Will prices go down in Quail Hill/Turtle Ridge in the near term?

C

confuzed

New member
I have been thinking about moving from Westpark II to Quail Hill/Turtle Ridge area... Basically, I am trying to see if we can move to ~3500 sq ft home from our current ~2500 sq ft. home by borrowing additional ~$500K in loans (including real estate transaction fees).  Looking for homes around $1.5m...

We can afford it financially, but I have this feeling that prices may correct in QH/TR due to higher number of foreclosures in general and rising interest rates. My dilemma is that if prices go up, we may not be able to move up in the future, but if prices go down, the difference in prices could be smaller.

We are very happy with our current house and this is more of a "want" than "need". Do you think we should stay put or make a move?

I am first time poster to this board, but read it regularly and value your opinion. What do you guys think?

Thanks in advance...

 
Welcome to the forum! If you're planning to stay in the new home long-term (5 years or more) and can afford the higher payment comfortably without sacrificing your savings (like retirement), it's probably a good time now to take advantage of the relatively low interest rates. If you think of the house more as a home than an investment then you'll be better able to stomach a slide in prices, if that ever happens.
 
confuzed said:
I have been thinking about moving from WestparkII to Quail Hill/Turtle Ridge area... Basically, I am trying to see if we can move to ~3500 sq ft home from our current ~2500 sq ft. home by borrowing additional ~$500K in loans (including real estate transaction fees).  Looking for homes around $1.5mill...

We can afford it financially, but I have this feeling that prices may correct in QH/TR due to higher number of foreclosures in general and rising interest rates. My dilemma is that if prices go up, we may not be able to move up in the future, but if prices go down, the difference in prices could be smaller.

We are very happy with our current house and this is more of a "want" than "need". Do you think we should stay put or make a move?

I am first time poster to this board, but read it regularly and value your opinion. What do you guys think?

Thanks in advance...
Click to expand...

Based on the highlighted statement, it seems as if you may already have your answer.

If you're still unsure...
There's an app for that. ;-)

The truth is that nobody knows what the market will hold. 
As a reader/participant here you know many of the variables to look for:
- short-term current market trend
- interest rates
- lending rules
- state and government incentive programs
- tax strategies
- zombie sightings*
- local employment
- stock market activity
- garaged swaggerwagon capacity*
- local business environment
- global events
- and further unknowns.

The decision needs to be your family's with these factors kept in mind.

Anyone telling you that they know what you should do is just selling you something.

As an admitted realtor, my business would be better in the short term telling everyone to transact now. 
Buy and Sell? Even better.
My business is better in the long term working with people capable of making their own informed decisions.
-IR2

*your weight on these items may vary
 
confuzed said:
I have been thinking about moving from WestparkII to Quail Hill/Turtle Ridge area... Basically, I am trying to see if we can move to ~3500 sq ft home from our current ~2500 sq ft. home by borrowing additional ~$500K in loans (including real estate transaction fees).  Looking for homes around $1.5mill...

We can afford it financially, but I have this feeling that prices may correct in QH/TR due to higher number of foreclosures in general and rising interest rates. My dilemma is that if prices go up, we may not be able to move up in the future, but if prices go down, the difference in prices could be smaller.

We are very happy with our current house and this is more of a "want" than "need". Do you think we should stay put or make a move?

I am first time poster to this board, but read it regularly and value your opinion. What do you guys think?

Thanks in advance...
Click to expand...
Welcome to the forum Confuzed.  No one knows where the market is going to go but I think in the short term there are some headwinds that might put a little pressure on home prices in QH and TR.  Check your PM.
 
If you're Westpark II and you have a 3CWG (see: garaged swaggerwagon capacity)... I would stay.

But I do think my love for QH might exceed that of the larger vehicular square footage.

I would wait it out if it's more of a "want" than "need". QH is still inflated and I do believe there is room to drop... esp once we see how Laguna Altura shakes out as that will probably be used as a benchmark for QH.
 
irvinehomeowner said:
If you're Westpark II and you have a 3CWG (see: garaged swaggerwagon capacity)... I would stay.

But I do think my love for QH might exceed that of the larger vehicular square footage.

I would wait it out if it's more of a "want" than "need". QH is still inflated and I do believe there is room to drop... esp once we see how Laguna Altura shakes out as that will probably be used as a benchmark for QH.
Click to expand...

Thanks... Actually those 3 (or 2.75 ??) car garages collect more junk than we need... I bet I can remove 1/3 of the contents in our garage and family won't notice anything :) :)

The other thing I constantly hear from residents of Vicara (I know some) and realtors is that - all these new doctors at Kaiser/Hoag are buying up properties there to be close to work...

We like TR more though - gated plus more scenic, beautiful and nice cool breeze from ocean (I believe temp is cooler by 6-8 degrees in summer than Shady Canyon)

Currently I am quietly watching all the action there from the sideline and reading IHB/talkirvine (really some good discussions from both sides)...
 
Confuzed, welcome to TI!

Buying is a personal decision and everyone's situation is different. Take all opinions with large grains of salt  :)

It sounds like you can afford to wait and watch the market. I still see very little downside in holding off your purchase in terms of rising prices. If anything, the $1M+ McMansion market is due for for more price pressure than other lower price points in Irvine. There is relatively lower demand for homes priced in your range (despite all those new docs) and there is more shadow inventory.

There is a lot of evidence by RE analysts that point to a double dip in RE but the key has always been: 1) How much of a decline will there be in Irvine? 2) Over what period of time will this take place? I am not sure of those answers.

My prediction at worst, prices stay flat and interest rates slowly rise over the next 12-24 months. At best, we see prices decline 10-15%.
 
I say buy now if you cab afford it.  It's in a Uni high school district.  That alone will keep the real estate price high. 
 
Hi,

I was in the same boat like you. I started to look for a house in either Vicara of Quail Hill or Turtle Ridge from last August. I will close the escrow on a short sale house in Turtle Ridge next week. I want to share some of my observations with you.

1. QH/TR is booming these days and there are a lot of activities. Price is bouncing back fast. You also have a lot of competitions. The following Vicara and Turtle Ridge properties went into escrow in last 30 days. Some of them have been on the market for long time (180+ days)
    http://www.redfin.com/CA/Irvine/39-Fresco-92603/home/5929315
    http://www.redfin.com/CA/Irvine/47-Momento-92603/home/5929474
    http://www.redfin.com/CA/Irvine/27-Trumpet-Vine-92603/home/5901276
    http://www.redfin.com/CA/Irvine/20-Cezanne-92603/home/5900781
    http://www.redfin.com/CA/Irvine/23-Clouds-Pt-92603/home/5900983  ( I offered $1.7m all cash. There are a few other all cash buyers as well and I didn't even get a counter offer.)
    http://www.redfin.com/CA/Irvine/51-Cezanne-92603/home/5900749
25 Garden Ter just sold for $2.175m full price. (http://www.redfin.com/CA/Irvine/25-Garden-Ter-92603/home/5901346)  I toured it last Oct. and was not interested in it even at $1.7m.

2. The inventory is pretty low. Similarly a lot shady canyon properties in 2m-3m range are in short sales and they are in escrow within 30-day. You need to concentrate on premium area of Irvine like view properties in Vicara and Turtle Ridge. While Irvine has a lot of land to build, view properties are limited and the value will bounce fast. In my opinion, Northpark, westpark, Northwood, etc. are all on flat land, no views and in competition with each other and new development. The appreciation potential is much lower than QH/TR.

3. There are many cash buyers for QH/TR ($1.5m - $3m) as well. Interest rate won't matter much to them. As long as economy is not double dipping, QH/TR will not have double dipping as well. Also your offer shouldn't have contingency such as selling your house first. Loan contingency is OK.

4. I was also trying to buy a foreclosure property in QH/TR for myself directly at courthouse. Most of them got canceled due to loan modification or short sales. Even for properties that went into trustee sales, the open bids were high. Your best shot will be short sales. You are buying at 10-20% discount to market price. Even if market will go double dipping, you have 10-20% built-in equity as a buffer. I would suggest you work with some experienced agents in QH/TR for short sale opportunities. Try to find shadow inventory that is not on the MLS so that you have no competitions.

5. 29 Hidden Trl (http://www.redfin.com/CA/Irvine/29-Hidden-Trl-92603/home/5927970) is bank owned and just went under contract. My agent told me there was a lot of traffic. The closing price of this property may be a barometer for QH/TR. If it closes below $1.5m, then the market is still weak. If it closes around or above $1.6m, then QH/TR market is very strong.

6. 101 Lattice (http://www.redfin.com/CA/Irvine/101-Lattice-92603/home/5902687) was sold to an investor for $932k on Dec. 15th. The investor resold it for $1.11m within 3 months. This is also an indication of strong market in QH/TR.
 
NonFCB said:
Hi,

I was in the same boat like you. I live in Northpark, 3300SF. I started to look for a house in either Vicara of Quail Hill or Turtle Ridge from last August. I will close the escrow on a short sale house in Turtle Ridge next week for $1.7m.
Click to expand...

Welcome NONFCB and congratulations on your new home!

1. High end is booming these days and there are a lot of activities. Price is bouncing back fast. You also have a lot of competitions. The following Vicara properties and Turtle Ridge went into escrow in last 30 days. Some of them have been on the market for long time (180+ days)
Click to expand...

I don't have direct MLS  data access but from what I've read in publications, the high end ($1M-1.5M+) homes in OC are stagnating on the market, with much longer times to sell.

Maybe IR can shed light on this specifically for Irvine, but is the trend really improving for this segment of the market? Are these homes really selling quickly now? Are prices really trending higher? My gut is telling me NO, but I don't have access to the data for Irvine. The trend overall for OC appears to contradict your assertion.

2. The inventory is pretty low. Similarly a lot shady canyon properties in 2m-3m range are in short sales and they are in escrow within 30-day. You need to concentrate on premium area of Irvine like Vicara or view properties in Turtle Ridge. While Irvine has a lot of land to build, view properties are limited and the value will bounce fast. In my opinion, Northpark, westpark, Northwood, etc. are all on flat land, no views and in competition with each other. The appreciation potential is much lower than Quail Hill and Turtle Ridge.
Click to expand...

I would imagine overall inventory in Irvine is historically low, so yes I could see if homes are priced right, there could be a lot of competition.

3. There are many cash buyers on the high end ($1.5m - $3m) as well. Interest rate won't matter much to them. As long as economy is not double dipping, the high end will not have double dipping as well. Also your offer shouldn't have contingency such as selling your house first. Loan contingency is OK.
Click to expand...

Yes there are a greater % of cash buyers at the high end but the absolute number of buyers is limited and less than the middle to low end of the market.

Interest rates will not direct affect cash buyers but will certainly affect pricing even at the high end.  Higher interest rates will make it more costly for prospective buyers in the upper end of the middle price homes and even lower part of the high end homes. The substitution effect will trickle upwards.

I enjoyed reading this blog post by Irvine Renter last month on high end homes:http://www.irvinehousingblog.com/blog/comments/high-end-home-prices-falling-in-orange-county/

After reading his blog, it appears higher end homes will be the last to bottom in the market but will probably have the largest fall from current pricing.
 
iacrenter said:
Confuzed, welcome to TI!

Buying is a personal decision and everyone's situation is different. Take all opinions with large grains of salt  :)

It sounds like you can afford to wait and watch the market. I still see very little downside in holding off your purchase in terms of rising prices. If anything, the $1M+ McMansion market is due for for more price pressure than other lower price points in Irvine. There is relatively lower demand for homes priced in your range (despite all those new docs) and there is more shadow inventory.

There is a lot of evidence by RE analysts that point to a double dip in RE but the key has always been: 1) How much of a decline will there be in Irvine? 2) Over what period of time will this take place? I am not sure of those answers.

My prediction at worst, prices stay flat and interest rates slowly rise over the next 12-24 months. At best, we see prices decline 10-15%.
Click to expand...

I agree with you on rising interest rates..  I expect at least 100bp rise in interest rates within next two years, but should that not lower the price a bit due to higher payments? (not including cash buyers)

Even on a same payment, I will borrow less in higher interest rate scenario...
 
Noma said:
I say buy now if you cab afford it.  It's in a Uni high school district.  That alone will keep the real estate price high.
Click to expand...
My daughter is already going to Uni High... She along with her three friends who applied for Uni High, all got accepted. It is not that hard if you live in Irvine, IMO... I heard there are so many kids living in 92603 and wanting to go to Woodbridge due to easy, non-competitive environment or for athletic programs.
 
NonFCB said:
Hi,

I was in the same boat like you. I live in Northpark, 3300SF. I started to look for a house in either Vicara of Quail Hill or Turtle Ridge from last August. I will close the escrow on a short sale house in Turtle Ridge next week for $1.7m. It is ocean view, on the corner with 11000SF lot. I want to share some of my observations with you.

1. QH/TR is booming these days and there are a lot of activities. Price is bouncing back fast. You also have a lot of competitions. The following Vicara and Turtle Ridge properties went into escrow in last 30 days. Some of them have been on the market for long time (180+ days)
    http://www.redfin.com/CA/Irvine/39-Fresco-92603/home/5929315
    http://www.redfin.com/CA/Irvine/47-Momento-92603/home/5929474
    http://www.redfin.com/CA/Irvine/27-Trumpet-Vine-92603/home/5901276
    http://www.redfin.com/CA/Irvine/20-Cezanne-92603/home/5900781
    http://www.redfin.com/CA/Irvine/23-Clouds-Pt-92603/home/5900983  ( I offered $1.7m all cash. There are a few other all cash buyers as well and I didn't even get a counter offer.)
    http://www.redfin.com/CA/Irvine/51-Cezanne-92603/home/5900749
25 Garden Ter just sold for $2.175m full price. (http://www.redfin.com/CA/Irvine/25-Garden-Ter-92603/home/5901346)  I toured it last Oct. and was not interested in it even at $1.7m.

2. The inventory is pretty low. Similarly a lot shady canyon properties in 2m-3m range are in short sales and they are in escrow within 30-day. You need to concentrate on premium area of Irvine like view properties in Vicara and Turtle Ridge. While Irvine has a lot of land to build, view properties are limited and the value will bounce fast. In my opinion, Northpark, westpark, Northwood, etc. are all on flat land, no views and in competition with each other and new development. The appreciation potential is much lower than QH/TR.

3. There are many cash buyers for QH/TR ($1.5m - $3m) as well. Interest rate won't matter much to them. As long as economy is not double dipping, QH/TR will not have double dipping as well. Also your offer shouldn't have contingency such as selling your house first. Loan contingency is OK.

4. I was also trying to buy a foreclosure property in QH/TR for myself directly at courthouse. Most of them got canceled due to loan modification or short sales. Even for properties that went into trustee sales, the open bids were high. Your best shot will be short sales. You are buying at 10-20% discount to market price. Even if market will go double dipping, you have 10-20% built-in equity as a buffer. I would suggest you work with some experienced agents in QH/TR for short sale opportunities. Try to find shadow inventory that is not on the MLS so that you have no competitions.

5. 29 Hidden Trl (http://www.redfin.com/CA/Irvine/29-Hidden-Trl-92603/home/5927970) is bank owned and just went under contract. My agent told me there was a lot of traffic. The closing price of this property may be a barometer for QH/TR. If it closes below $1.5m, then the market is still weak. If it closes around or above $1.6m, then QH/TR market is very strong.

6. 101 Lattice (http://www.redfin.com/CA/Irvine/101-Lattice-92603/home/5902687) was sold to an investor for $932k on Dec. 15th. The investor resold it for $1.11m within 3 months. This is also an indication of strong market in QH/TR.
Click to expand...

Thanks for your thorough analysis and congratulations on your purchase... I was following the very same houses you have listed in your example and had toured a few of them. I believe there may be some strength in the market now due to spring season and limited inventory, but I am sure there will be more houses on market by August/September.

Last thing I want to do is chase the market up...

 
Good luck with your decision!

My question for Laguna Altura- how nice is the "nicest" section of Laguna Altura?  Is there an area as nice as Vicara- or those homes by Standard Pacific in QH (on Ambiance, Retreat, Mosaic, etc)- or is the nicest part similar to the homes on Tapestry?  Just curious
 
Vicara will probably be the nicest because they are single loaded and all have sizable yards and view lots.

Some of the bigger homes in Altura will probably be configured like the StanPac area with culdesacs and some having views.
 
More anecdotal evidence of Irvine's high end posers and the possibility of price crush at the top.
http://www.irvinehousingblog.com/bl...orrower-jailed-forced-to-repay-stupid-lender/
That's a big mortgage
High wage earners, like the dentist who owns today's featured property, were given access to copious amounts of credit during the housing bubble. As I have stated on many occasions, high-end pricing did not get where it is by people making large down payments. Prices got so high because lenders were willing to underwrite $3,000,000 loans.

Prior to the housing bubble, loans over $1,000,000 were very rare. Since any amounts over $1,000,000 can't be deducted (assuming the AMT allowed it anyway), very few borrowers took out such large loans.

Prices in the over $1,000,000 range tended to have equity for amounts over $1,000,000. Since equity was necessary to inflate prices, high-end homes tended to be less volatile. However, once lenders started underwriting loans over $1,000,000 prices went up with the lender air, and now with the jumbo market in tatters, lenders are requiring borrowers to document their income which is reducing the borrower pool significantly.

In the story above, the borrower who lied on his income stood out as unusual. Here, the posers blend in with the achievers.

Today's featured property was purchased on 5/9/2006 for $4,288,500. The owner used a $3,000,000 first mortgage, a $200,000 second mortgage, and a $1,088,500 down payment. It is listed as a short sale for $3,500,000.

31 RESERVE Irvinehttp://www.redfin.com/CA/Irvine/31-Reserve-92603/home/5927837

Ponder that for a moment. There is no NOD filed on this property, yet the owner cannot pay off the two mortgages at a $3,499,999 selling price? The only way the mortgage balance could be that large is if this borrower hasn't made any payments in quite a while. That makes this true shadow inventory. It doesn't appear on any reports, but it's clearly a distressed property working to push prices lower.
 
That thing will never sell for $3.5m, unless a really big foreign sucker comes along. Decent Newport and Laguna Beach property is well within that range these days.
 
IndieDev said:
That thing will never sell for $3.5m, unless a really big foreign sucker comes along. Decent Newport and Laguna Beach property is well within that range these days.
Click to expand...

Well, this house should sell for $3m.  59 Grandview (http://www.redfin.com/CA/Irvine/59-Grandview-92603/home/5927989) sold for $2.915m last Nov for all cash and there were a few interested buyers.

Even with the same price, not everyone prefers to live in Newport or Laguna. As an Asian, I am more comfortable with Irvine. Also Irvine school is better.
 
If the RE market is same in 2011 if compared to 2010, then your statement is correct. I would say 31 reserve is much better than 59 grandview and better than 25 Cobalt Sky (closed for $3.6m last year and it has inferior view/lot size compared to 31 Reserve).

But there is some competition: 28 Reserve is sitting on market for a long time 29 Reserve got NOD in Feb 2011.

We will see...
 
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