Housing Analysis

[someguy]

It takes $349,200 income to buy an Orange County home​

A homebuyer would have to make $349,200 to buy the county’s $1.37 million median-priced, existing single-family home in the first quarter, according to affordability stats from the California Association of Realtors.

Realtor math tells us that only 11% of Orange County households had the financial muscle to pull off a purchase in early 2024 – the third consecutive quarter at that low level of affordability, last seen in the bubble days of 2007.

It takes $349,200 income to buy an Orange County home, 3.5 times the US salary

Yup, OC’s threshold is 252% higher than the US income required to qualify for a home.

www.ocregister.com

Wild. It's worth noting that their math assumes 20% down. I think many buyers today are putting more cash down, which means smaller loan payment and less income needed, but still, that's a big household income number to afford the median priced OC house.

 

[akkord]

Wild. It's worth noting that their math assumes 20% down. I think many buyers today are putting more cash down, which means smaller loan payment and less income needed, but still, that's a big household income number to afford the median priced OC house.

Article states SFRs, assume you'd need less for a townhouse or attached/detached condo. Guess income also doesn't matter for cash buyers which USC is stating is pretty high in Irvine compared to other cities.

 

[irvinehomeowner]

I agree with LL that many OC homes are overpriced for starters, I just don't see what will bring them down low enough.

 

[sleepy5136]

I agree with LL that many OC homes are overpriced for starters, I just don't see what will bring them down low enough.

simple. tax foreign ownership so high that it makes zero sense for foreign owners to have RE in US. Irvine will go down so fast that it won't even be funny.

 

[irvinehomeowner]

simple. tax foreign ownership so high that it makes zero sense for foreign owners to have RE in US. Irvine will go down so fast that it won't even be funny.

This will just result in Reverse Uno white flight.

You know how many Latter Day Saints will scoop up those Irvine homes?

 

[sleepy5136]

This will just result in Reverse Uno white flight.

You know how many Latter Day Saints will scoop up those Irvine homes?

as long as it's not foreign buyers, i don't care.

 

[irvinehomeowner]

But the prices won't drop. I don't know where they get their money but that demographic blings.

 

[sleepy5136]

But the prices won't drop. I don't know where they get their money but that demographic blings.

You really think local people would buy 1m+ for a condo if it wasn’t for FCB? Irvine is inland, not coastal.

 

[qwerty]

I’m curious what percentage of today’s buyers are move up buyers vs first time buyers. I don’t think there are large quantity of households that make $350k per year in OC. So it would seem that most buyers today would be people who bough a while ago and are using their equity to offset the higher price of the new home.

I feel bad for anyone that was not in the market before the crazy run up from Covid and inventory shortage from the low interest rate environment.

 

[sleepy5136]

I’m curious what percentage of today’s buyers are move up buyers vs first time buyers. I don’t think there are large quantity of households that make $350k per year in OC. So it would seem that most buyers today would be people who bough a while ago and are using their equity to offset the higher price of the new home.

I feel bad for anyone that was not in the market before the crazy run up from Covid and inventory shortage from the low interest rate environment.

I would also argue a lot of them have support from parents/relatives for the down payment to not require 350k income to get a loan.

 

[usctrojancpa]

I’m curious what percentage of today’s buyers are move up buyers vs first time buyers. I don’t think there are large quantity of households that make $350k per year in OC. So it would seem that most buyers today would be people who bough a while ago and are using their equity to offset the higher price of the new home.

I feel bad for anyone that was not in the market before the crazy run up from Covid and inventory shortage from the low interest rate environment.

My first time non move-up buyers are mostly around $1m +/- and most all of the $1.5m+ buyers are move-up buyers with lots of equity in their current homes.

 

[usctrojancpa]

I would also argue a lot of them have support from parents/relatives for the down payment to not require 350k income to get a loan.

Some do but people have also benefited from stock/investment/crypto appreciation too.

 

[ThirtySomethingWEquity]

I’m curious what percentage of today’s buyers are move up buyers vs first time buyers. I don’t think there are large quantity of households that make $350k per year in OC. So it would seem that most buyers today would be people who bough a while ago and are using their equity to offset the higher price of the new home.

I feel bad for anyone that was not in the market before the crazy run up from Covid and inventory shortage from the low interest rate environment.

I think you're underestimating the number of people who make $350k, or they make less but have career windfalls of much higher income. Some examples from some friends:

1. Worked for a startup, got stock options, options popped when the company got bought by a public company. They don't make $350k but they got a couple hundred grand in stock in one recent year.

2. Software Sales - had a big year, made a couple hundred thousand more than usual, used that for a down payment

3. Tech Company RSU appreciation - most tech companies give you stock pegged at a certain price when you join. If you're lucky...the stock goes up, and you get the appreciation in addition to the stock grant. I've gotten lucky on grants that got me an extra $100k here or there. Couple of my friends are in this group

4. Overtime - some nurses and cops can make crazy money if they work a lot. Not a bad way to grind for a couple years to get that chunk for the down payment, then coast a bit once you have a house.

 

[CalBears96]

Yeah, the only reason I was able to buy in Irvine was my RSU, not my salary. My co-workers and I were extremely fortunate that our CEO decided to give us 4 years worth of RSU back in 2019 instead of refreshing every year.

 

[Liar Loan]

I think you're underestimating the number of people who make $350k, or they make less but have career windfalls of much higher income. Some examples from some friends:

1. Worked for a startup, got stock options, options popped when the company got bought by a public company. They don't make $350k but they got a couple hundred grand in stock in one recent year.

2. Software Sales - had a big year, made a couple hundred thousand more than usual, used that for a down payment

3. Tech Company RSU appreciation - most tech companies give you stock pegged at a certain price when you join. If you're lucky...the stock goes up, and you get the appreciation in addition to the stock grant. I've gotten lucky on grants that got me an extra $100k here or there. Couple of my friends are in this group

4. Overtime - some nurses and cops can make crazy money if they work a lot. Not a bad way to grind for a couple years to get that chunk for the down payment, then coast a bit once you have a house.

We are talking about what it takes to buy the median home in Orange County though. Your comment illustrates just how unsustainable things have gotten.

 

[ThirtySomethingWEquity]

Yeah, the only reason I was able to buy in Irvine was my RSU, not my salary. My co-workers and I were extremely fortunate that our CEO decided to give us 4 years worth of RSU back in 2019 instead of refreshing every year.

Wow, was this in addition to the the initial grant from when you joined? Usually you get a four year grant, then a four year refresher grant that vest over many years, which significantly caps the upside (but it's still nice).

 

[CalBears96]

Wow, was this in addition to the the initial grant from when you joined? Usually you get a four year grant, then a four year refresher grant that vest over many years, which significantly caps the upside (but it's still nice).

I joined the company back in 2010, but the stock was going sideways for years. It wasn't until 2016 when we got acquired that things started looking up. We got RSU before, it was a yearly grant, which vested over 4 years. What I meant was that in 2019, we got a 4 years worth of RSU, meaning we were granted RSUs for 2019, 2020, 2021, 2022, the same amount each year, at 2019's stock price.