Biggest Irvine drop?

NEW -> Contingent Buyer Assistance Program
[quote author="graphrix" date=1226421991]No need to defend yourself. You have admitted that you have begun the Kool-Aid detox process.

</blockquote>
Yeah.... I have a story to tell about that.

<blockquote>

My point was, there are always buyers of RE, and especially in Irvine. Also, many of the purchases of RE in Irvine are Asian buyers. It doesn't matter if it is an REO, a new home, or just a normal resale. Buyers will buy the homes if they are priced for what people think they are worth, and Irvine happens to have always had a high percentage of Asian buyers. This is not new, it has always been like that. It's just that no one gave a rats a$$ when homes were selling like crazy, or even before that, to actually look at the demographics of the buyers. Only now, when people spew the BS that the Asians will save the Irvine market, that people start to point out a fact that has always been there. My other point was that many of the foreclosures in Irvine and all of OC are Asian owners. Foreclosures do not discriminate, they see no color, they don't know the difference between Kim and Smith, all they see is the money that should be coming is not, so go get that asset and sell it to a Kim or a Smith, whomever is willing to buy it.

</blockquote>
I'm not saying that Asian buyers will "save" Irvine... they just might slow the drop down. I've always been aware of the Irvine demographics... that's my point... I'm probably wrong but I think they have deeper pockets to ride out the drop and catch those knives more than other areas (and not just Asians... lots of Persians too).



My logic is this:



Most other places... prices are dropping because income doesn't equal pricing... combine that with inability to qualify because loans are more stringent and you have a freefall until prices get to an "affordable" level.



In Irvine, there are many buyers who are immune to these factors... the Knife Catchers. Not only do they NOT look at price compared to income, but they have large down payments to mediate the credit crunch factor. Asians are not going to buy houses in Santa Ana or Riverside County... they are going to buy in Irvine. That's also why the prices here are much higher than those places (although relatively). So by the same token, since the number of qualified buyers in Irvine is higher than other locations... prices may not drop as fast and as far.



Sure... that sounds KoolAidish... I'm just trying to work through these questions because these things come up in my conversations with other people when I try to point out that Irvine still has a ways to go.



The one thing I keep wondering about is the newer neighborhoods because of the fact that those homes started out at higher price point. Sure... maybe many of them will drop 20% (because that's the typical down payment)... but can they really drop 40-50%? I have no problem seeing a house in a less desirable area (ie the older ones) dropping from $1mil to $700k or lower... but it's harder for me to envision that same type of drop in Quail Hill or Woodbury. Even with a rash of foreclosures... I think there are buyers who will scoop up those homes slowing the price depreciation.



I hope they drop hard because I'll be waiting... I'm just wondering how long will that wait be and will it really get that low?
 
[quote author="irvine_home_owner" date=1226453958][quote author="graphrix" date=1226421991]No need to defend yourself. You have admitted that you have begun the Kool-Aid detox process.

</blockquote>
Yeah.... I have a story to tell about that.

<blockquote>

My point was, there are always buyers of RE, and especially in Irvine. Also, many of the purchases of RE in Irvine are Asian buyers. It doesn't matter if it is an REO, a new home, or just a normal resale. Buyers will buy the homes if they are priced for what people think they are worth, and Irvine happens to have always had a high percentage of Asian buyers. This is not new, it has always been like that. It's just that no one gave a rats a$$ when homes were selling like crazy, or even before that, to actually look at the demographics of the buyers. Only now, when people spew the BS that the Asians will save the Irvine market, that people start to point out a fact that has always been there. My other point was that many of the foreclosures in Irvine and all of OC are Asian owners. Foreclosures do not discriminate, they see no color, they don't know the difference between Kim and Smith, all they see is the money that should be coming is not, so go get that asset and sell it to a Kim or a Smith, whomever is willing to buy it.

</blockquote>
I'm not saying that Asian buyers will "save" Irvine... they just might slow the drop down. I've always been aware of the Irvine demographics... that's my point... I'm probably wrong but I think they have deeper pockets to ride out the drop and catch those knives more than other areas (and not just Asians... lots of Persians too).



My logic is this:



Most other places... prices are dropping because income doesn't equal pricing... combine that with inability to qualify because loans are more stringent and you have a freefall until prices get to an "affordable" level.



In Irvine, there are many buyers who are immune to these factors... the Knife Catchers. Not only do they NOT look at price compared to income, but they have large down payments to mediate the credit crunch factor. Asians are not going to buy houses in Santa Ana or Riverside County... they are going to buy in Irvine. That's also why the prices here are much higher than those places (although relatively). So by the same token, since the number of qualified buyers in Irvine is higher than other locations... prices may not drop as fast and as far.



Sure... that sounds KoolAidish... I'm just trying to work through these questions because these things come up in my conversations with other people when I try to point out that Irvine still has a ways to go.



The one thing I keep wondering about is the newer neighborhoods because of the fact that those homes started out at higher price point. Sure... maybe many of them will drop 20% (because that's the typical down payment)... but can they really drop 40-50%? I have no problem seeing a house in a less desirable area (ie the older ones) dropping from $1mil to $700k or lower... but it's harder for me to envision that same type of drop in Quail Hill or Woodbury. Even with a rash of foreclosures... I think there are buyers who will scoop up those homes slowing the price depreciation.



I hope they drop hard because I'll be waiting... I'm just wondering how long will that wait be and will it really get that low?</blockquote>


Knife catchers do provide liquidity by purchasing assets nobody else wants at current price levels. And so far, they have been muting the price declines in high-end areas. Is there enough of these people to support the market? Only time will tell, but I doubt it. They haven't been tested yet by a serious increase in the foreclosure numbers. That is still coming.



What you need to keep in mind about the newer areas is that the pricing there was extremely inflated to begin with. The % decrease in price is not determined by desirability, it is determined by the relationships between income, rent and pricing. For instance, Newport Coast has rents and incomes a bit higher than Irvine because it is considered more desirable; however, prices there were double Irvine's inflated prices. The gap between the fundamental value and peak pricing was even greater than it was in Irvine. Some of these "immune" coastal markets are going to crash very, very hard. If they reach rental parity, they will see price declines of 60% to 70% because the prices were so inflated. Before this is over with, you may see percentage declines in the most desirable areas are greater than some of the least desirable because they became so inflated.



If people are asking why house prices will decline further, you need to have a frame of reference to compare and evaluate the probably decline. Fundamental valuations based on income and rent provide this yardstick. By historical measures, prices in high end areas are still extremely inflated. The low end areas dominated by subprime are much closer to the bottom.
 
[quote author="IrvineRenter" date=1226454800][quote author="irvine_home_owner" date=1226453958][quote author="graphrix" date=1226421991]No need to defend yourself. You have admitted that you have begun the Kool-Aid detox process.

</blockquote>
Yeah.... I have a story to tell about that.

<blockquote>

My point was, there are always buyers of RE, and especially in Irvine. Also, many of the purchases of RE in Irvine are Asian buyers. It doesn't matter if it is an REO, a new home, or just a normal resale. Buyers will buy the homes if they are priced for what people think they are worth, and Irvine happens to have always had a high percentage of Asian buyers. This is not new, it has always been like that. It's just that no one gave a rats a$$ when homes were selling like crazy, or even before that, to actually look at the demographics of the buyers. Only now, when people spew the BS that the Asians will save the Irvine market, that people start to point out a fact that has always been there. My other point was that many of the foreclosures in Irvine and all of OC are Asian owners. Foreclosures do not discriminate, they see no color, they don't know the difference between Kim and Smith, all they see is the money that should be coming is not, so go get that asset and sell it to a Kim or a Smith, whomever is willing to buy it.

</blockquote>
I'm not saying that Asian buyers will "save" Irvine... they just might slow the drop down. I've always been aware of the Irvine demographics... that's my point... I'm probably wrong but I think they have deeper pockets to ride out the drop and catch those knives more than other areas (and not just Asians... lots of Persians too).



My logic is this:



Most other places... prices are dropping because income doesn't equal pricing... combine that with inability to qualify because loans are more stringent and you have a freefall until prices get to an "affordable" level.



In Irvine, there are many buyers who are immune to these factors... the Knife Catchers. Not only do they NOT look at price compared to income, but they have large down payments to mediate the credit crunch factor. Asians are not going to buy houses in Santa Ana or Riverside County... they are going to buy in Irvine. That's also why the prices here are much higher than those places (although relatively). So by the same token, since the number of qualified buyers in Irvine is higher than other locations... prices may not drop as fast and as far.



Sure... that sounds KoolAidish... I'm just trying to work through these questions because these things come up in my conversations with other people when I try to point out that Irvine still has a ways to go.



The one thing I keep wondering about is the newer neighborhoods because of the fact that those homes started out at higher price point. Sure... maybe many of them will drop 20% (because that's the typical down payment)... but can they really drop 40-50%? I have no problem seeing a house in a less desirable area (ie the older ones) dropping from $1mil to $700k or lower... but it's harder for me to envision that same type of drop in Quail Hill or Woodbury. Even with a rash of foreclosures... I think there are buyers who will scoop up those homes slowing the price depreciation.



I hope they drop hard because I'll be waiting... I'm just wondering how long will that wait be and will it really get that low?</blockquote>


Knife catchers do provide liquidity by purchasing assets nobody else wants at current price levels. And so far, they have been muting the price declines in high-end areas. Is there enough of these people to support the market? Only time will tell, but I doubt it. They haven't been tested yet by a serious increase in the foreclosure numbers. That is still coming.



What you need to keep in mind about the newer areas is that the pricing there was extremely inflated to begin with. The % decrease in price is not determined by desirability, it is determined by the relationships between income, rent and pricing. For instance, Newport Coast has rents and incomes a bit higher than Irvine because it is considered more desirable; however, prices there were double Irvine's inflated prices. The gap between the fundamental value and peak pricing was even greater than it was in Irvine. Some of these "immune" coastal markets are going to crash very, very hard. If they reach rental parity, they will see price declines of 60% to 70% because the prices were so inflated. Before this is over with, you may see percentage declines in the most desirable areas are greater than some of the least desirable because they became so inflated.



If people are asking why house prices will decline further, you need to have a frame of reference to compare and evaluate the probably decline. Fundamental valuations based on income and rent provide this yardstick. By historical measures, prices in high end areas are still extremely inflated. The low end areas dominated by subprime are much closer to the bottom.</blockquote>


Panda says, "Amen to that!"
 
[quote author="IrvineRenter" date=1226454800][quote author="irvine_home_owner" date=1226453958][quote author="graphrix" date=1226421991]No need to defend yourself. You have admitted that you have begun the Kool-Aid detox process.

</blockquote>
Yeah.... I have a story to tell about that.

<blockquote>

My point was, there are always buyers of RE, and especially in Irvine. Also, many of the purchases of RE in Irvine are Asian buyers. It doesn't matter if it is an REO, a new home, or just a normal resale. Buyers will buy the homes if they are priced for what people think they are worth, and Irvine happens to have always had a high percentage of Asian buyers. This is not new, it has always been like that. It's just that no one gave a rats a$$ when homes were selling like crazy, or even before that, to actually look at the demographics of the buyers. Only now, when people spew the BS that the Asians will save the Irvine market, that people start to point out a fact that has always been there. My other point was that many of the foreclosures in Irvine and all of OC are Asian owners. Foreclosures do not discriminate, they see no color, they don't know the difference between Kim and Smith, all they see is the money that should be coming is not, so go get that asset and sell it to a Kim or a Smith, whomever is willing to buy it.

</blockquote>
I'm not saying that Asian buyers will "save" Irvine... they just might slow the drop down. I've always been aware of the Irvine demographics... that's my point... I'm probably wrong but I think they have deeper pockets to ride out the drop and catch those knives more than other areas (and not just Asians... lots of Persians too).



My logic is this:



Most other places... prices are dropping because income doesn't equal pricing... combine that with inability to qualify because loans are more stringent and you have a freefall until prices get to an "affordable" level.



In Irvine, there are many buyers who are immune to these factors... the Knife Catchers. Not only do they NOT look at price compared to income, but they have large down payments to mediate the credit crunch factor. Asians are not going to buy houses in Santa Ana or Riverside County... they are going to buy in Irvine. That's also why the prices here are much higher than those places (although relatively). So by the same token, since the number of qualified buyers in Irvine is higher than other locations... prices may not drop as fast and as far.



Sure... that sounds KoolAidish... I'm just trying to work through these questions because these things come up in my conversations with other people when I try to point out that Irvine still has a ways to go.



The one thing I keep wondering about is the newer neighborhoods because of the fact that those homes started out at higher price point. Sure... maybe many of them will drop 20% (because that's the typical down payment)... but can they really drop 40-50%? I have no problem seeing a house in a less desirable area (ie the older ones) dropping from $1mil to $700k or lower... but it's harder for me to envision that same type of drop in Quail Hill or Woodbury. Even with a rash of foreclosures... I think there are buyers who will scoop up those homes slowing the price depreciation.



I hope they drop hard because I'll be waiting... I'm just wondering how long will that wait be and will it really get that low?</blockquote>


Knife catchers do provide liquidity by purchasing assets nobody else wants at current price levels. And so far, they have been muting the price declines in high-end areas. Is there enough of these people to support the market? Only time will tell, but I doubt it. They haven't been tested yet by a serious increase in the foreclosure numbers. That is still coming.



What you need to keep in mind about the newer areas is that the pricing there was extremely inflated to begin with. The % decrease in price is not determined by desirability, it is determined by the relationships between income, rent and pricing. For instance, Newport Coast has rents and incomes a bit higher than Irvine because it is considered more desirable; however, prices there were double Irvine's inflated prices. The gap between the fundamental value and peak pricing was even greater than it was in Irvine. Some of these "immune" coastal markets are going to crash very, very hard. If they reach rental parity, they will see price declines of 60% to 70% because the prices were so inflated. Before this is over with, you may see percentage declines in the most desirable areas are greater than some of the least desirable because they became so inflated.



If people are asking why house prices will decline further, you need to have a frame of reference to compare and evaluate the probably decline. Fundamental valuations based on income and rent provide this yardstick. By historical measures, prices in high end areas are still extremely inflated. The low end areas dominated by subprime are much closer to the bottom.</blockquote>
You hit the nail on the head, when you are at or below rental parity it is hard to see 20-30% further declines in prices (assuming rents dont decline much).
 
[quote author="usctrojanman29" date=1226458292]

You hit the nail on the head, when you are at or below rental parity it is hard to see 20-30% further declines in prices (assuming rents dont decline much).</blockquote>


This assumes:



(as you said, rents don't decline much) but based on the current economic trajectory, how much are you willing to bet on that? I already see reduced rents on many private listings, and we have a whole item talking about IAC reductions, no?



also, by 'rental parity', I'm guessing you mean for an owner/occupant? The problem that I see here is that fewer and fewer potential buyers will have 20% down payment, as they increasingly catch the knives in the short term. The remaining potential buyers are likely to be cash poor, and so unable to qualify for loans, at least at GRM=160 values.



which would lead to prices to drop to 'investor levels', GRM=100-120, which is a further 30% decline from GRM=160, no?



and even that backstop might fall if enough investors are cash poor from the plunge of the equity markets.



Therefore, I see a decline 30% below 'rental parity', to 'investor levels' to be more likely than not.
 
[quote author="freedomCM" date=1226472542][quote author="usctrojanman29" date=1226458292]

You hit the nail on the head, when you are at or below rental parity it is hard to see 20-30% further declines in prices (assuming rents dont decline much).</blockquote>


Therefore, I see a decline 30% below 'rental parity', to 'investor levels' to be more likely than not.</blockquote>


freedomCM is absolutely right. Claiming that prices won't fall much below rental parity makes no sense. I can think of at least two obvious reasons for this. 1) It's natural for rental prices to be higher than owner-occupied prices in a non-bubble market. 2) Scoreboard. Parts of Southern California have countless homes sitting on the market at around 100 GRM this very moment.
 
[quote author="IrvineRenter" date=1226454800]What you need to keep in mind about the newer areas is that the pricing there was extremely inflated to begin with. The % decrease in price is not determined by desirability, it is determined by the relationships between income, rent and pricing. For instance, Newport Coast has rents and incomes a bit higher than Irvine because it is considered more desirable; however, prices there were double Irvine's inflated prices. The gap between the fundamental value and peak pricing was even greater than it was in Irvine. Some of these "immune" coastal markets are going to crash very, very hard. If they reach rental parity, they will see price declines of 60% to 70% because the prices were so inflated. Before this is over with, you may see percentage declines in the most desirable areas are greater than some of the least desirable because they became so inflated.</blockquote>


I don't know if I like IR for what he is or what he says? Or, another way fo saying it, do I like more his message or his knowledge?



He makes me happy by day dreaming about a Crystal Cove property for $1M!
 
[quote author="IrvineRenter" date=1226454800]What you need to keep in mind about the newer areas is that the pricing there was extremely inflated to begin with. The % decrease in price is not determined by desirability, it is determined by the relationships between income, rent and pricing. For instance, Newport Coast has rents and incomes a bit higher than Irvine because it is considered more desirable; however, prices there were double Irvine's inflated prices. The gap between the fundamental value and peak pricing was even greater than it was in Irvine. Some of these "immune" coastal markets are going to crash very, very hard. If they reach rental parity, they will see price declines of 60% to 70% because the prices were so inflated. Before this is over with, you may see percentage declines in the most desirable areas are greater than some of the least desirable because they became so inflated.

</blockquote>
I would think that desirability is a factor. And it's a tricky one because it can't be directly quantified to an exact science.



I think there's something to the demographic spin that to me is overlooked. Sure... NC is more desirable and expensive than Irvine... but not by Asians (at least to my knowledge). I would even go to say there are more potential Asian buyers in Irvine than in NC. So while I agree that NC will experience a big drop... it's somewhat the same reason why Santa Ana has dropped... lack of credit worthy/cash buyers.



Using previous numbers... if the ratio of Asian buyers is 80% in Irvine. What is that ratio in Newport Coast?



There are people who can still afford and qualify for loans... and those people will probably aim for Irvine because not only is it lower priced than NC... it's also a better area than surrounding OC cities (again... my opinion).
 
[quote author="irvine_home_owner" date=1226476711]

I would think that desirability is a factor. And it's a tricky one because it can't be directly quantified to an exact science.



I think there's something to the demographic spin that to me is overlooked. Sure... NC is more desirable and expensive than Irvine... but not by Asians (at least to my knowledge). I would even go to say there are more potential Asian buyers in Irvine than in NC. So while I agree that NC will experience a big drop... it's somewhat the same reason why Santa Ana has dropped... lack of credit worthy/cash buyers.



Using previous numbers... if the ratio of Asian buyers is 80% in Irvine. What is that ratio in Newport Coast?



There are people who can still afford and qualify for loans... and those people will probably aim for Irvine because not only is it lower priced than NC... it's also a better area than surrounding OC cities (again... my opinion).</blockquote>


If NC was priced higher than Irvine before the bubble, why would it be different after? Asian buyers aren't the only ones buying. I think all the cities will pretty much return to their pre-bubble prices, with the same basic level of relativity to each other.
 
I didn't say NC would be different after... nor do I think so (I would buy NC in a second if it got lower than Irvine).



What I'm trying to get at is are there other factors at play than just plain numbers.
 
[quote author="irvine_home_owner" date=1226478052]I didn't say NC would be different after... nor do I think so (I would buy NC in a second if it got lower than Irvine).



What I'm trying to get at is are there other factors at play than just plain numbers.</blockquote>


Gotcha! I agree.
 
[quote author="Roo" date=1226475643][quote author="IrvineRenter" date=1226454800]What you need to keep in mind about the newer areas is that the pricing there was extremely inflated to begin with. The % decrease in price is not determined by desirability, it is determined by the relationships between income, rent and pricing. For instance, Newport Coast has rents and incomes a bit higher than Irvine because it is considered more desirable; however, prices there were double Irvine's inflated prices. The gap between the fundamental value and peak pricing was even greater than it was in Irvine. Some of these "immune" coastal markets are going to crash very, very hard. If they reach rental parity, they will see price declines of 60% to 70% because the prices were so inflated. Before this is over with, you may see percentage declines in the most desirable areas are greater than some of the least desirable because they became so inflated.</blockquote>


I don't know if I like IR for what he is or what he says? Or, another way fo saying it, do I like more his message or his knowledge?



He makes me happy by day dreaming about a Crystal Cove property for $1M!</blockquote>




WOW, that's a sweet dream. I hope I have a good-paying job then.
 
[quote author="irvine_home_owner" date=1226476711][quote author="IrvineRenter" date=1226454800]What you need to keep in mind about the newer areas is that the pricing there was extremely inflated to begin with. The % decrease in price is not determined by desirability, it is determined by the relationships between income, rent and pricing. For instance, Newport Coast has rents and incomes a bit higher than Irvine because it is considered more desirable; however, prices there were double Irvine's inflated prices. The gap between the fundamental value and peak pricing was even greater than it was in Irvine. Some of these "immune" coastal markets are going to crash very, very hard. If they reach rental parity, they will see price declines of 60% to 70% because the prices were so inflated. Before this is over with, you may see percentage declines in the most desirable areas are greater than some of the least desirable because they became so inflated.

</blockquote>
I would think that desirability is a factor. And it's a tricky one because it can't be directly quantified to an exact science.



I think there's something to the demographic spin that to me is overlooked. Sure... NC is more desirable and expensive than Irvine... but not by Asians (at least to my knowledge). I would even go to say there are more potential Asian buyers in Irvine than in NC. So while I agree that NC will experience a big drop... it's somewhat the same reason why Santa Ana has dropped... lack of credit worthy/cash buyers.



Using previous numbers... if the ratio of Asian buyers is 80% in Irvine. What is that ratio in Newport Coast?



There are people who can still afford and qualify for loans... and those people will probably aim for Irvine because not only is it lower priced than NC... it's also a better area than surrounding OC cities (again... my opinion).</blockquote>


I've been curious as to why Asians don't find Newport Coast as an attractive place to live as Irvine? Is it more of an affordability issue, Is it because they have a hard time fitting in to Newport Coast's Social Circle?, Is it purely because of schools? (i.e. University High being a better school than Corona Del Mar High?) I know on average a Caucasion male makes more money than Chinese, and Chinese makes more than Indian, and an Indian makes more income than a Korean working in the U.S. I am assuming that most Asians cannot break into the $300,000 median gross household income of Newport Coast. The ethnic demographics make up of Newport Coast looks much more like that of Aliso & Mission Viejo than it does to Irvine. Any other ideas why this is?
 
[quote author="IrvineRealtor" date=1226448402]

How do you say, "Congratulations, first Korean-American Mayor of Irvine?"</blockquote>


"Ir Byun (Irvine) choon han yeen see jang seng gyun gun chook ah ham ni da"



"Irvine first Korean American mayor to be formed congratulations"



Or something like...



"Han gook bun yuro jeeo jo we Irvine see jang due seen gosyul juk ha du leeb nee da."



?? ??? ??? Irvine ?? ???? ??????.



(I don't speak Korean, so don't kill me if it's wrong).
 
So today's blogicle seems to be related to my questions:



<a href="http://www.irvinehousingblog.com/blog/comments/the-arm-problem/">The ARM Problem</a>



Can IR explain more why other areas recast earlier than Irvine's? The buying/loaning trends for all areas should be similar and by the graphs... the loans seem to have the same peaks and valleys... so why is it that "less desirable" areas of Orange County recast before Irvine's?



Shouldn't an area like Quail Hill which broke ground over 5 years ago start seeing a rash of NODs now rather than in 2010/11? Or was it the majority of risky purchases were done in 2005/6 so we won't see those until later? I know O-Arms have been available since at least 1999 (I had one back then) so I would think that there were quite a few of these going on in Irvine at least 5 to 8 years ago.



I apologize if this has been explained all before but since I'm new here... I'm trying to understand the nuances.
 
Necro-titis.



So I've been thinking about this quite a bit lately... but no one has really explained why prices in certain parts of Irvine have not really dropped off all that much. The super-high end (like Shady) I can understand... and the older homes that had a lower basis also... but newer places that are NOT Columbus Grove have been just plain stubborn.



I was finally given some baseline prices for homes in Quail Hill and current prices are still ABOVE 2003 prices on certain models. If prices were fundamentally inflated in 2003 (as many claim)... then why haven't they gone even to that?



I've stated many times before that I can see prices on newer homes get to 20% off but I'm just not seeing it. Since price declines in certain parts of Irvine have been relatively flat for most of 2009, does that mean there is going to be cliff jump shortly?



I bought a house in mid-2005 (near the height of the bubble) and sold it for a 5.5% loss at the end of last year... and I still don't see similar homes selling for less more than 10% lower.



I think there is a second factor to my FCB Theory that doesn't get discussed. It's not just the FCBs who are buying the rather low inventory at non-fundamentally high prices... it's also the FCBs who have bought within the last 5-10 years and are HOLDING onto their homes even if they are upside down.



Sorry if I'm sounding bullish... but can we get some updates on predictions from the bears of IHB? Given the government/bank shenanigans... where do you now see the pricing going in Irvine (esp the more stubborn areas)? Do you think it will rollback to 1999? When?
 
[quote author="irvine_home_owner" date=1251167156]Necro-titis.



So I've been thinking about this quite a bit lately... but no one has really explained why prices in certain parts of Irvine have not really dropped off all that much. The super-high end (like Shady) I can understand... and the older homes that had a lower basis also... but newer places that are NOT Columbus Grove have been just plain stubborn.

</blockquote>


My opinion about the older neighborhoods has always been that they did not see the exponential appreciation during the boom years like the newer neighborhoods. There was a time when it would have been a better investment to purchase a home in Santa Ana, Compton or Moreno Valley than Woodbridge or Turtle Rock as long as you quickly sold within a year or two or purchase. I could be wrong (and if I am I will be corrected), but I believe that the older neighborhoods never experienced the 25%/year growth between 2002-2005. These were stable areas with not a lot of flippers or heloc abusers.



I have no idea why Turtle Ridge remains high except for the FCB and the illusion of that being a superior area. Of course the schools probably have a lot to do with that also.
 
[quote author="irvine_home_owner" date=1251167156]Necro-titis.



So I've been thinking about this quite a bit lately... but no one has really explained why prices in certain parts of Irvine have not really dropped off all that much. The super-high end (like Shady) I can understand... and the older homes that had a lower basis also... but newer places that are NOT Columbus Grove have been just plain stubborn.



I was finally given some baseline prices for homes in Quail Hill and current prices are still ABOVE 2003 prices on certain models. If prices were fundamentally inflated in 2003 (as many claim)... then why haven't they gone even to that?



I've stated many times before that I can see prices on newer homes get to 20% off but I'm just not seeing it. Since price declines in certain parts of Irvine have been relatively flat for most of 2009, does that mean there is going to be cliff jump shortly?



I bought a house in mid-2005 (near the height of the bubble) and sold it for a 5.5% loss at the end of last year... and I still don't see similar homes selling for less more than 10% lower.



I think there is a second factor to my FCB Theory that doesn't get discussed. It's not just the FCBs who are buying the rather low inventory at non-fundamentally high prices... it's also the FCBs who have bought within the last 5-10 years and are HOLDING onto their homes even if they are upside down.



Sorry if I'm sounding bullish... but can we get some updates on predictions from the bears of IHB? Given the government/bank shenanigans... where do you now see the pricing going in Irvine (esp the more stubborn areas)? Do you think it will rollback to 1999? When?</blockquote>
IHO, I've said it once but I'll keep saying it until it changes....the PRIMARY reason why prices in Irvine are holding up is due to a lack of organic and REO inventory. The number of buyers has probably stayed stable or slightly decreased but inventory has come down from about 1,300 homes to 557 as of 7pm today (of which there are 132 short sales which results in 425 real listings). I would guarantee you that prices would come down 10-20% if the inventory of homes more than doubled overnight.
 
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