What the bubble?!?
- Thread starter irvinehomeowner
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Redfin doesn't show new home inventory / new home sales. I wouldn't be surprised if over 485 new homes sold in the last 3 months between Stonegate, Cypress Village, Pavilion Park, Portola Springs and even the last neighborhood in Woodbury.
The main reason why Irvine home prices will be relatively stable over the next ten years is the huge amount of new construction. Builders can build fast or build slow and match supply to demand which will keep home prices rising at a slow steady pace.
I do think it will be an interesting spring season. Will the spring bring out a rush of buyers or a rush of sellers?
As USCTrojan said, we are still in a weak seller's market. Attractive homes that are priced at a slight discount are flying into escrow while WTF priced homes or homes that are undesirable are not moving. Inventory isn't as high as it seems because it includes houses like this one that are not really for sale IMO:http://www.redfin.com/CA/Irvine/71-Sacred-Path-92618/home/51685202
but, but, but its a "Executive 3-story upscale single family..."
By that measure, my sense from looking at some of the TIC and PP tracts, is that prices are pretty steady or increasing slightly (maybe mid single digit annual rate?).
Some tracts are struggling, some going great, but for the most part, phase releases sell out in ~4-6 weeks and prices go up modestly. Not a whole lot of quick move-ins or major incentives in most tracts. And no new home glut yet even with all the new construction
LOL, price drop. Useless something freakish happens to the global order of things, aka, someone starts pulling triggers in the Crimea, I'll be surprised to not see double digit increases. Again, there is no inventory.
I don't foresee any inventory coming online because everyone that owns the inventory can't see where they'd move to. In many aspects, it's like the job market over last year. It just fundamentally lacks fluidity. You won't get sellers until sellers can see there's a place to go to. Right now there's no place to go.
Price the home at market and it's sold in a week. USC typo'd when he said 'weak' sellers market, it's not weak, it's week. That's actually an incredible sellers strength position that you can sell the biggest purchase people will make in less time than most of them take to decide on the next cell phone.
That's what I meant by the fundamental problem of no starter market in Irvine. There's no place for new buyers to go, there's no move up market of small gain to carry forward, a purchase is quickly outstriped by price increases, but the curve is so steep that your gains on the low end are simply outpaced by the gains on the high end, that you actually fall further behind. You bought a $400K place and gained 15%, the $600K you wanted to move up to gained 20% if not 25%. So you can carry a $100K towards the down, but the house you want went up $120K or $150K and you're actually $50K further away.
Basic math.
Today, there are 4 buyers looking for a particular type of house. luckily, one will come on market this month.
next month, one more will come on market. In that same period, four more buyers will enter the market.
the next month, the cycle will repeat.
And demand isn't tepid, Irvine is growing by 3000-6000 households a year. That's 250- 500 new households a month.
Where they going to live?
You can't buy what's not for sale.
Are you not factoring all the new apartments that have been built?
And you still haven't clarified what you think "starter" means. A starter home in Irvine is going to be different than a starter home in Santa Ana.
And are you saying that it's not a bubble now because so many people want to live in Irvine today compared to back in 2003-2006?
Supply may be lower now (although it seems there is more new home stock and available apartments now than back during the bubble), but I'm not sure how you are gauging higher demand than before.
A starter home is also a function of income and demographics.
There are many people buying their first home in Irvine... and some are not just $500k or 3brs. Whether that down comes from savings or FCB gifting, there is a starter market in Irvine, it's just priced higher than many other OC cities.
Using your logic, there would be no starter market in any expensive city, like Newport or cities in Northern California.
Just my opinion, but "No starter market" in Irvine sounds like "ARM tsunami" to me.
Yes you can.
"When Mark Zuckerberg bought his pied-?-terre in San Francisco?s Noe Valley in 2012, he had a representative knock on the door of the home he liked ? it wasn?t even for sale ? and then offered the owners all cash at double the value of the property."
http://bits.blogs.nytimes.com/2014/03/02/the-housing-market-with-nowhere-to-go-but-up/?_php=true&_type=blogs&_r=0
http://sfist.com/2012/10/16/mark_zuckerberg_buys_pied_a_terre_i.php
paperboyNC
New member
nosuchreality said:
Redfin doesn't show new home inventory / new home sales. I wouldn't be surprised if over 485 new homes sold in the last 3 months between Stonegate, Cypress Village, Pavilion Park, Portola Springs and even the last neighborhood in Woodbury.
The main reason why Irvine home prices will be relatively stable over the next ten years is the huge amount of new construction. Builders can build fast or build slow and match supply to demand which will keep home prices rising at a slow steady pace.
I do think it will be an interesting spring season. Will the spring bring out a rush of buyers or a rush of sellers?
As USCTrojan said, we are still in a weak seller's market. Attractive homes that are priced at a slight discount are flying into escrow while WTF priced homes or homes that are undesirable are not moving. Inventory isn't as high as it seems because it includes houses like this one that are not really for sale IMO:http://www.redfin.com/CA/Irvine/71-Sacred-Path-92618/home/51685202
quattroporte
New member
paperboyNC said:
but, but, but its a "Executive 3-story upscale single family..."
Good point on new construction sales > resale right now. I think you can get a better sense of the market right now just by following what is going on with pricing and the pace of phase releases in the various new home tracts. It also gives you a somewhat apples-to-apples comp going phase to phase.paperboyNC said:
By that measure, my sense from looking at some of the TIC and PP tracts, is that prices are pretty steady or increasing slightly (maybe mid single digit annual rate?).
Some tracts are struggling, some going great, but for the most part, phase releases sell out in ~4-6 weeks and prices go up modestly. Not a whole lot of quick move-ins or major incentives in most tracts. And no new home glut yet even with all the new construction
usctrojancpa
Well-known member
When I say mirage, I was talking about to the general public like you and me. Of course there were a lot of foreclosures but the majority of them got sold to big boy investors with deep pockets as bulk sales.davenlei said:
usctrojancpa
Well-known member
Bingo, there's a reason why I was able to get my Las Ventanas listing into escrow within one week and that's because it was priced right. Besides, it's difficult to pull data on new home sales but if you start adding in how many new homes have been sold in the past year you'll begin to realize that total sales (new and resale) have been flat to increasing. Unless something chaotic happens, we will not get anywhere near a 5%+ price drop.paperboyNC said:
nosuchreality
Well-known member
USCTrojanCPA said:
LOL, price drop. Useless something freakish happens to the global order of things, aka, someone starts pulling triggers in the Crimea, I'll be surprised to not see double digit increases. Again, there is no inventory.
I don't foresee any inventory coming online because everyone that owns the inventory can't see where they'd move to. In many aspects, it's like the job market over last year. It just fundamentally lacks fluidity. You won't get sellers until sellers can see there's a place to go to. Right now there's no place to go.
Price the home at market and it's sold in a week. USC typo'd when he said 'weak' sellers market, it's not weak, it's week. That's actually an incredible sellers strength position that you can sell the biggest purchase people will make in less time than most of them take to decide on the next cell phone.
That's what I meant by the fundamental problem of no starter market in Irvine. There's no place for new buyers to go, there's no move up market of small gain to carry forward, a purchase is quickly outstriped by price increases, but the curve is so steep that your gains on the low end are simply outpaced by the gains on the high end, that you actually fall further behind. You bought a $400K place and gained 15%, the $600K you wanted to move up to gained 20% if not 25%. So you can carry a $100K towards the down, but the house you want went up $120K or $150K and you're actually $50K further away.
nosuchreality
Well-known member
OpenSky said:
Basic math.
Today, there are 4 buyers looking for a particular type of house. luckily, one will come on market this month.
next month, one more will come on market. In that same period, four more buyers will enter the market.
the next month, the cycle will repeat.
And demand isn't tepid, Irvine is growing by 3000-6000 households a year. That's 250- 500 new households a month.
Where they going to live?
You can't buy what's not for sale.
nosuchreality
Well-known member
Irvine has increased by 15000 households since the bubble. Has anywhere near that many been built?
Orchard hills is a good example. It 4500 unit including all the apartment and LIH That's not enough to cover one year of growth. And it will take how long to build out the entire plan? Pp and the other are same way
Most importantly. They aren't what the buyer want. They are wht they settle for because they can't find or can't afford what they want
Once they settle they're priced in forever. Without massive income increases they'll never catch up to the higher priced place they want. The low interet rates will just exacerbate that problem going forward.
In the short term. It supply and demand and supply is much less than demand even though demand really isn't that strong. Kind of like twinkies when hostess bk'd. $50 a box
As every investor knows the market can sty any way it want far longer than you can hold a position.
Please excuse iPad typos
Orchard hills is a good example. It 4500 unit including all the apartment and LIH That's not enough to cover one year of growth. And it will take how long to build out the entire plan? Pp and the other are same way
Most importantly. They aren't what the buyer want. They are wht they settle for because they can't find or can't afford what they want
Once they settle they're priced in forever. Without massive income increases they'll never catch up to the higher priced place they want. The low interet rates will just exacerbate that problem going forward.
In the short term. It supply and demand and supply is much less than demand even though demand really isn't that strong. Kind of like twinkies when hostess bk'd. $50 a box
As every investor knows the market can sty any way it want far longer than you can hold a position.
Please excuse iPad typos
irvinehomeowner
Well-known member
If true, where did they all go?nosuchreality said:
Are you not factoring all the new apartments that have been built?
And you still haven't clarified what you think "starter" means. A starter home in Irvine is going to be different than a starter home in Santa Ana.
And are you saying that it's not a bubble now because so many people want to live in Irvine today compared to back in 2003-2006?
Supply may be lower now (although it seems there is more new home stock and available apartments now than back during the bubble), but I'm not sure how you are gauging higher demand than before.
nosuchreality
Well-known member
A starter home is a function of price not layout although glorified apartments aren't starter homes
And at $500k you need to bring a $100k to the table to get a Conforming loan. The income to swing the payment isnt that hard to do. The capital is for a starter
And at $500k you need to bring a $100k to the table to get a Conforming loan. The income to swing the payment isnt that hard to do. The capital is for a starter
irvinehomeowner
Well-known member
So why did you frame your starter market post with a 3br?nosuchreality said:
A starter home is also a function of income and demographics.
There are many people buying their first home in Irvine... and some are not just $500k or 3brs. Whether that down comes from savings or FCB gifting, there is a starter market in Irvine, it's just priced higher than many other OC cities.
Using your logic, there would be no starter market in any expensive city, like Newport or cities in Northern California.
Just my opinion, but "No starter market" in Irvine sounds like "ARM tsunami" to me.
nosuchreality
Well-known member
Manhattan doesn't have a starter market either. It's a very different kind of market compare to the article about new buyers not applying
Irvine is still suburban and a 3 bd represent a basic starter suburban home. A loft or one bd coop isn't a starter. Is a fulfillment for a different clientele than the original piece about loans
It's a different starter, and many cases not a starter but jut their home of choice for a very different buyer thn e one highlighted
Fundamentally I think this a problem long term, as in 15-20 years. I'm not sure how many people moving to irvine are looking for urban living
Irvine is still suburban and a 3 bd represent a basic starter suburban home. A loft or one bd coop isn't a starter. Is a fulfillment for a different clientele than the original piece about loans
It's a different starter, and many cases not a starter but jut their home of choice for a very different buyer thn e one highlighted
Fundamentally I think this a problem long term, as in 15-20 years. I'm not sure how many people moving to irvine are looking for urban living
quattroporte
New member
nosuchreality said:
Yes you can.
"When Mark Zuckerberg bought his pied-?-terre in San Francisco?s Noe Valley in 2012, he had a representative knock on the door of the home he liked ? it wasn?t even for sale ? and then offered the owners all cash at double the value of the property."
http://bits.blogs.nytimes.com/2014/03/02/the-housing-market-with-nowhere-to-go-but-up/?_php=true&_type=blogs&_r=0
http://sfist.com/2012/10/16/mark_zuckerberg_buys_pied_a_terre_i.php