Housing Analysis

[irvinehomeowner]

2. Homes are being sold less or slower. It's not seasonal because the hottest season which is June-August has not been so hot in 2018.

However, all the year over year graphs show the same trends... volume and pricing going up during this time and then dropping off August to the December.

Yes, but I wrote, June-August was not hot. Which means it was not selling well in the hottest selling season of the year.

Not sure what you're looking at, but for Irvine homes, prices did go up from June to August.

I posted this several times from Zillow (which you referred me to):
https://www.zillow.com/irvine-ca/home-values/

 

[Mety]

2. Homes are being sold less or slower. It's not seasonal because the hottest season which is June-August has not been so hot in 2018.

However, all the year over year graphs show the same trends... volume and pricing going up during this time and then dropping off August to the December.

Yes, but I wrote, June-August was not hot. Which means it was not selling well in the hottest selling season of the year.

Not sure what you're looking at, but for Irvine homes, prices did go up from June to August.

I posted this several times from Zillow (which you referred me to):
https://www.zillow.com/irvine-ca/home-values/

Yeah, people kept raising the price. But how many got sold?

 

[irvinebullhousing]

Delano still way overpriced.

C'mon... Eastwood is not even close to the beach or elevated.

Overprice is subjective. I think it's overpriced as well. But to many buyers of that specific village, they see it a better investment than the ones near the beach or higher elevated. Just stating facts here.

These buyers buy in Delano with their heart. This is all good. I am sure at this point those are looking for the long run and they like what Eastwood has to offers. The slight decrease is on par with anything close to 1Mil for reduction. Still selling is a good sign.

 

[irvinehomeowner]

2. Homes are being sold less or slower. It's not seasonal because the hottest season which is June-August has not been so hot in 2018.

However, all the year over year graphs show the same trends... volume and pricing going up during this time and then dropping off August to the December.

Yes, but I wrote, June-August was not hot. Which means it was not selling well in the hottest selling season of the year.

Not sure what you're looking at, but for Irvine homes, prices did go up from June to August.

I posted this several times from Zillow (which you referred me to):
https://www.zillow.com/irvine-ca/home-values/

Yeah, people kept raising the price. But how many got sold?

I used the Sales Price, not the List Price option. Still went up.

You can also look at the Irvine Health graph for average days on market and see a definite seasonal pattern.

Show me a graph that supports this non-seasonal slowdown.

 

[meccos12]

is the recent slow down just seasonal?

More numbers to look at:

Sept closed sales is at 2108, which is 24% lower than the 2734 from last year.  In 2006 it was 2186.  Demand is down 15% YoY suggesting we will see continued downtrend in sales in the following months.  Demand is at the lowest levels this time of the year since 2007.
Current active listing is 7201 which is 34% higher than last years which was 5382.  Ave market time was 67 days in 2017, now at 105.

Can anyone here still make the argument this is just seasonal?  These are YoY numbers!

 

[irvinehomeowner]

is the recent slow down just seasonal?

More numbers to look at:

Sept closed sales is at 2108, which is 24% lower than the 2734 from last year.  In 2006 it was 2186.  Demand is down 15% YoY suggesting we will see continued downtrend in sales in the following months.  Demand is at the lowest levels this time of the year since 2007.
Current active listing is 7201 which is 34% higher than last years which was 5382.  Ave market time was 67 days in 2017, now at 105.

Can anyone here still make the argument this is just seasonal?  These are YoY numbers!

Thanks for the numbers.

But are we talking slowdown in sales/demand or slowdown in pricing?

Although somewhat related, you can still have an environment where volume is low and prices are still high. High prices could actually be a reason why volume is low.

 

[meccos12]

But are we talking slowdown in sales/demand or slowdown in pricing?

Capitulated yet?  Diversion responses like the one above suggests you have.

Although somewhat related, you can still have an environment where volume is low and prices are still high. High prices could actually be a reason why volume is low.

If high prices are the reason why volume is low/falling, especially in midst of rising inventory such as our current environment, where do you think prices will go?  Thank you for the set up. 

 

[irvinehomeowner]

But are we talking slowdown in sales/demand or slowdown in pricing?

Capitulated yet?  Diversion responses like the one above suggests you have.

I'm not capitulating.

The mention of a slowdown by eyephone was in regards to pricing I believe because the advice to wait was to save money. But you are giving numbers regarding volume which currently is still a high price environment.

It's not a diversion, I'm just trying to clarify what you consider a "slowdown".

Although somewhat related, you can still have an environment where volume is low and prices are still high. High prices could actually be a reason why volume is low.

If high prices are the reason why volume is low/falling, especially in midst of rising inventory such as our current environment, where do you think prices will go?  Thank you for the set up. 

Again, that's what usually happens during this time of year. How is this ebb/flow different from previous seasons. Prices will go down and then when spring rolls around, prices will go up again.

But I think what you are saying is that because volume of inventory is higher, this is different from previous years. But couldn't have that been said every year prior?

Are you saying that this year is different because we are at a tipping point and prices will not rebound?

What I'm trying to get at is what other factors are you citing for this? If interest rates didn't rise recently and the Dow wasn't experiencing trouble last week... what forces would prevent prices to go back up again?

I think you might be misunderstanding me... I'm not saying "THIS IS SEASONAL!!", I'm asking.... "What makes this different from the seasonal up/downs?".

 

[irvinehomeowner]

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. 

@meccos12:

Isn't Inc saying the same thing I am?

 

[irvinehomeowner]

So let''s define the parameters of a "slowdown":

1. Prices (not volume) drops 5-10%:

To me, that may not be worth waiting depending on your situation.

2. Prices drop 15-20%:

This could be a wait option, depending on what you are looking at.

3. Prices drop over 20%:

Most likely a wait option.

The only thing is to me, scenarios 2 and 3, especially 3, are highly unlikely to happen in Irvine unless some other major downturn occurs.

Are all of you who are on the other side believe that Irvine housing prices are going to drop over 15%?

 

[nosuchreality]

Was 2010 a slow down?

As i remember and retro statistics may disagree, prices were relatively sticky but slowly decreasing, buying was outrageously competitive but volume was abysmal.

So.much so that IMHO, the defining characteristic of the last downturn was actually lack of inventory.

 

[irvinehomeowner]

Here is a different point of view about the slowdown. It?s biased because it?s from a builder but there are points cited like lack of new home construction because of the 08 crash and an influx of millennials looking to buy that could counter a slowdown:
https://www.fool.com/investing/2018/08/30/this-homebuilder-doesnt-see-the-housing-market-slo.aspx

The volume numbers also tell another story that maybe less people are putting their homes for sale because they can?t afford to move up so this scarcity also affects pricing. In my Zillow link, it shows days on market trending Lowe which could mean demand is still high.

There are so many variables which is why I?m asking for more data points to support either side.

 

[lnc]

Builder confidence rises:
http://nahbnow.com/2018/10/builder-confidence-rises-one-point-in-october-remains-at-summer-levels/

Builder confidence in the market for newly-built single-family homes rose one point to 68 in October on the NAHB/Wells Fargo Housing Market Index (HMI). Builder confidence levels have held in the high 60s since June.

?Builders are motivated by solid housing demand, fueled by a growing economy and a generational low for unemployment,? said NAHB Chairman Randy Noel. ?Builders are also relieved that lumber prices have declined for three straight months from elevated levels earlier this summer, but they need to manage supply-side costs to keep home prices affordable.?

?Favorable economic conditions and demographic tailwinds should continue to support demand, but housing affordability has become a challenge due to ongoing price and interest rate increases,? said NAHB Chief Economist Robert Dietz. ?Unless housing affordability stabilizes, the market risks losing additional momentum as we head into 2019.?
...
The HMI index measuring current sales conditions rose one point to 74 and the component gauging expectations in the next six months increased a single point to 75. Meanwhile, the metric charting buyer traffic registered a four-point uptick to 53.

Looking at the three-month moving averages for regional HMI scores, the Northeast rose three points to 57 and the South edged up one point to 71. The West held steady at 74 and the Midwest fell two points to 57.
emphasis added

 

[daedalus]

IME confidence indices are backward-looking indicators.  About as good at making predictions as a rear view mirror is for navigating a road trip.

 

[Mety]

Since IHO thinks he and I are observing the market in anecdotal views I'm afraid there is not going to be an agreement in the end.

He thinks the market is not slowing down although he does think Irvine home prices might come down 5% or so in a year. And I've been just stating what I've seen in the recent market especially under $1m categories with no indication of the slowing down nor moving up although those things I've seen looked very similar to pre-crash/slowdown scenarios. 

But one thing to keep in mind is that IHO is focusing on Irvine market only which he thinks is less vulnerable than other OC areas. But I believe this thread was created not only focusing on the Irvine but the whole RE market nation wide. I do agree Irvine will get hit less in case of slowing down, but the slow down is a slow down even at 1% down.

 

[irvinehomeowner]

Since IHO thinks he and I are observing the market in anecdotal views I'm afraid there is not going to be an agreement in the end.

He thinks the market is not slowing down although he does think Irvine home prices might come down 5% or so in a year. And I've been just stating what I've seen in the recent market especially under $1m categories with no indication of the slowing down nor moving up although those things I've seen looked very similar to pre-crash/slowdown scenarios. 

To be clear, I have been asking if this current slowdown is seasonal because this usually happens at this time of year. Other than prices that keep going up, there haven't been strong factors otherwise.

But one thing to keep in mind is that IHO is focusing on Irvine market only which he thinks is less vulnerable than other OC areas. But I believe this thread was created not only focusing on the Irvine but the whole RE market nation wide. I do agree Irvine will get hit less in case of slowing down, but the slow down is a slow down even at 1% down.

This is true, I am focused on Irvine because this site is an Irvine-centric site. I've pointed that out in my comments.

The issue I have is if the "slowdown" is 1%, then the advice of "waiting" isn't very strong because in my opinion, 1% or 5% is not worth waiting for. And that advice wasn't aimed at some buyer in Florida or Wisconsin.

Now, if you guys are telling me that it's not a seasonal slowdown and we are looking at a 15-20% reduction in prices in *Irvine*... then claim it.

 

[Mety]

Since IHO thinks he and I are observing the market in anecdotal views I'm afraid there is not going to be an agreement in the end.

He thinks the market is not slowing down although he does think Irvine home prices might come down 5% or so in a year. And I've been just stating what I've seen in the recent market especially under $1m categories with no indication of the slowing down nor moving up although those things I've seen looked very similar to pre-crash/slowdown scenarios. 

To be clear, I have been asking if this current slowdown is seasonal because this usually happens at this time of year. Other than prices that keep going up, there haven't been strong factors otherwise.

But one thing to keep in mind is that IHO is focusing on Irvine market only which he thinks is less vulnerable than other OC areas. But I believe this thread was created not only focusing on the Irvine but the whole RE market nation wide. I do agree Irvine will get hit less in case of slowing down, but the slow down is a slow down even at 1% down.

This is true, I am focused on Irvine because this site is an Irvine-centric site. I've pointed that out in my comments.

The issue I have is if the "slowdown" is 1%, then the advice of "waiting" isn't very strong because in my opinion, 1% or 5% is not worth waiting for. And that advice wasn't aimed at some buyer in Florida or Wisconsin.

Now, if you guys are telling me that it's not a seasonal slowdown and we are looking at a 15-20% reduction in prices in *Irvine*... then claim it.

Who said there would be 15-20% reduction?

I think there's only been some observations of how the current market is doing with articles and datas and some personal opinions here and there, but I have not seen anyone bringing that number 20% down except from you. Also for the suggestion for "waiting," I don't think anyone really strongly suggested to wait for buying. The OP did mention maybe it would be smart to see how it turns out until the 2018 tax return is all finished which would be only in couple months, but I don't know where that waiting scenario was plucked in among our conversation.

As for me, all I've been saying throughout all other threads and here is pretty simple - "SELL HIGH". Now or I should say couple months ago was the best time to get the money you want in your pocket. Is that still the case? You still can, if you price your home right, but don't list above the last comp selling price unless your property has the perfect lot location with super high quality timeless upgrades.

You can also ask other professional RE agents and loan officers. They might have more trustful experience you might want to rely more on how the recent market has been lately for the last couple months.

Again, you might not call a 5% slowdown (again the number you brought up) a real slowdown, and that's totally fine. It's just how we word things differently.

 

[eyephone]

I think people already mentioned it, but the lack of foreign buyers should be considered as a factor.

 

[zubs]

Here are your foreign buyers:

@ 2486 today.

 

[Mety]

Here are your foreign buyers:

@ 2486 today.

Is that a lot? I'm not too familiar with foreign buyers.