4/3 Home Inventory

irvinehomeowner

irvinehomeowner

Well-known member
I did this last year on the IHB in trying to find rental parity for 4/3 homes in Irvine. It seems that inventory has dried up since then.

I did a quick Redfin and what I'm looking for is 4/3 SFRs (trying to fit that demographic who prefers a 4th room with a bath for guests/in-laws/whatever) under $800k. I even took out the build 1990 or later because that only returned 2 results.

As of today I found:

8 total SFRs under $800k, 1 was a short sale.
Of those 8, only 3 were under $700k and the lowest was $649k.

That's why TIC can price their homes the way they do.

So if there are any perma-bears out there left from the IHB who said Irvine isn't different... can one of you explain what is going on here? Record high unemployment, no easy credit, 40% down payment average in Irvine... what's the story?

I'll continue to update this so we can track how Irvine and the legend of the FCBs are doing (since IPO is MIA).
 
[quote author="irvinehomeowner"]I did this last year on the IHB in trying to find rental parity for 4/3 homes in Irvine. It seems that inventory has dried up since then.

I did a quick Redfin and what I'm looking for is 4/3 SFRs (trying to fit that demographic who prefers a 4th room with a bath for guests/in-laws/whatever) under $800k. I even took out the build 1990 or later because that only returned 2 results.

As of today I found:

8 total SFRs under $800k, 1 was a short sale.
Of those 8, only 3 were under $700k and the lowest was $649k.

That's why TIC can price their homes the way they do.

So if there are any perma-bears out there left from the IHB who said Irvine isn't different... can one of you explain what is going on here? Record high unemployment, no easy credit, 40% down payment average in Irvine... what's the story?

I'll continue to update this so we can track how Irvine and the legend of the FCBs are doing (since IPO is MIA).[/quote]

No one will sell their homes until they assess Collection's absorption and price their resale accordingly. They are hoping that TIC will sell as high as possible and mark down their homes 10-15% from new home prices.

There are a lot of corruption in China especially within the governmental sectors. Money is being laundered out quickly to purchasing expensive homes in Irvine by relatives. Officials in China are cunning and they don't keep much in their Chinese bank accounts just in case they become a fall guy.

They send their wife and "children" (yes, plural) abroad to live in Irvine. Their children bear the mother's maiden name where the government can't trace the family tree.

This is the primary reason why all Chinese governmental related social events exclude family participation.

Some Irvine homes are for money laundering investment purposes therefore the homes are not owner occupied and managed by relatives abroad.

Not knowing a lot about RE in America Irvine is a good target because home value is less likely to depreciate. They are not into flipping for profit just merely a place to dock their illegal money.

Besides home purchase Chinese also launder money by buying high ticket items that also retain most of its value. Estate jewelries from Winston and Van Cleef at SCP are popular among FCB.
 
[quote author="irvinehomeowner"]But graph said FCBs won't help Irvine's values.

<bait>[/quote]

That's not quite accurate.

I believe that graph's contention was that the rare-never-before-photographed-pipsquack FCBs would not help Irvine's values any differently than has been the case in the past.

There is a subtle but key difference.

The data pool is still thin, but is the volume of cash buyers really different than it was over the last few months or years? That's one of the key points I'm trying to make available with the closing/mortgage reportings. I don't think anyone has a good answer.


Yet. :-/
 
[quote author="IrvineRealtor"]
[quote author="irvinehomeowner"]But graph said FCBs won't help Irvine's values.

<bait>[/quote]

That's not quite accurate.

I believe that graph's contention was that the rare-never-before-photographed-pipsquack FCBs would not help Irvine's values any differently than has been the case in the past.

There is a subtle but key difference.

The data pool is still thin, but is the volume of cash buyers really different than it was over the last few months or years? That's one of the key points I'm trying to make available with the closing/mortgage reportings. I don't think anyone has a good answer.


Yet. :-/[/quote]
Oh sure... spoil my hyperbolic fun... bait isn't bait without a little spice.

Although, he has made that contention... there were times where he said Irvine will fall just as much and as fast as everywhere else to counter when I said that the rare bespeckled FCB would keep prices from crashing as fast as other places. I'm lazy but I should try to find that over at the IHB,

Does the MLS database go back to late 80s early 90s? Is there a way to find out what the down payments were back then? I have always asked and have yet to receive an answer on how far did new Irvine homes that sold during the peak of the 90 bubble fall? Someone? Anyone? Bueller?
 
The first Irvine sale to be recorded in the MLS was 3722 Provincetown, on 9/30/1997.
Since then there have been 27,335 more closed sales recorded in the MLS in Irvine.

All Irvine SoCalMLS Sales through 12/31/2009

Attached is a list of them all. I've done some initial scrubbing, but not much (empty APN numbers, addresses, and such). I've even run a couple of IF/THEN scenarios to find the homes that appear to have been on the market and sold more than once, by both address and by parcel number.

Your mission, should you choose to accept it, would be to develop an Irvine CS Index. You'll need to know which have to be thrown out because they were not arms-length transactions (difficulty = 7). You'll need to know which homes were overimproved and/or developed (difficulty = 9). You'll need to develop a baseline (difficulty = 10) or you can peg it to the actual CS index for LA/OC.

Note: I do not believe that "pegging" will be accurate though, since doing so assumes that the previous sale was right on the mark, and that the market flowed evenly with the rest of LA/OC.

(If it DID run parallel to the real CS index, then why bother with all of this effort?)

I think to be more accurate, you'd have to take a different approach. If you're out there, IPO or FreedomCM can correct me if I'm mistaken.

Good luck,
IrvineRealtor.
 
Oooo... data.

This will help me compare what prices homes were at the last trough (circa 96-98) but I am missing a piece, namely what were *new* home prices in the prior peak (circa 89-91). That will help determine how resistant Irvine new home values are to a receding real estate economy which may be applicable to the 2010 Collection.

I believe Westpark II was one of the few new home communities in that time period. Are there any other Irvinites how there who can recollect what pricing was on new homes during that time? I think Graph had some jpgs of ads on the IHB but those were after the time period I'm looking for.
 
[quote author="irvinehomeowner"]Oooo... data.

This will help me compare what prices homes were at the last trough (circa 96-98) but I am missing a piece, namely what were *new* home prices in the prior peak (circa 89-91). That will help determine how resistant Irvine new home values are to a receding real estate economy which may be applicable to the 2010 Collection.

I believe Westpark II was one of the few new home communities in that time period. Are there any other Irvinites how there who can recollect what pricing was on new homes during that time? I think Graph had some jpgs of ads on the IHB but those were after the time period I'm looking for.[/quote]

This is a tough one to draw the line. FCB will buy what ever the amount TIC is asking for the new homes. They have really no idea of pricing comparison and history. Their goal is not to save money but to launder cash out of the communist regime.

Price does not really matter to them. However, the dilemma is jacking up the prices where you the folks earning an honest living having to pay the marked up price.

Will the FCB sustain Irvine's unrealistic prices? The answers are yes and no. New homes like I said years before will benchmark resale prices less 10-15%. The buyers for an older homes are likely from Asian folks with money they hid from Uncle Sam and not the Communist crowd. The pend up demand for the older homes is creating great absorption indicated by the multiple offers. This is a finite group of Asian or mostly local Chinese buyers.

The illegal money pouring into Irvine from oversea is alarming. The relatives of the communists are making the purchases often have little established credit and a full or majority cash transaction is usually the case. This group of buyers only want new homes. Why settle for old when others pay the bill? They are also superstitious believing in new is better. The resale homes will not have this group as buyers which will affect absorption greatly.

Homeowners of resale may have an official gauge for asking WTF pricing but will they get the absorption that is needed to sustain the resale market? Buyers in the resale market are much more in tune with the reality and bid wisely. Local buyers are disappointed right now since most became losers of bidding wars. Sellers are not desperate right now. They are the leisure sellers (not sellers recently lost their job and depleted their saving). What we are seeing are sellers pulling their home off the market resulting in the low inventory as well as sellers watching closely the Collection's absorption to gauge the market.

The resale market have 3 advantages over the new homes: bigger yard, a third car garage, and less HOA fee.

I can't not draw a definite conclusion whether old homes will hold its value. The stubborn sellers apparently is winning this poker game so far.
 
[quote author="IrvineRealtor"]That's not quite accurate.

I believe that graph's contention was that the rare-never-before-photographed-pipsquack FCBs would not help Irvine's values any differently than has been the case in the past.

There is a subtle but key difference.
[/quote]
With all due respect for graph's immense RE knowledge... there seems to be a flaw in this argument that I keep trying to point out.

What was the saturation rate of FCBs during the 90s bubble compared to this one? We touched on this in the other thread but the mix of buyers in Irvine was less FCB back in the last 80s... compared to the early 2000s.

So if you extrapolate from that... let's assume that an FCB is a more stable owner than someone using a liar loan and equity. So, if back in the late 80s, 50% of the buyers were FCB and in the early 2000s, 75% were FCB... wouldn't that mean that prices will be stickier now then they were back then?

I remember that graph or someone used census numbers to show that the asian population is not much higher now than it was back in the 80s... but does that reflect homeOWNERs?

Now... I don't mind being proved wrong... but living in Irvine for almost 20+ years may give me a little insight into how the demographic has changed from the last bubble to this one.
 
[quote author="IrvineRealtor"]The first Irvine sale to be recorded in the MLS was 3722 Provincetown, on 9/30/1997.
Since then there have been 27,335 more closed sales recorded in the MLS in Irvine.

All Irvine SoCalMLS Sales through 12/31/2009

Attached is a list of them all. I've done some initial scrubbing, but not much (empty APN numbers, addresses, and such). I've even run a couple of IF/THEN scenarios to find the homes that appear to have been on the market and sold more than once, by both address and by parcel number.

Your mission, should you choose to accept it, would be to develop an Irvine CS Index. You'll need to know which have to be thrown out because they were not arms-length transactions (difficulty = 7). You'll need to know which homes were overimproved and/or developed (difficulty = 9). You'll need to develop a baseline (difficulty = 10) or you can peg it to the actual CS index for LA/OC.

Note: I do not believe that "pegging" will be accurate though, since doing so assumes that the previous sale was right on the mark, and that the market flowed evenly with the rest of LA/OC.

(If it DID run parallel to the real CS index, then why bother with all of this effort?)

I think to be more accurate, you'd have to take a different approach. If you're out there, IPO or FreedomCM can correct me if I'm mistaken.

Good luck,
IrvineRealtor.[/quote]

wow, that is a great data set. Go for it, IHO (and where the heck is IPO?)

i've only been monitoring for two years (omg, 2yrs!), but so far CM does not run parallel to the larger LA/SNA MSA reported by CS.

personally, I have no way to do the arms length scrubbing, and can only do a bit of the addition scrubbing from pub records and the sales description.

what i've resorted to is using a statistical test to scrub my data, which is that any transaction more than 5x the SE from the mean gets removed from the set. not perfect, but adequate, i think.

and using the LA CS as my baseline scenario. but i'm more confident in that, in that I have examined historical from 1988 and seen a very high correlation for CM and the broad index.

It has only recently broken down, in the decline from the peak of 2006.
 
[quote author="FreedomCM"]

wow, that is a great data set.
[/quote]

Yes it is. Thank you, IR2.

It's mind boggling to see how much profit one could have made that bought in 1998 or 99, and then held for 5 or 6 years. Wish my head had not been so far up my a$$ when I was single and 26 years old in 1998. A condo would have been a much wiser investment than where I was spending my money in those days.
 
I'm keeping a close eye on 3/2 detached and attached in WB & NW, before and after the Grand Opening... so far this week, there has been some really good short sales deals out there...!
 
[quote author="roundcorners"]I'm keeping a close eye on 3/2 detached and attached in WB & NW, before and after the Grand Opening... so far this week, there has been some really good short sales deals out there...![/quote]

seems to me that the deals are all gone... was trying to get in on 6 short sales... one had over 20 offers and will go for over $100K over the asking price. Based on these 6 comparable houses with similar lot sizes, it's at about $350/sq ft. Based on demand, I was told that we could expect $400/sq ft. soon.

I then turned my attention to 2 differnt listings for standard sales. One was asking $417/sq ft and I believe sellers just accepted a full price offer. The other is listed at about $360/sq ft and listing realtor said don't bother with anything less than full price. Ouch...
 
[quote author="akim997"]
[quote author="roundcorners"]I'm keeping a close eye on 3/2 detached and attached in WB & NW, before and after the Grand Opening... so far this week, there has been some really good short sales deals out there...![/quote]

seems to me that the deals are all gone... was trying to get in on 6 short sales... one had over 20 offers and will go for over $100K over the asking price. Based on these 6 comparable houses with similar lot sizes, it's at about $350/sq ft. Based on demand, I was told that we could expect $400/sq ft. soon.

I then turned my attention to 2 differnt listings for standard sales. One was asking $417/sq ft and I believe sellers just accepted a full price offer. The other is listed at about $360/sq ft and listing realtor said don't bother with anything less than full price. Ouch... [/quote]


what were the 8 addressed you put in offers for...? who is telling you all this b/s?
 
[quote author="roundcorners"]Not too bad either... all detached...

http://www.redfin.com/CA/Irvine/2-Bayfield-92614/home/4697628

http://www.redfin.com/CA/Irvine/44-Amberleaf-92614/unit-87/home/5250584

http://www.redfin.com/CA/Irvine/38-Winterhaven-92614/unit-107/home/5250676[/quote]

If you consider this a good deal, then wouldn't my 4/3 purchase at Coronado be a good deal as well? Sure I have to pay mello roos, but that's kinda expected in all new communities. I guess it's cuz I don't have a driveway and large backyard...
 
[quote author="irvinehomeowner"]
So if there are any perma-bears out there left from the IHB who said Irvine isn't different... can one of you explain what is going on here? Record high unemployment, no easy credit, 40% down payment average in Irvine... what's the story?
[/quote]

If you stop paying and the bank doesn't foreclose, you don't list, you sit.

If you're underwater and have or refinanced into a 5 yr ARM at incredibly low rates, you've got a couple years of buffer to hope with a payment less than rent.

With no inventory and still demand from the 90% of the population still working, prices are still upside down or uncomfortable for many owners.

How many can really sell for price where they will get out free and clear. The rest have to get through the incredibly painful realization that they are effectively screwed and then stop dreaming of a rebound to save them and hunker down into the sewer to slug out a short sale with the bank.

Does that sound fun? Didn't think so. So it's hunker down, hold on and hope. Either they get back on top and suck up the payments, the banks quit waiting an take the home, the banks and owner admit they're hosed and reach an agreement or the Government whips out some homeowner gravytrain.

That's all riding under the fear of contacting anybody and getting on the radar of the foreclosure process instead of letting everybody ignore the elephant of insolvancy between the bank and homedebtor. Right now, most can coast, why rock the apple cart.
 
You must log in or register to reply here.
Back
Top