Montecito / Sonoma / Carmel Pricing

NEW -> Contingent Buyer Assistance Program
The 2010 Collection is a renewal of faith in Irvine housing. It gave hope to underwater owners that there is light at the end of the tunnel so it is ok to drain every penny in the retirement saving account to hold on to the house or prolong duration of ownership until a FCB pays a WTF price for the home rather than to compromise the selling price.
 
[quote author="Panda "]
[quote author="akim997"]even if current MBS purchase program doesn't end in Mar, the gov can't subsidize the mortgage markets forever... not with our current deficit. higher mortgage rates + high unemployment should create some downward pressure on housing. [/quote]

You are absolutely correct. There are two diciplines I live by when i am ready to make a home purchase in Irvine.

1) I will not buy an Irvine home when the inventory is at its lowest levels.

2) I will not buy an Irvine home when mortgage rates are at its lowest levels.

I know that this may sound like a broken record, but right now is not the time to be buying a home in Irvine.
[/quote]

That pretty much sums up why buying a house right now, in Irvine especially, is not a good idea. It is as simple as that. All things being equal, a 1% increase in interest rates has about a 50K impact on principal on a 700-800K house. Unless you can get a price that has some built in protection (ie you are getting if for 10-20% below current closing prices) it probably doesnt make sense to buy.
 
[quote author="irvinehomeowner"]
[quote author="akim997"]even if current MBS purchase program doesn't end in Mar, the gov can't subsidize the mortgage markets forever... not with our current deficit. higher mortgage rates + high unemployment should create some downward pressure on housing. [/quote]
Fundamentally, that should... but Irvine has exhibited non-fundamental behavior.

And... I don't think there is as many stressed mortgages in Irvine as other places... 2009 sales data shows an average of 40%. So these people can hold to their WTH pricing longer than other areas and we won't see the lowering of prices proportional to that downward pressure.[/quote]

Right now it is like a perfect storm, you have low inventory, low rates, plus what appears to be a good amount of FCBs (or large down payment buyers, whatever you want to call them). I just cant see those three factors staying constant forever and keeping prices so high. Higher rates (whenever they get here) will have some impact, potentially higher unemployment could have an impact and and as BK/Grace said, alternate destinations for asians could have an impact.

Good luck to anyone who buys a house in Irvine right now.
 
[quote author="graceomalley"]

I hope Cantaloop did not buy this plan. There is no consideration for furnishing at all. For $1m there is no dining room assuming the Coach bag issue goes away on the exterior.[/quote]

Which Plan are you talking about here?
 
The plans that can't provide a decent well defined area for a dining table. Both plan 2 and 3.

For $1m a dining area that has no window, no hanging light and does not even relate to the can lights in the ceiling where the dining table is shoved between an island and the back of a sofa is not an acceptable solution at this price point..

I apprenticed with the former old (Pre-Young) regime of TIC who taught me many valuable design, segmentation and marketing wisdoms that allowed me to develop the critical eyes for products and consumer psychology.

Back in the last recession products have to be good to sell but it is different today. Product lacking substance marketing can make it up with pretty ads, website, brochure and packaging.
 
[quote author="cantaloop"]
[quote author="graceomalley"]

I hope Cantaloop did not buy this plan. There is no consideration for furnishing at all. For $1m there is no dining room assuming the Coach bag issue goes away on the exterior.[/quote]

Which Plan are you talking about here?[/quote]
I believe BK *is* talking about the Plan 2... defend your home choice 'loop!

(I actually like Plan 2... did you get the upstairs bonus room option?)
 
If you do not take the conservatory then imagine where you would put the table and what that will do to the living furniture and its relationship to the window behind. Now look at your dining table and where is the hanging light fixture and window for light? Will the table center from the view of the foyer or 1/2 awkwardly overlap into the foyer ?

No one should struggle like this for a dining area in a $1m home.
 
Dining table or Dining room? Bleh... Who ever eats on a dining table anymore? In today's lifestyle, heck, I'd be happy if I even got a plate. Im used to eating food from a top of a pizza box while sitting on the couch watching TV. Ahhh.. the good ol days.

But to BK's point, for the traditional family that needs a dining table, the only real option is to convert that california room to a conservatory. And be ready to shell out the extra $ as an option.

finally the reason why we bought carmel was not because of the fancy website, brochure, or marketing. And while it may have a few flaws, I've come to realize that there's no perfect home.

We bought Carmel because it just felt right. We looked around, went to many open houses, and had our share of rented places. Best analogy I can think of: It's like how you know that s/he's the one. May not be perfect, but deep down, you know they're right for you.
 
[quote author="cantaloop"]Dining table or Dining room? Bleh... Who ever eats on a dining table anymore? In today's lifestyle, heck, I'd be happy if I even got a plate. Im used to eating food from a top of a pizza box while sitting on the couch watching TV. Ahhh.. the good ol days.

But to BK's point, for the traditional family that needs a dining table, the only real option is to convert that california room to a conservatory. And be ready to shell out the extra $ as an option.

finally the reason why we bought carmel was not because of the fancy website, brochure, or marketing. And while it may have a few flaws, I've come to realize that there's no perfect home.

We bought Carmel because it just felt right. We looked around, went to many open houses, and had our share of rented places. Best analogy I can think of: It's like how you know that s/he's the one. May not be perfect, but deep down, you know they're right for you. [/quote]

Good reply and a valid point to your lifestyle.
 
So when I first posted this thread almost a month ago:

Sonoma
Plan 1: 3/2.5, 2365sft from $765,200
Plan 2: 4/3, 2463sft from $820,500
Plan 3: 4/3, 2635sft from $875,600
Click to expand...
We stopped by today and this was the pricing:
Plan 1: $765,200
Plan 2: $831,500
Plan 3: $869,500

If you look at the trend, since the 3/2.5 is missing that 4th bedroom, it's price has held. That 4th bedroom premium raises Plan 2 by $11k but the different between Plan 3 and Plan 2 was too much so they lowered Plan 3 by $5k, making only a $38k difference between them.

I just can't get over how high these are. In 2004-5, nearing the height of the boom, 3-car garage houses with 5 bedrooms, separate living areas, bigger lots, etc were going for slightly more than these... what happened to the massive price drops? Ugh.
 
[quote author="irvinehomeowner"]...
Interestingly enough, over at Sonoma... there wasn't very much FCB traffic... but at Montecito/Carmel, the ratio was much higher... I wonder why.[/quote]

Hi everyone. I'm new to TI and enjoy it very much. I've found you guys quite insightful sometimes. Would you be kindly enough to enlightening me on this constant mentioning of FCB/Asians in general? Is it because these two groups have supposedly contributed to the exorbitant housing prices in Irvine? I am an Asian and am not trying to be defensive. But please help me understand where you come from so that I can continue enjoy this forum. Thanks.
 
[quote author="ttl"]
[quote author="irvinehomeowner"]...
Interestingly enough, over at Sonoma... there wasn't very much FCB traffic... but at Montecito/Carmel, the ratio was much higher... I wonder why.[/quote]

Hi everyone. I'm new to TI and enjoy it very much. I've found you guys quite insightful sometimes. Would you be kindly enough to enlightening me on this constant mentioning of FCB/Asians in general? Is it because these two groups have supposedly contributed to the exorbitant housing prices in Irvine? I am an Asian and am not trying to be defensive. But please help me understand where you come from so that I can continue enjoy this forum. Thanks.[/quote]
First off, welcome to TI ttl.

As to the FCB Legend, it's part theory, part fiction, part fact and part humor... depending on who you are. And it's not just Asian (or Chinese as most people mistake the 'C' to stand for), it's any foreign decent as Irvine attracts many different Asians (I see quite a few Koreans) and Middle Easterners (I hate to lump them in one group but Persians, Indians and yes... Jewish).

The way the theory goes from my perspective is that an FCB (Foreign Cash Buyer) keeps an area's prices higher than others despite fundamentals and other nearby comps. The reasons being that most of their valuation of property has less to do with rental parity and income ratio affordability and more to do with harder to measure perceptions such as safety, education, location, ego/status, cultural preferences etc etc.

And when the buyers have large cash (or all cash) down payments, it makes an area more immune to the current and future economic downturns as they have less credit restrictions, more equity and are able to weather drops in real estate value because they either carry a very small or no mortgage and it's very hard to put them underwater.

Even investing FCBs will focus on the more immune areas as we see prices drop in surrounding cities yet Irvine is still holding (if not bumping a bit) in value. The whole "flight to quality" goes just as much for owners as investors.

It also doesn't help that TIC is fueling this by keeping new home pricing at a high benchmark and controlling the inventory so as not to degrade their products.

And remember, while there is plenty of anecdotal evidence to back this up, it is largely theoretical since there is no hard data to support it (very hard to quantify cultural phenomena). While we can't solidly prove the number of 'F' buyers, we can somewhat show a trend for the 'C'. We can look at resale data (check out http://www.irvinerealtorsite.com) and if you look at 2009, the average down payment percentage is 40%.

I can say that I have looked at a ton of sales information for newer areas like QH and WB and do notice that a majority (like 90%+) of the owners have foreign surnames. While hardly scientific, especially in SoCal... I will bet that the same kind of inspection in other newer areas like Ladera Ranch or Talega may turn up a different percentage.

Again, the Legend of the FCB is more of a way for me to complain about why Irvine is so stubborn in its pricing so take it with a grain of salt.
 
IHO, thanks for the explanation. Like I said, I find this forum fun, insightful and educational.

Being an Asian buyer and with a sizable down payment in hand, I have to plead guilty as charged. We are a couple with young kids and have longed for 949 for almost 10 years. And we've waited since before our kids were born. It's been a very sloooow 'flight' to quality.

That being said, Carmel's plan 2 has this option of a second floor bonus room for an extra $20k - it's almost as huge as the master bedroom and faces the front of the house. I saw the drawing at the sales office and it certainly makes the house more million-dollar like. I think this option is an after-thought and that's why it's not shown anywhere online or in the brochure.

I saw a post complaining the absence of a palm-sized delicate community park for Carmel and Montecito. But if you've walked along the open trail along Jeffrey you'd understand why it's not needed. The view of the sunset is simply soothing, not because it's prettier than anywhere else but because it's so close to your home. I wish we could get one.
 
In my opinion, a $1mil home should have a Great Room AND formal dining and either a den/study/pseudo living room.

It should also have 5 bedrooms (or 4+bonus/loft) and a 3-car garage.

That should all fit in 3000sft of space easily.

$800k: 4/3, 2400sf possibly a 3-car
$700k: 4/3, 2000sf
$600k: 4 or 3/2.5, 1700sf

Those are still high to me but all within the TIC current benchmarks of $330-$350/sf they have set at Woodbury. They are just not using space efficiently enough.
 
Latest Pricing for Phase 6 @ Sonoma:

Plan 1: $766,500-$769,500
Plan 2: $831,500-$838,500
Plan 3: $869,500-$874,500
 
[quote author="irvinehomeowner"]Not much movement, Plan 1 creeped up by $1300.[/quote]

All but 2 of the 7 lots selling are backing up to Trabuco.
 
We went back to look at both Montecito and Sonoma just to compare what we could buy for under $800k (the magic tax credit number).

A big drawback for us in regards to Sonoma is its zero lot line on one side of your home. The salesperson tried to spin it by saying you don't notice it if you put trees up or whatever on that side but it is a concern. Interestingly enough, the first two phases, the ones north of the park and above the old CalPac homes were not zero lot lines.

Montecito, on the other hand, while having a motorcourt, is not zero lot line as you have a wall around your entire property meaning you have 2 side yards (although that's a stretch since there's not much side to it). But still, something can be said for "some" separation from your neighbors.

What's even more distressing is even though many feel these homes are overpriced... they are sold out through all phases at both Montecito and Sonoma (we did not check Carmel). These homes don't open until May-September so anything can happen (as what usually does once they near completion) but it's amazing that so many people will pay these prices. I'm not saying I don't understand it, it's just that there is no pressure on TIC to lower prices as long as this demand keeps up.

I still think Irvine is different... I just went to that Summit Crest project in Lake Forest, new 2500-3000 sft homes for $670-$710k and I wonder if they'll see the demand that Woodbury is getting.
 
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