While the UK housing market grapples with sluggish values and rising mortgage rates, Irvine, California is defying the national trend, experiencing a remarkable surge in property prices and new home construction.
Kim Pohas, a recent resident of Irvine's thriving Great Park community, discovered this firsthand. After purchasing a one-bedroom flat in May 2023 for £500,000, she was shocked to see property values skyrocketing. On a whim, she listed her flat for sale and, within a year, received an offer she couldn't refuse: £640,000. "It was like flipping a house, but without doing anything to it," Pohas, 40, said.
This remarkable story is not an anomaly. Over the past year, the median house price in Irvine, a city in central Orange County, has soared to £1.22 million, representing a 20.8% increase, the highest in the nation, according to a review of Zillow data by real estate analyst Home Economics.
Irvine's success extends beyond just soaring prices. The city is also outperforming other Californian communities in terms of population growth and new home construction. While major cities like Los Angeles and San Francisco have seen a decline in residents, Irvine has welcomed over 13,000 new residents in the past three years, the highest in the state. This growth has propelled Irvine to become California's 13th largest city, surpassing Santa Ana. Furthermore, Irvine accounts for over one-third of the nearly 100,000 new homes built in Orange County since 2010, with an impressive 35,000 new homes added to the city.
Irvine's enduring popularity is a testament to its status as one of the nation's largest master-planned communities. The Irvine Company embarked on a ambitious development plan six decades ago, transforming 100,000 acres of farmland into a series of self-contained suburban villages. Over the years, Irvine has cultivated a reputation for its outstanding public schools, low crime rates, and ample green spaces. This, combined with the economic powerhouse of UC Irvine and its high-end office buildings, has solidified the community's appeal to upwardly mobile families, particularly those arriving from East Asia in recent decades.
"It's a clean, safe city that still has room to add more housing and jobs," said John Burns, chief executive of Irvine-based John Burns Real Estate Consulting. "Nothing else in Southern California is like that."
Irvine has consistently attracted fervent interest from homebuyers throughout its history. The Irvine Company's development plan, launched in 1960, involved donating 1,000 acres to the state for a university, which served as the foundation of the new community. Subsequent residential centres, comprising single-family homes, townhouses, and apartments, were carefully planned, each offering its own schools, shops, and recreational areas.
When Woodbridge, one of Irvine's most well-known areas, opened in 1976, a staggering 10,000 people flocked to the sales office, a scene reminiscent of the Oklahoma Land Rush, according to "Transforming the Irvine Ranch," a book documenting the city's history.
The villages are overseen by a network of homeowners' associations and special taxing districts, with the Irvine Company retaining a significant influence on the city. The Irvine Company owns over three-quarters of the city's 40,000 flats, according to real estate firm CoStar.
While some residents find the manicured uniformity somewhat stifling, Irvine's high-quality amenities and lifestyle have drawn dedicated supporters.
Jonathan Sun, 37, a tech worker, exemplifies this sentiment. After purchasing a new flat in Irvine in 2017, he and his wife later upgraded to a four-bedroom house. Sun appreciates the village concept, which brings together houses, schools, parks, and shops within close proximity. "Everything is just very neat and well organised," he said.
Irvine's population more than doubled between 2000 and 2020. Despite a slight dip in the first year of the pandemic, population growth has rebounded, particularly when compared to California's overall sluggish growth. A Times analysis of U.S. Postal Service data reveals that a northeast Irvine ZIP code saw a net increase of 6,200 residents between 2019 and 2022, the highest in Southern California.
This area encompasses the Great Park, a former Marine air base that, upon retirement, left 4,700 acres vacant. After extensive debate, including a proposal to establish a new commercial airport, the land was designated for residential development in 2002. A quarter of the site has been allocated to parks, and the city is planning for as many as 15,800 new homes.
The Great Park's ongoing construction enables Irvine to continue outpacing neighbouring communities in new home development. In the past five years, Irvine has permitted the construction of 9,400 homes, more than double the number permitted in any other Orange County city, according to U.S. Census data.
New three-storey, three- and four-bedroom townhouses with small balconies and double garages are springing up on smaller plots within Great Park's Solis Park section. These townhouses are being marketed at prices ranging from £1.17 million to £1.4 million, highlighting the high demand.
Despite this new supply, analysts believe that demand for housing in Irvine continues to outstrip available properties, particularly as the city serves as a major employment centre in Orange County. "The most amazing thing in Irvine is the really strong job growth," Burns said. "The jobs are in Irvine."
Beyond Irvine, four other areas in Orange County â Laguna Niguel, Tustin, Lake Forest, and Mission Viejo â are among the top 12 cities nationally with the highest percentage increases in home values over the past year, according to Zillow.
Chang âEmilyâ Calcote, a real estate broker with a decade of experience in Irvine, attributes the growth in surrounding communities to buyers priced out of Irvine.
Calcote attributes the recent surge in demand to foreign buyers from Asia, who have long been attracted to Irvine for its excellent schools, the university, and its amenities. Nearly 40% of Irvine's residents are foreign-born, with 80% originating from Asian countries, according to Census data. Asian residents now constitute the largest demographic group in Irvine, accounting for 44% of the population.
Irvine's reputation has spread through word-of-mouth among affluent Asian families, Calcote noted. "You could talk to a Chinese or Korean person and they would know Irvine," Calcote said. "They may not even know California, but they know Irvine."
Foreign buyers, who frequently pay in cash or secure financing outside the traditional mortgage market, are less susceptible to higher interest rates. These buyers may be relocating to Irvine or simply seeking a secure haven for their investments. Orange County is one of the few regions in the country where investor activity has been accelerating, according to research by Burns' firm.
Liu Guanyi, a resident of Shanghai, purchased a new four-bedroom house in Irvine's Portola Springs community in June for £1.55 million. He plans to move in with his family in the coming years.
Liu is already familiar with Irvine. In 2019, he and his wife visited the city for the birth of their first child, aiming for U.S. citizenship for their daughter. Subsequently, he purchased two houses in Orange County, one in Irvine and another in Anaheim. His current purchase marks his third property in the region.
Liu, 38, who owns a business specialising in car window coatings, expressed his admiration for Irvine's high-quality schools and low crime rates. He seeks an American education for his daughter and six-month-old son. "We feel like the American educational system is still the best in the world, so we thought we would give our kids a broader perspective," he said.
Liu's decision to relocate was accelerated by the stringent lockdowns imposed by the Chinese government during the pandemic. He is currently applying for a green card through the EB-5 Immigrant Investor Program.
The escalating property prices have left some successful Irvine residents feeling trapped. Sun and his wife, now with two young children, are eager to move to a larger home. Despite the significant appreciation in their current house's value, they are struggling to find suitable options.
With a budget of £2.1 million, Sun explained that the houses they are considering require renovation or offer little more space than their existing 2,200 square feet.
"We could probably sell and move north or south in Orange County and get exactly what we want, but it's our choice to stay," Sun said.
Irvine's expansive construction plans extend beyond the Great Park. Recognising the increasing demand for housing over office space, the Irvine Company agreed to construct up to 4,900 new apartments last year on several sites initially intended for commercial development. In the spring, the city reached an agreement with developer Brookfield for the construction of 1,200 new homes, primarily single-family, as part of a deal to shut down a nearby asphalt plant.
Following her sale of her Great Park flat in the spring, Pohas moved into a two-bedroom apartment in Irvine with her boyfriend and their three dogs. She has invested the profit from the sale into a high-interest savings account, aiming to maintain liquidity for when mortgage rates decline.
"I want to be ready to buy again," Pohas said.
It remains to be seen how long Irvine can sustain this rapid growth. However, the city's unique blend of master-planned living, strong job market, and attraction to affluent international buyers suggests that Irvine will continue to be a hot spot for property investment for the foreseeable future.
