Observations from the front lines of the Irvine housing market?

[irvinehomeowner]

Oh the pain!!!!

We were so close to buying 2010-2012, just couldn't find anything good in the price range we wanted to pay. Hindsight says we should have bought anyways but we hate moving (although it's good for purging away junk).

 

[Mety]

Oh the pain!!!!

We were so close to buying 2010-2012, just couldn't find anything good in the price range we wanted to pay. Hindsight says we should have bought anyways but we hate moving (although it's good for purging away junk).

So when did you buy? 2013?

 

[panda]

Trojan, it seems like the average and median Irvine Home prices are clearly now shifting. The unemployment in OC is also at its all time and low and this looks like it is going to turn as well. Unemployment can't be a negative and never travel in a horizontal line, but more like a wave pattern.

Can you give us just a median or average sold price?

The first one is median home prices and the second one is average home prices.

 

[B2FiNiTY]

I agree with your insight and share the same feelings. Thanks for sharing Martin.

 

[panda]

Trojan,

Is 2019 the first year we are seeing a negative appreciation number in the Irvine Housing Market since 2011?

I am surprised by the Irvine appreciation numbers as it looks quite low? Are you sure this is correct? I automatically assumed that Irvine's appreciation number would be higher than the LA housing index appreciation. Just surprised seeing this. No one can accurately predict exactly how much the Irvine housing market will correct unless they can accurately predict the coming peak of the unemployment rate in Orange County. If the OC unemployment rate were to rise from its current 2.4% to 7%, I can confidently say that we will see at least a 15% correction from now until the next bottom of the cycle. If I were a buyer in the Irvine market I would wait for the deal to come to me. Time is on your side and there is no need to hurry. On a $900,000 Irvine SFR purchased in 2020 could be a $135,000 equity loss in the next 24-48 months.

Irvine
2019  -1.0% appreciation
2018    4.8% appreciation
2017    5.8% appreciation
2016    2.4% appreciation
2015    5.8% appreciation
2014    1.8% appreication

Los Angeles
2019    2.1% appreciation
2018    2.9% appreciation
2017    6.5% appreciation
2016    4.5% appreciation
2015    5.8% appreciation
2014    5.2% appreciation

 

[Mety]

Panda, IHO will yell at you now since you told buyers to WAIT ...unless his view changed..

 

[panda]

Mety,
That's okay. He's been yelling at me ever since I activated my Panda account on Irvine Housing Blog in 2008.  8)

Panda, IHO will yell at you now since you told buyers to WAIT ...unless his view changed..

 

[irvinehomeowner]

Mety,
That's okay. He's been yelling at me ever since I activated my Panda account on Irvine Housing Blog in 2008.  8)

Panda, IHO will yell at you now since you told buyers to WAIT ...unless his view changed..

It's okay... if you shoot a million times, you will make the basket at least once no matter how bad your shot is.

Waiting isn't a forecasting decision, it's a personal one. No matter where the market is going, waiting depends on your affordability, stability and family situation.

If you think waiting the last 2 years for single percentage points drops in prices... that's your call.

But as posters who did buy when prices were "higher", they were tired of waiting even if it did cost more than renting.

 

[usctrojancpa]

January 2020 ended up being a solid month for both sales and prices in Irvine. There were 200 homes sold in Jan 2020 vs 121 homes sold in Jan 2019 or a 65% YOY increase while the average price per SF rose to $479/sf in Jan 2020 from $473/sf in Dec 2019 and from $466/sf in Jan 2019. The number of homes on the market also dropped approx. 23% from 736 in Jan 2019 to 569 in Jan 2020 (barely up from 553 in Dec 2019). This caused the 3-month average of inventory on the market to drop below 3 months worth of inventory resulting in a seller's market.

The lower end of the market (sub $800k) has been selling very well, including many homes selling for above asking price in a week or so. Homes in the middle of the market ($800k to $1.2ish) that show well and are priced right are also selling quickly as the market has a lot of move-up buyers in this market. The high end of the market still has a lot of resale inventory as well has an overhang of "quick move-in" new homes from builders. Buyers in this market are being very selective and patient because they know time is on their side. That being said, I have seen that sales at the new home offices that I've visited in Jan have seen sales pick up since the new year (confirmed by the sales people that I spoke to). 

Interest rates continued their decline in January as we dealt with both Middle East tensions with Iran and then news of the corona virus came out. The year started with the 30-year rate around 3.50% and rates got as low as 3.25% in the middle of the month and have ticked up a bit as the Middle East tensions have calmed down and the stock market recovered from the virus scares. I believe that rates will get to around 3% sometime this year as we will continue to deal with some other market heartburn. These low rates will provide support to the housing market unless we start seeing the job market weakening. So we look to have started the year in good shape.

From my standpoint, my upcoming listings are mainly move-up and job relocating clients. I've already had several referrals from clients as well as buyers who I have met at open houses in 2019 who contacted me to start their home search in January. When I asked them what prompted them to begin actively looking to buy, they responded that it was a need for a larger home and because rates were so low. There are a few banks out there out there that also are offering a 10% down purchase loan program without mortgage insurance which is helping many of these buyers.

 

[usctrojancpa]

Below are 5-year charts for active listings, home sales, average price per SF, and days on market from MLS.

 

[OCLuvr]

Thanks Martin. Which bank is offering 10% down with no PMI?

 

[usctrojancpa]

Thanks Martin. Which bank is offering 10% down with no PMI?

Check your PM.

 

[Dodgerinoc]

Hey guys. I?m completely new to this forum. But I?m not from Irvine but am looking to move here and buy a home here (first time buyer btw). I was wondering if you guys could give me some advice on when would be a good time to buy? A friend of mine told me to wait until the end of the year and even into next year. I know no one here can see the future but I?d appreciate any advice you guys have. Thanks. And please bear with me this is also my very first post. Thanks guys

 

[usctrojancpa]

Hey guys. I?m completely new to this forum. But I?m not from Irvine but am looking to move here and buy a home here (first time buyer btw). I was wondering if you guys could give me some advice on when would be a good time to buy? A friend of mine told me to wait until the end of the year and even into next year. I know no one here can see the future but I?d appreciate any advice you guys have. Thanks. And please bear with me this is also my very first post. Thanks guys

Welcome to TI, there's a lot of great information on here for you to help you research more on your home purchase. I've predicted that this year will probably be flat but I think we might get a soft patch in the middle of the year as we head into the election as some buyers may pull back to wait and see who will be elected (the same thing happened in 2016).  After the 2016 election, both the stock market and the housing market increased well into 2018.  I would recommend that you start going around some open houses to check out floor plans and neighbors that you may be interested in to start narrowing down the type of home/s and location/s that you'll be most interested in buying. As you get closer to purchasing a home, start working with a lender to find out what your buying power is.  That being said, I would only buy if you plan on owning the property for at least 5+ years as no one knows where the market will go but beyond that it's safe to assume that prices will be higher than they are today.  If you would like any other input on the market or copies of floor plans that have sold, feel free to email or PM me. 

Btw, are you a Dodgers fan? 

 

[gld2]

Which bank is offering 10% down with no PMI?

 

[usctrojancpa]

Which bank is offering 10% down with no PMI?

US Bank...it's for loan amounts up to $1m for primary residence purchases. I can PM you my US Bank contact if you would like.

 

[Satishleo]

Which bank is offering 10% down with no PMI?

US Bank...it's for loan amounts up to $1m for primary residence purchases. I can PM you my US Bank contact if you would like.

thanks for the info. is it for only new homes or resale homes also ?

 

[sgip]

@DodgerinOC - Welcome on-board.

Although I can't stand the realtor phrase "it's always a good time to buy".... sometimes it is. If you're looking for a solid neighborhood, good schools, and an easier commute, price and ROI aren't really major issue, right? Yes, everyone wants to see some return on capital, but by waiting for the right ROI you may miss the right property. If you've got ROI as a trigger point to buy, rest assured there are hundreds of other buyers at that same point in the purchase process. Should the absolute perfect home come up at a low price, will your bid be the winning one? Not always when dozens of other buyers leap in at the same time. 

If a solid 85-90 percent of your "must have's" can be found in a property the time to buy is now. I subscribe to the "Ecclesiastes 11:4" view of home buying: To paraphrase "If you wait for perfect conditions, you will never get anything done."

Still not sure about leaping in? At minimum getting a rental home in Irvine may be a wise first step. Sometimes planned communities are not for everyone, even though they might seem like it at the time. A sense of place helps narrow down where exactly you might want to convert cash into equity. If you rent for a year, you can still buy 6-8 months into your lease. In many ways it's nice to have a few months between properties, giving enough time for you to patch, upgrade, and improve your new home while still renting. Ask anyone who bought then remodeled while still living in the home. (blegh is an oft heard descriptor from those who stay in their home during a big fix up)

Engaging a solid Realtor is important. Getting your financing squared away is another. So many purchases collapse not because of the property, but because the strength of the Realtor and ability to get financing were put into play well after deposit money has been laid out. Don't be that buyer.

It's for all intents and purposes a giant leap of faith to make an investment of this size. There are an equal number of cheerleaders and naysayers trying to bend your ear on the subject. Read up - as you've done here - and be ready to make an informed decision, The right property will come to you within that period of preparation. Good luck with your home finding!

My .02c

 

[Mety]

Hey guys. I?m completely new to this forum. But I?m not from Irvine but am looking to move here and buy a home here (first time buyer btw). I was wondering if you guys could give me some advice on when would be a good time to buy? A friend of mine told me to wait until the end of the year and even into next year. I know no one here can see the future but I?d appreciate any advice you guys have. Thanks. And please bear with me this is also my very first post. Thanks guys

TalkIrvine's very own genius member, eyephone suggests you wait along with financial experts, Liar Loan and Panda. But also at the same time, Irvine's trustful resident, irvinehomewowner says you should buy if you're going to stay a long time there (more than 5-10 years) and so does Irvine's expert realtor USCTrojanCPA say the same. I would suggest if you're going to buy here in OC, you should definitely buy in Irvine. If you want to rent a year or so, that would also be a very nice experience of how you like this city.

I suggest you buy/rent in newer areas like Eastwood, Orchard Hills, Stonegate, Portola Springs, etc. Please note though, those newer areas have Mello-Roos taxes which your realtor should explain to you about. If you don't want to deal with those, there are villages like Northwood, Westpark, and University Park. Woodbury, Northpark, and Quail Hill are also somewhat new, not too old, but floor plans here are not as modern. The villages themselves are very nice though. If you want to explore original Irvine, Woodbridge and Turtle Rock are the places to be. They're built in 70s though so you might have to deal with some maintenance of the home. If you hate HOAs and Mello-Roos or that Irvine feel, El Camino Real is for real. If you're into super trendy stuff, check out Great Park. There are like 7 parks villages they're still building out. There are also some hazardous history about this city which your realtor also should warn you about if you ask. If they don't know what you're talking about when you ask, find another realtor.

If you're super rich, look no further than Shady Canyon, Hidden Canyon, or Turtle Ridge. You'll be satisfied.

 

[usctrojancpa]

Which bank is offering 10% down with no PMI?

US Bank...it's for loan amounts up to $1m for primary residence purchases. I can PM you my US Bank contact if you would like.

thanks for the info. is it for only new homes or resale homes also ?

It's for both new and resale homes, primary residences only.