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Bulls rejoice! The activity in 92612 is undeniably bullish. Increasing price on increasing volume is the sign of a healthy market.
Of course, there may be more there than meets the eye. The 92612 area code contains the Jamboree corridor where they are selling new condos (and dumping some of the overpriced trash from the Marquee). Builders have been offering incentives to artificially keep the price up and stimulate sales. It seems to be working.
The rest of Irvine… well, it does not look quite so bullish:
92603 is Turtle Ridge and Turtle Rock, and it is sporting a whopping 15.9% price decline and a 38.3% drop in sales which portends of even more price declines.
92620 is Northwood and Woodbury. The equity crushing 31.6% decline coupled with an monsterous 46.7% decline in sales does not correlate with the bullish rumors.
So much for the best neighborhoods holding their value.
Hmm seems to coincide with the article that I post yesterday about the socal housing market. I’m definitely waiting to buy!
Btw, it seems like places with new developments still are doing better than others – 92606 with Columbus Grove and 92612 with the new high rise and luxury condos. I suspect the reason for the major sales decrease in 92606 is because the new developments there are running out of phases.
Good luck to people at Woodbury… I keep seeing all those “for-sale” signs there.
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It seems that new home developers are much more realistic about price trends and their willingness to lower prices.
The numbers still look pretty bad…. however, I have to tell you that there still seem to be many people out there that just don’t get it. My family (mom, dad, sisters) all work in the medical field where the salaries are high and, apparently, a fundamental understanding of investing is still quite low. You would NOT BELIEVE how many of their colleagues are investing in flips right now. Apparently, their salaries make them prime targets for RE Brokers who seem to work the floors of the hospital… they are usually a husband / wife / sister / brother of someone that works there.
I know specifically of five investment properties that are in the process of closing escrow as we speak.
My favorite is a couple that I know of who have decided to start making money purely off of RE flipping (yes… they went to a seminar and bought the brochure.) Actually this couple is actually going about it as intelligently as I have seen. The husband is an ex-plummer who has many contacts with contractors in the industry (and for some strange reason.. a surprising number of contractors seem to be available these days… hmmmmmm) They bought a distressed property in Huntington Beach… which they bought for around $650K. Then they spent six months and quite a bit of money to fix it up… and they recently sold the property for $900K.
This couple beat the odds…. mind you.. .after all of the risk and time they managed to make themselves $40K. But hey.. .they managed to sell the property in this market.
So what did they do???? You guessed it… they bought another distressed property. Would anyone like to take odds on their chances for success this time around?
Actually, with this guys skills and contacts… and apparent work ethic… I think he would do very well in a normal market. However, as has been noted many times… this is no normal market.
92603.
Turtle Ridge is ready for a big drop. Sure, many homes have wonderful views but by and by why would you pay $800/sq foot for a crowded home in a small lot when right across at Turtle Rock you can get a single story, as large home, on a bigger lot for $600/sq foot?
Or buy in the Broadmoor for $500/sq foot -or less- and have the ability to rebuild the whole house and put in a second floor on a 5500++ foot lot?
Turtle Ridge was a egrerious example of what happens when the builder, the banks and the buyers go nuts. What should have been a nice tract of upper tier homes became an Italianate “MacMansione” tract priced in the stratosphere.
It’d be interesting to see what the actual breakdowns are in the 92603 zip code. I image that TR will drop about 20% to 25% percent, but Turtle Ridge will drop much more. Both villages will eventually reach parity, I think.
I agree with your assessment. This week is devoted to Turtle Ridge, so people will be able to see exactly what you are talking about.
About 3 months ago I had lunch with someone that was going to get into the real estate business and buy a few homes to resell. I couldn’t believe my ears…………..I sat their and smiled and said…”good luck with that”.
Simply amazing…………