Observations from the front lines of the Irvine housing market?

[sleepy5136]

Donald Bren gets a royalty for each and every home that gets sold that is owned by Irvine company. Each and every lot that is owned by IP which are sold to the builder requires pricing approval before they get sold AND a royalty is given to Irvine Company. You would think that once you sell the land to the builder that you get to have full control? Not with Irvine company. Talk about corporate greed.

I've heard this being thrown around, but do you have proof that housing price must be approved by TIC? I mean, I understand that higher price would bring more royalty for TIC, but I doubt that TIC has full control over the housing price set by other builders that bought TIC's land.

Ask any builder agent. They know. Non-IP builders that bought land from IP all require IP to approve their pricing before those homes get put to market. Again, you can easily see this by looking at Shea pricing of Cetara and Teresina. Base price grew by 1.2m for Cetara (no options, lot premiums). Teresina base prices went up 100k or less and they recently sold out. That should give you plenty of evidence of this.

 

[usctrojancpa]

Donald Bren gets a royalty for each and every home that gets sold that is owned by Irvine company. Each and every lot that is owned by IP which are sold to the builder requires pricing approval before they get sold AND a royalty is given to Irvine Company. You would think that once you sell the land to the builder that you get to have full control? Not with Irvine company. Talk about corporate greed.

I've heard this being thrown around, but do you have proof that housing price must be approved by TIC? I mean, I understand that higher price would bring more royalty for TIC, but I doubt that TIC has full control over the housing price set by other builders that bought TIC's land.

Yes, all of the builders get their pricing approved for their new lots by TIC. 

 

[irvinebullhousing]

Corporate Greed....pfffft... given the opportunity to do so, everyone on this board would do the exact same thing as Bren supposedly did. His money, his rules. Yes, his rules can cause havoc in values, but it's his to do with as he sees fit. Boo hoo if it's not for some theoretical greater good - something that is never a guaranteed result of any policy. I'm of the same opinion with Amazon, WalMart, and other greedy corporations. Their money, their rules. I choose not to shop with either company, but do I want them to bend the knee based on what other people think? Not really.

During the 1991-1994 crash, the master planned communities of RSM (Tony Moiso) and Foothill Ranch (William Lyon) had to re-sell their land to other developers at prices that were below their original cost. That was the market at the time. Both developers "lost" money, but gained it back and then some as the market rebounded in 1995-1999. None of this was driven by corporate altruism, but by savvy accountants, lawyers, and the unseen hand of market capitalism.  The same may happen in 2023-2024. Who knows? These actions, driven by circumstance, can rarely if ever be timed with any certainty. We'll have to wait and see, just like everyone else.

Well at least they worked for it. No handout please.  They have to pay employees and employees have to put food on the tables for their families. Greed...,? not really. They just do what they can, legally.

 

[irvinebullhousing]

On another thoughts, if Irvine drop by any amount due to the recessions, let's say 20 %, look to other communities surrounding cities to double that. I will take anyone wager on this. Why am I so foolish? Because I've seen the demographics and their balance sheets.  It is very strong. Anyone thinking they getting a bargain in the next crash for housing in Irvine is not understanding Irvine market. They may live somewhere else and hoping for this market to resemble where they are to catch a good deal. I am almost certain it a dead dream.

 

[sleepy5136]

Corporate Greed....pfffft... given the opportunity to do so, everyone on this board would do the exact same thing as Bren supposedly did. His money, his rules. Yes, his rules can cause havoc in values, but it's his to do with as he sees fit. Boo hoo if it's not for some theoretical greater good - something that is never a guaranteed result of any policy. I'm of the same opinion with Amazon, WalMart, and other greedy corporations. Their money, their rules. I choose not to shop with either company, but do I want them to bend the knee based on what other people think? Not really.

During the 1991-1994 crash, the master planned communities of RSM (Tony Moiso) and Foothill Ranch (William Lyon) had to re-sell their land to other developers at prices that were below their original cost. That was the market at the time. Both developers "lost" money, but gained it back and then some as the market rebounded in 1995-1999. None of this was driven by corporate altruism, but by savvy accountants, lawyers, and the unseen hand of market capitalism.  The same may happen in 2023-2024. Who knows? These actions, driven by circumstance, can rarely if ever be timed with any certainty. We'll have to wait and see, just like everyone else.

Well at least they worked for it. No handout please.  They have to pay employees and employees have to put food on the tables for their families. Greed...,? not really. They just do what they can, legally.

so monopolizing and controlling something after you have sold the goods to another person is not greed? you already made money from selling the land and now you want to collect royalties? how is that not greed? now we want to argue that royalties are needed to put food on the table for families? Again, housing is to house people. Don't know what you mean by handouts. No one ever said housing should be "free".

 

[The Motor Court Company]

this actually makes LL?s point. If I am an investor, when the recession comes and housing price correction comes, it is better to invest in non-Irvine market; easier for cash flow and more room for future appreciation.  Irvine housing price is a little skewed because of the sentiment of such demographic, so the rent vs own analysis never makes sense for Irvine.

On another thoughts, if Irvine drop by any amount due to the recessions, let's say 20 %, look to other communities surrounding cities to double that. I will take anyone wager on this. Why am I so foolish? Because I've seen the demographics and their balance sheets.  It is very strong. Anyone thinking they getting a bargain in the next crash for housing in Irvine is not understanding Irvine market. They may live somewhere else and hoping for this market to resemble where they are to catch a good deal. I am almost certain it a dead dream.

 

[irvinebullhousing]

Corporate Greed....pfffft... given the opportunity to do so, everyone on this board would do the exact same thing as Bren supposedly did. His money, his rules. Yes, his rules can cause havoc in values, but it's his to do with as he sees fit. Boo hoo if it's not for some theoretical greater good - something that is never a guaranteed result of any policy. I'm of the same opinion with Amazon, WalMart, and other greedy corporations. Their money, their rules. I choose not to shop with either company, but do I want them to bend the knee based on what other people think? Not really.

During the 1991-1994 crash, the master planned communities of RSM (Tony Moiso) and Foothill Ranch (William Lyon) had to re-sell their land to other developers at prices that were below their original cost. That was the market at the time. Both developers "lost" money, but gained it back and then some as the market rebounded in 1995-1999. None of this was driven by corporate altruism, but by savvy accountants, lawyers, and the unseen hand of market capitalism.  The same may happen in 2023-2024. Who knows? These actions, driven by circumstance, can rarely if ever be timed with any certainty. We'll have to wait and see, just like everyone else.

Well at least they worked for it. No handout please.  They have to pay employees and employees have to put food on the tables for their families. Greed...,? not really. They just do what they can, legally.

so monopolizing and controlling something after you have sold the goods to another person is not greed? you already made money from selling the land and now you want to collect royalties? how is that not greed? now we want to argue that royalties are needed to put food on the table for families? Again, housing is to house people. Don't know what you mean by handouts. No one ever said housing should be "free".

Greed, greed,,,is good. 

https://youtu.be/VVxYOQS6ggk

 

[sleepy5136]

Some people on this forum I feel don?t understand what greed means. So here?s the definition for a refresher

intense and selfish desire for something, especially wealth, power, or food.

 

[TestingIrvine]

Corporate Greed....pfffft... given the opportunity to do so, everyone on this board would do the exact same thing as Bren supposedly did. His money, his rules. Yes, his rules can cause havoc in values, but it's his to do with as he sees fit. Boo hoo if it's not for some theoretical greater good - something that is never a guaranteed result of any policy. I'm of the same opinion with Amazon, WalMart, and other greedy corporations. Their money, their rules. I choose not to shop with either company, but do I want them to bend the knee based on what other people think? Not really.

During the 1991-1994 crash, the master planned communities of RSM (Tony Moiso) and Foothill Ranch (William Lyon) had to re-sell their land to other developers at prices that were below their original cost. That was the market at the time. Both developers "lost" money, but gained it back and then some as the market rebounded in 1995-1999. None of this was driven by corporate altruism, but by savvy accountants, lawyers, and the unseen hand of market capitalism.  The same may happen in 2023-2024. Who knows? These actions, driven by circumstance, can rarely if ever be timed with any certainty. We'll have to wait and see, just like everyone else.

Well at least they worked for it. No handout please.  They have to pay employees and employees have to put food on the tables for their families. Greed...,? not really. They just do what they can, legally.

so monopolizing and controlling something after you have sold the goods to another person is not greed? you already made money from selling the land and now you want to collect royalties? how is that not greed? now we want to argue that royalties are needed to put food on the table for families? Again, housing is to house people. Don't know what you mean by handouts. No one ever said housing should be "free".

Sleepy we get it. You don?t live in TIC village, nor do you like Donald Bren.

But don?t correlate Orange County trends to the TIC.  I never said I like TIC, just said not to underestimate their value in times like this.

You will love TIC if you own in TIC village.
You will hate TIC if you don?t own in TIC village.

 

[CalBears96]

You will love TIC if you own in TIC village.
You will hate TIC if you don?t own in TIC village.

Well, I don't know if I love TIC, but I love their cookie cutter homes.  ;D

 

[irvinebullhousing]

this actually makes LL?s point. If I am an investor, when the recession comes and housing price correction comes, it is better to invest in non-Irvine market; easier for cash flow and more room for future appreciation.  Irvine housing price is a little skewed because of the sentiment of such demographic, so the rent vs own analysis never makes sense for Irvine.

On another thoughts, if Irvine drop by any amount due to the recessions, let's say 20 %, look to other communities surrounding cities to double that. I will take anyone wager on this. Why am I so foolish? Because I've seen the demographics and their balance sheets.  It is very strong. Anyone thinking they getting a bargain in the next crash for housing in Irvine is not understanding Irvine market. They may live somewhere else and hoping for this market to resemble where they are to catch a good deal. I am almost certain it a dead dream.

Precisely, to your points. Irvine cash flow for investors are always not good at all. That?s why you have much less retail investors and corporate investors get involve in local real estates in Irvine and buy up and bid up. Sure you have bidding war still today, but these are organic buyers, whom buy to live and not to speculate is very small % in comparison to the last mania.

When you have emotional buyers married to their house and make it their home, it is very difficult to let go. They will do whatever it takes to maintain it.

This cycle is not the 2008 cycles of liars loans and NINJA loans. Will some experience job loss? Sure. Every recessions will produce jobs cut and downsize. The will to keep it vs. walking away from a zero down payment and non performing assets with speculators in 2008 is not what we have now. Irvine will out perform other local socal real estate like it did during last down turn.

 

[sgip]

Greed is easy to point out in someone else, but hard to objectively quantify. It's not however one the "Big 10's" - coveting - a form of envy or bitterness over the success or possessions of others. When people see others with a measure of wealth, they bend towards the presumption that this wealth was unfairly gained. They project this is a form of greed, and want that wealth spent in a manner they feel would be more of a benefit to others instead of being hoarded.

Once someone is put in the shoes of the "greedy wealthy" it's human nature to do what to them is normal, but to the people of lesser means, an appearance of greed. That's the moment when coveting another's fortune begins.

Basic human nature.

That's why I don't care what Bren or Bezos do with their wealth. Life is too short to get worked up about this.

My .02c

 

[usctrojancpa]

this actually makes LL?s point. If I am an investor, when the recession comes and housing price correction comes, it is better to invest in non-Irvine market; easier for cash flow and more room for future appreciation.  Irvine housing price is a little skewed because of the sentiment of such demographic, so the rent vs own analysis never makes sense for Irvine.

On another thoughts, if Irvine drop by any amount due to the recessions, let's say 20 %, look to other communities surrounding cities to double that. I will take anyone wager on this. Why am I so foolish? Because I've seen the demographics and their balance sheets.  It is very strong. Anyone thinking they getting a bargain in the next crash for housing in Irvine is not understanding Irvine market. They may live somewhere else and hoping for this market to resemble where they are to catch a good deal. I am almost certain it a dead dream.

Precisely, to your points. Irvine cash flow for investors are always not good at all. That?s why you have much less retail investors and corporate investors get involve in local real estates in Irvine and buy up and bid up. Sure you have bidding war still today, but these are organic buyers, whom buy to live and not to speculate is very small % in comparison to the last mania.

When you have emotional buyers married to their house and make it their home, it is very difficult to let go. They will do whatever it takes to maintain it.

This cycle is not the 2008 cycles of liars loans and NINJA loans. Will some experience job loss? Sure. Every recessions will produce jobs cut and downsize. The will to keep it vs. walking away from a zero down payment and non performing assets with speculators in 2008 is not what we have now. Irvine will out perform other local socal real estate like it did during last down turn.

The strength of Irvine buyers over the past year has been stronger than I've seen before Covid so you've had some very strong buyers who bought with significant average down payment so they won't be scared off by minor price declines.

 

[irvinebullhousing]

Greed is easy to point out in someone else, but hard to objectively quantify. It's not however one the "Big 10's" - coveting - a form of envy or bitterness over the success or possessions of others. When people see others with a measure of wealth, they bend towards the presumption that this wealth was unfairly gained. They project this is a form of greed, and want that wealth spent in a manner they feel would be more of a benefit to others instead of being hoarded.

Once someone is put in the shoes of the "greedy wealthy" it's human nature to do what to them is normal, but to the people of lesser means, an appearance of greed. That's the moment when coveting another's fortune begins.

Basic human nature.

That's why I don't care what Bren or Bezos do with their wealth. Life is too short to get worked up about this.

My .02c

Amen! Brother.

 

[irvinebullhousing]

this actually makes LL?s point. If I am an investor, when the recession comes and housing price correction comes, it is better to invest in non-Irvine market; easier for cash flow and more room for future appreciation.  Irvine housing price is a little skewed because of the sentiment of such demographic, so the rent vs own analysis never makes sense for Irvine.

On another thoughts, if Irvine drop by any amount due to the recessions, let's say 20 %, look to other communities surrounding cities to double that. I will take anyone wager on this. Why am I so foolish? Because I've seen the demographics and their balance sheets.  It is very strong. Anyone thinking they getting a bargain in the next crash for housing in Irvine is not understanding Irvine market. They may live somewhere else and hoping for this market to resemble where they are to catch a good deal. I am almost certain it a dead dream.

Precisely, to your points. Irvine cash flow for investors are always not good at all. That?s why you have much less retail investors and corporate investors get involve in local real estates in Irvine and buy up and bid up. Sure you have bidding war still today, but these are organic buyers, whom buy to live and not to speculate is very small % in comparison to the last mania.

When you have emotional buyers married to their house and make it their home, it is very difficult to let go. They will do whatever it takes to maintain it.

This cycle is not the 2008 cycles of liars loans and NINJA loans. Will some experience job loss? Sure. Every recessions will produce jobs cut and downsize. The will to keep it vs. walking away from a zero down payment and non performing assets with speculators in 2008 is not what we have now. Irvine will out perform other local socal real estate like it did during last down turn.

The strength of Irvine buyers over the past year has been stronger than I've seen before Covid so you've had some very strong buyers who bought with significant average down payment so they won't be scared off by minor price declines.

Amen! Amen, brother.

 

[sleepy5136]

Greed is easy to point out in someone else, but hard to objectively quantify. It's not however one the "Big 10's" - coveting - a form of envy or bitterness over the success or possessions of others. When people see others with a measure of wealth, they bend towards the presumption that this wealth was unfairly gained. They project this is a form of greed, and want that wealth spent in a manner they feel would be more of a benefit to others instead of being hoarded.

Once someone is put in the shoes of the "greedy wealthy" it's human nature to do what to them is normal, but to the people of lesser means, an appearance of greed. That's the moment when coveting another's fortune begins.

Basic human nature.

That's why I don't care what Bren or Bezos do with their wealth. Life is too short to get worked up about this.

My .02c

I strongly disagree and I don?t think you understand my point at all. I have NEVER said Brens wealth was unfairly earned, nor did I mention how he should spend his wealth, and I have never said that he is hoarding his money. He can spend it all on his hookers and I don?t give a crap. The issue I have is how Bren is controlling the market AND taking royalties even when the land has already been sold to the builder. Why do I have an issue? Because the monopoly he has created impacts businesses and local residents in Irvine. Yeah, crazy I care about others and not only myself right?

If one owns land and sells it to a builder and adds additional clauses to the sale where you get to control the pricing AND get a royalty for each home from the builder after the land has been sold, that is when greed comes to the picture. I feel like you don?t understand what the main purpose of housing is and instead use phrases  ?his money, his rule? and how ?people of lesser means? view the wealthy as your arguments to justify this selfish and greedy act. The negative implications of this gets ignored and thrown under the rug. Shame on you.  Again, housing is to house people. That?s what housing is for. And I will bet money on it that you bought a house just for that reason didn?t you?

And if you were to crap on Amazon, I find that interesting. Let me ask you this. Have you ever seen Amazon control what sellers should be pricing their items for on their website? No you dont, they take a royalty fee when an item gets sold and that?s it. They don?t go to the degree as Bren to also control their pricing despite Amazon getting a cut off the sale price.

 

[sleepy5136]

Corporate Greed....pfffft... given the opportunity to do so, everyone on this board would do the exact same thing as Bren supposedly did. His money, his rules. Yes, his rules can cause havoc in values, but it's his to do with as he sees fit. Boo hoo if it's not for some theoretical greater good - something that is never a guaranteed result of any policy. I'm of the same opinion with Amazon, WalMart, and other greedy corporations. Their money, their rules. I choose not to shop with either company, but do I want them to bend the knee based on what other people think? Not really.

During the 1991-1994 crash, the master planned communities of RSM (Tony Moiso) and Foothill Ranch (William Lyon) had to re-sell their land to other developers at prices that were below their original cost. That was the market at the time. Both developers "lost" money, but gained it back and then some as the market rebounded in 1995-1999. None of this was driven by corporate altruism, but by savvy accountants, lawyers, and the unseen hand of market capitalism.  The same may happen in 2023-2024. Who knows? These actions, driven by circumstance, can rarely if ever be timed with any certainty. We'll have to wait and see, just like everyone else.

Well at least they worked for it. No handout please.  They have to pay employees and employees have to put food on the tables for their families. Greed...,? not really. They just do what they can, legally.

so monopolizing and controlling something after you have sold the goods to another person is not greed? you already made money from selling the land and now you want to collect royalties? how is that not greed? now we want to argue that royalties are needed to put food on the table for families? Again, housing is to house people. Don't know what you mean by handouts. No one ever said housing should be "free".

Sleepy we get it. You don?t live in TIC village, nor do you like Donald Bren.

But don?t correlate Orange County trends to the TIC.  I never said I like TIC, just said not to underestimate their value in times like this.

You will love TIC if you own in TIC village.
You will hate TIC if you don?t own in TIC village.

I would be concerned if I bought attached/detached condos for $700+ sq/ft in this market. Cost basis matters irrespective of location. When you bid homes to such a high price that in the event a slow down happens, these homes would be impacted the most regardless of location. Unless that condo has ocean views

 

[usctrojancpa]

Corporate Greed....pfffft... given the opportunity to do so, everyone on this board would do the exact same thing as Bren supposedly did. His money, his rules. Yes, his rules can cause havoc in values, but it's his to do with as he sees fit. Boo hoo if it's not for some theoretical greater good - something that is never a guaranteed result of any policy. I'm of the same opinion with Amazon, WalMart, and other greedy corporations. Their money, their rules. I choose not to shop with either company, but do I want them to bend the knee based on what other people think? Not really.

During the 1991-1994 crash, the master planned communities of RSM (Tony Moiso) and Foothill Ranch (William Lyon) had to re-sell their land to other developers at prices that were below their original cost. That was the market at the time. Both developers "lost" money, but gained it back and then some as the market rebounded in 1995-1999. None of this was driven by corporate altruism, but by savvy accountants, lawyers, and the unseen hand of market capitalism.  The same may happen in 2023-2024. Who knows? These actions, driven by circumstance, can rarely if ever be timed with any certainty. We'll have to wait and see, just like everyone else.

Well at least they worked for it. No handout please.  They have to pay employees and employees have to put food on the tables for their families. Greed...,? not really. They just do what they can, legally.

so monopolizing and controlling something after you have sold the goods to another person is not greed? you already made money from selling the land and now you want to collect royalties? how is that not greed? now we want to argue that royalties are needed to put food on the table for families? Again, housing is to house people. Don't know what you mean by handouts. No one ever said housing should be "free".

Sleepy we get it. You don?t live in TIC village, nor do you like Donald Bren.

But don?t correlate Orange County trends to the TIC.  I never said I like TIC, just said not to underestimate their value in times like this.

You will love TIC if you own in TIC village.
You will hate TIC if you don?t own in TIC village.

I would be concerned if I bought attached/detached condos for $700+ sq/ft in this market. Cost basis matters irrespective of location. When you bid homes to such a high price that in the event a slow down happens, these homes would be impacted the most regardless of location. Unless that condo has ocean views

Huge difference between an attached condo and a detached condo, a attached condo will decline in price significantly more than a detached condo in a down trending market. 

 

[Liar Loan]

Greed is easy to point out in someone else, but hard to objectively quantify. It's not however one the "Big 10's" - coveting - a form of envy or bitterness over the success or possessions of others. When people see others with a measure of wealth, they bend towards the presumption that this wealth was unfairly gained. They project this is a form of greed, and want that wealth spent in a manner they feel would be more of a benefit to others instead of being hoarded.

Once someone is put in the shoes of the "greedy wealthy" it's human nature to do what to them is normal, but to the people of lesser means, an appearance of greed. That's the moment when coveting another's fortune begins.

Basic human nature.

That's why I don't care what Bren or Bezos do with their wealth. Life is too short to get worked up about this.

My .02c

Behind every great fortune there is a crime. -Balzac

 

[Liar Loan]

Anybody else notice the disappearance of Hot Homes on Redfin?  I don't think the feature itself has disappeared, it's just that homes aren't getting enough views for the algorithm to predict they will go under contract in under two weeks.  So there's some sobering evidence that online traffic is way down.

Anecdotally, the house two doors down from my mine had a huge drop off in open house traffic from the prior week.  It was shockingly dead.  Once all the neighborhood lookie-loo's finished checking the place out in week #1, there just wasn't much interest from real buyers.