Irvine with Some Foreclosures and Orange County Amid Population Exodus

The beautiful and sunny weather of Irvine and Orange County today contrasts with the looming clouds in their real estate market due to California’s overall housing affordability crisis, a crisis that is leaving many Orange County residents uncertain about their next steps.

A recent survey by the University of California in the city of Irvine revealed that while more than 80% of respondents valued the quality of life in Orange County, many doubted their financial ability to remain in the area long-term. 51% of respondents see leaving as a possibility in the short term, citing high housing costs as the main factor and the overall cost of living as the second reason.

The r/OrangeCounty group on Reddit, with 367,000 members, is full of discussions about affordability, various housing issues such as foreclosures and auctions, and people looking to move elsewhere, mentioning places like Tennessee, Texas, Inland Empire, and the Central Valley. Statewide, Orange County residents represent a significant portion of homeowners who have left California’s coast in search of more affordable housing inland over the past five years.

One Reddit user posted: “I’m planning my move to Omaha in the next 2 or 3 months right now, as I want to be able to buy a house on my own, and that is practically impossible for me in this area.”

Despite the financial concerns of many residents and the displacement of a good number of them, the real estate market in Irvine and Orange County, in general, seems unfazed, as the area remains one of the most attractive places to live in California, and the median home price exceeds $1.1 million at the moment, with only 4% of homes unoccupied at any time, according to the U.S. Census Bureau.

Jan Brueckner, a UC Irvine economics professor who has lived in Irvine for 20 years, is surprised by the region’s housing costs. “The rent for a 2,000-square-foot house in Irvine is over $6,000 a month, which was kind of mind-blowing to me,” he says. Still, he also comments that the Orange County real estate market continues to be in a good position and that the place remains very attractive to live in, highlighting its beautiful mountain views and wonderful beaches.

Adding more housing to Orange County’s single-family home market seems like an obvious solution to the pricing crisis, but so far, the homes being built have sold so quickly that they haven’t alleviated the needs of first-time homebuyers or low-income renters. According to recent Zillow data, new and yet-to-be-built homes routinely sell for millions of dollars as soon as they are listed, and some are resold a year or two later for hundreds of thousands more.

Another obvious solution for Orange County would be to build up, given the scarcity of land suitable for building; however, this plan also has issues. For starters, most homeowners in different communities oppose this idea, as they want gardens, pools, parking spaces, and quiet streets.

With high land prices in Orange County, it is also increasingly difficult for the private development sector to make dense, affordable housing economically viable, and few are willing to invest in this type of housing. Even with new state-level mandates to increase density and affordability everywhere, a combination of community resistance, reluctant developers, and no plans for government-supported housing means that the gloomy forecast will continue for renters and hopeful homebuyers.

Foreclosures Available:

• Anaheim: 120 homes available
• Irvine: 85 homes available
• Santa Ana: 95 homes available

By Elias DaSilva | September 27, 2024