Montecito / Sonoma / Carmel Pricing

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irvinehomeowner said:
How is this not price manipulation?

TIC has a monopoly on new Irvine houses and while we can argue that buyers/the market sets the price... then at the same time, people cannot ignore the fact that Irvine has a premium or else people would not be willing to pay these prices.
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This is exactly what I was trying to say to the bears of Irvine.  The thought of as long as people don't pay for it, price will come down doesn't quite work in this situation.  Because there are people willing to pay for it.  If one choose to want to be in Irvine, one pays for it.  Should one decide it's not worth it, they will look else where.  Both cases are perfectly fine.  I wouldn't say TIC has monopoly on the new houses, it's more of the way they built and present the city that created this demand for it's product.  Then they just squeeze until there is nothing left.  Capitalism at it's best.
 
mikeirvine said:
My Sonoma plan 3 went up more than 30k compares to the same phase 10 plan 3.

The Sonoma phase 2 Plan 3 already sold more than 930k to 956k but those two are very big lots .... I passed both of them as one faces the low income housing apartment and the other next to sand canyon.

How is Carmel selling?
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If you don't mind me asking, which phase did you buy your house from?
 
jumpcut said:
If you remember the IHB conference call with Dan Young of TIC last year, somebody asked him if TIC is manipulating prices.  His answer: If we were manipulating prices, they would never go down.

He said that at the depth of the recession when prices were down.  Now they're going back up, although they're not anywhere near the height of the bubble.  Like any homeowner, they''re just pricing their product at what the market will bear.  If people are willing to pay more, they'll raise the price.  If they're paying less, they'll lower the price.  If buyers will only pay much less, they'll take the home off the market until they get what they want.  Just like any homeowner would do, unless they're distressed and forced to sell.  TIC is not a distressed homeowner, so they'll either get their price or wait it out until they can.
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That's a bit of misdirection.

Prices were already outrageous so to say they since they were down so they weren't manipulating them isn't really proof. They may have been down from peak but still higher than original prices.

1. Why would they raise them now? Did it cost more to build Phase 10 than it did to build Phase 1 and 2?
2. As far as I know, unemployment is still 10%+ and money is much harder to get than before... so what type of market supports this kind of home price increase... or benchmark for that matter?
3. I can accept the fact that people pay more to live in Irvine. It's the bears that cannot. Why is new Irvine housing so hot and why is it selling so quickly at such high prices compared to other OC cities?

Oh wait... I know the answer to all 3 questions... FCBs. I wish graphrix would come back and tell me how they don't make a difference. Back on the other forum, he admitted that based on the data from the 90s bubble, that Irvine did lag after the rest of Orange County but the big mystery is why.

Instead of "Follow the money", it should be "Follow the FCBs".
 
If you don't mind me asking, which phase did you buy your house from?
[/quote]

I bought at phase 3 or 4 .... they increases a few thousand every phase but the 10 seem like a 10k jump.

Mike 
 
irvinehomeowner said:
Instead of "Follow the money", it should be "Follow the FCBs".
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So do you think that the FCBs will eventually "settle" for Tustin Ranch, Aliso Viejo, or even NPB if the  prices in these areas drop significantly below the Irvine prices?

 
freedomcm said:
irvinehomeowner said:
Instead of "Follow the money", it should be "Follow the FCBs".
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So do you think that the FCBs will eventually "settle" for Tustin Ranch, Aliso Viejo, or even NPB if the  prices in these areas drop significantly below the Irvine prices?
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A few might, but most will not.
 
The issue is, what is "significantly".

Tustin Ranch seems to be keeping pace with Irvine in pricing... Aliso Viejo, although cheaper is much farther and with the turmoil in the Capo school district... you lose at least one substitution. It's very hard to subsitute for location, like one other poster said... Irvine is close enough to the IE, other parts of OC and even LA to make the commute livable jobwise, going south more cancels that out.
 
Also the ethnic supermarkets attract the older generation in a multi-generation family.  Ranch 99 was the normal stomping grounds for my grandparents when they lived in Irvine.
 
irvinehomeowner said:
jumpcut said:
If you remember the IHB conference call with Dan Young of TIC last year, somebody asked him if TIC is manipulating prices.  His answer: If we were manipulating prices, they would never go down.

He said that at the depth of the recession when prices were down.  Now they're going back up, although they're not anywhere near the height of the bubble.  Like any homeowner, they''re just pricing their product at what the market will bear.  If people are willing to pay more, they'll raise the price.  If they're paying less, they'll lower the price.  If buyers will only pay much less, they'll take the home off the market until they get what they want.  Just like any homeowner would do, unless they're distressed and forced to sell.  TIC is not a distressed homeowner, so they'll either get their price or wait it out until they can.
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That's a bit of misdirection.

Prices were already outrageous so to say they since they were down so they weren't manipulating them isn't really proof. They may have been down from peak but still higher than original prices.

1. Why would they raise them now? Did it cost more to build Phase 10 than it did to build Phase 1 and 2?
2. As far as I know, unemployment is still 10%+ and money is much harder to get than before... so what type of market supports this kind of home price increase... or benchmark for that matter?
3. I can accept the fact that people pay more to live in Irvine. It's the bears that cannot. Why is new Irvine housing so hot and why is it selling so quickly at such high prices compared to other OC cities?

Oh wait... I know the answer to all 3 questions... FCBs. I wish graphrix would come back and tell me how they don't make a difference. Back on the other forum, he admitted that based on the data from the 90s bubble, that Irvine did lag after the rest of Orange County but the big mystery is why.

Instead of "Follow the money", it should be "Follow the FCBs".
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I believe TIC is taking advantage--and smartly so--of Irvine's supply shortage, historically low interest rates, and the foregone gov. tax credits. There is very limited resale stock right now and not many developers are coming out with new product in OC. TIC has little competition right now and so they can jack up prices until buyers dry out. Hopefully this supply shortage in Irvine is short term and TIC will be forced to compete with REOs/resale.
 
Irvine2Irvine said:
Does anyone have Sonoma Phase 10 pricing?
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ps99 posted the pdf a few pages back, here's a summary:

Plan 1 $786,500
Plan 2 $863,500-870,500
Plan 3 $901,500-916,500

There is only 118sft between Plan 1 and Plan 2 (lots are similarly sized) yet the Plan 2 is priced at over $75k more. So dollar/sft efficiency, the Plan 1 is better... but for living area efficiency, the Plan 2 is better... and is commanding a higher premium. Isn't that lame how the footprint of both homes are similar yet TIC is charging you so much more? Room count (which is a factor of space efficiency) is a big deal to many.
 
It's even worse at Carmel.  Plan 1 and plan 2 are basically same product 4br/4ba with nearly identical square footage (2625 vs 2630).  Yet, the plan 2 is $30K-40K more.  I personally liked plan 2 layout but I don't see why it should cost so much more.
 
Maybe slaughtered by the Real Estate market in Irvine, not necessarily by the Irvine company.  I tried very hard to buy an existing house but ended up with a 2010 collection, which was the back up plan and happened to be cheaper than a resale.
 
I believe TIC has a big hand in it. They didn't have to raise prices each phase... it's not like the land cost them more.

And I wouldn't say slaughtered.... in the long run... these values will hold... despite what the Irvine haters say. The number 1 rule in Real Estate is location and Irvine is one of the best... if not THE best... located cities in Orange County. The bears can argue otherwise but they can't change what the map says.
 
irvinehomeowner said:
I believe TIC has a big hand in it. They didn't have to raise prices each phase... it's not like the land cost them more.

And I wouldn't say slaughtered.... in the long run... these values will hold... despite what the Irvine haters say. The number 1 rule in Real Estate is location and Irvine is one of the best... if not THE best... located cities in Orange County. The bears can argue otherwise but they can't change what the map says.
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Oh IHO...I love Irvine too but it is not special.

There was yet another great post on IHB today on why even Irvine is not a 'safe haven' for RE:
http://www.irvinehousingblog.com/blog/comments/safe-haven-buying-kool-aid-intoxication-of-the-housing-bust/

"Those who argue for safe-haven speculation make the same argument: prices haven't fallen therefore they will not fall. The bulls ignore the huge inventory of distressed properties as if it isn't there. "I'll believe it when I see it," they say. How much more obvious does it need to be? We can see years worth of inventory in the foreclosure pipeline, and although we don't have addresses of the shadow inventory, First American CoreLogic does, and they say 8.4% of Orange County mortgage holders are delinquent on their payments. That doesn't seem particularly safe to me..."

"In case you didn't notice, the IHB also operates in the real estate sales market. Since most readers of this blog are interested in Irvine real estate, it would benefit my business greatly to embrace buying in Irvine as a safe haven. I don't for one simple reason: safe-haven speculating is foolish. Don't do it. It will cost you dearly.

If you want to buy in Irvine today, know the risks. Prices may go down further (they probably will), and the best case is tepid appreciation or an extended period of flat prices. With the low payments from 5% interest rates, many properties are affordable, but buyers may find themselves underwater while the distressed properties are pushed through the market and interest rates rise. Any buyers planning to buy should expect to stay put for at least five to seven years. If there is any chance of moving three years from now, would-be buyers should rent instead."
 
I don't envy IR as he has to balance the blog and the business which almost oppose each other. Notice the slight of hand in the last paragraph. He said exactly what I have said many times in the past: "Any buyers planning to buy should expect to stay put for at least five to seven years."  Do you think he would say that about the Inland Empire? Las Vegas? He knows Irvine is special.

If Irvine is not special... how are their prices holding up better than surrounding cities? How are they able to sell new homes at such a high benchmark price and fast pace and raising them each phase? Why does Irvine not have a flood of REOs like other places? Why can't I find a newer 3CWG home for less than $700k but can find them in South County cities quite easily?

You may not think Irvine is special... but someone does.
 
This is how I look at it.  Everything is relative to what you like.  This statement "Any buyers planning to buy should expect to stay put for at least five to seven years."  Shouldn't this be the buyer's mind set from the start?  I look at buying a home like a home, a place to settle and live in.  Not something to buy and sell for fun to make money.  If that's the mind set, then losing value on a home isn't an issue.  The table stake here is, if you are buying a home, you have to be able to afford it.  If you can't afford it, don't buy period.

If you are an investor, then of course you have to worry about these things.  We all overpay for certain things.  The question is if you like it enough to overpay for it that's all.  As long as you don't go beyond your means, it's ok.  It may not be smart, but it's not going to hurt you either.  I can't relate to looking at a "home" as a "trade". 
 
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