Wow I can’t believe how far irvine has to drop. While the rest of of OC is deflating somhow the people in Irvine think they are the shit.  This is why I think Irvine will tank the worst.

Updated MLS Irvine Closed Sales through September 2009 at www.irvinerealtorsite.com.
(previous years are at tabs at the bottom)

- I show 170 closings for September, resale (5.67/day).
- Mortgage info has been updated through July. There was an increase back up from 42% to 44% average down payments.
- September median price for Irvine is in at $539,488, back down from August’s $585K median.

As a refresher:
Yellow is still unconfirmed (no data reported yet)
Blue is “suspicious” even though it is recorded. 
Green is confirmed.

Closed lease info has been updated through September, as well. 225 leases, prices edging slightly up to $1.54/sqft. average.

Floorplans have all been uploaded. Still in process of making it look a little more user-friendly, but every tract home in Irvine is in there.

Thank you again, and be sure to get your flu shots,
-IrvineRealtor

How come I do not see the price dropping in Foothill ranch. I predicted it will drop more than any other neighbourhood.

Also why are homes for sale not coming into the market for last 2 months. Is it because of the moritorium on foreclosures or is there some other reason?

Thank you for the information. I appreciate it as do the readers of the blog.

Wall Street Journal’s main article and three part series on Shadow Inventory:

Delayed Foreclosures Stalk Market

The Foreclosure Pain May Drag on for Years

Shadow Market Part II: Banks Avoid Acquiring Foreclosed Homes

Have You Seen Your Realtor Standing in the Shadows?

Same here, great info! ::applause::

I’ve come to terms with the fact that it’s a losing battle to get the IHBlog to go back to linking to Redfin for the property listings in these articles instead of the IHBrokers website. It’s an inferior resource, but ok, I understand the motivation behind it.

So, here’s an alternate suggestion: link to both. Let readers decide which site they want to go to. Yes, I can always copy-n-paste the link into a new Redfin tab (which is what I am doing now…along with many others, I assume), but how about the IHBlog choose functionality and user choice over the we-must-own-the-world mentality that prevails everywhere else?

Or is this request as outrageous as asking Shevy to spellcheck his listing descriptions?

C’mon, help us out here!

-Darth
...frustrated

You spend three years doing the public service that IR and Zovall have provided then see how much you enjoy some entitled jerk complaining about how they aren’t providing everything just so…

I agree it will tank.  But the last one to tank usually recover the first.  But since there is a long way to go down, I believe it still has a lot to tank.

What feature of Redfin do you miss? I still use Redfin to map search, and I like that they give the previous listing and sales data, but when I link to a property, I am not searching, so then I want more property data. The IDX feed that we use gives more information about the property, which is what we like. The main reason I probably won’t create a Redfin link is the additional time and effort involved, but if I am looking up the properties there anyway, it doesn’t take much additional time to make a link.

Are there others out there going back to Redfin to get more info?

The same could be written about the US market:

Another British Housing Bubble?

LONDON—Don’t believe the hype about a recovery in the British housing market. Recent surveys—including one by Halifax on Tuesday—have pointed to month-on-month home price increases, leading some excited property sellers to think the worst is over.

But British property firm Savills has been quick to dismiss hopes of a sustainable recovery. According to Carrie Scrivener-Leask, associate director of research at the firm, the U.K. housing market will experience a W-shaped recovery.

“Although there’s been growth in the property market, we don’t see how that growth can be sustained with the current state of the economy and unemployment still on the rise,” Scrivener-Leask said, adding that Savills did not expect a sustainable recovery before 2011 or even 2012.

U.K. unemployment rose to 7.9% for the three months to July, according to the National Statistics Office. Euro zone unemployment is currently at 9.6% and the U.S. jobless rate stands at 9.8%.

Her views emerged on the day that British lender Halifax said house prices had risen by 1.6% in September, the third-consecutive monthly increase and the fifth so far this year.

But even Halifax believes this recovery is only short-term.

Cash flow investors, take notice!

The current OC home price to rent ratio is a moving target.  Per the WSJ, The OC had the third highest percentage declines in rents in the nation the last 12 months.

This from the WSJ ... and yes, The OC is right in the thick of it!

Apartment Glut Expands
Vacancy Rate Rises to 7.8% as Unemployment Dents Demand; Monthly Rents Slip

Apartment vacancies hit their highest point since 1986, surging in cities from Raleigh, N.C., to Tacoma, Wash., as rising unemployment continued to chip away at demand during the traditionally strong summer rental months.

The U.S. vacancy rate reached 7.8%, a 23-year high, according to Reis Inc., a New York real-estate research firm that tracks vacancies and rents in the top 79 U.S. markets. The rate is expected to climb further in the fall and winter, when rental demand is weaker, pushing vacancies to the highest levels since Reis began its count in 1980.

Meanwhile, the air leaving the market is driving rents down, most sharply in markets that had been chugging along until a year ago, when unemployment accelerated, including Tacoma; San Jose, Calif.; and Orange County, Calif.

In New York, Jennifer Hyman rented a one-bedroom apartment in July at a monthly rate of $1,950—down from $2,450 for the previous tenant—when she returned to the city after graduating from Harvard Business School. Her first month’s rent was free—and her landlord painted the apartment, scrubbed the floors and added window coverings.

“The experience was night-and-day different from before,” said Ms. Hyman, who had rented other Manhattan apartments between 2002 and 2007, each time paying a brokers’ fee and feeling pressured to sign a lease the minute she found an apartment. Now, she says, “Renters are the ones with the power.”

“When job losses stop, rents will firm and occupancies will firm,” said Richard Campo, chief executive of Camden Property Trust, a Houston-based real-estate company.

The second and third quarters typically are the strongest periods for rental landlords because they are popular times for people to move. But this year, “vacancies just continued rising,” said Victor Calanog, director of research for Reis.

During the third quarter, vacancies increased in 42 markets, improved in 26 markets and remained unchanged in 11 markets. Omaha, Neb., saw the largest rise in vacancies, with the rate rising 1.1 percentage points to 7.4%. Other big rises were seen in Memphis, Tenn., Indianapolis, Raleigh and Tacoma.

I use Redfin to get more info as you described to see street view, birds eye view and the previous history. If you’re looking for additional feedback then yes I would recommend linking to Redfin as well as an option.

I’ve made the argument that Irvine has already bottomed.  A lot depends on the pace on which houses in default are actually foreclosed upon and put on the market as REOs, but as it stands now, prices in Irvine (and elsewhere) are no longer going down.

Our IDX system does have the map and street view. It hidden under a tab, so you don’t see it if you just scroll down. In fact, I will recommend to our IDX provider that they eliminate those tabs and make everything one long scroll down a page. I always liked that Redfin had all their information on one page—no other clicks required.

Redfin also has five comp figures (one based on active listings, one based on recently sold listings, and the three third-party robo-comps).  Having five numbers as opposed to just one usually makes it obvious at a glance whether or not a property is overpriced or not.  If all five of the numbers, or the four excluding active listings, are all lower than the sale price, it’s almost certainly overpriced.

I like your website listing, but miss having the map directly/automatically show the location of the property. Not a fatal flaw since obviously the address is there to look up, but it’s nice to see it immediately and then be able to zoom out to see what is around it.

“I’ve made the argument that Irvine has already bottomed.”

Well you’re wrong.

What, no colorful language this time?

I have agree with you, i was expecting a big drop this year…it did not happen. One would think that the economic meltdown of last year skipped Irvine. The traffic at some of the open houses in West Irvine/NP/WP is just plain crazy. Houses have multiple offers on the first day itself. Hard to believe that people have that kind of cash sitting around. IR2’s spreadsheet is a painful reminder(44% average downs :().

I have asked this question before and I am asking again i.e. what is the median family income in Irvine?  What is the would be median family income to afford the current home prices?

What is the GDP growth of US and what is the rate of property price appreciation?  I think all of these are linked so if someone can help me link these four parameters we can see whether Irvine has bottomed or not.

Thanks.

IR,

The issue that I ran into most recently is that the maps on IDX didn’t work for a few of the properties. It showed the street view in the lower box but not the overhead map view in the top box. I use that view to check the neighborhood and physical location, but it simply didn’t work in IDX even when I entered the address in the search box. I don’t remember which property that was for. (I use Firefox on a Windows XP machine.)

The maps do work on the link above (I had to go check, as I hadn’t clicked on the link before, but simply pasted it into Redfin), but do we really want to play whack-a-mole with the IDX features and bugs? If you do want to have your audience be your site testers, aren’t you acknowledging that IDX is a work-in-progress? Shouldn’t an alternative product be available in the interim? In my opinion, trying to build a product that is superior to Redfin is simply a quixotic quest.

The tabs are also annoying, as you point out in a later post.

On another property, the pictures wouldn’t come up. On all of them, the pictures interface on Redfin is better, in my opinion. I don’t like the auto-scrolling and the smaller picture interface. Also, Redfin’s picture interface is just simpler, cleaner.

-Darth

P.S. It’s obvious that you’re grinding a petty axe on an old and unrelated grudge, so this reply is lost on you, but my comment was given because IR has repeatedly asked for feedback on this site and the IDX site.

Barren,  according to the Irvine City demographics website, the median income is $98K, which according to IR’s calculator supports a $380K house price.  That same site says the average house price is $672K, which requires an income of $183K.

So I think there’s still plenty far to fall.

I have a FOF in the London financial biz.  Says their mortgages are now normally written with a 40-year term.  Sounds to me like only flippers would want that.

Perhaps but these 44% down payments are coming from assets, not income.

If all of these buyers have large downpayments than the amount they are borrowing is actually quite reasonable with respect to median income.

Perhaps many of these Irvine residents have succesfully positioned themselves and have preserved their assets?

It sounds far fetched. But these downpayments suggest income won’t be a problem until the pool of existing cash coming back into real estate is exhausted. And I wonder if this pool isn’t much larger than we think.

But…How many dual income homes are not tabulated correctly because a person uses a different city as a permenant address? While the income on record is 98K, but if you have another person supplying income for the property outside the census record, it could be higher.

And that’s the number one factor (income to home price multiple) we should be looking at right now.  And unless you have dreamy wishes of new economic paradigms, you are forced to realize that housing is fundamentally no different than what it was were prior to the establishment of this massive Ponzi scheme.

Oh, one more point.  I think that future tax records will indicate that incomes are declining right now in Irvine, just like they did during the tech/y2k/internet bubble.

Apartment vacany rates do not directly affect SFR prices. Now condo prices yes, but SFRs can go up or down depending on where people are moving. If people move from apts to SFR then SFR goes up. Always be weary of loosely linked propositions.

Who cares what the income in Irvine is when you can get a home for free by taking a place costing less than 3x your income, bullying the seller into fronting your down payment/fees, and getting 8K from the gubbermint ? ... and when it doesn’t work out you just walk away - but first have your rent free for a year or so, and lets not forget the everything must go craigslist sales.

Yes, but did your FOF also say how few mortgages got written - on account of the fact that the British are expected to actually repay their mortgages, and don’t get to say screw you when they can’t.

Also - I have several family members trying to sell homes - and can’t because the purchasers are being required to come up with 35% down payments in order to get funding - and are being held to the 3x limit on income. There are exotic loans out there - but no one they know can qualify for them.

Finally when you discuss London real estate, you’re talking about the same little slice that is Manhattan or Bel Air. Everyone there earns a lot more than in other parts of the country, and the homes cost a lot more… and a lot of the idiot flippers who bought the crappy condo towers are so far under water they truly need scuba gear.
Most of the UK is much less expensive - but still over valued wrt to wage incomes.

Agreed. There are very few families who have done well over the last year. Somehow these large downpayments irritate me a lot. It is a good thing that these people have been prudent enough to save money but this seemingly endless pool of buyers bidding the heck out of each other for stucco boxes just bugs the hell out of me. It just promotes the myth that anytime is a good time to buy in Irvine.

Taco ... your hypothesis of outside income would represent such a small figure ... it would be so marginal.  I bet it wouldn’t impact the income on record +/- $500.

And you’re questioning me at the bottom for referencing a story from the WSJ.  Please.

“Always be weary of loosely linked propositions.”  WTF?  LoL

“There are very few families who have done well over the last year. Somehow these large downpayments irritate me a lot.”

Mike ... the fact of the matter is Irvine is a very desirable place to live and raise your family.  There are a lot of wealthy people in Orange County (a lot people who’ve pretend to be wealthy too), and Irvine represents a very nice move-down market for those people who have decided to not buy in Newport or Laguna.

IrvineRenter,

For future comparison:

The land area of the Moon is about the same as the continent of Africa.

Regards,
Hard Numbers

There is a big reason why 44% downs or similar are common here in Irvine. The number one reason is because otherwise they could not afford the monthly payment. People are still intoxicated, so they believe they have to buy now that prices are “so low”, and the only way they can afford is by using all of their cash and “invest” in Real Estate.

You describe is perfectly. The amount of borrowing is similar to other areas, but the downpayments are what is propping up the market. More power to them. I think there will be more houses than there are heavy-cash buyers. Time will tell.

“Irvine represents a very nice move-down market for those people who have decided to not buy in Newport or Laguna.”

I know a family that lives in Irvine in a $1,000,000 property. The grandparents have a huge mansion in Newport Coast with millions in rare art on the walls. The Irvine family could live anywhere, but they chose to live in Irvine to have a “normal” family life. Once you move up or over the hill, life changes, and some people want the Irvine lifestyle.

Think Donny Osmond.

Redfin does set the standard for IDX systems.

Here is what I can do. I still use Redfin for my own searches because I need the recent sales information to find what I am looking for. As long as I am using Redfin, out of courtesy to them and for the convenience of readers like youself, I will post a link to the Redfin property listing.

I really have no interest in forcing people to use our IDX system. We are here to provide tools for people to use to watch and understand the market. I am going to continue to link my daily posts to our IDX site. I think our system is better at presenting property information which is what the post is about.

Look for the link to Redfin to appear soon.

Somebody in this forum had said that this property will not last long as its priced way below the going rate i.e. $238 per sq ft.  However it still hasn’t sold for 42 days.  Any idea what is going on as the $/sq ft is low compared to other Irvine properties…

How does an agent represent a buyer on a crystal cove house purchase, only to have a similar house down the street sell for $1.8 million less within a few months?  Anyone know what happened with the sale at 18 Rockshore?
More info at www.bluemove.blogspot.com

Show me the love IHB! I’m covering the crash of the upper end price ranges!

My wife and I did an identical Irvine Company property search for 2bed/2bath both in September 2008 and September 2009.

Rents were almost exactly 10% lower across all five properties we looked at both years.

A 10% drop in rent over a one year period is historic.  I don’t believe this has happened since 1931. 

Rents are going to continue to drop, though at a less dramatic rate.  The lower rents drop the more overprice these homes become.  The squeeze is on.  And fundamentals will win in the end.

Liz Anne Sonders at Scwaab has no clue as to what “SHADOW INVENTORY” is:

“Questions still surround the residential market, however, and we believe that there could be another down leg as the “shadow inventory” (those who’ve wanted to sell their houses but have delayed due to poor market conditions) comes onto the market.”

Yeah, RIGHT. Senior Vice President, Chief Investment Strategist, Charles Schwab & Co., Inc.
Is that not the longest job title ever?
I wonder how much she gets paid to spew B.S.?

Much appreciated, IR. I’ll try to look at the IDX site from time to time and continue to offer feedback.

-Darth

Wow, based on the anti-Laguna and anti-Newport comments, you must think ‘normal life’ is not alive and well in those communities.  Having lived in Laguna for 15 years, it was my experience that people on the inland side of the hill cared a lot more about appearance (cars, clothes, flat screen tv’s, you name it) than my local Laguna friends and neighbors.  I can’t speak for Newport as I have never lived there.  Laguna is ‘live and let live’, which is why one of your neighbors could be an artist and one a typical finance guy, and you could all be good friends.  I guess that’s not for everyone.

A lot of mortgages written in the UK would probably count as “exotic finance” in US terms. 30 year fixed rate mortgages are rare as hen’s teeth. Many folk have a fixed rate for 2 to 5 years, then the mortgage reverts to the lenders standard variable rate (usually linked some how to the Bank of England’s base rate). Although the system is not as lax as it has been in past years, I think that it is quite easy to exceed the 3x income barrier. You’re spot on with the requirement for large downpayments though.

London might be expensive compared to the rest of the UK, but there are many places in the UK where the price of property per square foot makes your eyes water. I reside near Cambridge - prices for tiny Victorian terraces houses in the city centre probably average out a > $500 / sq ft.

Folk in the UK exhibit a completely irrational attachment to buying property; unemployment up, wages down, economy in the toilet, dreadful government and *still* the news is of rising house prices!

That is a cool statistic. Thank you.

It is a short sale attention getter. It will go for over the ask.