Irvine home values up 36% in 5 years: How?s that rank nationally?

[irvinehomeowner]

Let me ask a dumb question. If you have to buy now which one you would buy, and which home will hold its value better?

1.4M 4 years old SFH or 1.4M Brand new SFH, both in a same neighborhood with similar floor plans. 

Obviously considering older home has all the upgrades, yard done etc, and newer home would need all the makeup.

This question is loaded for 2 reasons:

1. 4 years apart in same location and similar floor plan is rare in Irvine.
2. A new SFH would cost more than $1.4m to do the makeup... and would have higher MRs.

For the reasons BTB listed, new has the advantage, but I'm assuming you would buy old if their design choices were what you wanted. Then the only difference is the 1-year maintenance which is nullified by a 1-year home warranty which most resales include (not sure how ps9 didn't get one but I think his was a short sale).

Older may also have a bigger lot.

Either way, if the 2 are so similar in price, location, floorplan, then they would both retain their value equally.

 

[Burn That Belly]

x

 

[Liar Loan]

I wasn't the one who claimed Irvine will drop 40-50% and by your own posts, it didn't.

Who on this forum predicted a 40-50% price drop for Irvine?  Not me.

I'm using actual data to illustrate the damage that occured in Irvine.  It has nothing to do with Larry's prediction or anybody else's.

But since you continue to reference Larry, let's use his data:

You can see on the first chart that median home price in Irvine topped out around $710k and bottomed at about $480k.  That would be a 32.4% decline.

See, you won't even find me the data and make me do the work.

That's the thing... links to individual homes are anecdotes, not data.  If I showed you 10 houses that priced at $1M that later sold for $700k it wouldn't prove anything about the Irvine market as a whole, and besides you would find any reason to discredit the links provided (near a major street, needs rehab, etc.)

The data I've presented from Trulia and now from Larry's blog shows that prices in Irvine dropped by around 30%.  Why that is so controversial, I have no idea.

I don't have any personal stake in Irvine either way.  None of my property is located there and I have no intention of ever buying there.  My only interest is in not misleading people, and when I see professionals like Panda and other forum members citing only a 15% decline for Irvine I think it creates a false sense of security for current buyers.

Here is the history of Irvine:

1991-1995 ~ 20% decline

2006-2012 ~ 30% decline

Why pretend this can't happen again?

 

[Burn That Belly]

x

 

[OCLuvr]

Very good analysis!

I wasn't the one who claimed Irvine will drop 40-50% and by your own posts, it didn't.

Who on this forum predicted a 40-50% price drop for Irvine?  Not me.

I'm using actual data to illustrate the damage that occured in Irvine.  It has nothing to do with Larry's prediction or anybody else's.

But since you continue to reference Larry, let's use his data:

You can see on the first chart that median home price in Irvine topped out around $710k and bottomed at about $480k.  That would be a 32.4% decline.

See, you won't even find me the data and make me do the work.

That's the thing... links to individual homes are anecdotes, not data.  If I showed you 10 houses that priced at $1M that later sold for $700k it wouldn't prove anything about the Irvine market as a whole, and besides you would find any reason to discredit the links provided (near a major street, needs rehab, etc.)

The data I've presented from Trulia and now from Larry's blog shows that prices in Irvine dropped by around 30%.  Why that is so controversial, I have no idea.

I don't have any personal stake in Irvine either way.  None of my property is located there and I have no intention of ever buying there.  My only interest is in not misleading people, and when I see professionals like Panda and other forum members citing only a 15% decline for Irvine I think it creates a false sense of security for current buyers.

Here is the history of Irvine:

1991-1995 ~ 20% decline

2006-2012 ~ 30% decline

Why pretend this can't happen again?

 

[Burn That Belly]

x

 

[irvinehomeowner]

@LL:

You keep changing the narrative.

I was specifically asking you about 4-Br Irvine SFRs that dropped 30%. I even went into how I was looking for that particular stock. You keep going back to all Irvine homes which is not what I asked you about.

As for the 40-50% figure, I asked about this a number of times on the IHB (who claimed that would be the drop) because the math did not work.

And 15%? Again, it depends on which stock you are looking at.

If you don?t want anectodes then don?t make specific conclusions about general numbers... or maybe I misread your post.

Edit: Grammar

 

[Ready2Downsize]

@LL:

You keep changing the narrative.

I was specifically asking you about 4-Br Irvine SFRs that dropped 30%. I even went into how I was looking for that particular stock. You keep going back to all Irvine homes which is not what I asked you about.

As for the 40-50% figure, I asked about this a number of times on the IHB (who claimed that would be the drop) because the math did not work.

And 15%? Again, it depends on which stock you are looking at.

If you don?t want anectodes that don?t make specific conclusions about general numbers... or maybe I misread your post.

It's hard to find something that sold at the peak and the exact same house a few years later and when u limit it to 4 BR even harder.

Is there a reason this one doesn't count?
https://www.redfin.com/CA/Irvine/9-Oakhurst-Rd-92620/home/4790210

 

[irvinehomeowner]

It's hard to find something that sold at the peak and the exact same house a few years later and when u limit it to 4 BR even harder.

Exactly. So saying 4br homes dropped by 30% is misleading because it may not be the same product.

Is there a reason this one doesn't count?
https://www.redfin.com/CA/Irvine/9-Oakhurst-Rd-92620/home/4790210

Just based on price that would work but the listing looks suspect. It?s not a typical Redfin listing, no pics, no description etc.

I?m not saying they don?t exist, I just don?t think they make up the mode (for Mr Statistics).

 

[irvinebullhousing]

This really goes back to the principal of buying a house for a home. And that you planned to live in it for several years. You have to love where you live for the long run. If anyone of those buyers that sold at a lost, or a huge lost, they either did not have much skin in the game in the first place. Second they blindly banking on future appreciation and did not see it in the short term for their return and walk away. Had those still holding on, then there won?t be an argument to begin with. The whole systems stock, bonds and housing are opproaching bubbles. You have to plan for the worse case if it does crash.

Market crash is when wealth truly made.

It could run for 2 or 3 or more years before another major  event occur. Money does not disappear, when market crash. It is a transfer of wealth from one group to another.

 

[fortune11]

My 2 cents on this topic ?

When we talk about crash or volatility it is always always accompanied by something called ?velocity ?

Quant hedge funds and high frequency trading machines exacerbated the interest rate selloff in 2013 and also Seeded  the recent equity melt up . They create massive velocity . Fortunately housing stock does not lend itself to a that dynamic.

What created velocity in 2008 ? The sudden glut of homes on the market from foreclosures and speculators

What created velocity in 2012 ? gigantic Private equity firms like blackstone etc. that began scooping up vast inventory and became large scale landlords . And then the FCB wave since 2013 in Asian friendly neighborhoods like Irvine , Seattle , Vancouver. This legacy is partly  why the housing price melt up accelrated since then

The one thing we have going now is velocity is damn slow and once the new home build out is all done , it is about to get much much slower .  Economic conditions are favorable . But even if they weren?t favorable , you would need a large scale seller to create that velocity on the way down .

the only large seller to create that velocity would be

1) one dominant employer leaving the area (we don?t have that problem )

2) FCBs for some reason decide to repatriate cash back to China (ain?t happening ) 

3) a large crime or undesirability wave takes over Irvine and we get the opposite of gentrification = flight  (again not happening anytime soon)  . Although that neo nazi  teenage killer living on port streets (Newport ) was a shocker to many !!

People who have grown up here or lived here too long sometimes don?t realize how good we have here in Irvine despite all the drawbacks . Outsiders tend to appreciate it a lot more.

 

[Ready2Downsize]

Not so. I had a spread sheet a local realtor sent me every month for years on resales in Northwood because we were considering buying an investment property.

I KNOW for a fact homes dropped 30%.

Pix can be removed if the new homeowner wants them removed and you should ask for that. By living in a home with photos on redfin you are showing potential weak spots to burglars.

Mike Dunn typically removes all but one photo from his listings after they are sold, or maybe they are all suspect?

 

[the.irvine]

Does it have a similar impact on the rentals as well? For instance, if home price drop would rent drop as well at the same time?
Rents in Irvine are very high, and they keep going up. Would there be anytime when we will see 4 Bed SFH listed less than 3K a month for rent? 

 

[irvinehomeowner]

Not so. I had a spread sheet a local realtor sent me every month for years on resales in Northwood because we were considering buying an investment property.

I KNOW for a fact homes dropped 30%.

How many homes? Were there some on your sheet that didn't drop 30%? And did your realtor list the former sales price in 05/06 compared to the current listing price? What percentage of all homes in Northwood were these 30%ers?

That's what I'm trying to say here, no one knows that for a fact. All I know is that certain product only dropped X, while others dropped X. But I am certain that if you average it out, look at the majority (mode), the drop was not 40-50% as predicted by all the bears on the IHB. And to satiate LL, I don't think it was 15% either, but for the inventory I was looking it, it was closer to 15% than 30%. But that may be due to the type and location I was looking at.

And yes, Northwood is one of the tracts where the drops were higher because of older stock and floorplans. We looked at quite a few homes in the Windstream area. But the nicer ones were probably only 15-20% off of peak prices. If it was 30% it was rare. And remember, we are talking 4br+ SFRs to keep it consistent with my original question.

Here are some homes we looked at in Northwood, notice their history... no 30% drops:
https://www.redfin.com/CA/Irvine/10-Quebrada-92620/home/4788229https://www.redfin.com/CA/Irvine/15-Hermosa-92620/home/4788174

This one was in the mid $700k but never sold for more than $900k:
https://www.redfin.com/CA/Irvine/77-Grant-92620/home/4779507

I can list all the homes I looked at but I want to be lazy like everyone else.

Pix can be removed if the new homeowner wants them removed and you should ask for that. By living in a home with photos on redfin you are showing potential weak spots to burglars.

Mike Dunn typically removes all but one photo from his listings after they are sold, or maybe they are all suspect?

Compare your listing to the ones I just posted. Yours doesn't even have a property description which most MLS homes will have even years later. It doesn't have other details either.

All in all, bedroom count is also a tough metric because that can be an 1800sft house or a 3000sft house. I've been googling but is there a historical $/sft chart for Irvine from at least 2000 somewhere?

 

[irvinebullhousing]

Does it have a similar impact on the rentals as well? For instance, if home price drop would rent drop as well at the same time?
Rents in Irvine are very high, and they keep going up. Would there be anytime when we will see 4 Bed SFH listed less than 3K a month for rent?

I don't see that happening this time around. IF prices of homes does drop, it will be in tandem with substantial increase in mortgage interest rate to even out the playing field. Homes sold since 2011 goes into strict under-writting and people have to comes up with substantial down payment and got lots of skins in their housing.

Then when they do walk away either to foreclosed or sell at lost, they still gotta live somewhere, unless they join the homeless crowds, they will rent. Rent will be at the same level or could increase due to further demands from families needing shelters.

 

[eyephone]

Does it have a similar impact on the rentals as well? For instance, if home price drop would rent drop as well at the same time?
Rents in Irvine are very high, and they keep going up. Would there be anytime when we will see 4 Bed SFH listed less than 3K a month for rent?

I don't see that happening this time around. IF prices of homes does drop, it will be in tandem with substantial increase in mortgage interest rate to even out the playing field. Homes sold since 2011 goes into strict under-writting and people have to comes up with substantial down payment and got lots of skins in their housing.

Then when they do walk away either to foreclosed or sell at lost, they still gotta live somewhere, unless they join the homeless crowds, they will rent. Rent will be at the same level or could increase due to further demands from families needing shelters.

Under your scenario, companies will layoff and families that can?t afford will move to a cheaper place around town or out of town or move back with family.

 

[Liar Loan]

This thread is turning into IHO vs the world.

Look one flaw with your method of demanding listing histories is that nobody values real estate that way.  There is a thing called comparable sales that allows agents to determine the value of a home that hasn't sold yet.  You take several homes that have sold with similar features and square footage and use those to estimate the value of the home in question.  That is the way you should be approaching this if you are serious.

Secondly, the listings you have provided are ridiculous.

10 Quebrada sold in 1993 and then again in 2013.  How does this even apply to the time period in question when prices fell from 2007-2012?

15 Hermosa sold in 2002 and then again in 2012.  Nobody has argued that prices didn't rise over that 10 year timeframe.  This is true for almost any house in Orange County.

Again, your point about a 40-50% drop is a strawman because nobody on this thread has argued that is what happened.  The bears from IHB are long gone now, and I wasn't even a participant on IHB.

 

[Liar Loan]

Does it have a similar impact on the rentals as well? For instance, if home price drop would rent drop as well at the same time?
Rents in Irvine are very high, and they keep going up. Would there be anytime when we will see 4 Bed SFH listed less than 3K a month for rent?

They will drop slightly or flatten out for several years, but rents are not as volatile as home prices have been historically. 

If you look at the second chart in my post here (green line), it shows that rents did decline slightly in Irvine during each of the last 3 recessions.
http://www.talkirvine.com/index.php/topic,16093.msg325140.html#msg325140

From 2007-2010, the median Irvine rent declined from about $2,550 to $2,250 which is a 12% decline peak to trough. 

It looks like the mid-90's rent decline and the early 2000's rent decline were closer to 7% each.

 

[bones]

Look one flaw with your method of demanding listing histories is that nobody values real estate that way.  There is a thing called comparable sales that allows agents to determine the value of a home that hasn't sold yet.  You take several homes that have sold with similar features and square footage and use those to estimate the value of the home in question.  That is the way you should be approaching this if you are seriou

Yes THIS. That?s why while the individual listings may not matter, once you find a handful, it tells the story of IF any home in that tract/neighborhood had gone to market during that time frame, the drop would have been similar. Yes, there will always be outliers (location, feng shui, etc etc), but that?s not the macro view.

 

[irvinebullhousing]

Does it have a similar impact on the rentals as well? For instance, if home price drop would rent drop as well at the same time?
Rents in Irvine are very high, and they keep going up. Would there be anytime when we will see 4 Bed SFH listed less than 3K a month for rent?

I don't see that happening this time around. IF prices of homes does drop, it will be in tandem with substantial increase in mortgage interest rate to even out the playing field. Homes sold since 2011 goes into strict under-writting and people have to comes up with substantial down payment and got lots of skins in their housing.

Then when they do walk away either to foreclosed or sell at lost, they still gotta live somewhere, unless they join the homeless crowds, they will rent. Rent will be at the same level or could increase due to further demands from families needing shelters.

Under your scenario, companies will layoff and families that can?t afford will move to a cheaper place around town or out of town or move back with family.

I can see your doomsday points. However, with the current political of TRUMP Corporate Welfare and Job Acts. That ain't gonna happen.