Author Topic: Observations from the front lines of the Irvine housing market…  (Read 169335 times)

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Offline USCTrojanCPA

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Re: Observations from the front lines of the Irvine housing market…
« Reply #615 on: September 16, 2020, 12:27:59 PM »
Any updates from the trenches?  I ask because inventory around me is exploding.  Have not seen this many SFRs for sale in years...maybe not since 2008-2012.  But that's my zip code.  1 zip code over, where houses are cheaper, it's a different story.  Inventory is about as tight as it has been for the past several years.

I'm pulling the numbers together for August and will post it up later on today. From what I see there is still a lack of inventory into the sub $1m in Irvine and a ton in the $1.5m+ market but the higher end of the market has picked up a bit over the past few months.

Look forward to your post. By higher end, do you mean 2m+ and 2.5m+ market?

I classify the high end of the market in Irvine as $1.5m+
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Offline irvinehomeowner

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Re: Observations from the front lines of the Irvine housing market…
« Reply #616 on: September 16, 2020, 04:08:44 PM »
I classify the high end of the market in Irvine as $1.5m+

Guess I'm still a 99%er. :(
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Offline USCTrojanCPA

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Re: Observations from the front lines of the Irvine housing market…
« Reply #617 on: September 17, 2020, 10:21:37 AM »
Attached is the data for August 2020. The data shows that the market is strengthening with increasing sales, lower inventory, and now an increase in the median price per square foot. As of this morning (Sept. 17th) there are now 422 Irvine properties in escrow which is up 26 homes or 7% from August 9th.

Sales in August 2020 were 298 or about 9% higher than August 2019 as the increased number of homes in escrow continued to close. The median price per SF increased from $479 in July 2020 and $480 in August 2019 to $485 in August 20202 and that is despite the % of homes under $1m increasing from July to August. This indicates that there have been material price increases in the lower end of the market. An example of that is my listing at 128 Coralwood which will close over 5% above the model match closed comp that closed less than 2 months ago. Inventory at the end of August 2020 was down slightly from July 2020 from 764 to 758 and down almost 25% from August 2019. Not only does the lower end of the market continue to have a serious lack of inventory but now this lack of inventory is spreading into the middle market.

The strength that I’ve been seeing in the past few months has continued to grow and has now even gotten into the higher end of the market (I had 2 higher end buyers that purchased homes over $1.5m in August) which we see over at Cetara at Orchard Hills. Many of my buyers in the lower end and middle of the market continue to see multiple counter offer situations where homes are trading above very recent closed comps as there is stiff competition for good homes. Rates continue to stay low and I have this feeling that not only do buyers have buyer fatigue of getting out bid but also I’m sensing a bit of the low interest rate FOMO from these buyers. Home builders continue to see strong sales with many released lots selling quickly.

On the interest rate front, rates continue to stay low especially in the conforming and jumbo conforming loan products where rates are around 2.75%. Jumbo 30-year purchase rates around 3% if they have strong credit and are putting 20-25% down and there is plenty of lenders that offer these loans. One of my investor clients was even able to get a 3% 30-year fixed purchase loan (conforming loan) to purchase a rental property with 25% last month. I have heard from a few lenders that purchase loans are now taking about 30-35 days due to the high loan volume.

As of today (Sept. 16th), there have been 158 closed sales in September. With the number of homes in escrow being so high currently, we are on pace to break the record number of monthly sales of 306 in July 2015 this month. If inventory decrease or remain this low you can expect further price increases, more so in the lower end of the market where there are a higher number of buyers.
« Last Edit: September 17, 2020, 07:50:56 PM by USCTrojanCPA »
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Offline USCTrojanCPA

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Re: Observations from the front lines of the Irvine housing market…
« Reply #618 on: September 17, 2020, 10:24:54 AM »
Here are the 5-year charts for active listings, closed sales, median per SF, and Days On Market (DOM) through August 2020.
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Offline the.irvine

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Re: Observations from the front lines of the Irvine housing market…
« Reply #619 on: September 17, 2020, 10:20:34 PM »
Attached is the data for August 2020. The data shows that the market is strengthening with increasing sales, lower inventory, and now an increase in the median price per square foot. As of this morning (Sept. 17th) there are now 422 Irvine properties in escrow which is up 26 homes or 7% from August 9th.

Sales in August 2020 were 298 or about 9% higher than August 2019 as the increased number of homes in escrow continued to close. The median price per SF increased from $479 in July 2020 and $480 in August 2019 to $485 in August 20202 and that is despite the % of homes under $1m increasing from July to August. This indicates that there have been material price increases in the lower end of the market. An example of that is my listing at 128 Coralwood which will close over 5% above the model match closed comp that closed less than 2 months ago. Inventory at the end of August 2020 was down slightly from July 2020 from 764 to 758 and down almost 25% from August 2019. Not only does the lower end of the market continue to have a serious lack of inventory but now this lack of inventory is spreading into the middle market.

The strength that I’ve been seeing in the past few months has continued to grow and has now even gotten into the higher end of the market (I had 2 higher end buyers that purchased homes over $1.5m in August) which we see over at Cetara at Orchard Hills. Many of my buyers in the lower end and middle of the market continue to see multiple counter offer situations where homes are trading above very recent closed comps as there is stiff competition for good homes. Rates continue to stay low and I have this feeling that not only do buyers have buyer fatigue of getting out bid but also I’m sensing a bit of the low interest rate FOMO from these buyers. Home builders continue to see strong sales with many released lots selling quickly.

On the interest rate front, rates continue to stay low especially in the conforming and jumbo conforming loan products where rates are around 2.75%. Jumbo 30-year purchase rates around 3% if they have strong credit and are putting 20-25% down and there is plenty of lenders that offer these loans. One of my investor clients was even able to get a 3% 30-year fixed purchase loan (conforming loan) to purchase a rental property with 25% last month. I have heard from a few lenders that purchase loans are now taking about 30-35 days due to the high loan volume.

As of today (Sept. 16th), there have been 158 closed sales in September. With the number of homes in escrow being so high currently, we are on pace to break the record number of monthly sales of 306 in July 2015 this month. If inventory decrease or remain this low you can expect further price increases, more so in the lower end of the market where there are a higher number of buyers.

WOW this is incredible. Comparison with other parts of the OC will be interesting, this cant be unique to Irvine.  Secondly, now as most of us are confined into our homes, so whoever can afford a bigger place are going for it with lower interest rates. We are also looking to buy 5 bed

Offline USCTrojanCPA

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Re: Observations from the front lines of the Irvine housing market…
« Reply #620 on: October 04, 2020, 01:01:38 PM »
I'll update the Sept data this week but I'll just say that we had an all time record for sales in Sept 2020 in Irvine.
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Offline Soylent Green Is People

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Re: Observations from the front lines of the Irvine housing market…
« Reply #621 on: October 04, 2020, 05:34:50 PM »
We are now approaching ludicrous speed in terms of sales velocity. Rare is the offer that will be considered unless some or all contingencies are waived. We used to see some measure of slowdown once school started. No longer now that distance learning and distance employment are becoming the norm.

Interesting times indeed.

My .02c
My .02c

SGIP

Offline USCTrojanCPA

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Re: Observations from the front lines of the Irvine housing market…
« Reply #622 on: October 04, 2020, 07:14:40 PM »
We are now approaching ludicrous speed in terms of sales velocity. Rare is the offer that will be considered unless some or all contingencies are waived. We used to see some measure of slowdown once school started. No longer now that distance learning and distance employment are becoming the norm.

Interesting times indeed.

My .02c

There's a lot of low interest rate FOMO out there coupled with a lack of inventory is causing this.
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Offline irvinehomeowner

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Re: Observations from the front lines of the Irvine housing market…
« Reply #623 on: October 04, 2020, 08:38:02 PM »
So much pain in Irvine... where is LiarLoan? :)
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Offline USCTrojanCPA

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Re: Observations from the front lines of the Irvine housing market…
« Reply #624 on: October 04, 2020, 08:52:25 PM »
So much pain in Irvine... where is LiarLoan? :)

There is pain in Irvine but only for buyers who keep getting outbid. :P
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Offline USCTrojanCPA

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Re: Observations from the front lines of the Irvine housing market…
« Reply #625 on: October 04, 2020, 08:53:32 PM »
So much pain in Irvine... where is LiarLoan? :)

He sold his rental property a bit too early, the IE is experiencing the same inventory shortage as Irvine and Orange County.
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Offline Dr. CA Real Estate

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Re: Observations from the front lines of the Irvine housing market…
« Reply #626 on: October 04, 2020, 08:59:07 PM »
Let’s all pour out a drink for those renters who forever wait ‘for prices to drop a bit’

So much pain in Irvine... where is LiarLoan? :)

He sold his rental property a bit too early, the IE is experiencing the same inventory shortage as Irvine and Orange County.

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Offline USCTrojanCPA

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Re: Observations from the front lines of the Irvine housing market…
« Reply #627 on: October 05, 2020, 07:57:18 AM »
Let’s all pour out a drink for those renters who forever wait ‘for prices to drop a bit’

So much pain in Irvine... where is LiarLoan? :)

He sold his rental property a bit too early, the IE is experiencing the same inventory shortage as Irvine and Orange County.



I have a friend who's been waiting for a 10% price drop for the past 7 years so he could upgrade from an attached condo to a larger detached condo. He passed on about a half dozen detached condos/SFRs which I offered to him before going to market with that ended up selling for over list price. Thankfully he bought a 3-bedroom attached condo in Woodbury in 2010 but his wife is not a happy camper. haha
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Offline spootieho

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Re: Observations from the front lines of the Irvine housing market…
« Reply #628 on: October 05, 2020, 03:36:44 PM »
I just saw this...  It had Irvine in it, so I figured I'd post it here. 

https://assets.bwbx.io/images/users/iqjWHBFdfxIU/iOQMcRgBpUR8/v0/1200x-1.png

Percent of tenants not paying rent is increasing:
https://www.bloombergquint.com/onweb/las-vegas-tops-u-s-in-rise-of-apartment-tenants-not-paying-rent

Offline Liar Loan

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Re: Observations from the front lines of the Irvine housing market…
« Reply #629 on: October 09, 2020, 02:30:48 PM »
So much pain in Irvine... where is LiarLoan? :)

He sold his rental property a bit too early, the IE is experiencing the same inventory shortage as Irvine and Orange County.

IHO - Don't you know things are busy for me right now?  Yet, I can't help but notice that Irvine home prices have been stuck in neutral according to USC's charts.  They've gone nowhere for almost three years now!!  Irvine is definitely underperforming the rest of OC in terms of MaxROI.

USC - All real estate is local.  How many multi's have you sold in the IE?  LOL...

My last sale was the end of April (peak COVID fear) and yet none of the comps to sell since then have exceeded my sales price.  One did match my sales price and some others sold for a LOT less but needed lots of fixing/upgrading.  There is no way an appraiser would let me sell it now for more than I sold in April.

Then you take into account that landlords have no rights under COVID, and that my highly blue collar workforce is having trouble making ends meet, and I'm happy to have sold, even if peak pricing was not achieved.  The proceeds of that sale went directly into my brokerage account and the S&P is up 20% since then, without the landlord headaches!

« Last Edit: October 09, 2020, 02:37:03 PM by Liar Loan »

 

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