Real estate was booming in California but the market is now cooling off as mortgage rates continue to rise. This cooling is beneficial for the health of the real estate market since the record-breaking price increase and hyper-demand were unsustainable. The Irvine housing market also saw a massive decline in sales in August (-52.4%) while the median home price reached $1.68M, a +16.4% change from last year.
Irvine, California is overshadowed by Los Angeles located forty miles to the northwest. It is, however, a suburb of that rapidly expanding housing market and a niche housing market in its own right. Irvine, California is a one-hour drive from Los Angeles if the highways aren’t snarled with cars. The Irvine housing market is certainly part of the L.A. metro area, though many residents tend to work in Orange County.
The city of Irvine is home to around three hundred thousand people. We won’t say that cities like Anaheim are suburbs of Irvine since they’re as large (or larger) as Irvine itself. These LA suburbs have seen significant growth as people move out of the overpriced and often dangerous LA area while trying to maintain quality of life and proximity to high-paying jobs.
Inventory is low and prices are rising. There is no doubt that it is in the midst of a seller's market. Homes are selling in days, and sellers are commanding premium prices for their properties due to their high demand. Are you interested to know how competitive the Irvine housing market is? Let us discuss up-to-date information on market conditions, price movement, and real estate trends, among other things.
Irvine Housing Market Trends
Irvine is a city in Orange County, California. It is the most expensive market in Southern California. It has become a melting pot for the Southern California community. The Irvine real estate market has always done very well because of its easy excess to all major freeways and highways with lots of options for public transportation.
The CAR's August 2022 report indicates that the median sale price of single-family homes in Irvine is $1.68M, with median days on the market being 16 days. With prices continuing to rise as a result of a lack of inventory, now is an excellent time for homeowners to sell. Although the hot seller's market has cooled significantly due to rising mortgage rates, it continues to offer homeowners good returns.
- Existing SFR Home Sales in Irvine in August 2022 were 78, down 52.4% year-over-year.
- The Existing SFR Median Price was $1.68M, up 16.4% year-over-year.
- Total Active Listings in the month were 182, a +78.4% change from last year.
- Median Days on the Market were 16 days.
- The Sale-to-List Price ratio was 99.8%.
- % of Active Listings with Reduced Prices was 30.8%.
As per the real estate company named Redfin, in August 2022, Irvine home prices were up 13.4% compared to last year, selling for a median price of $1.3M. On average, homes in Irvine sell after 35 days on the market compared to 29 days last year. There were 201 homes sold in August this year, down from 376 last year.
- Sale-to-List Price was 99.5%.
- 34.8% of Homes Were Sold Above List Price.
- 37.9% of Homes Were with Price Drops.
- Only some homes for sale in Irvine get multiple offers.
- The average homes sell for around the list price and go pending in around 35 days.
- Hot homes can sell for about 3% above the list price and go pending in around 20 days.
Irvine Real Estate Market Forecast 2022-2023
The real estate data from Zillow shows that the typical home value in Irvine is $1,297,176. From 2019 to 2020, home prices were up by about 4.5%. Last year has been sizzling hot for sellers as Irvine home values went up 21.2%. The supply is very tight and with all the other factors considered, at this time, it is unlikely that the Irvine housing market will see a price decline in 2022. As of August 2022, Irvine home values have gone up 21% over the past twelve months.
Irvine is a master-planned city in Orange County, California, the United States in the Los Angeles metropolitan area.
- The typical home value of homes in Irvine City is $1,297,176, up 21% over the past year.
- Orange County's home values have gone up 13% year over year to $997,821.
- The typical home value of homes in the Los Angeles-Long Beach-Anaheim Metro is $972,828.
- Los Angeles metro home values have gone up 8.5% over the past year.
- The Los Angeles metro housing market forecast ending with August 2033 is negative.
- Zillow predicts that Los Angeles metro home values may decline by 2.2% between Aug 2022 to August 2023.
- If this forecast is correct, Los Angeles metro home prices will be lower in the 2nd Quarter of 2023 than they were in the 2nd Quarter of 2022.
Irvine Real Estate Investment Overview
Now that you know where Irvine is, you probably want to know why we’re recommending it to real estate investors. Investing in real estate is touted as a great way to become wealthy. Should you invest in Irvine real estate? Many real estate investors have asked themselves if buying rental property in Irvine is a good investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead.
We have already discussed the Irvine housing market forecast for answers on why to put resources into this market. Regulatory restrictions on top of environmental regulations make it incredibly difficult to develop open land. It also drives up the cost of redevelopment, such as when you tear down a small home on a large lot to build anything from a modern 2600-square-foot home to a duplex. This slows down construction and redevelopment in the Irvine housing market and limits supply overall.
That’s aside from local and state regulations that drive up the cost of labor and materials. Conversely, it ensures significant appreciation of any Irvine real estate investment property. Although, this article alone is not a comprehensive source to make a final investment decision for Irvine we have collected ten evidence-based positive things for those who are keen to invest in the Irvine properties. Investing in Irvine properties will fetch you good returns in the long term as the home prices in Irvine have been trending up year-over-year.
Irvine Real Estate Appreciation
If you're a home buyer or a real estate investor, Irvine has unquestionably been one of the best long-term real estate investments in the country over the last decade. According to Neigborhoodscout, Irvine has had some of the highest home appreciation rates of any community in the country over the last decade.
Irvine real estate has appreciated by 103.21 percent over the last decade, which equates to an annual appreciation rate of 7.35 percent on average, placing Irvine in the top 20% of all cities for real estate appreciation. Irvine's appreciation rate over the last twelve months has been 18.78 percent. According to NeighborhoodScout data, during the latest twelve months, Irvine's appreciation rate, at 14.53%, has been at or slightly above the national average.
While real estate’s mantra can be summarized as “location”, the Irvine real estate market is defined by it. Home prices in the Irvine housing market are certain to go up because the city is entirely built out. And they can’t build up into the regional and state parks directly east of the city. Nor can they spread west, since cities like Corona Del Mar and the Crystal Cove State Park hem it in on the western edge.
Everything to the north and south is built out. That means that the only way one could increase housing stock is to tear down existing stock and build taller, denser, or both. Conversely, people are willing to pay a premium to live in the Irvine area given the wealth of dedicated greenspace.
Some of the best neighborhoods in or around Irvine, California are Northwood, Woodbridge, Westpark, Tustin, Tustin Legacy, Woodbury, Laguna Altura, Cypress Village, Turtle Rock, Pavilion Park, and Stonegate. Shady Canyon has a median listing home price of $7.6M, making it the most expensive neighborhood. Oak Creek is the most affordable neighborhood, with a median listing home price of $718.9K.
Here are some of the best neighborhoods to invest in Irvine real estate because they have the highest appreciation rates since 2000 (List by Neigborhoodscout.com).
- Hidden Canyon
- Parasol Park
- Solano At Altair / Celestial At Altair
- Oak Creek West
- Terrace
- Turtle Rock West
- University Park
- Foothill Ranch
- Irvine Spectrum / Irvine Medical and Science Complex
- Westpark South
The Job Market
Orange County is Southern California’s tightest job market. Unemployment is less than 3 percent, and many of them are good-paying professional jobs. That’s one reason why many choose to live in Irvine. Given the horrors of regional traffic, anyone working at UC Irvine, Verizon, Irvine Company, or Broadcom typically chooses to live here so they aren’t commuting three hours a day to these good-paying jobs.
Irvine Rental Prices Are Rising
In Irvine, 50% of households are occupied by renters. It is easy to find a cheap apartment in a place no one wants to live, though the reasons why demand is low could range from abundant gunfire at night to a lack of jobs and people in the area. The Irvine housing market sits at a sweet spot. The City of Irvine consists of 8 zip codes and is often designated as one of the safest cities to live in. It has reasonable rental rates compared to expensive California coastal real estate prices, and it has a high quality of life rating.
This isn’t a matter of opinion. It was determined by WalletHub. That’s why the Irvine real estate market came in eleventh on the Wallethub ratings, the best city in California according to their metrics. Sometimes a housing market can only be gauged by the competition. For example, the 2,500 monthly rental rate in the Irvine housing market sounds insane to those used to 1000 a month rents in the heartland. Yet this is only a few hundred dollars more a month than a renter would pay in neighboring Anaheim.
The more accurate comparison is the Irvine real estate market relative to Newport Beach directly to the west. Renting in Irvine is several hundred dollars cheaper a month than Newport Beach and other towns sitting on the Pacific shore, yet you’re just as close to major employers. Rent control hurts renters entering a market because those in the rent-controlled market have a major incentive not to move. This results in older singles and couples staying in the apartment in which they raised their children.
The same thing is found in California due to Proposition 13. Many retirees and childless middle-aged couples can’t afford to move until they can no longer stay in their home, since they’d pay higher property taxes on a smaller condo or two-bedroom home than they pay in their grandfathered four-bedroom suburban house. That drives up both rental rates and property prices in the Irvine real estate market.
As of September 29, 2022, the average rent for a 1-bedroom apartment in Irvine, CA is currently $2,805. This is a 3% decrease compared to the previous year. Over the past month, the average rent for a studio apartment in Irvine decreased by -3% to $2,505. The average rent for a 1-bedroom apartment decreased by -4% to $2,805, and the average rent for a 2-bedroom apartment remained flat.
- The average rent for a 2-bedroom apartment in Irvine, CA is currently $3,574, up 8% compared to the previous year.
- The average rent for a 3-bedroom apartment in Irvine, CA is currently $4,300, up 12% compared to the previous year.
- The average rent for a 4-bedroom apartment in Irvine, CA is currently $5,438, up 10% compared to the previous year.
Proposition 10 prevented rent control from being imposed on single-family homes and apartments built after 1995. The vote to repeal Prop 10 was one of the most expensive legislative battles in California history, but the statewide rent cap went into effect in September 2019. Now rental rate increases are capped. You may find deals on Irvine real estate investment properties by those who just want to get out before their hands are tied or their profit margins eroded. This parallels the potential opportunities created by Oregon’s statewide rent control law. People afraid they’ll lose money become eager to sell.
The Relatively Friendly Environment for Landlords
California is tenant-friendly. However, local jurisdictions range from outright hostile to property owners to lukewarm. We’ll say that the Irving real estate market is one of the least hostile to property owners. For example, Orange County had fewer restrictions on why you could evict a tenant. They had the 30/60 day notice to quit rules or the minimum the state required at the time. There was less risk of squatters ruining an Irvine real estate investment property and being protected by the courts than you would with a Los Angeles real estate property.
The Large Student Market For Investors
Student markets always present an excellent opportunity for real estate investors. The student market is almost immune to inflation. The value of the property is almost directly proportional to its proximity to campus. And in the case of the Irvine real estate market, potential student renters are competing with locals for limited rental spots.
The robust rental market gives an Irvine real estate investment property extra value since the demand for the rental isn’t tied directly to the rise and fall of one particular school. Conversely, UC Irvine is home to around 30,000 students. That means the demand for an Irvine real estate investment property near campus won’t fall 10 percent because they built a new dorm or two.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.
Irvine’s housing market seems expensive, but that is in line with local real estate trends. The area remains stable and strong, though recent legislative trends along with ongoing regulations make this a great time to buy.
NORADA REAL ESTATE INVESTMENTS strives to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability.
The other best place to invest in real estate is Boulder, CO. The Boulder metro area is becoming a high-tech hub, driving up rental rates and property values. Others are lured here by the promise of high-paying jobs or attending school somewhere they can intern at Big Tech firms without paying a fortune. Boulder’s economy is stabilized by the presence of government research institutes and the proximity to Denver’s buzzing economy.
The median rent in the Boulder real estate market is $2500 per month. Even in the older downtown area, rents hover around 2300 dollars a month, and that figure is predominantly one and two-bedroom apartments. Rents are inflated by the massive number of students in the Boulder real estate market.
Another upcoming market to choose for real estate investment is Vancouver, WA. Vancouver, Washington is a steadily growing, appreciating real estate market. Investors here will profit from Portland’s mistakes while earning greater returns than if they invested in one of the more expensive housing markets in the region. The Vancouver WA housing market has a sizable student market. Better yet, it isn’t limited to a single school. Washington State University Vancouver has more than three thousand students. It is the second-largest Washington State campus. Gateway Seminary is home to around two thousand graduate students.
Let us know which real estate markets you consider best for real estate investing!
Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
References
Market Prices, Trends & Forecasts
https://www.car.org/marketdata/data/countysalesactivity
https://www.zillow.com/Irvine-ca/home-values
https://www.redfin.com/city/9361/CA/Irvine/housing-market
https://www.realtor.com/realestateandhomes-search/Irvine_CA/overview
https://www.neighborhoodscout.com/ca/irvine/real-estate
https://www.zumper.com/rent-research/irvine-ca
Oppressive regulation
https://www.ocregister.com/2018/06/19/hot-real-estate-markets-to-cool-in-2020-experts-predict/
Limited used home regulation
https://www.nber.org/digest/apr05/w11108.html
https://www.washingtonpost.com/opinions/2019/06/15/comeback-rent-control-just-time-make-housing-shortages-worse/
Regulatory effects
https://www.latimes.com/politics/la-pol-ca-proposition-10-rent-control-20181106-story.html
https://www.multifamilyaccounting.com/oregon-was-such-a-nice-place-rent-control-is-going-to-ruin-it/
https://www.latimes.com/california/story/2019-09-05/how-california-cap-rent-increases-would-work
https://www.nytimes.com/2019/09/11/business/economy/california-rent-control.html
Landlord friendly
https://www.rentcafe.com/blog/renting/states-best-worst-laws-renters
https://www.ocsd.org/gov/sheriff/divisions/custody/court/civil/evicting.asp
https://www.occourts.org/self-help/landlordtenant/
https://www.wsj.com/articles/the-hostile-occupation-of-carlos-lopezs-house-1527892100
Quality of life versus rent
https://wallethub.com/edu/best-cities-for-renters/23010/
Deal for renters
https://www.rentcafe.com/average-rent-market-trends/us/ca/irvine/
https://www.rentcafe.com/average-rent-market-trends/us/ca/anaheim/
Job market
http://www.irvinestop10.com/Employers.aspx
https://www.globest.com/2018/12/28/oc-is-socals-tightest-job-market/?slreturn=20190905122235
