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Outside CA, one can buy a nice multi unit building in a good rental area for 450K or less; cash flow would be far greater. 450K 2bdrm condo as an investment property? Great weather here in OC, Kool aid stays nice and fresh in the punch bowl.
Outside Irvine, one can find such in other places in California as well (that is, in the Inland Empire).
Just to clarify - this post mentions the IHB gathering on “Wednesday November 11th”. I think you mean Wednesday November 10th, right? (and not Thursday November 11th?)
Yes, it is November 10. Thank you for the clarification. I have fixed the post. I hope you can attend.
At this point, supply is the main problem, not demand, IMHO. There is still plenty of demand, but the delays in foreclosing means supply is still fairly low, excluding the hell that are short sales. This is why there have been price increases of up to 15% off the bottom.
Why can’t they clear off the water bottles, etc and take a nice picture of that kitchen? Most of the other pics show a mess too. Maybe they don’t want to sell it. BTW…these days having a condo like this to rent near UCI doesn’t mean much. Some new UCI apartments were just opened this year along Campus Dr. They are 70% empty. Since they can’t fill them with students, anyone can rent there.
I didn’t know that. Do you know what the asking price is for those places?
So riddle me this:
If low interest rates do not create demand, and low prices do… why is there such a high demand in Irvine?
Good schools, safe neighborhoods, great amenities (parks, pools, trails), high paying jobs, good weather
But there are many other OC cities that have that (especially in South County)... why is Irvine so stubborn?
I think the schools and low crime make Irvine somewhat unique in greater LA. Plus, a fair number of jobs are located right in Irvine itself. You got to hand it to the Irvine Corporation for excellent long term planning in these regards.
Add in location - I didn’t buy in Mission Viejo or Rancho Santa Margarita, even though they are nice, because of the traffic jam on 5N every morning. The time, stress and extra gas aren’t worth it.
One distinct area that is *not* stubborn
is Shady Canyon. Prices are in a tailspin.
To be fair, many of the homes in Shady
were built as spec, but price compression
at the top is reality.
It’s just a manner of time before other
areas (ie Turtle Rock) follow the downward trend.
How long? who knows. That certainly is the
$64 question.
Yeah, I thought that as well.
Until last week, when I saw 52 Echo Glen close for $7.499M.
Those are all great points and accurate but you forgot to include FCBs.
They love Irvine
What are FCBs?
I’ve been lambasted that such a theory does not exist and I would be better off thinking it was Santa Claus or the Tooth Fairy that is putting high cash downs on Irvine properties.
I agree with you.
They’re the primary force behind the successful 2010 New Home Collection sales
Not sure why that’s not acknowledged other than by a few of us.
Because using non-fundamental reasoning is a sin.
It can be used as something to blame the inflation of the bubble on… but not to explain the slower than everywhere else deflation of the bubble.
Nope. If it were any of those things, you’d see it in rents. And Irvine rents haven’t increased relative to the rest of OC. Try again.
“If low interest rates do not create demand, and low prices do… why is there such a high demand in Irvine?”
There is not “such a high demand” if you look at sales rates. Houses are selling slower than the peak and slower than historic norms. This is evidence of the absence of demand at current price points.
Further, the reason the bubble has not deflated as much here is a combination of desirability (people are willing to pay more for what is available), and low supply caused by the banks failure to foreclose on delinquent owners. Only recently has supply been allowed to creep up, and it is having downward pressure on pricing. Have you noticed that inventory has not declined much since peaking in September? The pricing pressure will continue.
Hold.
Did you calculate new home sales into your equation?
Could there be a lower sales rate of resale because new home sales were so brisk?
Please tell me that even you are surprised by the sales pace of Woodbury and even the upcoming projects in Stonegate East and Portola Springs.
Of course they are selling lower than peak… but do you compare these numbers to other OC cities?
I also think prices will still go down… but I don’t think demand will.
Show me some hard data… what is Summerlin’s numbers compared to Irvine… you should be well-versed in both (and don’t forget new home sales).
Demand is strong which explains all the new development taking place.
If prices drop, I don’t think demand will diminish. It may even skyrocket.
Just think if you had to be a US citizen to buy US Real Estate. I think the Skyrocket would never get off the ground. So nice to sell our country
to anyone with cash. Not to be racist or Xenophobe. But how many of those FCB`s are foreign money ? Bet its over 50%. And maybe Asian ? Just maybe ?
Now, this didn’t pan out, but get this: My former rental went on the market recently. The owner is Korean, lives in Korea, has owned the house for a number of years. The agent who manages it for him told me, after I said, no way is he going to get that price, well, he has a buyer, but the buyer hasn’t actually seen the house yet, he is coming from China.
I have no idea if that story was true, but the sale didn’t turn out anyhow. Now there is a renter lined up, nationality unknown.
If the Fed’s program is doing so much to keep Irvine’s prices high, why isn’t it having the same impact in Vegas?
Part of it is that bubble myths die harder in premium areas. See the above discussion and the “it’s different here” tone. It’s easier to come up with reasonable-sounding (but in the end just as wrong) justifications for bubble pricing in places like Irvine than it is for places like Las Vegas. A lot of people don’t seem to understand the difference between high prices and high P/E ratios, and use valid arguments for the former to try and justify the latter.
Another part of it has to do with bank behavior and the differental effect it has had on different markets. IrvineRenter has covered this in depth in several past posts.
Irvine Renter: Do you have an approximate percentage of the total number of existing homes (including condos) in Irvine that were purchased beginning in Jan, 2002, up to the present (exclude resales of the same unit- just count that unit as a single sale)?
I’m kinda busy. I was hoping someone else could rant on this for me:
http://www.huffingtonpost.com/2010/11/09/foreclosure-hunger-strike-baltimore-_n_781076.html
I count about six rant worthy items in this piece of shit.
Looks like tomorrows post…. Thanks.
Only 1 day? They sure don’t make Martyrs like they used to.
“They raised my taxes now I can’t afford my mortgage”. BULL.
More to the story than is being reported.
Actually, they’ve “reported” everything. You just need to read between the lines… so to speak.
I’ll tell you my favorite part. She is happy enough with a deed in lieu of foreclosure, but is somehow hysterical about being foreclosed on.
WTF is the difference!? Does it bother her that she has to do less work to be foreclosed on? Idle hands or something?
Of course, this is out of state. So, maybe a deed in lieu of foreclosure gets her out of the debt entirely whereas she might still owe something with a foreclosure. I don’t know the laws in Maryland. And more importantly, I just don’t care.
She took out an interest only loan. She couldn’t afford the house right from the get go.
I kinda wish all these people went on hunger strikes and stuck with them.
hunger strike. lol.
looks like she hasn’t missed any meals in the last few decades.
does that mean she’ll eat just 1 big mac instead of 3 big macs at every sitting? lol