Future of real estate in irvine

thezeb00

New member
What you expert think is future of real estate in irvine, come next 4-5 years. Wondering what would be the impact of all these new developments in great park, cypress village, OH etc on re-sales and home prices. I read there would be more than 10k homes in great park, so not sure where buyers would come from for these million or half million dollar homes.
 
thezeb00 said:
What you expert think is future of real estate in irvine, come next 4-5 years. Wondering what would be the impact of all these new developments in great park, cypress village, OH etc on re-sales and home prices. I read there would be more than 10k homes in great park, so not sure where buyers would come from for these million or half million dollar homes.

Keep in mind that most buyers don't follow a set formula such as:

Boy and Girl meet in College
Get married and both get professional jobs
Live in a small apt and save up money
Finally have $100k down payment after 8 years of saving
Buy $500k home

Buyers can also:
- Inherit $5 million and spend $1 million cash on a home
- Get an FHA loan with 3% down (or a conventional loan with a 10% HELOC)
- Sell the cheap condo they bought in 2010 for a $200k profit
- Cash in on their Oculus VR stock options
- Have mommy and daddy give them the down payment
- Have mommy and daddy buy them a house for cash

Then you throw in FCBs and investors and you have even a larger buyer pool. Try google and you'll find dozens of articles about forecasts of a housing shortage in the next few years due to population growth and a lack of new home construction.

One of the good things about new home construction is that they can delay projects if sales are slow and speed them up is sales are brisk so they are a lot more likely to maintain a level of supply that meets demand than a market with just resales.
 
irvinehomeowner said:
paperboyNC said:
One of the good things about new home construction is that they can delay projects if sales are slow
That's not what the smartest guy on TI told me.

Think about the Great Park or Portola Springs - have they set dates for every new section to open and finalized the plans? No. In fact Portola Springs delayed projects for years during the downturn and accelerated construction when the market rebounded in late 2012 / 2013.
 
@paperboyNC:

No, I'm with you. I know builders, esp land owners, can delay or even stop building. That's what happened with Orchard Hills, it was originally slated for 2008 I think.

I'm sarcastically referencing a discussion I had about economics with a certain member where I commented that based on market conditions, a builder can restrict supply but he insisted that doesn't happen.
 
Thanks paperboyNC. Loved your response LOL
if you drive on Irvine Blvd/ Portola Pky picture looks totally different than what it was 12-18 months ago.
 
thatOSguy said:
thatOSguy said:
On a monthly basis, it approaches some of the most expensive real estate in the county.

IR's "price to rent" analysis pointing to a healthy/fairly valued local housing market doesn't fully calculate MR/HOAs, which can be as high as 2 car payments worth of cost.

Aren't you breaking some unwritten TI rules? Back to back posts while quoting yourself  :)
 
thezeb00 is Panda/Baby Irvine?  ;)

Irvine will turn into any other highly desirable locale.  Once all the construct is completed, prices will likely stay up because the only way you get into the city is through re-sale.  Obviously, different villages will have different price ranges and selling point but I expect Irvine to remain place where people want to move to and buy real estate in.

 
thatOSguy said:
thatOSguy said:
On a monthly basis, it approaches some of the most expensive real estate in the county.

IR's "price to rent" analysis pointing to a healthy/fairly valued local housing market doesn't fully calculate MR/HOAs, which can be as high as 2 car payments worth of cost.

Can you link to the analysis? Right now interest rates for 5/1 ARMs are so low that buying makes a lot of sense. If interest rates go up hopefully inflation will go up too to keep the real interest rates lower.
 
Like IC said, look at any premium city where they no longer have land to build out and that's what Irvine will become.

While there may not be new homes to benchmark resale prices, resale prices should remain high due to lack of new inventory. Then when they mow down Woodbridge like test wants and cement over the flakes, they can build anew and charge even higher prices.
 
jbot747 said:
Interesting article-
http://www.doctorhousingbubble.com/cash-buying-real-estate-who-needs-a-mortgage-application/

As soon as interest rates rise, sales will fall, and prices will eventually drop. I am still seeing quite a few foreclosures, short-sales, and REO's hit the market here in Irvine. I also am seeing a lot of people that bought over 10 years ago and are just now able to sell without taking a huge loss.

Well...there is no super lax lending standards so it's not likely to happen.  Most new buyers in Irvine have significant equity.
 
People need to wake up, this is the height of the second bubble. It really has nowhere to go but down again. The median incomes in Irvine while high, are nowhere near inline with real estate prices. Why do you think they are building so many apartment complexes. You have so many houses being listed with pricing history like this-

Date          Event                  Price$/sqft
06/05/14  Price change      $535,000-1.8%$509
05/02/14  Listed for sale    $545,000$519
06/02/12  Listing removed  $2,150/mo
05/17/12  Listed for rent    $2,150/mo
08/06/04  Sold                  $530,000$504
http://www.zillow.com/homedetails/66-Alevera-St-Irvine-CA-92618/59730824_zpid/

So this person bought a decade ago, far from the exact height, and still can't sell it for a profit. Keep in mind that a best case scenario 30yr mortgage with the way interest is front loaded, and they probably only paid off about $100k on their mortgage. Renting something for $2K, and putting $1K month away in something that could earn 5% a year would have probably made them more money, and been a lot less stressful.

 
jbot747 said:
People need to wake up, this is the height of the second bubble. It really has nowhere to go but down again. The median incomes in Irvine while high, are nowhere near inline with real estate prices. Why do you think they are building so many apartment complexes. You have so many houses being listed with pricing history like this-

Date          Event                  Price$/sqft
06/05/14  Price change      $535,000-1.8%$509
05/02/14  Listed for sale    $545,000$519
06/02/12  Listing removed  $2,150/mo
05/17/12  Listed for rent    $2,150/mo
08/06/04  Sold                  $530,000$504
http://www.zillow.com/homedetails/66-Alevera-St-Irvine-CA-92618/59730824_zpid/

So this person bought a decade ago, far from the exact height, and still can't sell it for a profit. Keep in mind that a best case scenario 30yr mortgage with the way interest is front loaded, and they probably only paid off about $100k on their mortgage. Renting something for $2K, and putting $1K month away in something that could earn 5% a year would have probably made them more money, and been a lot less stressful.

I would love a bubble burst right now, just in time for La Vita 4 and Hidden Canyon
 
jbot747 said:
People need to wake up, this is the height of the second bubble. It really has nowhere to go but down again. The median incomes in Irvine while high, are nowhere near inline with real estate prices. Why do you think they are building so many apartment complexes. You have so many houses being listed with pricing history like this-

Date          Event                  Price$/sqft
06/05/14  Price change      $535,000-1.8%$509
05/02/14  Listed for sale    $545,000$519
06/02/12  Listing removed  $2,150/mo
05/17/12  Listed for rent    $2,150/mo
08/06/04  Sold                  $530,000$504
http://www.zillow.com/homedetails/66-Alevera-St-Irvine-CA-92618/59730824_zpid/

So this person bought a decade ago, far from the exact height, and still can't sell it for a profit. Keep in mind that a best case scenario 30yr mortgage with the way interest is front loaded, and they probably only paid off about $100k on their mortgage. Renting something for $2K, and putting $1K month away in something that could earn 5% a year would have probably made them more money, and been a lot less stressful.

Price is worst way to look at bubbles.  Affordability is the key.  Who cares what your price is if you can afford the monthly payments?  Just because the prices are back, it doesn't there is a bubble.  There are fundamental differences between what happened in 2006 and what is happening now.

I also don't understand your point...you're talking it from an investment point of view.  Real estate in Irvine is not generally for investment...it's to live in.

According to Zillow, Irvine has:

5.5% Homes with negative equity (18.8% US Avg) (Mar 31, 2014)

2.9% Delinquent on mortgage (7.2% US Avg) (Mar 31, 2014)

I don't know where you see a bubble.
http://www.zillow.com/irvine-ca/home-values/
 
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