Irvine market in 2010!!!!

NEW -> Contingent Buyer Assistance Program
[quote author="irvinehomeowner"]But what is historic norms? 2003? 1998?

In 1998-2000, 1800-2000sft *new* SFRs in Irvine sold for $300-350k. These were 3/4 br homes in areas like Oak Creek, Harvard Square and West Irvine.

Do you think they will get that low? I just did a quick RedFin search and the lowest similarly sized houses go is mid to high $500k. When I change the year build to 1995+, the lowest is high $600k.

It's those darn FCBs![/quote]

I would say pre bubble is 98-99 so lets take a 300k home in 98 add 3% per year and in 2009 under non bubble appreciation that home would be worth about $403k.

So if you keep adding the 3% appreciation to the 98-99 price and then deduct the 4% I think it will go down per year wait for the two numbers to intersect.

That will happen in late 2014 when the homes will be worth about $475k.

Now if a wave of foreclosures come that could increase the deflation. Or if the government and the banks keep the inventory artificially low this could drag out much longer.

The could conceivably just keep the homes at the value to day until the normal appreciation catches up to the price.
 
[quote author="morekaos"]Is this the future of Irvine luxury condos?

http://www.redfin.com/CA/Irvine/3141-Michelson-Dr-92612/unit-404/home/7219078

Sep 28, 2009 Price Changed $374,000 -- SoCalMLS #S543946
Sep 09, 2009 Relisted -- -- SoCalMLS #S543946
Aug 14, 2009 Sold (MLS) -- -- SoCalMLS #S543946
Jun 12, 2009 Price Changed $450,000 -- SoCalMLS #S543946
Feb 18, 2009 Price Changed $499,999 -- SoCalMLS #S543946
Oct 30, 2008 Relisted -- -- SoCalMLS #S543946
Oct 29, 2008 Delisted -- -- SoCalMLS #S543946
Oct 23, 2008 Price Changed $539,000 -- SoCalMLS #S543946
Oct 23, 2008 Relisted -- -- SoCalMLS #S543946
Oct 16, 2008 Delisted -- -- SoCalMLS #S543946
Aug 13, 2008 Listed $675,000 -- SoCalMLS #S543946
Feb 15, 2006 Sold (Public Records) $781,000 -- Public Records
[/quote]

morekaos

You need to start another "North Korea Towers" thread so we can keep track of it separately.

I really wonder what will happen with the HOA. Its just killing any chance for these condos. Its almost like a Spiral that cant stop. Like a black hole sucking them into oblivion.
 
So in 2014, you think an 2000sft 4br SFR will be about $475k? I would hope so but I can't see that.

That's a pretty long drop from $675k.

What will that home be priced at in 2010? Especially with TIC benchmarking at the high $500ks to low $600ks for similarly sized homes.
 
[quote author="irvinehomeowner"]So in 2014, you think an 2000sft 4br SFR will be about $475k? I would hope so but I can't see that.

That's a pretty long drop from $675k.

What will that home be priced at in 2010? Especially with TIC benchmarking at the high $500ks to low $600ks for similarly sized homes.[/quote]

Sorry I should have said that I started the depreciation at 600k not 675k.

So that number would be a depreciation of 4% per year from 600k.

Starting again from 600k a 4% depreciation would be about 582k in 2010.

I could be completely wrong and homes may not depreciate at all they just won't appreciate.

It that scenario the home would sell for 600k until 2030 or so.
 
Don't you also need to account for the different interest rates when going back in time. A house that was worth $300K in 98 was in a market where 30 year fixed was about 7%.

Similarly, in your projections shouldn't you make an assumption on what the interest rate will be. By 2014 it is very possible that we can see an upswing in interest rates. This will exert a negative pressure on home prices.

On top of that there is the inflation component (which is somewhat tied to interest rates).

In any case, I think that it boils down to monthly payment as a fraction of income. This would be an actual measure of "affordability".
 
[quote author="greencactus"]Don't you also need to account for the different interest rates when going back in time. A house that was worth $300K in 98 was in a market where 30 year fixed was about 7%.

Similarly, in your projections shouldn't you make an assumption on what the interest rate will be. By 2014 it is very possible that we can see an upswing in interest rates. This will exert a negative pressure on home prices.

On top of that there is the inflation component (which is somewhat tied to interest rates).

In any case, I think that it boils down to monthly payment as a fraction of income. This would be an actual measure of "affordability".[/quote]

I agree completely. Again I am just guessing and this is my guess as to what is going to happen.

If interest rates were to climb to double digits then depreciation could come quickly.

There are a lot of what if's involved. What if unemployment stays the same or gets worse.

What if taxes go up significantly to reduce deficits in CA and the US.

The point is that through inflation, interest rate changes, recessions etc Real Estate historically apreciates at around 3%.

I don't see anything that happened between 1999 to 2009 except for loose lending standards that would indicate that houses should have appreciated more then the historical 3%.

So my guess is through one mechanism or another we will hit those historical norms eventually.
 
[quote author="trrenter"] If interest rates were to climb to double digits then depreciation could come quickly.[/quote]

That's just silly talk. It can never happen because Bernanke doesn't have the "guts" to raise rates.

I know this because both Awgee and Winex say it's so, and they "know" because they don't "believe". >:(
 
[quote author="novaseline"]
[quote author="trrenter"] If interest rates were to climb to double digits then depreciation could come quickly.[/quote]

That's just silly talk. It can never happen because Bernanke doesn't have the "guts" to raise rates.

I know this because both Awgee and Winex say it's so, and they "know" because they don't "believe". >:([/quote]


I don't really think it will happen either.

If Bernake raised the interest rates to double digits it would undo all the manipulation they have already done to keep the bubble from bursting.

That is why I am convinced at this point the plan is to slowly deflate the bubble.
 
I wasn't serious in my remark, but I suspect you're right. I think the plan is to start raising rates later in 2010 and keep on tightening till they get them back where they want them "around" 6%.
 
It depends what the inflationary pressure is down the road. The Fed targets 3-4% inflation. If you were to peg the interest rate at 6% but it doesn't slow down inflation to the desired levels, policy changes may be needed to slow down economic growth. Let's say taxes end up shooting up to stem rapid growth. What's worse ... 10%+ interest rates and lower taxes or 6% interest rates and higher taxes? (assume they both achieve the same inflation rate) Either scenario would push home prices down. I can't foresee a situation where both interest rates AND taxes are kept low.
 
If anything it is my belief we will see both interest rates and taxes going up (taxes more than interest rate). Kinda the monster feeding on its own tail because the villagers were insufficent.

I wonder if the banks are going to keep riding the credit cruch and squeeze each and every creditee.... not just squeeze, but pulverize. Anyways good luck

-bix
 
My neighbors sold their house for a good price. Actually a good 80k above what we paid last year for our house which is similar. You never know! I was surprised. (and happy too)
 
[quote author="Cubic Zirconia"]My neighbors sold their house for a good price. Actually a good 80k above what we paid last year for our house which is similar. You never know! I was surprised. (and happy too)[/quote]
With such a low lack of inventory, it is a great time to sell (particularly 3+ bedroom detached condos and SFRs) in Irvine especially if you don't plan on owning a home for at least the next 5+ years.
 
True. That is the reason people are just buying I think. The long will just be too looong.. and then there is a possibility that 3 bed/2.5 bath houses might not fall that much after all in Irvine.
 
[quote author="USCTrojanCPA"]
[quote author="Cubic Zirconia"]My neighbors sold their house for a good price. Actually a good 80k above what we paid last year for our house which is similar. You never know! I was surprised. (and happy too)[/quote]
With such a low lack of inventory, it is a great time to sell (particularly 3+ bedroom detached condos and SFRs) in Irvine especially if you don't plan on owning a home for at least the next 5+ years.[/quote]

I agree. I sold my house in Irvine earlier this year (3 Bed, 3 Bath SFR built in 1987) for around $416 a sq. ft.
 
I was overhearing a Lady at the Coffee shop a couple of weeks ago who was talking really loud on her cell, she said something like "We are going to look at another House today, we missed the last four, you have to be really quick and see them as soon as they come on the market otherwise they're gone"
 
[quote author="peteruk"]I was overhearing a Lady at the Coffee shop a couple of weeks ago who was talking really loud on her cell, she said something like "We are going to look at another House today, we missed the last four, you have to be really quick and see them as soon as they come on the market otherwise they're gone"[/quote]
That's exactly how of my Irvine buyers are...as soon as something hits the market that fits what they are looking for we go see it (many times even the same day).
 
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