92604 is EN FUEGO!!!! Flat in the first week, and only declined 5.8%!!! And volume was UP, and everyone knows volume precedes price! Put your seat belts on folks, the rocket is ready to blast UP!!!!
In all seriousness, those are scary numbers, because Irvine is really a wonderful place to live. I think bailing out of 92603 was the smartest financial move I’ve ever made.
If things are getting this ugly in Irvine, how bad are they in not-so-nice parts of OC, like Garden Grove and Santa Ana?
ripcord
In all seriousness, if the NAR were to spin this they would look at the data IrvineRenter presented, and the data Lee in Irvine gave and note that the overall median price in Irvine INCREASED (slightly) from the week ending 4/6 to the week ending 4/11. They would conveniently forget to mention that on a YOY basis, both weeks really sucked.
No_Such_Reality
Nice Ripcord, you’ve got a future with the NAR.
While the numbers are scary, someone refresh my memory, isn’t a sample size of about 30 or smaller to predict actual median (mean) about where the sampling error goes wild and makes the sample useless?
Great Deal
Are there really house prices in 92603 for under $800,000 or are those numbers just for condos?
NickStone
No_Such_Reality:
The sampling rule for statistical analysis, that 30 or less is not statistically relevant, would only apply if the data monitored was a part of a larger whole.
In this case, the data shown above shows 100% of the market for the date range listed…. so no statistics are involved. It may not statistically correct to use this data to extrapolate future data trends based on such a small date range… but you can say with 100% confidence that within time period studied, home prices took a beating.
NanoWest
OK, here is what I would expect the RE to say….
Yea, these numbers arn’t as good as they were last year, but last year was one of the best in the history of OC. We are seeing a very short correction. In fact, over the past few weeks a lot of activity is occuring, we’re seeing an uptick in deals and people at open houses !!!!!!!
So, you better buy now becasue you will be priced out of the market, and they’r not making land in OC any more, and real estate is the safest investment in the world !!!!
Irvine Soul Brother
Wow! I guess the crash really does happen from the top down! I like the fat 37% reality check in 92603. Quail Hill is going to be looking like Quail Hell for some of them very soon! Oh yeah, some of them are going to get Turtle Rock’d by the upside down mortgage. Prices will descend into the. . shady. . . canyon. . . Okay, I’ll stop.
No_Such_Reality
Nickstone, I thought about that. I was thinking of that the universe of actual sales is a sampling of the universe of potential sales.
Either way, giving that only 30 sales are occuring and from the prior Blog entry, the 92603 has 1/1s for sale that are not selling at $435K and from blog responses in the one prior to that, there are other homes in the 92603 selling for $1.5 and $1.7 million, that the spread on the median given the observed occurences have a range of $1,000,000, that the literally, one additional home selling or not selling, could swing the median drastically in either direction.
Is there a relatively easy way for us to hunt down the 31 actual sales in the 92603 for the 22 days ending April 11 to see what it really looks like?
MarkusArelius
Most realtors will put on their Maxwell Smart hat at that point and say:
Would you believe the weather?
crucialtaunt
Where is nirvinerealtor when we need him?!
Irvine Soul Brother
No Such Reality — remember that median is a non-parametric measure of central tendency, as opposed to “mean.” Median is the center value, plain and simple (although if the number in the sample, in this case sales volume is even, then it is the average of the two central values). Median, rather than mean (or average) is the measure used in housing statistics because of just that– it is not subject to skew. For this reason, one sale that is very high or low would not significantly effect the median. Peace out.
IrvineR
Interestingly enough, the biggest valume increase are corresponding to biggest median price drop.
who told there are no buyers, ther might be left few but demanding much lower price.
sarah
Does anyone know what the original developer pricing was for the Plaza Irvine units? The 2/2 1675sf units are listed for $1.3M, I think these units were under $1M from the developer in 2006? If so, how can Irvine high rise flippers expect 30% returns when the data shows a 14% drop from a year ago for the 92612 zip code? Reality seems to be setting in for traditional Irvine condos and SFRs, but when will reality set in for Irvine high rise flippers?
nirvinerealtor
OK – IMO the median sale price is an indicator of what people are buying. Median sale price does not say anything about appreciation or depreciation.
Lower median sale price means people are not buying higher price homes, OR there is LITTLE inventory for higher price homes
What is happening now with the market in Irvine? I will tell you.
This market is dominated by move-up buyers as they see the opportunity to move-up; as the result, the move-up inventory is pathetic. Bidding price war is norm. People are paying record price and there is no sign of relief.
I am listing 3 move-up homes for lease (price >$1M) and I am getting multiple offers to buy for each property. LOL.
For those who are looking to rent 3 bedroom+, I bet you are having a hard time finding them. When frustrated you will have to buy to provide a roof for your family.
TIC kept producing more and more 1 & 2 bedrooms. That is the reason you are seeing rent consessions. 3 bedrooms are in demand because Irvine is a family oriented city.
Please do not think I am puffing. I am just telling you my personal experience.
graphrix
Sarah – The Plaza and 3000 The Plaza is by http://www.opuscorp.com and more info about The Plaza can be found here http://www.theplazairvine.com . Over 60% of the buyers in Marquee were non-owner occupied and the majority of them were flippers and there are plenty for sale to chose from. There are over 6000 units being developed, approved or waiting for approval in the “downtown” Irvine area. Although I do not think all of them will make it. To check out what is for sale check out http://www.octowers.com and I can tell you the same units 3 months ago are still for sale.
Here is what some of the speakers at the BIA conference had to say:
During the event, titled “What a Difference a Year Makes,” speakers highlighted how the housing market has changed in the past year, citing declining sales and revenues, a sharp drop in construction, and an abrupt halt in land acquisitions.
The year 2008 “won’t be so great,” said Les Thomas, president of Shea Homes Southern California.”We hope things will be fine in ’09.”
Mac O’Donnell, CEO of the Irvine brokerage O’Donnell/Atkins, noted that about 40 high-rise condo projects in the Irvine Business District have “ground to a halt.”
Matt Montgomery, director of real estate development for condo tower builder Opus West Corp., said his that while his company continues to look for new locations for residential high rises, it will only develop one a year during the next three to five years.
“I don’t see a whole heck of a lot of (construction) in the next five years,” Montgomery said.
graphrix
NIR – You may want to make sure you are sitting down but I don’t think you are puffing. The $1mil and up inventory is small and many have wishing prices. This is a very picky segment of the market too as they should be buying a $1mil+ home.
But I know this has been asked of you before but don’t you think that since the sub $1mil can’t get their price they won’t move up and since the sub $800k can’t get their price they won’t move up the group and since the sub $600k can’t sell for their price they can’t move up either? It’s an honest question. To me it is like when you are a kid at the mall and shove your foot in between the steps of an escalator and once you get to the top all of a sudden it stops.
nirvinerealtor
graphrix – In this market, majority of the move-up buyers are not even thinking, nor needing to sell existing homes. Just think outside of the box.
Who are the current move-up buyers that I personally saw?
Answers:
1. Relocation folks
2. Folks who sold in the last few years and rented apartments while waiting for market to adjust. There are so many of these around
3. $250K/year + income earners are plenty here. This group can easily afford $1.3M+ homes with the minimum 5% down. A large portion of this group can qualify both homes.
4. Folks who have so much money they do not know what to do with. They buy a 2nd home just to have.
IrvineRenter
nirvinerealtor,
I too have noticed the unusual activity with the over $1,000,000 homes. There has been some appreciation among like-kind properties in Northwood and the new area of Turtle Ridge. We have documented some of these properties selling for what appear to be above-market prices (see post on Dream Big). I would note this is the only market segment where this activity is occurring. The best homes in the best neighborhoods are always the last properties dragged down in a bear market. It is the activity in these higher priced homes which is propping up the median and masking the overall decline in prices. We have documented many homes selling at or below 2005 prices in addition to the stats on this post, so the price decline is impossible to deny.
I don’t know how I would profile these buyers other than Irvine move-ups. There are probably some investors with a lot of money and a healthy dose of kool-aid trying to keep the party going. The others listed in post #18 I am a bit doubtful of. I have a hard time imagining a relocation from another area moving to Irvine and suddenly coming up with the funds to by a million dollar plus home. There are certainly a number of renters with cash populating this board, but I doubt their numbers make up a significant percentage of the population. As for the preponderance of $250K+ wage earners, that is a widely espoused and discredited myth. I recently pulled up the income statistics in Northpark for a post, and there were no $150K+ wage earners in the neighborhood I studied (not even with liar loan data factored in). If there were large numbers of $250K+ earners, the income statistics for Irvine would reflect it.
Thanks for attempting — and perhaps succeeding — to put a positive spin on horrendous numbers.
Trooper
Perhaps the income stats aren’t there because it’s unreported income? Money laundering ? Nah, not in Irvine.
nirvinerealtor
IR,
I do not deny there are segments of the market that have price drop up to 20%, there are good reasons for it. That is why when you buy something, you consider factors that would hold the price (desirability factors).
I did observe the working folks in the Northpark neighborhood. This middle-class neighborhood composes of kid oriented families. About half are dual-income earners, mostly 6-figure salaries. Or those who bought early and have sizeable equity. About 1/3 paid cash, or nearly paid cash when bought from builders (I asked builders). Typical occupations are executives (CFO, CEO, VPs, directors), doctors, lawyers, consultants, engineers, and many business owners. Am I correct so far with my unscientific data collection?
I see and work with many buyers like you to become homeowners. These buyers have a big fear of price drop (afraid of the unknown) and they think they can not afford anything decent (clueless about cash flow analysis). Sorry to say! These folks will never buy unless someone with lots of patience to encourage them to buy.
fumbling
Hi, I’m from Ventura County, small town of Oak Park, which is next to Agoura Hills. It’s an upscale community, similar to Irvine. It’s amazing, the property values have held up very well. For example, 2000 sf 3×2 homes that sold for say $750K last year, have sold at listing prices of around $800K recently (not a realtor so don’t know the sales price of pending sales). The community is fully built out (no new housing tracts can be built on the permanent open space) so there are only resales. I notice a lot of flight from the San Fernando Valley to the Conejo Valley where Westlake Village, Thousand Oaks and Oak Park are, and it looks like the demand is there given the existing supply to keep the values up. So for good locations with constrained or no new development there are no 20% drops from last year’s selling prices as far as I can see. Driving around my ‘hood I don’t see too many for sale signs and while it takes a few months to sell, most homes do seem to go into escrow after a few months.
nirvinerealtor
fumbling,
Nice LA county area are acutally appreciating because of demand, much more than I can see in OC.
graphrix
I know of someone who is a corporate relocation with an income of $250k plus and a sizable down payment. After speaking with many others including a VP at a homebuilder he decided to rent vs. buy. It was cheaper to rent and he knows that prices will continue to come down. He like myself and irvinerenter have a very good understanding of cash flow analysis and right now you will have better cash flow by renting even with an interest only loan.
I can say for a fact that in the last four years homebuilders have not had 33% of their buyers paying cash. One maybe two buyers per development which is no where near 33% and not even 3%. Many developments had no cash buyers at all. When you speak to a homebuilder about how many buyers are paying cash you cannot rely on the sales agent of the builder. The majority I have dealt with and I know people who have dealt with them for 10+ years that they are some of the biggest liars I have ever met. You need to speak with someone at the homebuilder who actually has that information on record.
IrvineR
I happened to go to a movie theatre in fashion island and overhearing a couple. Appearantly they were making a big money. Anyway, the interesting thing was they bought the tickets using Costco prepaid discount tickets. I really doubt that that couple is willing to pay whatever to get
And here’s the following week:
For the 22 business days ending April 11
Irvine 92602 $765,000 -4.4% 44 -12.0%
Irvine 92603 $756,000 -36.9% 31 -34.0%
Irvine 92604 $605,000 -5.8% 29 3.6%
Irvine 92606 $655,000 -8.7% 21 5.0%
Irvine 92612 $521,000 -9.4% 39 30.0%
Irvine 92614 $550,000 -7.4% 28 -24.3%
Irvine 92618 $522,750 -2.5% 23 -32.4%
Irvine 92620 $740,000 -10.0% 50 -26.5%
—–
Here is the spin:
92604 is EN FUEGO!!!! Flat in the first week, and only declined 5.8%!!! And volume was UP, and everyone knows volume precedes price! Put your seat belts on folks, the rocket is ready to blast UP!!!!
In all seriousness, those are scary numbers, because Irvine is really a wonderful place to live. I think bailing out of 92603 was the smartest financial move I’ve ever made.
If things are getting this ugly in Irvine, how bad are they in not-so-nice parts of OC, like Garden Grove and Santa Ana?
In all seriousness, if the NAR were to spin this they would look at the data IrvineRenter presented, and the data Lee in Irvine gave and note that the overall median price in Irvine INCREASED (slightly) from the week ending 4/6 to the week ending 4/11. They would conveniently forget to mention that on a YOY basis, both weeks really sucked.
Nice Ripcord, you’ve got a future with the NAR.
While the numbers are scary, someone refresh my memory, isn’t a sample size of about 30 or smaller to predict actual median (mean) about where the sampling error goes wild and makes the sample useless?
Are there really house prices in 92603 for under $800,000 or are those numbers just for condos?
No_Such_Reality:
The sampling rule for statistical analysis, that 30 or less is not statistically relevant, would only apply if the data monitored was a part of a larger whole.
In this case, the data shown above shows 100% of the market for the date range listed…. so no statistics are involved. It may not statistically correct to use this data to extrapolate future data trends based on such a small date range… but you can say with 100% confidence that within time period studied, home prices took a beating.
OK, here is what I would expect the RE to say….
Yea, these numbers arn’t as good as they were last year, but last year was one of the best in the history of OC. We are seeing a very short correction. In fact, over the past few weeks a lot of activity is occuring, we’re seeing an uptick in deals and people at open houses !!!!!!!
So, you better buy now becasue you will be priced out of the market, and they’r not making land in OC any more, and real estate is the safest investment in the world !!!!
Wow! I guess the crash really does happen from the top down! I like the fat 37% reality check in 92603. Quail Hill is going to be looking like Quail Hell for some of them very soon! Oh yeah, some of them are going to get Turtle Rock’d by the upside down mortgage. Prices will descend into the. . shady. . . canyon. . . Okay, I’ll stop.
Nickstone, I thought about that. I was thinking of that the universe of actual sales is a sampling of the universe of potential sales.
Either way, giving that only 30 sales are occuring and from the prior Blog entry, the 92603 has 1/1s for sale that are not selling at $435K and from blog responses in the one prior to that, there are other homes in the 92603 selling for $1.5 and $1.7 million, that the spread on the median given the observed occurences have a range of $1,000,000, that the literally, one additional home selling or not selling, could swing the median drastically in either direction.
Is there a relatively easy way for us to hunt down the 31 actual sales in the 92603 for the 22 days ending April 11 to see what it really looks like?
Most realtors will put on their Maxwell Smart hat at that point and say:
Would you believe the weather?
Where is nirvinerealtor when we need him?!
No Such Reality — remember that median is a non-parametric measure of central tendency, as opposed to “mean.” Median is the center value, plain and simple (although if the number in the sample, in this case sales volume is even, then it is the average of the two central values). Median, rather than mean (or average) is the measure used in housing statistics because of just that– it is not subject to skew. For this reason, one sale that is very high or low would not significantly effect the median. Peace out.
Interestingly enough, the biggest valume increase are corresponding to biggest median price drop.
who told there are no buyers, ther might be left few but demanding much lower price.
Does anyone know what the original developer pricing was for the Plaza Irvine units? The 2/2 1675sf units are listed for $1.3M, I think these units were under $1M from the developer in 2006? If so, how can Irvine high rise flippers expect 30% returns when the data shows a 14% drop from a year ago for the 92612 zip code? Reality seems to be setting in for traditional Irvine condos and SFRs, but when will reality set in for Irvine high rise flippers?
OK – IMO the median sale price is an indicator of what people are buying. Median sale price does not say anything about appreciation or depreciation.
Lower median sale price means people are not buying higher price homes, OR there is LITTLE inventory for higher price homes
What is happening now with the market in Irvine? I will tell you.
This market is dominated by move-up buyers as they see the opportunity to move-up; as the result, the move-up inventory is pathetic. Bidding price war is norm. People are paying record price and there is no sign of relief.
I am listing 3 move-up homes for lease (price >$1M) and I am getting multiple offers to buy for each property. LOL.
For those who are looking to rent 3 bedroom+, I bet you are having a hard time finding them. When frustrated you will have to buy to provide a roof for your family.
TIC kept producing more and more 1 & 2 bedrooms. That is the reason you are seeing rent consessions. 3 bedrooms are in demand because Irvine is a family oriented city.
Please do not think I am puffing. I am just telling you my personal experience.
Sarah – The Plaza and 3000 The Plaza is by http://www.opuscorp.com and more info about The Plaza can be found here http://www.theplazairvine.com . Over 60% of the buyers in Marquee were non-owner occupied and the majority of them were flippers and there are plenty for sale to chose from. There are over 6000 units being developed, approved or waiting for approval in the “downtown” Irvine area. Although I do not think all of them will make it. To check out what is for sale check out http://www.octowers.com and I can tell you the same units 3 months ago are still for sale.
Here is what some of the speakers at the BIA conference had to say:
During the event, titled “What a Difference a Year Makes,” speakers highlighted how the housing market has changed in the past year, citing declining sales and revenues, a sharp drop in construction, and an abrupt halt in land acquisitions.
The year 2008 “won’t be so great,” said Les Thomas, president of Shea Homes Southern California.”We hope things will be fine in ’09.”
Mac O’Donnell, CEO of the Irvine brokerage O’Donnell/Atkins, noted that about 40 high-rise condo projects in the Irvine Business District have “ground to a halt.”
Matt Montgomery, director of real estate development for condo tower builder Opus West Corp., said his that while his company continues to look for new locations for residential high rises, it will only develop one a year during the next three to five years.
“I don’t see a whole heck of a lot of (construction) in the next five years,” Montgomery said.
NIR – You may want to make sure you are sitting down but I don’t think you are puffing. The $1mil and up inventory is small and many have wishing prices. This is a very picky segment of the market too as they should be buying a $1mil+ home.
But I know this has been asked of you before but don’t you think that since the sub $1mil can’t get their price they won’t move up and since the sub $800k can’t get their price they won’t move up the group and since the sub $600k can’t sell for their price they can’t move up either? It’s an honest question. To me it is like when you are a kid at the mall and shove your foot in between the steps of an escalator and once you get to the top all of a sudden it stops.
graphrix – In this market, majority of the move-up buyers are not even thinking, nor needing to sell existing homes. Just think outside of the box.
Who are the current move-up buyers that I personally saw?
Answers:
1. Relocation folks
2. Folks who sold in the last few years and rented apartments while waiting for market to adjust. There are so many of these around
3. $250K/year + income earners are plenty here. This group can easily afford $1.3M+ homes with the minimum 5% down. A large portion of this group can qualify both homes.
4. Folks who have so much money they do not know what to do with. They buy a 2nd home just to have.
nirvinerealtor,
I too have noticed the unusual activity with the over $1,000,000 homes. There has been some appreciation among like-kind properties in Northwood and the new area of Turtle Ridge. We have documented some of these properties selling for what appear to be above-market prices (see post on Dream Big). I would note this is the only market segment where this activity is occurring. The best homes in the best neighborhoods are always the last properties dragged down in a bear market. It is the activity in these higher priced homes which is propping up the median and masking the overall decline in prices. We have documented many homes selling at or below 2005 prices in addition to the stats on this post, so the price decline is impossible to deny.
I don’t know how I would profile these buyers other than Irvine move-ups. There are probably some investors with a lot of money and a healthy dose of kool-aid trying to keep the party going. The others listed in post #18 I am a bit doubtful of. I have a hard time imagining a relocation from another area moving to Irvine and suddenly coming up with the funds to by a million dollar plus home. There are certainly a number of renters with cash populating this board, but I doubt their numbers make up a significant percentage of the population. As for the preponderance of $250K+ wage earners, that is a widely espoused and discredited myth. I recently pulled up the income statistics in Northpark for a post, and there were no $150K+ wage earners in the neighborhood I studied (not even with liar loan data factored in). If there were large numbers of $250K+ earners, the income statistics for Irvine would reflect it.
Thanks for attempting — and perhaps succeeding — to put a positive spin on horrendous numbers.
Perhaps the income stats aren’t there because it’s unreported income? Money laundering ? Nah, not in Irvine.
IR,
I do not deny there are segments of the market that have price drop up to 20%, there are good reasons for it. That is why when you buy something, you consider factors that would hold the price (desirability factors).
I did observe the working folks in the Northpark neighborhood. This middle-class neighborhood composes of kid oriented families. About half are dual-income earners, mostly 6-figure salaries. Or those who bought early and have sizeable equity. About 1/3 paid cash, or nearly paid cash when bought from builders (I asked builders). Typical occupations are executives (CFO, CEO, VPs, directors), doctors, lawyers, consultants, engineers, and many business owners. Am I correct so far with my unscientific data collection?
I see and work with many buyers like you to become homeowners. These buyers have a big fear of price drop (afraid of the unknown) and they think they can not afford anything decent (clueless about cash flow analysis). Sorry to say! These folks will never buy unless someone with lots of patience to encourage them to buy.
Hi, I’m from Ventura County, small town of Oak Park, which is next to Agoura Hills. It’s an upscale community, similar to Irvine. It’s amazing, the property values have held up very well. For example, 2000 sf 3×2 homes that sold for say $750K last year, have sold at listing prices of around $800K recently (not a realtor so don’t know the sales price of pending sales). The community is fully built out (no new housing tracts can be built on the permanent open space) so there are only resales. I notice a lot of flight from the San Fernando Valley to the Conejo Valley where Westlake Village, Thousand Oaks and Oak Park are, and it looks like the demand is there given the existing supply to keep the values up. So for good locations with constrained or no new development there are no 20% drops from last year’s selling prices as far as I can see. Driving around my ‘hood I don’t see too many for sale signs and while it takes a few months to sell, most homes do seem to go into escrow after a few months.
fumbling,
Nice LA county area are acutally appreciating because of demand, much more than I can see in OC.
I know of someone who is a corporate relocation with an income of $250k plus and a sizable down payment. After speaking with many others including a VP at a homebuilder he decided to rent vs. buy. It was cheaper to rent and he knows that prices will continue to come down. He like myself and irvinerenter have a very good understanding of cash flow analysis and right now you will have better cash flow by renting even with an interest only loan.
I can say for a fact that in the last four years homebuilders have not had 33% of their buyers paying cash. One maybe two buyers per development which is no where near 33% and not even 3%. Many developments had no cash buyers at all. When you speak to a homebuilder about how many buyers are paying cash you cannot rely on the sales agent of the builder. The majority I have dealt with and I know people who have dealt with them for 10+ years that they are some of the biggest liars I have ever met. You need to speak with someone at the homebuilder who actually has that information on record.
I happened to go to a movie theatre in fashion island and overhearing a couple. Appearantly they were making a big money. Anyway, the interesting thing was they bought the tickets using Costco prepaid discount tickets. I really doubt that that couple is willing to pay whatever to get
a