Irvine Housing Blog

Jaysen,
This is a very interesting analysis and some attributes are similar to mine - such as the 4:1 ratio for square footage to lot size. I have a question for you - when you use the 2000- 2011 period, how do you account for the trend in the market? Are you breaking up your valuation into grouping of years into bands as you show in one of your charts above? There is also one additional variable that is hard to incorporate into the spreadsheet - specific pockets command a premium. I’m going to rework my model similar to yours for the Northwood area and compare results. I hope the info@ address is one where I can contact you off-line when I have a chance to look at this further.

We’ll if a 1 story house adds 4.3% and a 3 story house takes away 3.8% what would a 2 story house do?

IrvineRenter wrote:

As long as the third garage stall—which is very inexpensive square footage—adds 5.3% to the value, expect builders to provide this space. They would be foolish not to.

Unfortunately, any new projects since the 2010 New Home Collection in Irvine have all been 2-car garages. The only one selling new 3-car homes (tandems not the “classic” 3CWG) is Las Colinas and that was a tract being sold prior to 2010.

And maybe just as bad as losing that 3rd car space, a trend in new home building is the omission of the driveway. There are many detached condos (can’t call them SFRs) with the bad aesthetic of the frontal garage but it’s on a shared motorcourt instead of a proper private driveway.

So while new home stock in Irvine does have Great Rooms and huge master baths… it has not so great garages and disappearing driveways.

I may be dealing with a smaller sample size (last 2 years of Northwood), but the parking space correlation to sale price is very low (correlation factor of 0.06) for this year. I’m not surprised by the trend, and it’s not intuitive to me that for a 650K home, an additional garage adds nearly $35K in valuation - I’m going to take a fresh look at this. One stat that jumps out though is that older homes are correlated with fewer baths and bigger lot sizes.

I meant ‘parking space correlation to sale price is very low (correlation factor of 0.06) for this neighborhood’.

Per lot size - I think there are a few exceptions to the rule.  For example, in Turtle Rock I see some older (early 70s) homes that have smaller square footage but a big lot going for a premium because the buyer can tear the house down and have a lot big enough to build a big new house on it.

Be careful about Northwood.  There were quite a lot of 2-car tandems built there in the late 80’s and early 90’s.  In every case, the option of utilizing the tandem space as a finished room was offered by the builders.  And as it was a decision that had to be made before the slab was poured, most homes could have been finished that way originally, or retro-fitted later. It’s nearly impossible to tell from assessors records because the sq.ft of the homes came off of the approved plans prior to construction.

Concerning what will or is built is a reflection of the sale price and the building cost.  Lots of McStacker in Quail Hill due to the lower construction cost of the 3 story vs. a one or story.  Same thing for the garage, with the stinking lot size, there no space for a 3 car that requires land.  I guess a car lift can be installed or have a multilevel garage(s).

The low discount factor for age in Irvine is a relief.  Says people take care of or remodel their house or that the land value is a large factor.

For once a RE slogan is correct—location, location, location.

A house can be built almost anywhere or moved.
The location can’t be moved and to change a bad location to a great location takes a lifetime.  Too bad the opposition direction is much quicker.

Windows can be easily replaced and updated.  The teachers in the TR area are great.  The parents also sets the tone for the kids’ learning.

There lots of great geographic locations in L.A. with views, good commute times to work, shopping and cultural areas, but the neighorhood has gone to the dumps. with crime.

Any articles on how to make one part of the county by increaing the crime in the other parts of the county?  Irvine is very uniform except for some estate size houses—there really no dangerous neighorhoods other than enviromental polution or old landfill gases leaking out.

I followed up with my analysis of Northwood properties for the last two years under $1.25M. With regards to parking, I can see a relation, but what I see emerging as more statistically strong is a fixed-dollar contribution for parking. I see approximately $13K-$15K per additional garage in excess of a 2-car garage which I find more intuitive than a valuation which assigns a 5%+ increase to the valuation of the home. This itself did not have a significant impact on the overall fit. I did find a fairly strong relation with short sales as well, which I think had a bigger impact on the overall fit. I get a similar relationship for incremental baths as for incremental beds (i.e., negative correction) that I don’t think will significantly influence the regression if I didn’t consider baths in the first place. In summary, my current working hypothesis is that considering the square footage, lot size, age and short sale should be sufficient to mostly capture the relevant variables. That still leaves me with a fairly large standard error of around 9% for the overall fit which, I think, reflects various specific location within a zip code, other home-specific idiosyncrasies such as view and upgrades and buyer/seller mindset.

Are you seriously telling me that you can tell the price difference from a 45 x 85 lot and a 50 x 90 lot?  As a realtor, if I presented any of the above comments to a potential buyer, they would say, “Thank you for your time.  We’ll find someone else to find a home for us.”  All throughout Westpark, Northwood Square, Northwood Park, Tustin Ranch (yes, it is on The Ranch, just not in the school district)there were experiments with density achievements throughout the 1980-2005 time period.  Most of this is just BS.  When it boils down to resales there are only a few items on the criteria list.

SanJoseRenter, you’ve just identified the real problem.  We have, those of us who have been in the business for a while, convinced at least 2 generations that residential real estate should be treated just like stock purchases.  What’s it’s P/E?, small cap?, large cap?  This might come as a huge surprise to you but the word HOME is not retard-speak.  Besides any difficulties in obtaining financing, the real problem in the real estate market is that no one is seeing any rise in prices, read…equity (possibly that can be accessed for other uses).  SFR, Condo are zoning references.  They relate to type of building construction, size of lot, etc.  Why doesn’t the building industry just go back to building 1950’s post-war ding-bats all on the same standard sized lots and forget parks, neighborhood shopping, churches, schools, recreational opportunities, etc.?