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The neighborhoods of interest: Irvine, Cerritos, La Mirada
I want to buy a property soon but my relatives are telling me to wait another year or two.
I need an experts opinion on these neighborhoods. How much further can these areas go down?
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Look at how much they went UP between 2000 and 2005.
That's how much they will go down. They're not quite halfway there yet.
If you're thinking about Irvine you need to check out this blog. Prices are still coming down.
Very much further.
There is no need to rush, do some research on properties, follow them and lear the trends for yourself. Be patient, this is a big decision.
I've heard the bottom will be about 70% drop from peak from a lot of diff sources. So here's what I say:
1- Low interest rates are good now, but expect to lose 'equity' and hold the house for 10+ years or you will be selling at a big loss. If you can get rent EQUALS payment+taxes that's a good target.
2- Cash buyers don't need low interest rates, so don't buy until interest rates rise by a LOT.
3- The BEST possible time to buy is after the bottom, when interest rates have risen to high amounts, and have finally started to lower, BUT expect to wait 10 years to buy at this target.
This is a strategy that can be applied anywhere in the nation. If you don't want to risk a paper loss, then don't buy.
Your relatives are spot on. No need to consult with a housing guru.
caliguy that link is very useful.. Thanks..
Hey guys, what are your thoughts in the Porter Ranch, Granada Hills areas of So Cal. I'm also looking to buy a home around the $600k mark. Right now the homes that I'm seeing that I like are around the $650-$700k. Do you think I'll see these homes in the $600k area by this time next year?
gstracer05 "Do you think I'll see these homes in the $600k area by this time next year? ", most likely $500k and it continue to drop further.... have a nice day...
Debts wrote "I've heard the bottom will be about 70% drop from peak from a lot of diff sources"
Debts, would you mind sharing your sources ? That woud be a pretty dramatic drop. In my area (Ventura ~) I think we hit a high of approx. 650k (currently 450'ish +/-) so 70% down would be 195k. That would be approx 92-94 prices. And we have an average household income of around 75k. So that would put the ratio at about 2.6. This all sounds extremely low to me. However I'd be very interested in reading the information you are refering to.
"Have prices come down enough?"
That is a loaded questions. Depending on which side of the yard your standing on. If you are a seller, then yes houses have come down enough "stop the bleeding already". If you are a buyer than no, they need to come down more. The lower the better when it's time to buy.
"Debts, would you mind sharing your sources"
That's easy. His sources are Spleng and SoCal.
You'll probably save $150-200K on the median priced home in Irvine if you wait a couple years.
Debts isn't a he.
I moved to Irvine in 1997, and never found a need to look back. I highly recommend the city. Great public schools, a descent job base, a safe and clean environment to raise a family are just a few of the benefits enjoyed by the city residents. Also very very good are neighboring Newport Beach, and Laguna Beach if you can afford the pricing. You can buy now, next year, or whenever. It does not matter, it is going to cost you.
Robert Shiller yale economist (Case/Shiller)
in an interview
said that US housing price appreciation
deviated from the norm about 1997
and since, it has become 70%+ inflated from the norm (ie bubble)
here is a link to one of his interviews
you can search for robert shiller and find the other interviews
'''It does not matter, it is going to cost you.'
I would say ti will cost us less in the coming ears to come than it did in the past 5 years. I agree that areas like Irvine have always had a premium price tag. But please don't think the abnormal appreciation in the last few years will not be handed back. My relatives purchased houses in irvine in the 300k range new in 2001.
My sources are mostly here. It's also what my agent 'felt'. The number 70% comes up a lot. Partly the number is from myself of when I felt prices SHOULD have peaked, but kept rising due to the excessively easy loans by the bank. These loans started in the year 2000, so it does need to fall back down to about there. I was guessing 65%. Plus, some of the numbers are showing that this is really quite a possiblity. Coronado condos are down over 60% from peak, and other areas showed a severe dive, too. I've found that when one sector falls, they end up, over time, all falling about the same degree. Condos and inner city are first, then rural areas, then the suburbs, and last are the upper end areas. I hope this answers your question.
Dont look so yet... find what the 1997-98 prices and add 30-35% and you have your bottom...
Irvine certainly holds a premium. The schools are excellent, and there are a lot of nice community facilities. There has even been evidence that people with access to a lot of cash are willing to buy here, and have been in recent months. But there aren't enough of them out there paying foolishly high prices to support the market at its current prices.That's why you are seeing lots of 2004-2007 rollbacks.
"You can buy now, next year, or whenever. It does not matter, it is going to cost you" ...
... less today than it did yesterday, but more today than it will tomorrow!
Waiting, thank you for the link. I hadn't even thought of looking on youtube for information. I remember that interview but it was fairly non specific. I found another one that I thought was better and I'll do some more searching of youtube.
Debts, yes that does answer my question. I remember back in 03 I was thinking that this thing had gone far enough. I didn't get involved in it and was at times kicking myself from time to time.
Spacer I like your thinking ! It also sounds much more reasonable for my area.
Southern Cal has already been hit pretty hard. The house values have already been drastically reduced. Here's the differrence. I am an agent in So Cal and have bought many properties in the cerritos La Mirada areas. Some cities have been hit harder than others. Where the property values have fallen the most that make the overall percentage of southern California seem so big is not the areas you are talking about.
The areas that may continue to drop in value and that are hurting the values are the areas that the newer construction has taken place. Mostly the Inland Empire. The areas your are considering, even though the values have fallen from an over all trickle affect of these other areas are mostly seasoned neighborhoods. They are more established people bought these homes before the big negative amortisation loan boom. This is what has caused the mortgage institution meltdown and all the foreclosures on the market.
If you look at the LA area the real estate business is still hearty, yes prices have droped some but over all there is still a robust market. The areas you are talking about in my opinion will not drop in value like the other areas that I mentioned. Nopw is a great time to buy!
Most of the houses for sale right now are receiving multiple offers and selling for over the listed price. this will soon be recognized by the banks and they will start to change thier priocing structure on the foreclosures. This is going to make them raise the listed prices and will end the home values dropping sooner that everyone thinks. It is already happening.
I see it everyday, my office is in one of the hotbeds for the foreclosure market, I experience it everyday. I actually have a couple really good deals on a couple homes in the La Mirada area give me a call.
The Gusman Group
So Cal Foreclosure Deals
"They are more established people bought these homes before the big negative amortisation loan boom. This is what has caused the mortgage institution meltdown and all the foreclosures on the market."
That is a little bit of an over simplistic explanation of what happened.
''even though the values have fallen from an over all trickle affect of these other areas are mostly seasoned neighborhoods. 'Really? So these other areas are entitled to the bubble appreciation because they are special. The only reason their values are dropping because the neighboring counties are even though we are talking about a 40 mile distance? wow.'The areas you are talking about in my opinion will not drop in value like the other areas that I mentioned. Nopw is a great time to buy!'I dont get it. You just tolde us that values are dropping but regardless its a great time to buy?
"Nopw is a great time to buy!"
"Wahhhhh, Wahhhhh, Jerry wants commish! Jerry wants commish! Wahhhhh, Wahhhhh."
This is just a story from an old guy but might give you some insight. In my younger days I used to drive great distances to try to find deals. I think it was 1974 +/- and I looked at a 22 unit SFR subdivision outside of Lancaster, Ca. The houses were brand new never lived in. They were around 1200 to 1500 sq ft. That was a good size house for those days. There had been vandalism to them. Toilets thrown through the windows, doors kicked in, crap all over from kids raising hell out there. But all in all they weren't all that bad. Some wren't even touched. They weren't stripped of wiring or anything like that. At the time houses in my area (Ventura) were selling in the 35k to 45k range. The entire 22 unit subdivision was offered to me at a price of 5k to 7.5 per house. That was about 15% of a ventura house. Being as young and poor as I was there was no way I could raise that kind of money for the entire subdivision. So obviously I had to pass on it. This story dawned on me the other day and I thought I would share it with you because houses in Ventura are in the 450k +/- range now and coming down. Thats now a multiple of about 10 times. If I apply that to those houses out in the desert I come up with 50k to 75k. So could brand new homes out in the inland and dry areas come down to 50k to 75k ? Well if history is any guide then the answer is yes. But remember now I would have had to have bought all 22 of them to get that price but I think you get the point of the story. Just thought I'd share a tale from the ole days with you and it might give you some perspective.
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