Will prices go down in Quail Hill/Turtle Ridge in the near term?
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The buyer for 59 Grandview is not a foreign asian sucker. He was a white investment banker that worked for Citi Bank in the past. You are so biased in your mind.
I don't know why you think I'm biased, I actually own a fairly nice home in one of the neighborhoods you've been posting links about. I simply don't share your belief that 31 Reserve will go for $3.5m, or even $3.0m unless a really big sucker, asian or white, comes along and chases stupid money. Here's why:
In the past 3 months, Irvine has had THREE sales in the $3m to $4m range, within a mile or two of 31 reserve. All three sold at far below the $583/sqft that the listing agent is dreaming about. The Irvine high end market is clearly in a decline, and to be more specific the 92603 zip code is in a fairly steep decline.
Via Redfin (92603):
June 21, 2010:Avg. Sold per Sqft - $456
March 21, 2011:Avg. Sold per Sqft - $382
That's nearly a 20% loss in a 9 month span and the decline doesn't look like it's going to stop anytime soon. High end Irvine is getting crushed.
Using a 5 month old comp in 59 Grandview will only make sure whoever buys using only that information will lose a lot of money.
I work in China, it's my second home almost, my asian bros knows I only kid (somewhat).
I don't think you will see it in the 700's. I've been up in QH for almost a year now and I've found there is a certain niche of people who just want to live up here. I'm not trying to sell QH, but I looked at many home. There are just people "who want to be up here". Homes in Oak Creek are just homes...ok, i'll live there. Hard to explain it, but hope that makes sense...Kinda like, I know some people who "have to live in Woodbury"..and look down at the Woodbury Easters.
I'm not worried about price erosion on my home. My home has never been, and will never be a huge percentage of my personal wealth. The only people who normally care about whether the equity in their home is eroding are those who have a huge amount of their wealth tied up within their personal residence.
Also, I bought my home at a different time. I can understand a lot of the anxiety many wannabe home owners face in these days.
As for whether specific enclaves of QH will experience a drop, I can almost guarantee it. The external market factors, and internal market factors all point to a decline. But then again, maybe frank is right, people just want to live in QH because it's special. It wouldn't be the first time I've heard that reasoning though. ;D
With prices declining at the pace you describe, it's arguable that buying now is effectively the same as when you bought considering interest rates are much lower. So why would you recommend against purchasing now when the conditions are equal to when you bought?
IrvineRenter, a guy you seem to follow also got the same 26-27% number using DataQuick, so I think it's an accurate number.
You simply compare the Irvine peak median price to the current median price (sold of course), and you get 26-27% depending on whether you round up.
Of course. I always account for inflation, and interest rates. However one could also say that interest rates at their current level are a form of government intervention (and they would be right), but that's another topic. My general rule of thumb when advising friends these days has been to take a pre-bubble sold price, and multiply that price by 1.5 to see if the current price is nominally approaching historical housing trends. In Irvine, you will find very few properties that will meet that criteria. However in places like Aliso Viejo, or Mission Viejo, you will find more. It just shows you that the correction is taking place faster in some areas.
As for Commercial real estate, remember it was in a bubble for a long time, median prices are down about 40% since 2007. There is about $1.4 Trillion worth of CRE that is currently underwater, or will be in the next couple of years. The nation's Top 20 banks have an exposure rate equal to about 79% of their risk-based capital. It's going to get ugly, but you don't have to listen to me, just look around.
CRE is doing really badly right now, just drive down Von Karmann between Main and Barranca, it's a virtual ghost town. That's because unlike the poor "nuclear family", no one cares about whether a small business can afford their overhead on a commercial space/HQ, the banks are ruthless. I'm actually in the process of buying a building in Tustin (near Red Hill) that is a loser for the seller, and he's trying to dump it rather than chase the market further down. You don't get the balding husband, and teary eyed wife trying desperately to hold onto their "dream home" in CRE, it's simply business here.
usctrojancpa
Well-known member
I was laughing so hard I was almost crying...good to know we have the cold slap of reality on the forum named IndieDev.IndieDev said:NonFCB said:
Do people who spend $3,000,000 on a house care about public schools? That seems to me a very middle-class concern.
I do agree though that a foreign asian sucker might offer up $3,000,000. I'm fine with that though, we have to close the trade deficit somehow.
IndieDev said:NonFCB said:
Do people who spend $3,000,000 on a house care about public schools? That seems to me a very middle-class concern.
I do agree though that a foreign asian sucker might offer up $3,000,000. I'm fine with that though, we have to close the trade deficit somehow.
The buyer for 59 Grandview is not a foreign asian sucker. He was a white investment banker that worked for Citi Bank in the past. You are so biased in your mind.
IndieDev
New member
NonFCB said:
I don't know why you think I'm biased, I actually own a fairly nice home in one of the neighborhoods you've been posting links about. I simply don't share your belief that 31 Reserve will go for $3.5m, or even $3.0m unless a really big sucker, asian or white, comes along and chases stupid money. Here's why:
In the past 3 months, Irvine has had THREE sales in the $3m to $4m range, within a mile or two of 31 reserve. All three sold at far below the $583/sqft that the listing agent is dreaming about. The Irvine high end market is clearly in a decline, and to be more specific the 92603 zip code is in a fairly steep decline.
Via Redfin (92603):
June 21, 2010:Avg. Sold per Sqft - $456
March 21, 2011:Avg. Sold per Sqft - $382
That's nearly a 20% loss in a 9 month span and the decline doesn't look like it's going to stop anytime soon. High end Irvine is getting crushed.
Using a 5 month old comp in 59 Grandview will only make sure whoever buys using only that information will lose a lot of money.
IndieDev
New member
USCTrojanCPA said:I was laughing so hard I was almost crying...good to know we have the cold slap of reality on the forum named IndieDev.IndieDev said:NonFCB said:
Do people who spend $3,000,000 on a house care about public schools? That seems to me a very middle-class concern.
I do agree though that a foreign asian sucker might offer up $3,000,000. I'm fine with that though, we have to close the trade deficit somehow.
I work in China, it's my second home almost, my asian bros knows I only kid (somewhat).
irvinehomeowner
Well-known member
I take $/sft prices with a grain of salt. 92603 is a large area and unless I see a breakdown of each type of product sold... it's hard for me to come to the conclusion of a segment getting "crushed". Homes that sold for $700k+ in 2003 are still holding at $1m+.
Once I see Tapestry and Olivos homes in the mid $700k... I'll truly believe that Quail Hill got hammered (and that's relative considering that's what they originally sold for).
Once I see Tapestry and Olivos homes in the mid $700k... I'll truly believe that Quail Hill got hammered (and that's relative considering that's what they originally sold for).
irvinehomeowner said:
I don't think you will see it in the 700's. I've been up in QH for almost a year now and I've found there is a certain niche of people who just want to live up here. I'm not trying to sell QH, but I looked at many home. There are just people "who want to be up here". Homes in Oak Creek are just homes...ok, i'll live there. Hard to explain it, but hope that makes sense...Kinda like, I know some people who "have to live in Woodbury"..and look down at the Woodbury Easters.
irvinehomeowner
Well-known member
I know what you're saying frank, that's why I made that comment.
When IndieDev says it's "20% off in 9 months", that doesn't mean I can find an Olivos home that was selling for $1m last year selling for only $800k this year. The $/sft metric is useful when comparing like products in similar categories but not as a huge brush to paint the entire picture.
If things are as bad as Indie says in QH, I wonder if he's worried about price erosion of his home... has he lost his down payment, did he buy all cash?
When IndieDev says it's "20% off in 9 months", that doesn't mean I can find an Olivos home that was selling for $1m last year selling for only $800k this year. The $/sft metric is useful when comparing like products in similar categories but not as a huge brush to paint the entire picture.
If things are as bad as Indie says in QH, I wonder if he's worried about price erosion of his home... has he lost his down payment, did he buy all cash?
IndieDev
New member
irvinehomeowner said:
I'm not worried about price erosion on my home. My home has never been, and will never be a huge percentage of my personal wealth. The only people who normally care about whether the equity in their home is eroding are those who have a huge amount of their wealth tied up within their personal residence.
Also, I bought my home at a different time. I can understand a lot of the anxiety many wannabe home owners face in these days.
As for whether specific enclaves of QH will experience a drop, I can almost guarantee it. The external market factors, and internal market factors all point to a decline. But then again, maybe frank is right, people just want to live in QH because it's special. It wouldn't be the first time I've heard that reasoning though. ;D
irvinehomeowner
Well-known member
But that's the rub. It depends on when you bought. If it was in QH, it had to be some time from 2003 on... and that was already bubble pricing going up.IndieDev said:
With prices declining at the pace you describe, it's arguable that buying now is effectively the same as when you bought considering interest rates are much lower. So why would you recommend against purchasing now when the conditions are equal to when you bought?
IndieDev
New member
Yes, if I bought in QH, you're right, those prices were already bubbled. QH, 2003 and 2011, is still bubbly.
Considering that both time periods were within an inflated market based on easy access to credit, I would not recommend a purchase based on those conditions (now or then).
Considering that both time periods were within an inflated market based on easy access to credit, I would not recommend a purchase based on those conditions (now or then).
irvinehomeowner
Well-known member
BTW: Where are you getting this 27% drop number on Redfin?
I would be a bit wary of their data, when you look at house or condos separately, it seems more accurate, but when you combine them, the number get strange (which is an issue when looking at "median" anything).
I would be a bit wary of their data, when you look at house or condos separately, it seems more accurate, but when you combine them, the number get strange (which is an issue when looking at "median" anything).
IndieDev
New member
irvinehomeowner said:
IrvineRenter, a guy you seem to follow also got the same 26-27% number using DataQuick, so I think it's an accurate number.
You simply compare the Irvine peak median price to the current median price (sold of course), and you get 26-27% depending on whether you round up.
irvinehomeowner
Well-known member
Sorry... I meant 20%... not 27%... that was a typo. What I am referring to is this:IndieDev said:
Because that's a bit of cherry pick considering you took the highest point last year and compared it to the lowest point this year without mentioning that the actual bottom last year was March 1, 2010 at $403/sft and so the year over year drop is actually closer to 12%. In your example, you ignored your favorite median calculation which per Redfin is closer to a 6% loss:IndieDev said:
That "20% in 9 months" had a little slight of hand there.Redfin said:
IndieDev
New member
True, but I picked June of last year to really focus on the effects of the state and federal tax credits, the fact that June was the Irvine 2010 high, and it also happened to coincide with the last month you could close to get the federal credit are not entirely separate events.
2011 may be a year (unless Obama and Lawrence Yun have too many friendly dinners) that shows the effect of fundamentals, unmolested.
2011 may be a year (unless Obama and Lawrence Yun have too many friendly dinners) that shows the effect of fundamentals, unmolested.
usctrojancpa
Well-known member
Ok, so based upon fundamentals we should be at 1998-1999 levels adjusted for inflation and lower financing costs? The problem is, not only is residential real estate not even close to that here in Orange County but neither is commercial real estate which involves no irrational buyer emotions (or at least it shouldn't).IndieDev said:akim997 said:
I consider 1998-1999 the last true period where credit standards were at least nominally regulated. Based on that, Los Olivos has some correction to come. But didn't you go all in for Northpark already?
IndieDev
New member
USCTrojanCPA said:Ok, so based upon fundamentals we should be at 1998-1999 levels adjusted for inflation and lower financing costs? The problem is, not only is residential real estate not even close to that here in Orange County but neither is commercial real estate which involves no irrational buyer emotions (or at least it shouldn't).IndieDev said:akim997 said:
I consider 1998-1999 the last true period where credit standards were at least nominally regulated. Based on that, Los Olivos has some correction to come. But didn't you go all in for Northpark already?
Of course. I always account for inflation, and interest rates. However one could also say that interest rates at their current level are a form of government intervention (and they would be right), but that's another topic. My general rule of thumb when advising friends these days has been to take a pre-bubble sold price, and multiply that price by 1.5 to see if the current price is nominally approaching historical housing trends. In Irvine, you will find very few properties that will meet that criteria. However in places like Aliso Viejo, or Mission Viejo, you will find more. It just shows you that the correction is taking place faster in some areas.
As for Commercial real estate, remember it was in a bubble for a long time, median prices are down about 40% since 2007. There is about $1.4 Trillion worth of CRE that is currently underwater, or will be in the next couple of years. The nation's Top 20 banks have an exposure rate equal to about 79% of their risk-based capital. It's going to get ugly, but you don't have to listen to me, just look around.
CRE is doing really badly right now, just drive down Von Karmann between Main and Barranca, it's a virtual ghost town. That's because unlike the poor "nuclear family", no one cares about whether a small business can afford their overhead on a commercial space/HQ, the banks are ruthless. I'm actually in the process of buying a building in Tustin (near Red Hill) that is a loser for the seller, and he's trying to dump it rather than chase the market further down. You don't get the balding husband, and teary eyed wife trying desperately to hold onto their "dream home" in CRE, it's simply business here.