According to Altos Research, it’s up, up, and away for the Irvine’s single-family housing market. The Altos Market Action Index for Irvine’s single-family homes is 33.10, which Altos defines as a seller’s market. (Above 30 is defined as a seller’s market; below is defined as a buyer’s market.) Altos also states that the average single-family home in Irvine has been on the market for about 133 days as of February 9, 2013.

Altos Market Action Index for Single-family Homes in Irvine

Altos Research

Following is Irvine’s housing market data provided by Redfin on February 17, 2013.

Discuss on Talk Irvine: http://www.talkirvine.com/index.php/topic,3530.0.html

“I look to single-family housing as a bellwether for the general economy. Here in Orange County, single-family supply has shrunk considerably, which has led to an increase in demand. This points to increased competition and positive growth for the local economy. Single-family housing has an important psychological impact on the rest of the economy. When it points to positive growth, we will see the same for the rest of the economy.”

–Rand Sperry, CEO Sperry commercial real estate franchisor in Irvine (Jonathan Lansner and Jeff Collins, “For 2013, 13 less obvious keys to market,” The Orange County Register)

So what is happening with the single-family home in the Irvine real estate market? As shown a recent Altos Research graph for Irvine’s single-family housing market, the single-family housing market is on the upswing in Irvine (as well as in most of Orange County). Note the sharp upswing in this recent Altos Market Action Index (MAI) graph for Irvine. So it’s all good, right? According to Joel Kotkin, Distinguished Presidential Fellow in Urban Futures at Chapman University, not necessarily:

“Just six years since the last housing bubble, California is blowing up another. This may seem like good news to homeowners and speculators alike but it could further accelerate the demise of the state’s middle class and push more businesses out of the state.”

–Joel Kotkin (“Here we go again? Reinflating California housing values good for owners and governments, bad for middle, working classes, whose incomes haven’t kept up.” The Orange County Register)

Here are some points that Kotkin uses to back up his claim:

• Last year In Southern California, housing sales increased 14 percent and the median price increased 16 percent. However, housing construction has not increased substantially. Therefore, inventory is not being replenished.
• “[M]any of the homebuyers are not families seeking residences, but flippers, Wall Street types and foreign investors. A remarkable one-in-three Southern California home purchasers paid with cash, up from 27 percent from last year.”
• Kotkin refers to the American Community Survey that states, when compared to 2007-11, California incomes are down $2,600 per household. Since middle-class incomes are not keeping up with the increased prices, rising housing prices are not linked to household income.

Kotkin continues his commentary by giving his solutions to the problem. Room for discussion on these solutions exists. But before we get to that, what do you think about his basic premise? Is this upswing in housing sales and prices a good thing? Or is it profiting a select few while putting the middle class at a disadvantage? Are we heading for another bubble?

*The Altos Research Market Action Index measures the strength of a housing market.

Discuss on Talk Irvine: http://www.talkirvine.com/index.php/topic,3509.0.html

If you were planning on going to this week’s public workshops on the update for Irvine housing policies and goals, don’t. According to Irvine’s website, they have been postponed:

“The Housing Element Public Workshops scheduled for January 28 and January 30 at the Irvine Civic Center have been postponed. Notice will be posted once the workshop dates have been rescheduled. For more information, please contact Amy Mullay, Senior Planner at 949-724-7454 or email amullay@cityofirvine.org.” –City of Irvine Website

If you are reading this after the fact, my regrets. But if this is something that you are interested in, you now have more time to inform yourself and plan ahead.

The update to the Irvine housing goals and policies is a state requirement. The document produced is called the housing element. The next housing element that the city council adopts will set Irvine’s housing policy through much of 2021; therefore, it is worthwhile to put in your two-cents worth when this planning cycle come around. I will be watching for the new dates and putting in my two-cents worth as time and information availability allow.

Here is the definition of the housing element from the state website:

“State law recognizes the vital role local governments play in the supply and affordability of housing. Each governing body (City Council or Board of Supervisors) of a local government in California is required to adopt a comprehensive, long-term general plan for the physical development of the city, city and county, or county. The housing element is one of the seven mandated elements of the local general plan. Housing element law, enacted in 1969, mandates that local governments adequately plan to meet the existing and projected housing needs of all economic segments of the community. The law acknowledges that, in order for the private market to adequately address housing needs and demand, local governments must adopt land use plans and regulatory systems which provide opportunities for, and do not unduly constrain, housing development. As a result, housing policy in the State rests largely upon the effective implementation of local general plans and, in particular, local housing elements. Housing element law also requires the Department of Housing and Community Development (HCD) review local housing elements for compliance with State law and to report its written findings to the local government.”

And to brush up on matters related to the housing element, here are some past posts concerning the Irvine Housing Element:

· Council Members Differ on Inclusion of Set-Aside in Housing Element

· What is the Condition of Irvine’s Housing Stock?

· How Healthy is Irvine’s Housing Ladder