EZ way to predict housing adjustment

NEW -> Contingent Buyer Assistance Program
trrenter_IHB

trrenter_IHB

New member
<p>Irvine median income for a family from city-data.com is a little under 83k give or take.</p>

<p>I then go to mortgage-calc.com and put in that salary with almost no debt because I have almost none.</p>

<p>Kicks out I can afford a $370,000 house.</p>

<p>So if the median income is 83k and with a standard 30 year fixed rate loan that income will qualify you for a $370,000 home then shouldn't that be an easy way to figure out what the homes should go for</p>

<p>Here is the disclaimer </p>

<p>DISCLAIMER: The figures above are based upon conventional program guidelines. Other loan programs are available. Calculations by this tool are believed to be accurate, yet are not guaranteed. Further review is necessary to obtain an exact qualification. If you have less than 20% equity in your home, a monthly mortgage insurance payment may be required.</p>

<p>Then I go to lending tree and put in the $370,000 home and it kicks out this.</p>

<p>37k down...$333,000 financed. $2,104.79 with just principle and interest. No taxes or PMI.</p>

<p>This is all assuming 83k as the family income.</p>

<p>So to me the median housing price in Irvine should probably be in line with the median family income. </p>

<p>Just a thought</p>
 
<p>That is the median income for Irvine for the census so that should include every person in irvine renting or owning.</p>

<p>Now if you go to wiki pedia they say it is more in the low 90k range like 92</p>
 
<p>I just don't think that you should count on the average family income as being an indicator of what the average home value should be. There are a lot of renters and students to offset the median. For example, if you look up New York City, the median income is $44,000. You certainly cannot expect home prices to drop down to a level where people making $44,000 per year can realistically afford a home in New York City.</p>

<p>$83,000 sounds initially high. However, taking into account two people working, $80,000 could be reached if they both worked at the mall. For example, assistant managers at some retail stores make $40,000/year.</p>
 
I think $83k is household. Individual income is in the 60's. To me, $370k looks kind of aggressive for an $83k income. Doable, but not much fun.
 
<p>I think $83,000 might be do-able even after income taxes, but how long will it take you to come up with the 20% downpayment (well, unless parents are helping out).</p>
 
<p>Ah, the parents.</p>

<p>I guess we all better get ready to pony-up.</p>
 
<p>Laing,</p>

<p>Every demographic is different. New York city is huge. There are immigrant families that have 8 adults in a houshold to pay the rent. I know I lived there. I am sure the same can be said for other parts of So Cal but not Irvine.</p>

<p>As far as apartment dwellers skewing the number I highly doubt that. TIC owns almost all of the apartment communities in Irvine. There is no fancy reverse neg am rents. The rents in TIC apartments at the low end are $1700 a month. That is the real low end. They want proof of employment, salary and credit. If you don't make enough you don't get in.</p>

<p>Now I found this on yahoo for the city of irvine. The left is Irvine, the right is national.</p>

<p>







Median Household Income

$84253

$42350.95







</p>

<p>







Average Household Total Consumer Expenditures

$78514 per year

$41075.28 per year







</p>

<p>So both nationally and in Irvine people are on a very tight budget. NOt much play for an adjustment on interest rates is there?</p>
 
Something seems to be wrong or off-kilter with respect to the Irvine housing prices (and of the OC in general). My wife and I make more than 2.5x the median household income in Irvine, and yet, we can't even afford (or rather, we don't want to afford) the median SFR house in Irvine since 1750 square feet on a zero lot line house isn't what we want to sign up for.


Perhaps I am wrong or crass to think that we should be able to buy much more house than what is currently the available "median" SFR in Irvine based on our income levels?


When are these prices coming down already?
 
<p>It isn't just Irvine. It is OC in general. </p>

<p>I forgot to mention I went by the Tustin Acres I think it is. The Three bedrooms there are low 500's.</p>

<p>Melo Roos - over $300 per month</p>

<p>Assocation - over $360 per month.</p>

<p>It was right under $700 per month. That is to live on top of your neighbor Semi Attatched with a tiny porch. Before you even pay your mortgage or other taxes. </p>

<p>My friend lives in Omaha. That is their mortgage. LOL.</p>

<p>I wonder what would happen to housing prices if prop 13 was done away with. How many people could afford the taxes on the "equity" in their home. I bet people would beg for the housing prices to go down if they had to pay taxes on what their Home is worth now.</p>
 
<p>TR: I wouldn't know about New York City, but I do think there are also many people sharing apartments/homes in Irvine. I know UC Irvine is known largely as a commuter school, but all those "courts" nearby are filled with students sharing apartments (Stanford Court, Harvard Court, etc.). </p>

<p>Anyway, I do agree with you that prices will and should come down. I'm just not sure they'll come down that much where something desirable to you will be $370,000. Of course, desirability is all relative. If you're referring to a condo for that price, then perhaps. But, you're talking about prices dropping down to $185/sqft for a 2000sq ft home for $370,000.</p>

<p>Recovering: I totally feel your frustration. I am a single-income, no kid family (I guess you'd call that a SINK) and I make many times the average income of Irvine. I was very frustrated for several years while looking at homes and thinking that I can't believe that I make the top 1% of income, yet I'd be living paycheck to paycheck. </p>
 
<p>Laing,</p>

<p>I think Tustin would be a good representation of possibly Skewed numbers. IE people living on the hill vs in the "Shall we say not so nice neighborhoods.</p>

<p>The median income there is about 53k a year. So the students can skew it downward but I don't know many people living in Irvine making 250 a year. Which is about what you would need to buy a house and Eat. If you can give up eating and transportation. But I am not seeing many VW bugs in front of these houses. I am seeing $500-$700</p>

<p>I am looking at median incomes across Orange County and not one city has a median income that can support the housing prices in that city. </p>

<p>Santa Ana is an outright joke. 37k median income.</p>

<p> </p>

<p> </p>
 
<p>That's where the stated incomes come into play. $37,000 per year in Santa Ana, yet Shea (I think it's Shea) has homes for $1+Million (and some with backyards facing the 5 freeway).</p>
 
LL and TR: thanks for the great info posted on these blogs...I drive around the Irvine neighborhoods and wonder which FB is currently a squatter in a house that should rightfully be mine muhahaha. We like the larger 2300-2600square feet houses in West Park that actually has a lot and yard, but listing prices of 900k-1,000k for those houses is just wishful thinking. What would be a reasonable price for them pinkish stucco homes, which are currently listing for 370-425$/square feet.


Janet: Just like you, I recently sold our home and ate the obligatory smallish engineering starting salary type loss. Rather have my freedom to buy a bigger home later at more reasonable prices.
 
<p>I, for one, woud really like to know the average loan-to-value for every city.</p>

<p>No analysis of this kind can be complete without knowing this important metric.</p>

<p>Longtime owners will not be streched as far as you imagine, unless they went HELOC happy.</p>

<p>Of course, this is irrelevent if you're looking now - but it is statistically relevent to this analysis.</p>
 
Laing - We went to the Reserve yesterday. There are at least a few homes there with multiple families or renters in them. We saw one with 8 cars in the long driveway and they weren't having a party.
 
<p>RH,</p>

<p>Maybe I understated: do entry-level engineers make $135,000? </p>
 
<p>Recovering:</p>

<p>I'm biased because I bought in the community (in fact, escrow is closing within one month). However, if you don't have to be right in the heart of Irvine or within a few minutes of it... then try looking a little further out. I bought in San Juan Capistrano which just worked out fantastically for me in terms of being close to work and coast and all. There are new construction homes for less than $1Million for 3200+sq ft with lots larger than 6500 sqft. Even with upgrading, my house is less than $350/sqft and I'm within a mile from the coast. In fact, I actually get a partial ocean view. Yes, there is Mello-Roos. And yes, the association is high. But, you're gonna get all that in Irvine, too. That, and a much smaller lot.</p>
 
<p>And Recovering:</p>

<p>I feel your pain in regards to the loss from the recent sale. Every year, I pay at least twice an entry-level engineer's salary in income tax! Now, that's my true problem is income tax!!! :)</p>
 
<p>Eva:</p>

<p>So, you joined the interest list for "the Reserve," right? J/K.</p>

<p>I've only seen them online...but was so shocked a few weeks ago when I was driving down the 5 and saw how their homes literally back up to the freeway (the back of the homes were like 20 feet from the freeway wall). Yet, the sign on the freeway wall read "luxury homes!"</p>
 
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