Irvine Housing Market Predictions

[patientlywaiting]

Thanks for bring an old thread back to life with a nice illustration. Quail Hill is not even worth $1 million in my view.

[PadreBrian]

A 2 million dollar track house.

Forget the 500k homes, it’s these houses which will see the largest drop %. bye-bye liar loans. Irvine doesn’t have enough (non-mortgage) workers making 500k+ a year to afford a 2 million dollar house.

[PadreBrian]

A 2 million dollar track house.

Forget the 500k homes, it’s these houses which will see the largest drop %. bye-bye liar loans. Irvine doesn’t have enough (non-mortgage) workers making 500k+ a year to afford a 2 million dollar house.

[bsrsharma]

not even worth $1 million

I think a knife catcher may buy this at a "bargain" price of around 1.5M before it ends up at or below a million. It will be fun to watch a lot of Trump wannabes get their fingers burnt in this cascade.

[bsrsharma]

not even worth $1 million

I think a knife catcher may buy this at a "bargain" price of around 1.5M before it ends up at or below a million. It will be fun to watch a lot of Trump wannabes get their fingers burnt in this cascade.

[kev374]

Few observations –

The stats are often repeated: The median Irvine household income is $83k/yr etc. etc. Does this equate to the median first time home buyer household income being $83k/yr? Of course not! I’m guessing a lot of these households are homeowners already and have more experienced workforce making more money.

What we should be concentrating is the first time buyer because he/she is what makes or breaks the market. A trade up buyer is chained to the first time buyer.

With the marriage age for high earning professionals these days being very late (mid 30s), i’m guessing our potential first time homeowner in his/her late 20s is more likely than not SINGLE and makes in the $50-75k/yr range. A late 20s/early 30s buyer is also most likely going ZERO DOWN, and interest only or possibly even NegAm. With those creative schemes now out the door and interest rates higher those buyers are all but gone!

The late 20s/early 30s folks these days are spending more than the previous generations did, they should have EVEN LESS to spend on a mortgage meaning lower affordability than historic norms. It also means higher delinquency for those who stretch, as is evidenced by the carnage happening right now. Increased job volatility in this past decade does not help the situation either.

Case in point: A friend of mine is a Business Analyst for a Fortune 500 company, she is a grad from UCI. Her starting salary was $42,000/yr and she is now, 2.5 yrs later at $47,500/yr. People DON’T make as much money as you think!!! We often infer income by looking at spending patterns which is obviously not the right way to guage it.

[kev374]

Few observations –

The stats are often repeated: The median Irvine household income is $83k/yr etc. etc. Does this equate to the median first time home buyer household income being $83k/yr? Of course not! I’m guessing a lot of these households are homeowners already and have more experienced workforce making more money.

What we should be concentrating is the first time buyer because he/she is what makes or breaks the market. A trade up buyer is chained to the first time buyer.

With the marriage age for high earning professionals these days being very late (mid 30s), i’m guessing our potential first time homeowner in his/her late 20s is more likely than not SINGLE and makes in the $50-75k/yr range. A late 20s/early 30s buyer is also most likely going ZERO DOWN, and interest only or possibly even NegAm. With those creative schemes now out the door and interest rates higher those buyers are all but gone!

The late 20s/early 30s folks these days are spending more than the previous generations did, they should have EVEN LESS to spend on a mortgage meaning lower affordability than historic norms. It also means higher delinquency for those who stretch, as is evidenced by the carnage happening right now. Increased job volatility in this past decade does not help the situation either.

Case in point: A friend of mine is a Business Analyst for a Fortune 500 company, she is a grad from UCI. Her starting salary was $42,000/yr and she is now, 2.5 yrs later at $47,500/yr. People DON’T make as much money as you think!!! We often infer income by looking at spending patterns which is obviously not the right way to guage it.

[patientlywaiting]

Forget the 500k homes, it's these houses which will see the largest drop %.

I agree.  The overpriced McMansions will get hit hardest.  Average houses will hold up better. 

[patientlywaiting]

Forget the 500k homes, it's these houses which will see the largest drop %.

I agree.  The overpriced McMansions will get hit hardest.  Average houses will hold up better. 

[Diego Mamani]

I think a knife catcher may buy this at a “bargain” price of around 1.5M before it ends up at or below a million. It will be fun to watch a lot of Trump wannabes get their fingers burnt in this cascade.

Well, every week we get at least one knife catcher in this forum telling us that they are ready to buy because they found “a bargain” selling at “below market value,” and that they don’t care about potential depreciation b/c they expect to live in the house for the next 20 years, etc., etc.

Actually, I’m grateful for the knife catchers. Thanks to them, we’ll have declining comps all the way to the bottom. If all buyers were like us Piggintionians, no one would be buying and we would be stuck with the 2005 comps.

Knife catchers: Keep on buying!

[Diego Mamani]

I think a knife catcher may buy this at a “bargain” price of around 1.5M before it ends up at or below a million. It will be fun to watch a lot of Trump wannabes get their fingers burnt in this cascade.

Well, every week we get at least one knife catcher in this forum telling us that they are ready to buy because they found “a bargain” selling at “below market value,” and that they don’t care about potential depreciation b/c they expect to live in the house for the next 20 years, etc., etc.

Actually, I’m grateful for the knife catchers. Thanks to them, we’ll have declining comps all the way to the bottom. If all buyers were like us Piggintionians, no one would be buying and we would be stuck with the 2005 comps.

Knife catchers: Keep on buying!

[newguy]

***With the marriage age for high earning professionals these days being very late (mid 30s), i’m guessing our potential first time homeowner in his/her late 20s is more likely than not SINGLE and makes in the $50-75k/yr range. A late 20s/early 30s buyer is also most likely going ZERO DOWN, and interest only or possibly even NegAm. With those creative schemes now out the door and interest rates higher those buyers are all but gone!***

You said it in the first sentence: With the marriage age for the high earning professionals these days being very late (mid 30s)…While YOU’re guessing that the first time homeowner is in his/her late 20’s…I’MM guessing that the first time homeowner will be in the early to mid 30’s. Because home prices have gone up so much, it wouldn’t make sense for someone in their “late 20’s” making “50-75K” to buy a house. In fact, I doubt they were looking to buy a house in the first place . That’s what half this board is doing anyways: renting. That’s how you save up money. Or find other ways to save money such as getting married/finding roommates. I’m on the young side, but were people in their late 20’s that are SINGLE making 30-40K looking to buy single family homes with 4 beds 3 baths in the 80’s? (or whatever income that would scale 50-75K down to 80’s money). I’m GUESSING (as we all do on the boards) the answer is no. (Hey! I proved your point though about young buyers will no longer be in the market…but I guess I’m trying to say is that the young buyers were never in the market to begin with).

***Case in point: A friend of mine is a Business Analyst for a Fortune 500 company, she is a grad from UCI. Her starting salary was $42,000/yr and she is now, 2.5 yrs later at $47,500/yr. People DON’T make as much money as you think!!! We often infer income by looking at spending patterns which is obviously not the right way to guage it.***

Case in point: I know 4 people who graduated recently from UCLA and UCI. One graduated with a masters at UCI working in a Biotech company making 67K first year. One graduated with a bachelor’s UCLA at a biotech company making 60K firs year. Another one graduated UCLA with a bachelor’s working at a petroleum refinery making 74K first year (with 10% raises after 6, 12, and 24 months…no surprise coming from oil companies). And yet another graduated UCLA with a bachelor’s in business working at a Second Tier financial group making 50K first year.

Just have two of them live together, and you’re already over 100K.

On a side note, I do believe housing prices are inflated. But I don’t like it how some stories post out the extreme points of the picture. Or maybe I’m a bull in disguise =P

[newguy]

***With the marriage age for high earning professionals these days being very late (mid 30s), i’m guessing our potential first time homeowner in his/her late 20s is more likely than not SINGLE and makes in the $50-75k/yr range. A late 20s/early 30s buyer is also most likely going ZERO DOWN, and interest only or possibly even NegAm. With those creative schemes now out the door and interest rates higher those buyers are all but gone!***

You said it in the first sentence: With the marriage age for the high earning professionals these days being very late (mid 30s)…While YOU’re guessing that the first time homeowner is in his/her late 20’s…I’MM guessing that the first time homeowner will be in the early to mid 30’s. Because home prices have gone up so much, it wouldn’t make sense for someone in their “late 20’s” making “50-75K” to buy a house. In fact, I doubt they were looking to buy a house in the first place . That’s what half this board is doing anyways: renting. That’s how you save up money. Or find other ways to save money such as getting married/finding roommates. I’m on the young side, but were people in their late 20’s that are SINGLE making 30-40K looking to buy single family homes with 4 beds 3 baths in the 80’s? (or whatever income that would scale 50-75K down to 80’s money). I’m GUESSING (as we all do on the boards) the answer is no. (Hey! I proved your point though about young buyers will no longer be in the market…but I guess I’m trying to say is that the young buyers were never in the market to begin with).

***Case in point: A friend of mine is a Business Analyst for a Fortune 500 company, she is a grad from UCI. Her starting salary was $42,000/yr and she is now, 2.5 yrs later at $47,500/yr. People DON’T make as much money as you think!!! We often infer income by looking at spending patterns which is obviously not the right way to guage it.***

Case in point: I know 4 people who graduated recently from UCLA and UCI. One graduated with a masters at UCI working in a Biotech company making 67K first year. One graduated with a bachelor’s UCLA at a biotech company making 60K firs year. Another one graduated UCLA with a bachelor’s working at a petroleum refinery making 74K first year (with 10% raises after 6, 12, and 24 months…no surprise coming from oil companies). And yet another graduated UCLA with a bachelor’s in business working at a Second Tier financial group making 50K first year.

Just have two of them live together, and you’re already over 100K.

On a side note, I do believe housing prices are inflated. But I don’t like it how some stories post out the extreme points of the picture. Or maybe I’m a bull in disguise =P

[newguy]

***With the marriage age for high earning professionals these days being very late (mid 30s), i’m guessing our potential first time homeowner in his/her late 20s is more likely than not SINGLE and makes in the $50-75k/yr range. A late 20s/early 30s buyer is also most likely going ZERO DOWN, and interest only or possibly even NegAm. With those creative schemes now out the door and interest rates higher those buyers are all but gone!***

You said it in the first sentence: With the marriage age for the high earning professionals these days being very late (mid 30s)…While YOU’re guessing that the first time homeowner is in his/her late 20’s…I’MM guessing that the first time homeowner will be in the early to mid 30’s. Because home prices have gone up so much, it wouldn’t make sense for someone in their “late 20’s” making “50-75K” to buy a house. In fact, I doubt they were looking to buy a house in the first place . That’s what half this board is doing anyways: renting. That’s how you save up money. Or find other ways to save money such as getting married/finding roommates. I’m on the young side, but were people in their late 20’s that are SINGLE making 30-40K looking to buy single family homes with 4 beds 3 baths in the 80’s? (or whatever income that would scale 50-75K down to 80’s money). I’m GUESSING (as we all do on the boards) the answer is no. (Hey! I proved your point though about young buyers will no longer be in the market…but I guess I’m trying to say is that the young buyers were never in the market to begin with).

***Case in point: A friend of mine is a Business Analyst for a Fortune 500 company, she is a grad from UCI. Her starting salary was $42,000/yr and she is now, 2.5 yrs later at $47,500/yr. People DON’T make as much money as you think!!! We often infer income by looking at spending patterns which is obviously not the right way to guage it.***

Case in point: I know 4 people who graduated recently from UCLA and UCI. One graduated with a masters at UCI working in a Biotech company making 67K first year. One graduated with a bachelor’s UCLA at a biotech company making 60K firs year. Another one graduated UCLA with a bachelor’s working at a petroleum refinery making 74K first year (with 10% raises after 6, 12, and 24 months…no surprise coming from oil companies). And yet another graduated UCLA with a bachelor’s in business working at a Second Tier financial group making 50K first year.

Just have two of them live together, and you’re already over 100K.

On a side note, I do believe housing prices are inflated. But I don’t like it how some stories post out the extreme points of the picture. Or maybe I’m a bull in disguise =P

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