Housing Analysis

[meccos12]

Then that goes all the way back to IHO?s question. If there is only 5-10% drop, is it worth waiting? My answer is YES. Because less money is less money even at 1% drop AND there are more chance of getting even MORE discount when it?s buyers? market.

BUT I?m not so sure how you guys are so confident about how the next downturn will not be anything like 2008. Yes there were more ninja loans back then and not qualified people were buying, etc. but did you guys expect it would be THAT bad then? Something that never happened in history happened.

Agree.  I know people keep saying ONLY 5% or 10%, but 5-10% in Irvine is easily 50-150K!  Its not small change.  Even if prices stayed the same, its still a price drop as the value of money used to buy the house will be about 2-2.5% less per year due to inflationary pressures.  Furthermore, its not all about the potential $ saved.  If inventory continues to rise and demand continues to fall, there will be a bigger selection of homes to choose from and less people to compete with. 

I do think the chances of a crash like 2008 is very unlikely because of the magnitude of that crash.  You are right, not many people expected that crash.  hindsight is 20/20 and it seems obvious now, but I wonder how many people were certain of what would happen back then.  And if they did, did they put their money where it counted?

 

[fortune11]

I don?t know how many times I have repeated this here ?

2008 happened because there was no 2008 before it

2008 will not happen Again  because there is 2008 to look back to

 

[Mety]

I don?t know how many times I have repeated this here ?

2008 happened because there was no 2008 before it

2008 will not happen Again  because there is 2008 to look back to

So then will it be worse than 2008?

 

[fortune11]

I don?t know how many times I have repeated this here ?

2008 happened because there was no 2008 before it

2008 will not happen Again  because there is 2008 to look back to

So then will it be worse than 2008?

Well, you can plan your life as if 2008 or worse is just around the corner and miss out on all the fun

I know many people and we all know them - who were right about 2008 happening or got personally affected by it and then hunkered down and failed to benefit from the cyclical rebound

If you keep waiting for a 2008 like correction , you may see your entire life pass you by ...

 

[fortune11]

The point is no one knows the future

But there are bounded outcomes as long as the world is a going concern

One X factor  ? if you think US and China enter into a Cold War similar to what happened w US and USSR back in the day - and I fully expect trump will make a deal of some sorts to avoid that scenario .

 

[eyephone]

The point is no one knows the future

But there are bounded outcomes as long as the world is a going concern

One X factor  ? if you think US and China enter into a Cold War similar to what happened w US and USSR back in the day - and I fully expect trump will make a deal of some sorts to avoid that scenario .

Kuddlow recently said no

 

[eyephone]

My thougts are: If he was going to make a deal. He would of made a deal before the midterms.

 

[fortune11]

My thougts are: If he was going to make a deal. He would of made a deal before the midterms.

Blame the caravan !  Which now seems to have conveniently vanished overnight

Anyways Cold War w China hurts China and US both - unlike the past one which primarily hurt USSR

 

[eyephone]

My thougts are: If he was going to make a deal. He would of made a deal before the midterms.

Blame the caravan !  Which now seems to have conveniently vanished overnight

Anyways Cold War w China hurts China and US both - unlike the past one which primarily hurt USSR

You know the drill. He needs a punching bag. Blame it on China. [Blame it on the rain (song)]

 

[Liar Loan]

There was a wave of foreclosures back in 2008.  Do you see this happening again?
I don't see it.

Can we agree that this slowdown won't be as big as 2008? 
And if the 2008 slowdown was marked at 20% for Irvine, then this slowdown should be max 10%.

Agree.  I do not think this slowdown will be anything similar to the 2008 crash. 
Fortunately, I was not around for the 2008 crash, but I thought Irvine fell more than 20%.  Regardless, I highly doubt this slowdown will resemble anything like the last crash.

It did fall by more than 20% but there has been a lot of revisionist history on TI by a certain emotionally invested member.  If somebody repeats something enough times, others start to believe it and take it as a given.  The raw numbers show a 30% decline occurred.

 

[irvinehomeowner]

There was a wave of foreclosures back in 2008.  Do you see this happening again?
I don't see it.

Can we agree that this slowdown won't be as big as 2008? 
And if the 2008 slowdown was marked at 20% for Irvine, then this slowdown should be max 10%.

Agree.  I do not think this slowdown will be anything similar to the 2008 crash. 
Fortunately, I was not around for the 2008 crash, but I thought Irvine fell more than 20%.  Regardless, I highly doubt this slowdown will resemble anything like the last crash.

It did fall by more than 20% but there has been a lot of revisionist history on TI by a certain emotionally invested member.  If somebody repeats something enough times, others start to believe it and take it as a given.  The raw numbers show a 30% decline occurred.

For Irvine? Depends on what product but possibly.

It wasn?t 40%+ and most of the homes I shopped for were around 10-15%.

Even at 30%, there were a big factors to get it that low, I just don?t see anything happening now close to those events that could get prices to drop that much or even 15-20%.

 

[meccos12]

It did fall by more than 20% but there has been a lot of revisionist history on TI by a certain emotionally invested member.  If somebody repeats something enough times, others start to believe it and take it as a given.  The raw numbers show a 30% decline occurred.

Thats what I thought. 

 

[meccos12]

It wasn?t 40%+ and most of the homes I shopped for were around 10-15%.

Even at 30%, there were a big factors to get it that low, I just don?t see anything happening now close to those events that could get prices to drop that much or even 15-20%.

Who said there was a 40%+ drop?  What area were you looking at where it only dropped 10-15%? 

 

[Kenkoko]

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.

You are looking at the wrong market to predict FCBs behavior. Unless we have a US meltdown, which is extremely unlikely, you should look at foreign markets instead. If FCBs really cared about Irvine housing market going down 5/10/15% in the next 5 year, they would rent out their homes instead of leaving them vacant.

Another key point would be in the " what we've seen in the past" part
We have never had a US economy downturn that coincided with a Chinese economy downturn. The last US crash, the Chinese economy was booming.

I just do not understand why you would think FCBs would not first sell their US homes that sits empty. If I am in financial trouble, the first thing I would sell is a liquid asset that has appreciated and has the least impact on my life.

If you have a vacation home in Hawaii, would you sell that first or your primary home in Irvine when your financial situation gets bad? You would really keep your vacation home and sell your primary home first? leave your job/business? move to another state/country where you do not speak the language?and leave your life behind??

 

[irvinebullhousing]

Those are good points from FCB perspectives. If Ken suggest that FCB will sell when they are in short of cash and dumping Irvine empty homes, then aren?t the China stock market crashing right now? So when are they going to start the fire sale? China market been down for awhile now and I haven?t seen any dumping, yet. So we might have to wait until year 202X to see the low of the low?

Gotcha, I will just put off living life and wait until the Chinese herding to buy again and jump in.

 

[meccos12]

Those are good points from FCB perspectives. If Ken suggest that FCB will sell when they are in short of cash and dumping Irvine empty homes, then aren?t the China stock market crashing right now? So when are they going to start the fire sale? China market been down for awhile now and I haven?t seen any dumping, yet. So we might have to wait until year 202X to see the low of the low?

There has been a huge sell off in commercial real estate. In Q2 of this year there was 1.3B sold vs 0.126B bought by the Chinese which is an astounding reversal from many years prior.  Not sure how this will translate into residential. 

Gotcha, I will just put off living life and wait until the Chinese herding to buy again and jump in.

Im lost by this comment.  What is this in reference to?

 

[zubs]

Im lost by this comment.  What is this in reference to?

If the best time to buy is 2024, you will have to structure your life and finances around renting until 2024. 
"putting your life on hold" or "put off living life"
This assumes that buying a house is advancing your life.


If you believe owning a house is advancing your life, then the statement is true.

 

[irvinehomeowner]

The raw numbers show a 30% decline occurred.

You probably have better access to this data but it depends on how you slice it.

I just checked Truila:
https://www.trulia.com/real_estate/Irvine-California/market-trends/

If you look at the rolling average price from about 06-07 it's about $690k as the high. Then you look at 2012 and the average rolling low looks around $550k.

That's about 20%.

I can take the absolute high ($714k?) and the absolute low ($515k?) and that comes out to about 28% but I don't think that's a fair representation of prices for a reasonable time frame.

You can also check the different bedroom counts and the numbers go up or down (the 1brs had the highest drop I think of over 30%) but I think you'll be hard pressed to say that 4-5br SFRs (which is what we were looking for) dropped 30%.

I can tell you from my experience that from 05-06, 3CWG homes in Westpark II, Northwood, Oak Creek, Turtle Rock were at about $950k-$1m+. From 11-12, that same stock of homes, was about $825k-900k, That's only about a 10% drop. And by 2013, those same homes were back up to the $950k+ range. Sure we saw one or two that we liked that were below $800k, but they were either right next to the freeway, didn't have a downstairs BR or something else was wrong. The good ones (as I've said before) were not the cheap ones.

Maybe others members who were actively shopping during these high and low points can corroborate these numbers but I know what I saw. I was actively looking for at least a 20% drop in prices for 3CWGs and it didn't materialize in a large enough volume for us to capitalize on.

So I'm skeptical that we will see any type of "slowown" close to that given how many things went wrong during that time.

 

[Mety]

The raw numbers show a 30% decline occurred.

You probably have better access to this data but it depends on how you slice it.

I just checked Truila:
https://www.trulia.com/real_estate/Irvine-California/market-trends/

If you look at the rolling average price from about 06-07 it's about $690k as the high. Then you look at 2012 and the average rolling low looks around $550k.

That's about 20%.

I can take the absolute high ($714k?) and the absolute low ($515k?) and that comes out to about 28% but I don't think that's a fair representation of prices for a reasonable time frame.

You can also check the different bedroom counts and the numbers go up or down (the 1brs had the highest drop I think of over 30%) but I think you'll be hard pressed to say that 4-5br SFRs (which is what we were looking for) dropped 30%.

I can tell you from my experience that from 05-06, 3CWG homes in Westpark II, Northwood, Oak Creek, Turtle Rock were at about $950k-$1m+. From 11-12, that same stock of homes, was about $825k-900k, That's only about a 10% drop. And by 2013, those same homes were back up to the $950k+ range. Sure we saw one or two that we liked that were below $800k, but they were either right next to the freeway, didn't have a downstairs BR or something else was wrong. The good ones (as I've said before) were not the cheap ones.

Maybe others members who were actively shopping during these high and low points can corroborate these numbers but I know what I saw. I was actively looking for at least a 20% drop in prices for 3CWGs and it didn't materialize in a large enough volume for us to capitalize on.

So I'm skeptical that we will see any type of "slowown" close to that given how many things went wrong during that time.

I think your specific range is very different from typical Irvine home hunter's especially for the first time buyers who would actually depend more on forums like these. Not only the attached but many detached homes did fall more than 20% in Irvine, but of course I'm not talking about 3CWG SFRs with 5-br.

I believe people don't really learn from the history hence it repeats itself, but I also do believe every cycle is unique on its own. So it might not be just like 2008, but slowdown is already here. One thing that is always the same is it takes some time to go down and also go up. It doesn't happen in a day, usually months and years. You just gotta compromise the timing and settle at some point instead of waiting for the lowest of the lowest.

 

[Irvinecommuter]

No crash but slowdown is real.  SALT deduction limits and increasing interest rates make houses a lot less affordable. 

Crash will only come if there is a dramatic increase in unemployment.