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NEW -> Contingent Buyer Assistance Program
Skeptic said:

"Check out the Decada discussion on this forum. If you bought in Phase I, you would have already lost your down payment."

I have some follow-up intel on this. Reportedly, no one bought a single unit until mid-December. Not that things haven't dropped since then, and I agree with the rest of your sermon.

I just found it chilling that they didn't sell anything for the first several months (3-6, probably). Wow.

SCHB
 
hmm..

I was at Decada over the last weekend and the sales rep there informed me that they will have total of 7-8 phases but release dates are in question due to slow market.
 
Yes, i understand that even Irvine will experience a leveling or even price drop during the next year or two...but from what I have heard is that getting in early is better than later when the prices start to rise again slowly.

i'm spending $1500/mo just on rent..which is not recoverable.

iceeman, we feel your pain. the bf and I are in the same boat.. mid 20's looking (now waiting) to buy in Irvine..in the meantime, spending 1600 on rent.

BUT this is how i see it. 1500/mo for 2 years is 36K. at face value that seems like a lot going down the toilet, but thats not much at all considering how much you might lose in depreciation if you bought now. when bloggers here say that irvine prices will fall, theyre not talking like 10-15k drop, they're talking upwards of 100k or more. 36k vs 100k...

even if its self gratification to say, 'yeah i bought my own house in irvine,' you also don't want to be like one of VoC picketers that bought early and lost almost 200k in value over a span of a few months. yeah they spent 800-900k on a house, but do we look at them with envy? not so much.
 
great point MK9

I know i'm being rash and irrational in my thoughts. I'm just tired of looking at model homes weekend after weekend..with no result. On brighter side, I am glad that I did not purchase a home last year...but if bloggers are right..and Irvine home prices drop $100k + , that's something to keep in mind.

But as I have stated before...i'm in it for the long haul. If I find a decent layout at decent price...moving in shouldn't be a hard decision. I'm just learning alot more about the whole home buying process right now... (when it comes to finances). I want a place to call home for next 5-10 years.

when will the RE god give shower us with some home buying blessing? I'm getting antsy.
 
ohh man we can all relate. i spent 6 months looking at homes before buying one. weekends, after work, during lunch hours.

hang in there. when i bought in 2003, it was right before prices shot up, so i was working against time. you're in the right situation. time works for you! heck, you could take a 2 month vacation, and come back knowing that prices had stayed stagnant or dropped.
 
iceeman said:

"I know the risk involved with buying a home (especially in today's market), but from the study i've done...buying a house is one of the safest investment ( just as long you keep it for a long time). I think of it as my 401k plan almost. There will be times when the return isn't as great,but over the long haul..it will be well worth it. "

Homes are not really that good of an investment. Check out this 3/12/2007 article from The Wall Street Journal: http://online.wsj.com/article/SB117329581356629863-email.html?

If the link doesn't work, the title is "Why Your Home Isn't the Investment You Think It Is" Subtitle = "Too many people rely on their home as their primary savings strategy. That's a mistake." By DAVID CROOK.

Per Chuck D: "Don't Believe the Hype!"
 
irvine_native said:

"The additional info about Decada is that phase 3 might be the last phase."

When and where did you get this info? I would suspect Cal-Pac would be one of the last the pull up camp out there given their TIC ownership. I see Laing and Taylor-Woodrow as greater flight risks.

SCHB
 
iceeman,

The market is so uncertain right now. You are still in much better position than so so so many people that I know who sold in 2003 and 2004 to wait for the market to crash. Even in today depressed market, prices are still sky high, and rent has gone almost double. These folks are feeling very sad and tired in their rented houses or apartments.

In the mid 1990's, the dream house I bought dropped to $200K after only 4 months. I paid $300K for it after sitting on the fence for 3 years. The market was so bad you could not even give your house away. This same house dropped 20% from peak to $1M today. Some folks on this forum think prices will drop to 2003 level, then this same house will be worth $500K.
 
"Even in today depressed market, prices are still sky high, and rent has gone almost double."

Since when are you claiming rent has doubled? (assuming that's what you meant by "gone almost double")

Be careful with this answer...

SCHB
 
SCHB - Thank you - I really meant almost double in the private sector as we are talking about residential real estate here. Homes that were renting for $2,200 in 2002 is going for $4,000 in 2007. Thank you again for your reminder.
 
"Homes that were renting for $2,200 in 2002 is going for $4,000 in 2007."

I call shenanigans! There is no way that example is even close to representative. Show us the data.

iceeman,

It sounds like you should buy iff you disagree with the prediction that prices in Irvine are going to significantly decline in the next few years. So focus on figuring out whether you think the prediction will come true. Keep reading. Do your homework. Hundreds of thousands of dollars are at stake.
 
OK - Almost Double

Just 1 data point in a neighborhood in North Irvine. Comparable homes tract. Zip 92602

16 Bodega - leased on 10/1/2001 for $2,800.

10 Glenn Ellen - leased on 10/15/2004 for $2,880

130 Spring Valley - leased on 2/1/2002 for $2,500

On the market now:

16 Bodega - asking $3400

78 Rockport - asking $3900

6 Glenn Ellen - asking $3900

64 Rockport - asking $4,200

You guys got me here! Not quite almost double! It seems that way. Sorry!
 
bump! seems like this thread is getting abit nasty between parties...let's focus on why i have this thread posted in the first place. I'm here to find out more about the Irvine housing market not to discuss the rental increase over the years. I'm sure rent will continue to rise with so many foreclosures coming up and more residents getting pushed out of their enormous and unaffordable mortgages.

My point is... if Irvine new homes continue to drop, where is the bottom? I heard anything from 20%-40%. As I mentioned, i'm new to the world of real estate and even newer to Irvine. I know Irvine will remain the hottest OC real estate for long time to come, but how do I make a rational and sensible decision?

I am not relying on a house purchase to become my retirement plan... i have my 401K for that. I just want to make sure I get into the right home and the righ time ( I know this is the million dollar question...but i'm sure there's some reasonable unit of measurement or gauge to measure the timing of home purchase). I don't want my first home purchase to become my last.

There's a mix of different opinions depending on who I talk to...but everyone agrees the price will continue to stumble ( but at what point do I jump in?).
 
iceeman,

If you want to know where the bottom is, then you should really pay attention to rents. Owner-occupied and rental homes are substitute goods and their prices are strongly linked. Think about it - the most expensive places to rent also tend to be the most expensive places to own. This simple fact is so obvious it's sometimes easy to miss. If the rent on a one bedroom in city X is about half as much as the rent on a one bedroom in city Y, then the price of a median home in city X will tend to be about half the price of a similar home in city Y. It's not a perfect correlation, and it can be temporarily thrown off by crazy lending practices, but the correlation is quite strong. So if you want to know where prices in Irvine are going to settle compared to other cities I think it's helpful to look at where rents in Irvine are going compared to other cities.

Historically, it has on an average been just a little more expensive to own a Southern California home using traditional financing than to rent an equivalent unit. Right now we are light years from that. It will be safe to jump back in when we are closer to the historical norm.

Also, why do you think Irvine will be the "hottest OC real estate" market for a long time to come? Obviously Irvine prices are going to stay higher than average because Irvine's desirability is higher. But that's no reason to think they are going to increase faster (or decrease slower) than the rest of OC. Irvine's high desirability is already "priced in". A Ferrari costs more than a Toyota for obvious reasons. But does that mean the price of Ferraris is going to increase at a faster rate than the price of Toyotas? Absolutely not.
 
Iceman....I feel you when you say when is the bottom the bottom. I personally look at it like purchasing a stock. When purchasing a stock not only do you look at the fundamentals, clearly the So Cal housing fundamentals are failing, but also the market that the stocks are competing in and how it is performing, thus this would be the job market, health of Irvine economy, OC economy...etc when choosing where and when to buy.

Warren Buffet has always said, this is not quoted perfectly, that when foolish money comes in it's time to get out. Right now I think everyone on this post would agree that their is still alot of foolish money out there in this market. And until you believe that money is out then I wouldn't buy.
 
This was spirited debate, not nasty.

nirvinerealtor, thanks for providing some examples and dialing back your claim.

Most of the people here are similarly open-minded.

SCHB
 
SCHB - I appreciate it. Please understand I am not here to get business since I will not tell you who I am.

I always look at rent rate as a very important indicator to project home sale activity. When you buy, you save roughly 30% tax. Therefore, when rent cost is 70% of buying cost, then people will buy because it's the break-even point. There is no question that there are even more buyers than ever who wants to buy, but not actually buying. Check out the local school enrollment and you will see. Just count how many portable classrooms added every year. The school district does not know where to fit all the children.

Currently rent rate is about 50% of buying cost; therefore, it's logical to rent. As the result, rental inventory is way low, and rent keeps rising.

I do see some part of Irvine (the more desirable area), the price is stabilizing and actually appreciated since late last year. True.
 
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