Could Irvine turn into the Beverly Hills of Orange County?

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financeguy_IHB

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A lot of people are saying that Irvine housing prices will drop in the future as more foreclosures come into the market, but that's just looking at the supply side of it. What about the demand and especially for detached homes in popular neighborhoods like Westpark? When I go to look at homes there, I see a lot of foreign buyers compared to other OC cities.



Irvine has gotten a lot of good publicity both here and abroad (ie 4th best place to live, etc.). In the early 1900s Beverly Hills was just a bunch of farmland and Hollywood was a good place to live. At some point, Hollywood became a dump and Beverly Hills became prime real estate. The point is that over time certain city become more attractive while others become less attractive. I'm not saying that Irvine is anywhere close to Beverly Hills or that it ever will be. However, I wondering if the demand for living in Irvine will continue to rise (due to both domestic and foreign buyers) thereby preventing any major price declines due to increased REOs.
 
Agree completely.



I've been a long time waiter for a home in irvine. I never understood the dramatic run up

in prices even before this blog came along. Then I've been a regular reader of the blog

and have further waited for few more years. But somehow despite todays topic and the maps

indicating upcoming REO's etc I'm starting to feel differently about Irvine.



Almost every house I'm willing to consider despite knowing that it is priced higher than my

realistic expectation, just gets gobbled up so quickly. Newer homes have come down to 300 +/-

15 per sq ft. But the Fees and taxes just make them unaffordable.
 
[quote author="financeguy" date=1242711346]A lot of people are saying that Irvine housing prices will drop in the future as more foreclosures come into the market, but that's just looking at the supply side of it. What about the demand and especially for detached homes in popular neighborhoods like Westpark? When I go to look at homes there, I see a lot of foreign buyers compared to other OC cities.



Irvine has gotten a lot of good publicity both here and abroad (ie 4th best place to live, etc.). In the early 1900s Beverly Hills was just a bunch of farmland and Hollywood was a good place to live. At some point, Hollywood became a dump and Beverly Hills became prime real estate. The point is that over time certain city become more attractive while others become less attractive. I'm not saying that Irvine is anywhere close to Beverly Hills or that it ever will be. However, I wondering if the demand for living in Irvine will continue to rise (due to both domestic and foreign buyers) thereby preventing any major price declines due to increased REOs.</blockquote>


This reminds me of the patrick.net "housing bubble glossary" :)



<b>MIRAGE (Moneyed Immigrants, Rich Ancestors, Generous Expatriates)</b>: Acronym coined by HARM to lampoon the bulls? argument that housing demand is being supported by cash-rich immigrants, wealthy parents and transplants from other states.



Oh, and to answer your question, my short-answer opinion is "no". While there are some desirable areas or Irvine (think TR), it largely consists of stucco-boxes with no backyards. Who could read IR's post from today and suggest that major price declines are not coming (and keep a straight face)?
 
You need to keep in mind when considering the price declines that REOs only determine the rate of decline, the price point to which properties will fall is determined by financing terms. People are now being required to really afford houses out of their real incomes. Prices will fall to these levels because that is all the more people can pay. Demand is measured in dollars not in desirability.
 
[quote author="IrvineRenter" date=1242715550]You need to keep in mind when considering the price declines that REOs only determine the rate of decline, the price point to which properties will fall is determined by financing terms. People are now being required to really afford houses out of their real incomes. Prices will fall to these levels because that is all the more people can pay. Demand is measured in dollars not in desirability.</blockquote>


But I?m not talking about the people that can?t afford to buy a home in Irvine, as you say, that is not the relevant demand. I am referring to an increase in demand from those individuals that can afford to pay.



Most individuals in this blog seem to value homes in Irvine at the pre-bubble price and then assume that things will come down to an inflation adjusted pre-bubble price eventually. Right or wrong, my point is that what if the perceived value of Irvine for a large group of individuals has risen since the pre-bubble era and will continue to rise due to this MIRAGE phenomenon referred to earlier.



Therefore the individual who can afford to pay +600K (20% down or all cash) for SFR and might have bought in Turtle Rock in 2000 now pays for the same SFR in Westpark because they now view Westpark as being worth +600K.
 
[quote author="financeguy" date=1242717240] this MIRAGE phenomenon referred to earlier.



Therefore the individual who can afford to pay +600K (20% down or all cash) for SFR and might have bought in Turtle Rock in 2000 now pays for the same SFR in Westpark because they now view Westpark as being worth +600K.</blockquote>


the thing is, it is a "mirage".



1. not enough jobs pay $200k to support all the $600k houses.



2. not really that many "mirage" buyers



3. people who really do make $200k, and mirage buyers, won't find Westpark that attractive if they can live in NPB for the same price.
 
Gosh, some people are so impatient. Home prices won't correct as quickly as stock market prices. The lack of inventory on the market in Irvine is really giving people the false sense that prices won't be going down much.
 
[quote author="usctrojanman29" date=1242719955]Gosh, some people are so impatient. Home prices won't correct as quickly as stock market prices. The lack of inventory on the market in Irvine is really giving people the false sense that prices won't be going down much.</blockquote>


We just need to find a sacrificial lamb for the sheople to follow.
 
[quote author="financeguy" date=1242717240][quote author="IrvineRenter" date=1242715550]You need to keep in mind when considering the price declines that REOs only determine the rate of decline, the price point to which properties will fall is determined by financing terms. People are now being required to really afford houses out of their real incomes. Prices will fall to these levels because that is all the more people can pay. Demand is measured in dollars not in desirability.</blockquote>


But I?m not talking about the people that can?t afford to buy a home in Irvine, as you say, that is not the relevant demand. I am referring to an increase in demand from those individuals that can afford to pay.



Most individuals in this blog seem to value homes in Irvine at the pre-bubble price and then assume that things will come down to an inflation adjusted pre-bubble price eventually. Right or wrong, my point is that what if the perceived value of Irvine for a large group of individuals has risen since the pre-bubble era and will continue to rise due to this MIRAGE phenomenon referred to earlier.



Therefore the individual who can afford to pay +600K (20% down or all cash) for SFR and might have bought in Turtle Rock in 2000 now pays for the same SFR in Westpark because they now view Westpark as being worth +600K.</blockquote>


I doubt too many of the posters on this blog or forum accept peak prices as a properties value. In fact, most never did which is why they came to the blog. There will be a complete realignment of thinking toward value. Go ask someone in Riverside County what houses are worth there. Once priced cut in half, people realize they are not coming back soon. Right now, there is so much denial in Irvine, particularly at the high end, that some people do not even accept that their houses have dropped in value. Riverside county has already capitulated, and they accept that houses cost less than $200,000 again. Irvine is still in denial at the high end, in fear at the middle, and the low end is capitulating now.
 
For those of you who are discouraged by the continued high prices in Irvine, are you considering maybe buying somewhere else?
 
During this recession LV bags have not come down in price but Asian buyers are still flocking to the stores at SCP to validate their status. In fact LV expanded to 3 separate stores inside the same mall. Unless Irvine has no novelty of status then prices should drop.



The psychological power of status is sustaining Irvine from plummeting prices.
 
[quote author="awgee" date=1242723776]For those of you who are discouraged by the continued high prices in Irvine, are you considering maybe buying somewhere else?</blockquote>


I had this awesome post and the PC ate it. Damn. That's what I get for trying to use MS Word to edit/spellcheck.



I admit it. I considered it. I had to go to Corona today to a guy's house, and the trip changed my mind.



The IE really is a wasteland. The man I visited paid $460K, the house next door to him just sold at auction for $260. The new owner is trying to flip it listing it at $300K. There are homes listed at $250K in the neighborhood. Here's a primer ? except it?s 16 years newer:



1033 Queenspark Rd

Corona, CA 92880

Price: $249,000

Beds: 3

Baths: 3

Sq. Ft.: 2,040

$/Sq. Ft.: $122

Lot Size: 3,067 Sq. Ft.

Property Type: Single Family Residence

Style: Contemporary

Stories: 2

Year Built: 2006

Community: Corona

County: Riverside

MLS#: P686901

Source: SoCalMLS

Status: Active

On Redfin: 7 days



Almost approved short sale, priced to sell quickly! Built 2006 Ryland Homes. 1 Full Bedroom downstairs and bath w/ shower down! Washer-dryer on second level. 4 full bedrooms, 1 loft upstairs. Master bath is very large, walk in closet, seperate tub/shower, dual sinks. Granit countertops in kitchen, lots of space in kitchen, black appliances. Kitchen nook, very open floorplan. Association pool, jacuzzi & tot play lot walking distance. Church being built next door to neighborhood. Great family friendly neighborhood close to 91fwy, great location for Orange County commuters. Minutes to Serfas club train station.



http://www.redfin.com/CA/Corona/1033-Queenspark-Rd-92880/home/12500420



Bigger......newer........cheaper..........300K with the full brown yard eh?



The kicker was the neighbors. White trash does not begin to describe these people. Lots of abandoned cars, adults riding dirt bikes in the street (in the middle of the day!), at least four foreclosures (or at least fully abandoned yellow yards a foot tall). Oil spills. Lots and lots of sketchy stuff. They don?t call it ?Valley of the Dirt People? for nothing.



Here's the search link for SFR?s in the greater Corona - while you are browsing it, consider this question - Why anyone would live in Irvine at $375 a foot when they can own a new place over the hill for $125 (big jab at IHO) and with that much pricing differential, why wouldn?t it spread over the hill?



http://www.redfin.com/search#lat=33.859365841408675&long;=-117.57844281860929&market=socal&region_id=4249&region_type=6&status=1&uipt=1&v=4&zoomLevel=11
 
[quote author="bkshopr" date=1242725127]During this recession LV bags have not come down in price but Asian buyers are still flocking to the stores at SCP to validate their status. In fact LV expanded to 3 separate stores inside the same mall. Unless Irvine has no novelty of status then prices should drop.



The psychological power of status is sustaining Irvine from plummeting prices.</blockquote>
Ahhh, perception becomes reality for the sheople until the lenders further tighten the screws in their underwriting.
 
[quote author="usctrojanman29" date=1242726143][quote author="bkshopr" date=1242725127]During this recession LV bags have not come down in price but Asian buyers are still flocking to the stores at SCP to validate their status. In fact LV expanded to 3 separate stores inside the same mall. Unless Irvine has no novelty of status then prices should drop.



The psychological power of status is sustaining Irvine from plummeting prices.</blockquote>
Ahhh, perception becomes reality for the sheople until the lenders further tighten the screws in their underwriting.</blockquote>


WTF prices reflect the will of the people. They all think Irvine is a LV bag. High ticket price for printed texture vinyl bags. $375 per cubic inch of bag volume. Why LV does not lower their prices when other competition stores are having bag sales during the recession.
 
[quote author="bkshopr" date=1242726771][quote author="usctrojanman29" date=1242726143][quote author="bkshopr" date=1242725127]During this recession LV bags have not come down in price but Asian buyers are still flocking to the stores at SCP to validate their status. In fact LV expanded to 3 separate stores inside the same mall. Unless Irvine has no novelty of status then prices should drop.



The psychological power of status is sustaining Irvine from plummeting prices.</blockquote>
Ahhh, perception becomes reality for the sheople until the lenders further tighten the screws in their underwriting.</blockquote>


WTF prices reflect the will of the people. They all think Irvine is a LV bag. High ticket price for printed texture vinyl bags. $375 per cubic inch of bag volume.</blockquote>


So what is Aliso Viejo? a Coach Bag?
 
[quote author="PANDA" date=1242726983][quote author="bkshopr" date=1242726771][quote author="usctrojanman29" date=1242726143][quote author="bkshopr" date=1242725127]During this recession LV bags have not come down in price but Asian buyers are still flocking to the stores at SCP to validate their status. In fact LV expanded to 3 separate stores inside the same mall. Unless Irvine has no novelty of status then prices should drop.



The psychological power of status is sustaining Irvine from plummeting prices.</blockquote>
Ahhh, perception becomes reality for the sheople until the lenders further tighten the screws in their underwriting.</blockquote>


WTF prices reflect the will of the people. They all think Irvine is a LV bag. High ticket price for printed texture vinyl bags. $375 per cubic inch of bag volume.</blockquote>


So what is Aliso Viejo? a Coach Bag?</blockquote>


<img src="http://3.bp.blogspot.com/_SCNsjQ2I6a0/SQFSwxNkYCI/AAAAAAAAAaY/kFDIEAd-hX8/s320/douchebag.jpg" alt="" />



I'd write my answer but I don't want Poppa Zovall to have to park me. I am being nice, dammit!
 
[quote author="PANDA" date=1242726983][quote author="bkshopr" date=1242726771][quote author="usctrojanman29" date=1242726143][quote author="bkshopr" date=1242725127]During this recession LV bags have not come down in price but Asian buyers are still flocking to the stores at SCP to validate their status. In fact LV expanded to 3 separate stores inside the same mall. Unless Irvine has no novelty of status then prices should drop.



The psychological power of status is sustaining Irvine from plummeting prices.</blockquote>
Ahhh, perception becomes reality for the sheople until the lenders further tighten the screws in their underwriting.</blockquote>


WTF prices reflect the will of the people. They all think Irvine is a LV bag. High ticket price for printed texture vinyl bags. $375 per cubic inch of bag volume.</blockquote>


So what is Aliso Viejo? a Coach Bag?</blockquote>


I am not sure but I do know VOC is a bag made in China with lead paint. NoVas just took the words out of my mouth.
 
I found Newport Coast



<img src="http://www.cooldesignerhandbags.com/wp-content/uploads/2008/01/fendi-bbag.jpg" alt="" />



Fendi "B.Bag"



$27,700*



Hailing the return of the structured bag, this might be Fendi's best seller since the Baguette. Although the white lambskin runway bag (pictured on the runway) was well-received, the $27,700 black crocodile version is truly coveted.



*(14,731 pounds, 21,617 euros, 1.2M rupees, C$31,038, A$36,910)
 
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