Housing Analysis
- Thread starter eyephone
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You have been given numerous examples of YoY significant increase in inventory, decreased sales volume, decreased demand and increased time on the market. Why do you ignore these numbers? Also since these are YoY numbers, I really do not understand why one would continue to question seasonality.
The biggest fallacy of your argument is that you think price is the only indicator of a slowdown. I would argue that price is not even really a indicator of a slowdown but rather the result of a slowdown, meaning that once you see prices drop, we are likely well into a slowdown.
In all honesty I respect the people like Eyephone who are willing to make claims with the trending evidence they have, such as calling this housing slowdown. He seems to have foresight... you seem to have hindsight. This is probably why he bought at the lows of 2011 and you waited a few years later and bought higher. Im sure you rexperience of waiting years to buy is what is influencing you to tell people to buy right now. However you have to understand that you waiting during the lowest of the lows, but your advice to buy is coming at the highest of the highs or near highs.
It has been mentioned in this thread that if prices went back to 1-2 years ago, that's a 15-20% drop.
But more to the point, as I stated earlier, if the drop is 15-20%, then that is most likely a wait scenario. However, as I mentioned many times, just because prices are lower, doesn't mean it will be on the house you want.
Seriously? Then you haven't been reading. Isn't that what a whole page was, people arguing against me saying not to wait?
Sure. But is that 5% a slowdown to wait for?
There are 3 issues that are getting intermingled here:
1. The depth of the slowdown
2. If the slowdown is seasonal
3. Without knowing how much of a slowdown, is it worth putting off buying?
Because all those numbers have done the same thing in prior years... what is different? If someone claimed a slowdown in May, thi would be a different conversation. But to say this in fall after a huge run-up isn't really foresight... it's just regurgitation. What i'm trying to do is challenge this notion with better data because in areas like Irvine, it tends to go against the national market.
Hold on. That's not my argument. That's everyone's who says to wait... because prices will be lower and you will save money. At the same time, as stated by not just myself, price can still remain high despite changes in volumes.
So you missed my point. The reason I waited is because the product available at lower prices wasn't the best product. It wasn't where or what we were looking for. That's the precautionary tale, bargains are rarely the good stuff.
Sure, we probably could have settled for something, rode the wave more and then sold and moved again, but we have moved way too many times and just wanted to settle in for the long haul.
No... I get your point. We'll see how this pans out in a few years.
And don't get me wrong... I would never tell anyone to buy anything as overpriced as Delano... that's a decision I would recommend waiting on.
There is NO FEAR in Irvine.
I really meant that, there is no fear in Irvine. I am backing IHO 100%. If your time is long term. Don?t be afraid to buy in Irvine.
Cv said it in jest , but made me think ... this is something one of my smarter clients brought up in a recent meeting
What if ?cycles? are dead ? What if everyone is so spooked by 2008 that the second the market starts to overheat , people run for cover and therefore , the market never really overheats .
This results in a bunch of mini ?rolling cycles ? like 2011, 2013, then 2015 and now 2018 but never really a true , solid bear correction .
Current slowdown may well be setting the stage for next leg higher .
I must say - people may have different opinions on this , but eyephone is quick to catch on to trends early , even if the ultimate % s may be off . In real life , this is half the battle ? trying to catch turning points , many of us spend too much time trying to fine tune % estimates when the numbers are only available in hindsight
Average demographics doesn?t tell the story of who is buying homes in Irvine.
Irvine is full of buyers who don?t report income to the IRS.
If you think the average home buying family in Irvine makes less than $100k/yr, then no way can an attached condo be prices close to $1mil.
How many people do you know that live in Irvine? That own a home or bought a home here?
My advice may be aimed at the minority? but it?s better than telling everyone to wait for a discount without telling anyone what that discount will be.
Not sure who you are referring to. I?ve already said I expect a 5% down by 2020. But I wouldn?t buy because I see a possible doomsday scenario beyond 2020 when we have a US economy slowdown compounded by a China meltdown.
Yeah, I agree with you. Long term will definitely be more safe to buy in Irvine, but I also agree with Kenkoko that Irvine buyers tend to sell and move up every 5 years or so.
I did say 5 years at the low end of my 5-10 parameter.
I tried to google this but what is the average years of ownership in Irvine? That data can be gleaned from the MLS.
Real data always paints a better picture than what people assume is the average.
This reminds me of the time when I kept saying that Irvine homes are less susceptible to price drops because a good number does not finance and many are high down or all cash purchases. Then IrvineRenter wrote an article that supported my claim because average down payments in Irvine were close to 30 or 40 percent which was higher than other OC cities.
irvinehomeowner said:
You have been given numerous examples of YoY significant increase in inventory, decreased sales volume, decreased demand and increased time on the market. Why do you ignore these numbers? Also since these are YoY numbers, I really do not understand why one would continue to question seasonality.
The biggest fallacy of your argument is that you think price is the only indicator of a slowdown. I would argue that price is not even really a indicator of a slowdown but rather the result of a slowdown, meaning that once you see prices drop, we are likely well into a slowdown.
In all honesty I respect the people like Eyephone who are willing to make claims with the trending evidence they have, such as calling this housing slowdown. He seems to have foresight... you seem to have hindsight. This is probably why he bought at the lows of 2011 and you waited a few years later and bought higher. Im sure you rexperience of waiting years to buy is what is influencing you to tell people to buy right now. However you have to understand that you waiting during the lowest of the lows, but your advice to buy is coming at the highest of the highs or near highs.
irvinehomeowner
Well-known member
Mety said:
It has been mentioned in this thread that if prices went back to 1-2 years ago, that's a 15-20% drop.
But more to the point, as I stated earlier, if the drop is 15-20%, then that is most likely a wait scenario. However, as I mentioned many times, just because prices are lower, doesn't mean it will be on the house you want.
Seriously? Then you haven't been reading. Isn't that what a whole page was, people arguing against me saying not to wait?
Sure. But is that 5% a slowdown to wait for?
There are 3 issues that are getting intermingled here:
1. The depth of the slowdown
2. If the slowdown is seasonal
3. Without knowing how much of a slowdown, is it worth putting off buying?
irvinehomeowner
Well-known member
meccos12 said:
Because all those numbers have done the same thing in prior years... what is different? If someone claimed a slowdown in May, thi would be a different conversation. But to say this in fall after a huge run-up isn't really foresight... it's just regurgitation. What i'm trying to do is challenge this notion with better data because in areas like Irvine, it tends to go against the national market.
Hold on. That's not my argument. That's everyone's who says to wait... because prices will be lower and you will save money. At the same time, as stated by not just myself, price can still remain high despite changes in volumes.
So you missed my point. The reason I waited is because the product available at lower prices wasn't the best product. It wasn't where or what we were looking for. That's the precautionary tale, bargains are rarely the good stuff.
Sure, we probably could have settled for something, rode the wave more and then sold and moved again, but we have moved way too many times and just wanted to settle in for the long haul.
No... I get your point. We'll see how this pans out in a few years.
And don't get me wrong... I would never tell anyone to buy anything as overpriced as Delano... that's a decision I would recommend waiting on.
I'm not bold enough to claim how many% it will reduce. I'm not even sure if we will have a slowdown. I just see the flow and it seems like it is slowing down. The thing to consider is when the price starts to reduce it will drop and drop and drop and drop until it is like what the heck? seriously? Just like how it is when it's moving up. A simple graph that shows how it usually cycles in RE BZness. I believe we might be in the beginning of 'fear' stage.
IHO, I think a better poll question would have been ?Are you willing to buy now if prices will go down 5/10/15/20% by the end of 2020?
Another point you fail to consider is the 4 to 6 percent transaction cost. If the market only goes down 5% but you must sell. You are looking at a 10% loss, doubling your loss.
Your counter to that is you know people who lives in their homes 20-30 years or never sells. But the statistic shows people change homes every 5 years. I am not saying nobody lives in their homes 20-30 years. But for every single one of those 20-30 years homeowners there?s got to be 10 times more Homeowners who sells MORE frequently than 5 years to bring that average back to 5.
Another point you fail to consider is the 4 to 6 percent transaction cost. If the market only goes down 5% but you must sell. You are looking at a 10% loss, doubling your loss.
Your counter to that is you know people who lives in their homes 20-30 years or never sells. But the statistic shows people change homes every 5 years. I am not saying nobody lives in their homes 20-30 years. But for every single one of those 20-30 years homeowners there?s got to be 10 times more Homeowners who sells MORE frequently than 5 years to bring that average back to 5.
irvinebullhousing
Well-known member
Mety said:I'm not bold enough to claim how many% it will reduce. I'm not even sure if we will have a slowdown. I just see the flow and it seems like it is slowing down. The thing to consider is when the price starts to reduce it will drop and drop and drop and drop until it is like what the heck? seriously? Just like how it is when it's moving up. A simple graph that shows how it usually cycles in RE BZness. I believe we might be in the beginning of 'fear' stage.
There is NO FEAR in Irvine.
irvinehomeowner
Well-known member
@kenkoko:
Why do you keep throwing out my ?5-10 year have to live in the home? parameter? That?s why it?s there, because of transaction costs.
And quite honestly, if you are buying without that timeframe in mind, maybe you shouldn?t be buying regardless of pricing direction.
And I think there are a good number of people who have stayed 5-10 years... I didn?t say 20-30 or forever.
Why do you keep throwing out my ?5-10 year have to live in the home? parameter? That?s why it?s there, because of transaction costs.
And quite honestly, if you are buying without that timeframe in mind, maybe you shouldn?t be buying regardless of pricing direction.
And I think there are a good number of people who have stayed 5-10 years... I didn?t say 20-30 or forever.
IHO, Are you saying if they stay 5-10 years before selling, the transaction cost become obsolete??? Transaction cost is something people tend not to think of in a market trending upward. But it?s something people need to consider.
My point is that people who are suitable for your advice are in the minority. This is a general discussion. Shouldn?t we use an average person/family in Irvine to frame the discussion? It?s a fact that people move more often than before, making transaction cost a bigger part of the equation. Irvine medium household income is less than 100k. Irvine medium age is less than 35. This is a young city with F level affordability. A average Irvine family will most likely buy their primary home both as a personal need and an investment. People will need to consider the transaction cost and the possibility of home prices decline.
My point is that people who are suitable for your advice are in the minority. This is a general discussion. Shouldn?t we use an average person/family in Irvine to frame the discussion? It?s a fact that people move more often than before, making transaction cost a bigger part of the equation. Irvine medium household income is less than 100k. Irvine medium age is less than 35. This is a young city with F level affordability. A average Irvine family will most likely buy their primary home both as a personal need and an investment. People will need to consider the transaction cost and the possibility of home prices decline.
irvinebullhousing
Well-known member
Mety said:Now it seems to me that IHO is the minority here. Maybe I should back him up. Why is everyone attacking him? Come on guys, be nice.
I really meant that, there is no fear in Irvine. I am backing IHO 100%. If your time is long term. Don?t be afraid to buy in Irvine.
Compressed-Village said:Mety said:I'm not bold enough to claim how many% it will reduce. I'm not even sure if we will have a slowdown. I just see the flow and it seems like it is slowing down. The thing to consider is when the price starts to reduce it will drop and drop and drop and drop until it is like what the heck? seriously? Just like how it is when it's moving up. A simple graph that shows how it usually cycles in RE BZness. I believe we might be in the beginning of 'fear' stage.
There is NO FEAR in Irvine.
Cv said it in jest , but made me think ... this is something one of my smarter clients brought up in a recent meeting
What if ?cycles? are dead ? What if everyone is so spooked by 2008 that the second the market starts to overheat , people run for cover and therefore , the market never really overheats .
This results in a bunch of mini ?rolling cycles ? like 2011, 2013, then 2015 and now 2018 but never really a true , solid bear correction .
Current slowdown may well be setting the stage for next leg higher .
I must say - people may have different opinions on this , but eyephone is quick to catch on to trends early , even if the ultimate % s may be off . In real life , this is half the battle ? trying to catch turning points , many of us spend too much time trying to fine tune % estimates when the numbers are only available in hindsight
irvinehomeowner
Well-known member
Kenkoko said:
Average demographics doesn?t tell the story of who is buying homes in Irvine.
Irvine is full of buyers who don?t report income to the IRS.
If you think the average home buying family in Irvine makes less than $100k/yr, then no way can an attached condo be prices close to $1mil.
How many people do you know that live in Irvine? That own a home or bought a home here?
My advice may be aimed at the minority? but it?s better than telling everyone to wait for a discount without telling anyone what that discount will be.
This is the only part we agree on. Yes, they are what this forum calls FCBs. Irvine is now a minority dominant city so foreign economy will matter. Look around the world, there are very few places outside of USA where economy is great. Just last quarter Chinese investors sold 10 times more US real-estate than they bought. The winds have changed. There are so many headwinds facing the housing market. Better to exercise caution. Have an exit strategy and better factor in the transaction cost before you buy.irvinehomeowner said:
irvinehomeowner said:
Not sure who you are referring to. I?ve already said I expect a 5% down by 2020. But I wouldn?t buy because I see a possible doomsday scenario beyond 2020 when we have a US economy slowdown compounded by a China meltdown.
Compressed-Village said:Mety said:Now it seems to me that IHO is the minority here. Maybe I should back him up. Why is everyone attacking him? Come on guys, be nice.
I really meant that, there is no fear in Irvine. I am backing IHO 100%. If your time is long term. Don?t be afraid to buy in Irvine.
Yeah, I agree with you. Long term will definitely be more safe to buy in Irvine, but I also agree with Kenkoko that Irvine buyers tend to sell and move up every 5 years or so.
irvinehomeowner
Well-known member
Mety said:
I did say 5 years at the low end of my 5-10 parameter.
I tried to google this but what is the average years of ownership in Irvine? That data can be gleaned from the MLS.
Real data always paints a better picture than what people assume is the average.
This reminds me of the time when I kept saying that Irvine homes are less susceptible to price drops because a good number does not finance and many are high down or all cash purchases. Then IrvineRenter wrote an article that supported my claim because average down payments in Irvine were close to 30 or 40 percent which was higher than other OC cities.
irvinehomeowner
Well-known member
By the way, how many years have each of you been in your home? Eyephone is going on 7 years, I know a good number of us have been in our home over 5 years.
I think aquabliss is the only one who moves every 6 months.
I think aquabliss is the only one who moves every 6 months.