The housing recovery has swept across California. In many parts of the Golden State, inventories are falling sharply while home prices are rising. Irvine has mirrored this trend for the most part. But there are some areas where the Irvine real estate market is faring even better. Low unemployment and declining foreclosures are helping to stabilize the local housing market.
Foreclosures Dropping Across the County
Default notices to homeowners have dropped significantly over the last year, in Irvine and elsewhere in Orange County. According to DataQuick, a San Diego-based real estate tracking firm, notices of default (NODs) dropped 32.4% between the third quarter of 2011 and the same period this year.
A default notice is essentially a letter of intent from a bank to a delinquent homeowner. It states that the bank will foreclose on the property if the default continues. So a reduction in these notices typically corresponds to a reduction in actual foreclosures.
During the same period mentioned above, trustee deeds fell by nearly 47% in Orange County. A trustee deed is generated at the time of foreclosure. A major reduction like this means there will be fewer foreclosure homes on the market over the coming months. This is the story within Irvine’s housing market, and elsewhere across California. It is part of a major market transformation that will carry over into 2013.
Home Prices Rising in Parts of Irvine
In Orange County, the median sale price for homes rose by 5.9% over the last year or so. In Irvine, price trends are mixed. For instance, the median sale price dropped 34% in the 92603 zip code, while rising 27% in the 92616 zip code. This is based on data provided by DataQuick for the period of September 2011 to September 2012.
Trulia also reports a mix of rising and falling sales prices in Irvine. According to their data, the largest price gains occurred in the Turtle Ridge and Shady Canyon communities. They show a citywide gain of 8.2% between the three-month period of July to September 2011, and the same period in 2012. The average price per square foot rose by nearly 5% during the same period.
Citywide, Zillow reports a gain of 2.4% in the median sale price, year over year.
Strong Job Market Attracts and Benefits Buyers
For years, Irvine has benefited from a strong local economy. The same is true today. The city’s unemployment rate fell to 5.8% in August, down from a high of 7.5% in January 2010. That puts it well below the national average, the statewide average, and the average rate for Orange County.
Irvine has long been an employment hub within Orange County. For instance, a 2012 study by UC Irvine found that, in 2009, the Irvine area had:
- 10 times the regional average for white-collar jobs
- 8 times the number of blue-collar jobs
- 5 times as many retail-related jobs
This relates to the local housing market in two ways. For one thing, the city’s strong economy attracts new residents, fueling population growth. Irvine’s population has grown from 202,947 in 2008 to 223,729 in 2012 (projected). The high employment rate also enables more people to buy homes, striking a favorable balance of supply and demand. Both of these things tend to lift home values over time.
So there’s a lot going on in the Irvine real estate market right now — most of it good. The job market is strong. The foreclosure rate is falling. Excess inventories have dried up. And demand is growing.
At the same time, mortgage rates are still incredibly low. The average rate for a 30-year fixed mortgage was 3.37% last week, the second-lowest average of the last four decades.
Based on these and other factors, Irvine’s housing market will likely continue to strengthen into 2013.
Disclaimers: This story contains forward-looking statements relating to the real estate market in Irvine. This information has been provided for educational use and does not constitute actionable financial advice. We make no guarantees or assertions about the future of this housing market.