When do you plan on buying and where in Irvine?

NEW -> Contingent Buyer Assistance Program
"....... it's nowhere near rental parity, and, apparently, will never be so. Looks like it will always be cheaper to rent than to own in Irvine, at least for several decades......"



I tend to agree with this more and more. Exceptions: Maybe you can find a 30 year-old house that needs a lot of TLC in an "undesirable" neigborhood in Irvine. Perhaps condos/townhouses/SFH with a small yard.
 
If you had listened to the earlier conference call, you would understand that there are no undesirable neighborhoods in Irvine. Irvine may be expensive, but it holds its value.
 
[quote author="bkshopr" date=1248755951][quote author="cran" date=1248755534][quote author="organicpop" date=1248577487]Also, is $250 a sq ft still a reality or not? If so, what's your educated guess as to when. </blockquote>


That's what I am waiting too. I am looking for a SFR in Northwood or Northwood II and I hope they will go lower a little lower than $250 psf in 12 to 18 months. It will be an interesting winter to watch.</blockquote>


Camellia in Northwood II and Carlyle in Northwood Pointe. If you have the budget then Mahogany and Rosegate.</blockquote>


Thanks for all your insight BK. But just to clarify, does this mean you expect these models to drop to about $250/sf? This house range should fall to about $1-1.2M in your estimation?
 
[quote author="Look4house" date=1248778854]"....... it's nowhere near rental parity, and, apparently, will never be so. Looks like it will always be<strong> cheaper to rent than to own in Irvine, at least for several decades</strong>......"



I tend to agree with this more and more. Exceptions: Maybe you can find a 30 year-old house that needs a lot of TLC in an "undesirable" neigborhood in Irvine. Perhaps condos/townhouses/SFH with a small yard.</blockquote>


What the heck?! I have to wait 20 years for home ownership to be near rental parity? With a 30 year fix, I'll be dead before I own the house outright? Oh, forget it. Hahaha!
 
[quote author="reason" date=1248783220][quote author="Look4house" date=1248778854]"....... it's nowhere near rental parity, and, apparently, will never be so. Looks like it will always be<strong> cheaper to rent than to own in Irvine, at least for several decades</strong>......"



I tend to agree with this more and more. Exceptions: Maybe you can find a 30 year-old house that needs a lot of TLC in an "undesirable" neigborhood in Irvine. Perhaps condos/townhouses/SFH with a small yard.</blockquote>


What the heck?! I have to wait 20 years for home ownership to be near rental parity? With a 30 year fix, I'll be dead before I own the house outright? Oh, forget it. Hahaha!</blockquote>


That's my guess. Now, maybe you can buy low now and sell high later (much later). But your monthly payment will be significantly higher than rent, and there won't be another bubble to really boost prices for quite some time.



Plus, there is the whole "live in a place for 30 years and then not have a monthly payment" bit. But if you have to overpay by so much for that thirty years...
 
Remember that both buyers and sellers establish price.



Getting "antsy" about prices means as a buyer you're no longer controlling the price (you pay). You're already giving in.



There stills seems to be this prevalent attitude where sellers still believe they are "in control" (since they're obviously not dropping the prices, no matter how little sales volume there might be) while buyers always seems to get antsy to give in. This built-in bias does tend to forestall price declines, but only to a point, until some marginal seller somewhere needs to anchor everyone else to a new price.
 
You make is sound as if one person can control the prices of homes. It's like saying you can control the price of a stock with stock manipulation. Just as with stocks, unless you have a billion lying around, I don't think you're going to be manipulating anything. The prices in Irvine have been falling, more rapidly about 6 months ago and currently slowing down. There's just too much demand, and any further decreases is going to increase the demand even more so. Currently, there is a 70% ratio or homes in escrow compared to homes available for sale. That's a strong number alone, but keep the momentum in mind. 70% is up from 31.6% since the end of March. Irvine is following the same path as Aliso Viejo and Costa Mesa, which are at 187% and 133.6%, respectively. Aliso Viejo and Costa Mesa are already off their bottoms. The median home was selling for I believe $350,000 in Aliso Viejo about 4-6 months ago and now it is up to $400,000 and remaining constant. Irvine may not reach the same activity level as Aliso viejo and Costa Mesa, primarily due to the difference in price ranges and one is mainly condos, but Irvine is following the same path. Most people get so upset when they hear what I have to say, but it's true! Look at the charts:http://occoastalnews.com/?p=294.But, when I say now is the time to buy or start looking, I don't mean any piece of property you can get your hands on. BUT! There are deals out there that difference themselves from the rest of the market. And those are the ones that sell. We have all seen the properties listed recently that sell in 1 or 2 days. My advice summed up: Be patient until the deal presents itself and then pounce on it, because it won't last. And it's easy to find the deals, just have an agent that really knows the area. And I'm not talking about the housewife turned realtor that knows every neighborhood and nail salon. I'm talking about someone that analyzes the facts. I would say that this is the market Irvine is going to be for the next 3-6 months, and then we will see a slight boost in prices.



As for the NODs... when reports like that come out it sounds like the inventory is going to triple overnight, but have you ever talked to someone that has gone through the process recently. People have been living in distrssed properties for up to a year, rent free, before they finally come on the market. It takes FOOOOREVER and when they start trickling in the market, like they have been, the high level of demand is going to gobble them up. I'm not going to say now is the time to buy, I'm saying that now is the time to make good, educated purchases.



I could also go into a huge, long speech about interest rates and give a cost analysis/break-down, but I won't. This turned out a lot longer than I planned. Damn my rants.









Follow my blog for up-to-date analysis:http://occoastalnews.com
 
Robert, glad you found us. Hopefully you are not just trolling for business, and you plan on contributing your market insights on a regular basis. But... like most agents, you rant on and on, then disappear, thinking we are all nuts. While we are nutty, we have been right about the market. I can dig up some old posts from Realtors that thought we were crazy, and it just turns out we were right and not just nutty.



Now I tend to be blunt, and since I should treat everyone equally... Dude... you really need some work on your website The title header looks like a color blind 3 year old made that. You are a professional, get a professional website. How can people take you seriously when SoCal78's oldest boy could create a better site, don't know his exact age, but his crayon work is better.



BTW, we do have quite a few agents here on IHB with outstanding market knowledge. <a href="http://www.irvinehousingblog.com/forums/member/6/">IrvineRealtor</a> is the best example, with his 3251 posts and 1114 thank yous he has received from the members here. So I recommend doing some searches here to find out who is who, and really how much they know. You never know, you might learn a few things yourself.
 
[quote author="RobertLarsen" date=1249458466]The prices in Irvine have been falling, more rapidly about 6 months ago and currently slowing down. There's just too much demand, and any further decreases is going to increase the demand even more so. Currently, there is a 70% ratio or homes in escrow compared to homes available for sale. That's a strong number alone, but keep the momentum in mind. 70% is up from 31.6% since the end of March. Irvine is following the same path as Aliso Viejo and Costa Mesa, which are at 187% and 133.6%, respectively.

[...]

Irvine may not reach the same activity level as Aliso viejo and Costa Mesa, primarily due to the difference in price ranges and one is mainly condos, but Irvine is following the same path.

[...]

I would say that this is the market Irvine is going to be for the next 3-6 months, and then we will see a slight boost in prices.

</blockquote>
So are you calling bottom in Irvine?



Or after that "slight boost"... you think prices will drop again?



Just trying to be clear because we need this post for prosperity.
 
Don't worry, I'm here to stay. It's hard not to with such charisma as yours. Plus, I'm a stubborn realtor and before that I was a stubborn financial analyst that trolled this site for awhile, but didn't provide any contributions. I'm not a typical realtor, just as I'm sure you're not a typical... whatever it is you do. I don't form my opinions off of gut feeling or sales. I collect and analyze the data that I have available using various ratios and spreads, and make educated projections from there. I can tell you're very protective of your forum...



"While we are nutty, we have been right about the market." While I'm not sure exactly sure who you are referring to as "we," but it is a rather bold statement to say that you have been "right." The majority of what I read comes from media groupies that absorb what they hear, from the 10 o'clock news and the newspaper, word for word. In reality, the media twists and contorts selected bits of information any which way they want. 3-6 months ago all I read were "educated predictions" that we had only seen the tip of the iceburg, and the real estate collapse was just about to get ugly. Well, I could be wrong, but I don't think that happened. Someone was wrong, but no one will ever admit to that. Yes, I'm sure a few people predicted this before the downturn started in 2005, and I'm sure even more supported the theory once it began. In fact, I've been saying prices will continue to fall for over a year now. But, now I'm making my predictions on the recovery. Not for Orange County as a whole, but on a city-by-city basis. BTW, I definitely do not think I know everything. I'm not sure where you even came up with that. I definitely believe that there are dozens of individuals on this forum who I can learn from, and hundreds more who I would just like to have conversations with. Why do you think I joined this network? I'm here to have some good conversations with interesting people in the forum. I'm not here to read that spiffy anlysis section, talk about the design of a 5 year old. Time to throw out paint and at least step up to photoshop. Anyways, enough of this rant. Try to get so know someone before making such ridiculous statements graphix.



To sum up what I was saying about Irvine is that I expect the bottom to be here, and if not now, within the next 3-4 months. The beginning of 2010 will bring a surprising level of stability to Irvine real estate and areas alike. A good level of resistance that I would like to first see passed is the 90% Activity Ratio (In escrow vs. Actives), currently at 70.1%, especially with the winter/holiday months quickly approaching. As it approaches 90-100% it will be enough demand to absorb the distressed properties, as well as, the excess properties currently on the market. As for the slight pop in value after hitting the bottom, I don't expect it to be quite as evident as it was in Aliso Viejo and Costa Mesa, but I expect homes to level out about 3-5% higher in the beginning of the year than they were selling at the bottom. Aliso Viejo and Costa Mesa followed a V-shaped trend, which allowed for a significant boost, while Irvine, due to the difference in prices, is following a U-shaped trend.



It's just my opinion, all other opinions are more than welcome. There are about a million aspects that come into play here and obviously I'm not an expert in all of them.
 
[quote author="RobertLarsen" date=1249481203]Don't worry, I'm here to stay. It's hard not to with such charisma as yours. Plus, I'm a stubborn realtor and before that I was a stubborn financial analyst that trolled this site for awhile, but didn't provide any contributions. I'm not a typical realtor, just as I'm sure you're not a typical... whatever it is you do. I don't form my opinions off of gut feeling or sales. I collect and analyze the data that I have available using various ratios and spreads, and make educated projections from there. I can tell you're very protective of your forum...</blockquote>


I too, collect the data and analyze it. By doing so is how I make money, and lets leave it at that as to what I do.



<blockquote>"While we are nutty, we have been right about the market." While I'm not sure exactly sure who you are referring to as "we," but it is a rather bold statement to say that you have been "right." The majority of what I read comes from media groupies that absorb what they hear, from the 10 o'clock news and the newspaper, word for word. In reality, the media twists and contorts selected bits of information any which way they want. 3-6 months ago all I read were "educated predictions" that we had only seen the tip of the iceburg, and the real estate collapse was just about to get ugly. Well, I could be wrong, but I don't think that happened. Someone was wrong, but no one will ever admit to that. Yes, I'm sure a few people predicted this before the downturn started in 2005, and I'm sure even more supported the theory once it began. In fact, I've been saying prices will continue to fall for over a year now. But, now I'm making my predictions on the recovery. Not for Orange County as a whole, but on a city-by-city basis. BTW, I definitely do not think I know everything. I'm not sure where you even came up with that. I definitely believe that there are dozens of individuals on this forum who I can learn from, and hundreds more who I would just like to have conversations with. Why do you think I joined this network? I'm here to have some good conversations with interesting people in the forum.</blockquote>


Glad to hear you are here for the interesting conversations, and it already looks like you will stick around for some of the more interesting ones.



When I say people who have been right... I mean Irvinerenter, awgee, morekaos, no_such_reality, freedomCM, myself, and several others that have provided factual info to back up their premise. None of whom get their info from the 10 o'clock news, and in fact get their info from historical data, current data, alternative sources like Calculated Risk, The Big Picture, etc., we have access to MBS pools, foreclosures, sales data, and many other analytical data points. The only reason we were ever wrong was government meddling. And back when we first started predicting things we were not pessimistic enough, so it is still as bad as we predicted if not worse. See the foreclosures will rise 50% in the next six months thread, because they did, and exceeded that number.



Glad you don't think you know everything, because neither do I. But, I do know more than the average bear.



<blockquote>I'm not here to read that spiffy anlysis section, talk about the design of a 5 year old. Time to throw out paint and at least step up to photoshop. Anyways, enough of this rant. <strong>Try to get so know someone before making such ridiculous statements graphix.</strong></blockquote>


You really should read the analysis section, it would help you understand the basic premise here. You also should read the posts of mine about foreclosures too. Information is worth more than anything.



At least spell my screen name right, and try to not make a typo that makes your sentence incoherent. I make mistakes too, but I have about 4000 times as many posts as you, and we... all of IHB... are highly critical of Realtors who make typos or misspell words.



And seriously... your website blows. For the love of gawd... get a professional to clean it up. At least shadow white text behind the blue text of the title header so that you can actually read it. I'm not being a dick about this... if you are expected to be thought of as a professional... then please, please spend the money to look like one. I haven't done design in years, but I could fix your site in a couple of hours, but you don't want to pay my rates... it's cheaper to pay a real designer.



<blockquote>To sum up what I was saying about Irvine is that I expect the bottom to be here, and if not now, within the next 3-4 months. The beginning of 2010 will bring a surprising level of stability to Irvine real estate and areas alike. A good level of resistance that I would like to first see passed is the 90% Activity Ratio (In escrow vs. Actives), currently at 70.1%, especially with the winter/holiday months quickly approaching. <strong>As it approaches 90-100% it will be enough demand to absorb the distressed properties, as well as, the excess properties currently on the market.</strong> As for the slight pop in value after hitting the bottom, I don't expect it to be quite as evident as it was in Aliso Viejo and Costa Mesa, but I expect homes to level out about 3-5% higher in the beginning of the year than they were selling at the bottom. Aliso Viejo and Costa Mesa followed a V-shaped trend, which allowed for a significant boost, while Irvine, due to the difference in prices, is following a U-shaped trend.



It's just my opinion, all other opinions are more than welcome. There are about a million aspects that come into play here and obviously I'm not an expert in all of them.</blockquote>


LOL! You have no idea what the foreclosure backlog looks like... do you? Add in future organic sales... and we are looking at double digit months of inventory. Here is my prediction... Q3 and Q4 will be somewhat stable but more volatile than Q1 and Q2, then in Q1 of 10 it will start to crack, and the backlog of foreclosures will really hit in Q2 10. Then the real capitulation begins. Of course this is all my opinion, that is backed up by the foreclosure data that I know very well, as well as some inside info from institutions, and a little history repeating itself again too.



I really do hope you stick around, I like you already, but if you really are a long time lurker, then it doesn't seem like you really know me... or who "we" are when I say "we". I think you might want to brush up on the forums a bit, and maybe just add a few points here and there as needed. No need to go on long rants, when you can post short points then go on a long rant linking back to those short points. You do know how to link things... right? Or did you miss that sticky thread?
 
There is no bottom, in Irvine, Costa Mesa, or anyplace else in So Cal. There are a few dead cat bounces, but after the current slew of knifecatchers buy, there will be another wave of decreasing prices, this wave larger than the last.
 
[quote author="RobertLarsen" date=1249481203]Don't worry, I'm here to stay. It's hard not to with such charisma as yours. Plus, I'm a stubborn realtor and before that I was a stubborn financial analyst that trolled this site for awhile, but didn't provide any contributions. I'm not a typical realtor, just as I'm sure you're not a typical... whatever it is you do. I don't form my opinions off of gut feeling or sales. I collect and analyze the data that I have available using various ratios and spreads, and make educated projections from there. I can tell you're very protective of your forum...



"While we are nutty, we have been right about the market." While I'm not sure exactly sure who you are referring to as "we," but it is a rather bold statement to say that you have been "right." The majority of what I read comes from media groupies that absorb what they hear, from the 10 o'clock news and the newspaper, word for word. In reality, the media twists and contorts selected bits of information any which way they want. 3-6 months ago all I read were "educated predictions" that we had only seen the tip of the iceburg, and the real estate collapse was just about to get ugly. Well, I could be wrong, but I don't think that happened. Someone was wrong, but no one will ever admit to that. Yes, I'm sure a few people predicted this before the downturn started in 2005, and I'm sure even more supported the theory once it began. In fact, I've been saying prices will continue to fall for over a year now. But, now I'm making my predictions on the recovery. Not for Orange County as a whole, but on a city-by-city basis. BTW, I definitely do not think I know everything. I'm not sure where you even came up with that. I definitely believe that there are dozens of individuals on this forum who I can learn from, and hundreds more who I would just like to have conversations with. Why do you think I joined this network? I'm here to have some good conversations with interesting people in the forum. I'm not here to read that spiffy anlysis section, talk about the design of a 5 year old. Time to throw out paint and at least step up to photoshop. Anyways, enough of this rant. Try to get so know someone before making such ridiculous statements graphix.



To sum up what I was saying about Irvine is that I expect the bottom to be here, and if not now, within the next 3-4 months. The beginning of 2010 will bring a surprising level of stability to Irvine real estate and areas alike. A good level of resistance that I would like to first see passed is the 90% Activity Ratio (In escrow vs. Actives), currently at 70.1%, especially with the winter/holiday months quickly approaching. As it approaches 90-100% it will be enough demand to absorb the distressed properties, as well as, the excess properties currently on the market. As for the slight pop in value after hitting the bottom, I don't expect it to be quite as evident as it was in Aliso Viejo and Costa Mesa, but I expect homes to level out about 3-5% higher in the beginning of the year than they were selling at the bottom. Aliso Viejo and Costa Mesa followed a V-shaped trend, which allowed for a significant boost, while Irvine, due to the difference in prices, is following a U-shaped trend.



It's just my opinion, all other opinions are more than welcome. There are about a million aspects that come into play here and obviously I'm not an expert in all of them.</blockquote>
As a fellow realtor, I'm a bit more cautious on the near term. How can the real estate market stabilize if employment and income stay under pressure? If things really do stabilize in the economy that will translate into higher interest rates, won't higher interest rates adversely effect real estate prices and sales? I believe one of the reasons for the "pop" we are getting in the market is due to the lack of realistically priced organic inventory and REO inventory. I'd be willing to bet that there are a lot of wanna-be sellers out there but they can't because they would have to kick in money into escrow to get their homes sold so they are staying put. Then you have those folks who have given up....like one of my friends who owns a home in Irvine and hasn't paid the mortgage since Oct. 2008. Guess what, BofA still hasn't been issued an NOD on the property after about 9-10 months of non-payment. At the pace things are going, he might end up living in the home rent free for 2 years.
 
Graphix - I'll make you happy and shade the title for you later today to stop the complaining. It's a blog buddy... not a website. Blogs don't require the same "professional" touch as a website does. For example IHB, thrown up in a day, and just filled to the rim with ads - not "professional," because it doesn't need to. It's the quality content that has been placed into IHB that makes it great.



Hey usctrojanman29 - I'm a fellow alumni myself. Unemployment will be the last thing to recover in the economy, so it's hard to use as an indicator. And, I agree higher interest are going to come next after stability, but that is going to require stability in the entire housing market. Plus, I think the fed is going to do what it can to hold down the interest rates as long as they can. 1-2 years down the road, I see interest rates creeping up, with the definite potential of getting out of control. I know what you mean about the NODs not being issued. I wrote an offer on a home about 3 weeks ago and come to find out the seller hasn't paid her mortgage since January. She got a divorce and has just been saying screw it. She will probably live there for about a year, rent free. It all just depends on the bank; some banks are great to work with right now and some are absolutely awful.



"There is no bottom, in Irvine, Costa Mesa, or anyplace else in So Cal. There are a few dead cat bounces, but after the current slew of knifecatchers buy, there will be another wave of decreasing prices, this wave larger than the last." - Only time will tell, but I'm willing to bet that in the beginning of the year you thought we would be in a much worse situation right now.
 
[quote author="RobertLarsen" date=1249507927]

"There is no bottom, in Irvine, Costa Mesa, or anyplace else in So Cal. There are a few dead cat bounces, but after the current slew of knifecatchers buy, there will be another wave of decreasing prices, this wave larger than the last." - Only time will tell, but I'm willing to bet that in the beginning of the year you thought we would be in a much worse situation right now.</blockquote>


In Irvine, yes, I thought prices would be declining much farther. But in my neighborhood where I plan to buy, things are declining quite nicely. How successful were you in calling the top and/or acting on it? How many clients did you tell that it was a good time to sell? How many buyers did you tell at the top that it may not be a good time to buy?
 
[quote author="graphrix" date=1249475180]How can people take you seriously when SoCal78's oldest boy could create a better site, don't know his exact age, but his crayon work is better.</blockquote>


Thanks, Graph. He's six and available for a consultation.
 
Rlarson,



Inventories have been low lately. I don't believe buyers snatched them all up. I remember a year ago, I saw lots of active listings. Current inventories, as stated, is very low. From your opinion, what is or are the reasons behind this?
 
[quote author="reason" date=1249517372]Rlarson,



Inventories have been low lately. I don't believe buyers snatched them all up. I remember a year ago, I saw lots of active listings. Current inventories, as stated, is very low. From your opinion, what is or are the reasons behind this?</blockquote>


There are numerous reasons:



A) Demand: Not the entire reason, but there has been about a 23% increase in home sales. (Depending on the area of course)

B) Modifications: Not a very significant factor because it is very difficult to obtain a loan modification right now, but a factor nonetheless. Banks are much more willing to go through the short sale process right now, rather than a loan mod.

C) Banks: I haven't seen/heard any proof of this but it appears to me that banks are filtering the amount of distressed properties coming on the market. I'm not sure why, because I would imagine the carrying costs are a heavy burden. I could be wrong and the banks could just be understaffed to handle the distressed properties.

D) Investors: Within the last month or two, I have been seeing an increasing number of investors purchasing homes from banks before the homes are even listed on the market. They have created a type of sub-market; one where they do not have to deal with appraisals and lending, and they can just get the homes off their books quickly.

E) Distressed properties: For the two weeks ending 7/23/09, distressed homes in inventory fell by 5% to 2,616. These homes now represent less than 30% of the active inventory and are 56% lower than the peak hit last summer. The total number of distressed homes for sale in Orange County hit 5,950 on August 7, 2008.
 
[quote author="RobertLarsen" date=1249481203]...I'm a stubborn realtor and before that I was a stubborn financial analyst that trolled this site for awhile...</blockquote>


Mr. Larsen, would you mind sharing how long you've been a Realtor? You see, I'm not an expert on anything but just a reader who likes to draw from the experience of older people who have lived through several cycles in the market and have learned from first-hand experience. I visited your site and from your photo, you appear to be quite young. What life experience do you have to offer here that the more seasoned people here don't? It is a legitimate question. You said you browsed this site for a while before becoming a Realtor. This site is only a few years old at best. So where does that put you? I hope you will answer my sincere question and stick around. Welcome to IHB.
 
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