Irvine Housing Blog

O.C. bankruptcies highest in 65 months>

In March, 1,881 individuals and businesses filed for bankruptcy protection in Orange County, the highest one-month total since the federal bankruptcy law changed in October, 2005.

The number of filings is also 10.1% higher than a year earlier and the highest number of bankruptcies in March in at least 11 years, according to data from the U.S. federal bankruptcy court.

“The recession might be over from a definitional standpoint, but the economy has been stagnate, at least in California,” Smiley said. “In Southern California it is very real estate related. There is such tightening in lending requirements (for both individuals and businesses) that it is difficult to do anything.

“Until the banking industry loosens up its underwriting requirements, I don’t see things getting all that much better,” Smiley added.

Is 642 new home sales in 2010 a good or bad number?

I remember when TIC announced they were building 700 new homes back at the end of 2009, people on this blog said they wouldn’t be able to sell that many in 2 years.

And before someone pulls out the “gov cheese” card… the card was already in play when these comments were made.

Regardless of spin, the fact that so many new homes in Irvine were sold last year compared to other new home projects in other cities should be remarkable. It’s okay to admit that.

However, 2011 is not 2010. Despite Dan Young saying that 2011 is going to be a better year, I don’t see that happening. San Marino, their $1m “luxury home” project in Woodbury, has only been open for a month or so and already their inventory is hitting the MLS and they are offering a broker co-op. Laguna Altura marketing has gone quiet offering previews to “qualified” buyers and you have to dig for any information on it.

And I don’t like the new floorplans. There is nothing innovative about putting 4 bedrooms into a 2600sft home (Maricopa Plan 2) with no separate living spaces downstairs or additional living spaces upstairs… what a waste of space. Back in the day, you can fit a 5 bedroom house with a 3-car garage, formal living, dining, great room and a bag of chips into that square footage.

The detached condos are even worse… 2000sf and the master bedroom/closet/bathrooms are tiny. TIC/Irvine Pacific got too complacent thinking that as long as they slap “Great Room” and “California Room” on their plans, they will sell. Poor locations and higher price points will expose those flaws… which is what is happening in 2011.

It angers me to no end the way a major “newspaper” reprints spin and hype and when called on it they do nothing.  This article on how to read a press release reminds me of an article about how to read Pravda, the Soviet newspaper.  When they wrote about “Comrades enjoying prosperity and comfort” you knew there was no enjoyment, no prosperity, and no comfort in the Soviet Union - i.e., the truth was the opposite of what was being printed.

Excellent post!
There’s clearly demand and TIC is rolling out supply to meet it.
The level or strength of demand can be argued.
I do agree in that in the event of a slowdown, TIC will slow/halt production and offer incentives.
Either way, they’ve built in plenty of cushion and ultimately will come out ahead.
As long as they control the market, they’ve got the upper hand.
By design they launch at higher price points, knowing they may have to cut and offer incentives as a Plan B scenario.
It’s already baked in.
Meanwhile the buyer feels good thinking they got a deal or put one over on TIC because of the perceived $$$ incentive or broker co-op.

Good post!, in Orange Co. a real estate press release passes for good investigative reporting, we need a Myth Buster!

I hate the new designs. 6 homes share 1 driveway. I step out my front door and I’m stepping on to the shared driveway. I would never buy that kind of design.
Having said that I am thinking about buying a home in Portola Springs. The house name is Las Ventannas.
Has anyone walked through these new homes.
What do you think?

I always enjoy the posts on the Irvine Company. I think it’s important to note that Don Bren has his hand in everything his company brings to market. He has the experiance, 50 years in orange county developing land and building homes. In those 50 years he has built wealth, little debt and full control of his properties. If you are going to buy a new home or lease retail space from him you are going to pay top dollar. In the past 50 years he has paid off debt, built wealth and kept a very low profile in the public and except for trading in three wifes for a new model I think he is a great businessman.

I look forward to the redevelopment of El Toro from the Five Points group. These folks are developing the project with other peoples money. They will have debt, time lines to pay back the dept and returns to produce for their investors. They will not have the luxury to start and stop development, they will need to price to market and move for sale product. If I was in the market for a new home in Irvine I would wait for this development to start.

Mortgage With 0% Down? Ask NASA”

Best comment: “Wow. After they default the new consumer finance protection agency will step in and argue that a rocket scientist was taken advantage of by the bank and that the bank needs to be punished for its predatory lending practices. I mean, it’s just not fair to expect a rocket scientist to be able to calculate whether they can afford their mortgage payment especially with all those highfalutin finance terms like “interest”.”