Irvine Housing Blog

I saw this linked at calculatedrisk a minute ago.  Was going to post a link here

The circle is closing.  Some of the most shocking price declines I’ve seen in FL ( > 80% down from peak pricing) were apartment to condo conversions.  You had a company buy the complex from the original property manager.  They usually did very well.  Then the apt-to-condo converter sells to either investors or potential residents.  There were a lot of multi-unit buyers that I think had to be investors.  The apt-to-condo converter did pretty well, but they usually paid a high premium for the apartments.  A few final buyers could unload the apartments to a greater fool, but most gave up.

Units foreclosed, and many now scooped up by real investors (LLC’s or registered investment groups).  I haven’t checked, but thought that the best way to get value back out would be to buy all the units and convert back to apartments!  Maybe the original owners can come out of retirement and buy them back at a fraction of what they sold for.

The area deserves this. Property is WAY too high and income low, not even the FCB can keep the prices up. I checked with a friend of mine and Laguna Altura has sold 7 units total, most if not all, are purchases from TIC employees.

I hope the Donald takes a huge bath on this development. As I had posted earlier, I believe The Donald saw the writing on the wall and tried to cash out before the HUGE pop….but I believe he is a little too late.

“rent identical units for $2,590 and up. Even with the super-low interest rates and owner-occupant tax deductions, this property costs $3,291 to own. Why would anyone do that?”

Poor math skills coupled with an ignorance of the state of the housing market? Is there still a bias towards owning?

You almost make it seem close to rental parity, which I know was not the intention, but your Net cost of ownership assumes a certain tax savings and equity payments (assuming the loan will be fully amortized). AND the buyer puts down $120,000!!!

This is precisely why I RENT at Skyline.

I’m glad this turned to rentals… More competition so maybe Skyline won’t raise my rent when the lease comes up

You wouldn’t get this 1,500 sf unit at the lowest rent,

This is at rental parity at $625,000?  Oh.

I’m so happy I escaped OC and California back in 2008. I used to laugh at the ridiculous prices. $750k (3/4 of a Million Dollars) for 1,500 sf? Where if there was a fire and you were stuck in your beautiful high rise?

I now own a 4,600 sf house and paid $375k with an unobstructed 180 degree view of the Rockies; and total PITI is less than the rent I paid renting from TIC. Sure it’s cold in the winter and I don’t have the ocean close by but I never really had time to enjoyed the beach anyway (because OC kept me working too hard). Because I have way more money left over at the end of the month I’ve been able to go on some great vacations (with beaches) and paid cash.

Is that really a stretched out bathtub, or is it the photo perspective? I’ll ignore leaning up paintings on the floor as a staging gimmick, though the implication is not enough wall space.

And the problem with holding it for 20 years for the price appreciation to maybe catch up, is that there will be serious special assessments for major maintenance and updating to the building and common areas, plus your own “investments” to keep up the unit as a high-end property.

No special view (ocean, park/wilderness) and minimal big-city amenities and attractions within easy walking distance. Why, why, why?

The remoseful buyer who is filled with hate should of read IHB.  Most if not all her critism of the place were mentioned.  The place is not likely to go to pot physically in the next year cause the selling point was to have 2years (?) of the HOA included in the purchase price/bonus.  Since most was borrowed money, the taxpayers will need to eat the loss again and this time for the HOA.  The squatters can just live off the downpayments without much negative impact on the quality of life.  Stop gap loss limit was the downpayment.  If they read IHB, the lower the downpayment the better.  Road noise on the showing was covered by having music both on the outside common patio and inside of the units.  Just the noise by opening the window was a stressor for me.

The noise is worse than in most major cities.  Too close to I-405.  I doubt if the HVAC filtration will fully take care of the car fumes and dust.  How will be responsible for the filtration upkeep?

It was a great investmentment—for the seller, RE agent, loan officer and those working off commis.

For those that pushing paper and call it value added and wealth creation, all their “products” is a great investment—for them.

Gambling is a great investment but for whom?

“The most expensive unit is a 14th-floor, 2-story, 3,185-square foot corner penthouse that can be leased for $20,000 a month.”

The only people I know who do leasing at the price are corp. and fed. govt., who money is not coming out of their personal pockets. 

One would be hardpressed to find more than a handful of people willing to spend that much for an Irvine apt.  I would say $6000 would be more likely the 80%-tile point.

OC Builders do not understand high-density residential.  It only works when you have surrounding development which supports the high-density residential use.  That means you need supermarkets, restaurants, dry cleaners, movie theaters, etc. within WALKING distance of the high-rise.  Otherwise the density doesn’t get you anything.  In a good high-density living situation you can drive home at night, park your car, and walk to get anything you need.  You don’t have a yard, but in exchange you get convenient access to amenities.  OC high rise living is the worst of both worlds - you give up the privacy and space of a detached single family home, but you still have to drive to get anything you need.

I never understood the view aspect. What view?
405 FWY!!!
At least Ruth’s Chris steakhouse is nearby. Oh, and there’s valet parking there too, though not complimentary.

>fully integrated 12-speaker home entertainment system with component/amplifier tower

Do you know if it’ll be quiet in the units above and below this well-equipped room? Most walls in these apartments are paper-thin.

And so we have a bunch more luxury rental supply hitting the already-saturated high end rental market. How do people figure that rents are going to go up and up with so much of the housing supply that has been empty the past few years converting to rentals? Not just this property, but all the cash investors who are “knife catching” vacant properties and then renting properties out for cash flow. You can also add in the many people (possibly fewer now than 2 years ago, though) who rent out rooms to make ends meet?

The fact is, the more we have housing space sitting vacant, the more housing supply is restricted. There are a LOT of vacant properties right now. I don’t have the firm numbers on this, but IR probably does. This vacant supply can’t sit around being a drain forever. Economic pressures are going to force owners to cut losses and either take their loss with a sale, or rent it out. This keeps adding fresh supply to the market in a bad economy where the demand for high-end properties is much lower.

Higher supply (shadow inventory getting put back to use) and lower demand (unemployment, underemployment) mean high-end rental properties should continue being forced to reduce prices to maintain occupancy rates.

As IR pointed out, a lot of very nice housing was built in the last 5 years without the economics to support it. Putting it on the market with the economy bad and getting worse means a glut.

Am I wrong?

So if this is being converted into rental, what happens to those properties that has actually sold like this one…  Can you even have a high rise with part rental and part owned?

Who would rent these apartments for the price of detached homes?

http://www.forrent.com/apartment-community-profile/1000064755.php
Name   Beds   Baths   Price    
Plan D   1   1.5   $2535-$3395  
Plan B   1   2   $2635-$3505  
Plan I   2   2   $3105-$3730  
Plan A1   2   2   $3190-$4140  
Plan H   2   2   $3220-$4230

i’m sorry

i don’t think i heard correctly

u didn’t say monthly HOA fees of $900 a motnh did u ?