Irvine Housing Blog

Anyone with thoughts on 92603 and 92618?  Granted they are both well located for Irvine, and will be the last to be hit by the “Pain Train” (saw this on Pigginton’s today), but are people really still stepping up to pay these prices?  IR - do you know if the price/rent comparisons make sense in these locales?
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For home prices then, today is also the first day of (Free) Fall.

It will be interesting to see how 92612 does over the next few weeks in this OC Reg 22 Business Days report.  If Hovnanian can be believed, then there are a lot of condo sales in that zip at Avenue One that could bring the median down.

My guess is that all it takes is one or two $3,000,000 sales in Shady Canyon to move the median price up in 92603.  And from the data presented, there is no way to know if the price of the $3,000,000 homes is less than it was last year or the year before.  Of course, maybe the bottom is in and re appreciation is happening in the OC again.  But, I wouldn’t bet on it.

One or two sales would move up the average not the median.  The median moves on volume.  That’s why it is less than informative to have only one figure or the other.

Here is what I absolutely do not understand…...

Real Estate professionals make their livings for the most part from commissions on the sale of homes. When the volume goes down this substantially, what are they thinking, what are they doing.

If I was an Agent of Realty, I would go to every one of my clients and say, this is it, you need to reduce your asking price. Instead, you see home after home put on the market at 2006 prices.

It would seem that not getting a pay check would be motivation to take some action…......

I have often wondered about this myself. I suspect it is very difficult to detox the sellers from their kool aid rally, particularly if the realtor was telling this seller prices always go up back when the seller was a buyer.

Despite the current aberration with the published median price, values are without a doubt declining right now.  We’re eventually going to reach the threshold were lower prices spur demand, and volume will increase mainly below the current median.  I think this will weigh on the median price.

You think the permabulls are goofy now, wait until the Register reports the median price below $500,000.

Meanwhile, we watch the inevitable.

With no exceptions, everyone I know who wants to sell their house either pulled their house off the market, or keep at the high price hoping for a sucker to come along…Unless you have to sell, why sell at this market? 
Trust me, there are suckers (VERY VERY VERY FEW) in this market.  One of my friends just found one from the east coast, and the deal is closed.

There are only 23 sales.  Can anybody pull all 23 so we can actually look at the distribution?

When a seller is looking for a realtor, they try to find the one that comforts their ambitions the most.  Sellers will not hire somebody that tells then that their goal price is no longer achievable.  Sellers are not going to voluntarily go alone with the inevitable decline ... it’s going to be a drawn out process, like pulling teeth.  Homeowners have been conditioned to believe their homes are worth crazy prices.  Grandma still believes her Huntington Beach condo is worth $500,000.

If I were a realtor, I could become very wealthy by simply convincing owners to allow me to sale their homes at 65 percent of recent comps.

Not too worried over 92603.  Interesting looking around in Redfin.com for properties that sold in the last 3 months.

Sold Property
208 TALL OAK
IRVINE, CA 92603-0659
Sold For:  $583,950
(08/24/2007)
Beds:  - 
Baths:  - 
Sqft: - 
Style: Condominium
Year Built:  - 
Find on the Map Sales History
Date Price Appreciation
08/24/2007 $583,950 -15.4%/yr
05/22/2006 $720,000 —

Taxable Value
Taxable
Land $242,394
Additions $208,390
Total $450,784

Taxes paid in 2006: $6,738

From Redfin.com, a few properties Redfin has sales history for. 

Sold Property
24 ARCADE
IRVINE, CA 92603-0120
Sold For:  $1,670,000
(08/29/2007)
Beds:  - 
Baths:  - 
Sqft: - 
Style: Residential
Year Built:  - 
Find on the Map Sales History
Date Price Appreciation
08/29/2007 $1,670,000 15.6%/yr
01/03/2005 $1,137,000 —

Taxable Value
Taxable
Land $687,750
Additions $477,489
Total $1,165,239

Taxes paid in 2006: $16,131

Sold Property
52 SWEET BAY
IRVINE, CA 92603-0210
Sold For:  $1,380,000
(08/16/2007)
Beds:  - 
Baths:  - 
Sqft: - 
Style: Residential
Year Built:  - 
Find on the Map Sales History
Date Price Appreciation
08/16/2007 $1,380,000 15.3%/yr
08/30/2004 $904,500 —

Taxable Value
Taxable
Land $585,990
Additions $336,404
Total $922,394

Taxes paid in 2006: $13,714

Sold Property
71 SHADE TREE
IRVINE, CA 92603-0150
Sold For:  $1,480,000
(08/28/2007)
Beds:  - 
Baths:  - 
Sqft: - 
Style: Condominium
Year Built:  - 
Find on the Map Sales History
Date Price Appreciation
08/28/2007 $1,480,000 3.5%/yr
01/10/2006 $1,400,000 —

Taxable Value
Taxable
Land $559,723
Additions $315,349
Total $875,072

Taxes paid in 2006: $12,295

Sold Property
54 SHADY LN
IRVINE, CA 92603-0128
Sold For:  $1,550,000
(08/02/2007)
Beds:  - 
Baths:  - 
Sqft: - 
Style: Residential
Year Built:  - 
Find on the Map Sales History
Date Price Appreciation
08/02/2007 $1,550,000 1.0%/yr
08/12/2005 $1,520,000 —

Taxable Value
Taxable
Land $1,382,271
Additions $73,248
Total $1,455,519

Taxes paid in 2006: $19,363

Sold Property
71 CANYONCREST
IRVINE, CA 92603-0131
Sold For:  $685,000
(08/09/2007)
Beds:  - 
Baths:  - 
Sqft: - 
Style: Condominium
Year Built:  - 
Find on the Map Sales History
Date Price Appreciation
08/09/2007 $685,000 -3.9%/yr
10/28/2005 $735,000 —

Taxable Value
Taxable
Land $592,285
Additions $142,715
Total $735,000

Taxes paid in 2006: $10,410

Maybe the game is in reverse now.  Since there’s way more sellers than buyers, maybe as an agent you’re better off having lots of listings (regardless of price) so you can stake out lots of open houses to find a qualified buyer.  Then you can spend most of your time helping the buyer to find yourself your commision…

The clueless will always be prevalent on both sides, just in few numbers. Some will be sellers, thinking their overpriced 3 bedroom 1100sq ft appartment conversion box built in ‘78 is worth 425k, and there will always be clueless buyers willing to put their financial future on the line in anticipation that another clueless buyer will come along and relieve them of their mortgage in the future when they decide to move. Of course, he/she might be right—if they’re luckly.

Personally, I’d rather leave luck out of this financial equation.

That’s the thing about housing prices, there is a lot of resistance to lowering prices at the start of a downturn. Eventually as conditions start squeezing sellers, competition will encourage price cutting. It’s going to take a while before the CW says “house prices are dropping”.
The fact that all zips show 11-58% sales drops mean ALL those prices are gonna drop…

Two houses across the street from each other are for sale.

House A - purchased June 2005 for $700K (3/1, 2 car garage, tropical landscaping, very nice house)

orig list price last month $869K, after one month dropped price to $779 - $819K

House B - purchased March 2004 for $449K (894 sq feet, no garage, lot is 2500 sq ft, house is way overdone for its size),

just put on market yesterday for $569K

I will be keeping a sharp eye on these two but already it seems house A has much more of a clue than house B. House B owners are completely enamored with their house and have overdone the remodeling with excessively nice fixtures and fancy flooring - much more suitable for one of those “lord of the manor” type places as opposed to their squirrel hutch.

There are still hopeful, conceited sellers in this market, convinced that their homes are not only special but worth so much more than what they put into it - a “design genius” premium?

This is what I found on Zillow for 92603.  I don’t know how accurate it is

17 Prairie Grass       $3,808,134 8/31/2007
9 Kent                 $3,168,000 8/24/2007
24 Arcade             $1,670,000 8/29/2007
54 Shady Ln           $1,667,907 8/2/2007
71 Shade Tree         $1,480,000 8/28/2007
19372 Sierra Perla Rd $1,415,000 8/31/2007
52 Sweet Bay         $1,380,000 8/16/2007
2 Morning Dew         $1,250,940 8/29/2007
18971 Glenmont Ter   $1,209,277 8/10/2007
71 Coriander           $1,062,617 8/31/2007
42 Gardenpath         $966,000 8/16/2007
2 Los Gatos #19     $860,000 8/21/2007
6231 Sierra Bravo Rd $800,000 8/17/2007
71 Canyoncrest         $785,043 8/9/2007
67 Canyon Rdg #18   $757,388 8/30/2007
18726 Paseo Picasso   $718,671 8/10/2007
47 Nightshade         $651,375 8/17/2007
5311 Plum Tree         $635,000 8/7/2007
205 Dewdrop           $614,862 8/22/2007
 
 
Median $1,062,617

http://www.nytimes.com/2007/09/23/business/yourmoney/23view.html?ref=business

Some sage advice from an economist in this article from today’s NY Times:

“If you want to sell your house then you list it at the market price and you sell it,” he said. “If you don’t really want to sell then don’t put it on the market. But don’t say you want to sell and then set the price so high that you spend the year cleaning up every morning, having people walk through your living room and look in your medicine cabinets and reject you. That’s just painful — and expensive.”

This article discusses the loss aversion that bottle-necks real estate markets.  Basically, not only are tighter lending standards removing a sizable portion of potential buyers, but every seller that refuses to price to market is precluded from buying their move-up property.

With the exception of the “top pf the lime”, “view forever”.... in Shady Canyon and top of TR and TRidge…. these numbers have to be scary for the people on the East Side of the 405.

When TR goes around $500 to $400 per square foot. who’s gonna pay more than $250 for anything in Northwood, Woodbridge and the like?

And, let’s not forget our friends over Quail Hill… who’s gonna pay their $700 per square foot when you can get a larger home in TR for less?

Other than that, 92603 is a bit schizophernic… until TRidge settles down and Shady Canyon finishes build out, median prices on such slow sales can be all over the map.

I don’t understand the point of printing bad news.  Try looking on the bright side of life.

That article is right on when it says most people hate selling for a loss.  That’s likely why housing markets tend to flatten for a few years rather than fall when people have a choice about selling.

I think this time is different, because many don’t have a choice (ie. sell yourself, or the bank will repossess and sell it for you) due to the exotic financing.

It’ll be interesting to see how quickly or slowly the whole thing falls out.

“Miller and Rep. Linda Sánchez Introduce Legislation to Protect Consumers in Financial Distress from Losing Their Homes”

http://www.house.gov/bradmiller/prpr20070921.html

“Real Estate professionals…”  There is an oxymoron

Looks like a couple of over $3,000,000 sales moved the median in an upward direction.

That certainly would make it easier for realtors to dupe knife-catchers into buying in a declining market if the buyers were ignorant to what is going on.

I thought the declining market was the bright side.  It is looking brighter and brighter for us.

O.C. project delays may be tied to housing slump

http://www.latimes.com/news/local/la-me-lennar22sep22,1,3166433.story?coll=la-headlines-california

Jitters about delays in Irvine have raised broader questions about Irvine’s dependence on a single developer to fund the design and construction of the billion-dollar public park.

Lennar has received no significant return on the $1 billion it has invested in the former Marine base, including $650 million to purchase the property from the Navy in 2005 and $200 million in developer fees to the city of Irvine.

I don’t understand the point of printing bad news. Try looking on the bright side of life.

All depends on how you define “the bright side,” dear. Ha!

Nano, here’s my take on why realtors are trying to prop up the market.  Many realtors own several properties and are leveraged to the hilt. They will be gutted if the market drops dramatically. Would you dare utter a negative word about the real estate market if most of your net worth / status were tied to it?

Mattel apologizes to China for having lead paint in their toys. No, The Onion DID NOT write this:
http://tinyurl.com/2ynqaw

Perspective is everything.

Just noticed a new listing where it appears the seller actually has accepted they have lost a bundle and now they want to unload:

http://www.redfin.com/stingray/do/printable-listing?listing-id=1154969

Poor suckers bought at the peak of the market, 2,300 sf for $1.08M, in NW II backing to Trabuco.  I think this same model Cal Pac place has sold over the past month or two in NW II at down around $900K.  Assuming they unload this bad boy right now for $900K, they’ll have lost over $200K in 17 months…

Kudos to whoever bought this thing in ‘05 and was smart or lucky enough to have flipped it in less than a year for $100K+ gain.

The bright side is my future property tax bill going down to something less than equivalent to a year of college at a state school…

Does anyone know how to find the original list price of a home that has sold.  In particular, I am interested in the home at 6231 Sierra Bravo that sold for $800k on 8/17/2007.  How many days was it on the market?  What was the original price?  How many price reductions did it go through?  Where is a good place to find this information?

thanks,
Carl

I’m guessing from the property tax records ($900) that the property was sold by the original owners.  It could have been transferred to a family member at a discounted price or maybe it was just in desperate need of updating.

Irvinerenter,

I get these emails on foreclosures from one of my friend who happens to be a realtor dealing in foreclosures.  Following came up in Quail Hill and I am not sure what price/SF you had at this time:

Following is the specifics:
112 Stepping Stone
Quail Hill (QH) 92603-4244

3B/3BA, 1,553 SF, listed for $545,000, comes to $350/SF

$350/SF was unheard of, its heading in the right direction

Its bad news to you, its the bright side for us, worse it gets out there, better it gets for us renters waiting on the sidelines.

There are a few others in Quail Hill that are close to that price per SF.  Stepping Stone is the packed in, all lanes and garages area of Quail Hill.  There are listings in other areas of QH that are nicer to look at and walk though and are pretty close in terms of $/SF

For example
113 Tall Oak, Irvine, CA 92603
$579,900, $/Sq. Ft.: $360
http://redfin.com/stingray/do/printable-listing?listing-id=731705

Easiest way is to go to redfin.com, zoom in on Quail Hill area to see all the listings, then click on the $/SF column to sort the listings to see what’s going on.