Where da bears?

What is your stance on Irvine Real Estate?

  • I'm still a bear.... don't buy.

    Votes: 9 26.5%

  • I'm a bull... buy now or be priced out forever.

    Votes: 3 8.8%

  • I'm neutral... I just want to find a home to live in.

    Votes: 17 50.0%

  • Other (please post why)

    Votes: 6 17.6%
  • Total voters
    34
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irvinehomeowner

irvinehomeowner

Well-known member
This site is a spin-off from IHB which was driven by content from Larry Roberts, a huge bear on housing. He's no longer as bearish, but there have been many bears along the way that would claim that Irvine is not special. Part of me does think he expanded to OC Housing because Irvine was rebounding and hadn't dropped as far as he predicted... and it seems like many of the other bears have disappeared (IndieDev, who was a big non-believer in the Irvine premium (and bet loser) even ended up buying a house elsewhere and running away from this forum).

Given the current state of Irvine housing, I'm wondering where they are now? Back in 2008, I was very bullish on Irvine but that was tempered by the IHB, the stock market burst and the fear of rising interest rates. I was hopeful that prices in Irvine would drop (not the 40%+ that the bears predicted)... but 20% in some of the homes we were looking at would have been good. It didn't happen (at least not in the ones we were looking at).

Now that the interest rates never jumped like the bears though they would (they actually halved and are at record lows) and the Shadow Inventory Tsunami never came to shore (inventory is the lowest it's been in years)... what do they think now? Especially with Irvine looking like it's in another bubble.

I remember being told that FCBs don't exist, that Irvine isn't any more ethnic than it was 20 years ago and that like the rest of OC, Irvine would drop 50% or more and get back to 1999 pricing. While I did believe Irvine was inflated, I found it hard to fathom 1999 pricing... considering I knew what the prices were in 1999. As for the ethnic thing, I didn't even need the 2010 Census to prove my point anymore (eat that Graphrix!).

I was ridiculed for saying that Irvine seemed to attract higher cash/down payment buyers and that's one of the reasons it was less immune to drops because that would lead to less upside down mortgages. And while Larry was able to find HELOC abuse of the week cases, I bet if he looked for all cash or large down homes, he would find just as many if not more (I recall there was an article Larry actually wrote that showed that Irvine's average down payment was higher than 20%).

I've posted a question like this before but I'm asking again as it seems like all the dissenting opinions have vanished and the more meaningful discussions happen when there are people representing both sides.

#PulledPin
 
#bear. IHO, join me, we will wait for a better deal when this thing comes crashing :P or move to Mission Ranch someplace because Irvine is not what it seems ;)
 
irvinehomeowner said:
This site is a spin-off from IHB which was driven by content from Larry Roberts, a huge bear on housing. He's no longer as bearish, but there have been many bears along the way that would claim that Irvine is not special. Part of me does think he expanded to OC Housing because Irvine was rebounding and hadn't dropped as far as he predicted... and it seems like many of the other bears have disappeared (IndieDev, who was a big non-believer in the Irvine premium (and bet loser) even ended up buying a house elsewhere and running away from this forum).

Given the current state of Irvine housing, I'm wondering where they are now? Back in 2008, I was very bullish on Irvine but that was tempered by the IHB, the stock market burst and the fear of rising interest rates. I was hopeful that prices in Irvine would drop (not the 40%+ that the bears predicted)... but 20% in some of the homes we were looking at would have been good. It didn't happen (at least not in the ones we were looking at).

Now that the interest rates never jumped like the bears though they would (they actually halved and are at record lows) and the Shadow Inventory Tsunami never came to shore (inventory is the lowest it's been in years)... what do they think now? Especially with Irvine looking like it's in another bubble.

I remember being told that FCBs don't exist, that Irvine isn't any more ethnic than it was 20 years ago and that like the rest of OC, Irvine would drop 50% or more and get back to 1999 pricing. While I did believe Irvine was inflated, I found it hard to fathom 1999 pricing... considering I knew what the prices were in 1999. As for the ethnic thing, I didn't even need the 2010 Census to prove my point anymore (eat that Graphrix!).

I was ridiculed for saying that Irvine seemed to attract higher cash/down payment buyers and that's one of the reasons it was less immune to drops because that would lead to less upside down mortgages. And while Larry was able to find HELOC abuse of the week cases, I bet if he looked for all cash or large down homes, he would find just as many if not more (I recall there was an article Larry actually wrote that showed that Irvine's average down payment was higher than 20%).

I've posted a question like this before but I'm asking again as it seems like all the dissenting opinions have vanished and the more meaningful discussions happen when there are people representing both sides.

#PulledPin
Click to expand...

I'm a little confused.  There was a lot of issue in the Irvine housing market.  Prices have fallen 35-40%.  There are a lot of cash buyer but the market was pretty bad for seller up to about 6 months ago.  The tiny inventory is actually the result of the fact that most of the owners are still severely underwater but can make the payments due to refinancing or higher income.  Irvine has not had it nearly as bad as a lot of other places but the market is still extremely scarred. 
 
irvinehomeowner said:
I remember being told that FCBs don't exist, that Irvine isn't any more ethnic than it was 20 years ago
Click to expand...

Speaking of irvine being more ethnic. went to the albertsons on irvine blvd for the first time in about four months and they had a bunch of cold drinks available that appear to be from japan and korea as well as different snacks at the end of the aisles.  i have not seen this at other grocery stores yet (i primarily shop at the ralphs on culver/walnut though).  i guess the customer base has shifted so much that this may be the new norm.  im going to have to go grocery shopping in santa ana now.    :)
 
qwerty said:
irvinehomeowner said:
I remember being told that FCBs don't exist, that Irvine isn't any more ethnic than it was 20 years ago
Click to expand...
Click to expand...

Speaking of irvine being more ethnic. went to the albertsons on irvine blvd for the first time in about four months and they had a bunch of cold drinks available that appear to be from japan and korea as well as different snacks at the end of the aisles.  i have not seen this at other grocery stores yet (i primarily shop at the ralphs on culver/walnut though).  i guess the customer base has shifted so much that this may be the new norm.  im going to have to go grocery shopping in santa ana now to get american food.    :)
 
Saw that too... Seems like just albertsons....  But they still need to improve...  Selling nasty cans of Mr Brown coffee is not gonna make me switch from Zion/Costco/trader joes
 
The term "Shadow Inventory" is sooo 2008. For those who didn't get the memo last month, it has been replaced with the new buzzword: "Cloud Inventory".

Admittedly, I haven't been paying a ton of attention to that other site as I spend every blinking moment here with all of you, my favorite people. However, I see the merit in what Larry is saying. I agree with him that a friction point will come as homeowners look for an exit on this bubble ride. Will it be 25% over the next 3 years? Who knows. I have been thinking about it a little bit lately because even here in Foothill Ranch a.k.a. Not Irvine  ;) -- the community's most prominent agent has been known to tell buyers lately that an offer will not be considered unless they can come in with enough cash to bridge the difference between appraisal and strike price... as values creep and inventory wanes, similar to Irvine. I wouldn't know what option to select in the vote above. Although I could be a potential move-up buyer, I would not consider re-entering at this stage. I would be confidant using it as an exit point to take my chips somewhere else if the situation called for it. Or, would consider re-entry on a lower-tier cash-flow positive rental as rents creep up. I'd feel the same if I was 5 miles down the road. What does that make me - a bull or bear? I do not know how to label that.
 
Right now, I'm glad I got in back in mid-2011.  I was pretty bearish at the time, now I'm cautiously bearish, but happy with the increase in values.  I try to keep an open mind as new economic data come in.
 
Irvinecommuter said:
I'm a little confused.  There was a lot of issue in the Irvine housing market.  Prices have fallen 35-40%.
Click to expand...
Depends on the section of market you are looking at. Below $700k and over $1mil, there may have been 40%+ drops, but in between those points (where I am looking), it's probably 20% or less. Take any $1mil Quail Hill SFR in 2006 (or whenever the peak was), how many are selling for $800k today?
There are a lot of cash buyer but the market was pretty bad for seller up to about 6 months ago.  The tiny inventory is actually the result of the fact that most of the owners are still severely underwater but can make the payments due to refinancing or higher income.  Irvine has not had it nearly as bad as a lot of other places but the market is still extremely scarred. 
Click to expand...
I'll agree with you that 6 months ago seemed like a turning point but that's when inventory went sub-400. I would say that most of the market outside of Irvine (and some certain tracts IN Irvine) was extremely scarred. Santa Ana and other surrounding cities took significant hits... but Irvine as a whole did not seem as bad. Unlike other cities, they were able to sell out of new home projects in just over a year (Woodbury's 2010 Collection). There is similar housing stock (ie. stucco boxes with 3CWGs) in Foothill Ranch, Aliso Viejo and other South County cities but dropped more than Irvine.

I'm not sure if you were around on the IHB back then, but my contention was that Irvine would be more immune than surrounding cities... which seems to have been proven true (just observational, haven't crunched hard data to prove it).

And it seems that even if Irvine does drop as much as everyone else, it's the last to go and the first to come back (I might add that other cities like Newport Beach seem to have some immunity too... but they have a beach... what does Irvine have?).
 
jayl23 said:
Right now, I'm glad I got in back in mid-2011.  I was pretty bearish at the time, now I'm cautiously bearish, but happy with the increase in values.  I try to keep an open mind as new economic data come in.
Click to expand...

Yes. What you said. Perfect, thank you. And this is also coming from a 2011 re-entrier (is that a word?) For me, anything higher end or used as a primary residence is too hot to touch right now. I've never been a bandwagon person, maybe even to a fault, but that's just how it is. Need more time to see how things play out.
 
When I bought my house in 2012, it almost didn't happen.  I was actually hoping that it would fall through because I thought realestate would be lower today.  In the end I was lucky.  But who knows.  I may be lucky presently, and 6 months later it turns to shit.

But really are we back to bubble prices?  No because we have been printing money for the past 5 yrs.  Shits more expensive today. 

Your 1 million dollar house at 2006 being 1 million in 2013 means you lost purchasing power.

So realestate has been falling, it's just the government smoke & mirrors have us confused.
 
I don't think home prices will move very much up (w/o no doc, lo doc, easy lending) or down (with all the cash/high down buyers/investors).  so my answer is "neutral...  I just want to find found a home to live in.."
 
irvinehomeowner said:
Irvinecommuter said:
I'm a little confused.  There was a lot of issue in the Irvine housing market.  Prices have fallen 35-40%.
Click to expand...
Depends on the section of market you are looking at. Below $700k and over $1mil, there may have been 40%+ drops, but in between those points (where I am looking), it's probably 20% or less. Take any $1mil Quail Hill SFR in 2006 (or whenever the peak was), how many are selling for $800k today?
There are a lot of cash buyer but the market was pretty bad for seller up to about 6 months ago.  The tiny inventory is actually the result of the fact that most of the owners are still severely underwater but can make the payments due to refinancing or higher income.  Irvine has not had it nearly as bad as a lot of other places but the market is still extremely scarred. 
Click to expand...
I'll agree with you that 6 months ago seemed like a turning point but that's when inventory went sub-400. I would say that most of the market outside of Irvine (and some certain tracts IN Irvine) was extremely scarred. Santa Ana and other surrounding cities took significant hits... but Irvine as a whole did not seem as bad. Unlike other cities, they were able to sell out of new home projects in just over a year (Woodbury's 2010 Collection). There is similar housing stock (ie. stucco boxes with 3CWGs) in Foothill Ranch, Aliso Viejo and other South County cities but dropped more than Irvine.

I'm not sure if you were around on the IHB back then, but my contention was that Irvine would be more immune than surrounding cities... which seems to have been proven true (just observational, haven't crunched hard data to prove it).

And it seems that even if Irvine does drop as much as everyone else, it's the last to go and the first to come back (I might add that other cities like Newport Beach seem to have some immunity too... but they have a beach... what does Irvine have?).
Click to expand...

There has definitely been an uptick in value...35-40% at the extremes...probably 20-25% now. 

I think higher end community are always more immuned because the people who buy them usually have more stable career/jobs with higher salaries.  I mean, nothing short of a economic meltdown is going to make Newport Beach affordable but even there, there was a lot of properties who sat unsold for a long period of time.

Also, a lot of the buying is spurned on by low mortgage rates.  I know I couldn't afford to buy at the price range I am at if the rates were around 3.5%.
 
Depending on where you look, prices are at 2003 levels.  2003 was a decade ago.  Even in our low inflation environment, ten years of inflation is a lot.  In the interim, a lot of my concerns in the froth years have come true.  Inventory has dried up, quality of for sale inventory is dropping. 

We bought in 2010, glad we did because we need a place to live.  Was bearish then, but took a deal when we saw it. Money was cheap, it's gotten cheaper.  Current mortgage is less than renting an IAC 2 bedroom.

As for Irvine, time will tell.  It'll tell not for Irvine, but for California. The things that will affect housing are frankly out of our control.  What happens when money is no longer cheap is an interesting question. There's three basic buying groups at the moment, Investor with no place better to put their money because of low interest rates driving low rates of return, cash buyers, no place better to use the cash because of low rates/risk reward and buyers who can make payments on a lot due to low interest rates.

The interest rates/ risk return dynamic changes globally and all three of those buying channels get hit at once.

But given global realities, that dynamic may last a year or like Japan, 20 years.

meanwhile
#whereyougoingtolive
 
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