Is this True?

R

rickradian_IHB

New member
I was dropping my daughter off at school this morning and started talking to a fellow parent. The parent was telling me her frustrations with trying to buy a house. She stated every house that comes up in Irvine that she is interested in is getting snatched up right away.



Is this what everyone is seeing? I just don't understand. I still think the prices are sky high. I want to buy in Quail Hill or Woodbury and still looking for a 20-30% drop from current prices.



I make a good 6 figure income and still cannot afford a desirable house at these prices. Where do these people get their money, I just don't understand. My objective is 3 bed/2Bath 2000 sq ft, $450,000. Is that too much to ask.



I will not give in to the low interest rate tease. I would rather pay less for a house at a higher interest rate then more for it at a lower rate.



Opinions are appreciated.
 
2,000 sf for $450k is impossible for Irvine. Home sellers are anxiously waiting for TIC's bench mark pricings for Woodbury school site. My guess is between $335-375 per sq.ft. Take 10% off for a used house you will be still looking at $600k for a 2,000 sf house. Oh, by the way, you will have no "California room" if you purchase a used house.
 
[quote author="rick_r" date=1238642550]I was dropping my daughter off at school this morning and started talking to a fellow parent. The parent was telling me her frustrations with trying to buy a house. She stated every house that comes up in Irvine that she is interested in is getting snatched up right away.



Is this what everyone is seeing? I just don't understand. I still think the prices are sky high. I want to buy in Quail Hill or Woodbury and still looking for a 20-30% drop from current prices.



I make a good 6 figure income and still cannot afford a desirable house at these prices. Where do these people get their money, I just don't understand. My objective is 3 bed/2Bath 2000 sq ft, $450,000. Is that too much to ask.



I will not give in to the low interest rate tease. I would rather pay less for a house at a higher interest rate then more for it at a lower rate.



Opinions are appreciated.</blockquote>


The average days on the market value of Jan and Feb Irvine sales is around 50 days, so I believe that means that the typical Irvine property is hitting escrow within 2-3 weeks of going active... My perception is that anything priced reasonably is getting sold pretty quickly.



March prices are up over Feb and the velocity of sales, escrow activity, etc. has increased over the past month or so. We may see a couple of months of price increases, yes increases, during this Spring.



It's possible you may never see the $225/sf you are looking for, unless you want to live right on top of a freeway or in a serious fixer-upper.
 
Irvine is still a very desirable place to live for a lot of people. Think of all the people who have money available who are waiting to get a place. For example, there are a lot of wealthy Asians out there who can afford to purchase homes with cash. I personally know quite a few of them and they are looking only in Irvine. It's hard to compete with straight cash. I'm sure a lot of people think that we are close to the bottom already and they are willing to get in a little bit early to secure a nice place. The low rates are definitely enticing a lot of these people to jump in now. Add in the emotional factors about renting vs buying and it makes sense that properties are getting snatched up. I say this because this is personally all happening in my brain so it's probably going through the minds of a lot of other people.



Personally, I am trying to wait a bit longer before I purchase. It's getting to the point where I can afford a decent 2 BR condo but I still think they will go down a little bit more. Why not wait and hopefully get a 3 BR for near the same price? My lease ends in January 2010 so I will reevaluate the market at that point. I'd rather get in at a lower price point because I believe the rates will be low for a while. Then again, if an amazing deal comes up I am not going to hesitate to break my lease. I am hoping that it works out for me. Good luck.
 
[quote author="ipoplaya" date=1238644218][quote author="rick_r" date=1238642550]I was dropping my daughter off at school this morning and started talking to a fellow parent. The parent was telling me her frustrations with trying to buy a house. She stated every house that comes up in Irvine that she is interested in is getting snatched up right away.



Is this what everyone is seeing? I just don't understand. I still think the prices are sky high. I want to buy in Quail Hill or Woodbury and still looking for a 20-30% drop from current prices.



I make a good 6 figure income and still cannot afford a desirable house at these prices. Where do these people get their money, I just don't understand. My objective is 3 bed/2Bath 2000 sq ft, $450,000. Is that too much to ask.



I will not give in to the low interest rate tease. I would rather pay less for a house at a higher interest rate then more for it at a lower rate.



Opinions are appreciated.</blockquote>


The average days on the market value of Jan and Feb Irvine sales is around 50 days, so I believe that means that the typical Irvine property is hitting escrow within 2-3 weeks of going active... My perception is that anything priced reasonably is getting sold pretty quickly.



March prices are up over Feb and the velocity of sales, escrow activity, etc. has increased over the past month or so. We may see a couple of months of price increases, yes increases, during this Spring.</blockquote>




Hurry, hurry, hurry and buy before the good ones are gone! Ha, ha, ha.



Irvine is the cookie cutter capitol. There will always be another 30 clones that look exactly like the "good one".



Don't be a sucker and fall for the trick "there is actually a one of a kind house" so better buy now.
 
[quote author="bkshopr" date=1238644203]2,000 sf for $450k is impossible for Irvine. Home sellers are anxiously waiting for TIC's bench mark pricings for Woodbury school site. My guess is between $335-375 per sq.ft. Take 10% off for a used house you will be still looking at $600k for a 2,000 sf house. Oh, by the way, you will have no "California room" if you purchase a used house.</blockquote>


First, what's a california room?

So at the bottom are you saying that homes will not get close to $225 for "used" home? I thought they were estimating that it would be $250 a sq. ft at the bottom?
 
A lot of the buyers in the more expensive areas are on their 2nd, 3rd, or 4th house, well into their career, and have been on the train for the increase in their home equity even before the bubble. More still are using an unreasonably high portion of their income to pay the mortgage, rather than investing the traditional % of income in various retirement investments. I guess they see their home as their retirement investment, in some part.



Dont forget, many of the buyers of these homes used to live in the older parts of Irvine. They bought their homes in the 80s and 90s between 180-300K and sold them for well more than double that. A few hundred grand of equity can move you into a pretty nice place.



I am otherwise in your same boat. My wife and I currently rent in Woodbury while saving for that down payment. Prices did start coming down, but it became obvious that the loan amount we could afford comfortably (I dont want to be house poor or eliminate my savings goals), would not buy us into the range of home we wanted. Even the 2+ walled jigsaw puzzle intermeshed condo homes in woodbury (the more shared walls the worse it is) were still over 500K - many with god-awful floor plans, a front entryway that is basically a parking/garage door alley, or some combination of the two. If you want a better value, take a look around Oak Creek - its newer than most of the other villages with some homes that actually are very livable. Hard to find a good one in there, but they do pop up from time to time if you keep an eye out.



My advice is to stick to your guns on what you think is a reasonable monthly mortgage payment and resist the temptation to deviate. It WILL happen as you look longer and longer. Just remember that the people telling you that "everything will be fine" and that you can swing a payment higher than what you wanted are usually (a) the exact people who are creating this mess and having the banks take their homes at the slightest faultering of their financial situation, or (b) directly financially interested in getting your business.
 
The typical Irvine buyer puts down around 30%. That figure was fairly consistent during 2008.



Looking back over the three months or so of 2008, somewhere around 10-15% of buyers were all cash.
 
[quote author="ipoplaya" date=1238644685]The typical Irvine buyer puts down around 30%. That figure was fairly consistent during 2008.



Looking back over the three months or so of 2008, somewhere around 10-15% of buyers were all cash.</blockquote>
Even if I could pay for a house in cash, I won't. When I'm ready to buy you can bet your arse that I'll be using Bank of America's no fee mortgage program where I'll get a 90% LTV and they pick up the PMI. One thing that I have learned in this downturn is that cash is king and it's always good to have more of it around just in case. My re-entry point is around $300k for a 2+bed/2+bath attached condo built in the 1990s or later somewhere in Irvine. The ones that I'd be interested in picking up are selling for $350k-$375k at the moment.
 
[quote author="halfnote19" date=1238644425][quote author="bkshopr" date=1238644203]2,000 sf for $450k is impossible for Irvine. Home sellers are anxiously waiting for TIC's bench mark pricings for Woodbury school site. My guess is between $335-375 per sq.ft. Take 10% off for a used house you will be still looking at $600k for a 2,000 sf house. Oh, by the way, you will have no "California room" if you purchase a used house.</blockquote>


First, what's a california room?

So at the bottom are you saying that homes will not get close to $225 for "used" home? I thought they were estimating that it would be $250 a sq. ft at the bottom?

</blockquote>


The median price per sf for Jan and Feb Irvine sales was $335. I don't think there is any way that prices will fall another 33% to make the median PSF $225... What would be the catalyst for such a decline? Credit has been uber tight and will probably only get looser. Mortgage rates have come down significantly of late, at least of loans under $625K, and the economy is bound to start improving by the end of this year. I think we'll be lucky to see another 10-15% down before bottom.
 
[quote author="halfnote19" date=1238644425][quote author="bkshopr" date=1238644203]2,000 sf for $450k is impossible for Irvine. Home sellers are anxiously waiting for TIC's bench mark pricings for Woodbury school site. My guess is between $335-375 per sq.ft. Take 10% off for a used house you will be still looking at $600k for a 2,000 sf house. Oh, by the way, you will have no "California room" if you purchase a used house.</blockquote>


First, what's a california room?

So at the bottom are you saying that homes will not get close to $225 for "used" home? I thought they were estimating that it would be $250 a sq. ft at the bottom?</blockquote>


California Room is the new "I-Phone" for housing. It is the latest TIC gadget. Having it is cool. Buying a used house is like carrying the old Motorola brick phone. The glorious days of owning a flip home no I meant flip phone are over.
 
My theory of Parental Help is being confirmed everyday. I'm not seeing older couples, in Woodbury, Quail Hill, I'm seeing young couples 30-40 something with young children. There are wealthy Asian cash alright; from the Parents! I feel your frustration, who in their 30s have a few hundred thousand? Next time, just watch and see who is dropping off those kids at pre-school or elementary. Look at who is pushing those strollers around Woodbury or Quail Hill, it's not the parents, it's the Grandparents! IR2, I don?t know if you can confirm this, but do you get to see where the 30% down payment is coming from? The buyers or their parents?
 
[quote author="roundcorners" date=1238645400]My theory of Parental Help is being confirmed everyday. I'm not seeing older couples, in Woodbury, Quail Hill, I'm seeing young couples 30-40 something with young children. There are wealthy Asian cash alright; from the Parents! I feel your frustration, who in their 30s have a few hundred thousand? Next time, just watch and see who is dropping off those kids at pre-school or elementary. Look at who is pushing those strollers around Woodbury or Quail Hill, it's not the parents, it's the Grandparents! IR2, I don?t know if you can confirm this, but do you get to see where the 30% down payment is coming from? The buyers or their parents?</blockquote>


I know. I know. It is from the stroller pushers.
 
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[quote author="ipoplaya" date=1238645093] and the economy is bound to start improving by the end of this year.</blockquote>


Why?
 
[quote author="roundcorners" date=1238645400]My theory of Parental Help is being confirmed everyday. I'm not seeing older couples, in Woodbury, Quail Hill, I'm seeing young couples 30-40 something with young children. There are wealthy Asian cash alright; from the Parents! I feel your frustration, who in their 30s have a few hundred thousand? Next time, just watch and see who is dropping off those kids at pre-school or elementary. Look at who is pushing those strollers around Woodbury or Quail Hill, it's not the parents, it's the Grandparents! IR2, I don?t know if you can confirm this, but do you get to see where the 30% down payment is coming from? The buyers or their parents?</blockquote>


This is the down payment in Irvine.



<img src="http://www.kharmafengshui.com.au/images/red-envelope.jpg" alt="" />

<img src="http://www.germes-online.com/direct/dbimage/50279104/Baby_Stroller.jpg" alt="" />
 
[quote author="usctrojanman29" date=1238645088][quote author="ipoplaya" date=1238644685]The typical Irvine buyer puts down around 30%. That figure was fairly consistent during 2008.



Looking back over the three months or so of 2008, somewhere around 10-15% of buyers were all cash.</blockquote>
Even if I could pay for a house in cash, I won't. When I'm ready to buy you can bet your arse that I'll be using Bank of America's no fee mortgage program where I'll get a 90% LTV and they pick up the PMI. One thing that I have learned in this downturn is that cash is king and it's always good to have more of it around just in case. My re-entry point is around $300k for a 2+bed/2+bath attached condo built in the 1990s or later somewhere in Irvine. The ones that I'd be interested in picking up are selling for $350k-$375k at the moment.</blockquote>


Do you have any more information on this BofA no fee mortgage program? I'd rather do that as well. I couldn't find anything on the BofA site though.
 
[quote author="roundcorners" date=1238645400]I feel your frustration, who in their 30s have a few hundred thousand? </blockquote>


Not as unusual as you might think. Two professionals and/or savers... perhaps add in a little equity from a prior home. Most of my friends in the DC area and SoCal fit this description and none of them had any major help from parents.
 
[quote author="irvinehapa" date=1238647124][quote author="usctrojanman29" date=1238645088][quote author="ipoplaya" date=1238644685]The typical Irvine buyer puts down around 30%. That figure was fairly consistent during 2008.



Looking back over the three months or so of 2008, somewhere around 10-15% of buyers were all cash.</blockquote>
Even if I could pay for a house in cash, I won't. When I'm ready to buy you can bet your arse that I'll be using Bank of America's no fee mortgage program where I'll get a 90% LTV and they pick up the PMI. One thing that I have learned in this downturn is that cash is king and it's always good to have more of it around just in case. My re-entry point is around $300k for a 2+bed/2+bath attached condo built in the 1990s or later somewhere in Irvine. The ones that I'd be interested in picking up are selling for $350k-$375k at the moment.</blockquote>


Do you have any more information on this BofA no fee mortgage program? I'd rather do that as well. I couldn't find anything on the BofA site though.</blockquote>
Looks like they did away with their no fee mortgage program (they would pick up the PMI payment along with the closing costs like title, escrow, and recording).
 
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