Author Topic: Irvine market in 2010!!!!  (Read 9991 times)

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Offline nefron

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Irvine market in 2010!!!!
« Reply #15 on: December 06, 2009, 07:25:00 PM »
I've continued to watch University Park very closely and it's looking a lot like last winter to me.  I saw the 3-bedroom bank owned foreclosure around the corner from me sit for weeks at $599,000, and as soon as the price dropped to $549,000 it was snapped up.  There is now a For Rent sign in the front.   I think that's the 7th University Park property I saw that happen to since May.  

Anything 3-bedroom within 10% of $500,000 is still considered investment property, looks to me.   I think the only way prices are going to go lower, besides interest rates starting up, is for those investors, whoever they are, to decide that a half a mil for an Irvine 3-bedroom is a poor investment.  What is THAT going to take?

Offline morekaos

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Irvine market in 2010!!!!
« Reply #16 on: December 07, 2009, 01:28:00 PM »
Is this the future of Irvine luxury condos?

http://www.redfin.com/CA/Irvine/3141-Michelson-Dr-92612/unit-404/home/7219078

Sep 28, 2009  Price Changed $374,000  --  SoCalMLS #S543946  
Sep 09, 2009  Relisted --  --  SoCalMLS #S543946  
Aug 14, 2009  Sold (MLS) --  --  SoCalMLS #S543946  
Jun 12, 2009  Price Changed $450,000  --  SoCalMLS #S543946  
Feb 18, 2009  Price Changed $499,999  --  SoCalMLS #S543946  
Oct 30, 2008  Relisted --  --  SoCalMLS #S543946  
Oct 29, 2008  Delisted --  --  SoCalMLS #S543946  
Oct 23, 2008  Price Changed $539,000  --  SoCalMLS #S543946  
Oct 23, 2008  Relisted --  --  SoCalMLS #S543946  
Oct 16, 2008  Delisted --  --  SoCalMLS #S543946  
Aug 13, 2008  Listed $675,000  --  SoCalMLS #S543946  
Feb 15, 2006  Sold (Public Records) $781,000  --  Public Records

Offline icey

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Irvine market in 2010!!!!
« Reply #17 on: December 07, 2009, 02:31:00 PM »
Great price!

But then...$1,125 HOA!!!!!!? WTF...

Offline trrenter

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Irvine market in 2010!!!!
« Reply #18 on: December 08, 2009, 10:05:00 AM »
Between the government and the banks actions the bubble will deflate slowly so the decrease anywhere especially Irvine will not be as dramtic as it should be.  

I think people will loose their equity slowly.

RE historically has increased in value between 2% and 5% a year.  I think buyers can forget about that.  I personally believe that Real estate will probably decline between 4% and 8% in 2010.

What is lost in that is if you take a $500,000 home (box in Irvine) and in 2010 it appreciates by 3% the home will be worth $515,000 but if you take that same home and it depreciates 4% it will be worth $480,000 at the end of 2010.

I think housing will continue to decrease until prices adjust back to the historic norms.  I don't think Irvine will be any different.
« Last Edit: December 08, 2009, 10:05:00 AM by Anonymous »

Offline irvinehomeowner

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Irvine market in 2010!!!!
« Reply #19 on: December 08, 2009, 10:25:00 AM »
But what is historic norms? 2003? 1998?

In 1998-2000, 1800-2000sft *new* SFRs in Irvine sold for $300-350k. These were 3/4 br homes in areas like Oak Creek, Harvard Square and West Irvine.

Do you think they will get that low? I just did a quick RedFin search and the lowest similarly sized houses go is mid to high $500k. When I change the year build to 1995+, the lowest is high $600k.

It's those darn FCBs!
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Offline trrenter

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Irvine market in 2010!!!!
« Reply #20 on: December 08, 2009, 10:44:00 AM »
Quote from: "irvinehomeowner"
But what is historic norms? 2003? 1998?

In 1998-2000, 1800-2000sft *new* SFRs in Irvine sold for $300-350k. These were 3/4 br homes in areas like Oak Creek, Harvard Square and West Irvine.

Do you think they will get that low? I just did a quick RedFin search and the lowest similarly sized houses go is mid to high $500k. When I change the year build to 1995+, the lowest is high $600k.

It's those darn FCBs!


I would say pre bubble is 98-99 so lets take a 300k home in 98 add 3% per year and in 2009 under non bubble appreciation that home would be worth about $403k.

So if you keep adding the 3% appreciation to the 98-99 price and then deduct the 4% I think it will go down per year wait for the two numbers to intersect.

That will happen in late 2014 when the homes will be worth about  $475k.

Now if a wave of foreclosures come that could increase the deflation.  Or if the government and the banks keep the inventory artificially low this could drag out much longer.

The could conceivably just keep the homes at the value to day until the normal appreciation catches up to the price.
« Last Edit: December 08, 2009, 10:46:00 AM by Anonymous »

Offline bltserv

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Irvine market in 2010!!!!
« Reply #21 on: December 08, 2009, 11:05:00 AM »
Quote from: "morekaos"
Is this the future of Irvine luxury condos?

http://www.redfin.com/CA/Irvine/3141-Michelson-Dr-92612/unit-404/home/7219078

Sep 28, 2009  Price Changed $374,000  --  SoCalMLS #S543946  
Sep 09, 2009  Relisted --  --  SoCalMLS #S543946  
Aug 14, 2009  Sold (MLS) --  --  SoCalMLS #S543946  
Jun 12, 2009  Price Changed $450,000  --  SoCalMLS #S543946  
Feb 18, 2009  Price Changed $499,999  --  SoCalMLS #S543946  
Oct 30, 2008  Relisted --  --  SoCalMLS #S543946  
Oct 29, 2008  Delisted --  --  SoCalMLS #S543946  
Oct 23, 2008  Price Changed $539,000  --  SoCalMLS #S543946  
Oct 23, 2008  Relisted --  --  SoCalMLS #S543946  
Oct 16, 2008  Delisted --  --  SoCalMLS #S543946  
Aug 13, 2008  Listed $675,000  --  SoCalMLS #S543946  
Feb 15, 2006  Sold (Public Records) $781,000  --  Public Records


morekaos

You need to start another "North Korea Towers" thread so we can keep track of it separately.

I really wonder what will happen with the HOA.  Its just killing any chance for these condos.  Its almost like a Spiral that cant stop.  Like a black hole sucking them into oblivion.

Offline irvinehomeowner

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Irvine market in 2010!!!!
« Reply #22 on: December 08, 2009, 11:09:00 AM »
So in 2014, you think an 2000sft 4br SFR will be about $475k? I would hope so but I can't see that.

That's a pretty long drop from $675k.

What will that home be priced at in 2010? Especially with TIC benchmarking at the high $500ks to low $600ks for similarly sized homes.
Once you go 3-car garage... your junk can never go back.
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www.irvinerealtorsite.com
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Offline trrenter

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« Reply #23 on: December 08, 2009, 11:27:00 AM »
Quote from: "irvinehomeowner"
So in 2014, you think an 2000sft 4br SFR will be about $475k? I would hope so but I can't see that.

That's a pretty long drop from $675k.

What will that home be priced at in 2010? Especially with TIC benchmarking at the high $500ks to low $600ks for similarly sized homes.


Sorry I should have said that I started the depreciation at 600k not 675k.  

So that number would be a depreciation of 4% per year from 600k.

Starting again from 600k a 4% depreciation would be about 582k in 2010.

I could be completely wrong and homes may not depreciate at all they just won't appreciate.

It that scenario the home would sell for 600k until 2030 or so.

Offline greencactus

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Irvine market in 2010!!!!
« Reply #24 on: December 08, 2009, 12:31:00 PM »
Don't you also need to account for the different interest rates when going back in time. A house that was worth $300K in 98 was in a market where 30 year fixed was about 7%.

Similarly, in your projections shouldn't you make an assumption on what the interest rate will be. By 2014 it is very possible that we can see an upswing in interest rates. This will exert a negative pressure on home prices.

On top of that there is the inflation component (which is somewhat tied to interest rates).

In any case, I think that it boils down to monthly payment as a fraction of income. This would be an actual measure of "affordability".

Offline trrenter

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« Reply #25 on: December 08, 2009, 01:03:00 PM »
Quote from: "greencactus"
Don't you also need to account for the different interest rates when going back in time. A house that was worth $300K in 98 was in a market where 30 year fixed was about 7%.

Similarly, in your projections shouldn't you make an assumption on what the interest rate will be. By 2014 it is very possible that we can see an upswing in interest rates. This will exert a negative pressure on home prices.

On top of that there is the inflation component (which is somewhat tied to interest rates).

In any case, I think that it boils down to monthly payment as a fraction of income. This would be an actual measure of "affordability".


I agree completely. Again I am just guessing and this is my guess as to what is going to happen.

If interest rates were to climb to double digits then depreciation could come quickly.

There are a lot of what if's involved.  What if unemployment stays the same or gets worse.

What if taxes go up significantly to reduce deficits in CA and the US.

The point is that through inflation, interest rate changes, recessions etc Real Estate historically apreciates at around 3%.

I don't see anything that happened between 1999 to 2009 except for loose lending standards that would indicate that houses should have appreciated more then the historical 3%.  

So my guess is through one mechanism or another we will hit those historical norms eventually.
« Last Edit: December 08, 2009, 01:04:00 PM by Anonymous »

Offline novaseline

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« Reply #26 on: December 08, 2009, 01:34:00 PM »
Quote from: "trrenter"
If interest rates were to climb to double digits then depreciation could come quickly.


That's just silly talk.   It can never happen because Bernanke doesn't have the "guts" to raise rates.  

I know this because both Awgee and Winex say it's so, and they "know" because they don't "believe".    >:(

Offline trrenter

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« Reply #27 on: December 08, 2009, 01:46:00 PM »
Quote from: "novaseline"
Quote from: "trrenter"
If interest rates were to climb to double digits then depreciation could come quickly.

That's just silly talk.   It can never happen because Bernanke doesn't have the "guts" to raise rates.  

I know this because both Awgee and Winex say it's so, and they "know" because they don't "believe".    >:(



I don't really think it will happen either.

If Bernake raised the interest rates to double digits it would undo all the manipulation they have already done to keep the bubble from bursting.

That is why I am convinced at this point the plan is to slowly deflate the bubble.

Offline novaseline

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« Reply #28 on: December 08, 2009, 02:20:00 PM »
I wasn't serious in my remark, but I suspect you're right.  I think the plan is to start raising rates later in 2010 and keep on tightening till they get them back where they want them "around" 6%.

Offline greencactus

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« Reply #29 on: December 08, 2009, 02:50:00 PM »
It depends what the inflationary pressure is down the road. The Fed targets 3-4% inflation. If you were to peg the interest rate at 6% but it doesn't slow down inflation to the desired levels, policy changes may be needed to slow down economic growth. Let's say taxes end up shooting up to stem rapid growth. What's worse ... 10%+ interest rates and lower taxes or 6% interest rates and higher taxes? (assume they both achieve the same inflation rate) Either scenario would push home prices down. I can't foresee a situation where both interest rates AND taxes are kept low.

 

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