Housing Analysis

[zubs]

It means don't save money.  If you wanted to try sniffing coke off a hookers ass...now is the time.  Carpe Diem motherfuckers!

 

[paperboyNC]

I think there is a chance of a complete societal collapse in my lifetime after which virtually all assets will be worthless and most people in the world will not survive. I'd say the odds of this exceed the odds of 2008-09 repeating. It's another reason to live it up now and not put all of your eggs in the retirement basket.

so does that mean you're stockpiling cans of beans and jugs of water in your bomb shelter? 

Nah. This article is somewhat useful:https://www.thebalance.com/u-s-economy-collapse-what-will-happen-how-to-prepare-3305690

Some of the highlights from the articles:

If the U.S. economy collapses, you would not have access to credit. Banks would close. Demand would outstrip supply of food, gas and other necessities. If the collapse affected local governments and utilities, then water and electricity would no longer be available. As people panic, they would revert to survival and self-defense modes. The economy would return to a traditional economy, where those who grow food barter for other services.

Keep yourself in top physical shape. Know basic survival skills, such as self-defense, foraging, hunting, and starting a fire. Practice now with camping trips. If you can, move near a wildlife preserve in a temperate climate. That way, if a collapse occurs, you can live off the land in a relatively unpopulated area.

As for cash, it may not be useful in a total economic collapse because its value might be decimated. Stockpiles of gold bullion may not help because they would be difficult to transport if you needed to move quickly. In a severe collapse, they may not be accepted as currency. But it would be good to have a stash of $20 bills and gold coins, just in case. During many crisis situations, these are commonly accepted as bribes.

Honestly it's relatively easy if you live on an acre+ to do the following nowadays:
- Solar panel with battery backup that is completely disconnected from the grid
- Water pump powered by your solar electricity
- Septic tank
- Fruit trees and garden with some reserved canned food

The problem is that in the event of a complete societal collapse, you'd figure that armed men would come and take everything you have..

 

[Mety]

So I wanted to see what everyone's opinion is.  Last down turn was 30-40% (worst ever) , the down turn before that peaked at 10% drop what do people think that this next down turn will be?

How about 18.57% down and the interest rate around 2.895%?

 

[eyephone]

So I wanted to see what everyone's opinion is.  Last down turn was 30-40% (worst ever) , the down turn before that peaked at 10% drop what do people think that this next down turn will be?

How about 18.57% down and the interest rate around 2.895%?

Housing market slowdown could have major impact on U.S. economy, Redfin CEO says
https://www.google.com/amp/s/www.ge...major-impact-u-s-economy-redfin-ceo-says/amp/


Who said there isn?t a slowdown?  ;D

 

[irvinebullhousing]

So I wanted to see what everyone's opinion is.  Last down turn was 30-40% (worst ever) , the down turn before that peaked at 10% drop what do people think that this next down turn will be?

How about 18.57% down and the interest rate around 2.895%?

Housing market slowdown could have major impact on U.S. economy, Redfin CEO says
https://www.google.com/amp/s/www.ge...major-impact-u-s-economy-redfin-ceo-says/amp/


Who said there isn?t a slowdown?  ;D

OLD NEWS.

 

[eyephone]

So I wanted to see what everyone's opinion is.  Last down turn was 30-40% (worst ever) , the down turn before that peaked at 10% drop what do people think that this next down turn will be?

How about 18.57% down and the interest rate around 2.895%?

Housing market slowdown could have major impact on U.S. economy, Redfin CEO says
https://www.google.com/amp/s/www.ge...major-impact-u-s-economy-redfin-ceo-says/amp/


Who said there isn?t a slowdown?  ;D

OLD NEWS.

I had to post it. There is someone on TI that is not convinced. (the person is not you)

 

[eyephone]

So I wanted to see what everyone's opinion is.  Last down turn was 30-40% (worst ever) , the down turn before that peaked at 10% drop what do people think that this next down turn will be?

How about 18.57% down and the interest rate around 2.895%?

Housing market slowdown could have major impact on U.S. economy, Redfin CEO says
https://www.google.com/amp/s/www.ge...major-impact-u-s-economy-redfin-ceo-says/amp/


Who said there isn?t a slowdown?  ;D

OLD NEWS.

I had to post it. There is someone on TI that is not convinced. (the person is not you)

I?m waiting for Iho response watch it?s coming.

 

[irvinehomeowner]

I had to post it. There is someone on TI that is not convinced. (the person is not you)

So let's READ the article to actually see what it says (emphasis mine):

This isn?t a huge problem now, as the housing market tends to slow toward the end of the year. But if the trend holds into next spring ? the busiest time of year in real estate ? some long-term consequences could be on the horizon, Redfin CEO Glenn Kelman said at the 2018 GeekWire Summit.

?If next spring the buyers don?t come back in force willing to pay those prices, this is a change in the U.S. economy,? Kelman said.

So the article has a bunch of conjectures and ifs... I can do that all day:

IF zombies were to rise, Irvine real estate prices will take a dive.

When you look at the article more closely, the title is a catch line, it's really just a thinly veiled advertisement for what Redfin is doing.

It has no definitive proof that this isn't more than what normally happens at this time of year... it even says that.

So that's all I'm asking for, better evidence that this isn't just the normal slowdown or a dead cat bounce.

Links to articles full of "ifs" are all over the Internet, give me one with a more thorough "analysis" since eyephone can't give me one himself.

 

[eyephone]

I had to post it. There is someone on TI that is not convinced. (the person is not you)

So let's READ the article to actually see what it says (emphasis mine):

This isn?t a huge problem now, as the housing market tends to slow toward the end of the year. But if the trend holds into next spring ? the busiest time of year in real estate ? some long-term consequences could be on the horizon, Redfin CEO Glenn Kelman said at the 2018 GeekWire Summit.

?If next spring the buyers don?t come back in force willing to pay those prices, this is a change in the U.S. economy,? Kelman said.

So the article has a bunch of conjectures and ifs... I can do that all day:

IF zombies were to rise, Irvine real estate prices will take a dive.

When you look at the article more closely, the title is a catch line, it's really just a thinly veiled advertisement for what Redfin is doing.

It has no definitive proof that this isn't more than what normally happens at this time of year... it even says that.

So that's all I'm asking for, better evidence that this isn't just the normal slowdown or a dead cat bounce.

Links to articles full of "ifs" are all over the Internet, give me one with a more thorough "analysis" since eyephone can't give me one himself.

I?ll hit you with the facts.

The following are decling or downward trends:
Building permits, existing home sales, pending home sales

Top it off with increasing interest rates. Also, building supplies are higher due to tarrifs which marginalize the margins for builder and contractors.

 

[irvinehomeowner]

I?ll hit you with the facts.

The following are decling or downward trends:
Building permits, existing home sales, pending home sales

But is that any different from previous years/cycles? Any graph will show you the same behavior.

What is different that will make this a *sustained* slowdown?

Top it off with high interest rates.

This might be difference. But again, it depends on how high the rates go and if they do.

For a few years, people kept saying that rates could not go any lower and they kept going lower.. I think even SGIP was shocked by how low they went. Then they said rates will rise... but they didn't.

So is this the year they will finally rise and keep rising? Can the market sustain 6-7% rates again (which is actually low compared to previous decades)?

 

[daedalus]

The market would survive 6-7% rates.  Today's prices would not.

 

[irvinebullhousing]

If speculation and pure appreciation plays remove from housing the equation, then prices will stabilize. A house is a roof over your head, a shelter and a place to raise your family. That is evident with institutional and Wall Street purchased has all aborted single family homes purchased, but holding and even withdrawal current listing as the market soften. With those that in the process of buying, this revert back to a house purchase is for the real need of buying. To put root down and to raise a family. Of course in the long run if they stay put and continue to pay down the mortgage, they will out right own it. Market will go up and down. When you need to settle then does it matters if rate is high and prices is high, the real question is will you able to afford it? Will you able to be a renters for as long as it takes until you believe that it bottom. Some does not have a choice and choose their best path. These discussed before on this forum, what if prices is stagnant during the slow cycle of the year and interest continue to go higher. Then when the buying season will comes and drive prices higher with higher rate. That is a double whammy.

 

[Kenkoko]

Homeowners are rushing to sell. Inventory has gone way up.
https://www.ocregister.com/2018/10/...owners-rush-to-sell-listings-up-34-in-a-year/

A few people like me had been saying for awhile that the market has turned. But if you want to be the next knife catcher, keep believing this isn't anything unusual like IHO. Keep waiting for more lagging indicators to surface.

 

[irvinebullhousing]

No, you are not a few that believe prices will come down drastically and waiting, many fears right now. Psychology is this, when prices does go lower, then they believe that it will continue to go lower, just like when the frenzy buy, people believe that it will continue to go higher and place their bet.

Rather than shutout, tune in and dig deeper. The best find is when people given up and sideline.

 

[irvinehomeowner]

Homeowners are rushing to sell. Inventory has gone way up.
https://www.ocregister.com/2018/10/...owners-rush-to-sell-listings-up-34-in-a-year/

A few people like me had been saying for awhile that the market has turned. But if you want to be the next knife catcher, keep believing this isn't anything unusual like IHO. Keep waiting for more lagging indicators to surface.

You are misrepresenting my posts.

I have been asking how this current "slowdown" is different from what we usually get at this time of year.

Rising inventory, lower prices, lower sales volume etc are usually consequences of the cyclical nature of real estate... but it takes other factors to be a real downturn.

You guys haven't even defined the quantity of a slowdown but you make it sound like it's going to be drastic when the poll I posted shows 5% down as what most people think. Is that a knife catcher scenario?

Here is what I think eyephone has posted as other external factors that will contribute to a *sustained* slowdown and why buyers should wait:

1. Rising interest rates (which is zero sum to me because it will affect affordability more for those financing than whatever price drops happen)
2. Tariff/Trade war
3. Trump Tax Policy

Now... given what's happening with the Dow, that to me, could have more impact but who here predicted that? The Dow poll I posted didn't.

Are those first 3 enough to create a knife catching free fall?

 

[lnc]

But the price is still up from a year ago right?  That OCR article leave one important data out for some reason. 

It is still possible that with the inventory goes up, sales goes down but the price continue to go up modestly.  With strong economy, relative low interest rate and extremely low inventory level, the market can still absorb some increase in inventory before it will affect the prices.

Seattle area market for example is also in similar situation  as OC and their inventory is up 78%, sales down 29% but their inventory level is still only 2.8 month of supply.  Need to reach over that 5-6 month of supply level in order to see a price drop. 

I do agree the market has turned, but for now it only turning from a seller's market to a neutral market. 

 

[eyephone]

Homeowners are rushing to sell. Inventory has gone way up.
https://www.ocregister.com/2018/10/...owners-rush-to-sell-listings-up-34-in-a-year/

A few people like me had been saying for awhile that the market has turned. But if you want to be the next knife catcher, keep believing this isn't anything unusual like IHO. Keep waiting for more lagging indicators to surface.

You are misrepresenting my posts.

I have been asking how this current "slowdown" is different from what we usually get at this time of year.

Rising inventory, lower prices, lower sales volume etc are usually consequences of the cyclical nature of real estate... but it takes other factors to be a real downturn.

You guys haven't even defined the quantity of a slowdown but you make it sound like it's going to be drastic when the poll I posted shows 5% down as what most people think. Is that a knife catcher scenario?

Here is what I think eyephone has posted as other external factors that will contribute to a *sustained* slowdown and why buyers should wait:

1. Rising interest rates (which is zero sum to me because it will affect affordability more for those financing than whatever price drops happen)
2. Tariff/Trade war
3. Trump Tax Policy

Now... given what's happening with the Dow, that to me, could have more impact but who here predicted that? The Dow poll I posted didn't.

Are those first 3 enough to create a knife catching free fall?

The dow has a factor too. There are people that use their 4oh1 for down payment to buy a house.

 

[irvinebullhousing]

But the price is still up from a year ago right?  That OCR article leave one important data out for some reason. 

It is still possible that with the inventory goes up, sales goes down but the price continue to go up modestly.  With strong economy, relative low interest rate and extremely low inventory level, the market can still absorb some increase in inventory before it will affect the prices.

Seattle area market for example is also in similar situation  as OC and their inventory is up 78%, sales down 29% but their inventory level is still only 2.8 month of supply.  Need to reach over that 5-6 month of supply level in order to see a price drop. 

I do agree the market has turned, but for now it only turning from a seller's market to a neutral market.

The real estate market is different now, and it not going to happen like it did during the last down turn. I really see it would be a mistake to not consider buying if you needed to and able to, only to hold out because you think it going to crash. The crash is not going to come from real estate. Other sectors will and it may send some small wave to housing, but it won't be a shock like we witness last great recession. It will be different this time and housing is your safe harbor.

 

[Mety]

But the price is still up from a year ago right?  That OCR article leave one important data out for some reason. 

It is still possible that with the inventory goes up, sales goes down but the price continue to go up modestly.  With strong economy, relative low interest rate and extremely low inventory level, the market can still absorb some increase in inventory before it will affect the prices.

Seattle area market for example is also in similar situation  as OC and their inventory is up 78%, sales down 29% but their inventory level is still only 2.8 month of supply.  Need to reach over that 5-6 month of supply level in order to see a price drop. 

I do agree the market has turned, but for now it only turning from a seller's market to a neutral market.

Yes, the price is still above last year from this season. But it sort of ceased moving up. I do see the prices going down from the last comp sold homes also. The price has definitely started to fall.

For IHO's seasonal argument, it is not the same since the market' moving flow is different from last year's. If you compare this year's seasonal affect to the last years', there's a quite a bit of significant differences in terms of volume of the sales and the inventories. It's been the slowest in the last 6 years.

So is this just a seasonal thing coming from Sept-Oct-ish time? I don't think so. Is this a falling knife phase already? That we shall see.

 

[eyephone]

Let?s face it, there are a lot of people in which the house is their retirement. They don?t have any other investments/assets. Believe it or not it?s true. They don?t have time to wait or something.