usctrojancpa
Well-known member
I'll update the Sept data this week but I'll just say that we had an all time record for sales in Sept 2020 in Irvine.
Observations from the front lines of the Irvine housing market?
- Thread starter usctrojancpa
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There's a lot of low interest rate FOMO out there coupled with a lack of inventory is causing this.
There is pain in Irvine but only for buyers who keep getting outbid.
He sold his rental property a bit too early, the IE is experiencing the same inventory shortage as Irvine and Orange County.
I have a friend who's been waiting for a 10% price drop for the past 7 years so he could upgrade from an attached condo to a larger detached condo. He passed on about a half dozen detached condos/SFRs which I offered to him before going to market with that ended up selling for over list price. Thankfully he bought a 3-bedroom attached condo in Woodbury in 2010 but his wife is not a happy camper. haha
IHO - Don't you know things are busy for me right now? Yet, I can't help but notice that Irvine home prices have been stuck in neutral according to USC's charts. They've gone nowhere for almost three years now!! Irvine is definitely underperforming the rest of OC in terms of MaxROI.
USC - All real estate is local. How many multi's have you sold in the IE? LOL...
My last sale was the end of April (peak COVID fear) and yet none of the comps to sell since then have exceeded my sales price. One did match my sales price and some others sold for a LOT less but needed lots of fixing/upgrading. There is no way an appraiser would let me sell it now for more than I sold in April.
Then you take into account that landlords have no rights under COVID, and that my highly blue collar workforce is having trouble making ends meet, and I'm happy to have sold, even if peak pricing was not achieved. The proceeds of that sale went directly into my brokerage account and the S&P is up 20% since then, without the landlord headaches!
That's part of it but the other reasons why inventory is so low is that there is strong demand (as reflected in the record sales volume) and that move-up buyers who refinanced into these super low rates are keeping their smaller properties as rentals as they pencil with the low rates. From the demand side, I'm seeing 5-15 competing offers on homes that I'm making offers for on behalf of my buyers so even if you double the amount of inventory that may not satisfy the buyer demand and it's not just in Irvine either.
I have been working remotely since when the pandemic started to get serious in March and we are thinking about making this remote work permanent. But, I ain't going No where. I can't find anywhere else that is as clean with natural surroundings/trails, low crime, good education/school, ethnic food variety and markets, good choice of shopping destinations, easy access to roads/fwys, with so many attractions as Irvine. I am willing to pay the high price to work and live in Irvine.
I actually know few families from LA, NYC, and SF moving to Irvine to work remotely here. I am sure it goes both ways.
Agreed. Working remote means you can live where you want and without the expense of driving to your office, you can use that savings to afford Irvine.
sgip
Well-known member
We are now approaching ludicrous speed in terms of sales velocity. Rare is the offer that will be considered unless some or all contingencies are waived. We used to see some measure of slowdown once school started. No longer now that distance learning and distance employment are becoming the norm.
Interesting times indeed.
My .02c
Interesting times indeed.
My .02c
usctrojancpa
Well-known member
Soylent Green Is People said:
There's a lot of low interest rate FOMO out there coupled with a lack of inventory is causing this.
irvinehomeowner
Well-known member
So much pain in Irvine... where is LiarLoan?
usctrojancpa
Well-known member
irvinehomeowner said:So much pain in Irvine... where is LiarLoan?
There is pain in Irvine but only for buyers who keep getting outbid.
usctrojancpa
Well-known member
irvinehomeowner said:So much pain in Irvine... where is LiarLoan?
He sold his rental property a bit too early, the IE is experiencing the same inventory shortage as Irvine and Orange County.
Dr. CA Real Estate
New member
Let?s all pour out a drink for those renters who forever wait ?for prices to drop a bit?
USCTrojanCPA said:irvinehomeowner said:So much pain in Irvine... where is LiarLoan?
He sold his rental property a bit too early, the IE is experiencing the same inventory shortage as Irvine and Orange County.
usctrojancpa
Well-known member
Dr. CA Real Estate said:Let?s all pour out a drink for those renters who forever wait ?for prices to drop a bit?
USCTrojanCPA said:irvinehomeowner said:So much pain in Irvine... where is LiarLoan?
He sold his rental property a bit too early, the IE is experiencing the same inventory shortage as Irvine and Orange County.
I have a friend who's been waiting for a 10% price drop for the past 7 years so he could upgrade from an attached condo to a larger detached condo. He passed on about a half dozen detached condos/SFRs which I offered to him before going to market with that ended up selling for over list price. Thankfully he bought a 3-bedroom attached condo in Woodbury in 2010 but his wife is not a happy camper. haha
I just saw this... It had Irvine in it, so I figured I'd post it here.
https://assets.bwbx.io/images/users/iqjWHBFdfxIU/iOQMcRgBpUR8/v0/1200x-1.png
Percent of tenants not paying rent is increasing: https://www.bloombergquint.com/onweb/las-vegas-tops-u-s-in-rise-of-apartment-tenants-not-paying-rent
https://assets.bwbx.io/images/users/iqjWHBFdfxIU/iOQMcRgBpUR8/v0/1200x-1.png
Percent of tenants not paying rent is increasing: https://www.bloombergquint.com/onweb/las-vegas-tops-u-s-in-rise-of-apartment-tenants-not-paying-rent
Liar Loan
Well-known member
USCTrojanCPA said:irvinehomeowner said:So much pain in Irvine... where is LiarLoan?
He sold his rental property a bit too early, the IE is experiencing the same inventory shortage as Irvine and Orange County.
IHO - Don't you know things are busy for me right now? Yet, I can't help but notice that Irvine home prices have been stuck in neutral according to USC's charts. They've gone nowhere for almost three years now!! Irvine is definitely underperforming the rest of OC in terms of MaxROI.
USC - All real estate is local. How many multi's have you sold in the IE? LOL...
My last sale was the end of April (peak COVID fear) and yet none of the comps to sell since then have exceeded my sales price. One did match my sales price and some others sold for a LOT less but needed lots of fixing/upgrading. There is no way an appraiser would let me sell it now for more than I sold in April.
Then you take into account that landlords have no rights under COVID, and that my highly blue collar workforce is having trouble making ends meet, and I'm happy to have sold, even if peak pricing was not achieved. The proceeds of that sale went directly into my brokerage account and the S&P is up 20% since then, without the landlord headaches!
usctrojancpa
Well-known member
Attached is the data for both September and October 2020. Both of these two months were record setting sales months for Irvine, surpassing the all-time monthly sales of 306 homes in July 2015 as demand has been increasing into the Fall. The strong sales will continue into November because as of today (November 10th) there are still 380 Irvine properties in escrow which down only about 10% from September 17th which had 422 Irvine properties in escrow. I would venture to say that part of that decrease is partial due in part to less inventory in the lower end of the market and newer listings have materially higher listing prices.
Sales in September 2020 were 311 or over 53% than September 2019 and sales in October 2020 were even higher at 317 or almost 42% higher than October 2019 which was a result of the large number of homes that got into escrow from late July through early October. The median price per SF increased to the second highest level of $492/sf in September 2020 from August 2020 and September 2019 (highest median price was $496/sf in May 2018) while the median price per SF decreased slightly back to $488/sf in October 2020. Inventory at the end of September 2020 was slightly lower from May 2020 from 758 to 743 and down almost 24% from September 2019 and the inventory of homes continued it decline at the end of October to 730 homes which was over 18% lower than the number of homes on the market at the end of October 2019. The lower end of the market continued to be constrained while there?s been an increase in the listings of middle and high end homes.
The strength that I?ve been seeing from both the listing and buyer side in the summer continued into September and October with more properties going into escrow at a faster pace which is reflected in the declining days-on-market (DOM) in the chart on the next thread. On the lower end of the market, I?ve seen situations where there were 5-10+ offers where buyers are asked to waive the appraisal contingency and buying the home without any repairs or credits for repairs. Some of these homes sold for 3-5%+ more than similar/model matches that closed 1-2 months earlier. It is getting harder and harder to find homes for buyers in the lower end of the market due to all buyers in the market but I did have some success with a few buyers by going very fast (i.e. going to see the home within a day or two of being listed and making an offer on the same day).
Builders on the lower and middle market (mainly California Pacific Homes) have no unsold homes for the most part as buyers who are getting outbid on resales homes are opting for a new home. I?ve also noticed that prices are up over 5% at these California Pacific Homes communities from the summer because they are getting a bid tailwind from the strength of the resale market. Even builders on the middle and higher end are now not offering the same kind of discounts on released and unsold homes like they did in the Spring and Summer (I?m speaking mainly about Lennar, Shea, TriPoint, and KB).
Interest rates continued to bleed even lower and touched 2.50% for conforming and jumbo conforming loans in the fall while jumbo rates were a bit higher around 3%. A few of my buyers that bought homes around $1m opted to put enough down to bring their loan balance to the jumbo conforming loan limit amount of $765,600 to take advantage of the low rates. Interest rates did begin to tick up a little bit in November as bond yields have risen but we?ll see how much higher they go.
The market looks to be very strong right now and good properties that are priced right fly into escrow with multiple offers. Going ?fast? and making strong offers with favorable seller terms can make a difference. Unless a significant amount of homes come onto the market and/or interest rates increase materially, I don?t see things slowing down as Covid vaccines and treatments are right around the corner. That being said, I believe that the median Irvine home price will exceed $500/sf sometime in early 2021.
Sales in September 2020 were 311 or over 53% than September 2019 and sales in October 2020 were even higher at 317 or almost 42% higher than October 2019 which was a result of the large number of homes that got into escrow from late July through early October. The median price per SF increased to the second highest level of $492/sf in September 2020 from August 2020 and September 2019 (highest median price was $496/sf in May 2018) while the median price per SF decreased slightly back to $488/sf in October 2020. Inventory at the end of September 2020 was slightly lower from May 2020 from 758 to 743 and down almost 24% from September 2019 and the inventory of homes continued it decline at the end of October to 730 homes which was over 18% lower than the number of homes on the market at the end of October 2019. The lower end of the market continued to be constrained while there?s been an increase in the listings of middle and high end homes.
The strength that I?ve been seeing from both the listing and buyer side in the summer continued into September and October with more properties going into escrow at a faster pace which is reflected in the declining days-on-market (DOM) in the chart on the next thread. On the lower end of the market, I?ve seen situations where there were 5-10+ offers where buyers are asked to waive the appraisal contingency and buying the home without any repairs or credits for repairs. Some of these homes sold for 3-5%+ more than similar/model matches that closed 1-2 months earlier. It is getting harder and harder to find homes for buyers in the lower end of the market due to all buyers in the market but I did have some success with a few buyers by going very fast (i.e. going to see the home within a day or two of being listed and making an offer on the same day).
Builders on the lower and middle market (mainly California Pacific Homes) have no unsold homes for the most part as buyers who are getting outbid on resales homes are opting for a new home. I?ve also noticed that prices are up over 5% at these California Pacific Homes communities from the summer because they are getting a bid tailwind from the strength of the resale market. Even builders on the middle and higher end are now not offering the same kind of discounts on released and unsold homes like they did in the Spring and Summer (I?m speaking mainly about Lennar, Shea, TriPoint, and KB).
Interest rates continued to bleed even lower and touched 2.50% for conforming and jumbo conforming loans in the fall while jumbo rates were a bit higher around 3%. A few of my buyers that bought homes around $1m opted to put enough down to bring their loan balance to the jumbo conforming loan limit amount of $765,600 to take advantage of the low rates. Interest rates did begin to tick up a little bit in November as bond yields have risen but we?ll see how much higher they go.
The market looks to be very strong right now and good properties that are priced right fly into escrow with multiple offers. Going ?fast? and making strong offers with favorable seller terms can make a difference. Unless a significant amount of homes come onto the market and/or interest rates increase materially, I don?t see things slowing down as Covid vaccines and treatments are right around the corner. That being said, I believe that the median Irvine home price will exceed $500/sf sometime in early 2021.
usctrojancpa
Well-known member
usctrojancpa
Well-known member
Something very interesting just happened that I haven't seen in 7 years. The number of properties in escrow exceeds the number of active listings in Irvine. Back in 2013 when we had about 1 month of inventory we had the same thing happen. That being said, we are at/near the seasonal low point of inventory in the year.
Most of the low inventory is artificial though due to policy.
Eviction moratorium, mortgage forbearance, etc. all restrict supply. People that want to sell can't sell before they can't evict. People that would normally sell because they are trading up aren't selling because there isn't inventory for them to buy. People who normally would foreclose have leeway due to forbearance.
Eviction moratorium, mortgage forbearance, etc. all restrict supply. People that want to sell can't sell before they can't evict. People that would normally sell because they are trading up aren't selling because there isn't inventory for them to buy. People who normally would foreclose have leeway due to forbearance.
usctrojancpa
Well-known member
Cares said:
That's part of it but the other reasons why inventory is so low is that there is strong demand (as reflected in the record sales volume) and that move-up buyers who refinanced into these super low rates are keeping their smaller properties as rentals as they pencil with the low rates. From the demand side, I'm seeing 5-15 competing offers on homes that I'm making offers for on behalf of my buyers so even if you double the amount of inventory that may not satisfy the buyer demand and it's not just in Irvine either.
irvinehomeowner
Well-known member
Where is Liar Loan?
Hugo Township
Active member
I would expect a fair number of people to move away from Irvine to lower-cost markets if their work goes remote full-time. I personally don't know anybody like this, but I have been observing the *commercial* office real estate market in Irvine, and that has been VERY soft. If less offices require butts in seats, the appeal of living close to work here in Irvine has to take a toll.
HMart said:
I have been working remotely since when the pandemic started to get serious in March and we are thinking about making this remote work permanent. But, I ain't going No where. I can't find anywhere else that is as clean with natural surroundings/trails, low crime, good education/school, ethnic food variety and markets, good choice of shopping destinations, easy access to roads/fwys, with so many attractions as Irvine. I am willing to pay the high price to work and live in Irvine.
I actually know few families from LA, NYC, and SF moving to Irvine to work remotely here. I am sure it goes both ways.
irvinehomeowner
Well-known member
Goriot said:
Agreed. Working remote means you can live where you want and without the expense of driving to your office, you can use that savings to afford Irvine.
Many people up here in the Bay area are leaving for much cheaper Irvine or even Texas, but unless you're super tight with the GM of your BU and are 100% sure your move is cool with that person, HR and Finance will take a dim view a year from now especially as it relates to compensation and succession planning.
I played golf with a prominent local realtor yesterday and he gave me a staggering statistic - Santa Clara/San Mateo County 35 yr median sale price CAGR is just under 9%. NIMBYism and crushing CEQA regs create artificially low inventory that becomes a vehicle for storing wealth from the equity markets, compounded by the Prop 13 landed tax aristocracy of 60s/70s era buyers.
OC is lucky to have the Irvine Company and so much high quality newer inventory. Eventually some of these Bay area companies need to migrate south to enable their younger workers to stay in CA.
I played golf with a prominent local realtor yesterday and he gave me a staggering statistic - Santa Clara/San Mateo County 35 yr median sale price CAGR is just under 9%. NIMBYism and crushing CEQA regs create artificially low inventory that becomes a vehicle for storing wealth from the equity markets, compounded by the Prop 13 landed tax aristocracy of 60s/70s era buyers.
OC is lucky to have the Irvine Company and so much high quality newer inventory. Eventually some of these Bay area companies need to migrate south to enable their younger workers to stay in CA.