I think afford is the wrong word.  I obviously don’t know your financial situation but I know many people who sat out of the housing bubble and now have hefty down payments.  I could put my down payment funds towards this house and the loan amount would be 3x our pre-tax income and I am not unique.  Basically people can *afford* this house but it’s financial suicide. 

Maybe its just me but I hate the word afford.  One of my biggest qualms of this bubble is this constant view of not being able to afford a house because I choose to rent.

This would be a pretty good deal at 600k.

So what price do you think this will be at the bottom? What price would you pay?

Both $250 sq/ft and 4% appreciation since 1999 lead to a current “worth” of around $775k or a little over that. That’s about 22% more to drop from here. Does it seem realistic that this will really happen? Will the option ARM fallout really work that way? Maybe the severity in SoCal will make it so, but other places I’m not so sure…

It should, I know. But in D.C. right now there’s a heck of a lot of kool-aid knife catchers who wouldn’t even think of buying the bottom of the market that’s already close to rental parity (and priced but not moving for $200k—$280k), but are snapping up the $450k townhomes like hotcakes (previously $550—$600k, generally 5 years newer and with a garage). This season there look to be enough knife catchers out there, such that if you’re willing to sacrifice your 20% down now, you can get out of your over priced home before it resets. It’s batty and frustrating. People really seem to think the next tranch up is immune. And if there are enough knife catchers, maybe it will be…

I’m looking at that place, and thinking what sort of place the mere -downpayment- would get me here in the wilds of Arkansas.

I know exactly what $199,000 would get me out here:

The very same home- paid in full.

:hugs backwards ol’ Arkansas:

You have got to love the hubris on the part of the seller and people like them who manage to scrounge up 119,000 (most of which is likely coming from the sale of a previous house that requires a first time buyer to leverage themselves further than they had to).

A buyer with 119K in cash deluded into believing that he/she is in the market for million dollar homes.

A 119K down payment sets your affordability limit around 500K (assuming you can make the payments on the remaining balance for 30 years) - certainly not 1 million.

Nice house though.  It will bottom out around 550K.

oooooooo….look out!

They don’t like it when those comparisons are made on this blog!

Truly amazing isn’t it? You can buy a comparable home for $250k in some violence/traffic-free high-end resort town in the midwest, buy a condo in some S/E resort town for $100k to reside in the winters, and still have some 300k left over even after this Irvine home eventually bottoms out.

In regards to retiring baby boomers, the SoCal lifestyle is so overrated.

Why are all the houses in Irvine so boring?

Very nice set of pictures.  Another home I would like to buy when the market bottoms.

Obviously So Cal is not the answer for everyone, but there’s a reason why people choose to live here.

There is a post on the forum where somebody breaks down the per capita income.

If you have $250K to put down and make $250K a year, you are in the top 2% of Irvine and the top 1% of all US citizens.

You, sir, are in rare air.  Congrats!

That said, there are very few people like you.

“Afford” is a huge sliding scale that’s very subjective.  When I use “afford” I qualify it; e.g. “People who bought homes they could afford (2.5x income & below 28/33% DTIs) in the past few years are not in hopeless horrible situations.”

Because the land is expensive.

I agree with the stats, but if you went to grad school, you probably married someone with a graduate degree and have many local friends/coworkers with graduate degrees.  And it certainly “feels” like there are plenty $250k households with sufficient liquidity.  Just an observation…

I think I must be the only one in Irvine that likes carpet.

IR,
Given the inflationary cycle we are currently in, isn’t the effective loss on this house considerable more than 256k?

I would like to see a “Breakeven” date for each house listed.  If things proceeded as typical for the real estate market (increase of 4% a year with 3% inflation) people who bought at the peak are probably looking at 10 years or so to break even.  However, given the 8% inflation we are experiencing, and another 25% correction for homes like today’s listing, the breakeven point is what, 2025 maybe 2027 for today’s listing at its asking price?

Could you imagine buying a home today and waiting until 2025 just to get your money back?

Where are houses “exciting”?  Condo towers on the Vegas strip?

You must be a mind reader too IR, I had my eyes on this place when it was up for sale, and I like it very much. Too bad I don’t like the price tag. So does anyone know what’s the tax rate on this house? And what would be a realistic price for this house? Thanks to all who answer.

I can’t agree that $500-600k at the bottom is realistic.  I’m expecting another 20-30% drop which would put the bottom at $699 - $799k.

Unless of course the recession gets a lot worse.

Not sure I’m following you.  If you bought at the peak (2005) with a fixed rate mortgage, then the dollars you borrowed are “fixed” to their 2005 value. 

If we suffer through 8% inflation for a decade, then wages will lag, but they will catch-up, and they’ll bring along housing prices.  If that’s your scenario, then the peak buyer won’t have to wait very long to “break-even.”

Also, a renter in this scenario isn’t hedged for the inflation with their housing cost adjusting every year to account for inflationary pressures.

At $600,000 I would PASS.  In fact, I wouldn’t live here at any price (well, maybe SOME price). 

It backs to Alton (literally, your back wall is on Alton), so you have cars wizzing by 24/7, along with the roar of trucks and the diesel fumes.  Yes, resort like setting unless you’re in the upstairs bedroom.  Then the car beams in your windows all night long are like searchlights looking for Allied bombers over Germany.

Of course, all that noise right in your back yard will drown out the constant drone of the 405 freeway just 100 yards away. And the fumes / carbon monoxide will kill enought brain cells so you won’t even notice after a week or two.

Call me a snob, but for a cool million I expect much, much better.

Yes, So.Cal. is sooooo overrated.  By the way, I biked to work today in the cool, dry, 68 degree weather.  My gas bill is about $60.00 per month tops.  Tonight it’s BBQ night out on the covered patio - no bugs here. And I don’t bother to lock up my bike because it’s Irvine (I think crime is against Association rules, but I’m not sure).

Yes, Irvine is expensive, but you can’t compare it to Arkansas.

http://www.hyattluxuryproperties.com/irvine.html

According to year 2000 census (right about when this property was first built and purchased)

Demographics
The median income for a household in the city is $72,000, and the median income for a family is $85,000.

This puts the 1999 median house value in the neighborhood of (85,000 * 4) = 340,000 if you use a 4x income as a means of calculating affordability.

Therefore, the 1999 purchase price of 551,500 was roughly 551,500 / 340,000 = 1.62x the median house price.

Assuming that Irvine maintains its 2006 reported family income of 103,604, the median house price will bottom out around 103,604 * 4 = 414,416 using 4x income as a measure of affordability.

Multiply that 414,416 by the 1.62 ratio from the 1999 semi-pre-bubble purchase and you get a bottom call of 414,416 * 1.62 = 671,353.

This is assuming that median incomes remain at their 2006 levels (highly unlikely).

I’m hedging my bet that median Irvine income will be dropping over the next few years.  If it drops back down to 85K to 90K then you can expect the value of this house to return to the 550K to 580K range.

90 * 4 * 1.62 = 583,000
85 * 4 * 1.62 = 551,000

Call me a snob, but for a cool million I expect much, much better.

I am with you on this one.

That’s great, Buster.  However, you are failing to mention any of the issues that people might find uninviting about Irvine. 

Little bit of “confirmation bias” in your post suggesting that Irvine is superior to all areas of Arkansas.

This is almost irrelevant but some of the comments and in many threads force me to ask.

I read, over and over again, comments from people on how close a particular house to the freeway or a busy road and almost as often in addition to that comment is one of noxious fumes or carbon monoxide poisoning or losing bran cells or something of that order.

So my question is this, leaving aside the generally undesirable nature of home close to a major road or freeway, specifically, can anyone link to a study that says a home in close proximity (let’s call it 100 yards since that was a figure quoted above) to a road is more dangerous than one say, 200 or even 400 yards away from the same road?  Or is this just kvetching?

I’m not advocating for living next or underneath freeways or major thoroughfares.  Hardly.  All I’m asking is this a real concern or just some basic prejudice, a different way to make one better than another?

For some reason I suspect that the real research into the subject would yield results which indicate that it’s not much, if any, more healthy to live one mile from a freeway, from a breathing perspective, than it is to live 100 yards from one.  The pollution might disperse a bit but I tend to doubt it’s enough to make a big difference.  In other words, if you live in Socal, don’t pretend your home that’s a mile from the 405 is substantially more healthy than the poor sod who lives half a block away.

This is from yesterday’s Political Diary, a newsletter published by the Wall Street Journal.

———

Payback

Democrats and most Republicans in the Senate are furiously rushing out the housing bailout bill before more embarrassing revelations interfere with this multi-billion dollar French kiss to the real estate lobby.

On Thursday the Senate decided it wouldn’t let the scandal of Senators Chris Dodd of Connecticut and Kent Conrad of North Dakota—who received VIP cut-rate loans from Countrywide Financial—slow down the legislation. Senator Jim DeMint demanded a floor vote on a motion to postpone the bill until it’s known how many other Senators and House members received special treatment from Countrywide. Unbelievably, only eleven Senators sided with Mr. DeMint on the amendment. Chris Dodd voted “no” (naturally) and Kent Conrad, who had been on the Senate floor shortly before this vote, was nowhere to be found. The vast majority of Republican Senators voted against the DeMint amendment and for the “ethics pardon,” prompting one Senate Republican leadership aide to ask: “Are we trying to lose the election?”

Then it was reported on Thursday that Bank of America, which is buying Countrywide, handed out more than $70,000 in contributions to Mr. Dodd.

On Friday we received a copy of a “confidential” Bank of America “discussion document” called the “FHA Housing Stabilization and Homeownership Retention Act of 2008.” The March 11th document lays out in some 60 pages of meticulous detail how the housing bailout plan should work. The document appears to have become the framework for the bill negotiated by Sen. Dodd and GOP Sen. Richard Shelby. It provides rich information about who should get paid, how much it will cost, how the bill should be financed, how to overcome political opposition to the bill. The document notes that the bill would subject the Federal Housing Administration, the taxpayer bailout agent here, to $39.67 billion in “potential exposure.” This is much higher than “official estimates.”

One Senate banking committee staffer tells me: “We literally had banking lobbyists writing this bill.” This isn’t the way it’s supposed to work in Washington especially when the party in power on Capitol Hill keeps pledging to get rid of the “corporate special interests.” But apparently that new ethic of anti-corruption will have to wait until at least next week, when the Dodd-Shelby housing bill comes up for a final vote and taxpayers are put on the line for nearly $40 billion of bailout funds. No word yet on whether Senator Barack Obama will break from his crusade against “corporate lobbyists” to be on hand—or which way he would vote if he were there.

—Stephen Moore

Whenever I read those comments, I figure it is some mortgage-owner who is in denial and desperately trying to justify why the house a block away is declining in value while asserting that the value of their own home is not.

My bet is that IR would pull out his checkbook for this one at $750k. Am I close, IR?

Of course he would be late to the party—- because I’d already haved lock this down when it hit $800k. But those numbers are pointless in 2008, because a more talented knifecatcher will probably cough up at least $950k this summer.

Property Tax for this house is just under 1.02% with Special Assessments including Mello Roos and 1915 AD Bond totaling $3,250 per year. That is pretty standard for most areas of Irvine except VoC and PS.

As for my SWAG price this will sell for… $950,000. There are not a lot of comparables in Oak Creek to base this on, but that price would be expected in other areas of Irvine. There are not a lot of negatives on this property other than it backs to Alton.

agreed - people on this blog just love to sing the praises about so ca. without mentioning all the negatives aboout it - of which there are many - lets start with traffic traffic traffic.  In my travels I have come to believe that most people (regardless of whether they live in so. ca. or somewhere else) have to find reasons to *believe* that they are living in the best spot in the world - guess it is that competitive human nature.

Just because you hang out with a lot of people making 250K doesn’t mean they’re everywhere.

I imagine some McMansion sellers have this myth floating in the back of in their mind to justify their WTF asking price.

The *majority* of people working in the fancy Irvine corporate buildings are likely making beans. My girlfriend is an accountant and works for one of the top nominees for OC Metros “Best places to work in OC”, who happens to be in Irvine, and the salaries for the majority of their staff aren’t much higher than our neighbor of the sun, Phoenix.

Which is why, IMO, if you’re on the bottom of the pay scale in OC, you’re probably impoverished considering the high cost of living. I mean heck, a one bedroom rents for a MINIMUM of $1450 in Irvine, a movie ticket is $15, and a frozen yogurt at Golden Spoon is $4.50 with just one topping! Renting and eating ice cream is about all you can do in Irvine if you make under 50-55K per year. Get out if you can!

Another hidden cost of living in a high cost area such as Irvine is you get pummeled on state and local taxes. I would pay about 15-18k/year in taxes when I made 50K because the gruberment doesn’t take into account your cost of living as a W2 employee. I find it ironic that our tax code pummels low wage earners in high cost of living locations since the whole purpose of the progressive tax structure in this country is to tax people what they can “afford” to pay. Why the government believes everyone can “afford” to pay the same rate while living in different areas of the country is beyond me.

I have a friend who lives in a home near the big, white TBN complex in Costa Mesa off the 405. And the 73 is on the other side. If she leaves a glass of water on the patio for a day, she will see black flecks of particulate in the water. How much and how far that particulate travels from the freeway, I can’t say. I just wouldn’t drink water I’ve left out all day.

I did live in a condo off Trabuco and Yale about 400-500 yards from I-5. I didn’t notice my patio or car getting more dirty at a quicker rate than other places I’ve lived. If I was more concerned about the effects, I’d probably live somewhere else with much less population; But I’d rather live here.

To me, the more determining factor is the road noise. Living near a freeway can be bad, but in my opinion it can be reduced to white noise that blends more readily with other noises. Personally, I could not live near a major intersection. The starting and stopping of cars with engines revving and cars braking is too much for me.

Buster,

Again, all that you do in Irvine can be (and is) done daily in any college town in the U.S.  I see vespas and sedgways (sp?) everyday on the way to work.  What you SOCAL people don’t understand is that we expect to see something . . . something to justify these prices.  Where i live - an uber green college town - granite countertops have been passe for 4 years!!!  Resort living looks like real resort living.  We expect REAL views. Further, our homes have beautiful roof cuts, 1/2 acre gardens, and all the accoutrements in 2 million dollar SOCAL homes etc.  i see granite, travertine, cabinents, and crown molding in these SOCAL homes that can be found on the shelves of any Home Depot Expo nationwide.  And these recent homes are . . . ugly. 

What you all don’t get is . . . what we are (non-SOCALers) seeing is not a step up in lifestyle, but 2 steps down.

That is why Austin, Boulder, Madison, Chapel Hill, etc. are still growing. 

FYI, many SOCAL people living in suburbs are simply NOT, by any stretch of the imagination enjoying “suburban living.”

I have to admit I am very close to pulling out of the political process.  I see no point in even voting anymore.  It really doesn’t matter if the person has a D or an R next to their name, they get to Washington and look out for #1….themselves.
I think I have had enough.  I choose to bury my head in the sand.  It is too infuriating to even pay attention.

Because they’re all built cheap cheap cheap. Its difficult to justify artisans, skilled carpenters or masonries when land is so expensive.

If one were to simply look at trappings (e.g., size house, cars, etc) my move back to So. Ca (I am a So. Ca native) was definetely a step down financially - huge step down.  Of course there are benefits here - no bugs, Irvine is so easy to live in - close grocery stores, etc.), no weather problems at all (don’t have to sweep my floor three times a day!) and family.  However, we resisted moving here for years because prior to this last move it would not simply have been a step down but would have been a financial disaster to move here.  There are so many beautiful places to live that do not require the financial sacrifice required here.

I cannot see any comparison with any of the towns you listed.  I actually wouldn’t mind living in Austin, but for me there is no comparison to living in Southern Cal.  Last week on the same day you had the US Open golf championship, the NBA finals and US soccer world cup qualification all going on at the same time within 100 miles of each other.
To each his own, but hearing someone compare Madison or Boulder or Arkansas to So. Cal is laughable.

I would be interested to know what all of these 250K high wage earners do (job titles) and what companies they work for.

When I see the “I know lots of people making blah blah”, I have to assume it is a gross exaggeration as the average salaries for Irvine do not correlate well with those statements.

I also think that people are generalizing couples income and stating it as though a single person’s income.  They may know a couple where the one person earns 150K and the other earns 100K and then they say “Oh I know lots of people who earn 250K”.

Amen, brother!
What is the point of having wood floors/tile/etc. just so you can put area rugs down over them?

the arrogance of people in so. ca. is simply astonishing - get out there and experience the world someday will you?  Now, I know that everyone on this blog will delight in insisting - “oh, I have lived here and there and I still want to move back to good old Irvine”  - but don’t you get that every single town, community, city has people that want to live there more than anywhere else in the world.  Southern California is NO DIFFERENT - some people love it - some people don’t.  The ONLY thing that I see truly unique about so. ca. is the Hollywood industry - thats it.

Most of the people in Arkansas or Arizona who like to come to IHB to crap on Irvine and OC are always screaming how much more house they can buy for the $$ in ______.  That’s great, and if a big house is your calling you are in the right place.  For others, climate and coastline (and maybe family) are bigger factors than indoor sq ft.  So they may prefer So Cal. Neither is right or wrong, live and let live.

But for reference, please recognize this is the Irvine Housing Blog. When IR changes the name of the blog and starts profiling properties in Arkansas, I will STFU (and probably log off, because it will cease to be relevant to me). But until then, please understand that people who are focused on Irvine and OC really could give damn what it costs in your town. We all know that its cheaper out there, we don’t live in a complete vacuum.  Yet about 20 million people choose to stay in So Cal for many reasons, despite the cost. I know, hard for you to believe, but true. And understand that its probably hard for us to imagine living in Arkansas—- but if you are happy, that’s what its all about.

There’s a downside to everything.

In my condo, across the street from the beach, all metal except brass and stainless steel rusts away in the salt air.  I had to replace every recepticle in the unit after 10 years and you should see the air conditioner.  My first bbq just turned to dust and you have to replace the burners every couple years because holes develop.

I don’t think it is irrelevant at all - so many people I know continually justify the housing prices by talking about how everyone wants to move here - which is just not true.  If people in california did not live in a vacuum to some extent - I don’t think prices would have gone where they did. 

I like to be reminded of what others can buy - especially when I see a nice house like the one posted today - being reminded about what life was like outside of CA keeps me sober.

“Just because you hang out with a lot of people making 250K doesn’t mean they’re everywhere…”

Um, I said I agree with the stats…

“...They may know a couple where the one person earns 150K and the other earns 100K and then they say “Oh I know lots of people who earn 250K”...”

Um, I said “there are plenty $250k households.”

Steve,

All can be done in other locals?  Hey I may not like the traffic in OC but I can go to the beach in December and wear shorts.  I can get to the Mountains and ski if I want to in a short time couple hours maybe. I don’t shovel snow and I don’t have to worry about the monster bugs and humid conditions in other places.  I can get into LA for a show or a Lakers/Dodgers/Angels/USC/Ducks/Kings/Clippers game.  Can you do all that in any other college town USA? I have been to a great many places in the US and having been born and raised here I’ll stay.  Hey I have no problem if you don’t like Irvine and wouldn’t want to live here. Good for you maybe you can talk a few more people into leaving.  That would be good for me. So I save up and buy a house a bit later than my cousins in Michigan or Oklahoma or Colorado.  Big deal they all want to come visit me on vacation not the other way around.

In most cases graduate degrees = serious debt which overshadows any increased income gleamed from the degree.

In fact, most of the granduate degree holders I know, after taking into consideration educational debt, are much closer to insolvancy than holders a college degree who have worked since graduating.

I work in banking.  I’ve helped write legislation.  On many occassions, I’ve helped fix poorly written bills already pending.  Fairly often, I’ve helped to make the bills clearer and have fewer unintended consequences. 

I’m one of the “good” people who you probably actually want contributing to legislation.  I’m precise, careful, understand political pressures, but don’t pander to them.  If you took either a typical politician or their staffers and asked them to write bills on highly technical topics, they would screw it up unless they had outside help.  The key is finding knowledgable helpful people who aren’t just trying to be self-serving.  When I make certain suggested changes, I might say “this is definitely in the interest of bankers, but this wording is most helpful to responsible bankers who are trying to do the right thing”.

If someone in the Senate wanted my help, I would be glad to give it.  The problem with this bill there is too much attention and political pressure.  Not sure if my employer would let me do it.

Why do so many people want to live here if it is no different then? It would indicate a lot more people love it than don’t.

CK -

When you see a mangled car flipped over upside down on the freeway, do you say to yourself “Ah, it’s not relevant to me - I’m not going to look”?

movingaround—I don’t like it any more than you, but those things they say ARE true, there are people out there who will want to come here—- not everyone, but enough. You have noticied how many more people are here than out there?  How’d that happen?

Yes—SoCal is WAY overvalued for what you get now, and if I did not live here I would NEVER dream of moving here in 2008.  BUT, once prices fall back to earth (they will) and it becomes only marginally cheaper to live someplace like Minnesota—- a guy is going to be sitting there in 30 below zero weather on New Year’s Day, having just shovled his driveway for the 10th time in the week—- and flip on the Rose Bowl game.  And he is going to say “I’m outta here”.  Not everyone one there will say that, but some will.  And our bubble pattern will start all over again.  You are from here, you know the history.  It is bound to repeat itself.

“Then the car beams in your windows all night long are like searchlights looking for Allied bombers over Germany.”

Too funny…

Hey, its only a million bucks. You expect something on a quiet street?

AZ—- I pay a premium to live in Irvine so I don’t have to get on the freeway.  But as I drive up Main St every morning during my 4.2 mile commute, I do look at all those new apartment complexes under construction and think “that’s relevant, because soon those are going to house a bunch of transplants from Arizona”. 

You are going to get this mine-is-bigger-than-yours CA related Kool-Aid talk on here because of the nature of the blog being related to CA.

If this were a Phoenix, AZ blog, you would have the same characters popping off about how awesome AZ is and how crappy California is.

Obviously, to people like us who do not live in CA, this belief that some of the locals put faith in about CA being superior to every place else in the world is wildly amusing.

Ah, people like to go to the beach for a week’s vacation.  It naturally follows that the implication is that they want to live here year-round.  Why else would they visit? Surely, there is no other explanation.

ok - but here is my truly serious question to which I have yet to get a good statistical answer - are they here because of a simple lifestyle choice - or because of jobs, jobs, jobs.  I went around with this once in one of the forums and got the feeling that people don’t think it matters why people come but I do think it matters.  We are back here because of a job - fact is for me many of the jobs are here in ca.

You also forget that many, many people are sitting there in the snow thinking “hmmm - want to just pop out to the ski resort around the corner?” 

The comments today are going so many different directions… it’s hard to know where to jump in.

But I have seen a couple of recent studies that address proximity to major roads and health issues in both adults and children.

Journal Report
07/16/2007

Living near high-traffic roads may be hazardous to your health

American Heart Association rapid access journal report

Compared to participants living more than 200 meters (642 feet) from major traffic, the chance of high coronary artery calcification (top quarter of calcification levels) for those living

within 50 meters (160 feet) of heavy traffic was 63 percent higher.
between 51 – 100 meters (164 to 328 feet) was 34 percent higher.
between 100 and 200 meters (328 to 642 feet) was 8 percent higher.
These percentages were calculated after adjusting for known risk factors such as age, gender, high blood pressure, smoking, cholesterol level and diabetes.

Living Close To Road May Worsen Allergies
Asthma, Eczema More Common The Closer To Traffic

POSTED: 8:49 am EDT June 16, 2008

The researchers tried to compare the children evenly based on things such as parents’ allergies, pets and siblings. But they found that the closer a child lived to a major road, the more likely they were to have asthmatic bronchitis, hay fever or eczema.
We consistently found strong associations between the distance to the nearest main road and the allergic disease outcomes,” wrote Heinrich in a news release. “Children living closer than 50 meters to a busy street had the highest probability of getting allergic symptoms, compared to children living further away.

Personally I don’t need piles of research to keep me from buying a house that is too close to a freeway, or backs to a major road/intersection, or has power lines running through the backyard, or has minimal setback fron the street, or is all garage frontage. I just don’t like any of the above and would assume that in anything but the nonsensical market of the past few years such homes would be more difficult to sell, or would net a lower price, or both.

I guess I’m just insensitive that way. Once after a long day of looking at a LOT of houses; when we pulled up in front of the last house and I saw power lines in the back yard, I made my RE agent tell the seller I didn’t need to look at his house. I was tired and knew I would never buy that house. I barely glanced at the brochures, published by the utility company (no agenda there and completely unbiased I’m sure)claiming no health risks, that the seller insisted on sending out to me. Didn’t matter.

You may know “many”, but that is not representative of the masses.  There has been an ongoing negative savings rate in the country.  Actually I beg to differ quite a bit—I’ll bet there are less than 1,000 people in Orange County “who sat out the housing bubble and now have hefty down payments”.  One thousand would be 0.03% of OC’s population.  Plus, “hefty” is very subjective.  I know of very few people who are patiently waiting on the sidelines, entirely out of the local real estate market, with hefty down payments ready to go.  Not in Santa Ana, and not in Newport Beach.

Principals at my company probably make $200k+.  If their spouse work, they can top the $250k.  With that said, there are a lot more people making way less than them.  Top few % of earners.

A lot of people live here because our parents live here.  I for one was born in raised in Orange County.  My best friend lives in Oak Creek.  I go to the beach over 100 times a year and I ride my bike to work.  That being said, I find a lot of people in Orange County are overly aggresive, snobbish, wasteful, self centered, and not very good parents to their children.  Maybe they are like that every where else as well.  All I can say is we are a family of four surfers and that is one of the few reasons why we stay.  If there were waves in Austin, we would be there tomorrow.

“ski resort around the corner”.  You’ve never been to Minnesota (or Wisconsin, or Iowa, or Michigan, or Illnois, or Ohio, or Nebraska, or North Dakota, or South Dakota and so on).  Unless you are talking about a cross-country ski resort, Irvine is much, much closer to a mountain ski resort than any of those places. They are COLD and FLAT.

Further to the point of the desireablity of ski resort areas, I wonder if income fundamentals support housing prices in places like Park City or Vail?  I’ll bet no.  Some places are unique, and will command a premium.

I lived with a ski resort around the corner from me.

I have seen studies that indicate significant health effects on children of living within a quarter mile of major freeway; theres a lot of variables in traffic, ambient breezes and background levels…
I work at a facility that uses toxic materials, and so we have toxic monitors and alarms.  We are also about a half mile from the freeway; we regularly get Ozone alarms on hot summer days during commute hours.
A quote from one study:
” It is easy to see why new homebuyers are concerned with how close property is to a busy road or freeway. Unfortunately scientists cannot say exactly how close is “too close” at this point. European studies have shown increased respiratory health problems in children who live or go to school within 100 meters (~330 feet) of a busy roadway, with the greatest risks appearing in the first 50 meters (~165 feet). Studies conducted by SCPCS investigators here in LA show that carbon monoxide and ultrafine particles – the smallest portion of particulate matter emissions and potentially the most toxic – are extremely high on or near the freeway, dropping to about half that concentration 50-90 meters (~165-295 feet) from the freeway. After about 300 meters (~990 feet) the concentration of particulate matter reaches the “ambient” level ”

The particulate at the 405/73 interchange is likely from the airport.  I have lived under the flighpath, adjacent to it and further adjacent to it - in each case far from high traffic areas.  Anywhere near the takeoff flight path yields the significant black soot - even Balboa Island, which is under the reduced throttle area.

Actually, some of us who live in CA also find it amusing.

It would be interesting to see how often most CA residents actually take advantage of many of the opportunities posted here as being unique to the area.

Just one example: I was at a dinner party over the weekend and mentioned plans for a beach day. I couldn’t believe how many people said they hadn’t been in years. Yet you wouldn’t believe how much $$$ some of the same folks paid for their ocean view properties. I guess just looking from a distance is good enough.

“If this were a Phoenix, AZ blog, you would have the same characters popping off about how awesome AZ is and how crappy California is.”

I think that is the main point in this discussion topic.  I would add that many (most?) of us who like living in SoCal don’t think it is better than elsewhere for everyone.  It’s just the best place for us.

I’ve lived in an Iowa town of 25,000 people; lived in Kansas City, MO; went to college in a town of 10,000 people; lived in St. Louis, MO; and lived in Irvine and Newport in SoCal.  My mom loves living in the Midwest because she loves winter and snow.  She would not be happy here.  I love $7 Mexican food for lunch.  She likes Claim Jumper.

Steve, a few days ago you nicely asked why we like it here.  I re-posted a list that I had posted at <http://www.irvinehousingblog.com/forums/viewthread/2278/P50/#53433>.  Since then, you keep saying that you can do all that at any college town.  But I know that isn’t true, so, it seems that either I didn’t stress some things enough for you to understand, or you don’t want to understand.  I will assume it was the former.  Let me try again.

Just as an example, what college town has a different water park for each day of the week?  Now, you might say that you will just go to the same one 7 times.  My point is that being here gives you that option or the option of going to a different one each day.  You may or may not care or like the things listed, but there you are. 

In SoCal, people are outside all the time.  It is hard to really understand until you are here.  When I was watching TV growing up in the Midwest, I would see shows where the kids’ lockers were outside.  I thought that was such an unrealistic thing.  When I moved out here, I saw that schools out here actually do that.  It is so rarely too hot, too cold, or too wet that you can do that.  Again, if you don’t like being outside all the time, you won’t care.

It is all about values and priorities.

Ok, I have close to 1.5 in net worth but I’m making only $128k a year. I guess I’m not in the top 1% but rather the top 10% then.

What you make a year doesn’t mean crap. It’s the net worth that counts. Try saying what you make a year counts to those laid off BSC folks

I would be interested to know what all of these 250K high wage earners do (job titles) and what companies they work for.

During the bubble years (aka 2005-2006), it was not uncommon to find high school graduates (and dropouts)and even ex-felons making $10,000/month in the Orange County mortgage industry.

Tell me you didn’t just compare Vail to Irvine…  I bet income fundamentals there are less out of whack than they are in Irvine, and I bet their median income is a lot higher.

*waits for someone to post census information making me look like an idiot*

Where I live we have major golf tennis tournaments, triatholons, pro sports, etc. etc etc all witin a 1 hour drive.  Further, we have REAL mountains - Rockies - within a 1.5 hour plane trip - which is cheaper than driving.

We have at least 30 professional athletes who play out of town/state, yet curiously all choose to raise their children in out little town.  Some even send their kids to public schools. 

I have been to Orlando 5 times (i got kids), but I don’t want to ever live there. We don’t have 7 water parks - but when did that ADD to quality of life? 

And, I regularly fly to Boston for yankee games at fenway.  I always schedule business trips around yankee games (I buy 4 tickets on craigslist and sell 2 outside the park or “on the bridge”.)

I was raised in Chicago, and 99% of Bear fans have never set foot in soldier field.  So when i catch a game on the dish, i am doing exactly what my family is in the City.

My quality of life is that there is nowhere in my City that I am scared to have my hybrid car stop.  Also, if my wife’s car ever did stop - at least 10 people we have never met would stop to ask if she needed assistance. 

I hate pro basketball - so does most of the U.S. if you have been watching the ratings - but, I regularly see 5-10 top 20 college football/basketball teams per year play.  And i sit 3 rows from the floor when I do.

maybe you have missed the memo,, but why SOCAL is tanking, Madison and Austin are exploding.

“7 water parks is it” ??????

as a software/IT guy living in Irvine and working in Santa Ana (8 mile commute… could almost bike, if i wasn’t such a fat sluggard :D) I can say that it’s both.
Other non-financial restrictions applied, such as family:
1) Wife’s industry is so limited we had only 2 companies to choose from at the onset, one in Ventura, and one in deep-south OC.  Irvine is the nicest area in OC that’s midway between where she works and where I used to work (downtown LA)
2) Metrolink made my commute up to downtown LA a… well, I wouldn’t say a breeze, but it wasn’t too bad.  Ride the train means reading for 2 hours each day to improve my mind… or something.
3) Family members - to paraphrase a bad translation of yore: all our families are belongz to SoCal.  That includes multiple aunts and uncles.  They’re all within 1 hour drive from us, which might seem like a lot (I mean, an hour drive can get you across 3 national borders in Europe, IIRC) but isn’t too bad.

But, thinking back, the reason we’re here is mainly because of #3, which lead to the limited job selection of #1.  And it’s pretty hard to change #3

that was supposed to be a response to movingaround’s q: “ok - but here is my truly serious question to which I have yet to get a good statistical answer - are they here because of a simple lifestyle choice - or because of jobs, jobs, jobs.”  not sure why it didn’t attach to the right astute observation.  mea culpa

exactly T!m - good post - we agree finally!  I do have to add though that some people like being outside a whole lot - but they prefer being outside in the cold, snowy weather - not me - I still have too much Ca blood - but I happened to be married to one.  He would prefer Alaska or Canada I think.

” have to admit I am very close to pulling out of the political process.  I see no point in even voting anymore.  It really doesn’t matter if the person has a D or an R next to their name, they get to Washington and look out for #1….themselves.
I think I have had enough.  I choose to bury my head in the sand.  It is too infuriating to even pay attention. “

I agree!

I put all my trust in gold ANYDAY versus a politican with a printing press.

Exciting and/or interesting?  Eichler homes in Orange, pre-war homes in Long Beach, homes in Floral Park, custom homes with quality craftmanship in Laguna Beach, etc.

If you bought at the peak, even with a fixed rate, your breakeven point is way out in the distant future.  How exactly does your fixed rate to 2005 value make up for the massive loss sustained at the end of this correction?  Paid 999k, it is worth 650k 6 years later and takes another 10 years to get back to 999k - hardly a short period of time to wait.  And these numbers don’t account for inflation.  Renter have the luxury of not actually losing money with a plummeting housing market. People who bought at the peak, and put money down, are looking at decades to recover their money.

Okay, so it appears you aren’t understanding because you don’t want to.  In your initial post, you were nice and also said you expected to get some hostility for asking.  I haven’t been hostile, but your post reads that way to me.

Did you follow the link I provided?  It lists lots of things.  I even clearly said I was using the water park item as an EXAMPLE.  Man, I’m just trying to answer your question.  As I said, it is all about priorities and values.  If you prefer flying out of town to see a baseball game, then good for you—it sounds like you are in the right city for yourself.  I prefer driving 20 minutes to one.  I’m not saying I am better than you.

You said all the things I listed could be found in any college town.  Then you go on to say how you have to fly to other towns for many things.  Which is it?

I’m wondering if you have some hidden motivation here.  You don’t seem like you are really trying to understand.

Our lockers are outside too…

Why would you have an air conditioner if you are across the street from the beach?!

an aside based on Shannon’s comment above

The one thing sickening about where i live.  The pedastal that children are placed on.  Its insane.
The children clearly know that they are in charge of their parents happiness.  I see people picking up/dropping off their kids off at school and, when you watch the hello’s and goodbye’s you would guess that the parents are leaving or returning from a 3 week to the Netherlands.

And, everyone, has to have “perfect families”, “perfect vacations”, “brilliant prodigy-level kids” and “perfect holidays.”  As a “rough and tumble” chicago kid with a loud obnoxious family, I find my city overbearing.

But the music IS back playing!

Just heard the Mortgage Bailout Bill passed Congress—after all, it’s an Election Year.

What do you mean, “caught without a chair”?
She’s got her Guaranteed Gummint Gravy!
Paid in full by all us stupid suckers!

Uh, did I read incorrectly or did you just say that you have a better quality of life than the “tanking” SoCal because you can FLY to stuff to do?

I’ve seen some good ones, but that one takes the cake. Best of luck to ya.

Yeah, I think that is happening more and more everywhere in the US.  It’s weird.

BHC - your situation is very similar to most of the people I grew up with - wanted to stay in CA for family - lucky enough to find a job to fit the area.  Yet, those exact same people - even knowing there own situation - have told me numerous times over the past 10 years how everyone wants to come here.

On the other hand, I also know a lot of people who are gypsys because of job and many of them do not want to be in CA - how would they feel if the cost of living was equal country wide - who knows.  My bet is that most people would prefer to stay close to where they grew up.

” the whole purpose of the progressive tax structure in this country is to tax people what they can “afford” to pay. “

Not really - the whole purpose of the tax structure (especially prop 13 and high income taxes in california) is to give wealthy baby boomers a free ride while young families and the cities and schools that serve them go broke.  Why?  Because the boomers and AARP are designed to make that happen.  And they do.

Tim,

I go to Vegas.  But, I ain’t raising my kids there. 

Anything you can drive to in SOCAL . . . so can anyone else.  Its not more “yours” because you arrived by car or have a state license.  There are hundreds of people residing in Tennessee that have Dallas Cowboys seasons tickets.  Are they more or less fans than the person living in Plano who has never seen the inside of the stadium?

Lets get this back on track.

I see nothing special about these homes and I have been waiting . . . and waiting.  i routinely see homes and locales that make me fantasize.  I have never seen one (1) in Irvine.  None of these million dollar properties are the ones in “The O.C.”  Further, most of these homes have substantailly less of EVERYTHING (size, accoutrements, wow-factor, etc.) than homes 1/2 the price in places I, and 99% of the U.S., would rather live. 

For example:
http://www.redfin.com/CA/Irvine/59-Fire-Thorn-92620/home/5931294?src=blg_irvine&utm_source=irvinehousingblog&utm_medium=blog&utm_nooverride=1  

The above is not a dream house nor is it in a dream location or “dream” anything.  This is an ugly, ugly home - inside an out. 

I know people who has stainless steel appliances that are MADE (doors/walls) of . . . stainless steel.  They will last 30 years . .  industrial quality machinery.  Not a regular LG fridge/stove with a stainless steel front - This is insanity?!!

I don’t understand how thinking people have gotten US (the country) into this mess.  It is scary.  Very scary.  I can live anywhere and I there are so many reasons to NOT live here.

Do you know where I can get a prescription for some pot? I lost my response that I was writing on this board.

Tim

I understand your perspective and believe you love and enjoy where you live.  I humbly apoligize if i have hastily gone off on a tangent.

SFR

Agree 100% MMG.  In the case of today’s house, $999k is insano. But IMO $750k ($247 sq ft) would be a fair price reflective of this market. Yep, still more than Phoneix or Arkansas, but fair for here.

But I’m going to guess you this baby at about $600k?

mmmmm…..Rihanna…...

“...Renter have the luxury of not actually losing money with a plummeting housing market…”

Renters lose the rent!  There are no freebies.  A peak homebuyer loses the equivalent rent + the extra costs (since we haven’t been near rent/own parody for years).  The peak homebuyer is also losing equity, but a lot of housing market bears like to view all increased equity as illusory; if it is, then lost equity is illusory as well until it’s realized.

A home you live in should not be viewed as an investment.  The peak homebuyer who paid $1 mil in 2005 is losing a lot of money.  If this same family rented the same $1 mil house, they’d be losing a lot of money - less money lost, but still a lot of money.

Then again, money is relative.  If your household income is $400k (the minimum necessary to consider the purchase of a million dollar home), then the amount you’re losing by buying or renting isn’t too great.

What do you do making $128k/yr?  And do you do it in Irvine?  Just curious.  Cheers! 

Define “graduate degree”

PhD: yes, certainly. I have one, and I could be making much more with much less debt.

MBA/JD: no way. You’ll end up borrowing as much as a PhD does, but the pay to a JD or MBA can easily be double.

Face it, SteveForReal,
you will never get anyone who has paid that much for their entry to hell to admit where they are…
When I check out “Best Places To Live”, I find there are many wonderful places that are not in Southern California.  I have retirement visible on the horizon, and keep thinking about where I could go after trading in my overpriced home for a big chunk of cash.  The question is becoming just how much smaller that chunk may be… and what tradeoffs will I make? 
I see people around me paying a million for a peek of blue slightly different than the blue of the sky, or the privilege of walking a few blocks less to the beach.  Not worth it to me; yet it seems I was willing to pay quite a bit to be here and not somewhere without an ocean handy.  My brother decided he wasn’t going to pay, now he’s in Boulder and very happy with mountains.  Of course, he spent 10 years cruising the world on a sailboat, so got enough ocean.

I don’t recall saying anything about something being more mine or that other people couldn’t drive to the same things.  I don’t know what you are referring to here.

I agree that you aren’t going to see houses that are your dream house in Irvine.  Maybe in Newport or something you might.  (Also, “The OC” was filmed in LA—it is a union thing that has to do with distance from Hollywood).  When I lived in St. Louis, I still couldn’t afford my dream home.

I don’t think people like living in SoCal because of the amazing house you get for your money, unless you are Oprah or Kobe.  I’m happy living in a small place, so it is not something that bothers me.  I am more bothered by the lack of real darkness at night due to light pollution.

. . . and which of the three sporting events listed did you attend???

Prop 13 didn’t bother me the last 15 years as a homeowner because I figtured that some day 30+ years down the road, I would ultimately get the benefit of it…then again, it’s probably going to be like social security - a benefit that generations before me had that I’ll never see.  But hey, who said life was fair ?  You don’t like taxes here, go to a state back east (like N.J.) where the RE tax rate often exceeds 3%...oh, and home values in your town get reassessed every 7 years so your taxes can literally double overnight…then as housing values plummet, you can spend years trying to get a refund.  Should people really have to sell a home they’ve lived in for a lifetime just because of RE tax increases ?  Or how about the states where there’s a ‘transfer’ tax of like 1% of home value when you sell it ?  I’m not sure there’s a fully equitable R.E. tax system out there…

Okay, thanks. 

There is a huge difference between being one/half mile or one mile away from a freeway (in both air and noise pollution).  The prevailing winds also make a big difference.

The only studies I have read relate to how far a school should be from a freeway.  Being very close to a freeway is very bad for children.