Irvine Housing Blog

PLEASE !!! Stop using the Number FROM THE TAX CREDIT BOOM to do your comparisons, really the month to month numbers are UP!!!

The Double Dip is OVER ALREADY!!! Get used to it.

That devastating double dip sure is trouble for less premium SFRs in Irvine like those in Columbus Grove.  Now you can have one for only $1M.  Oh the devastation never ends.

I remember when people were saying high down payments in Irvine would disappear.  Can we put that myth to bed already.  Look at that down payment chart for Irvine.  When is the lowly average joe—median down payment going to dip below $100,000.  Let’s be realistic…... Never.

PR is correct, low rates will spur a wave of refis
It’s already happening.
Recent numbers out from MBA back it up.
There’s been a surge in refi applications over the past four weeks coinciding with the drop in rates.
It strengthens demand among would-be buyers while helping those looking to refinance existing loans.

MBA: Mortgage Purchase application activity decreases, Refinance activity increases

Another Mortgage Refinance Wave?

With 30 year mortgage rates still about 0.4 percentage points above the lows of last October, mortgage refinance activity will probably only pickup a little.

There may be an increase in refi volume, but nothing like the other real waves when rates fell more significantly.

Hey IR, or (any other prognosticators of the doom in RE),

You obviously have been very strong in your blog beliefs about the bubble and the consequences of that bubble.

Did you make any money off these “first to call the bubble” and unwavering convictions?

I know you are running your fund now but did you short the home builders and all the banksters back in 2006 or 2007?

Even with all the unforseen government intervention, you must have made bank shorting these stocks or buying puts or pulling a Paulson and buying CDS on the lousy MBS.

Curious…

The froth that is the Irvine housing market is getting moldy, but it’s still there.

The relative stagnation of the median price whilst markets around OC are falling can be interpreted a at least two different ways.

1) High wage earners are flocking to OC, buttressing prices.

or

2) The disbelief of the bubble persists in more minds as it relates to OC.

If the median income numbers don’t support theory (1) then theory (2) must be true.

The north part of Irvine and the newer parts of Irvine seems to have come down in price.  Turtle Ridge and QH have definately gone down.  Turtle Rock went down but then bounced back. 

The plus side of lower house price is that more income will be free for saving and spending.  Saving for investments and spending for jobs.  Low interest will also help, but that if you keep the property for a long time and interest rate remain low.

The condo buyer was not all that dumb for a nothing down purchase.  2 years of free rent.  She came out of the deal better than she when into it.  24 x $1500 = $36,000 tax free saving!

That’s like max’ing out on the 401k for 2 years, but even better.  Almost as good as a ROTH IRA of $300000.

I like the other areas except for the crime and schools.  The low crime and schools are a big selling point for Irvine.  The more crime the other locations creates greater demand for Irvine housing.

I went to Stonegate Maricopa and Laguna Altura Toscana over the past few days.  Findings are below, sales will be slow…..

Though they will both say they are more than pleased with sales, etc., the fact of the matter is they are not starting off like gangbusters compared to the well marketed launch of homes in Woodbury in early 2010.  (Though I would love to poll new owners in Woodbury today to see if they feel they got a good deal….)

STONEGATE
- Since early April, Stonegate has sold about 12 houses in Maricopa and they were borderline pushy to sell a Plan 3 home with June delivery once they heard I did not have to sell a home….
- For a house that is nearly a million dollars, I want more than 10 feet from the back of my home to the back of my property….
- Layout of homes on inside were Decent

LAGUNA ALTURA - TOSCANA
- I felt trapped once I was inside the gate - at least 7 minutes from house to any commercial location
- I was surprised that I did not hear the highway traffic more but TOSCANA is farthest from the highway
- NOT a single lot was designated as “sold” though they were happy with sales (read foot traffic) the first 3 days….
- For 1.25 Million, I want more that 12 feet from the back of my house to the back of the lot
- $400 a square foot before landscaping and window treatments, etc. is steep though the layout is functional
- With HOA, RE taxes and Mello Roos, your monthly obligation is nearly $2000 before you even get to the mortgage…...

We’re seeing a self-sustaining cycle building in Irvine. I’ve mentioned the cottage homes in Woodbridge several times, and the most recent 3BR listing there is now in Backup at $495K: http://www.redfin.com/CA/Irvine/6-Silkleaf-92614/home/4691467. It’s a short sale, but it’s nicely upgraded and I couldn’t see any other problems with it that would lead to an abnormally low price compared to other model matches.

If it sells at or below list, then we’ll have 2 recent comps: $488K and $495K. That will be the death knell for this Carmel cottage floorplan, and there are HUNDREDS of this model in clusters throughout Woodbridge, and dozens, perhaps even more than a hundred, of them sold during the bubble years. Once this sale comp goes through, there will be no denying that this is the new appraisal ceiling for these properties. These 2 comps aren’t outside the loop, or too close to the freeway, or any of the other things that a creative appraiser could point to in justifying a higher appraisal for other Carmel models. I counted TWELVE of the Carmel floorplan properties ON A SINGLE BLOCK (the block shared by 6 Silkleaf) that last sold for $600K or higher and will now be more than $100K below today’s appraised value. How many of these owners do you think will continue to sit on a losing investment?

This is a race to the bottom.

-Darth

Real estate is local.  Has been and always will.  It’s a moot point to say the housing market will be so and so and the price will be such and such in general terms.  Total waste of time.  While all you need is focusing on the area that interests you and analyzing how that particular market is behaving over the years.

Generalized talk is cheap talk.