What do you guys think?

I remember when they were selling that model brand new, it was like the second or third cheapest detached home in the community. Now they want $709,000 for it? Did median household income suddenly double since 1999? I think not.
 
Crazy huh?  I guess 2000 sq ft detached condo is right in line with San Marcos in Stonegate.  But at least that is new but higher MR.
 
I like this tract... although detached condos... they feel more like SFRs than the current new detached condos, they even have driveways... and the 3 bigger plans have upstairs laundries with sinks.

But 20 Redberry is probably overpriced... a model match on 21 Dahlia sold for $625k... so it makes me wonder what kind of premiums it has over it (they both look Pergraniteeled).
 
jyeh74 said:
Crazy huh?  I guess 2000 sq ft detached condo is right in line with San Marcos in Stonegate.  But at least that is new but higher MR.
Click to expand...

What about other options such as Las Ventanas, Sevilla or Casero? Those are all cheaper/around the same price and new. You'd have to factor in the Mello Roos, location and all those other tradeoffs.
 
jyeh74 said:
Crazy huh?  I guess 2000 sq ft detached condo is right in line with San Marcos in Stonegate.  But at least that is new but higher MR.
Click to expand...

Of course it's crazy. I know a lot of home buyers think 10-12 years ago was an eternity, but I remember very clearly how cheap that model was selling for back then. That was the average starter home for a lot of young couples basically. At $709k, that house is a solid pass.
 
IndieDev said:
I remember when they were selling that model brand new, it was like the second or third cheapest detached home in the community. Now they want $709,000 for it? Did median household income suddenly double since 1999? I think not.
Click to expand...

Nominal incomes didn't double but nominal personal per capita income is up 40% from 1999 to 2010 in california. Interest rates are are down 44% over that same period of time. Combined together, prices could have increased about 70% if people are really buying on "payment" basis and spending the same 28% of income on housing.



 
so_scared said:
Nominal incomes didn't double but nominal personal per capita income is up 40% from 1999 to 2010 in california. Interest rates are are down 44% over that same period of time. Combined together, prices could have increased about 70% if people are really buying on "payment" basis and spending the same 28% of income on housing.
Click to expand...

You're looking at CA as a whole, that's not going to be as accurate a metric when looking at a local area like Irvine. Since we have Irvine's actual income numbers, we should use them.

Median household income in Irvine was $72,057 in 2000, and it was $98,923 in 2010. Using a CPI adjusted number, the $72,057 translates roughly into $94-$95k in 2010 dollars which is pretty close to the $98,923 census data. That's because wages, for the most part, tracked with inflation (housing obviously did not). While I will agree that rates are lower than they were in 2000, unemployment is also much higher than it was in 2000 as well, so I would call that a wash (4.9% vs 12.1%).

That's why the house in question is much less affordable to someone in 2010, than to someone in 2000. Solidly over priced.
 
IndieDev said:
so_scared said:
Nominal incomes didn't double but nominal personal per capita income is up 40% from 1999 to 2010 in california. Interest rates are are down 44% over that same period of time. Combined together, prices could have increased about 70% if people are really buying on "payment" basis and spending the same 28% of income on housing.
Click to expand...

You're looking at CA as a whole, that's not going to be as accurate a metric when looking at a local area like Irvine. Since we have Irvine's actual income numbers, we should use them.

Median household income in Irvine was $72,057 in 2000, and it was $98,923 in 2010. Using a CPI adjusted number, the $72,057 translates roughly into $94-$95k in 2010 dollars which is pretty close to the $98,923 census data. That's because wages, for the most part, tracked with inflation (housing obviously did not). While I will agree that rates are lower than they were in 2000, unemployment is also much higher than it was in 2000 as well, so I would call that a wash (4.9% vs 12.1%).

That's why the house in question is much less affordable to someone in 2010, than to someone in 2000. Solidly over priced.
Click to expand...

The irvine numbers from 2000 to 2010 are in line with rest of CA. 38% from 2000 to 2010.

Not sure what Irvine's unemployment rate 7.8% (not 12.1%) has do with affordability of housing. In so far as it holds down incomes broadly speaking, yes. But that has already been factored into the income side of this equation.

Using these numbers, and the 1998 transaction price as a point of reference, this is clearly overpriced...not arguing with that.

However, incomes don't need to double for housing prices to double if people are buying off payments/affordability. Conversely, incomes don't need to go down for prices to go down either.
 
so_scared said:
Not sure what Irvine's unemployment rate 7.8% (not 12.1%) has do with affordability of housing.
Click to expand...

Really? Employment is a direct input for demand when it comes to housing. You don't know what that has to do with affordability?

It may be 7.8%, but that's still over 2x what it was in Irvine in July, 2000 (3.0 %).


However, incomes don't need to double for housing prices to double if people are buying off payments/affordability. Conversely, incomes don't need to go down for prices to go down either.
Click to expand...

Umm, yes you do. All other things equal, REAL incomes do need to double for REAL housing prices to double. Yes, people can stretch affordability standards, or the FED can manipulate rates, but those are interventions, not fundamentals, therefore unpredictable for the most part.
 
Prices are determined by supply and demand.  You can have stagnant wages and population growth outpacing housing growth for prices to go up.  You can also have increase in demand from FCBs and DACBs like myself.  REAL incomes and unemployment have little to do with anything.  Those that are unemployed couldn't buy a house even if they were employed.


 
test said:
Prices are determined by supply and demand.  You can have stagnant wages and population growth outpacing housing growth for prices to go up.  You can also have increase in demand from FCBs and DACBs like myself.  REAL incomes and unemployment have little to do with anything.  Those that are unemployed couldn't buy a house even if they were employed.
Click to expand...

the stagnant wages are what pays for the houses, so even if the population increases you still need wage growth, not just population growth.  if the irvine population doubled then demand would increase, i agree there, but if they are making the median income then how would prices go up? people need to eat first right? this is the problem with just using theory.  you are assuming that people would continue to pay a higher and higher portion of their income for a house (to allow for price growth) and bank financing would only allow so much debt, which would put a cap on the house prices.
 
qwerty said:
test said:
Prices are determined by supply and demand.  You can have stagnant wages and population growth outpacing housing growth for prices to go up.  You can also have increase in demand from FCBs and DACBs like myself.  REAL incomes and unemployment have little to do with anything.  Those that are unemployed couldn't buy a house even if they were employed.
Click to expand...

the stagnant wages are what pays for the houses, so even if the population increases you still need wage growth, not just population growth.  if the irvine population doubled then demand would increase, i agree there, but if they are making the median income then how would prices go up? people need to eat first right? this is the problem with just using theory.  you are assuming that people would continue to pay a higher and higher portion of their income for a house (to allow for price growth) and bank financing would only allow so much debt, which would put a cap on the house prices.
Click to expand...

I was about to respond but I think qwerty pretty much sunk the theory of "Incomes don't matter, Chinese and Indian millionaires will supply the demand that has gone missing because of unemployment."
 
Don't know much about Oak Creek... it is close to the hospital... 405 is also close as well... Easy access to daycare/preschool along the holiest part of Irvine on Alton Pkwy between Culver and Jeffrey.  Far from Ranch 99 (if you consider an extra 5 minutes far)...  405 for me is the biggest killer...  but it seems these condos are a good distance away.
 
@jyeh74:

Oak Creek is a nice newer community but some people think the area is a bit bowlish (not sure how that works as it seems relatively flat to me).

It's gated, which some people love, but it doesn't feel like a gated (read "exclusive") community. The big park is central but there are enough pocket parts for the farther out 'hoods. The pedestrian bridge gives access to and from the school/park for both sides of Alton. It may not be close to a Ranch 99 but it is in between 3 well-tenanted shopping centers.

Prices seem to be a bit lower there... as I've seen 3CWGs less than $800k but those are right next to the 405. I would probably rate if after Woodbridge based on amenities but at least it's not as old. I think part of the reason it has lower values is it's not on the "preferred" school track.
 
You must log in or register to reply here.
Back
Top