See Spot Buy or Sell

Inventory on January 5, 2013: 181.
Inventory has dropped 8.6% on month to month basis.
Median List Price/ SF has increased 1.4% on month to month basis.

In an article, Orange County Register says  “Last year, the (Irvine Pacific) company sold 1,436 new homes, nearly twice what it sold in 2011 when it ranked fourth in the nation for master planned community home sales according to an annual survey from John Burns Real Estate Consulting. Ten neighborhoods and two entire villages sold out. And what's happened to every neighborhood they started selling in January 2010? Sold out, too”.

But, two weeks ago Robert Shiller said, "A lot of people seem to think that if the market turns around, that means more of the same, meaning another big boom. I don't think that's in the cards. We might see home prices go up a little bit, you know, a little bit above inflation, maybe. Not likely that we'll see a real boom."

Shiller and Roubini have always given a pessimistic projection of the economy. But, in my opinion, when irrational exuberance begins, it’s good to keep ourselves educated of things to come. We have not entered a bubble phase but with unemployment for Orange County at 7.0%, Dow Jones at 13,435, low inventory and buyer desperation, Irvine can expect a mini bubble this year.

What are your Real Estate plans for the year? Buying or selling?

The featured property today is one of the “Wisteria” detached condominiums of West Irvine. In a neighborhood where single family homes were selling in the high $500s last year, we have a detached condominium listed for $619,000. Given the market conditions, it might sell quickly also, at the listing price or even more. There are already talks about how all cash offers are pushing others away from the market. Remember those fairy tales where princes came from a land far away? I can imagine Realtors telling the story of the client coming from land far away with briefcases filled with dollars to make an all cash offer!

95 Waterman #155, Irvine CA 92602

Beds/ Baths: 4 Beds/ 2.75 Bath
Area: 1730 SF
Year Built: 2001
Builder Tract Name: Wisteria
Builder Tract Code: WIST
Builder’s Name: California Pacific
Builder’s Model Code: 4

Listing Price: $619,000
HOA Dues: $174 Monthly
Property tax @ 1.0593: $6557 Annually
Mello Roos: $1278 Annually
Monthly Property Tax+ Mello Roos: $652
Monthly Mortgage: $2194

Fixed Monthly Expenses: $3,020

Here is how Wisteria homes have performed in the past two years:

2011:
85 Avondale $344/SF
49 Avondale $366/SF
80 Glen Arbor $305/SF
66 Glen Arbor $331/SF
46 Congress Pl $321/SF
68 Glen Arbor $342/SF

2012:
86 Deermont $323/SF
73 Glen Arbor $350/SF
105 Waterman $361/SF
84 Deermont $350/SF
111 Waterman $344/SF

In the past two years, the Wisteria homes have steadily marched from $300/SF to $350/SF, and now consolidating that position further with the listed property at $358/SF.

Property History:
Oct 2001: $332,000 ($191/SF)
April 2004: $660,000 ($381/SF)

What would you do?
Join the frenzy and buy before you are priced out forever?
Hold off, because you can spot a bubble, and a recession?

Comment below, or discuss at Talk Irvine.


Astute Observations

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