General observation from the front lines about the Irvine housing market...

NEW -> Contingent Buyer Assistance Program
[quote author="IrvineRenter" date=1247732794][quote author="Look4house" date=1247717141]If anyone think buying a house now=overpaying=fools, then I guess there are a lot of fools in this world. If the real estate agents don't stop people from buying homes now, they are fools too, I guess.</blockquote>


Consider a more nuanced look at this: anyone who is buying a house right now <em>for financial reasons</em> is overpaying and making a foolish decision.</blockquote>


I would add "in Irvine" to that sentence. Heck, you posted a Tustin house close to rental parity just a couple days ago.
 
even if that tustin house was "near" rental parity (and I personally doubt it), that doesn't mean that it won't drop another 25%.



oops, there goes your dp.



(and don't think that corona or riverside won't drop too, as the wave of price drops reverberates)
 
***Word of caution for everyone***



One of my buyers will be closing escrow early next week and something came up out of the blue with the lender. We got the green light from the lending officer early on that it was fine for me to contribute a portion of my buyers' agent commission towards my buyers recurring and non-recurring closing and lender costs (which I thought was normal since it's been OK with 5 other banks that I had transactions with). Well, today we get word from the underwriters that the lender is not allowing me to contribute my buyers' agent commission to my buyers (it's against their policy). So we had a bit of a "fire drill" moment. The resolution was to have the seller contribute the same dollar amount that I was going to and then reduce the buyers' agent commission by the same amonut...basically the backdoor route of what I wanted to do in the first place. Moral of the story....VERIFY, VERIFY, VERIFY everything not only with your lender contact but also have them double check with their underwriter/s (especially if you are a buyer and your buyer's agent is contributing a portion of their commission towards your closing costs).



The bank that I speak of is a large regional bank out of the Southeast (not a bank that has branches out here).
 
Quick update for everyone...you guys already know that Mazy was one of my buyers but my second buyers closed on their Irvine home last week so I'd like to congratulate them (they are more lurkers than posters). Both appraisals came in right around the sales prices and both transactions went fairly smoothly (I was fortunate to have worked with 2 good listing agents).



Now on to some annoying realtor matters [BEGIN RANT]...



1. Non-short sale inventory still remains very thin and decently priced properties are flying into escrow in Irvine along with other cities in Orange County.



2. I put an offer OVER LIST PRICE on a short sale Woodbridge listing about 2 weeks ago and the damn listing agent will not respond to return my calls or e-mails to see where things stand (i.e. how many offers are there and has the short sale package been submitted). WTF, how hard is it to send an e-mail or make a call for 5 minutes (especially since I know the agent doesn't have that much going on) and respond to a fellow realtor??? I'm about ready to call his broker and throw that bastard under the bus. Is it asking for that much to get an update???



3. Submitted an offer on a equity sale this weekend for another buyer. The offer was $50k under list price and closer to where comps are. The listing agent counters back by reducing the list price by $10k along with a provision that my buyers remove ALL CONTINGENCIES in 10 days. Are you focking kidding me? Does this agent think this is still 2005? So we submitted a second counter back by going up around $15k on the price and dropping the contingency removal language indicating that this will be our BEST & FINAL offer. So what do you think the listing agent does tonight??? You guessed it, he e-mails me counter # 3 which is $15k off the list price but still about $25k away from my buyers final offer. WTF, how did best and final offer language translate into my buyers being willing to go any higher on the final price??? When did realtor land turn into bizzaro world???



[END RANT]



Ahh, that felt good to get that out. :cheese:
 
[quote author="usctrojanman29" date=1250692467]Quick update for everyone...you guys already know that Mazy was one of my buyers but my second buyers closed on their Irvine home last week so I'd like to congratulate them (they are more lurkers than posters). Both appraisals came in right around the sales prices and both transactions went fairly smoothly (I was fortunate to have worked with 2 good listing agents).



Now on to some annoying realtor matters [BEGIN RANT]...



1. Non-short sale inventory still remains very thin and decently priced properties are flying into escrow in Irvine along with other cities in Orange County.



2. I put an offer OVER LIST PRICE on a short sale Woodbridge listing about 2 weeks ago and the damn listing agent will not respond to return my calls or e-mails to see where things stand (i.e. how many offers are there and has the short sale package been submitted). WTF, how hard is it to send an e-mail or make a call for 5 minutes (especially since I know the agent doesn't have that much going on) and respond to a fellow realtor??? I'm about ready to call his broker and throw that bastard under the bus. Is it asking for that much to get an update???



3. Submitted an offer on a equity sale this weekend for another buyer. The offer was $50k under list price and closer to where comps are. The listing agent counters back by reducing the list price by $10k along with a provision that my buyers remove ALL CONTINGENCIES in 10 days. Are you focking kidding me? Does this agent think this is still 2005? So we submitted a second counter back by going up around $15k on the price and dropping the contingency removal language indicating that this will be our BEST & FINAL offer. So what do you think the listing agent does tonight??? You guessed it, he e-mails me counter # 3 which is $15k off the list price but still about $25k away from my buyers final offer. WTF, how did best and final offer language translate into my buyers being willing to go any higher on the final price??? When did realtor land turn into bizzaro world???



[END RANT]



Ahh, that felt good to get that out. :cheese:</blockquote>
The seller and his/her agent are not limited by your "best & final" language. The buyer's opinion on how much higher he/she is willing to go is their business, not mine. Personally, if I receive an offer with the "best & final" phrase, it is irrelevant to the offer and I will ignore it. A "best and final" phrase is realtor bs.
 
[quote author="awgee" date=1250709781][quote author="usctrojanman29" date=1250692467]Quick update for everyone...you guys already know that Mazy was one of my buyers but my second buyers closed on their Irvine home last week so I'd like to congratulate them (they are more lurkers than posters). Both appraisals came in right around the sales prices and both transactions went fairly smoothly (I was fortunate to have worked with 2 good listing agents).



Now on to some annoying realtor matters [BEGIN RANT]...



1. Non-short sale inventory still remains very thin and decently priced properties are flying into escrow in Irvine along with other cities in Orange County.



2. I put an offer OVER LIST PRICE on a short sale Woodbridge listing about 2 weeks ago and the damn listing agent will not respond to return my calls or e-mails to see where things stand (i.e. how many offers are there and has the short sale package been submitted). WTF, how hard is it to send an e-mail or make a call for 5 minutes (especially since I know the agent doesn't have that much going on) and respond to a fellow realtor??? I'm about ready to call his broker and throw that bastard under the bus. Is it asking for that much to get an update???



3. Submitted an offer on a equity sale this weekend for another buyer. The offer was $50k under list price and closer to where comps are. The listing agent counters back by reducing the list price by $10k along with a provision that my buyers remove ALL CONTINGENCIES in 10 days. Are you focking kidding me? Does this agent think this is still 2005? So we submitted a second counter back by going up around $15k on the price and dropping the contingency removal language indicating that this will be our BEST & FINAL offer. So what do you think the listing agent does tonight??? You guessed it, he e-mails me counter # 3 which is $15k off the list price but still about $25k away from my buyers final offer. WTF, how did best and final offer language translate into my buyers being willing to go any higher on the final price??? When did realtor land turn into bizzaro world???



[END RANT]



Ahh, that felt good to get that out. :cheese:</blockquote>
The seller and his/her agent are not limited by your "best & final" language. The buyer's opinion on how much higher he/she is willing to go is their business, not mine. Personally, if I receive an offer with the "best & final" phrase, it is irrelevant to the offer and I will ignore it. A "best and final" phrase is realtor bs.</blockquote>
Understood and in most cases this is true. That being said, that is my buyers' highest price (reserve price) that they are willing to pay for the property so if the sellers dont accept it they'll have to find another buyer or let the property sit on the market.
 
usc: I know you rarely do sell-side transactions but I would like to know how it is from the other side for RE in Irvine. I posted a thread about this but got little response (as expected).



Since inventory is so low, you would think that it would be a bit advantageous for sellers, I just think the current pricing is the big obstacle but if you have equity, why not cash in now... especially if we are still headed downward and may stay flat for some time.



The house in Irvine that closed... can you tell us what was the price per sft?
 
[quote author="irvine_home_owner" date=1250723938]



The house in Irvine that closed... can you tell us what was the price per sft?</blockquote>


~ $337 for the past 3 months.
 
[quote author="irvine_home_owner" date=1250723938]usc: I know you rarely do sell-side transactions but I would like to know how it is from the other side for RE in Irvine. I posted a thread about this but got little response (as expected).



Since inventory is so low, you would think that it would be a bit advantageous for sellers, I just think the current pricing is the big obstacle but if you have equity, why not cash in now... especially if we are still headed downward and may stay flat for some time.



The house in Irvine that closed... can you tell us what was the price per sft?</blockquote>
Well, I've talked to a few realtors that have a few listings and they tell me that it is difficult to pick up any new listing nowadays. All of them say that they don't really like taking on short sale listings but will do it as they are beginning to close a little more often. They sense that there are sellers out there that need prices to tick up a little more before they can attempt to sell their properties because they'd have to come into escrow with money to close today. So it sounds like realtors are trying to turn over every stone to get listings but there aren't many anxious equity sellers out there ready to sell their homes.



My buyers paid about $306/sf (not including my buyers agent contribution) for their Irvine home.
 
Since it's been a while, I thought I'd give a quick update as to what is going on in the Irvine housing market. The lack of inventory has gotten worse since this time last month when we had a little more than 600 active listings. Today we are down to about 565 active listings (447 are non-short sale listings). This lack of "real" inventory has caused many buyers to sit back on the sidelines and wait until that "right" property pops up. While other buyers who are flush with cash are "grabbing the bull by the horns" and venturing out to the courthouse foreclosure auctions in search of their home. On the mortgage front...interest rates have come down about .50% since mid-August from the mid 5% range to around 5% for a 30-year fixed conforming loan which only help to put a temporary floor on Irvine prices. Many of the current buyers continue to sink large down payments for the homes they purchase.



Attached I have complied a spreadsheet that breaks down total sales (including condos and SFRs) in Irvine since Jan. 2007 through August 2009 along with the number of active listings at each month-end based upon IR's inventory chart. I also include the total numbers supply along with the trailing 3-month supply. The market definitely feels like it has bumped it's head on a top in terms of the number of sales (along with CS index that IPO has posted up for Sept.) but this can all be due to the busy summer selling season. It will be interesting to see what happens with the Irvine housing market if the Congress allows the $8,000 tax credit expire and as we get into 2010 with the backlog of foreclosures growing and the Option ARM resets coming like a freight train. Only time will tell...
<fieldset class="gc-fieldset">
<legend> Attached files </legend> <a href="http://www.talkirvine.com/converted_files/images/forum_attachments/440_GyEFIvfNrnfAsQicDP5E.xls" target="_blank" class="gc-files">Irvine Sales & Inventory Data.xls</a> <span class="gc-filesize">(34 B)</span> </fieldset>
 
[quote author="USCTrojanCPA" date=1253624500]Since it's been a while, I thought I'd give a quick update as to what is going on in the Irvine housing market. The lack of inventory has gotten worse since this time last month when we had a little more than 600 active listings. Today we are down to about 565 active listings (447 are non-short sale listings). This lack of "real" inventory has caused many buyers to sit back on the sidelines and wait until that "right" property pops up. While other buyers who are flush with cash are "grabbing the bull by the horns" and venturing out to the courthouse foreclosure auctions in search of their home. On the mortgage front...interest rates have come down about .50% since mid-August from the mid 5% range to around 5% for a 30-year fixed conforming loan which only help to put a temporary floor on Irvine prices. Many of the current buyers continue to sink large down payments for the homes they purchase.



Attached I have complied a spreadsheet that breaks down total sales (including condos and SFRs) in Irvine since Jan. 2007 through August 2009 along with the number of active listings at each month-end based upon IR's inventory chart. I also include the total numbers supply along with the trailing 3-month supply. The market definitely feels like it has bumped it's head on a top in terms of the number of sales (along with CS index that IPO has posted up for Sept.) but this can all be due to the busy summer selling season. It will be interesting to see what happens with the Irvine housing market if the Congress allows the $8,000 tax credit expire and as we get into 2010 with the backlog of foreclosures growing and the Option ARM resets coming like a freight train. Only time will tell...</blockquote>
Do you really think that $8,000 credit affects the state of Irvine housing that much? This credit starts to fade away once annual income reaches $150,000 and after $180,000 there is no more credit.

Do you think that all these houses in $800,000 range are being bought by people making less than $150,000 a year?
 
[quote author="USCTrojanCPA" date=1253624500]Since it's been a while, I thought I'd give a quick update as to what is going on in the Irvine housing market. The lack of inventory has gotten worse since this time last month when we had a little more than 600 active listings. Today we are down to about 565 active listings (447 are non-short sale listings). This lack of "real" inventory has caused many buyers to sit back on the sidelines and wait until that "right" property pops up. While other buyers who are flush with cash are "grabbing the bull by the horns" and venturing out to the courthouse foreclosure auctions in search of their home. On the mortgage front...interest rates have come down about .50% since mid-August from the mid 5% range to around 5% for a 30-year fixed conforming loan which only help to put a temporary floor on Irvine prices. Many of the current buyers continue to sink large down payments for the homes they purchase.



Attached I have complied a spreadsheet that breaks down total sales (including condos and SFRs) in Irvine since Jan. 2007 through August 2009 along with the number of active listings at each month-end based upon IR's inventory chart. I also include the total numbers supply along with the trailing 3-month supply. The market definitely feels like it has bumped it's head on a top in terms of the number of sales (along with CS index that IPO has posted up for Sept.) but this can all be due to the busy summer selling season. It will be interesting to see what happens with the Irvine housing market if the Congress allows the $8,000 tax credit expire and as we get into 2010 with the backlog of foreclosures growing and the Option ARM resets coming like a freight train. Only time will tell...</blockquote>


Which price bracket are these sales happening in? Is it the <$600K or has the upper end started to soften?
 
[quote author="new_to_irvine" date=1253669871][quote author="USCTrojanCPA" date=1253624500]Since it's been a while, I thought I'd give a quick update as to what is going on in the Irvine housing market. The lack of inventory has gotten worse since this time last month when we had a little more than 600 active listings. Today we are down to about 565 active listings (447 are non-short sale listings). This lack of "real" inventory has caused many buyers to sit back on the sidelines and wait until that "right" property pops up. While other buyers who are flush with cash are "grabbing the bull by the horns" and venturing out to the courthouse foreclosure auctions in search of their home. On the mortgage front...interest rates have come down about .50% since mid-August from the mid 5% range to around 5% for a 30-year fixed conforming loan which only help to put a temporary floor on Irvine prices. Many of the current buyers continue to sink large down payments for the homes they purchase.



Attached I have complied a spreadsheet that breaks down total sales (including condos and SFRs) in Irvine since Jan. 2007 through August 2009 along with the number of active listings at each month-end based upon IR's inventory chart. I also include the total numbers supply along with the trailing 3-month supply. The market definitely feels like it has bumped it's head on a top in terms of the number of sales (along with CS index that IPO has posted up for Sept.) but this can all be due to the busy summer selling season. It will be interesting to see what happens with the Irvine housing market if the Congress allows the $8,000 tax credit expire and as we get into 2010 with the backlog of foreclosures growing and the Option ARM resets coming like a freight train. Only time will tell...</blockquote>
Do you really think that $8,000 credit affects the state of Irvine housing that much? This credit starts to fade away once annual income reaches $150,000 and after $180,000 there is no more credit.

Do you think that all these houses in $800,000 range are being bought by people making less than $150,000 a year?</blockquote>
My personal opinion is that the $8k credit is more of a psychological factor more than anything else. You would be surprised that there are people who will justify buying a $800k+ loan based upon the credit even though it's less than 1% of the purchase price. There are many buyers, including ones I'm working with, that are putting 35-50%+ as down payments so they wouldn't necessary have to document income of over $150k to qualify for the loan. I just hope that Congress does not pass the $15k tax credit without income limitations to replace the $8k credit that I've read about in the past few months because that will only push more would-be buyers off the fence and make any already tight inventory situation worse. Like I said, we will have to see what happens once we get into November on what they'll do. I would think that if they let the $8k credit expire you might see a blip down on prices in many markets and maybe even in Irvine. But the real issue at the moment is the lack of real inventory.
 
[quote author="Stuff It" date=1253677312][quote author="USCTrojanCPA" date=1253624500]Since it's been a while, I thought I'd give a quick update as to what is going on in the Irvine housing market. The lack of inventory has gotten worse since this time last month when we had a little more than 600 active listings. Today we are down to about 565 active listings (447 are non-short sale listings). This lack of "real" inventory has caused many buyers to sit back on the sidelines and wait until that "right" property pops up. While other buyers who are flush with cash are "grabbing the bull by the horns" and venturing out to the courthouse foreclosure auctions in search of their home. On the mortgage front...interest rates have come down about .50% since mid-August from the mid 5% range to around 5% for a 30-year fixed conforming loan which only help to put a temporary floor on Irvine prices. Many of the current buyers continue to sink large down payments for the homes they purchase.



Attached I have complied a spreadsheet that breaks down total sales (including condos and SFRs) in Irvine since Jan. 2007 through August 2009 along with the number of active listings at each month-end based upon IR's inventory chart. I also include the total numbers supply along with the trailing 3-month supply. The market definitely feels like it has bumped it's head on a top in terms of the number of sales (along with CS index that IPO has posted up for Sept.) but this can all be due to the busy summer selling season. It will be interesting to see what happens with the Irvine housing market if the Congress allows the $8,000 tax credit expire and as we get into 2010 with the backlog of foreclosures growing and the Option ARM resets coming like a freight train. Only time will tell...</blockquote>


Which price bracket are these sales happening in? Is it the <$600K or has the upper end started to soften?</blockquote>
I'm seeing the higher end soften...$1M and up. The middle market ($500k-$800k) seems to be hanging in there pretty good but a big factor of that is due to tight inventory. The higher end has a lot more inventory as a relationship to sales. I would have to run the numbers, but I would bet that the higher end even in Irvine has more than double the months supply than than the lower and middle market.
 
Update for Sept. 2009 - 164 closings (up from 147 in Sept. 2008) and inventory is down to 507 properties. We are still hovering slightly over 3 month's worth of inventory. Full speed ahead for now, but I'm willing to bet that if the tax credit expires sales will slow down by at least 10%. The question will be....is the number of homes for sale going to rise during that same time period???
<fieldset class="gc-fieldset">
<legend> Attached files </legend> <a href="http://www.talkirvine.com/converted_files/images/forum_attachments/446_QZRitaREekP9mwBlkgYt.xls" target="_blank" class="gc-files">Irvine Sales & Inventory Data.xls</a> <span class="gc-filesize">(34 B)</span> </fieldset>
 
Update for Oct. 2009 - 192 closings (way up from 158 in Oct. 2008) and inventory has dropped to 495 as of 11/1/09. We have now less than 3 months worth of supply of homes on the market which puts us into a strong seller's market in Irvine (typically less than 4-5 months worth of inventory is a seller's market). The increase may have been partially caused by people trying to get the tax credit before it was set to expire (last week we heard that it will be extended until 4/30/10 and allowed to included move-up buyers). Many non-short sale listings (equity sales, flips, and REOs) that are priced below, at, or slightly above comps are flying into escrow within 7-10 days of being listed. Based upon my personal experience, many new listings are swamped with buyers touring the property within the first few days the property is listed. Call it a buyer's frenzy, but there have been several properties that got bid up (even some as much as $50-$100k over current comps) so prices are ticking up a bit. I even saw one buyer on a University Park home listing writing an offer with their agent as I was showing the property to my buyer which was the day after the property got listed. In terms of the foreclosure auctions, lenders continue to postpone and cancel 90%+ of Irvine properties that are scheduled to be auctioned....extend and pretend in full effect. On the lending front, both conforming and jumbo conforming 30-year fixed loans are now around 4.75%.



On a side note, I was able to get 2 of my buyers into escrow the past week on homes that are not in Irvine (both of those two homes also had multiple offers near or over the listing price). This was partially due to some good fortune and some to being an aggressive little SOB plus getting in an offer as soon as possible. Having a loan pre-approval letter from SGIP was also very helpful. It seems that some listing agents will actually give the first bidders the final crack at getting the property but making sure to check that the potential buyers are well qualified to purchase the home.
<fieldset class="gc-fieldset">
<legend> Attached files </legend> <a href="http://www.talkirvine.com/converted_files/images/forum_attachments/483_dyKJtYgREV0z0KQVU0a4.xls" target="_blank" class="gc-files">Irvine Sales & Inventory Data.xls</a> <span class="gc-filesize">(35 B)</span> </fieldset>
 
[quote author="irvine_home_owner" date=1257214342]So what cities outside of Irvine are your buyers going to?



We visited south county over the weekend and like the homes... but it's far (at least to me).</blockquote>
Typically South County....Mission Viejo, Laguna Niguel, Dana Point, and Ladera Ranch but it also includes Newport Beach and parts of Costa Mesa. I got one of my buyers into a gorgeous 3,000sf+ Laguna Niguel home in a gated community, very good schools, built in the 90s, no Mello Roos, low HOA and upgraded to the nine along with a <strong>3-CAR GARAGE</strong> for less than $270/sf (this home would probably cost around $1.2m in Irvine).
 
[quote author="USCTrojanCPA" date=1257213615]Update for Oct. 2009 - 192 closings (way up from 158 in Oct. 2008) and inventory has dropped to 495 as of 11/1/09. We have now less than 3 months worth of supply of homes on the market which puts us into a strong seller's market in Irvine (typically less than 4-5 months worth of inventory is a seller's market). The increase may have been partially caused by people trying to get the tax credit before it was set to expire (last week we heard that it will be extended until 4/30/10 and allowed to included move-up buyers). Many non-short sale listings (equity sales, flips, and REOs) that are priced below, at, or slightly above comps are flying into escrow within 7-10 days of being listed. Based upon my personal experience, many new listings are swamped with buyers touring the property within the first few days the property is listed. Call it a buyer's frenzy, but there have been several properties that got bid up (even some as much as $50-$100k over current comps) so prices are ticking up a bit. I even saw one buyer on a University Park home listing writing an offer with their agent as I was showing the property to my buyer which was the day after the property got listed. In terms of the foreclosure auctions, lenders continue to postpone and cancel 90%+ of Irvine properties that are scheduled to be auctioned....extend and pretend in full effect. On the lending front, both conforming and jumbo conforming 30-year fixed loans are now around 4.75%.



On a side note, I was able to get 2 of my buyers into escrow the past week on homes that are not in Irvine (both of those two homes also had multiple offers near or over the listing price). This was partially due to some good fortune and some to being an aggressive little SOB plus getting in an offer as soon as possible. Having a loan pre-approval letter from SGIP was also very helpful. It seems that some listing agents will actually give the first bidders the final crack at getting the property but making sure to check that the potential buyers are well qualified to purchase the home.</blockquote>


Congratulations on your work, trojanman. Did your consulting contract expire with the bank? When did that happen? Are you now working full-time as a realtor?
 
[quote author="USCTrojanCPA" date=1257215727]I got one of my buyers into a gorgeous 3,000sf+ Laguna Niguel home in a gated community, very good schools, built in the 90s, no Mello Roos, low HOA and upgraded to the nine along with a <strong>3-CAR GARAGE</strong> for less than $270/sf (this home would probably cost around $1.2m in Irvine).</blockquote>
You made me Redfin Laguna Niguel you evil red/gold almost CPA.
 
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