing values. Data for all Orange County ZIPs can be found online at bit.ly/augustmedians
Here are the new members of the million-dollar club ….
San Clemente 92673: $1.36 million — up 40% in 12 months.
Huntington Beach 92649: $1.25 million — up 36%.
Irvine 92620: $1.21 million — up 34%.
Huntington Beach 92648: $1.16 million — up 16%.
Irvine 92618: $1.12 million — up 25%.
Yorba Linda 92886: $1.09 million — up 29%.
Costa Mesa 92626: $1.08 million — up 22%.
Laguna Hills 92653: $1.08 million — up 40%.
Ladera Ranch 92694: $1.05 million — up 28%.
Santa Ana 92706: $1.03 million — up 32%.
Laguna Niguel 92677: $1.01 million — up 22%.
Costa Mesa 92627: $1 million — up 18%.
And established members on the seven-figure list …
Newport Beach 92662: $3.58 million — up 111%.
Newport Beach 92661: $3.3 million — up 38%.
Newport Coast 92657: $3.15 million — up 4%.
Corona del Mar 92625: $2.9 million — up 6%.
Laguna Beach 92651: $2.65 million — up 10%.
Newport Beach 92660: $2.21 million — up 6%.
Dana Point 92624: $1.94 million — up 68%.
Villa Park 92861: $1.68 million — up 22%.
Irvine 92603: $1.6 million — up 31%.
Newport Beach 92663: $1.48 million — off11%.
Dana Point 92629: $1.4 million — up 21%.
Irvine 92602: $1.39 million — up 10%.
Los Alamitos 90720: $1.39 million — up 26%.
Seal Beach 90740: $1.31 million — up 20%.
Trabuco/Coto 92679: $1.29 million — up 29%.
San Clemente 92672: $1.21 million — off 1%.
Santa Ana 92705: $1.2 million — up 14%.
And Orange County’s sub-$666,667 ZIPs in August …
Anaheim 92801: $655,000 — up 9%.
Santa Ana 92703: $645,000 — up 23%.
Santa Ana 92707: $620,000 — up 16%.
Orange 92868: $600,000 — up 29%.
Garden Grove 92844: $570,000 — up 5%.
Stanton 90680: $531,250 — flat.
Santa Ana 92701: $469,750 — up 6%.
Laguna Woods 92637: $382,500 — up 1%.
Jonathan Lansner is business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
For many years, advising associations was at times very stressful, as boards would sometimes disregard my best advice for them. However, a defining moment in my HOA law career came when I realized my role is to tell the board the truth and provide to them my best advice, but compelling the board to follow my advice was not my responsibility.
Once I had a better understanding of my role, things became less stressful. Each member of the HOA team has its own boundary, and each team member staying within that role helps the entire HOA team.
Managers: They take action managing the association, carrying out board directions and providing important advice helping boards operate within the Business Judgment Rule. Managers do not make decisions, except those specifically assigned to them by the board.
Boards: The board decides things but doesn’t implement its decisions. The board provides direction to management and approves contracts with other HOA vendors. Boards should not co-manage the HOA but should allow the manager to carry out the board’s directives. Boards normally don’t oversee vendors; that is what you pay management to do.
Vendors: Service providers (including managers) should perform their contracts and avoid HOA politics. Endorsing or opposing board candidates is outside their role and is unethical – they must stay neutral.
Officers: In HOAs, individual officers (even presidents) have little power. Everything they do is only upon the express authorization of the board. HOA officers occasionally confuse their limited nonprofit role with the more powerful role given officers in for-profit corporations.
Individual directors: A single director has no power except the power to cast a vote on board decisions. The real power rests with the whole board. Well-intentioned directors can usurp the board’s role by acting without board authority; usually justifying it by claiming the action was needed. But the well-intentioned director becomes a “renegade” by taking actions, which is reserved for the board, such as instructing the manager or other vendors or making contractual commitments for the association.
Committees: Except for architectural committees, most committees are advisory to the board and do not act. Committees typically are assigned an ongoing important subject and advise the board by issuing “reports,” hopefully written, suggesting certain board actions. Committees do not make commitments to association vendors, and their meetings are less formal. Boards should avoid doing committee work in the board meetings, just as the committee avoids doing board work.
Committee members: A committee member should be part of a team. However, sometimes extremely interested and active committee members step outside their role by speaking for the committee when the committee has not met. A committee of one is not a committee!
Homeowners: The governing documents list certain matters that are subject to membership vote where individual homeowners can participate. Beyond these, let the board handle things because they are legally responsible. Non-directors should not participate in board discussions except for open forum input. Another common homeowner boundary issue arises when homeowners instruct HOA vendors, but that is the manager’s role. One of the great benefits of association living is that the board, manager, and vendors handle many community matters – so let them!
Check YOUR boundaries, and stay within your proper role. When everyone does THEIR job and allows others to do theirs, the HOA wins.
Kelly G. Richardson CCAL is Partner of Richardson Ober DeNichilo LLP, a California law firm known for community association advice. Send potential column questions to Kelly@rodllp.com.
