Irvine: Northpark Overview
Median home price is $534,000. Based on a rental parity value of $624,000, this market is under valued.
Monthly payment affordability has been improving over the last 2 month(s). Momentum suggests improving affordability.
Resale prices on a $/SF basis increased from $293/SF to $294/SF.
Resale prices have been falling for 12 month(s). Price momentum suggests falling prices over the next three months.
Median rental rates increased $83 last month from $2,506 to $2,590.
Rents have been rising for 12 month(s). Price momentum suggests rising rents over the next three months.
Market rating = 6
Proprietary Irvine Housing News home purchase analysis 
$825,000 …….. Asking Price
$810,000 ………. Purchase Price
1/23/2004 ………. Purchase Date
$15,000 ………. Gross Gain (Loss)
($64,800) ………… Commissions and Costs at 8%
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($49,800) ………. Net Gain (Loss)
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1.9% ………. Gross Percent Change
-6.1% ………. Net Percent Change
0.2% ………… Annual Appreciation
Cost of Home Ownership
——————————————————————————
$825,000 …….. Asking Price
$165,000 ………… 20% Down Conventional
3.68% …………. Mortgage Interest Rate
30 ……………… Number of Years
$660,000 …….. Mortgage
$166,580 ………. Income Requirement
$3,030 ………… Monthly Mortgage Payment
$715 ………… Property Tax at 1.04%
$242 ………… Mello Roos & Special Taxes
$206 ………… Homeowners Insurance at 0.3%
$0 ………… Private Mortgage Insurance
$110 ………… Homeowners Association Fees
============================================
$4,303 ………. Monthly Cash Outlays
($685) ………. Tax Savings
($1,006) ………. Equity Hidden in Payment
$200 ………….. Lost Income to Down Payment
$123 ………….. Maintenance and Replacement Reserves
============================================
$2,935 ………. Monthly Cost of Ownership
Cash Acquisition Demands
——————————————————————————
$9,750 ………… Furnishing and Move In at 1% + $1,500
$9,750 ………… Closing Costs at 1% + $1,500
$6,600 ………… Interest Points
$165,000 ………… Down Payment
============================================
$191,100 ………. Total Cash Costs
$44,900 ………. Emergency Cash Reserves
============================================
$236,000 ………. Total Savings Needed
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This property is available for sale on the MLS.
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$828,800 29 DINUBA |
0.07 miles 3 bd / 3 ba 2,265 Sq. Ft. |
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$869,000 1 OLINDA |
0.13 miles 4 bd / 2.75 ba 2,268 Sq. Ft. |
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$988,800 28 CALISTOGA |
0.21 miles 4 bd / 3.5 ba 2,839 Sq. Ft. |
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$925,000 21 LAURELWOOD |
0.25 miles 4 bd / 3.75 ba 2,600 Sq. Ft. |
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$1,149,900 18 BRENTWOOD |
0.33 miles 4 bd / 3.75 ba 2,950 Sq. Ft. |
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$695,000 14 APPLE Vly |
0.37 miles 4 bd / 2.5 ba 2,477 Sq. Ft. |
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$699,800 10 MINERAL KING |
0.39 miles 4 bd / 2.5 ba 2,477 Sq. Ft. |
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$925,000 78 DOVECREST |
0.46 miles 5 bd / 3.5 ba 2,996 Sq. Ft. |
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$1,015,000 21 BLUE SPRUCE |
0.51 miles 4 bd / 3 ba 2,630 Sq. Ft. |
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$918,678 6 UPLAND |
0.53 miles 4 bd / 2.5 ba 2,810 Sq. Ft. |
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People need jobs to buy homes. Who would have guessed that?
Market Hinges on Sustained Increase in Employment: Harvard Study
Sales are down, then they’re up. Home prices are up, then they’ve fallen. Clearly, it has been an unstable journey for the housing market, with hopeful reports dashed by disappointing data a month later. As the market tries to maintain confidence that it’s riding on a recovery that is here to stay, what does it need to continue strengthening?
“What the for-sale market needs most is a sustained increase in employment to bring household growth back to its longterm pace,” the Joint Center for Housing Studies of Harvard University concluded in a report.
“While still in the early innings of a housing recovery, rental markets have turned the corner, home sales are strengthening, and a floor is beginning to form under home prices,” says Eric S. Belsky, managing director of the Joint Center for Housing Studies. “With new home inventories at record lows, unless the broader economy goes into a tailspin, stronger sales should further stabilize prices and pave the way for a pickup in single-family housing construction over the course of 2012.”
However, the Harvard study also noted that the backlog of foreclosures and millions of underwater homes may keep recovery in the owner-occupied market fairly subdued.
While the owner-occupied market is struggling,the rental market, on the other hand, is growing strong and is yet to realize its full potential.
The foreclosure crisis and the aging of the population have already helped the rental market grow, but it may see a wave of demand from the echo boom generation as well.
While definitions vary, the echo boom generation typically includes those born from 1980 to the mid-90s.
As young people under age 25 find it difficult to live on their own, fewer households are dominated by an age-group that has a proclivity towards renting.
If economic conditions improve, echo boomers might find themselves living on their own, leading to an increase in demand in the rental market.
Aside from the rental market, the owner-occupied market may be awaiting a major boost if economic conditions improve and maintain progress.
Recent surveys have revealed that most Americans still aspire to own a home, but it’s the economy that is shaking up their confidence.
“Surveys consistently find that the overwhelming majority of young adults plan to own a home in the future, but many would-be buyers have stayed on the sidelines waiting for the job outlook to improve and house prices to stop falling,” said Belsky. “But as markets tighten, these fence-sitters may begin to take advantage of today’s lower home prices and unusually low mortgage rates. With rents up, home prices sharply down, and mortgage interest rates at record lows, monthly mortgage costs relative to monthly rents haven’t been this favorable since the early 1970s.”
For example, a Fannie Mae survey for May 2012 revealed that 72 percent of consumers believe now is a good time to purchase a house, but the percentage of respondents who said they would buy a house after moving dropped for two consecutive months, averaging 63 percent in May compared to 66 percent in March.
Also, a separate survey from Integra Realty Resources found that 85 percent of potential buyers said market conditions are favorable for purchasing a home, but uncertainty about the economy prevents them from making a purchase.
According to the report, the excess housing supply is due to a sharp slowdown in household growth in 2007–2011, not from overbuilding, and the lack of household growth stems from a decline in the rate at which people form their own households and a drop in immigration.
“The country has seen new household formations fall well below expected long-run rates due to a falloff in young adults being able to move out on their own and a slowdown in net immigration. Even in 2011, fewer than 700,000 households were added and that’s well below the 1.2 million or more annual trend expected under more normal economic conditions,” said Chris Herbert, Director of Research at the Joint Center for Housing Studies.
However, assuming there is a sustained recovery in the next few years, the report expects for the growth and aging of the current population alone, which includes the entrance of the echo boomers into adulthood, to support the addition of about 1 million new households per year over the next decade.