Irvine 7th highest median income in US??

kcmkane_IHB

kcmkane_IHB

New member
Wow, AZDavid from the main blog isn't going to like these numbers. It would appear that the 2008 Census income survey ranks Irvine the 7th highest median income in the US, for cities over 65,000 population. The ranking is a little misleading, since it eliminates all the wealthy towns with smaller populations (Beverly Hills for instance) --- but I suppose it demonstrates that Irvine ranks well against its peer group.



The median for a household in Irvine is $99k, and the median for a family is $111k. Newport Beach and Yorba Linda are ranked higher than Irvine on the survey.







<a href="http://ocbiz.freedomblogging.com/2008/08/26/three-oc-cities-rank-near-top-in-us-income/">OC Reg - Census Median Incomes</a>
 
When was the info for the 2008 census taken? 2007 or was it 2006? i wonder with the collapse of the mortgage industry will the median income be affected?
 
I was initially shocked when I saw the numbers, household median income grew 17.5%. I then had my duh! moment. Irvine is still growing and building new homes, some 6000 new households and let?s face it, in the new homes, even the crappy condos were starting at a half million for more than a one bedroom. If you weren?t making $100K plus, you couldn?t afford to move into Irvine.



That?s exactly what the detailed data shows on the income too. The below $100K is flat versus 2006 and the $100K+ is net 6000+ gain. What?s good news for Irvine is bad news for everybody on the board. Household income in excess of $150K represents 25% of households.



I?ll have to start to revisit how badly the high end and middle will get hurt. I don?t see the 25% of housing being what $150K+ household are chasing after. I think what we?ve been seeing on the board and in RL discussions is going to come to pass. We all chasing the same housing stock and there isn?t enough to go around. It?s what IPOP sees with his tracking site. And likely why there?s so much strength presenting there.



I don?t have detailed breakdown for Irvine housing stock, does anybody other than Bren? But frankly, I suspect what IPOP has been tracking represents between 5-10% of the housing stock when stretched out through the other villages. Probably closer to 5% and yet 25% of the households have the income to be chasing it and think and feel they earned it.



The counter balance will be fear and ability. Can they get the loans, are their DTIs in shape. But income wise, unless we implode economically going forward, they can drive buying on payments.



Irvine?s mid-tier and top-tier fall looks like it?s going to be a lot longer. Of course, if the reality is the debt ratios are what our resident mortgage guys post, even though they?ve got the income, they won?t be able to play.



So, based on incomes, I?m guessing we?re about to see ugly competition going forward in homes priced $600-$800K. The big question will be: "how little will three quarters of a million buy?"
 
Money #3 Best Places to Live

Naperville, IL

Median Income: $123,221.00

Median Home Price: $369,000.00



Money #4 Best Places to Live

Irvine, CA

Median Income: $108,206.00

Median Home Price; $650,000.00



Sunshine Tax = $281,000.00
 
[quote author="No_Such_Reality" date=1219881551]I was initially shocked when I saw the numbers, household median income grew 17.5%. I then had my duh! moment. Irvine is still growing and building new homes, some 6000 new households and let?s face it, in the new homes, even the crappy condos were starting at a half million for more than a one bedroom. If you weren?t making $100K plus, you couldn?t afford to move into Irvine.



That?s exactly what the detailed data shows on the income too. The below $100K is flat versus 2006 and the $100K+ is net 6000+ gain. What?s good news for Irvine is bad news for everybody on the board. Household income in excess of $150K represents 25% of households.



I?ll have to start to revisit how badly the high end and middle will get hurt. I don?t see the 25% of housing being what $150K+ household are chasing after. I think what we?ve been seeing on the board and in RL discussions is going to come to pass. We all chasing the same housing stock and there isn?t enough to go around. It?s what IPOP sees with his tracking site. And likely why there?s so much strength presenting there.



I don?t have detailed breakdown for Irvine housing stock, does anybody other than Bren? But frankly, I suspect what IPOP has been tracking represents between 5-10% of the housing stock when stretched out through the other villages. Probably closer to 5% and yet 25% of the households have the income to be chasing it and think and feel they earned it.



The counter balance will be fear and ability. Can they get the loans, are their DTIs in shape. But income wise, unless we implode economically going forward, they can drive buying on payments.



Irvine?s mid-tier and top-tier fall looks like it?s going to be a lot longer. Of course, if the reality is the debt ratios are what our resident mortgage guys post, even though they?ve got the income, they won?t be able to play.



So, based on incomes, I?m guessing we?re about to see ugly competition going forward in homes priced $600-$800K. The big question will be: "how little will three quarters of a million buy?"</blockquote>


For the sake of argument, okay, I agree.



Now, then......explain Chino Hills. And Ladera.
 
[quote author="no_vaseline" date=1219882793]



For the sake of argument, okay, I agree.



Now, then......explain Chino Hills. And Ladera.</blockquote>


Chino Hills: Supply distribution = demand distribution



Ladera Ranch: Supply distribution >= demand distribution (plus a lot of speculators)



Irvine: Supply distribution < demand distribution





I'm guessing on Chino Hills, but I recall it being largely SFRs on real lots and horse properties. With a median income of $100K, the kinds of places $100K people are happy buying.



Ladera isn't big enough to have Census income stats and I don't know the housing mix there well, but apparently the fraudera ranch label sticks or the people didn't have the income to buy $900K places. But I admit, I'm guessing.



The question then becomes will the $150K family move from Irvine to Ladera or Chino Hills when $600,000 buys them Ipop's old place in Irvine and $400,000 buys them a much nicer place in Ladera or Chino Hills?
 
I mentioned this problem in IPO's thread. Basically, we always assume income is constant and housing prices have to come down. But what if income goes up a lot? Irvine is a fairly attractive place to live - good schools, near the beach, doesn't get that hot, etc. I thought homes were way over priced, but I'm beginning to think after income demographic changes, perhaps there is only another 10-15% to go.



The big problem is still all of the $1mm + homes. Even at $150k, that would give a price of $600k. At $250k, it's $1mm. There are so many home over $1mm, how would they ever sell? I'm not sure how many $250k income families Irvine could draw from.



Oh, and also it seems the substitution effect is rather small as Asian people on the board indicated they would never live outside of Irvine.
 
Here is the total chart:



1 Pleasanton, Calif. $113,345 $8,196 $131,048 $10,415

2 Newton, Mass. $110,885 $10,361 $139,404 $16,481

3 Newport Beach, Calif. $110,511 $5,967 $162,976 $28,370

4 Yorba Linda, Calif. $109,681 $7,142 $122,373 $8,686

5 Flower Mound, Texas $105,812 $6,366 $112,555 $7,838

6 Highlands Ranch, Colo. $99,066 $5,052 $103,516 $7,265

7 Irvine, Calif. $98,923 $4,821 $111,455 $5,487

8 West Bloomfield Township, Mich. $98,832 $8,442 $113,191 $9,882

9 Chino Hills, Calif. $96,733 $8,745 $102,745 $5,497



Here is the Irvine sales data (July):



Irvine 92602 $650,000 -9.7% 24 9.1%

Irvine 92603 $726,000 -15.1% 39 -2.5%

Irvine 92604 $567,500 -11.0% 21 0.0%

Irvine 92606 $721,000 -0.6% 13 -38.1%

Irvine 92612 $475,000 -37.1% 31 -29.5%

Irvine 92614 $561,000 11.5% 12 20.0%

Irvine 92618 $460,000 -22.0% 20 -9.1%

Irvine 92620 $634,000 -14.7% 44 -17.0%



Here is Ladera Ranch sales data (July)



Ladera Ranch 92694 $570,000 -28.7% 52 -3.7%



Here is the Yorba Linda sales data (July):



Yorba Linda 92886 $566,000 -34.4% 54 22.7%

Yorba Linda 92887 $775,000 -3.1% 26 8.3%



Here is Chino Hills sales data (July)



Chino Hills 91709 58 $499 -16.5% 6 $308 -23.0% $241



So, it appears that Irvineistas are paying about 6:1 (price:income), Ladarians are paying about 5.7:1 (I'm assuming Ladera and Irvine have the same median income), Yorba Lindaindans are paying about 6.5:1, and Chino Hills Holla Ballas are paying about 5:1.



Whats the difference between Chino Hills and YL and Ladera and Irvine? IMO, where they fall on the backside of the road to Bustoville, as they revert to whatever Case Schiller multiple they should be at. And not just my opinion:



<blockquote>"People are saying the reason prices are falling are because of all of the foreclosures, but the foreclosures are happening because the prices are falling," Thornberg said. "They've got it backwards. The prices are falling because they're too freakin' high."</blockquote>


<a href="http://www.voiceofsandiego.org/articles/2008/08/27/housing/869dataparty082708.txt">http://www.voiceofsandiego.org/articles/2008/08/27/housing/869dataparty082708.txt</a>



I would like to see the whole data set of the census, not just the median. If somebody has it, please post it or a link or something along those lines. It will give us an absolute cap on what you can finance using "conventional" products, which will accurately nail what you can ultimately spend on a given stucco box.
 
I just want to say this is a <I>great</I> thread. The new median info is a good reason of why Irvine is going to crash softer then the rest of the bubble towns. On the other hand these seem outstanding arguemetns for why prices will continue to fall:



[quote author="No_Such_Reality" date=1219890773]The question then becomes will the $150K family move from Irvine to Ladera or Chino Hills when $600,000 buys them Ipop's old place in Irvine and $400,000 buys them a much nicer place in Ladera or Chino Hills?</blockquote>


[quote author="Schlotkins" date=1219891985]

The big problem is still all of the $1mm + homes. Even at $150k, that would give a price of $600k. At $250k, it's $1mm. There are so many home over $1mm, how would they ever sell? I'm not sure how many $250k income families Irvine could draw from.</blockquote>
 
No_vase, that's not the point I'm making. Irvine is on the way to bustville. My point is that what I, and I suspect many others on the board want to buy, is going to looking at serious buyer competition when it's gets to the sub-$800K range.



I may be wrong, maybe prices have been so completely out of whack that I don't realize 25% of the housing stock is 4+/2+ SFRs on real lots because like Turtle Rock, they're all priced at $2MM.



10% of Irvine makes over $200K. another 15% make over $150K. At 4X income, that's 25% looking and able to buy the best deal they can at $600K+.



The question is excluding megabuck mansions, what does the top quartile of housing in Irvine look like in terms of housing stock?



The census data is at



<a href="http://factfinder.census.gov/servlet/DatasetMainPageServlet?_program=ACS&_submenuId=&_lang=en&_ts=">American Fact Finder.</a> 2007 is a limited set, have at it, you can see income breakdown by family, household, ethnicity, type of income.



Nutshell: the top 10% of homes will be $800K+, top 25% $600K+ because it's the income. My question is what does it look like?
 
[quote author="No_Such_Reality" date=1219896159] I may be wrong, <strong>maybe prices have been so completely out of whack </strong>that I don't realize 25% of the housing stock is 4+/2+ SFRs on real lots because like Turtle Rock, <strong>they're all priced at $2MM.</strong>



</blockquote>


I think this is the case.



Have you seen Bks posts on "don't overimprove your tract home - nobody will pay you a premium for the upgrades"?
 
[quote author="no_vaseline" date=1219896935][quote author="No_Such_Reality" date=1219896159] I may be wrong, <strong>maybe prices have been so completely out of whack </strong>that I don't realize 25% of the housing stock is 4+/2+ SFRs on real lots because like Turtle Rock, <strong>they're all priced at $2MM.</strong>



</blockquote>


I think this is the case.



Have you seen Bks posts on "don't overimprove your tract home - nobody will pay you a premium for the upgrades"?</blockquote>


That is correct. I made this big mistake on my first, second and third home. Really sophisticated buyers seeking for custom details would not be looking for cookie cutter homes. All these fancy finishes I see in tract home upgrades are like adding mahogany panels and leather seats to a Ford Focus or Geo Metro or the tricked up old Civic the Mexicans drive in Santa Ana.



A common dilemma is when a buyer with champagne taste but has a beer budget. Don't get a beer can and dress it up like a champagne bottle.
 
These are 2007 numbers. Using these #s as evidence of a currently robust economy is about as smart as using last summer's home sale prices as proof of a strong housing market.



I would contend that the economic climate has changed just a little in the past year.
 
I still don't buy that there is that much income in Irvine sustainably.



What is going to happen to the figures for the next year (2008) when all the RE finance people's incomes have gone away?



Also, how many of those $150k households have $150k cash to use as a downpayment? From my limited interactions, it is/was mostly those same $150k families who were heloc ing and refi ing.
 
[quote author="no_vaseline" date=1219896935]



Have you seen Bks posts on "don't overimprove your tract home - nobody will pay you a premium for the upgrades"?</blockquote>


It never hurts to put a custom wok in your kitchen. At the height of the bubble most houses in my tract neighborhood were selling between $1.5-1.75 million. The first and only house that broke the $2million mark must have followed bk's fung shui advice and put in an "Asian" kitchen.
 
[quote author="bkshopr" date=1219898051][quote author="no_vaseline" date=1219896935][quote author="No_Such_Reality" date=1219896159] I may be wrong, <strong>maybe prices have been so completely out of whack </strong>that I don't realize 25% of the housing stock is 4+/2+ SFRs on real lots because like Turtle Rock, <strong>they're all priced at $2MM.</strong>



</blockquote>


I think this is the case.



Have you seen Bks posts on "don't overimprove your tract home - nobody will pay you a premium for the upgrades"?</blockquote>


That is correct. I made this big mistake on my first, second and third home. Really sophisticated buyers seeking for custom details would not be looking for cookie cutter homes. All these fancy finishes I see in tract home upgrades are like adding mahogany panels and leather seats to a Ford Focus or Geo Metro or the tricked up old Civic the Mexicans drive in Santa Ana.</blockquote>


I don't see it with search, so if you know where it is please link it. As for over-improving, I understand that, and that isn't my point.





What percentage of homes in Irvine are thishttp://www.redfin.com/CA/Irvine/35-Malibu-92602/home/5856759or nicer?



What percentage of homes in Irvine are thishttp://www.redfin.com/CA/Irvine/27-Kernville-92602/home/5858624or nicer?



What percentage of homes in Irinve are thishttp://www.redfin.com/CA/Irvine/7-Bayporte-92614/home/4697278or nicer?



That's my point. Show me the link to what you think will be the bottom of the top 10% of homes? What does it look like? What's the bottom of the top 25% of homes look like? That's the end of the line for the $150K earners. Irvine is, IMHO, a working professional town. They are professionals, but the majority work.





I'm not being facetious, No_Vase may be right. Do I just not see them because the pricing is so screwed up?



Bkshopr, seriously, you probably have the best visibility for the housing stock. Looking today at the MLS, not worrying about the pricing, what does the top 10% of homes in Irvine look like? 25%? 50%? 75% (bottom 25%)



What's the median home look like? Not from a sales standpoint, but a what is actually built out there standpoint.



I just quickly grabbed my links, but I don't think they represent 25% of the market. That's my point. Does housing stock distribution match the income distribution?



If the top 10% of earners in Irvine make $150K+ in a few years, then the top 10% of homes are going to $600K+ homes.
 
[quote author="25w100k+" date=1219896087]The new median info is a good reason of why Irvine is going to crash softer then the rest of the bubble towns. </blockquote>


Um, no.



Irvine can have a median income of $1 million and prices will still fall as long as the price/rent ratios are as out of whack as they are now.
 
Higher priced places like Irvine will fall less than some other bubble areas. But only because, and to the extent that, they did not become as inflated in the first place.
 
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