The average household income for Irvine is $108k, which means about a $3k per month housing budget. Most of the rentals I see in Irvine for 3+ bedroom family homes are $4k or $5k in newer areas. The 1% rule means I would buy those as an investment at $400 to $500k. However, the home prices are 2 to 3 times that. So everything above what the population can support is bubble pricing, in my view.
Great points. You’ll definitely need a large down payment to keep the monthly payments manageable. Even before the recent appreciation, it was difficult to find a rental under $3k.
In 2022 the amount of owner occupied homes is less than 50 percent. Homes are starting to sit. Agents are playing games with pulling a listing waiting a while and relisting. The prices are too high when compared to high average income for Irvine residents. Looking at census data and home prices in Irvine the housing is severely overpriced. Rates are about to go even higher like to 7 or 8 percent. Does it make financial sense to buy a house from a seller who only had the home for a couple of years and now wants a half a million or more than what they paid in this environment? Incomes don’t support it and if your current mortgage is less than 3 percent why on earth would you give that up to buy a more expensive house at double the interest rate? No way home prices in Irvine can stay at these levels when rates have doubled. History and statistics don’t support that.
Great points. And it definitely is important for any buyer to make sure it makes financial sense to purchase, regardless of the situation of the seller. Whether the seller is making or losing money on any sale, it needs to make sense for a buyer to buy.
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The average household income for Irvine is $108k, which means about a $3k per month housing budget. Most of the rentals I see in Irvine for 3+ bedroom family homes are $4k or $5k in newer areas. The 1% rule means I would buy those as an investment at $400 to $500k. However, the home prices are 2 to 3 times that. So everything above what the population can support is bubble pricing, in my view.
Great points. You’ll definitely need a large down payment to keep the monthly payments manageable. Even before the recent appreciation, it was difficult to find a rental under $3k.
In 2022 the amount of owner occupied homes is less than 50 percent. Homes are starting to sit. Agents are playing games with pulling a listing waiting a while and relisting. The prices are too high when compared to high average income for Irvine residents. Looking at census data and home prices in Irvine the housing is severely overpriced. Rates are about to go even higher like to 7 or 8 percent. Does it make financial sense to buy a house from a seller who only had the home for a couple of years and now wants a half a million or more than what they paid in this environment? Incomes don’t support it and if your current mortgage is less than 3 percent why on earth would you give that up to buy a more expensive house at double the interest rate? No way home prices in Irvine can stay at these levels when rates have doubled. History and statistics don’t support that.
Great points. And it definitely is important for any buyer to make sure it makes financial sense to purchase, regardless of the situation of the seller. Whether the seller is making or losing money on any sale, it needs to make sense for a buyer to buy.