discount to live in a substitue city (irvine for me)

[villiagepeople]

so this coincides with the poll i created in the o.c. real estate section.  when i was looking, i was hoping to find roughly a 20% discount to irvine.  20% in my price range was about 100k... now you might think that's a lot, but it's actually not... for those of you who would send your child to a private school if you didn't like the public school it would cost you roughly 115k in private school tuition (assuming 1 child, 12 years at roughly 800 a month)... now you might say i'm not calculating pvif, but i'm also not counting increases in tuition or all the irvine pluses (for me 15min non freeway drive to work, all the shops/dr/dentist/optometrists that i go to, family, etc.), so let's call it a wash... in any case, that's the discount i was hoping to find.... with that in mind i set out to look for a house that fit our needs but with a 20% discount to what we could afford... but after looking at a dozen cites, and over 2 years... surprisingly we couldn't find this discounted house and ended buying in irvine for about 10% more than we wanted to spend. 

but the question for everyone is, what discount would you have to get to consider other cites?

*this is for any city that you consider "substitutes" to your number #1 city... So the last one in your case would be (my favorite city) or bust*

 

[irvinehomeowner]

I think some places are already > 30% discount. You can find 1990+ South County 3CWGS for about mid $500ks right now... while most in Irvine are at $800k... that's 30% and we still won't bite.

I guess it's Irvine or bust for us.

 

[Nous]

I said 20~25%, but I also think Irvine prices are high for no reason.  Prices in other cities are 10~15% less for what I've been looking at, a little more and I might cave.  Ya know, after the economy crashes.

 

[irvinehomeowner]

Interesting to see any answers below 20% because I think most OC cities are already there.

I guess everyone is buying outside of Irvine... hehe.

 

[davenlei]

I think some places are already > 30% discount. You can find 1990+ South County 3CWGS for about mid $500ks right now... while most in Irvine are at $800k... that's 30% and we still won't bite.

I guess it's Irvine or bust for us.

Those $500K 3CWG houses are generally not pretty/need work/updating or are short sale fake price.
The one thing I found with South County is the price for homes have a much wider spread based based on location than Irvine does.  You can see a 2800 Sq. Ft. 3CWG move pretty quickly for the mid 8's and then see a 2800 Sq. Ft. 3CWG in another part of town go for the low 6's.

 

[irvinehomeowner]

Just to clarify... *mid* $500ks... not $500k.

I've seen nice ones CLOSE at that price... not short sales, for example, in Foothill Ranch:
http://www.redfin.com/CA/Foothill-Ranch/17-Beaulieu-Ln-92610/home/4800346

And it is true... the spread is wide... although lately I've seen things move towards the lower end. Just last year I could not find any of these below $600k or $700k.

 

[villiagepeople]

Just to clarify... *mid* $500ks... not $500k.

I've seen nice ones CLOSE at that price... not short sales, for example, in Foothill Ranch:
http://www.redfin.com/CA/Foothill-Ranch/17-Beaulieu-Ln-92610/home/4800346

And it is true... the spread is wide... although lately I've seen things move towards the lower end. Just last year I could not find any of these below $600k or $700k.

i think i ranted about this a while back... but i did see a few examples like what you referenced above... great deals on short sales... but nothing seem to ever go thru (and believe me i put in lots of offers and waited, and waited)  when you see a sale like that you say to yourself "darn i would have bought it for that..." but if you were to have actually put an offer you may or may not have been "chosen"... or it may have started a bidding war... so seeing a "sold" price doesn't mean you would have gotten it at that price.

 

[irvinehomeowner]

@vp:

The thing is 17 Beaulieu wasn't a short sale, it was a standard sale... and it closed below it's original list price of $599k in April. It didn't sell and had a price drop to $579k in June and then finally closed last month... so it doesn't seem like there was a bidding war for this one.

When I first saw the listing, I thought $599k was a decent price... so closing for $560k makes it better. But who knows, maybe there were problems with the foundation.

 

[villiagepeople]

@vp:

The thing is 17 Beaulieu wasn't a short sale, it was a standard sale... and it closed below it's original list price of $599k in April. It didn't sell and had a price drop to $579k in June and then finally closed last month... so it doesn't seem like there was a bidding war for this one.

When I first saw the listing, I thought $599k was a decent price... so closing for $560k makes it better. But who knows, maybe there were problems with the foundation.

thanks for the clarification... i didn't spend time on the redfin page, and i know you probably know, but i was just pointing out how frustrating buying resale/short sale can be.  and the fact remains, you never know what the price would have ended up if you got into a bidding war with the person/people who ended up getting the house.

 

[irvinehomeowner]

I think the bidding shenanigans happens more in certain areas than others. When there is a reasonable amount of inventory (like South County 3CWGs), you're not going to see it as much.

One of the variables people tend to leave out when it comes to solving the Irvine unicorn is that there is very low "quality" inventory. Regardless of income to pricing ratios... like other posters have said, supply/demand is also a large part of the equation.

 

[davenlei]

Just to clarify... *mid* $500ks... not $500k.

I've seen nice ones CLOSE at that price... not short sales, for example, in Foothill Ranch:
http://www.redfin.com/CA/Foothill-Ranch/17-Beaulieu-Ln-92610/home/4800346

And it is true... the spread is wide... although lately I've seen things move towards the lower end. Just last year I could not find any of these below $600k or $700k.

I see.  I have to agree the 'inland OC' ones near RSM do go for a lot less than Irvine and are in decent condition.  I guess I had the blinders on to your statement and was looking at it from the point of view of where I live in south county which is on the coastal side.
I think when looking at it from a pricing point of view, South County needs to be split into two sides, the canyon side and the coastal side.  There is definitely a premium to be on the ocean side of the 5.

 

[irvinehomeowner]

I see.  I have to agree the 'inland OC' ones near RSM do go for a lot less than Irvine and are in decent condition.  I guess I had the blinders on to your statement and was looking at it from the point of view of where I live in south county which is on the coastal side.

You are correct... coastal south OC is still higher than "inland" south OC (like FR and RSM). Heck... I think in RSM there are actually $500k (not mid) 3CWGs but I'm not sure how nice they are.

But even places like Aliso and Mission are approaching that mid $500k range... I was actually surprised to see them in the mid $600ks a few months ago.

That's what makes the substitute effect kind of strange (at least ours).

For my situation it's something like this:

Over a year or so ago:

When are Irvine 3CWGs going to get below $800k, they are already at $700ks in south county... if south county goes to $600k, I'm going to consider buying there.

Sometime late last year:

Hmm... seems like some older 3CWGs in Irvine are around $700k and newer ones are getting close to below $800k, but south OC ones look like they are in the mid $600ks now... if those go below $600k, I think I'll really reconsider buying there.

Now:

Wow... south OC 3CWGs are actually below $600k... but instead of buying there... I'll wait until Irvine 3CWGs get down to $700k and if not, I'll settle for a newer 2CWG in the $600ks.

Instead of substituting buying somewhere else... I keep substituting Irvine at lower price points.

 

[Nous]

I see.  I have to agree the 'inland OC' ones near RSM do go for a lot less than Irvine and are in decent condition.  I guess I had the blinders on to your statement and was looking at it from the point of view of where I live in south county which is on the coastal side.

You are correct... coastal south OC is still higher than "inland" south OC (like FR and RSM). Heck... I think in RSM there are actually $500k (not mid) 3CWGs but I'm not sure how nice they are.

But even places like Aliso and Mission are approaching that mid $500k range... I was actually surprised to see them in the mid $600ks a few months ago.

That's what makes the substitute effect kind of strange (at least ours).

For my situation it's something like this:

Over a year or so ago:

When are Irvine 3CWGs going to get below $800k, they are already at $700ks in south county... if south county goes to $600k, I'm going to consider buying there.

Sometime late last year:

Hmm... seems like some older 3CWGs in Irvine are around $700k and newer ones are getting close to below $800k, but south OC ones look like they are in the mid $600ks now... if those go below $600k, I think I'll really reconsider buying there.

Now:

Wow... south OC 3CWGs are actually below $600k... but instead of buying there... I'll wait until Irvine 3CWGs get down to $700k and if not, I'll settle for a newer 2CWG in the $600ks.

Instead of substituting buying somewhere else... I keep substituting Irvine at lower price points.

And that's a dangerous game my friend.  Eventually things will hit bottom.  I'm saying it'll be years before that happens, so I hope you like the place you live currently cuz at this rate you'll be there a while.

 

[irvinehomeowner]

And that's a dangerous game my friend.  Eventually things will hit bottom.  I'm saying it'll be years before that happens, so I hope you like the place you live currently cuz at this rate you'll be there a while.

I'm not sure if "dangerous" is the right word. While where we are living is okay, it's much cheaper than the alternatives so it's just saving us money. Who knows... maybe we'll just stay here and eventually have enough put away to be a DCB (domestic cash buyer).

Although... I wouldn't put that much cash into real estate... we should be like awgee and buy precious metals. 

 

[villiagepeople]

Small sample but >30% of the people who voted say "irvine (or city of choice) or bust"... This is the second time I've bought a house/condo and both times I started out with my ideal city, price, house type/layout, and house size... Both times after looking for what I think is a long time (1 year the first time, 2 years the second) I had to compromise on nearly of my criteria... And by big margins too.  Was I being impatient both times?  Is it normal to find exactly what you want in the price you first set out to pay? 

 

[irvinehomeowner]

Small sample but >30% of the people who voted say "irvine (or city of choice) or bust"... This is the second time I've bought a house/condo and both times I started out with my ideal city, price, house type/layout, and house size... Both times after looking for what I think is a long time (1 year the first time, 2 years the second) I had to compromise on nearly of my criteria... And by big margins too.  Was I being impatient both times?  Is it normal to find exactly what you want in the price you first set out to pay? 

Today in Irvine... no.

Because prices in Irvine are so inflated... you can find what you want... just not at the price you want it.

Our first home... while we probably saw tons of homes in Irvine, we couldn't find the right one... we ended up finding the right one in a different city (only looked at one). We finally ended up in Irvine, but again... this was before prices got insane like they are now.

Now that the bubble is deflating, I think you can make smaller concessions but will be hard pressed to find everything... heck... new homes don't even have driveways anymore.

And sometimes it's a factor of just your needs changing... we now think we know what we are looking for... we just hope to find it in one of our desired locations.