Thoughts + Lease Market

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ocorbust_IHB

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<p>This is an awesome site. Bumped into it from a google search over the weekend and have been hooked ever since. Great source of information, laughs, opinions, and analysis. I was already on the sidelines in terms of purchasing a home, but reading this site convinced me even more I'm making the right decision. </p>

<p>I'm not as bearish as some folks here though. Here's why:</p>

<p>1. Irvine demand will not fall-off dramatically. We all know this is a great, diverse place to live with wonderful schools. Demand will exist at various levels of the market correction from foreign investment (asians), organic OC'ers starting a family and wanting to be in Irvine, job relocators, etc. Each has a different entry price point! What may be acceptable for certain folks (2004 levels) versus a 10-20% drop from current would be sufficient for people to start buying again. Everyone's timeline and circumstance is different. What's for sure is that Irvine will always be in demand. Yes, the other side of the equation is supply. TIC will simply pull back and sit on new development...</p>

<p>For my own selfish reasons, wondering why the lease market is not stronger in Irvine given the current inventory of new homes and failed flip attempts. I would think alll of the WTF, LOL, OMG, and Knife-Catchers would suck it up and at least post their properties for lease/rental. This way folks like myself can pick up some decent house rentals while on the sidelines. </p>

<p>C'mon you realtors - convince your Quail Hill, Woodbury, Northpark clients to stop the bleeding and lease their homes to me...</p>
 
Ocorbust....welcome and hope you have fun on the site. I am actually in the process of looking for a new place and have noticed an uptick of Irvine "rentals" in some of those neighborhoods. However many of them are still sipping on the Kool-Aid.
 
Welcome,





I suspect you will see many more rentals come on the market when the summer is over and sellers have given up. A house is much easier to sell if you don't have to worry about occupants, so the rental inventory dried up going into the selling season.
 
"What's for sure is that Irvine will always be in demand"



I think that depends on how you would define “demand”. If you define demand as the DESIRE to purchase a product, what you say would be true, Irvine or a place like it is in great demand. That would be like saying a Ferrari is in more demand than a Honda Civic, because everyone wants it more. But we know that this isn’t true, because very few can afford a Ferrari and therefore is only demanded by those that can afford it, which happens to be a fraction of a percent of the population. If the definition, however, is the willingness for someone to purchase a product at a given price level, which is the more technical business definition, then no, Irvine is not in great demand. In fact, housing in SoCal is not in great demand. As much as people want to live in Irvine (not demand, desire), they are no longer willing to pay the price level that it is currently at, which equates to… lack of demand.
 
<p>How timely.... I just spent about 15-20 minutes looking over local rentals on Craigslist. The market looks to be softening, even beyond what I saw in December. I can get into a recently-built 2/2 for some $200 under the Spring asking rate, and there are more to choose from. IAC looks to be coming down a bit too. </p>
 
<p>I love the population predictors and especially the ones who claim that the foreigners love to be here. ocorbust welcome to the forums. I don't want to appear as crass but I do have dispell the high demand lots of foreigners want to be here myth. From the <a href="http://www.scag.ca.gov/publications/pdf/2006/SOTR06/SOTR06_Population.pdf">SCAG report</a> which is very bullish but their predictions have been very overestimated:</p>



<p align="left">Since 1990, annual population growth in the region has varied significantly</p>

<p align="left">(Figure 2).</p>

<p align="left">(births over deaths) of approximately 164,000 per year, total population growth</p>

<p align="left">in the region has been reduced from about 350,000 (over 2 percent growth rate)</p>

<p align="left">to about 222,000 (1.2 percent) per year. Specifically, between 2001 and 2005,</p>

<p align="left">the net foreign immigration into the region dropped from about 157,000</p>

<p align="left">to 115,000. This is consistent with the trend that recent immigrants are</p>

<p align="left">becoming a little more dispersed throughout the nation and are increasingly</p>

<p align="left">less concentrated in historical gateway regions particularly Southern</p>

<p align="left">California. During the same period, domestic migration also decreased from</p>

<p align="left">about 32,000 net in-migration in 2001 to 24,000 net outmigation in 2005,</p>

<p align="left">i.e. there were 24,000 more people moving out of Southern California to the</p>

<p>rest of the nation in 2005 than vice versa.</p>

1 Since 2001, despite a generally stable natural increase
 
<p>Although, I don't have the numbers. But I will have to agree with Ocorbust with regards to "demand for Irvine." I had attended college in Irvine back in the mid 80's. And since then I have seen the city grown and expanded. Even though, the housing prices in Irvine are higher as compare to most other cities in the county. People still buy in Irvine. That might not sound logical. But could it be some buyers don't consider the "numbers" when buying but rather do it out of emotion? Who knows.</p>
 
<p>awgee - "Why do folks think that foreign money is more stupid than domestic money?"</p>

<p>I don't think foreign money is more "stupid" than domestic money, but I do think foreign money continues to be a growing influence in all our markets. Asia, Mexico, etc - their economies are booming and their money is finding its way into our country. It's a theme I believe in, but don't get me wrong, they won't be able to stem our awful housing market very much, at least not directly.</p>
 
check out the lease at woodbury...you can lease a 3400 sq ft SFH between 4000 to 5000 a month. That is not bad...One of them just recently leased out for 4300 / month.
 
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