Housing about to Blowup

[jamboreedude]

I've lived in Irvine since '79 when I was 5 years old.  All I want to do is buy a place here I will live in until I retire (eventually).  What kind of salary is required at this point even, for a new buyer?  I'm a DINK and it still looks impossible to buy a decent condo.

~S

In 79 condos were going for $15k.  Prices didn't rise to $500k overnight.  What have you been doing all this time?  Are you quattroporte trolling under a new account name?

No, but I think you are trolling me and you answered with a totally worthless reply.  Thanks, I'm glad you took the time out of your day for that.

first get prequalified for a mortgage. you will know how much house you can afford after that?

How much house can you buy?
By Bankrate.com http://www.bankrate.com/finance/mortgages/how-much-house-can-you-buy--1.aspx

 

[Soporific]

I've lived in Irvine since '79 when I was 5 years old.  All I want to do is buy a place here I will live in until I retire (eventually).  What kind of salary is required at this point even, for a new buyer?  I'm a DINK and it still looks impossible to buy a decent condo.

~S

In 79 condos were going for $15k.  Prices didn't rise to $500k overnight.  What have you been doing all this time?  Are you quattroporte trolling under a new account name?

No, but I think you are trolling me and you answered with a totally worthless reply.  Thanks, I'm glad you took the time out of your day for that.

first get prequalified for a mortgage. you will know how much house you can afford after that?

How much house can you buy?
By Bankrate.com http://www.bankrate.com/finance/mortgages/how-much-house-can-you-buy--1.aspx

I've done that, I can get more than I want really.  I was just curious as to who was buying this stuff with a median income of $86K in Irvine.  Thanks though.

~S

 

[Coleman]

Median is a tricky statistic to think about when there is a lot of "inexpensive" housing in Irvine.

 

[usctrojancpa]

Is there any data/website where we can find out how many house change to pending last month?

thanks

There are currently 131 homes in Irvine in Pending status (not including Backup).  71 of them changed status to Pending within the last 30 days.

If you include those accepting Back up offers, the number jumps to 333 in current status and 237 within the last 30 days.

Current inventory = 503, which has dropped a little.  There were 242 closed sales in the last 30 days so, we are still at ~2.1 months of supply

Hence my statement that we are still in a seller's market.  Once we get above 3-3.5 months of inventory then we are in a neutral market.  It doesn't become a buyer's martket until we have over 6 months of inventory so with the current sales volume we would need about 1400-1500 homes on the market.  The numbers don't lie. 

 

[morekaos]

Rates really have exploded.  After a long time of slowly trending lower, they are up about 5/8% over what they were a month ago or so.  I watched Amerisave daily, waiting for a $5k credit on 3.5% fixed.  One day the credit jumped to over $6k.  I said to myself I would give them a call the next day, but the next day the credit dropped to about $3k, so I waited.  Right now to get 3.5% I would have to pay $15k.

If you think that blew I think we are more in line for something like this....That is 1994 and yes,  that is up 3% in 12 months, For those of us who were around it is the sole reason OC went BK that year, I remember this well.

...and to further this argument...

6% Treasury yields? May come sooner than you think
http://www.cnbc.com/id/100926417

The Federal Reserve will lose control of interest rates as the "great rotation" out of bonds into equities takes off in full force, according to one market watcher, who sees U.S. 10-year Treasury yields hitting 5-6 percent in the next 18-24 months.

"It is our opinion that interest rates have begun their assent, that the Fed will eventually lose control of interest rates. The yield curve will first steepen and then will shift, moving rates significantly higher," said Mike Crofton, President and CEO, Philadelphia Trust Company told CNBC on Wednesday.

 

[yaliu07]

Is there any data/website where we can find out how many house change to pending last month?

thanks

There are currently 131 homes in Irvine in Pending status (not including Backup).  71 of them changed status to Pending within the last 30 days.

If you include those accepting Back up offers, the number jumps to 333 in current status and 237 within the last 30 days.

Current inventory = 503, which has dropped a little.  There were 242 closed sales in the last 30 days so, we are still at ~2.1 months of supply

Thanks Marty.  But where did you find this data?

 

[Irvineshopper]

MLS.  I have full access

 

[calimark]

The impact of mortgage rate increases aside (which is hard to ignore, but just for the moment), I wonder to what extent there is a "quality of listing" and "seasonality"/"timing"/"time on market" effect here... there's certainly a high season (spring/summer?) for home sales during the calendar year, but it appears that higher quality/more desirable (at least to me) homes were more plentiful earlier this spring/summer... those quality homes sold quickly, so what's left are less desirable homes sitting on the market towards the end of the annual real estate sales season (these are the ones dropping prices).  Certainly rising inventories will impact pricing too, but just thought that there might be some kind of effect here (quality bias)... maybe someone who's more familiar with sales statistics/experiences can comment on this effect, if any.

 

[paperboyNC]

The impact of mortgage rate increases aside (which is hard to ignore, but just for the moment), I wonder to what extent there is a "quality of listing" and "seasonality"/"timing"/"time on market" effect here... there's certainly a high season (spring/summer?) for home sales during the calendar year, but it appears that higher quality/more desirable (at least to me) homes were more plentiful earlier this spring/summer... those quality homes sold quickly, so what's left are less desirable homes sitting on the market towards the end of the annual real estate sales season (these are the ones dropping prices).  Certainly rising inventories will impact pricing too, but just thought that there might be some kind of effect here (quality bias)... maybe someone who's more familiar with sales statistics/experiences can comment on this effect, if any.

Also sellers continued to bump up prices by 2% a month or more even when the market cooled down. A lot of sellers get reports of sales that closed weeks ago that went into escrow months-ago and are thus months behind in awarenesss of what the market is doing.

 

[quattroporte]

The impact of mortgage rate increases aside (which is hard to ignore, but just for the moment), I wonder to what extent there is a "quality of listing" and "seasonality"/"timing"/"time on market" effect here... there's certainly a high season (spring/summer?) for home sales during the calendar year, but it appears that higher quality/more desirable (at least to me) homes were more plentiful earlier this spring/summer... those quality homes sold quickly, so what's left are less desirable homes sitting on the market towards the end of the annual real estate sales season (these are the ones dropping prices).  Certainly rising inventories will impact pricing too, but just thought that there might be some kind of effect here (quality bias)... maybe someone who's more familiar with sales statistics/experiences can comment on this effect, if any.

Also sellers continued to bump up prices by 2% a month or more even when the market cooled down. A lot of sellers get reports of sales that closed weeks ago that went into escrow months-ago and are thus months behind in awarenesss of what the market is doing.

I agree. I think there is a lag of about 2 to 3 months. I wonder how the market is going to look like in the winter, which is a down season anyways.

 

[paperboyNC]

I agree. I think there is a lag of about 2 to 3 months. I wonder how the market is going to look like in the winter, which is a down season anyways.

My prediction: Desirable homes that are priced right will fly off the market (as they always do) while overpriced or undesirable homes might take 90 days to go pending (as they do in a more neutral market). Motivated sellers will need to price homes aggressively and hope they get bid up.

 

[ocerdoc]

I am waiting to pull the trigger.  As unpredictable as it is, I am hoping for a drop in real estate prices in irvine in the next year or so, mainly driven by increase in inventory and sluggish economic recovery, what do you guys think?  Although I am sure we will never go back to 2009-2010 prices, hope we can get close.

 

[iacrenter]

I am waiting to pull the trigger.  As unpredictable as it is, I am hoping for a drop in real estate prices in irvine in the next year or so, mainly driven by increase in inventory and sluggish economic recovery, what do you guys think?  Although I am sure we will never go back to 2009-2010 prices, hope we can get close.

Doubtful unless there is a major market disruption within the next 12 months. Prices will probably still rise but at a more moderate/sustainable pace.

I know there is much talk about a significant rise (?200-300 basis points) in interest rates over the next 12-24 months as the Fed takes the gas off the pedal for the QE program. It should put some damper on RE but not sure how it will impact Irvine given the large amount of all cash deals/foreign buyers.

 

[test]

Since mid-May, the Dow Jones Home Construction Index has plummeted roughly 25%, and it's in negative territory year-to-date.

http://www.profitconfidential.com/r...ollapse-in-homebuilder-stock-prices-tells-us/

 

[Irvinecommuter]

Interesting to see how much longer this can continue...

More than half of all homes sold last year and so far in 2013 have been financed without a mortgage, according to an analysis by economists at Goldman Sachs Group.

The Goldman analysis also estimates that around 44 cents of every $1 of homes sold currently is being financed, compared to 67 cents before the crisis.

Purchase-mortgage origination volumes have fallen from around $1.5 trillion in 2005, when the housing market peaked, to around $500 billion in each of the last two years.

http://blogs.wsj.com/developments/2...s-are-being-purchased-with-cash/?mod=yahoo_hs

 

[yaliu07]

is it me or does the listing price seems to drop down a little lately?

 

[quattroporte]

The listing prices are coming down.

 

[quattroporte]

Looks like Lennar is having a hard time selling their homes at Central Park West. This is the most current information as of today on their website.

Madison at Central Park West
From $400,000s
From 1,332 - 1,920 sq. ft.
1 Quick Move-In Homes

Manhattans at Central Park West
From $700,000s
From 1,825 - 2,349 sq. ft.
4 Quick Move-In Homes

Soho at Central Park West
From $500,000s
From 1,538 - 1,818 sq. ft.
3 Quick Move-In Homes

Also, this home in the same community had a price reduction from $658,000 to $635,000 in 11 days. I am not sure if its being sold by Lennar or by someone who is trying to flip it. http://www.redfin.com/CA/Irvine/43-Soho-92612/home/49771555

 

[usctrojancpa]

Looks like Lennar is having a hard time selling their homes at Central Park West. This is the most current information as of today on their website.

Madison at Central Park West
From $400,000s
From 1,332 - 1,920 sq. ft.
1 Quick Move-In Homes

Manhattans at Central Park West
From $700,000s
From 1,825 - 2,349 sq. ft.
4 Quick Move-In Homes

Soho at Central Park West
From $500,000s
From 1,538 - 1,818 sq. ft.
3 Quick Move-In Homes

Also, this home in the same community had a price reduction from $658,000 to $635,000 in 11 days. I am not sure if its being sold by Lennar or by someone who is trying to flip it. http://www.redfin.com/CA/Irvine/43-Soho-92612/home/49771555

That resale is a private seller (husband/wife) who bought it on 7/8/13 for $530k from Lennar and is trying to flip it for a profit. 

 

[morekaos]

....rates are the "thermal exhaust port" of housing..

http://www.youtube.com/watch?v=Q7hn3XImO0U

[youtube]http://www.youtube.com/watch?v=Q7hn3XImO0U[/youtube]