Originally posted December 27, 2007
Address: 1124 Scholarship, Irvine, CA 92612
Plan: 1A 725 sq ft – 1/1
MLS: P609516 DOM: 46
Sale History: none
Current Price: $334,990
See our previous posts on Avenue One. This brand new home is for sale by the builder, K Hovnanian. The builder listed a similar property in October 2006 for $396,990 which translates to about a 15% drop in asking price in the past 14 months.
Here are the private remarks on the property:
BROKERS AND REALTORS, DOUBLE YOUR COMMISSION TO 6% ON SELECT UNITS. Contracts must be written by 12-31-07 and COE by 1-31-08. MOVE-IN-READY. $10,000 Deposit required. Agents must bring Buyers to the Sales Office and register them during their very first visit to Avenue One. Our Sales Office ( 2100 Scholarship ) is open Mo. 1p.m. – 5p.m. and Tue. – Sun. 9a.m. – 5p.m. Please call a Sales Consultant at 949-975-8545 and ask about our current specials , incentives and upcoming events.
{adsense}
The builder has priced this well below other units with the same plan. It’s putting this seller (a RE Broker who has the highest asking price for this plan) in a tough spot:
Address: 1138 Scholarship, Irvine, CA 92612
Plan: 1A 725 sq ft – 1/1
MLS: P584759 DOM: 123
Sale History: About $409k on 8/2006?
Current Price: $420,000
These 725 sq ft units can bring in a rent of $1400-$1600/month. What’s the unit worth to you?
UPDATE #1 – February 13, 2008
Recently, I noticed that several units in this complex were labeled as ‘Sold’ in MLS. What’s interesting is the price listed in MLS as the Sold Price. These units were all sold by the builder:
- 1164 Scholarship – Plan 1B – 1/1 – 602 sq ft
– Sold for $323,990 on 1/10/2008 - 1124 Scholarship – Plan 1A – 1/1 – 725 sq ft
– Sold for $253,492 on 1/30/2008 - 1327 Scholarship – Plan 1A – 1/1 – 725 sq ft
– Sold for $280,591 on 1/29/2008 - 1434 Scholarship – Plan 2AL – 2/2 – 1213 sq ft
– Sold for $445,042 on 1/25/2008
And here’s what is pending from the builder:
- 2138 Scholarship – Plan 2A – 2/2 – 1037 sq ft
– $474,990 - 2434 Scholarship – Plan 2AL – 2/2 – 1213 sq ft
– $556,990 - 1446 Scholarship – Plan 3AL – 2?/2 – 1538 sq ft
– $674,990
The Sold prices are significantly lower than anything we’ve seen in this tract. I haven’t been able to confirm this information with the Title info. If anyone can confirm, please post. As I’ve mentioned on other Avenue One posts, the builder is going to sell these units one way or another.
The 1124 Scholarship unit is the one that started the this post on Dec 27, 2007. If it can be rented for $1600/month, then it is at just under the 160 multiple.
No sympathy for the peak buying broker. Bummer.
As for the builder and this development, this is more of what I’ve always thought of Irvine to be. Huge, dense complexes of grossly overpriced apartments. Would I pay $335 for this? Hell no. Would someone else? Maybe. IS it “worth” almost $2k a month in rent? Not in my opinion but again, if you have a local job and can’t rent anything else then I suppose this would suffice.
Let’s see the other “amenities” this fine development offers. Close to the airport (about half a mile). It’s close to every freeway one might need (dare I suggest too close to all of them). Oh and the $308 in HOA’s are nice. I also like “close to beach” thing. That’s the longest six miles you’ll ever drive (unless you live in Manhattan).
Wow, $1500 for 725sq.ft. in Irvine. I can’t wait.
Oh yes I can.
—–
What is a Mello Roos?
http://en.wikipedia.org/wiki/Mello-Roos
REDC has 2373 Scholarship going to auction Feb. 2. This is also a 2bd/2ba unit…… starting bid 199,000.
homekitty…
Thanks for the tip…did you find that on a web site? Below $300K for two bedrooms is still expensive, but much closer to sanity than $300k+ for one bedroom!
Does anyone know what the HOA fee is here?
Thank you former Irvine Resident.
It is interesting. Here in Virginia at least, in the big planned communities, Reston is most comparable, the developer has to pay for the infrastructure upfront as part of the deal. It is rolled into the housing cost. That is one thing that makes housing expensive here. Maintenance and other items are then covered by the HOA fee. Property taxes go to the county for other items and the state maintains the roads.
It is interesting the tax structure for housing communities in CA. I guess that is a response to Prop 13.
I have only seen special tax districts applied to commercial properties for specific needed improvements.
I think I would rather move to an extended stay hotel then to live in one of those “homes”.
These condo’s are not even in the Irvine Unified school district. Check out the district map.
http://maps.google.com/maps/ms?hl=en&ie=UTF8&msa=0&msid=117855157091606678259.00000112b049f520b36f7&ll=33.683068,-117.774982&spn=0.101275,0.189514&z=13&om=1
The kids (if any) in this place will go to santa ana schools…so much for an “Irvine Premium”.
Im curious, 725 sq ft, where do you plan on putting the kids, bunk beds for you the wify and the kids in the one 12×14 bedroom?
This place is a dorm room with a kitchen, it’s not even very large by apartment standards.
Not much space to put away your surf boards.
Avenue One has always been easy to value because the apt complex right next door (Villa Siena) has nearly identical units for rent. So it’s simply a question of how much of a premium, if any, you’re willing to pay to own your apt. I considered it, and fortunately didn’t participate.
I see that this a ground floor unit, in condo’s the top prices go for the top floors and prices fall as you go down, this is the bottom of a four story building, not the prime location.
I believe that this place has will rent for about $1,200.
It is really hard to figure out at this point the what is going on with the supply and demand balance for homes in orange county…..but I am starting think that there may be more homes/conos/apts than residents can use by about 10%. If this is the case, as the bubble deflates, there will be stiffer and stiffer competition for renters….and downward pressure on rents.
As for numbers, on Lanser’s blog he indicated that there were about 800,000 homes on the tax log in orange county. If the average monthly sales from 2001 to 2006 were 4000 units then about 240,000 homes were transacted in 5 years. If we return to 2002 pricing(very likely in my opinion), about 30 % of the orange county home owners will be under water……thats a lot.
Hmmm lets see,
If I purchase this “apartment” I will need to put 67k down and then need to pay 1700 mortgage + 300 HOA for a total of 2000k a month
on a rapidly depreciating assett or I can rent for 1300 and blow out of it after a year when my lease comes up. To me it wouldn’t make much sense purchasing this unit until it drops below 200k and even then I’d still prefer to flexibility of renting.
This property will be hammered very bad as soon as the banks start dumping the REOs and Foreclosures start pouring in. This property is a loaded mine which will burst on the knife catcher taking him out financially.
But I ALSO think that there are enough dumb people out there who think they are getting a deal. This is the probably what the real estate agents, lenders, REO holding banks are thinking.
Unless these ‘thinkers’ come around and realize that we now have 11 months worth of inventory and the first mover who slashes prices might be able to get away with minimal losses, they are going to remain in the current state of denial. But I tell you this is like financial contagion. Once one bank starts offloading by slashing and dumping properties, the rampage will begin. So this is the lull before the storm. Inventories are going to keep building and once we are at more than 12 months inventory level, these brave lenders/agents/REO owners will have to start dumping. Just my prediction.
I am bearish on OC real estate, but lets be somewhate realistic here. This is a nice unit that many people (including myself) would like to own for their kids etc. Right now it’s too much money, but if this comes down to the 200’s they will sell.
You cant compare living here to living in an apartment, besides in the next 20 years rents will continue to rise.
To me this is a great starter home for college kids and at some point will rent for more then what the mortgage is, but not today, maybe in a year or so.
Inventories are alreadly well above 12 month levels.
Um, I don’t follow.
What’s the difference between this and an apartment?
camsavem meant that parents of UC Irvine students may buy this for their children while they attend school; I knew a few families that did this. Owning a second home for this use has some financial benefits — mortgage interest deduction, increasing equity (yeah i know) , recouping equity on the sale, not paying exorbitant university housing fees…
ic weasel: “This is more of what I’ve always thought of Irvine to be. Huge, dense complexes”
Kim Stanley Robinson, author of the Three Californias trilogy (also called the Orange County trilogy) called it “condomundo”.
“I believe that this place has will rent for about $1,200.”
Next door at Villa Siena, the equivalent rental is no less than $1,500. So you’re forecasting a 20%+ drop in rental prices in Irvine apts?
Pretty scary, isn’t it? There are a lot of purchasers who bought 800 sq ft condos in Avenue One for $400K+ at the height of the boom.
What’s the difference between this and an apartment?
It’s more expensive?
HOA $308, and (my guess) taxes $392 equals to $800/month. $1500/month rent generates $700 per month after HOA and taxes.
While unit price is declining, anything over $250K just does not make any sense for investment purpose.
UCI only started to charge reasonable housing fee in past fee years. Before that, it is a real bargain compare to other rental alternative. I don’t think the university housing fees are exorbitant in any standard.
If it were to sell for $250k, taxes wouldn’t be $392, would they? Sort of an inverse-relation analysis, no? The lower the sale price, the more after tax & HOA cash to pay a mortgage. Or am I misremembering CA tax assessment?
Yes, 20% decrease in rents.
I lived in Silicon Valley at the end of the dot com bust and rental prices went down by 30 – 40 %. When things start to go in reverse it is amazing what happens.
http://money.cnn.com/2007/12/26/real_estate/Case_Shiller_down/index.htm?postversion=2007122615
Alan
Do you have a credible reference that talks specifically about OC inventory being greater than 12 months’ supply? The link above clearly mentions that inventories are at 11 months supply level. Lets be fair and quote the source of information before making a statement.
PH
Any more info on this?
I remember that. They were selling like hot cakes!
“…some financial benefits — mortgage interest deduction…”
Um.. Can you explain the benefit of having an interest deduction vs not having one?
A buddy of mine is a processor who just saved his money during the run-up on OC housing. His suggestion is to save as much money as possible. That 20k you had saved that would have been 3% down? In a year, it could be 10% down. Save your money.
In your income taxes you can deduct all mortgage interest that goes toward your primary residence. For example, I just did a first pass on my 2007 taxes (yes I’m that kind of weirdo), and my interest payments were about $20,000. That means that your adjusted income is $20k less than what it would have been.
Let’s say your marginal tax bracket is 25%. 25% of $20k is $5k, so your tax owed is about $5k less than if you weren’t spending that money on mortgage interest.
(Here’s a horribly simplified example. Person A and B both make $100k a year and spend $20k on rent or an interest-only mortgage. Person A rents, has $100k of taxable income, and owes $25k in income tax. Person B has a mortgage, has $80k in taxable income, and owes $20k in income tax. Both spend the exact same amount on living costs, but the mortgage payer saves $5k in taxes)
That mortgage interest deduction is a huge benefit to homeowners. That’s one reason people are willing to spend more on a monthly mortgage than on rent for an equivalent property. Another is the capital gains on a home sale are tax-free, up to $250k for a single taxpayer, or $500k for a married couple. (Cap gains? In today’s market? One can dream)
… That said, how does a family buy a home for a child and get those tax benefits? Well… There are ways to game the system, and I’m not giving any advice on that subject…
If you use the sales number for November, which was 1567 units in OC, and the month-end November inventory figure from housingtracker.net, you get around 11.75 months supply of inventory in OC. With rounding, I’d call that 12 months as well… If December sales come in around the 1400’s in terms of volume, that’ll put us at a 12-month or greater supply.
hey nano, watch what you’re sayin, its different here in IRVINE dontch ya know
I think Alan is doing another “sky is falling” bit Haze. To most people, “well above 12 month” would be at least 13-14 months inventory. December sales in OC would have to be around the 1200-1300 unit level for that to be the case…
Lasner OC register post Dec 17th, see below.. OC home inventory at 14 months sales. Don’t have a specific number just for Irvine. Note that total monthly sales numbers for homes >750K are running a little under 300/month for the whole county (not just Irvine) with 4800 homes listed at over 750K. 4800 homes chasing 300 buyers just can’t be good for the sellers.
http://lansner.freedomblogging.com/2007/12/17/oc-home-inventory-at-14-months-of-sales/
HOA dues eat up most of the savings 300 x 12 =$3600 HOA for $5000 in tax savings. Income taxes don’t spare you from property taxes also. These savings are somewhat elusory.
Interesting the inventory differential between that guy Lansner is quoting and housingtracker. You’d think they both would just be pulling off MLS… Wonder what could account for 1000-1500 difference in available inventory?
Maybe, but ipoplaya says he want to buy one of the pricer homes >900K. Current inventory on the homes ipoplaya is interested in is at 16 months and this number will grow as defualts and mortgage resests start, that’s why prices for these high end homes have to fall, there are just too many of them.
Yeah baby, come on down to Papa Playa! Gimme a nice 2700sf place for $875K. I’ll off my place for $575K and enjoy watching the market fall and rise for the next 20 years from my 6000sf lot. I’ll have saved $100K in spread between homes and around $3K per year in property taxes. Don’t want to get too greedy…
I think I figured out the disparity between housingtracker and the Lansner dude numbers. HT uses raw MLS which includes everything that is pending but accepting backup offers. The Lansner dude must factor those out to get to a more “real” inventory number.
Well when in doubt, every reputed analyst will go with the conservative number. So let us assume that the months’ inventory number is somewhere between 11-12 months. IR and others, if we assume months’ inventory as a dominant factor in affecting demand and pricing in this market, what do you think is the point (months’ inventory) at which the price elasticity will change in favor of increased demand?
Interesting stats from housingtracker on the fall in list. From April 2006, list prices in OC have fallen 18.86% at the 25th percentile, 17.29% at median, but only 15.78% at the 75th percentile.
Still got some koolaid hangover going on at the larger homes. They need to come down a couple of more percent just to match what is happening at the bottom and middle of the market. The pace of price reductions at the 25th percentile has really picked up in recent months.
The spread between the relative % declines has been tighter all year than it is now and the larger homes at the 75th percentile actually led in % price reductions from list earlier in the year. Looks like maybe we are hitting or nearing a final resistance point with the places around the 75th percentile? Hopefully as more inventory enters the market in the new year, we blow past that and start getting serious discounting across the full spectrum of properties…
Oooops…….now that I live in Huntington Beach I forgot just how special Irvine really is.
In all fairness my example was “horribly simplified” and didn’t account for anything beyond fixed yearly living expenses … In reality, you deduct mortgage ‘points’, property taxes and HOA dues, but state income taxes are about the same the property tax deduction, so it’s a wash. I also assumed that the homeowner doesn’t pay PMI, and didn’t compare the opportunity cost of the down payment that may be in favor of the renter. I also assumed the snapshot of living expenses was constant, but generally speaking, rents increase with inflation and mortgages fall relative to inflation.
And it’s the rare landlord that would (or could for long) rent at less than the cost of having the property, so you’d have to assume that the rent covers expenses like HOA and property tax.
PMI = private mortage insurance, often required when down payment is less than 20%
Mortgage points = an upfront fee (kind of a bribe) to the lender, about 1% of the total loan, give or take depending on how competitive the interest rate is. You can deduct 100% the first year, or amortize the points over several years.
At least you won’t find something that looks like this in Irvine:
http://www.redfin.com/stingray/do/printable-listing?listing-id=1195801
Is it just me or does it make everyone feel like yodeling?!
The lag in the high end price decline is propably due to these homes being more highly leveraged and the banks are slower approving these larger losses for short sales to go through. This bottleneck at the bank end can’t last forever.
ex-tangelo:
the rent vs. buy comparison is not even worth talking about in as much detail as you did.
you can run all the numbers, the tax benefits more or less cancel out with all the taxes and HOA dues….. so at the end of the day you are still just comparing a payment of $2000 to a rent of $1300.
pocket $700 a month? or watch this POS decrease in value and lose a boat load of money in the process. Few people can live in this POS for more than 5 years, even that might be a stretch….. you have to be over 65 or a perpetual single (most likely not by choice)…. fun fun.
Just Google REDC and it should come up. Sorry I don’ t know how to paste a link.
California’s Proposition 13 set property tax at 1% of the sale price (excepting super-majority approvals by voters). For example, my property taxes are 1.3724%.
California doesn’t ‘assess’ property taxes unless there’s a significant change to the property. There is also a mechanism for owners requesting a re-assessment, which is getting used now that homeowners are facing a market value that is less than the purchase price.
Well, yeah… THIS property is a dog. Either rents have to rise or this property’s price has to fall before it becomes economically feasible.
OK,,,,,OK,,,,,
There are some seriously fugly houses in Huntington Beach…especially out on the flats. At least there are dive bars in Huntington Beach………
One of my realtor friends pointed out the Irvine Market Update for November 2007:
http://ziprealty.typepad.com/marketconditions/2007/12/irvine-ca-marke.html
It shows that actual sale prices in Irvine are up 18%.
I’m as bearish on RE as the next guy, but how do you argue with these numbers?
It looks like the local market is well on its way to recovery.
Here are some interesting statistics that I took from the MLS last night. In zipcode 92602 there were 90 listings. Of the 90 listing:
10 were posted as Bank owned and vacant,
12 were posted as Short Sales,
10 were posted as Vacant (owner not identified),
7 were posted as Tenant occupied.
If this is any indication of the market in the county as a whole, I believe that prices will be falling very soon.
If a realtorwalked in the door soaking wet and told me that it was raining, I would still go outside and check for myself. They have no credibility when it comes to what is happening in the real estate market.
So you are saying these numbers from the MLS are lies?
Do you have anything to back that up?
like ww said, just walk out the door, drive around and look for yourself
if you follow IHB you would notices that 440 sf is total BS, there are 69 sales as opposed to 100 from last year, could it be more expensive homes are selling for now. still 440 sf is rare to find and probably would be featured on WTF postings by this blog 😆
In college I learned the saying “garbage-in, garbage-out”
Total sales are down 30%, not even 70 transactions to consider. A lot more than 70 properties are for sale. With so few transactions all it takes is for a few outliers to distort the dataset.
Irvine has 16 zip codes, that would estimate total listings of 540 for the city.
I do follow IHB, but as a trained scientist I give more weight to hard numbers than anecdotal evidence.
The “housing ripoff of the day” entries may be entertaining, but they provide only a small number of data points. They are chosen for “laugh” value and not as representative samples.
Are you implying that IR is biased?
What say you IR, are you biased, are your examples all outliers chosen for shock value only?
Is chicken little right?
chicken little
check the previous posting, house has been on the market, as low as 372 per sqft for over a year and has’nt sold.
I see your point about anectodal evidence. thats’ why I suggest you take a drive around Irvine and check out for your self, being a trained scientist, do your own research, forget about you buddy RE agent or the biased IHB. 😆
The MLS has far better visibility into Irvine sales than anybody on here, including myself.
Driving around Irvine will not provide actual sale prices. At best, I will see asking prices for a small percentage of the 900+ properties on the market.
Driving around Irvine will not provide data for the 70+ gated communities.
The statistics I posted came from the MLS, not from a realtor. Like many on here, I am skeptical of realtors’ claims as they have a vested interest in skewing the perception of the market. But the MLS does not lie.
ok, prices are going up
Very true about dive bars… I miss them. We need a few faux dive bars in Irvine. Can’t be real dive bars with those high rents.
True, MLS doesn’t lie. Use redfin and search for yourself. I just pulled up the map or northern and central Irvine with 217 listed properties in Irvine that are 2000sf or greater. There are only 16 that are listed greater than $440 per sf. The data you refer to must be skewed in some fashion… Couple of whopping TR sales maybe, who knows. If $440 per sf were an truly an average sales price, there is NO way 201 Irvine SFRs (93% of the population I am looking at) would be listed below that price level.
Let’s see here……… take the max rent of $1600 and multiply it by the maximum multiplier of 160, using the rent multiplier supplied by IR.
That gives us $256,000 for this smallish 2-bed, which is 100 sq ft smaller than my one bed. I really don’t see how more than one person can live here comfortably. It would be quite a squeeze for 2 people- I get claustrophobic just looking at the photo of the living room.
It’s an extremely pretty complex, lots of curb appeal. However, the interior is a disappointment. It’s cramped and extremely ordinary, with the kitchen in the living room, cheap cabinetry, undistinguished interior architecture front-to-back; really quite a comedown from the rather spectacular exterior. You’d have to put considerable love and imagination into this place to make it really attractive.
Again, we’re at the “slow season” Dec – Jan. Many sellers listings expired and they expect to relist this Spring. Feb inventories start to ramp up into a March/April peak.
Anecdotally, I know at least a half dozen boomers who are looking to cash out this year as they know the train has left the station on this bubble. Conventional wisdom is that 2009 – 2011 will be much lower than 2008. Methinks this is not just happening in tealeaf’s circle of, ahem, seasoned friends, but in larger numbers.
Between the CSFB ARM reset calendar, foreclosures, and the boomer factor, 2008 is ramping up to be the year of record inventory.
For all the scientists who appear to be attending to this blog, there’s nothing hard to back this up but it does make intuitive sense.
I’ve seen more curb appeal than that in WEST Hollywood.
Condos should be the leading indicator of the market, or so I thought. As much as I hated that place posted yesterday I’d take it over one of these condos in a heartbeat.
OT – A week in Anthem AZ really made me realize how much I love Los Angeles. Golf can only compensate for so much.
Wow. Way to go me for trying to make a joke without supplying a context.
So you spend your time checking out the appeal of things on the curb in West Hollywood Genius? Not quite on the curb, but definitely West Hollywood:
http://gayprideboyz.com/07/whp2007/07wehopride080.JPG
Wonder if he/she hits the links?
🙂
Dr. Chicken Little, I have an excellent way for you to satisfy your need for scientific validity and empirical data: buy a house in Irvine! Finally you’ll be able to cut right through all the crazy biased talk and see the market reveal its true nature. Oh, and please report back your results! Should be interesting… 😉
Ex-tangelo,
Wow, you really explained that well. I see now, but still, why would you want to give $20k to a finance company to save $5k in taxes?
Doesn’t that put you $15k in the hole? remember, the question was about buying a second home.
Thanks! Like I said, lots of ways to game the system …I’m going to just quote this:
http://www.bankrate.com/brm/news/real-estate/20041018a1.asp
“First, the property you’re selling must be your principal residence. That means you live in it. This tax break doesn’t apply to a house or other property that you have solely for investment purposes. In those cases, the usual capital gains rules apply.
You can, however, turn a rental house into your primary residence, making the sale of it eligible for the exclusion. This is accomplished when you meet the IRS use and ownership tests: You own and live in the home for two out of the five years before the sale.
And your actual habitation of the home doesn’t have to be sequential, notes Mark Luscombe, lawyer, accountant and principal tax analyst at CCH Inc., a Riverwoods, Ill.-based provider of tax law information and software. The IRS lets you aggregate your time living in the house to meet the two-year residency requirement.”
Um. I didn’t quite answer the question. That quote is on how you shield your capital gains when you sell.
Most ways to get the interest deduction sounds like fraud to me. But in the example of parents buying a condo for their child, one could buy entirely in cash, funded by a home equity loan on their original home. Home equity loan interest is treated the same as interest on a primary loan.
That should have read
“Most ways to get the interest deduction _on a second home_ sounds like fraud to me.”
Actually … the AMT allows deductions for mortgage interest.
Why would any house in an appreciating market be selling for 20% or more off a purchase price two years past?
Why would many of them be doing so?
We document the leading edge of the market. Right now the direction is downward — strongly downward. How many anecdotes of decline do you need before you see a trend?
One could use the gift tax exclusion to put $12K per year into the child’s name. Once it came to for college, the child could use part of that for a down payment, obtain a mortgage with parents as co-borrowers, and use the interest deduction as the unit would be the child’s primary residence. Income derived on the transferred cash would have the benefit of an interest tax deduction to offset. It would be at a lower margin tax benefit most likely though…
Perfectly legal and within IRS guidelines. Just takes some planning and years of maintenance. The child would also get the $250K exclusion to use against any capital gains…
“I’m as bearish on RE as the next guy, but how do you argue with these numbers?”
That’s easy. Just read every other market update.
http://ziprealty.typepad.com/marketconditions/
Mission Viejo, nearly flat but with a $/sf of $320. and a $/sf decline of near 8%.
Laguna Niguel, down 9%, similar % decline in $/sf, $/f of $362.
Anaheim, down 9.6%, $/sf down 7.7% to $299.
Huntington Beach down 15.3%, $/sf down 9.4%.
If the Irvine market has bottomed out, it is not reasonable to expect prices to return to 2005 highs in the course of a month or two.
It is the sudden uptick that bothers me. I could rationalize a small bounce, maybe a few percent, but a 20% surge defies all expectations in a market that is supposedly declining.
I believe there is something more at play here. Wouldn’t you agree?
LMAO, that made my night. I don’t even want to know how you came up with that url.
S/he’s way hotter than these condos.
I’d make an inuendo but I wouldn’t even know where to begin.
I see big signs with free rent offers right now all over the big apartment complexes in HB.
HB compares very closely to Irvine, in many ways. Both large suburbs, with very low crime rates. Prices are often similar, and unrealisticly priced, at the moment. Only one has nine miles of sand and surf, the other has better schools than almost any other city.
You know what they say about real estate: location, location. Where else can you live that is only 12 lanes away from a lovely restaurant? Other than that, you can always watch the migrating geese. Why not choose Irvine, when you want to live in a dense urban setting?
That’s up 18% IN ONE MONTH–the linked chart compares 11/07 to 10/07. Do you think that maybe there’s some sort of selection bias in those numbers? And even if
If you really think that there is not any (coincidental, admittedly) bias in the numbers, I would strongly suggest that you , CL, get out there and start snapping up SFRs! 18%/month is an annualized rate of over 720%!!!! So, if this keeps up, next October the average SFR in Irvine will sell for $5.4MM!!!!!
You’re the scientist, check a few more data points (you complain about the lack of data point available thru observational methods)–try this one from June:
http://ziprealty.typepad.com/marketconditions/2007/07/irvine-ca-marke.html
It also shows an 18.7% month-over-month increas in sale prices– from $766k to $909k (v. your cited $745 to $878). May/June had 293 total sales v. Oct/Nov 169 (probably partially a seasonal change, but whatever). Run the (Ziprealty) numbers and the overall average for M/J was $833,726. For O/N it was $799,546. So, a 5 month decrease of almost 4.1%; compound that for an annual rate and it’s over 12%. That’s a 12% annual DECREASE using over twice (2.7x) as many data points as your initial link.
If you want a truer picture, look at all the Irivine posts here:
http://ziprealty.typepad.com/marketconditions/orange_county_real_estate/index.html
They show monthly variations in the averages which are most likely (Occam’s Razor, dontcha know?) caused by a monthly variation in the particular homes selling rather than a trend one way or the other in overall market values (I’m not bothering with the overall trend). Month-to-month numbers just aren’t very reliable and using say, July, for year-to-year comparisons has similar issues.
Did someone in here refer to Irvine as “dense” or “high density?”
Say WHAT?
I looked up your stats and they say you have population density of approximately 3,000 humans/mile.
My nabe has 34,000 humanoids/mile. That’s dense, though not nearly so much as NYC, where densities in some zip codes exceed 100,000 people per mile.
Irvine sounds like it has typical suburban density.
Laura Louzader – My sarcasm meter is notoriously unreliable, but Lost Cause may have been joking. (“Where else can you live that is only 12 lanes away from a lovely restaurant?”)
The 1 bedrooms at Villa Siena that have the modern finishes go for $1800.
And the reason the rents in Silicon Valley went down 30% is because they went up 30% the year before. Classic bubble behavior…just like our housing prices. Rents here have not had a big spike, so I wouldn’t expect any big declines. A couple percent at the most.
I posted the auction date for 2373 Scholarship 2bd/2ba on 2/2/08 with REDC. Minimum bid 199,000. I am not in the RE business but I would like to think that this would establish some sort of baseline price for this complex. I see so much Yap-Yap about what 2008 OC pricing might be…. I would love to see this type of sale against the surrounding listings but I don’t have access to the info. Has another unit auctioned and for how much ?
The Egyptian geese are pretty cool although you get stuck with a lot more of the garden variety ducks and mud hens.
I got his sarcasm, but I also get that many people on this blog consider Irvine to be “high density”.
It sounds like an attractive, average-density suburban place with a lot of community amenities.
However, if this place is surrounded by interstate ramps and 12-lane collector roads, I can see why it might not be attractive. Do you think 160X rent is perhaps too high a multiple for this particular place, given the location within Irvine?
Is 120Xrent is a better formula for this property? That gives us $192,000. That seems cheap for this place, because newly rehabbed places of similar size are selling for that much here, in a very marginal neighborhood. (Marginal means high crime and social problems in combo with “gentrification”, or the influx of middle class folk like me looking for deals). But maybe prices really will back off that far.
Maybe prices will back off that far in my neck of the woods, at least I hope.
If there are no bidders at that level, will the property be let go lower?
So far, the REDC auctions have been lame. Previously they have had shills and reserve pricing so many of the properties don’t sell at all to a real buyer.
Irvine’s density is masked by the unbuilt land and substantial spacious commercial use.
If you look at wikipedia, the density is for population for all land, a mere 3000. The reality, is the density is more akin to the density observed in Stanton pushing 12,000 people per square mile. If not higher particularly in the townhome/condo areas. Garden Grove, tilts in at 9100/sm. Westminster 8700. Foutain Valley, another more suburban mix comes in at 7400/sm
Frankly, Irvine feels denser than GG or Westminster to me. Likely with a real density for the used land areas of 10,000+
It’s not dense like urban high rise, but it has urban population density. Chicago, the city, not the metro area comes in at 12,000/sm. Minneapolis is comparatively spacious at 7000/sm. Dallas and Atlanta, mid 3000s.
Philadelphia, 10,000 per square mile. Washington DC, 9000/ sq mi.
The Bronx, Brooklyn, yep, 30,000+. Queens? 20,000/sm. Irvine could be closing in on that for the inhabited parts.
So is Irvine NYC or San Fran dense, nope. But it comes right on par or even more dense than Chicago, Philadelphia and Washington D.C. To me, I’d say that’s ‘dense’.
Ok, so the eensy weensy units can be bought at a somewhat less horrendous price, but what about the decent sized units? Don’t you think those prices are ridiculous?
I am surprised that nobody mentioned that this property (or an adjacent lot) was at one time on the list of Superfund sites.
Am I wrong, or was this property the former site of a Xerox plant (18691 JAMBOREE BLVD, EPA Site #CAD058231598). This guy lists the site as a Superfund site:
http://www.cqs.com/super_ca.htm
Maybe it was a Beckman site, and not Xerox:
http://www.boe.ca.gov/proptaxes/pdf/lta00056.pdf
higher priced houses may sell because they are being sold to the people with money. My understanding is that the average home sale price going up is common in many markets, even thought those markets are tanking. But it should be obvious to a scientist that average selling price has no meaning. What if the only house that sold next month was a $10 million McMansion? Wouldn’t help all the other home sellers, would it?
Not all toxics are equal. Developers often use site pollution as a lever to get discounts on industrial urban lots. In this case, they’re using pollution to get a reduction in property tax.
The .pdf gets to the point on page 6:
“The property was worth $26 million if not contaminated, and from that $26 million, $16.7 million in clean up costs should be deducted, leaving a value for property tax purposes of $10 million.”
Sounds like this was cleaned up, or remediated to the point where the groundwater contamination is inert or immobile.
MLS does lie. Realtors DO NOT put in sales prices – they will put in high list price; I see this often – complete fraud
Reserve pricing is a common practice in auctions.
Shill bidding is fraud and is illegal. If you are aware of any shill bidding, please get in touch with the District Attorney and file a report.
Hanlon’s Razor.
725 sf for $200k on $1400 monthly rent.
Hi:
What are we missing?
I am relatively new to Irvine. We are transplants from Chicago and will be looking for a more permanent home in another year or two. We do not know which community would fit our needs. So we are renting in Irvine because it is centrally located and have good schools (or so I heard).
My son have been attending Irvine elementary school since August 2007. So far we have been disappointed with the school. With all the rave about Irvine, we were wondering if we are missing something. Our son’s school have no art program, no gym and no viable music program. Everything have to be provided by the PTA through fund raising. Thank god they were able to raised enough money for a part time gym teacher this year. We took these enrichment programs for granted in Chicago and St Louis. We did not realized it’s not a given for a school district with such a sterling reputation like Irvine. The math and science curriculum are weak. GATE program is equally weak. GATE APAS is impossible to get in, unless someone drop out. There is no sport or extra activities.
Did we missed something? Where are all the property tax revenue?
We are not knocking Irvine. It is a beautiful and nice place to live. Boring but nice. We just honestly want to know if there is something we are missing about Irvine school.
Thanks,
Which irvine elementary school does your son attend? The lack of any art program, gym and music program is not very common within the district.
So far for out elementary school, it goes like this:
art program – for elementary school, that means there is a dedicated art teacher that floats between the different schools, your kids will have a few lessons with her sometime during the school year. I really like ours – the kids like her, and even the kindergarden art is quite good. It is not a course until middle school.
gym – yeah, no gym. I think this is because the weather is so nice, they are almost always outside for gym.
music program – this starts in grade 4 which kids can pick violin/viola/cello, or vocal (singing). Classes twice a week.
I would not call the math & science curriculum weak – I used to teach those subjects, they do a good job there. Mostly focus on academics (ex. writing, reading, math) with additional focus on social studies and science. Some music/art stuff, minimal fun time filler stuff like school plays, class parties, and stuff.
Certain programs and resources for elementary school are provided by fundraising activities at the school. I don’t know about the funds for irvine schools, but some newport elementary schools have a goal to raise $500/student to support programs that the district does not cover, such as the ones above.
So, for elementary school, it not just the district, but the individual schools that matter. This is especially true for K-3.
BTW, as I have posted above, these Condo’s are not in the irvine school district anyway.
No your not missing anything..
For all the raves here about IUSD the fact is that people are compaing IUSD only to other So Cal schools, not East Coast School Districts. That is a pretty low bar.
All Caifornia schools have suffered since Prop 13 was passed 30 years ago. Property taxes in California just fixed by Prop 13 are not high enough to pay for the shools people want anymore. PBS did a program on CA schools a few years ago, they estimated that CA schools were underfunded by about $400/pupil/year because of Prop 13.
To chicken little,
Go buy you stupid a55. Go buy right now.
Ummm…Is not the limit to deductible mortgage interest equal to the amount of Purchase Money + 100k? So even if you rang up 300K to purchase something else, only 1/3 would be deductible, IIRC.
IFAIR, the mortgage interest deduction phases out starting at $150,000 AGI for married couples. I don’t think the purchase amount enters into it.
Wow these prices are still insane. These are apartments, with underground parking, nothing else.
Nicer amenities and zero debt exists for you 2 blocks down @ Villa Siena.
Give me a break! Do you really think California’s funding issues are because of prop 13? How about all the money the schools were supposed to get from the lottery (never mind they cut other things the general fund used to pay for)? Or all the money the state blew during the last 7 or 8 “good” years of revenue?
Apparently, the condo profiled in the OP—1124 Scholarship—is no longer on the market
Comparable places like this in Irvine rent for $1500 min.