Housing Analysis

[irvinehomeowner]

In almost every economic and finance metric , year over year data is used - this takes care of seasonality.

Ex - Retail sales will look fantastic  if you compared the December peak quarter to the one before it , but it means nothing significant.

It is so simple but some people dont get it.

It?s not only that. He asks for a prediction of the percentage that is nearly impossible to get. If you don?t give a percentage then you are wrong. It?s been like 6 months (or even longer) and he still thinks it?s seasonality. The summer time suppose to be hot for RE and it wasn?t. I hope no serious person is acting on his advice.

Trolling gets really old. Who knows he might make a thread dedicated to you like he did to me? 

At this point, I think its his ego that prevents him from seeing the truth or at least admitting the truth.  Im sure he will continue to argue for seasonality until housing does actually pick up. 

Hah... what ego? I believe you are the only one who doesn't recognize that I've said there is a slowdown. Several members, including mety and kenkoko, seem to have no problem understanding my stance. You're the one who won't see what I'm saying.

The question I had was how is it not seasonal because that's what happens every year. So you and a few others say it's not, but I've heard that before. How many times has it been predicted that this is the time that Irvine housing will drop and then it just picks back up. I remember that was being said in 2015 and prices did drop over 10% (based on Trulia) but they went back up again.

Again, the default is prices go down every year and then go back up. Now, if the prices don't go back up... then yes, it's not seasonal, but I'm not sure how that is a measurement of my credibility. People can be wrong, look at Steve Thomas, he's been off a number of times yet you keep citing him as a credible source of data and according to eyephone, anyone in the business has their own agenda so really can't be trusted of which Steve Thomas qualifies for.

And again, I've never asked for an exact percentage, a ballpark is good enough. Why? Because... history shows that within a certain margin, prices do down and back up, so if any prediction falls within that percentage, how is that different from previous cycles?

You even said it yourself:

My predictions:
in 1 year: I expect 5% drop.  in 5 years I expect 10% drop, only because its on the way up from a 15-20% drop between years 1-5. 

So if housing prices drop only 5% this time and go back up, that's within the margin of seasonal drops (at least by recent history). However, if prices drop more than 10%, say like 15-20% like you predicted, and remain that way for an extended period of time, than I do agree it's beyond seasonal.

But we can't know that until the end of the next selling season.

 

[irvinehomeowner]

The summer time suppose to be hot for RE and it wasn?t.

It wasn't as hot as some other years but prices did rise from a median of just under $820k in April to a $848k in July according to Trulia. There was another spike in September which is strange because that happened in 16 and 17 but not in 14 and 15.

I'll add this because USC has said this a number of times yet neither of you have challenged him and he has access to both data and experience:

I think the lower end of the market will be flat to slightly down a few percent (more flat if rates continue to bleed lower and more down if rates rise and inventory levels continue to rise significantly). I think the higher end of the market will continue to see price declines as there is a lot of resale inventory (with many, many stubborn/delusional sellers) and a growing amount of unsold new home inventory (our new shadow inventory).  The majority of the unsold homes in Irvine are in the $1m+ category. 

My guess is that interest rates will bleed down to 3.50% to 3.75% on the 30-year fixed and to around 3% for a 7-year ARM.  If there is a trade deal with China and the FED does stay paused while the job market stays strong that should be a safety net for any material price declines.

That to me is the kind of "analysis" I've been asking for. It categorizes which housing, why, what outs there might be and around what time frame.

Both USC and Mety predict 2017 type pricing which if you look at, is around the $850ks. Which is similar to the pricing back in August/September 2018 and again, if you couldn't "wait", then not a big discount compared to opportunity costs that several people talked about like this one:

I don't really care where the market is right now or whether we end up in 3 bedrooms or 4 bedrooms (more bedrooms than we have now either way!). I just know I'm not getting any younger and my husband and I want to buy a house.

And sure, people could have saved money by waiting, but as I've said, there are other reasons not to wait beyond just the money savings. Why some of you don't want to see that side of it is perplexing.

 

[meccos12]

I believe you are the only one who doesn't recognize that I've said there is a slowdown.

You didnt see the slowdown until it slapped you in the face.  The fact you admit it now doesnt mean you were saying it all along.  If so, we wouldnt be having this conversation and you certainly wouldnt be ridiculing eyephone such as in the beginning of this thread.

So you and a few others say it's not, but I've heard that before. How many times has it been predicted that this is the time that Irvine housing will drop and then it just picks back up. I remember that was being said in 2015 and prices did drop over 10% (based on Trulia) but they went back up again.

Im glad you brought up 2015 because yes there was a price drop that year.  However, it wasnt seasonal as you suggest (im 100%certain you claimed up the 11% seasonal price drop was from this year).  Prices dropped 11% that year because there was a small market slowdown in 2014, which eventually reflected prices in 2015.  Sure prices went back up, but just because it did doesnt mean there was no slowdown.  When you look at prices devoid of context including other market stats such as supply and demand, you might think its was just seasonal as you do now.

Again, the default is prices go down every year and then go back up. Now, if the prices don't go back up... then yes, it's not seasonal, but I'm not sure how that is a measurement of my credibility.

Again you do not understand seasonal changes.  The default is for prices to increase every year in general, however look at YoY numbers to tell you if its seasonal or not.  I have explained that to you many times as have Fortune11.  Its hard to explain things over and over.

People can be wrong, look at Steve Thomas, he's been off a number of times yet you keep citing him as a credible source of data and according to eyephone, anyone in the business has their own agenda so really can't be trusted of which Steve Thomas qualifies for.

Everyone is wrong at some time.  However I have mainly posted the data that he collects.  Are you claiming that his data is not correct?  If so you might have an issue with the MLS data as that is where he gets his report from.  You shouldnt trust USC's data also then.

So if housing prices drop only 5% this time and go back up, that's within the margin of seasonal drops (at least by recent history). However, if prices drop more than 10%, say like 15-20% like you predicted, and remain that way for an extended period of time, than I do agree it's beyond seasonal.

But we can't know that until the end of the next selling season.

Again you fail to understand what seasonality means.  At least it appears you finally understand that prices are a lagging indicator of real estate strength.  If so, how can you consistently argue against a current slowdown using current prices.  Furthermore, why not use other data points such sale volume, inventory and demand which are more accurate indicators of current market strength?

 

[meccos12]

It wasn't as hot as some other years but prices did rise from a median of just under $820k in April to a $848k in July according to Trulia.

Oh yeah mean before anyone claimed there was a slowdown?  Even if he did claim prior or during this time, you know by now that prices lag right?

I'll add this because USC has said this a number of times yet neither of you have challenged him and he has access to both data and experience:

Why would we challenge USC?  What did he say that was so outrageous?  Did he deny there is a slowdown?  Does he claim this is just seasonal changes?  In fact,  here is his quote below.  I find it hilarious that you are trying to align what you say with what USC is saying. 

I think the lower end of the market will be flat to slightly down a few percent (more flat if rates continue to bleed lower and more down if rates rise and inventory levels continue to rise significantly). I think the higher end of the market will continue to see price declines as there is a lot of resale inventory (with many, many stubborn/delusional sellers) and a growing amount of unsold new home inventory (our new shadow inventory).  The majority of the unsold homes in Irvine are in the $1m+ category. 

My guess is that interest rates will bleed down to 3.50% to 3.75% on the 30-year fixed and to around 3% for a 7-year ARM.  If there is a trade deal with China and the FED does stay paused while the job market stays strong that should be a safety net for any material price declines.

That to me is the kind of "analysis" I've been asking for. It categorizes which housing, why, what outs there might be and around what time frame.

Both USC and Mety predict 2017 type pricing which if you look at, is around the $850ks. Which is similar to the pricing back in August/September 2018 and again, if you couldn't "wait", then not a big discount compared to opportunity costs that several people talked about like this one:

Lets be clear.  You are not looking for analysis but rather price predictions.  Again the reason you missed this slowdown is because all you can see is price and Ill say it again, price is lagging indicator.  Also just to be clear, USC said price gains in first half of 2018 were lost by end of year and he expects prices to be flat at best or down at lower end homes and down at higher end homes this year.  So with that in mind and the fact that prices lag sale, you have no idea what opportunity costs will be compared to discounts.  Go tell a current buyer that at least 6% saving + 8-9%savings from lower interest rates + a huge increase in available homes to choose from wasn't worth the opportunity costs of a 6 month wait. 

 

[irvinehomeowner]

Lets be clear.  You are not looking for analysis but rather price predictions. 

I was looking for analysis first. eyephone did not provide his own which is how I got into this thread in the first place. Then after he advised people to wait, that's when I asked for price predictions (percentage drops to be clear) so that people can decide if it's worth the wait or not.

Again the reason you missed this slowdown is because all you can see is price and Ill say it again, price is lagging indicator.

Again, show me where I missed it. I don't even care because I'm not shopping. You keep acting like it's such a big deal on who called the slowdown and when... newsflash... it's not to me.

Also just to be clear, USC said price gains in first half of 2018 were lost by end of year and he expects prices to be flat at best or down at lower end homes and down at higher end homes this year.

And he doesn't expect a 15-20% slowdown like you predicted.

So with that in mind and the fact that prices lag sale, you have no idea what opportunity costs will be compared to discounts.

Neither do you. That's why I said it depends on your situation. I listed several caveats which you conveniently dismiss.

Go tell a current buyer that at least 6% saving + 8-9%savings from lower interest rates + a huge increase in available homes to choose from wasn't worth the opportunity costs of a 6 month wait. 

If their situation calls for it, they may make that decision not to wait.

And don't pretend like you knew that interest rates would drop. I even quoted eyephone saying that he thought low fixed rates were gone. You yourself even said you would rather buy in a high interest rate/low price environment because you could always refi to a lower rate. And then when I bring up that people who bought 6 months ago with a higher rate could refi now to help with the their cost, all of a sudden doing a refi to a lower rate is an issue.

You and eyephone are the ones who are all "Look at how right we are!!"... I don't really care but it seems so important to you... actually it seems more important to you that I'm wrong... well... find the post where I actually make a call and make it your wallpaper on your computer so you can feel good about yourself.

 

[irvinehomeowner]

As for Steve Thomas, you're not just quoting his data but also his opinion on what the data means.

That's what I mean by he has been wrong in the past. As has many people's analysis of the data when it comes to Irvine real estate.

But that's okay... right or wrong analysis, as long as you explain why, I think that is helpful.

 

[eyephone]

Bingo. You don?t care about the slowdown because your not looking. But you took the position that there is no slowdown. I guess post carelessly for fun? (I don?t care attitude?)

Lets be clear.  You are not looking for analysis but rather price predictions. 

I was looking for analysis first. eyephone did not provide his own which is how I got into this thread in the first place. Then after he advised people to wait, that's when I asked for price predictions (percentage drops to be clear) so that people can decide if it's worth the wait or not.

Again the reason you missed this slowdown is because all you can see is price and Ill say it again, price is lagging indicator.

Again, show me where I missed it. I don't even care because I'm not shopping. You keep acting like it's such a big deal on who called the slowdown and when... newsflash... it's not to me.

Also just to be clear, USC said price gains in first half of 2018 were lost by end of year and he expects prices to be flat at best or down at lower end homes and down at higher end homes this year.

And he doesn't expect a 15-20% slowdown like you predicted.

So with that in mind and the fact that prices lag sale, you have no idea what opportunity costs will be compared to discounts.

Neither do you. That's why I said it depends on your situation. I listed several caveats which you conveniently dismiss.

Go tell a current buyer that at least 6% saving + 8-9%savings from lower interest rates + a huge increase in available homes to choose from wasn't worth the opportunity costs of a 6 month wait. 

If their situation calls for it, they may make that decision not to wait.

And don't pretend like you knew that interest rates would drop. I even quoted eyephone saying that he thought low fixed rates were gone. You yourself even said you would rather buy in a high interest rate/low price environment because you could always refi to a lower rate. And then when I bring up that people who bought 6 months ago with a higher rate could refi now to help with the their cost, all of a sudden doing a refi to a lower rate is an issue.

You and eyephone are the ones who are all "Look at how right we are!!"... I don't really care but it seems so important to you... actually it seems more important to you that I'm wrong... well... find the post where I actually make a call and make it your wallpaper on your computer so you can feel good about yourself.

 

[zubs]

There should be a foil in a thread to create discussion, or all you have is a bunch of shit heads circle jerking themselves.

 

[eyephone]

There should be a foil in a thread to create discussion, or all you have is a bunch of shit heads circle jerking themselves.

But make sure it looks nice. It?s all about presentation. 
(Cough) According to IHo forget the content.

 

[irvinehomeowner]

There should be a foil in a thread to create discussion, or all you have is a bunch of shit heads circle jerking themselves.

Yeah.

I guess eyephone and meccos12 want us all to sing "It's a slowdown and you know it clap your hands!!"

 

[irvinehomeowner]

But you took the position that there is no slowdown.

Quote the post where I took this position without caveats.

You and meccos12 can't seem to get past this.

 

[eyephone]

But you took the position that there is no slowdown.

Quote the post where I took this position without caveats.

You and meccos12 can't seem to get past this.

I think we all know what happened here. Now you are trying to spin the conversation. (I was waiting for it)

 

[irvinebullhousing]

Slow-down, let's put the slowdown aside for a moment and focus on debts. Lacy Hunt, has a great chart that shows how debt bubbles have built and then collapsed, creating depression, all through modern history. When debt grows faster than the economy--which is inevitable, thanks to human nature, we get economic and financial asset bubbles that always burst. A massive deleveraging follows every debt bubble. A massive orgasm finally climax. 2020.

 

[usctrojancpa]

In almost every economic and finance metric , year over year data is used - this takes care of seasonality.

Ex - Retail sales will look fantastic  if you compared the December peak quarter to the one before it , but it means nothing significant.

It is so simple but some people dont get it.

It?s not only that. He asks for a prediction of the percentage that is nearly impossible to get. If you don?t give a percentage then you are wrong. It?s been like 6 months (or even longer) and he still thinks it?s seasonality. The summer time suppose to be hot for RE and it wasn?t. I hope no serious person is acting on his advice.

Trolling gets really old. Who knows he might make a thread dedicated to you like he did to me? 

I've actually noticed that the Jan to April period has been stronger than the summer periods in the past 3-4 years both in terms of showing traffic and offers from my listings and homes that I've made offers on.  I think it may have to do with lower levels of inventory and probably the same level of buyers in the market.  This is just my opinion from what I've seen personally.

 

[usctrojancpa]

I believe you are the only one who doesn't recognize that I've said there is a slowdown.

You didnt see the slowdown until it slapped you in the face.  The fact you admit it now doesnt mean you were saying it all along.  If so, we wouldnt be having this conversation and you certainly wouldnt be ridiculing eyephone such as in the beginning of this thread.

So you and a few others say it's not, but I've heard that before. How many times has it been predicted that this is the time that Irvine housing will drop and then it just picks back up. I remember that was being said in 2015 and prices did drop over 10% (based on Trulia) but they went back up again.

Im glad you brought up 2015 because yes there was a price drop that year.  However, it wasnt seasonal as you suggest (im 100%certain you claimed up the 11% seasonal price drop was from this year).  Prices dropped 11% that year because there was a small market slowdown in 2014, which eventually reflected prices in 2015.  Sure prices went back up, but just because it did doesnt mean there was no slowdown.  When you look at prices devoid of context including other market stats such as supply and demand, you might think its was just seasonal as you do now.

Again, the default is prices go down every year and then go back up. Now, if the prices don't go back up... then yes, it's not seasonal, but I'm not sure how that is a measurement of my credibility.

Again you do not understand seasonal changes.  The default is for prices to increase every year in general, however look at YoY numbers to tell you if its seasonal or not.  I have explained that to you many times as have Fortune11.  Its hard to explain things over and over.

People can be wrong, look at Steve Thomas, he's been off a number of times yet you keep citing him as a credible source of data and according to eyephone, anyone in the business has their own agenda so really can't be trusted of which Steve Thomas qualifies for.

Everyone is wrong at some time.  However I have mainly posted the data that he collects.  Are you claiming that his data is not correct?  If so you might have an issue with the MLS data as that is where he gets his report from.  You shouldnt trust USC's data also then.

So if housing prices drop only 5% this time and go back up, that's within the margin of seasonal drops (at least by recent history). However, if prices drop more than 10%, say like 15-20% like you predicted, and remain that way for an extended period of time, than I do agree it's beyond seasonal.

But we can't know that until the end of the next selling season.

Again you fail to understand what seasonality means.  At least it appears you finally understand that prices are a lagging indicator of real estate strength.  If so, how can you consistently argue against a current slowdown using current prices.  Furthermore, why not use other data points such sale volume, inventory and demand which are more accurate indicators of current market strength?

I remember that I replied somewhere on TI to someone's question about what prices might do in 2018 and I thought that prices would be flattish (my best guestimate).  Well, the first half of the year of 2018 made me look like I was going to be way off but then the second half of the year made my guestimate look good (more luck than anything).  It's a losing game to predict the magnitude of price increases or declines but a bit easier to on the overall direction (still not easy because there are so many variables to consider). 

 

[irvinehomeowner]

Again you fail to understand what seasonality means.

So now you are arguing what seasonality (or seasonal) is? That's a new one.

Maybe you don't understand what I'm referring to (although it seemed like you did before). Forget all the statistical jargon, to me it's simple, it's something that usually happens periodically. For real estate, sales volume and prices go up and then down, usually coinciding with the spring to summer timing. If you look at the chart I linked to in Trulia, you will see a pattern of this in regards to sales price (and even volume).

Is this true or not?

At least it appears you finally understand that prices are a lagging indicator of real estate strength.  If so, how can you consistently argue against a current slowdown using current prices.  Furthermore, why not use other data points such sale volume, inventory and demand which are more accurate indicators of current market strength?

I'm going to answer this one even though you are still being condescending in your framing of the question.

I'm not arguing against the current slowdown, nor am I ignoring the other data points. In fact, I asked eyephone and then others, including you, about more data to answer my seasonal question.

The only reason I focus on price is because of eyephone's statement to wait in order to save money. Hence, if the price at the bottom of this slowdown isn't significantly lower than previous years, there may be an argument for someone not to wait. As USC said, he had buyers who paused last fall but are now back in... should they still wait? If so, for how long and for how much? I'm not asking you to answer this, but this is a question they would have.

This is what I am getting at about the uncertainty of making these type of predictions. Although you say the data points will help people predict, that's not always entirely accurate.

Where was the data that predicted that interest rates would drop? Almost everyone said they would not... and look what happened?

Additionally, you seem to ignore the non-fundamental factors that come into play when it involves Irvine real estate. In the past, you claimed that Irvine is not more resilient than surrounding cities (I would go find the post but you guys never find posts so whatever), but the data says that's not the case. That's also why I ask you for Irvine specific data because Irvine has been different... as I've said before... last to fall, first to rise.

So why do you ignore the non-data factors? The frontline stories that USC talks about (I don't see you hammering on him for data to prove why he sees multiple offers on the nice homes thus driving up the price) or the other members who post here that talk about buying regardless if it cost more than rent.

 

[meccos12]

So now you are arguing what seasonality (or seasonal) is? That's a new one.

Maybe you don't understand what I'm referring to (although it seemed like you did before). Forget all the statistical jargon, to me it's simple, it's something that usually happens periodically. For real estate, sales volume and prices go up and then down, usually coinciding with the spring to summer timing. If you look at the chart I linked to in Trulia, you will see a pattern of this in regards to sales price (and even volume).

Is this true or not?

You brought up seasonality, not me.  Yet you still cant wrap your head around what that means. 
The problem is that you cant get past seasonality because that is the only thing you see.  There can be ups and downs beyond that of seasonal changes, hence why I keep saying look at YoY numbers.  This past summer we saw an unusually large drop in demand and a large increase in supply coinciding with a low sales volume.  Did you not see the huge shift in demand/supply/sales beyond that of normal seasonal changes that were posted for the past 6 months?  Did those numbers look like every other year?  The same truth can be said about previous up years.  Was it just seasonal then also?

I'm not arguing against the current slowdown, nor am I ignoring the other data points.  In fact, I asked eyephone and then others, including you, about more data to answer my seasonal question.

I have given you tons of YoY numbers to answer your "seasonal" questions.  What else do you need?

The only reason I focus on price is because of eyephone's statement to wait in order to save money. Hence, if the price at the bottom of this slowdown isn't significantly lower than previous years, there may be an argument for someone not to wait. As USC said, he had buyers who paused last fall but are now back in... should they still wait? If so, for how long and for how much? I'm not asking you to answer this, but this is a question they would have.

Again, you focus on price which is a lagging indicator.  How many times must I tell you this.
I dont know when the bottom is nor does anyone else.  As I have said before, this is not my place to tell people what to do.  No one should be listening to a random stranger on the internet about when to buy a house, so I am not sure why keep pushing for what advice to give people.  People can see the trends of the market and decide for themselves based on their specific situation.

Where was the data that predicted that interest rates would drop? Almost everyone said they would not... and look what happened?

And your point is?  Correct me if I am wrong but it was you who predicted higher rates causing higher housing costs regardless of price drops.  And yeah, look what happened.  Not only did prices go down, so the rates and now there is an bigger choice of homes to buy from.  Win-win-win. 

So why do you ignore the non-data factors? The frontline stories that USC talks about (I don't see you hammering on him for data to prove why he sees multiple offers on the nice homes thus driving up the price) or the other members who post here that talk about buying regardless if it cost more than rent.

Why do you keep bringing USC into this?  I dont have anything to say to USC because I do not disagree with what he says.  You imply that what you and USC say are the same things.  They are not. 

 

[irvinehomeowner]

@meccos:

I think you have a reading problem.

The reason you keep repeating the same things is because you aren't reading what I'm writing, you're so caught up in trying to prove me wrong that you aren't even open to understanding where I'm coming from. At least other members do, they may not agree but at least they see my point of view.

And you may not think USC and I are on the same page, but there are many of my posts he agreed with and you just ignored. But that's okay, you're just another "random stranger on the internet" so your opinion shouldn't really hold any more weight than anyone else's.

Just relax. We don't agree.

 

[zubs]

Yeah I saw mety on your case for a while with eyephone and meccos, but after he clarified it 2 pages back, he hasn't been back to argue with u.  Reading comprehension is taught in elementary school, but some people have a hard time with it.


The desire to be right clouds comprehension... an ugly human trait.

 

[meccos12]

Yeah I saw mety on your case for a while with eyephone and meccos, but after he clarified it 2 pages back, he hasn't been back to argue with u.  Reading comprehension is taught in elementary school, but some people have a hard time with it.


The desire to be right clouds comprehension... an ugly human trait.

Oh so it only took 56 pages on this thread and dozens more pages on other threads for him to finally clarify his position?  Makes sense now, actually it still doesnt, but I guess I may not have paid attention in elementary school.  Unfortunately personal attacks dont make a bad argument right.