Home Buying in 92618>Question Details

Fromhouston, Home Buyer in 92618

Is this a good time to buy a 3BR townhome in Irvine, CA with a view to sell in in next 3 years?

Asked by Fromhouston, 92618 Sat Jun 12, 2010

I have recently moved to Irvine, CA from out of state and looking to buy a town home in Irvine .Resale value is important to me as I know I am not going to live here for more than 3 years. I have been a homeowner for a long time and find renting a waste of money since you are not building equity or getting tax benefits. Seems like prices in Irvine have dropped quite a bit. Also I have very good relocation benefits from my employer including buying down points, preferred lending rates, contribution to closing cost etc. Given all this, is this a good time to buy in Irvine, CA?

Help the community by answering this question:

Answers

19
Hello From Houston,

I've been selling real estate in this area for over 33 years, starting in Irvine. In that time I've seen many cycles, and each one has been different.

Here's some wisdom I can impart, based on my experience. If you KNOW that you will be absolutely moving out of Irvine after 3 years, there is NO way that you should be buying a property here - unless you don't mind losing money.

In my humble opinion, the likelihood that there will be 10% appreciation in the next 3 years - enough to cover your eventual costs to sell - is far too much of a gamble to take the risk on.

Here's how look at your situation; Would I take such a risk? My answer is absolutely not. For the same reason I bought my last house in 2001. After that, I was uncomfortable that the market might stall, or worse, collapse, as the years ensued.

Rent somewhere of your choosing - perhaps even in a nicer neighborhood than one you might buy in, and renew the lease every year. If you go into such a lease telling the landlord that you'll probably be there for at least 3 years, you'll likely get a more favorable rate, as well.

When it's time to move on, it won't matter what the real estate market is like - it will simply be the end of your lease. And mark my prediction - prices then will probably not be 10% or higher, than they are right now.

By the way, I would be happy to assist you in finding a suitable property to lease, if you need such assistance.

Good luck in your decision making.
Web Reference: http://BobPhillips.net
1 vote Thank Flag Link Fri Sep 17, 2010
It is definitely a good time to purchase in Irvine. As many other have mentioned, the price is lower and the interest rate is also low. However, the resale value in 3 years is something that I don't think anyone can answer for you now, especially, the real estate bubble just burst not too long ago.

I agree with you that Real Estate is always a good investment comparing to renting. You get the benefits of owning a home. But, don't forget that there are many investors (most clients I work with) out there buying homes because of the lower price and lower interest rate. Even if 3 years from now the re-sell price is not anywhere you'd like it to be, the townhome you are buying now could possibly be an income producing property for you. Homes in Irvine are very desirable (especially if it is a 3 bedroom) because of the SCHOOLS! I am working with several investors and all of them want to have at least one house in Irvine. We acquired one property in UT in November and used it as a rental property. I also have seen many good homes in Turtle Ridge that have lowered the sales price.

Feel free to let me know if you have any questions.

Jonathan
Web Reference: http://www.JonathanChi.com
1 vote Thank Flag Link Sun Jun 13, 2010
Hi Home Buyer

Looks like your company is offering you some great perks!

I do believe prices may not drop much further. Prices in Irvine have gone up compared to last year , especially in some neighborhoods.
However, I think that a 3 year time frame to buy and reselling for a profit a bit of a risk especially given the current economic scenario. Irvine has comparatively been shielded from too much distress sales so far, which is what helped home owners here.. Low Mortgage rates and lower prices have got in lot of strong buyers into the market.

If you do decide to buy, I would suggest look at cost of ownership other than just mortgage and insurance. Are the HOA & Mello Roos ( If applicable) low enough to attract a buyer in a soft market? Is it a desirable neighborhood with proximity to good schools? Can the property be leased easily?

Regards

Archana

Archana Jayaraman
e-PRO Realtor
DRE Lic# 01845233
Hanu Reddy Realty
Irvine
1 vote Thank Flag Link Sun Jun 13, 2010
No, it only makes sense to buy when you have a 3 year time frame to again sell in a rapidly appreciating market. Transaction costs to sell are at a minimum of 6%. With a 3 year time frame, you would be better off renting. You will not be building equity in the next 3 years in our market and even with the tax benefits, the cost to own vs rent in Irvine does not make owning favorable over a 3 year time frame.

If your employer is willing to give you some contributions towards buying, aren't they willing to give you some perks towards renting?

Seriously, in this market, unless you plan on being in the home for a minimum of 7 years, it does not make sense to buy now.
1 vote Thank Flag Link Sat Jun 12, 2010
Some great answers were shared here. Knowing the So. California market and just a time-frame of 3 years anticipating prices to go up. I would not buy, and a condo, would not be my a first or second choice.
However, if you asked the same question in 2010 or 2011, I'd be on the fence about it and would have to justify buying it based on the rental income paying for the mortgage and HOA. Irvine does have some newer housing developments in the works which may raise the median home value overall. I hope it works out for you whatever choice you make.
0 votes Thank Flag Link Mon Apr 21, 2014
Hello Fromhouston,

Yes, this is a great time to buy in Irvine! Not only are the schools top notch, but the parks, trails, etc. are as well. Irvine is ranked one of the Safest Cities and that is appealing to many as well. Since your company is giving you a great relocation package, buying now is made easier. If you rent for a year or so, you won't be able to enjoy the benefits your company is offering you now.
Also, while renting avoids you having to come up with an initial downpayment, you can not enjoy the tax benefits of writing off your interest.
Please call me if you would like to discuss further.

Shelli Banko
Tarbell Realtors
949-554-9675
0 votes Thank Flag Link Thu Apr 17, 2014
It is your decision after all, but based on the the points mentioned, buying is better than renting but if you are looking to sell in the next three years, make sure to consider different areas in Irvine. It is better to go with the areas where asociation is not too high and it is close to the blue ribbon schools, ( the main attraction for people to move into Irvine is because of its schools). So based on these, Woodbridge townhomes can be a good option, and they are also popular for rent as well. So in case you prefer to rent it out later, the sitting period would be much less. Let me know if you have any questions,
Fran Vafaie
Tarbell Realtors,
949 929 4908
FranRealtor@mail.com
0 votes Thank Flag Link Sat Sep 25, 2010
Interesting question on what is a good time to buy a 3 BR townhome in Irvine. Since you asked the question on June 12, the home buyer tax credit has expired, and the market at Irvine is softer, with slower sales, larger inventory, better selection for buyers, fewer offers, less buyer competition, which probably favors buyers and not sellers. If you are interested to possibly buy or sell a home at Irvine and South Orange County, please contact us.

I recommend you hire a professional and experienced REALTOR for your situation. Best wishes.

Harrison K. Long, REALTOR and broker associate, Coldwell Banker Residential Brokerage, Irvine, CA. 949-854-7747
Web Reference: http://www.LiveAtIrvine.com
0 votes Thank Flag Link Thu Sep 16, 2010
Hi Fromhouston,

This is a good time to buy in Irvine, why?
1. Irvine itself is a very good city/ town, recently rank #22 Best Place to Live in CNN, #1 city from California that was mentioned in that article
2. Interest rate is the lowest in 40 years history
3. Market is at bottom, with indication that prices & sales in Irvine are starting to rise in June
4. 3BR is the most common that people search to buy

So, don't miss a great opportunity to own in Irvine. :)
Web Reference: http://www.firas.remax.com
0 votes Thank Flag Link Wed Jul 21, 2010
Realtor can't predict the future no one can determine what happens in next month. However it is your business plan recommend speak with CPA or financial planner for your short / long term benefits.

Lynn911.com
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Wed Jun 16, 2010
Hi Fromhouston:

Welcome to Irvine! There are a few factors to consider when buying and selling in a short time frame (within 5 years from now). First you need to consider all the advantages of purchase (tax deduction, relocation assistance from your company, potential resale value, low interest rate, low home prices, 2 year owner occupied tax free gain). As you probably know, capitalizing in the equity sell of a property is usually more promising as a longer term purchase. For a 3 year equity sell is a little on the edge since you will probably be spending some money to upgrade and when you sell, you need to pay for the closing costs and commission. However, if you allow it a little longer, the equity gain will be more promising because Irvine has been and is still a very highly desired area. I am having a seminar on Short Sales July 24, 2010 to educate people the ins and outs of short sale to help California on the road to recovery. During the seminar, I will touch up on the real estate market trend and rent vs. buy in today's market. Please feel free to email me and I will have my assistant send you the flyer. Hope this helps!
0 votes Thank Flag Link Wed Jun 16, 2010
Hello Fromhuston,

Irvine has always been in demand because it is a model planned city,it has excellent schools that are one of the most hightly rated in the NATION, it is the home of UCI which is one of the best universities, and to add to all of this, Irvine is rated THE safest city in the NATION as it was reported by the FBI, for several years now. Also, Irivne is the the heart of Orange county which is the heart of Southern California.
We have noticed that in the past few months prices have gone up a little bit, this may have been caused by the increased demand due to the first time home buyer tax credit, as well as investors. Whether or not prices will jump much higher in 3 years, no one can give a definite answer to this. One thing is for sure, Irvine will ALWAYS be in demand.

II will be more than happy to show you properties within your price range, I have lived in Irvine for the past 25 years, and am very familiar with it and its surroundings.

Ghada Wadi
Keller Williams Elite Realty
(949) 533-9537
DRE#: 01759990
0 votes Thank Flag Link Tue Jun 15, 2010
Dear "OC Buyer", I completely respect your right to a "descending" opinion, I really do. I love this country because of freedoms like that, and in looking at your profile, here on Trulia, you have been quite active with "helpful" input, but....The whole "Cloche & Dagger", "man behind the curtain" thing is taking away from the "believability" of your input. It comes across as "intrusive" vs "Insightful".

Won't you come out from behind the curtain and engage with us in dialogue? I sense you would be an excellent resource. :-)

Stay Blogging My Friends!

@CBRELongBeach
Web Reference: http://CoastalAlliance.net
0 votes Thank Flag Link Mon Jun 14, 2010
As you can see from the other answers, there are lots of differing views on your question. If you decide to look into the possibility of purchasing in Irvine, I would be happy to help you. I grew up in Irvine and live and work here now. I can share with you historical appreciation figures (last 6 months, 1 year and 5 years) as well as help you figure out other possible exit strategies such as renting the home that would give you options when you decide to move from Irvine.
0 votes Thank Flag Link Sun Jun 13, 2010
Dear Houston,
It's a great time to buy. Interest rates are at an all time low and home prices have dropped. If you are thinking of selling that soon, I would not recommend that. Rather, consider purchase of a nice townhome in a desireable area that you can lease in three years. We are in a recovery, but it will take time for Real Estate to rebound enough for you to be able to make a profit on that investment. If you need a professional referral for Irvine, feel free to contact me.
0 votes Thank Flag Link Sun Jun 13, 2010
If only we actually knew the answer to your questions! It would be a good idea for you to consult a CPA to help you decide if it is a good time for YOU to purchase a property at this time. In my opinion buyers need to hold on to their properties for three to five years before selling.

In the past we could count on properties appreciating in value each year! What we can count on now is that we simply cannot make promises concerning building equity in a property. It sounds like your company is offering you some great perks...will you be transferring with this company in three years? If so, will they be offering you more perks?

Dot Chance
Keller Williams Realty
DRE #01494182
Web Reference: http://www.DotChance.com
0 votes Thank Flag Link Sat Jun 12, 2010
Dear Buyer from Huston;
When it comes to the market there is no FOR SURE way to tell if the market is going to go up or down. The best thing for you to do is start looking. You NEVER know when the best deal is going to come along! If you go to my website http://www.deltamaxmortgage.com/SearchtheMLS you can search the entire MLS for Irvine and all close by cities such as North Tustin, Lake Forest, Costa Mesa etc.. like the Realtors do and you can set up a free property saver account to send you daily email updates of new homes that match your search criteria. That way you can stay ahead of the newest homes that come on the market and beat other buyers to the hottest listings! When you see a great deal you can jump on it! The bottom line is Now in South Orange County California including Irvine prices are much affordable and we are now experiencing multiple offers in many of the homes. So this is the buying time. I can guarantee you that you will not get the same deal in Irvine- CA three years from today. Please do not hesitate to call me if you would like to know more about Irvine housing, prices and market conditions.
Best of luck
Shadi Kian
Broker
DeltaMax Mortgage/Realty
949-510-1955
,
If you need any help at all I would be happy to help you or to just answer any questions you might have. Feel free to call me anytime at your convenience.
Warmly,
Shadi
(949) 510-1955
0 votes Thank Flag Link Sat Jun 12, 2010
No one knows what house prices will do over the next 3 years. If they drop more you would lose money. If they remain the same you would lose money based on amortization tables. If prices go up you just might make some money.

Does it make more economic sense to rent or buy? Use your numbers and see below.
http://www.trulia.com/blog/dan_chase/2010/01/does_it_make_mo…
Why renting at a higher monthly cost might be the right choice to make. A very different way to look at things below.
http://www.trulia.com/blog/dan_chase/2010/02/why_rent_if_you…
A site that shows what they think the future of house prices will look like below.
http://www.housingpredictor.com/california.html

In the end it is a choice you will make. One thing is do you want to buy, leave, and keep it as a rental. If so find out what the cost of buying is compared to renting. Maybe you do not mind losing money if you can do as you please with no landlord. Buying would make more sense. Look up foreclosures in your area. See what is expected to come. You may find it looks bad. You may not. Do a lot of research and then make an informed decision.
0 votes Thank Flag Link Sat Jun 12, 2010
YES! Wish I could drone on and on, but it just doesn't matter. The answer to your question is YES!

Best of luck!

@CBRELongBeach
Web Reference: http://CoastalAlliance.net
0 votes Thank Flag Link Sat Jun 12, 2010
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2014 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer