Observations from the front lines of the Irvine housing market… (Anaheim: apartment, rent)

[USCTrojanCPA]

Originally Posted by EscapeCalifornia

They're not all foreigners either. Asians have a knack for making 6 figure professional incomes while living with extended family and using coupons at the 99 cent store. I believe we're seeing a lot of that saved cash coming into play in places like Irvine right now. But eventually the market runs out of people with hundreds of thousands of dollars in liquid capital and you have to start selling houses to people with incomes to support the mortgage. Incomes are still way short of what it takes to purchase a modest 3-4 bedroom home in OC unless you want to live in Santa Ana or Stanton.

They aren't all first generation immigrants. Several of my buyers are 2nd and 3rd generation Asian who have their down payment funds from savings (like you mention above), sales proceeds from a home they sold during the bubble days, and/or gift money from family.

[masalamomma]

Well, I just made my yearly pilgrimage to the Irvine resale market this past weekend. I spent much of Saturday looking at homes in the Turtle Rock and Quail Hill area. So, what is my take? I will be happily renewing my IAC apartment lease and waiting another year for my yearly pilgrimage.

The homes I saw were literally crumbling out-takes from the 70s, and all in the mid to upper $300s psf. Mkay, no thanks.

I love Irvine, and love the schools, but I will love it even more from my IAC apartment.

[USCTrojanCPA]

Originally Posted by masalamomma

Well, I just made my yearly pilgrimage to the Irvine resale market this past weekend. I spent much of Saturday looking at homes in the Turtle Rock and Quail Hill area. So, what is my take? I will be happily renewing my IAC apartment lease and waiting another year for my yearly pilgrimage.

The homes I saw were literally crumbling out-takes from the 70s, and all in the mid to upper $300s psf. Mkay, no thanks.

I love Irvine, and love the schools, but I will love it even more from my IAC apartment.

Turtle Rock and Quail Hill are the 2 most desirable Villages in Irvine and hence have the big price tags. I've seen plenty of homes in Turtle Rock sell north of $400/sf. Turtle Rock is the old money area of Irvine and since it feeds into Uni High it along with no Mello Roos it commands a big premium. But yeah, like you said the homes tend to be old and not very upgraded. Quail Hill is the nearer put of Irvine and mostly new money. I owned a condo in Quail Hill that I sold in 2008 and lived over at Quail Meadows until I moved to another IAC complex in Oak Creek this year. The Quail Hill homes are running around $375-$400/sf and the detached condos are around $400/sf. The problem with Quail Hill and Turtle Rock is the same as almost everywhere else in Irvine...a lack of inventory. Have you looked at Oak Creek?

[Mr. Fantastic]

Originally Posted by USCTrojanCPA

I totally agree with, especially when most of them only have a high school diploma. I'm not a full-time realtor by trade. I'm actually a CPA who happens to be a realtor helping buyers out and kicking back a good portion of my commission to them. Believe me, I hate realtards as much as the next guy and when I have to deal with uneducated, arrogant listing agents I want to put my head through a wall. Like I said, I was very bearish on the market until last summer when I started seeing the demand with my every own eyes. The purpose of this thread was to give folks an objective idea of what is going on with the Irvine market as that is the market I'm most familiar with.

Give it 6 months.

[Mr. Fantastic]

Originally Posted by USCTrojanCPA

I personally don't think that buying a home in Irvine is a "good investment" due to the high prices. I think the lure to these cash buyers are the great schools and location.

That's an understatement. Irvine is one of the worst priced real estate markets in the country. The schools are good, but so are the schools in the Newport-Mesa, Laguna Beach, and Saddleback Unified school districts.

Irvine is one of those remnant bubbles that is going to slowly deflate like North SD County.

[veg8]

Originally Posted by Mr. Fantastic

That's an understatement. Irvine is one of the worst priced real estate markets in the country. The schools are good, but so are the schools in the Newport-Mesa, Laguna Beach, and Saddleback Unified school districts.

Irvine is one of those remnant bubbles that is going to slowly deflate like North SD County.

Ahh but Asian parents want the best non-testin schools and are willing to pay top dollar for it so areas like San Marino, Irvine and South Pas will defy logic.

After all, how many times have you heard the story of the Asian kid that gets straight A's but their parents were still not satisfied because they didn't get A+'s, that student would probably be smart enough to testin to Whitney or Oxford so off to finding a house in Cerritos and Cypress they go

[k374]

the market is somehow strong here in OC, I think prices are going to go up due to inflation... but wages are down and unemployment in OC is very high..home prices here SHOULD be falling like a rock given the economic fundamentals here but they're not and people are buying stuff up, i'm not sure where people have the money but apparently they do from somewhere.

[masalamomma]

Originally Posted by USCTrojanCPA

Turtle Rock and Quail Hill are the 2 most desirable Villages in Irvine and hence have the big price tags. I've seen plenty of homes in Turtle Rock sell north of $400/sf. Turtle Rock is the old money area of Irvine and since it feeds into Uni High it along with no Mello Roos it commands a big premium. But yeah, like you said the homes tend to be old and not very upgraded. Quail Hill is the nearer put of Irvine and mostly new money. I owned a condo in Quail Hill that I sold in 2008 and lived over at Quail Meadows until I moved to another IAC complex in Oak Creek this year. The Quail Hill homes are running around $375-$400/sf and the detached condos are around $400/sf. The problem with Quail Hill and Turtle Rock is the same as almost everywhere else in Irvine...a lack of inventory. Have you looked at Oak Creek?

Not interested in Oak Creek, if we ever buy, it will be in Turtle Rock. But to be honest, unless we win the lottery and literally have money to burn, I doubt we ever buy. Likely we will just rent till the kids finish high school, and then buy somewhere outside of Irvine, like Laguna Niguel or something.

Nothing wrong with renting if you get to live in the place you love at half the cost to own.

[USCTrojanCPA]

Originally Posted by masalamomma

Not interested in Oak Creek, if we ever buy, it will be in Turtle Rock. But to be honest, unless we win the lottery and literally have money to burn, I doubt we ever buy. Likely we will just rent till the kids finish high school, and then buy somewhere outside of Irvine, like Laguna Niguel or something.

Nothing wrong with renting if you get to live in the place you love at half the cost to own.

Couldn't agree with you more and that is why I rent.

[GoldenZephyr]

Many Chinese and Asian cultures in general, have an unusual belief in RE, this is most true in China where people are still paying a lifetimes of income for an apartment in Shanghai, with multiples far above anything experienced in the US. Look at Japan, prices have been declining for 20 years and have only recently begun to bottom out, 20 years!!. Japan had the same ridiculous multiples as China, yet in the end gravity won.

Prices have likely hit their zenith for a generation or more and will be unlikely to go higher in inflation adjusted terms for the foreseeable future. That being said, trying to beat an irrational market can be difficult. Give it time, the RE myth will end.

Agree about renting at half the cost, be happy where you live.