2011 Prices vs 2016 Price on a 550K [attached]condo @Irvine?

[dream16]

San Carlos in Portola Springs had 3/3 1600 sq ft tri-level condos for low 400s in 2011 IIRC.  Slightly better configuration than yours since it was a 3/3 with standard garage.

Oh wow i wish i was in the US Real Estate Market at that time, i was in my early 20s and never gave a damn about buying a house A 3/3 with Standard Garage for low 400s, lets say even 430k with closing costs included = WIN !

So in a matter of 5 years, it changed from 430 to 550k = 120k difference....i hope this upward trend continues in next 5 years...or i will have to keep it as a rental investment for another 10-15 years.

I have a thought that no rental property is ever going to be a bad thing to have.  You'll always be making money on them.  You can still write off depreciation and mortgage interest on investments...

Even if prices drop, as long as you have a tenant, you'll still be good.  Wait 10-15 when the mortgage is paid off 50% or even more if you are able to even add in $500 additional principal pay..then boom! that 550k price (assuming 400-450 mortgage) will be a $200-250 mortgage and you'll be sitting on massive equity and cash...good luck! Irvine recovered really well from the recession so you invested in the right city..

im sorry but I just had to respond to this because its such bad logic.  Rental properties can be GREAT... but you have to buy at the right time and the right place.  Furthermore, it has to be properly managed.  There are thousands of people who have lost their shirt because of the reasons above.  You can only write off things if you profit on them and in current market, there is no way you will cash flow from rentals in Irvine.  So to bring up MID and depreciation is a moot point here. 

If prices do drop, then you are even more screwed in Irvine.  If you are thinking about investment property in Irvine, your only play right now is appreciation, since you will not cash flow well.  When I talk about cash flow, I am talking from a standard 20-25% down payment (not 100% cash purchases) which is probably how you bought your house.  So if your house depreciates, on top of the fact you have no cash flow, you are royally F'ed. 

Its not as easy to make money on rentals as the poster suggests.  There are plenty of ways to make money, but also plenty of ways to lose money.  Rentals in Irvine is a great way to currently lose money.  Ask any seasoned investors who is purchasing long term buy and holds in Irvine right now.  You wont find ONE, unless its an off market deal under market value.  Even then, it may be hard to cash flow well (again assuming 20-25% down and calculating costs such as vacancies, maintenance, cap-ex costs, etc, etc, etc)

completely agree. anyone buying a investment property banking on appreciation is taking quite a bit of risk. not to make OP sweat on this some more or add negativity to it. if OP is breaking even or close to it then I'd understand.. but OP if you bought a half a million tri-level condo in portola spring expecting it to appreciate at the same level again (from 2011)... I would seriously suggest running the math again.

Oh no, i guess i am not expecting this 550k tri-level stucco box condo to hit 650k in next 5 years, although i do feel an yearly increase of $100 rent is sufficient enough to break me even going forward with an estimated risk of 3-4k/year in loss/repairs/vacancy/agent fee etc. or whatever if it came to that situation, in the longer run, i actually bought this not just with the sole intent of investment, but also for myself as i like Irvine and lived there & will be living there again.

So eitherways, since the housing market in my home country has stagnated quiet badly, i did not know what else to do with the $120k down-payment as i am not into poker/trading/gambling etc.

 

[dream16]

Despite whatever the market condition is: zillow showing COLD buyer market, everything got sold out in my neighborhood in last 1 year

 

[woodburyowner]

Despite whatever the market condition is: zillow showing COLD buyer market, everything got sold out in my neighborhood in last 1 year

Yes, it's a buyer's market meaning home prices are steady or slightly decreasing.  I see the same market temp in Woodbury.

 

[collected]

What price would your condo be if it was bought in 2011 instead of 2016? 

I think Zillow would be great to find this out.  All we can get is an estimate.

http://www.zillow.com/irvine-ca/home-values/

According to Zillow the median sale price / sq ft for an Irvine condo in June 2016 was $427.  In June 2011 it was $315.  Doing some simple math prices on average were 26% lower.  So a condo bought in June 2016 for $550,000 should've been worth about $407,000 in June 2011.

 

[hello]

San Carlos in Portola Springs had 3/3 1600 sq ft tri-level condos for low 400s in 2011 IIRC.  Slightly better configuration than yours since it was a 3/3 with standard garage.

Oh wow i wish i was in the US Real Estate Market at that time, i was in my early 20s and never gave a damn about buying a house A 3/3 with Standard Garage for low 400s, lets say even 430k with closing costs included = WIN !

So in a matter of 5 years, it changed from 430 to 550k = 120k difference....i hope this upward trend continues in next 5 years...or i will have to keep it as a rental investment for another 10-15 years.

I have a thought that no rental property is ever going to be a bad thing to have.  You'll always be making money on them.  You can still write off depreciation and mortgage interest on investments...

Even if prices drop, as long as you have a tenant, you'll still be good.  Wait 10-15 when the mortgage is paid off 50% or even more if you are able to even add in $500 additional principal pay..then boom! that 550k price (assuming 400-450 mortgage) will be a $200-250 mortgage and you'll be sitting on massive equity and cash...good luck! Irvine recovered really well from the recession so you invested in the right city..

im sorry but I just had to respond to this because its such bad logic.  Rental properties can be GREAT... but you have to buy at the right time and the right place.  Furthermore, it has to be properly managed.  There are thousands of people who have lost their shirt because of the reasons above.  You can only write off things if you profit on them and in current market, there is no way you will cash flow from rentals in Irvine.  So to bring up MID and depreciation is a moot point here. 

If prices do drop, then you are even more screwed in Irvine.  If you are thinking about investment property in Irvine, your only play right now is appreciation, since you will not cash flow well.  When I talk about cash flow, I am talking from a standard 20-25% down payment (not 100% cash purchases) which is probably how you bought your house.  So if your house depreciates, on top of the fact you have no cash flow, you are royally F'ed. 

Its not as easy to make money on rentals as the poster suggests.  There are plenty of ways to make money, but also plenty of ways to lose money.  Rentals in Irvine is a great way to currently lose money.  Ask any seasoned investors who is purchasing long term buy and holds in Irvine right now.  You wont find ONE, unless its an off market deal under market value.  Even then, it may be hard to cash flow well (again assuming 20-25% down and calculating costs such as vacancies, maintenance, cap-ex costs, etc, etc, etc)

Pardon my lack of US real estate investment experience, what according to you is the right time to invest in Irvine? 2018, 2020, 2022? We have all heard the infamous phrase "Housing to tank hard soon or next year blah blah" and i have done my extensive research on the 7 year high-low cycle, but with the recent brexit, the ongoing chinese money, lowest ever interest rates, the future does not promise to go as low as 2011 ever again, might be an adjustment here and there, but will it be more than 15% in southern california market for condo's is what i am not too certain about, please enlighten.

I think you are giving me too much credit.  I dont know the answer to that nor will anyone else on this blog.  The right time to invest is when the numbers make sense.  The numbers in Irvine has not made sense for a long time.  Almost everyone who invests in Irvine is speculating on appreciation or they do not understand the numbers.  I had one realtor tell me he thinks it is wise to invest in a property that is losing a 1000 a month because he expect to make that up in appreciation.  If you look at any serious real estate investors, no one is buying rentals in Irvine for long term buy and hold. 

 

[eyephone]

San Carlos in Portola Springs had 3/3 1600 sq ft tri-level condos for low 400s in 2011 IIRC.  Slightly better configuration than yours since it was a 3/3 with standard garage.

Oh wow i wish i was in the US Real Estate Market at that time, i was in my early 20s and never gave a damn about buying a house A 3/3 with Standard Garage for low 400s, lets say even 430k with closing costs included = WIN !

So in a matter of 5 years, it changed from 430 to 550k = 120k difference....i hope this upward trend continues in next 5 years...or i will have to keep it as a rental investment for another 10-15 years.

I have a thought that no rental property is ever going to be a bad thing to have.  You'll always be making money on them.  You can still write off depreciation and mortgage interest on investments...

Even if prices drop, as long as you have a tenant, you'll still be good.  Wait 10-15 when the mortgage is paid off 50% or even more if you are able to even add in $500 additional principal pay..then boom! that 550k price (assuming 400-450 mortgage) will be a $200-250 mortgage and you'll be sitting on massive equity and cash...good luck! Irvine recovered really well from the recession so you invested in the right city..

im sorry but I just had to respond to this because its such bad logic.  Rental properties can be GREAT... but you have to buy at the right time and the right place.  Furthermore, it has to be properly managed.  There are thousands of people who have lost their shirt because of the reasons above.  You can only write off things if you profit on them and in current market, there is no way you will cash flow from rentals in Irvine.  So to bring up MID and depreciation is a moot point here. 

If prices do drop, then you are even more screwed in Irvine.  If you are thinking about investment property in Irvine, your only play right now is appreciation, since you will not cash flow well.  When I talk about cash flow, I am talking from a standard 20-25% down payment (not 100% cash purchases) which is probably how you bought your house.  So if your house depreciates, on top of the fact you have no cash flow, you are royally F'ed. 

Its not as easy to make money on rentals as the poster suggests.  There are plenty of ways to make money, but also plenty of ways to lose money.  Rentals in Irvine is a great way to currently lose money.  Ask any seasoned investors who is purchasing long term buy and holds in Irvine right now.  You wont find ONE, unless its an off market deal under market value.  Even then, it may be hard to cash flow well (again assuming 20-25% down and calculating costs such as vacancies, maintenance, cap-ex costs, etc, etc, etc)

completely agree. anyone buying a investment property banking on appreciation is taking quite a bit of risk. not to make OP sweat on this some more or add negativity to it. if OP is breaking even or close to it then I'd understand.. but OP if you bought a half a million tri-level condo in portola spring expecting it to appreciate at the same level again (from 2011)... I would seriously suggest running the math again.

Oh no, i guess i am not expecting this 550k tri-level stucco box condo to hit 650k in next 5 years, although i do feel an yearly increase of $100 rent is sufficient enough to break me even going forward with an estimated risk of 3-4k/year in loss/repairs/vacancy/agent fee etc. or whatever if it came to that situation, in the longer run, i actually bought this not just with the sole intent of investment, but also for myself as i like Irvine and lived there & will be living there again.

So eitherways, since the housing market in my home country has stagnated quiet badly, i did not know what else to do with the $120k down-payment as i am not into poker/trading/gambling etc.

Are you serious? you have money but don't what to do with it?

 

[usctrojancpa]

Despite whatever the market condition is: zillow showing COLD buyer market, everything got sold out in my neighborhood in last 1 year

Yes, it's a buyer's market meaning home prices are steady or slightly decreasing.  I see the same market temp in Woodbury.

Prices are declining because you are seeing listings with highly optimistic prices (aka over closed comps) reduce their prices back down to comps.  There is only about 2.5 months of resale inventory on the market current and we recently had the first month ever in Irvine where we had 300 closings.  The market for sub $1m homes is doing well.

 

[usctrojancpa]

Not to pile on Dream, but I ALWAYS steer my clients away from 3-level homes.  Not only do they not appreciate as well as 2-level homes, but they are also harder to rent.  On paper they may look like a bargain but you get what you pay for.  That being said, the rental market is hot right now....every rental listing that I had this year received 4-8 rental applications with a week and one even went $100 over the asking rent.  From what I can tell, rents are up 6-10% from last year.  As long as the economy keeps moving along rents will continue to move higher so you might get closer to break even. 

 

[irvinebullhousing]

Not to pile on Dream, but I ALWAYS steer my clients away from 3-level homes.  Not only do they not appreciate as well as 2-level homes, but they are also harder to rent.  On paper they may look like a bargain but you get what you pay for.  That being said, the rental market is hot right now....every rental listing that I had this year received 4-8 rental applications with a week and one even went $100 over the asking rent.  From what I can tell, rents are up 6-10% from last year.  As long as the economy keeps moving along rents will continue to move higher so you might get closer to break even.

These are real data from a trusted local realtor expert in Irvine and surrounding OC area. I believe USCCPA anydays over some pure hunch waco, wishing price to drop for opportunities. I give DREAM credit for doing something about his money.

 

[B2FiNiTY]

What is your reasoning? Inconvenience of it being tri-level?

 

[irvinebullhousing]

What is your reasoning? Inconvenience of it being tri-level?

Maybe too many stairs to climb. Not that I am lazy, three level everyday can be be inconvenient to some people.

 

[collected]

The problem with tri-level is that it's usually just for one room.  Having a third floor for just one room just doesn't feel right with the rest of the house.  It's like having a long hallway leading to one room.  If it's a 10k sqft house then a third floor makes a lot of sense.  Stairs are also included in livable sqft. 

 

[paperboyNC]

What is your reasoning? Inconvenience of it being tri-level?

Maybe too many stairs to climb. Not that I am lazy, three level everyday can be be inconvenient to some people.

3rd floor is too removed from the main living area. At least with a basement the main living area is in the middle.

 

[woodburyowner]

For tri-level condos, it's nice when the master is the only room on the 3rd floor.  Makes it more secluded and private.  Also it allows the master to have a larger footprint.

 

[dream16]

The problem with tri-level is that it's usually just for one room.  Having a third floor for just one room just doesn't feel right with the rest of the house.  It's like having a long hallway leading to one room.  If it's a 10k sqft house then a third floor makes a lot of sense.  Stairs are also included in livable sqft.

The layout i have includes both bedrooms on the top floor (i.e. 3rd flr in this case) and yeah irony is that tandem garage - stairs - everything is counted in the sqft - so its a questionable marketing gimmick.

 

[dream16]

San Carlos in Portola Springs had 3/3 1600 sq ft tri-level condos for low 400s in 2011 IIRC.  Slightly better configuration than yours since it was a 3/3 with standard garage.

Oh wow i wish i was in the US Real Estate Market at that time, i was in my early 20s and never gave a damn about buying a house A 3/3 with Standard Garage for low 400s, lets say even 430k with closing costs included = WIN !

So in a matter of 5 years, it changed from 430 to 550k = 120k difference....i hope this upward trend continues in next 5 years...or i will have to keep it as a rental investment for another 10-15 years.

I have a thought that no rental property is ever going to be a bad thing to have.  You'll always be making money on them.  You can still write off depreciation and mortgage interest on investments...

Even if prices drop, as long as you have a tenant, you'll still be good.  Wait 10-15 when the mortgage is paid off 50% or even more if you are able to even add in $500 additional principal pay..then boom! that 550k price (assuming 400-450 mortgage) will be a $200-250 mortgage and you'll be sitting on massive equity and cash...good luck! Irvine recovered really well from the recession so you invested in the right city..

im sorry but I just had to respond to this because its such bad logic.  Rental properties can be GREAT... but you have to buy at the right time and the right place.  Furthermore, it has to be properly managed.  There are thousands of people who have lost their shirt because of the reasons above.  You can only write off things if you profit on them and in current market, there is no way you will cash flow from rentals in Irvine.  So to bring up MID and depreciation is a moot point here. 

If prices do drop, then you are even more screwed in Irvine.  If you are thinking about investment property in Irvine, your only play right now is appreciation, since you will not cash flow well.  When I talk about cash flow, I am talking from a standard 20-25% down payment (not 100% cash purchases) which is probably how you bought your house.  So if your house depreciates, on top of the fact you have no cash flow, you are royally F'ed. 

Its not as easy to make money on rentals as the poster suggests.  There are plenty of ways to make money, but also plenty of ways to lose money.  Rentals in Irvine is a great way to currently lose money.  Ask any seasoned investors who is purchasing long term buy and holds in Irvine right now.  You wont find ONE, unless its an off market deal under market value.  Even then, it may be hard to cash flow well (again assuming 20-25% down and calculating costs such as vacancies, maintenance, cap-ex costs, etc, etc, etc)

completely agree. anyone buying a investment property banking on appreciation is taking quite a bit of risk. not to make OP sweat on this some more or add negativity to it. if OP is breaking even or close to it then I'd understand.. but OP if you bought a half a million tri-level condo in portola spring expecting it to appreciate at the same level again (from 2011)... I would seriously suggest running the math again.

Oh no, i guess i am not expecting this 550k tri-level stucco box condo to hit 650k in next 5 years, although i do feel an yearly increase of $100 rent is sufficient enough to break me even going forward with an estimated risk of 3-4k/year in loss/repairs/vacancy/agent fee etc. or whatever if it came to that situation, in the longer run, i actually bought this not just with the sole intent of investment, but also for myself as i like Irvine and lived there & will be living there again.

So eitherways, since the housing market in my home country has stagnated quiet badly, i did not know what else to do with the $120k down-payment as i am not into poker/trading/gambling etc.

Are you serious? you have money but don't what to do with it?

Lmao, na man i know, it doesn't take much to blow up on luxury things, i meant more from an investment perspective in area where i want to live myself.

 

[dream16]

Not to pile on Dream, but I ALWAYS steer my clients away from 3-level homes.  Not only do they not appreciate as well as 2-level homes, but they are also harder to rent.  On paper they may look like a bargain but you get what you pay for.  That being said, the rental market is hot right now....every rental listing that I had this year received 4-8 rental applications with a week and one even went $100 over the asking rent.  From what I can tell, rents are up 6-10% from last year.  As long as the economy keeps moving along rents will continue to move higher so you might get closer to break even.

Thanks, honestly, i got blindsided by $/sq feet number which turned out to be the lowest for me compared to others, however it got rented out, young couples are a good fit for it and i can count on Irvine staying stronger in future at-least on the rental market side (it has 50-50 ratio of renters vs owners).

If i had the chance again to blow up 550k, i would take a condo with a loft or an outdoor patio or something with only 2 floors and no tandem garage (there were a few 1200-1300 sq ft ones), phewww...turns out i made too many mistakes just to get a bigger number of 1600 sq ft in my head...well lessons learnt !

 

[usctrojancpa]

Not to pile on Dream, but I ALWAYS steer my clients away from 3-level homes.  Not only do they not appreciate as well as 2-level homes, but they are also harder to rent.  On paper they may look like a bargain but you get what you pay for.  That being said, the rental market is hot right now....every rental listing that I had this year received 4-8 rental applications with a week and one even went $100 over the asking rent.  From what I can tell, rents are up 6-10% from last year.  As long as the economy keeps moving along rents will continue to move higher so you might get closer to break even.

Thanks, honestly, i got blindsided by $/sq feet number which turned out to be the lowest for me compared to others, however it got rented out, young couples are a good fit for it and i can count on Irvine staying stronger in future at-least on the rental market side (it has 50-50 ratio of renters vs owners).

If i had the chance again to blow up 550k, i would take a condo with a loft or an outdoor patio or something with only 2 floors and no tandem garage (there were a few 1200-1300 sq ft ones), phewww...turns out i made too many mistakes just to get a bigger number of 1600 sq ft in my head...well lessons learnt !

You aren't alone, several of my clients got interested in 3-level homes due to the lower price/sf.  But I explained to them why those properties were priced like that....you buying it for a lower price/sf and then you'll end up selling it for a lower price/sf.  Don't be too hard on yourself because it could have been worse, you could have bought in the Inland Empire at the peak and been down 50%.  You got it rented and as time goes along rents will increase so you will get to breakeven soon. 

 

[collected]

I don't think it matters that much if someone buys a three story at fair market value.  If three story sells for a 7% price per sqft discount to two story then it should sell for that same 7% discount down the road.  There's no gain or loss from buying a three story instead of two.

 

[The Motor Court Company]

how about Willow at Portola Springs? that is a FOUR story monstrosity.