If you've received a lease renewal notice or are hesitating to look at homes, you're probably wondering one thing: where are rents and home prices in Irvine headed right now?

To put it briefly, rents are rising very slowly, while home prices are cooling off faster than transaction speeds. Since the October figures are not fully in yet, I'll include the reference point.

Let's start with rents. According to Apartment List's November report, which includes October data, the median rent in Irvine is $3,144 based on the total number of bedrooms.

A one-bedroom is $2,669, and a two-bedroom is $3,271. The difference is only $602, so if you have someone to share with, the two-bedroom is lighter on the wallet per person.

In October, rents increased by 0.4%, and compared to a year ago, they are up by 1.4%. This is slower than California's average of 3.0% but faster than the national average of 0.1%.

The median rent from foreclosure.com as of October 14 is also $3,180, showing no change from the previous month or year. Since the sample is different, you can refer to the direction rather than the amount.

Expanding to all of Orange County, there's the CBRE third-quarter report. The average rent for apartments is $2,999, which is a 1.7% increase from the second quarter, with an occupancy rate of 96.5%.

The occupancy rate refers to the percentage of total units that are occupied. The new supply in the third quarter was 815 units, down from 1,299 units in the second quarter.

Notably, in the net absorption, which is the difference between newly filled units and vacated units, 769 out of 1,356 units came from North OC and South Irvine. While this number isn't exclusive to Irvine, it does indicate a concentration of demand.

Even within the same city, conditions vary depending on the age of the buildings. CBRE noted that complexes built after 2020 tend to have higher vacancy rates. If you're considering moving into a new build, it's worth asking about any move-in incentives.

As for home prices, the California Association of Realtors (C.A.R.) hasn't confirmed the October county statistics yet, so we'll look at the most recent figures from September.

The median sale price for existing single-family homes in Orange County in September was $1.48 million. This is a 1.9% increase from August's $1.4525 million and a 5.6% increase from a year ago's $1.40125 million.

However, sales volume decreased by 0.7% from the previous month and 2.0% from the previous year.

I couldn't find the median transaction value for all of Irvine in October from public data. Instead, I'll fill in with estimated values and ZIP code data.

According to foreclosure.com's automated valuation model, as of October 14, the median home value in Irvine is $1,484,380. This is down 3.84% from a year ago and 0.60% from a month ago.

While the county has increased, why has Irvine decreased? The two figures are not measuring the same thing. One is the median value of existing single-family homes sold in September, while the other is an estimate calculated by an algorithm.

You shouldn't conclude that Irvine is moving in the opposite direction of the county based solely on one estimate.

Looking at neighborhoods, it gets more interesting. According to Resideline's November 2 data, the median transaction price for 234 recent transactions in 92620, which includes Northwood and Woodbury, is $1.46 million.

In 92618, which includes Great Park, the median is $1.45 million based on a sample of 327 transactions. They appear to be almost the same market.

However, looking at the middle 50% transaction range, 92620 spans from $942,000 to $1.98 million, while 92618 ranges from $1.18 million to $1.90 million. The price range in 92620 is much wider, making it difficult to estimate the price of homes I might be interested in based solely on the median.

The current asking median price is $1.66 million for 92620 and $1,586,495 for 92618. These are each $200,000 and $136,495 higher than the recent transaction median, but since the composition of listings is different, it would be misleading to interpret this as a discount.

What I'm paying the most attention to is the speed. In 92620, there are 43 listings with 1 pending, while in 92618, there are 130 listings with 6 pending. Pending means the status is under contract and waiting to close.

The pending ratio compared to listings for the ZIP codes tracked by this firm is between 0.05 and 0.11, but for 92620, it's 0.02, and for 92618, it's 0.05. While this is just a one-day sample, it does seem that the market is on the slower side.

You can't overlook interest rates as a reason for the slowdown. The average 30-year fixed rate from Freddie Mac rose from 7.28% on October 1 to 7.40% on the 8th and 15th, then dropped to 7.24% on the 29th. A year ago, it was 6.17%.

If you take out a $1 million loan on a 30-year fixed rate, the monthly principal and interest would be $6,105 at 6.17% and $6,815 at 7.24%. That's a $710 difference even before property taxes and insurance.

This $6,815 is more than double the median rent for a two-bedroom in Irvine. The threshold for moving from renting to buying is quite high.

If I were a tenant, I wouldn't rush. If the renewal increase is significantly higher than 1.4%, compare it with the new move-in rates for the same complex and nearby new builds.

Landlords and investors have different calculations. Rent increases are slow, and with interest rates in the 7% range, it's tight to match cash flow with new loans.

If you're looking to buy, now might be a good time to negotiate since there are fewer pending transactions. I would first check the pending ratios by ZIP code and then bring up pricing discussions for listings that have been on the market for a while.

Once the C.A.R. figures for October are released, it will be necessary to reassess the county trends. Since the numbers come from various sources and reference dates, make sure to check recent transaction examples for the specific complex before making any agreements.