Observations from the front lines of the Irvine housing market?
- Thread starter usctrojancpa
- Start date
CalBears96
Well-known member
jomama229 said:
They were still doing that on selected homes on the last phase release.
sgip
Well-known member
Don't expect price cuts as that will anger the earlier phases and cause in contract buyers to chatter among themselves about how "I got this" and "Really, because I didn't" - a recipe for disaster.
Once the dam breaks - and yes, it's going to - expect bigger design center credits, significant rate buy downs or "free" long term rate extensions with other hard to spot concessions. This is, as it's been said by others, the same "tale as old as time....." as these things repeat during every RE cycle.
My .02c
Once the dam breaks - and yes, it's going to - expect bigger design center credits, significant rate buy downs or "free" long term rate extensions with other hard to spot concessions. This is, as it's been said by others, the same "tale as old as time....." as these things repeat during every RE cycle.
My .02c
usctrojancpa
Well-known member
Soylent Green Is People said:
And then the higher broker coop.
The Motor Court Company
Well-known member
it won't surprise me we see 20% national average of RE price correction..S&P is 22% off from ATH...Irvine may be a little less. If I am a cash buyer I will definitely wait it out.
usctrojancpa
Well-known member
The California Court Company said:
I think we might get more modest price declines like we got back in late 2018 and we'll probably flat line. The recession that we'll most likely get will be more recession we got in the early 2000s after dot.com bubble burst. Rates are already starting to roll over with the 10 and 30 year bond rates down 30-40bps from the highs. Watch inventory levels carefully.
Irvinehomeseeker
Active member
I I am now seeing highest number of homes for sale in Eastwood in the last 6 months. Prices are all high...will be interesting to see if there will be any price cuts. Smallest Delano still at 1.15M.
usctrojancpa
Well-known member
Irvinehomeseeker said:
Of the 9 listings, 7 of them got listed within the past 7 days.
TestingIrvine
Active member
Soylent Green Is People said:
Don?t underestimate the power of The Irvine Company in times like this.
Private, cash rich, has no stockholders to report to except for one person, Bren. TIC will just not approve any new home releases for any builder (Irvine Pacific, KB, TaylorMo, etc) and just pull inventory creating demand.
Anyone with a TIC village home should be really happy TIC is private. Anyone looking for a home should hate TIC is private.
TIC will just pull inventory and ride any recession.
sleepy5136
Well-known member
In 2008, builders were going to leave the dirt lots and give it back to Donald Bren. Guess what happened? He gave in and prices went down in Irvine. Don?t think it can?t happen again. I don?t think things will crash, but pricing adjustments is inevitable especially when you have attached condos selling for $700+ a sqft with no lot or driveway.TestingIrvine said:
usctrojancpa
Well-known member
sleepy5136 said:
They aren't building anymore attached condos outside of Great Park. There's not a lot of remaining new home lots left to build out for most of the builders in Portola Springs, Eastwood, and Orchard Hills currently. Yes, there new home communities coming in Orchard Hills and Portola Springs but they can slow things down if needed.
irvinehomeowner
Well-known member
sleepy5136 said:
Not sure that's actually what happened.
From what I remember, TIC changed the new home paradigm, instead of selling the land to the builders, they contracted them to design and build the homes while TIC still owned the land. TIC also increased the number of homes built by their own builder, Irvine Pacific. I think the 2010 New Home Collection in Woodbury was the first tract with this arrangement.
The prices for those *new* homes in 2010 were not significantly lower than existing tracts in Woodbury, what they did was increase homes to lot ratio so you paid the same for less (smaller lots, no driveways, boxy floorplans)... this is where the big increase of motorcourt SFRs started (previously relegated to condos).
There was a big argument on here (well IHB) that TIC would not be able to pause building during the 2008 "crash" (because I theorized they would)... but they did exactly that. Orchard Hills was the perfect example of this so they can do it again.
sleepy5136
Well-known member
I talked to a Shea rep about this. She specifically mentioned that in 2008, builders reached out to Donald Bren to ask to lower prices because that's where the market was going. Donald with his big ego, said no for the longest time. It got so bad at one point that all the builders gathered and threatened to give back all the land if he doesn't allow prices to go lower. It took all that effort to get prices down in Irvine. And TBH, buyers dictate pricing in a down market, not the builder or Donald Bren. If Donald Brendoesn't want to accept that, then he doesn't need to do anything. But he did in 2008.irvinehomeowner said:
TBH after hearing that story, I'll never buy a IP home, ever. Donald Bren is the definition of corporate greed and people like him are the reasons why we have AOC and others thinking that socialism is the way to go. When in fact, it's corporate greed in a capitalistic environment that is the problem, not capitalism.
irvinehomeowner
Well-known member
This story doesn't make sense... what prices would Bren lower?
Traditionally, builders buy lots from TIC and then build and price according to what they feel the market would support.
So the lots that the builders owned in 2008 were already on their books. If you're talking about future lot prices... again, they changed that where builders didn't buy any of the land... it was owned by TIC and they were paid to build on them.
Maybe that's what the Shea rep was talking about.
Traditionally, builders buy lots from TIC and then build and price according to what they feel the market would support.
So the lots that the builders owned in 2008 were already on their books. If you're talking about future lot prices... again, they changed that where builders didn't buy any of the land... it was owned by TIC and they were paid to build on them.
Maybe that's what the Shea rep was talking about.
sleepy5136
Well-known member
Donald Bren gets a royalty for each and every home that gets sold that is owned by Irvine company. Each and every lot that is owned by IP which are sold to the builder requires pricing approval before they get sold AND a royalty is given to Irvine Company. You would think that once you sell the land to the builder that you get to have full control? Not with Irvine company. Talk about corporate greed.irvinehomeowner said:
CalBears96
Well-known member
sleepy5136 said:
I've heard this being thrown around, but do you have proof that housing price must be approved by TIC? I mean, I understand that higher price would bring more royalty for TIC, but I doubt that TIC has full control over the housing price set by other builders that bought TIC's land.
sgip
Well-known member
Corporate Greed....pfffft... given the opportunity to do so, everyone on this board would do the exact same thing as Bren supposedly did. His money, his rules. Yes, his rules can cause havoc in values, but it's his to do with as he sees fit. Boo hoo if it's not for some theoretical greater good - something that is never a guaranteed result of any policy. I'm of the same opinion with Amazon, WalMart, and other greedy corporations. Their money, their rules. I choose not to shop with either company, but do I want them to bend the knee based on what other people think? Not really.
During the 1991-1994 crash, the master planned communities of RSM (Tony Moiso) and Foothill Ranch (William Lyon) had to re-sell their land to other developers at prices that were below their original cost. That was the market at the time. Both developers "lost" money, but gained it back and then some as the market rebounded in 1995-1999. None of this was driven by corporate altruism, but by savvy accountants, lawyers, and the unseen hand of market capitalism. The same may happen in 2023-2024. Who knows? These actions, driven by circumstance, can rarely if ever be timed with any certainty. We'll have to wait and see, just like everyone else.
During the 1991-1994 crash, the master planned communities of RSM (Tony Moiso) and Foothill Ranch (William Lyon) had to re-sell their land to other developers at prices that were below their original cost. That was the market at the time. Both developers "lost" money, but gained it back and then some as the market rebounded in 1995-1999. None of this was driven by corporate altruism, but by savvy accountants, lawyers, and the unseen hand of market capitalism. The same may happen in 2023-2024. Who knows? These actions, driven by circumstance, can rarely if ever be timed with any certainty. We'll have to wait and see, just like everyone else.
sleepy5136
Well-known member
I agree with you on Amazon and other big tech. But I do not agree with you when this is related to housing. Do you know what housing is suppose to be used for? Housing. So when you say it?s the same as Amazon and companies like it, you are comparing apples to oranges.Soylent Green Is People said: