Housing Analysis

[irvinebullhousing]

And here another case in point for waiting. The time line keeps moving forward. If you can buy now and decided to wait, can you wait 3 or 5 more years before you take the the plunge?

https://www.etftrends.com/portfolio-construction-channel/housing-has-the-recession-3-years-off/?utm_source=Yahoo&utm_medium=referral&utm_campaign=ReadMore

That "analysis" is weaker than Saudi Arabia's murder defense.  Like reading tea leaves. 

"Last night I drank 1 too many jalapeno popper tequilas and shit the bed.  The last time that happened, a recession occurred 3 years later.  Looks like we'll be in trouble in 2021!"

Are you sure you quoting the same analysis? Simply put it this way., when was the last time you drive on the 405, 110, 91, 105? We keep expanding and yet our roads way are still completely over capacity. Housing will need and required for all these growth in population. And housing will continue to grow to try to support these demands. Yes price in LA area of your is extraordinary high, is there more lands for developer to build or it?s more like tear down and rebuild. Do you think it?s cheaper to build on raw land vs. gentrification in DTLA?

We all have our own analysis to bring us our own comforts regardless of what the experts say. Go tell Sears employees that we are in the best of economic cycle and that the Tax Cut and Job Acts is the best thing for the economy. And you either get a middle finger or might get a punch in the face. I say that with respects.

 

[Mety]

Also, a TI member mentioned that their family member got $50k credit when they bought a new home.

Is it just me or are there many quick move ins? (New construction)

There are more quick move-ins than usual.

But just say everything is seasonal. We will say it's seasonal even after $100k discount from a detached condo sale. Yeah, it's just seasonal when there are lots of less transactions than the same time last year. Come on, it's only seasonal when even Delano is having a price drop in a newer phase. Don't you get the seasonal thing yet when the home prices are even getting more and more like close to last year's range?

 

[Mety]

It is happening. Mety recently posted a house that sold for around $100k less than the original price asking.

Such compelling evidence!!!

IHO, I guess you are being sarcastic here because it's only one example, but by now I have shown you quite a bit of examples of homes with reduced prices and I also have shown you examples of other things like how the price range has gotten a lot higher than you think from 2 years ago and so on. All those things were single examples, but they are all speaking the same story. Hence they are not a singular example anymore. Other members also have posted many homes with discount prices.

You should show examples also instead of pointing out or asking what you disagree on. All I got from you is #seasonal. Come on, bring some examples to back up what you are saying. It could be an article, Redfin link, or even a single example like Delano.

 

[irvinehomeowner]

@Mety:

The burden of proof isn't on me. Seasonality is the default... if this is different, the proof of burden is on all of you to show me otherwise.

All those things you bring up... have all happened in prior years... there were many quick move-ins when prices were still going up... it just happens at this time of year.

I know there is a consensus on this board that it is more than just seasonality, even SGIP has mentioned this being a slowdown, but again, no one has defined what type of slowdown and how large... because if it's only a small slowdown (5%?), what do you really save by the "wait to buy" advice being given by others?

And you must not be reading, both Inc and I have posted links to other articles saying why this might not be a "slowdown".

I'll re-cite them here so you don't have to scroll and search:

1. Lack of new product because of the last bubble crash where builders basically went into hibernation and new construction almost came to a standstill.

2. Aging Millenials who realize they can't live with their parents forever and actually need to go out and buy a home.

3. Still a historically low interest rate environment

4. Some cause for concerns in the stock market and buying real estate usually has a good return over a longer period of time.

5. Other areas like Seattle, where volume numbers are down but prices are still high.

6. Irvine is the best and prices never stay low for long!!!!!!!!! #LastToFallFirstToRise

And since eyephone wants to use other member's posts as evidence, how about:

- USCTrojan has closed at least 3 Irvine homes with multiple offers above list... how is that a slowdown?

 

[Mety]

@Mety:

The burden of proof isn't on me. Seasonality is the default... if this is different, the proof of burden is on all of you to show me otherwise.

All those things you bring up... have all happened in prior years... there were many quick move-ins when prices were still going up... it just happens at this time of year.

I know there is a consensus on this board that it is more than just seasonality, even SGIP has mentioned this being a slowdown, but again, no one has defined what type of slowdown and how large... because if it's only a small slowdown (5%?), what do you really save by the "wait to buy" advice being given by others?

And you must not be reading, both Inc and I have posted links to other articles saying why this might not be a "slowdown".

I'll re-cite them here so you don't have to scroll and search:

1. Lack of new product because of the last bubble crash where builders basically went into hibernation and new construction almost came to a standstill.

2. Aging Millenials who realize they can't live with their parents forever and actually need to go out and buy a home.

3. Still a historically low interest rate environment

4. Some cause for concerns in the stock market and buying real estate usually has a good return over a longer period of time.

5. Other areas like Seattle, where volume numbers are down but prices are still high.

6. Irvine is the best and prices never stay low for long!!!!!!!!! #LastToFallFirstToRise

And since eyephone wants to use other member's posts as evidence, how about:

- USCTrojan has closed at least 3 Irvine homes with multiple offers above list... how is that a slowdown?

How is it different than just seasonal? I've said it many times, but I'll say again.

Compare from exact this time 2017. EVERYBODY can see the difference. You could say 2017 was the craziest year, but that also says 2018 is slower than 2017 and once it slows down, who can guarantee back the moving up? This is where you can reference the cyclical graph. But I can see the counter argument too. Maybe this is just a seasonal thing and the price might back up. I'm just saying how this is difference than last year and it doesn't seem so seasonal to me and many others.

I don't care 5% or 25%, I don't know how much that will be and I strongly believe no one can predict that amount. But just in case you think I'm suggesting people to WAIT, I'm NOT. I've said this couple times and you also did agree - "Buy if you find the perfect home you can afford." I'm always focusing on SELLING more than BUYING. #MAXROI. However, I also see the benefit of waiting at least until you do all your 2018 tax and re-budget accordingly. If you've all sorted out everything now already and confident to buy Delano, go for it. No one's stopping you.

No disrespect to USCTrojan, but you really going to argue with 3 transactions from his listings? How about I can show you 5 transactions from Delano to argue that it is not overpriced? You say a single example is misleading, but I must say your counter with 3 sales is less than what I've brought here so far.

But all in all, thanks for your reply. I really mean that since I see your points clear.

 

[irvinehomeowner]

No disrespect to USCTrojan, but you really going to argue with 3 transactions from his listings? How about I can show you 5 transactions from Delano to argue that it is not overpriced? You say a single example is misleading, but I must say your counter with 3 sales is less than what I've brought here so far.

I though you understood my sarcasm.

Just like eyephone wants to use your post as ?compelling evidence? I can use USC?s, which is 3x more compelling.

But all in all, thanks for your reply. I really mean that since I see your points clear.

I find it interesting no one responds to the lack of new construction argument or the shift in buyers from Millenials.

I am pretty sure that in this current economy there are more buyers for Irvine than there is product. Someone insulted my lack of economic intelligence on the concept of supply and demand back when they thought Turtle Rock homes were going to hit bottom but they never did.

 

[Mety]

No disrespect to USCTrojan, but you really going to argue with 3 transactions from his listings? How about I can show you 5 transactions from Delano to argue that it is not overpriced? You say a single example is misleading, but I must say your counter with 3 sales is less than what I've brought here so far.

I though you understood my sarcasm.

Just like eyephone wants to use your post as ?compelling evidence? I can use USC?s, which is 3x more compelling.

But all in all, thanks for your reply. I really mean that since I see your points clear.

I find it interesting no one responds to the lack of new construction argument or the shift in buyers from Millenials.

I am pretty sure that in this current economy there are more buyers for Irvine than there is product. Someone insulted my lack of economic intelligence on the concept of supply and demand back when they thought Turtle Rock homes were going to hit bottom but they never did.

Millennials? I think they do a thing called, "rent" once they move out of their parents' home. I believe many of them are waiting for the crash which I don't think will happen for awhile, but I'm a borderline millennial in terms of age so I think a little different than the most of them. In my mind, there are plenty of resales which I don't care for the new construction, but I also think there are plenty of new constructions in Irvine. I mean, check GP. They got how many Parks now?

 

[eyephone]

No disrespect to USCTrojan, but you really going to argue with 3 transactions from his listings? How about I can show you 5 transactions from Delano to argue that it is not overpriced? You say a single example is misleading, but I must say your counter with 3 sales is less than what I've brought here so far.

I though you understood my sarcasm.

Just like eyephone wants to use your post as ?compelling evidence? I can use USC?s, which is 3x more compelling.

But all in all, thanks for your reply. I really mean that since I see your points clear.

I find it interesting no one responds to the lack of new construction argument or the shift in buyers from Millenials.

I am pretty sure that in this current economy there are more buyers for Irvine than there is product. Someone insulted my lack of economic intelligence on the concept of supply and demand back when they thought Turtle Rock homes were going to hit bottom but they never did.

You forgot to mention the great deal he got his client. (Way below asking) Full disclosure.

 

[meccos12]

@IHO

Is there ANY other person here who thinks this "slowdown" is just seasonal besides you?  Have you seen ANY real estate professional on the news or other reporting service state this is just "seasonal"?  I attached a few graphs from the Steve Thomas report on housing to show you that this is NOT seasonal.

First is active inventory for past 4 years.  Notice the low # at start of this year but look at the acceleration till now.  Inventory this jan was significantly lower than last year but is currently significantly higher than last year.  Also notice inventory usually peaks in summer months but this year it kept rising and peaked in Oct.  Can you say this happens every other year?

second graph is expected time on the market.  Self explanatory.  Does the green line (2018) look like every other year?  something happened in July, about a month prior to Eyephone starting this thread. 

Final graph is closed sales comparisons for past 5 years.  Look at closed sales in Sept from 2013 till now.  it keeps increasing from 2494 in 2013 to 2734 in 2017.  Then in 2018, it plummets to 2108.  Literally lower than 2006 closed sales.  Again, does this look like every prior year?

 

[irvinehomeowner]

@meccos:

Thanks for those graphs, do they have any for Irvine only because that's my focus here.

Graphs 1 and 3 do support non-seasonality but like I said, we can't know for sure until spring. As for the second graph, there was an Irvine Health report on the Zillow site that has a different story about days on market. I don't know if that's specific to Irvine but according to Zillow, Irvine still has a comparatively low number days on market for homes.

I've been asking this question about seasonality for pages now and finally someone posts data... and it wasn't eyephone. I know you referenced this in previous posts, but the charts help however I still want to see the Irvine numbers for this because it could be a different picture (which Irvine usually is).

But this all goes back to my original premise... without know exactly how low this slowdown will be (I've read some don't think Irvine will crash again like last time), should you wait?

Oh and to answer your question about ANY other person... 10 years ago on the IHB, I think I was the only one who said there was no way Irvine prices would drop by 50% or more. So sometimes you don't need to be a real estate professional to understand the non-fundamental behavior of a market.

 

[Mety]

Oh and to answer your question about ANY other person... 10 years ago on the IHB, I think I was the only one who said there was no way Irvine prices would drop by 50% or more. So sometimes you don't need to be a real estate professional to understand the non-fundamental behavior of a market.

How much did it drop then? Were you advising the same thing to buyers then?

 

[Kings]

enjoy

https://www.car.org/en/marketdata/data/countysalesactivity

 

[eyephone]

?The housing market?s slowdown is going to kill the home renovation boom too

The stagnant housing market has been a boon for the remodeling industry for the past few years as more homeowners stayed put, adding footage, upgrading features or retrofitting their houses to allow them to ?age in place.?

But now the housing market?s funk has become deep enough that it?s dragging down remodeling.

The pace of spending on renovations is likely to start declining next year, according to a report out Thursday from the Joint Center for Housing Studies of Harvard University.

Harvard?s Leading Indicator of Remodeling Activity touched a decade high of 7.7% this year, but annual increases in remodeling expenditures are projected to drift down to a 6.6% annual increase at this time next year.

Another headwind: rising interest rates. They?ll make buying homes more challenging for many Americans, and also increase the cost of tapping home equity for big projects.

The housing slowdown is also likely to weigh on some of the players that have benefitted from this iffy situation over the past few years. On Wednesday, Credit Suisse analysts downgraded shares of Home Depot HD-0.12%  and Lowe?s Cos. LOW+0.21% citing slower growth in home prices, among other factors.?
https://www.marketwatch.com/story/t...-kill-the-home-renovation-boom-too-2018-10-18

 

[eyephone]

?Southern California house sales fall 18%, biggest drop in 8 years

Southern California house sales fell in September by the biggest rate since the depths of the Great Recession, the latest housing report by the California Association of Realtors shows.

Sales of existing single-family homes fell 17.6 percent from September 2017 in the five-county Los Angeles metro area, the biggest annual percentage drop since October 2010, CAR reported Monday, Oct. 22. The drop was the state?s biggest, with Los Angeles County house sales falling 22 percent.

In Orange County, sales fell 21.8 percent. Riverside and San Bernardino counties recorded an annual sales decline of 9.7 percent and 12.4 percent, respectively. Statewide, house sales fell 12.4 percent in September, which was California?s biggest year-over-year sales decline since March 2014, CAR reported. Economists with the industry group have been blaming higher home prices and interest rates for cutting into housing affordability.?
https://www.dailybulletin.com/2018/...fell-18-in-september-biggest-drop-in-8-years/

 

[Mety]

enjoy

https://www.car.org/en/marketdata/data/countysalesactivity

So the price YTY went up about 5%, but the sales YTY went down about 15%. How should we translate this?

 

[zubs]

Translation: Owners have money and if they have to sell at a loss, they gonna hold the property.


2007 had financially weak owners with fake news mortgages, so the drop was very pronounced.

Current owners had to submit 1,000 pages of financial backup to get a loan.

 

[Mety]

Translation: Owners have money and if they have to sell at a loss, they gonna hold the property.

What if the seller is not losing any money even if they were to sell it way below today's market price?

 

[irvinehomeowner]

Oh and to answer your question about ANY other person... 10 years ago on the IHB, I think I was the only one who said there was no way Irvine prices would drop by 50% or more. So sometimes you don't need to be a real estate professional to understand the non-fundamental behavior of a market.

How much did it drop then? Were you advising the same thing to buyers then?

As far as I know, for the products I was looking at, less than 20%. Some 3CWG homes not even 10%.

Back then I don?t think I was advising anything other than affordability. I didn?t experience the issues I had with waiting until after that point in time.

 

[zubs]

Translation: Owners have money and if they have to sell at a loss, they gonna hold the property.

What if the seller is not losing any money even if they were to sell it way below today's market price?

People with money don't need the funds from selling their rentals.  Stock market is looking shaky, and so is housing, but since it's already in housing, just leave it.

 

[Mety]

Translation: Owners have money and if they have to sell at a loss, they gonna hold the property.

What if the seller is not losing any money even if they were to sell it way below today's market price?

People with money don't need the funds from selling their rentals.  Stock market is looking shaky, and so is housing, but since it's already in housing, just leave it.

Is that why Warren Buffett currently sold his Laguna Beach home? I don't think he needs funds from selling his old home. I don't know if selling home is always to get the funding. I appreciate your responses, but just asking in another perspective to see if there is something I should consider also.

I don't think this is like 2007 either, but to be honest, you can push the loan officer/bank to get the loan you want if you really wanted to. Of course in a little more realistic sense than 2007.