Some caveats to the numbers…

Important items to note:
-These are only the MLS listed sales in the time period referenced, and not ALL sales for Irvine.
-Many of the “new build” homes are direct sales from the builders and never hit the MLS, and therefore are not on the site.
-The lending numbers were pulled from an independent site, realist.com, representing actual title references.  There are numerous methods available to keep the lending information private, but for the most part these are good data.
-Running into the end of April numbers, I was beginning to find that although the transactions had been “closed” on the MLS, the title reports have not been updated, yet.  I will continue to update as they come in, but expect about a 3 week lag.
-Please recognize that this was only one person’s entry with a substantial amount of manual entry.  Anyone out there available to perform a secondary verification would greatly enhance the confidence in this data.  That said, I think it’s pretty solid.

I am not going to take the bait and say that these numbers mean X or Y continued depreciation, how long the market corrects, or anything else.  I leave that to you to pontificate upon. My crystal ball is still on backorder.

Helpful observations -

The “rich buyer” theory may hold some water.  From the names on title, well over 50% of the buyers bear Asian surnames.  (But do not make the mistake of lumping them all together: Chinese, Vietnamese, Korean, and Japanese culturally are very different buyers with very different hot-points they are looking for in our market!)  Also with a big presence were the middle-eastern buyers representing about 20% of the sales. 

Only two buyers came in utilizing local low-income qualified financing.

Lending was still topped by Countrywide (surprisingly to me) with OCTFCU making a big splash, as well.  There were many, many small lenders available, also, that were making loans of all sizes. 

The City of Irvine picked up one relatively small property (financed with Countrywide).  Any ideas why we needed that?

Lastly, we now have a very well-known professional basketball coach who has moved to the area!... ahhhhhh, the benefits of public information voyeurism.

What jumps out to me on IR2’s spreadsheet is the sales volume.  Average sales in Jan/Feb were 77.  April was 137 units…  Almost 80% more sales in April with the same inventory count essentially as on 12/31/07 means WAY less inventory.

In Irvine, we started the year out with 10-11 months inventory.  In a few short months, that has been reduced to 6-7 months worth.  The median DOM was down to 80 on the April sales whereas it was 115 on the Feb sales…

Unless/until the recent dynamics change, prices will start firming soon if they haven’t already.

.

-The lending numbers were pulled from an independent site, realist.com, representing actual title references.  There are numerous methods available to keep the lending information private . . .

How does one keep the lending numbers private?
 
I believe there is a way to keep the sold price off the public records as well, but I’m not sure how one would go about doing that.

IrvineRealtor - 05 May 2008 05:38 PM

Some caveats to the numbers…

Lastly, we now have a very well-known professional basketball coach who has moved to the area!... ahhhhhh, the benefits of public information voyeurism.

Who? Phil Jackson?

i’m gonna take a devils advocate stance on the rich buyer theory.

rich buy theory involves two parts:
1) rich buyers exist
2) rich buyers maintain price premiums

there’s evidence to suggest #1 is true.  there’s no evidence to suggest #2 is happening however.
it seems the counter-argument that rich buyers are not stupid and will gobble up trophy homes price be damned.

the % downpayments on conforming vs non-conforming loans is very telling imo.  it shows that the cash-rich buyers are also the more conservative ones—taking on more modest homes and mortgages.  they are not just putting down 20% and buying more house even though they could afford to.  in other words, the conservative are being extra conservative.  not sure the implication of that, but just something interesting to note the profiles of buyers.

(i dropped all observations where down and loan data is not avail.  also excluded the handful of >$2M sales)

Loans > $417000

  Variable   |      Mean  
——————-+————————————————————————————
  salesprice |      830269.7  
    downpmt   |    205503.4
percentdown |      .2205405

Loans <= $417000

  Variable   |          Mean  
——————-+————————————————————————————
  salesprice |    592880.7  
    downpmt   |      305021  
percentdown |      .4379255  

Loans <= $417000 (but also excluding 100% down payments, i.e. $0 loan)

  Variable   |          Mean
——————-+————————————————————————————
  salesprice |        561745
    downpmt   |    227685.5  
percentdown |      .347716

also, rich foreign buyers are not necessarily a good thing.  a town full of wealthy foreigners who may or may not actually make their living here is not beneficial in the long-run.  irvine needs diversified industries with good income-producing jobs, instead of pinning its hopes on replacing one bubble (housing) with another (asian/middle-east economies).  look at japantown in LA, for example.  it was a boomtown in the late 80s and now it’s a ghost town.

acpme - 05 May 2008 08:41 PM

also, rich foreign buyers are not necessarily a good thing.  a town full of wealthy foreigners who may or may not actually make their living here is not beneficial in the long-run.  irvine needs diversified industries with good income-producing jobs, instead of pinning its hopes on replacing one bubble (housing) with another (asian/middle-east economies).  look at japantown in LA, for example.  it was a boomtown in the late 80s and now it’s a ghost town.

Two words are all you need to know: San Marino

no offense but san marino is a terrible example.  san marino is a tiny, almost entirely SFR-only town.  you might compare it with specific high-end enclaves around here.  villa park is actually pretty good comparison.

aside from a large population of asians, san marino completely unlike irvine, which is the major commercial, “urban” heart of OC.  irvine has low income housing, rv parks, gigantic apt complexes, pink stucco boxes as far as the eye can see, and custom estates all rolled into one.

IR <<well over 50% of the buyers bear Asian surnames.  (But do not make the mistake of lumping them all together: Chinese, Vietnamese, Korean, and Japanese culturally are very different buyers with very different hot-points they are looking for in our market!) Also with a big presence were the middle-eastern buyers representing about 20% of the sales. >>

VERY interesting! 70%...unreal.

Maybe the falling dollar is having a impact on drawing out foreign buyers. 2008 is different than 1996. Many Asians are now flush with cash and a comparable Shanghai house (land lease only) is more expensive than an Irvine house.

IR <<well over 50% of the buyers bear Asian surnames.

but hasn’t this been the case for quite some time now?  it seems as if many of the people, over the past 10 years,  moving into Irvine and putting their kids in the schools are of asian descent (i don’t know if it is 50% or 80%)?

ipoplaya - 05 May 2008 06:06 PM

What jumps out to me on IR2’s spreadsheet is the sales volume.  Average sales in Jan/Feb were 77.  April was 137 units…  Almost 80% more sales in April with the same inventory count essentially as on 12/31/07 means WAY less inventory.

In Irvine, we started the year out with 10-11 months inventory.  In a few short months, that has been reduced to 6-7 months worth.  The median DOM was down to 80 on the April sales whereas it was 115 on the Feb sales…

Unless/until the recent dynamics change, prices will start firming soon if they haven’t already.

Sounds like you better get out there and make some serious offers, Ipop.

awgee - 05 May 2008 10:39 PM

ipoplaya - 05 May 2008 06:06 PM

What jumps out to me on IR2’s spreadsheet is the sales volume.  Average sales in Jan/Feb were 77.  April was 137 units…  Almost 80% more sales in April with the same inventory count essentially as on 12/31/07 means WAY less inventory.

In Irvine, we started the year out with 10-11 months inventory.  In a few short months, that has been reduced to 6-7 months worth.  The median DOM was down to 80 on the April sales whereas it was 115 on the Feb sales…

Unless/until the recent dynamics change, prices will start firming soon if they haven’t already.

Sounds like you better get out there and make some serious offers, Ipop.

Nah, I’ll sit and wait.  The current market dynamics just mean I’ll probably have to wait longer or get lucky enough to pick up an REO.  I wish it weren’t so, but 3-4% declines per month were too good to be true for a protracted period of time.  I think we were all getting spoiled by it…

ipoplaya - 05 May 2008 06:06 PM

What jumps out to me on IR2’s spreadsheet is the sales volume.  Average sales in Jan/Feb were 77.  April was 137 units…  Almost 80% more sales in April with the same inventory count essentially as on 12/31/07 means WAY less inventory.

In Irvine, we started the year out with 10-11 months inventory.  In a few short months, that has been reduced to 6-7 months worth.  The median DOM was down to 80 on the April sales whereas it was 115 on the Feb sales…

Unless/until the recent dynamics change, prices will start firming soon if they haven’t already.

You mean sales went up and DOM went down during the spring selling season?  Say it ain’t so. 

If you want a good trend analysis, check YOY numbers for each month instead.

asianinvasian - 05 May 2008 09:01 PM

acpme - 05 May 2008 08:41 PM

also, rich foreign buyers are not necessarily a good thing.  a town full of wealthy foreigners who may or may not actually make their living here is not beneficial in the long-run.  irvine needs diversified industries with good income-producing jobs, instead of pinning its hopes on replacing one bubble (housing) with another (asian/middle-east economies).  look at japantown in LA, for example.  it was a boomtown in the late 80s and now it’s a ghost town.

Two words are all you need to know: San Marino

Dude, San Marino was swanky before the Asians showed up.  It was designed to be that way.

I seem to remember Ipop saying in this thread that YOY numbers were unimportant to him and he was more concerned with month to month escrow openings, because they indicated to him whether or not prices would be rising soon.

I find it interesting that a slowing of the incredible rate of decline is as bullish as people can get right now.

Have you ever heard of that analogy:  A guy falls off a one hundred story building and at first panics.  But about ten stories down he starts to relax when he thinks, “Hey, this isn’t so bad.”

EvaLSeraphim - 06 May 2008 02:42 AM

ipoplaya - 05 May 2008 06:06 PM

What jumps out to me on IR2’s spreadsheet is the sales volume.  Average sales in Jan/Feb were 77.  April was 137 units…  Almost 80% more sales in April with the same inventory count essentially as on 12/31/07 means WAY less inventory.

In Irvine, we started the year out with 10-11 months inventory.  In a few short months, that has been reduced to 6-7 months worth.  The median DOM was down to 80 on the April sales whereas it was 115 on the Feb sales…

Unless/until the recent dynamics change, prices will start firming soon if they haven’t already.

You mean sales went up and DOM went down during the spring selling season?  Say it ain’t so. 

If you want a good trend analysis, check YOY numbers for each month instead.

You conveniently ignore the fact that inventory typically INCREASES during the spring selling season Eva…  Do you see that being the case this year? 

YOY sales being down but they are only a single point of data that must be considered against other variables.  If sales were down 50% but inventory was down 75%, looking at it your way would and does produce a poor picture of reality.

awgee - 06 May 2008 02:48 AM

I seem to remember Ipop saying in this thread that YOY numbers were unimportant to him and he was more concerned with month to month escrow openings, because they indicated to him whether or not prices would be rising soon.

YOY sales numbers are unimportant to me and that is definitely still the case.  I think YOY months inventory is a much more useful stat.  As months inventory gets lower, sellers have less competition, are less reluctant to lower list, less reluctant to take lower-priced offers, etc.

IPOP,

In a “normal supply and demand” market I would agree with you; however, the housing market (prices) has many other influences than just simple supply. 

Homes are financed, and in California they are heavily financed.  People NEED to sell but they can’t.

ipoplaya - 06 May 2008 04:23 AM

EvaLSeraphim - 06 May 2008 02:42 AM

ipoplaya - 05 May 2008 06:06 PM

What jumps out to me on IR2’s spreadsheet is the sales volume.  Average sales in Jan/Feb were 77.  April was 137 units…  Almost 80% more sales in April with the same inventory count essentially as on 12/31/07 means WAY less inventory.

In Irvine, we started the year out with 10-11 months inventory.  In a few short months, that has been reduced to 6-7 months worth.  The median DOM was down to 80 on the April sales whereas it was 115 on the Feb sales…

Unless/until the recent dynamics change, prices will start firming soon if they haven’t already.

You mean sales went up and DOM went down during the spring selling season?  Say it ain’t so. 

If you want a good trend analysis, check YOY numbers for each month instead.

You conveniently ignore the fact that inventory typically INCREASES during the spring selling season Eva…  Do you see that being the case this year? 

YOY sales being down but they are only a single point of data that must be considered against other variables.  If sales were down 50% but inventory was down 75%, looking at it your way would and does produce a poor picture of reality.

Or if you look at this another way Eva, when YOY sales are higher come late Summer / early Fall, I won’t be hollering about the market being at a bottom if the inventory has grown relative to those sales figures such that months inventory is still suggestive of further declines.  We will see YOY sales figures that are higher as sales came to a relative standstill last year…  Hopefully many of the NODs filed early this year will provide an inventory boost during Summer and Fall to bring the months inventory back up.

Bear Trap.

ipoplaya - 06 May 2008 05:00 AM

ipoplaya - 06 May 2008 04:23 AM

EvaLSeraphim - 06 May 2008 02:42 AM

ipoplaya - 05 May 2008 06:06 PM

What jumps out to me on IR2’s spreadsheet is the sales volume.  Average sales in Jan/Feb were 77.  April was 137 units…  Almost 80% more sales in April with the same inventory count essentially as on 12/31/07 means WAY less inventory.

In Irvine, we started the year out with 10-11 months inventory.  In a few short months, that has been reduced to 6-7 months worth.  The median DOM was down to 80 on the April sales whereas it was 115 on the Feb sales…

Unless/until the recent dynamics change, prices will start firming soon if they haven’t already.

You mean sales went up and DOM went down during the spring selling season?  Say it ain’t so. 

If you want a good trend analysis, check YOY numbers for each month instead.

You conveniently ignore the fact that inventory typically INCREASES during the spring selling season Eva…  Do you see that being the case this year? 

YOY sales being down but they are only a single point of data that must be considered against other variables.  If sales were down 50% but inventory was down 75%, looking at it your way would and does produce a poor picture of reality.

Or if you look at this another way Eva, when YOY sales are higher come late Summer / early Fall, I won’t be hollering about the market being at a bottom if the inventory has grown relative to those sales figures such that months inventory is still suggestive of further declines.  We will see YOY sales figures that are higher as sales came to a relative standstill last year…  Hopefully many of the NODs filed early this year will provide an inventory boost during Summer and Fall to bring the months inventory back up.

I agree with this. My wife and I looked at a number of homes the last 5 days. Any of them that appeared competitively priced and showed well were just about in escrow before we even had time to consider an offer. Many of them have multiples and they are probably going to be mid 2005 rollbacks at best. You can basically throw out many of the 900+ homes in inventory because they are either multi-million, which most people can’t afford, or because they are WTF prices and have been on the market 200 days.

This thread is amusing. The bulls have come out.

I suppose if you completely ignore the macroeconomic picture, the conditions in the mortgage markets, the flood of REOs entering the market, and the collapse of prices in all surrounding markets, you could interpret the activity in Irvine as bullish. There does seem to be a concentration of knife catchers looking for quality in Irvine. Are there going to be enough of them to prop up the market? Anything is possible. I suspect you will see a decline in volume as the surrounding neighborhoods continue to decline as the substitution effect takes over. If a 2000 SF home is going for $250,000 in Rancho Santa Margarita, people will not be willing to pay $750,000 in Irvine. The collapse of surrounding markets is going to entice buyers away from Irvine ultimately depress volumes and prices. I don’t know if any of you have been going to South OC Tracker, but prices in South County are already approaching rental parity, and the flood of REOs is going to continue to push prices lower there.

ipoplaya - 06 May 2008 04:23 AM

EvaLSeraphim - 06 May 2008 02:42 AM

ipoplaya - 05 May 2008 06:06 PM

What jumps out to me on IR2’s spreadsheet is the sales volume.  Average sales in Jan/Feb were 77.  April was 137 units…  Almost 80% more sales in April with the same inventory count essentially as on 12/31/07 means WAY less inventory.

In Irvine, we started the year out with 10-11 months inventory.  In a few short months, that has been reduced to 6-7 months worth.  The median DOM was down to 80 on the April sales whereas it was 115 on the Feb sales…

Unless/until the recent dynamics change, prices will start firming soon if they haven’t already.

You mean sales went up and DOM went down during the spring selling season?  Say it ain’t so. 

If you want a good trend analysis, check YOY numbers for each month instead.

You conveniently ignore the fact that inventory typically INCREASES during the spring selling season Eva…  Do you see that being the case this year? 

YOY sales being down but they are only a single point of data that must be considered against other variables.  If sales were down 50% but inventory was down 75%, looking at it your way would and does produce a poor picture of reality.

Typically?  I don’t know.  I don’t have any of the historical inventory information to be able to agree or disagree that inventory typically increases during the spring season.  If anyone has that, I would enjoy looking it over.  I would really enjoy historical inventory information from about 1988 forward to see what the inventory patterns of the last downturn were like.