Ready2Downsize
Well-known member
Our neighborhood (top end of Northwood Pointe) dropped 20-30% and houses sat and sat. Multiple offers didn't come in until end of 2012.
Beacon Park- Buy Now or Wait!?
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Hard to time the market. btw, Average cycle for bear market is <1 year. Average is 10 months since 1929. If you are planning to stay put for a while no point of timing. Trying to time the market is like gambling. Based on looking at the current activity, looks like housing market is actually picking up since end of last year.
btw, do you meet all the check marks of being able to afford a house, than probably buy (i.e. Back-end DTI<30%, Down payment >20%, stable job, emergency savings of >6 months of expenses after down payment, planning to stay >5 years). If not, than don't buy.
Houses might go up, might go down or might stay the same and it could be different for different areas of the country.
When the market crashed in 1987, stocks rebounded but later fell back down. Many stocks were lower than their crash lows of the Oct 87 crash by December and yet houses continued to rise until they peaked out in 1989. They started to rise again nationally a few years later but the OC bankruptcy led to a prolonged slump locally.
The bear market that began in 2000 did nothing to deter houses from rising, maybe even encouraged people to buy real estate rather than stocks.
There ya have my opinion. If you need a place to live, buy something if you can afford it, like it for the LONG term (it's big enough in the right school district, close enough to work, etc for a LONG time cuz you never know......... it might be your forever home whether you like it or not).
Bottom line - Market knows.
Hence the $507/sqft asking for 88 Cunningham, with $350 HOA. While most homes around lambert ranch are closing at approx. $450/sqft, and this home being so huge should have even lower per sqft rate, it is infact listed at $507! Even if it closes 5-7% below LP, it will be more expensive home compared to the homes around that have MR.
For buyers, the choices are, you wanna pay over time (MR) or you wanna pay upfront.
I drove through BP area and went to their sales office where they mentioned about a plan of building 9500+ homes in next 5+ years in there. On my drive back out of IR to LA, Google maps diverted me to some place in Tustin and i was kinda blow away by the ghett-o-ness i felt driving through or i might be in the wrong neighborhood but whatever seems to be the case, i can never see myself living in places of that nature - no matter how much lower the price may be, and hence bought a condo in Portola Springs.
Perhaps, i am not a Tustin/OC boy....just moving in IR soon...so will have a pretty solid idea about the neighboring cities... i have been to IR/NewPort/Huntington/Laguna multiple times, but thats about it for my OC experience...as i have been living in Pasadena
Don't blame google maps, blame the driver.
irvinehomeowner
Well-known member
It depends on the neighborhood and product, we bought during the peak and sold it for only 5% less (we had 3 offers).tz said:
I doubt the price will go down materially at Beacon Park/Irvine. Once Beacon's K-8 school and Portola High School opens in the late 2016 and 2017, the sales are going to pick up noticeably.
Economy in U.S., California, and Orange County are all strong. Orange County's job market is very strong with thousands of net additions a month and pick up in wage growth. Housing supply is still very low compared to what is needed to meet demand.
Additionally, household debt service ratio is at 35 year historic low (see chart below - household debt service and financial obligation ratio). There is a high correlation between household debt service ratio and housing bubble/bust. Also, mortgage obligation is at a reasonable range to rent cost in OC. I don't forsee any significant drop but more of a slower price increase or very small correction at best. If you plan to stay 5+ years, I say buy now while you can get some incentives for a new home and mortgage rate is super low.
http://www.calculatedriskblog.com/2016/01/fed-q3-household-debt-service-ratio.html
Economy in U.S., California, and Orange County are all strong. Orange County's job market is very strong with thousands of net additions a month and pick up in wage growth. Housing supply is still very low compared to what is needed to meet demand.
Additionally, household debt service ratio is at 35 year historic low (see chart below - household debt service and financial obligation ratio). There is a high correlation between household debt service ratio and housing bubble/bust. Also, mortgage obligation is at a reasonable range to rent cost in OC. I don't forsee any significant drop but more of a slower price increase or very small correction at best. If you plan to stay 5+ years, I say buy now while you can get some incentives for a new home and mortgage rate is super low.
http://www.calculatedriskblog.com/2016/01/fed-q3-household-debt-service-ratio.html
tz said:
Hard to time the market. btw, Average cycle for bear market is <1 year. Average is 10 months since 1929. If you are planning to stay put for a while no point of timing. Trying to time the market is like gambling. Based on looking at the current activity, looks like housing market is actually picking up since end of last year.
btw, do you meet all the check marks of being able to afford a house, than probably buy (i.e. Back-end DTI<30%, Down payment >20%, stable job, emergency savings of >6 months of expenses after down payment, planning to stay >5 years). If not, than don't buy.
Ready2Downsize
Well-known member
tz said:
Houses might go up, might go down or might stay the same and it could be different for different areas of the country.
When the market crashed in 1987, stocks rebounded but later fell back down. Many stocks were lower than their crash lows of the Oct 87 crash by December and yet houses continued to rise until they peaked out in 1989. They started to rise again nationally a few years later but the OC bankruptcy led to a prolonged slump locally.
The bear market that began in 2000 did nothing to deter houses from rising, maybe even encouraged people to buy real estate rather than stocks.
There ya have my opinion. If you need a place to live, buy something if you can afford it, like it for the LONG term (it's big enough in the right school district, close enough to work, etc for a LONG time cuz you never know......... it might be your forever home whether you like it or not).
Yeah what you guys are saying makes sense. I guess we r still traumatized from the last bubble and crash so I am over-thinking everything and trying (and failing? 
) to be smarter this time. We live in our own place right now (town home) which we bought after the market crashed in 2009. Finally recently sold our bubble-era bought home in the bay area. There is no urgent need to move as far as school (since we r in a great elementary school at walking distance in South OC), however our current place has been tight for a while now as our family grew. So I guess at this point it is a want vs need decision for us. If we buy a 1.15 mil home at 2500/2600 sq ft in BP we would be making a 40/45 percent down payment (FHA loan) but wud have DTI ratio at 40%. We had initially hoped that after we sell our bay area home we would buy our forever home ...i.e around 2700/3000 sq ft + decent back yard at our price point. However since prices went crazy, now for same budget we r at 2500 sq ft and a small yard. After Feb/march 2017 we can do a conventional loan, but if rates have risen by then, our payments would still be similar. In this scenario, where we have waited so long, maybe it is wise to wait a little longer as more inventory comes on the market in Spring. OR we wait till 2017 when we can do a conventional loan and avoid the PMI on FHA loan. OR we take the incentives being offered in a BP house right now and hope prices remain stagnant at worst :
) to be smarter this time. We live in our own place right now (town home) which we bought after the market crashed in 2009. Finally recently sold our bubble-era bought home in the bay area. There is no urgent need to move as far as school (since we r in a great elementary school at walking distance in South OC), however our current place has been tight for a while now as our family grew. So I guess at this point it is a want vs need decision for us. If we buy a 1.15 mil home at 2500/2600 sq ft in BP we would be making a 40/45 percent down payment (FHA loan) but wud have DTI ratio at 40%. We had initially hoped that after we sell our bay area home we would buy our forever home ...i.e around 2700/3000 sq ft + decent back yard at our price point. However since prices went crazy, now for same budget we r at 2500 sq ft and a small yard. After Feb/march 2017 we can do a conventional loan, but if rates have risen by then, our payments would still be similar. In this scenario, where we have waited so long, maybe it is wise to wait a little longer as more inventory comes on the market in Spring. OR we wait till 2017 when we can do a conventional loan and avoid the PMI on FHA loan. OR we take the incentives being offered in a BP house right now and hope prices remain stagnant at worst :
Cornflakes
Active member
eyephone said:
Bottom line - Market knows.
Hence the $507/sqft asking for 88 Cunningham, with $350 HOA. While most homes around lambert ranch are closing at approx. $450/sqft, and this home being so huge should have even lower per sqft rate, it is infact listed at $507! Even if it closes 5-7% below LP, it will be more expensive home compared to the homes around that have MR.
For buyers, the choices are, you wanna pay over time (MR) or you wanna pay upfront.
The Case-Shiller index is way more extended today than 1987 or 2000. IMHO this is not a pretty chart to buy into. Color me impressed if stocks do indeed crash and the Fed approves negative interest rates to kick the can further down the road. Til then I'm hiding in my rabbit hole.
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Ready2Downsize said:
but wud have DTI ratio at 40%.
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40% DTI? You are way overbuying. Don't do it unless you are expected to get double digit raises. DTI of 40% is way too high and you will be stressed all the time to meet various payments. Thus, the answer is not yet, not at BP or find a place with no MR or go to a lower price point.
[/quote]
40% DTI? You are way overbuying. Don't do it unless you are expected to get double digit raises. DTI of 40% is way too high and you will be stressed all the time to meet various payments. Thus, the answer is not yet, not at BP or find a place with no MR or go to a lower price point.
Looked at Ladera Ranch some time ago. Their HOA when combined with MR/tax comes out to be similar payments on same priced home as the newer higher tax rate areas in Irvine. Their HOA dues are significantly higher, around $350 for most homes we looked at and inside covenant hills, the gated community HOA r around $500. We eventually decided to buy in Irvine after looking extensively in South OC because we felt it is a better value and safer long term investment.It is centrally located, better schools, more diverse etc. It was a bit of an adjustment though to go from looking at 1 million dollar grand homes in Ladera or Coto to the cookie cutter Irvine homes which dont "feel" like million dollar homes. But GP seemed like a good compromise because you can get bigger yards and homes are beautiful and it doesn't feel cookie cutter like SG or PS. BP pricing is ridiculous though so we are still waiting on the sidelines.
tz said:
I drove through BP area and went to their sales office where they mentioned about a plan of building 9500+ homes in next 5+ years in there. On my drive back out of IR to LA, Google maps diverted me to some place in Tustin and i was kinda blow away by the ghett-o-ness i felt driving through or i might be in the wrong neighborhood but whatever seems to be the case, i can never see myself living in places of that nature - no matter how much lower the price may be, and hence bought a condo in Portola Springs.
Irvine Fanatic said:dream16 said:
Tustin ghetto?You must not get out much.
Perhaps, i am not a Tustin/OC boy....just moving in IR soon...so will have a pretty solid idea about the neighboring cities... i have been to IR/NewPort/Huntington/Laguna multiple times, but thats about it for my OC experience...as i have been living in Pasadena
dream16 said:Irvine Fanatic said:dream16 said:
Tustin ghetto?
Perhaps, i am not a Tustin/OC boy....just moving in IR soon...so will have a pretty solid idea about the neighboring cities... i have been to IR/NewPort/Huntington/Laguna multiple times, but thats about it for my OC experience...as i have been living in Pasadena
Don't blame google maps, blame the driver.