While the focus here is Chinese FCBs and their economic woes and loss of access to money, just remember that Irvine has a number of other FCB buyers. There is a large population of Korean, Middle Eastern, Jewish, Indian, Pakistani and others.
Additionally, if like Mety said, FCBs hold for MAXROI, if prices are going down in the next 2-5 years, there won't be a huge sell-off, they could wait until prices are back up which will actually slow the price drops... just like during the last downturn. There are conflicting opinions here that FCBs will sell their US holdings first but that doesn't make sense to me considering what we've seen in the past.
And as I mentioned in other threads, the last crash with the shady financing has actually produced a whole new set of buyers that are well financed and thus will be more immune to price drops. There will not be as many distressed properties or a need to sell as owners can afford to ride this out which is another factor that could keep prices from dropping any significant percentage.
Back during the last crash, it was obvious to everyone that people who ninja'd their way into a home would have issues, but... there were things that people who predicted a larger drop didn't foresee, particularly in Irvine:
1. FCBs who didn't use liar loans and would hold during the drop thus keeping the drop slower and smaller.
2. Kick the can squatters who were able to stay in their homes for longer periods thus keeping the foreclosures off the market.
3. Fed intervention with interest rates which actually allowed OARMS and other suspect borrowers to get into payments much more affordable for them. This and programs like HARP also helped keep distressed properties off the market.
I feel that the reason prices are so high now in Irvine is because of what happened the last crash. People saw how other cities dropped much harder and faster than Irvine and how Irvine not only dropped slower and lower, but recovered faster too and so that even made it more enticing to anyone who wanted to "protect" their investment to buy in Irvine. I believe there was a time when demand actually outpaced new construction which is why we saw so many new neighborhoods built in the last 5 years.
Additionally, there are strong job centers in Irvine. The Spectrum and the IBC have tons of job opportunities... so much so that the rental market in Irvine has expanded more in the last 5 years than I have seen previously. Everyone sees all the new apartment complexes The Irvine Company has built off the 405... not only near the Spectrum but also near what I call "Downtown Irvine". If you drive through the IBC (Main/Alton/Barranca/Jamboree) you will see quite a few in-builds of large non TIC apartment complexes. The ones around Diamond Jamboree alone have quadrupled in number.
I haven't followed pricing in other cities but I think it was kenkoko who said that Aliso Viejo is getting close to Irvine in prices. In cities outside of Irvine (including qwertustin), I would be wary of purchasing if they were relatively high priced. Again, there could be exceptions, say you live and work in a city like Aliso Viejo so it might make sense to buy now depending on your affordability.
I just think there is too strong of an owner force currently in Irvine that will keep prices more stable. And this will have a ripple effect where buyers would still continue to purchase in Irvine because they see that.
