I’d gladly lose me to find you
I’d gladly give up all I got
To catch you I’m gonna run and never stop
I’d pay any price just to win you
Surrender my good life for bad
To find you I’m gonna drown an unsung man
I’d call that a bargain
The best I ever had
The best I ever had
Bargain — The Who
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There are always bargains in the rental market. Something has to define value, and as has been discussed in numerous posts on this blog, rents are where it is at. Today I want to look at the rental market for 3 bedroom units. I am excluding pseudo-apartments and looking at both attached and detached properties to see where the leading edge of rents (and thereby house values) can be found.
This property is the least expensive 3/2 with an attached two-car garage I could find. It does not appear to be updated or particularly well kept. It is located in University Park in a quiet, interior location with an easy walk to 2 community pools.
$2295 / 3br – CHARMING DETACHED SINGLE-FAMILY HOME
This looks like a particularly good deal. It is relatively inexpensive, fully detached, it doesn’t look to bad from the one interior picture shown, and it has a very spacious yard by Irvine standards. An address is not given, but the Walnut/Yale intersection would put it in El Camino Real.
This unit is in Northwood just behind the small shopping center on Yale and Trabuco Canyon. It is a short walk to a tot lot and community swimming pool. I have seen units in this neighborhood, and I would guess there is a small, concrete-patio back yard. Very good price though.
$2300 / 3br – 2.5 Bath in Irvine
This property is also in Northwood near the Potomac property. These are attached condos that feel like an apartment complex. The unit itself is newly updated with granite tops in the kitchen.
$2350 / 3br – 3 bed/2 bath with 1244 sq ft in Woodbridge
This appears to be a single-story attached condo in Woodbridge. There are others in this area asking $2,500. This isn’t a bad price for the area.
$2500 / 3br – ..3 bed/2.5 ba/Garage/Upgrade/townhome…agent 2500
This Corta Bella unit seems reasonably priced, but no real bargain. It appears to be being offered by an agent. Do you think he is a floplord?
$3200 / 3br – Beautiful House in Turtle Ridge
I put this one in just for fun. I have seen lower priced rentals in Turtle Ridge. I guess you just need some kool aid…
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Based on the above comps, we can establish the leading edge of rental values for non-updated, small 3/2s with attached garages are going for $2,300 in the market. This puts their fundamental value at $368,000 assuming the rents remain stable. This time last year, I was looking for rentals, and I do not remember so many 3/2s being offered for under $2,500. One of the reasons I wanted to do this series of posts on rentals is to document the rise and fall of rental rates over time. We will check back again later.
If properties of this description are worth $368,000, how much are they currently asking in the for-sale market?
Price: $470,000
GRM = 204
| Beds: | 3 |
| Baths: | 2.5 |
| Sq. Ft.: | 1,517 |
| $/Sq. Ft.: | $310 |
| Lot Size: | 2,112 sq. ft. |
| Type: | Condominium |
| Style: | Other |
| Year Built: | 1976 |
| Stories: | Two Levels |
| Area: | El Camino Real |
| County: | Orange |
| MLS#: | S504840 |
| Status: | Active |
| On Redfin: | 137 days |
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Unsold in 90+ days
BEAUTIFUL IMMACULATE HOME!!! REMODELED WITH HARDWOOD FLOORING, TILED BATHROOMS, AND CUSTOM TOUCHES THROUGHOUT. STAINLESS STEEL APPLIANCES. CATHEDRAL VAULTED CEILINGS. FIREPLACE IN LIVING ROOM AND MASTER BEDROOM, BRIGHT AND OPEN KITCHEN. LARGE PATIO.
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Price: $499,999
GRM = 217
9 Ericson Aisle, Irvine, CA 92620
| Beds: | 3 |
| Baths: | 2 |
| Sq. Ft.: | 1,679 |
| $/Sq. Ft.: | $298 |
| Lot Size: | – |
| Type: | Condominium |
| Style: | Townhouse |
| Year Built: | 1989 |
| Stories: | Two Levels |
| View(s): | Peek-A-Boo, Has View |
| Area: | Northwood |
| County: | Orange |
| MLS#: | S507288 |
| Status: | Active |
| On Redfin: | 119 days |
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Gorgeous townhome in highly sought-after tract. Premium interior location + one of the largest models available! Inviting floorplan enhanced by soaring vaulted ceilings + custom upgrades. Expansive living room features recessed lighting, custom slate-wall fireplace & a myriad of well placed windows. Charming chef’s kitchen boasts raised ceilings + eating area & attached patio. Huge master suite w/ lavish bath & private balcony. Easy access to shopping, entertainment & freeways. WOW!
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Price: $465,000
GRM = 202
802 Terra Bella, Irvine, CA 92602
| Beds: | 3 |
| Baths: | 2.5 |
| Sq. Ft.: | 1,476 |
| $/Sq. Ft.: | $315 |
| Lot Size: | – |
| Property Type | Attached, Condominium |
| Year Built: | 2000 |
| Stories: | 2 Level |
| View: | Pool |
| Area: | Out of Area |
| County: | Orange |
| MLS#: | C08008466 |
| Status: | Active |
| On Redfin: | 8 days |
Northpark community. Great corner unit, very private. Balcony with view of the pool and green belt. Spacious living room with fireplace, bright kitchen with view of the green belt. ceramic tiles in all the bathrooms, kitchen, laundry room and berber carpert. Lowest price for a 3 bedroom unit. Submit all reasonable offers. Lender owned sold “as is” no warranty. All information believed to be correct please verify for your client.
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Price: $499,900
GRM = 217
| Beds: | 3 |
| Baths: | 2.5 |
| Sq. Ft.: | 1,500 |
| $/Sq. Ft.: | $333 |
| Lot Size: | – |
| Type: | Condominium |
| Style: | Contemporary, Mediterranean |
| Year Built: | 2001 |
| Stories: | Two Levels |
| View(s): | Mountain, Park or Green Belt, Peek-A-Boo, Trees/Woods |
| Area: | West Irvine |
| County: | Orange |
| MLS#: | S514971 |
| Status: | Active |
| On Redfin: | 47 days |
STUNNING SHOWCASE HOME! Very PRIVATE END UNIT w/ Larger PATIO than most. Lots of High Quality Upgrades featuring; Corian Kitchen Counters w/ full backsplash & Maple Cabinetry, High-end GE Profile Appliances, Designer Italian Porcelain Tiles, Custom-Designed Entertainment Center w/ Surround Sound, Security System, Ceiling Fans & Recessed Lighting throughout home. Elegant French Doors leading to Flagstone Patio. Functional Loft/Tech Area & Upstairs’ Laundry Room. VERY LOW ASSOCATION FEES.
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As you can see, GRMs for this product are hovering between 200 and 220. This is real progress from the 250-280 units like this were going for at the peak. These products are the least desirable of the 3/2s in the market, so there is the very real possibility they may drop below parity with rents because not everyone will want to be an owner-occupant. The bottom for these will probably be closer to 140 which translates to a bottom price of about $325,000. We still have a way to go.