Irvine market in 2010!!!!

octrends

New member
Now we are kicked out of the IHB forums, i am thinking to start a new thread to discuss, how irvine house market will look like in 2010. Given the current Govt intervention, low interest rates and all possible ways to keep foreclosure low it seems it won't go down much, may be 5-10%. Also today there was news about forcing banks to reduce the principals to avoid foreclosure at any cost. I don't think bottom is near or possible in the next 2-3 years.
 
[quote author="octrends"] Also today there was news about forcing banks to reduce the principals to avoid foreclosure at any cost.[/quote]

Yeah, [bovine excrement].
 
See... you can take the forums out of the IHB... but you can't take the RE out of the forums.

I think it's going to be very hard to avoid discussing RE before Friday (is that the deadline?).

Also... is the closure of the IHB forums a subtle nod that we are near the bottom?
 
[quote author="irvinehomeowner"]I think it's going to be very hard to avoid discussing RE before Friday (is that the deadline?) [/quote]

You may discuss RE. IHB does not permit me to create any categories for it right now, in exchange for our link being up in their announcement temporarily. However, RE posts will not be removed.
 
[quote author="irvinehomeowner"]See... you can take the forums out of the IHB... but you can't take the RE out of the forums.

I think it's going to be very hard to avoid discussing RE before Friday (is that the deadline?).

Also... is the closure of the IHB forums a subtle nod that we are near the bottom? [/quote]
good point, i never thought of it. also it's quite possible TIC might have bought it so that they can sell their homes without the IHB intervention.
 
Good Dr. Housing Bubble has a fantastic chart in his last post called "the eye of the hurricane". One look at it and you'd probably surmise that 2010 will be a deja vu event of the 2007-2008 market. The Fed and Treasury has run out of silver bullets. My guess is that the monster will rise from the dead and kill off any housing recovery/green shoots people are hoping for.
 
It's all about the inventory levels. Until inventory increases significantly from current levels, Irvine home prices will be very stable to slightly increasing. The only way Irvine home prices drop from today's levels are if one or more of 3 things happen: 1) significant increase in inventory, 2) interest rates above 6%, and/or 3) the economy takes a turn for the worse and unemployment keeps rising higher and higher.

I'll give you guys a great example, there was a new listing in Irvine that hit MLS at 10am this morning and I submitted an offer for one of my buyers at 6pm (without seeing the home as the home will not be shown until Saturday). The listing agent indicated that they had already received 4 other offers. The craziness continues....
 
What do you think, all of these are real buyers or investors or both. another point is to see if these are investors and they are grabbing all the properties at WTF prices, that means prices won't go down.
 
[quote author="octrends"]What do you think, all of these are real buyers or investors or both. another point is to see if these are investors and they are grabbing all the properties at WTF prices, that means prices won't go down.[/quote]
From what I've seen going to view new listings, most all are real buyers who plan on occupying the homes. The investors are sticking with the courthouse foreclosure auctions. From the closing information on MLS, most of the buyers are putting 30-50% down and there's a fair number of homes purchased in the past 2-3 months for cash.

I'll post up my monthly update of Irvine real estate on Saturday as soon as the official ban of real estate discussion expires and share some more thoughts and observations.
 
Can someone post a foreclosure radar map? That may give us some idea of what is in the pipeline as far as pent up supply.
 
I can't speculate the Irvine market in 2010. However, overall housing market in CA beyond 2010 does not look so good. Here's graph posted in Calculated Risk today. http://www.calculatedriskblog.com/
CA has 54% of total option ARM loans, and these loans are due to recast in next few years. With CA's high unemployment rate and negative equity on these loans, strategic default can be even more popular in the next few years. That wills definite made impact on Irvine housing prices.
http://www.housingwire.com/wp-content/uploads/2009/12/outstanding-option-arms.png
 
[quote author="USCTrojanCPA"]It's all about the inventory levels. Until inventory increases significantly from current levels, Irvine home prices will be very stable to slightly increasing. [/quote]


You nailed that one. The inventory county wide is on par with a grocery store at the height of the cold war in the USSR's Warsaw Pact States.

If you strip out the short sales and the wishing, there is very little there.
 
[quote author="lnc"]I can't speculate the Irvine market in 2010. However, overall housing market in CA beyond 2010 does not look so good. Here's graph posted in Calculated Risk today. http://www.calculatedriskblog.com/
CA has 54% of total option ARM loans, and these loans are due to recast in next few years. With CA's high unemployment rate and negative equity on these loans, strategic default can be even more popular in the next few years. That wills definite made impact on Irvine housing prices.
http://www.housingwire.com/wp-content/uploads/2009/12/outstanding-option-arms.png [/quote]

don't expect reset to cause any big issues, since there are so much govt intervention. its quite possible banks/lenders will work with all the mrtg holders to keep the same payment for another 3-5 yrs, expand the loan to 35 or 40 years to keep the same payment, reduce the principal or give the lowest possible APR. ofcourse it won't work on those cases where the mrtg holder is out of job. i don't expect mkt to go down in double digits, it will be dragging down in single digits quite possible 5%-7% range for the next 5-10 yrs.
 
[quote author="nosuchreality"]
[quote author="USCTrojanCPA"]It's all about the inventory levels. Until inventory increases significantly from current levels, Irvine home prices will be very stable to slightly increasing. [/quote]


You nailed that one. The inventory county wide is on par with a grocery store at the height of the cold war in the USSR's Warsaw Pact States.

If you strip out the short sales and the wishing, there is very little there.[/quote]
That's a great analogy as it brought back the memories of how my parents used to tell me that they had to stand in line for hours just to get their ration of cold cuts for the month back in Poland in the 70s.
 
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?
 
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
 
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.
 
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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