Housing Analysis
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If you insinuating that the chart is a precursor for the incoming crash of Irvine real estate, then either you smoking some good stuffs or you pushing the fear factors. Either way as an active investor, I like both options. But I am afraid it ain?t gonna come to fruition. Put that pipe down. We are not in a decade era ago. The pots though might be a progressive movements in a positive direction
for dudes like you.
Not sure why not. All I did was use the median for each month and average them so you can see what the median is for a 6-month period and a 12-month and compare them.
Median as a data point isn't actually entirely reliable either but that's all the data I have to play with.
Still, just using your numbers, if sales volume is so low, why aren't prices lower?
The California Association of Realtors (CAR) shows that existing SFR home prices for Orange County increased by 1.3%, but DECREASED by -4.6% in Irvine. I would be very worried if I were you. I'd also give serious thought to selling your investments.
Those that believe Irvine is invincible and will always perform better than the rest of Orange County are about to receive a rude wake up call.
No one believes Irvine is invincible but I posted data last year that showed Irvine fared better than even your coastal cities during the last crash.
So jelly.
During the last crash, Irvine got bailed out by Chinese buyers. During this crash, Chinese buyers are drying up. So the case could be made that Irvine has more excesses built into the market than coastal cities, which accounts for the faster and sharper drop in prices you are experiencing.
Once you average a series of six or twelve medians, they cease to be medians. You have to pick one or the other, mean or median, because even the lowliest statistics professor at UCI would advise against taking the mean of a series of medians to derive anything meaningful about the data. The mean, median, and mode are all meant to be summary statistics that capture the "center" of the data. They are alternatives to one another, not designed to be layered on top of one another.
Sales volume is a leading indicator of the market. Once sales start to decline, it takes awhile for prices to find a new equilibrium, especially since real estate transactions take a long time to close, and the market then needs time to absorb that new information.
You don't consider 4.6% of your home's value to be a big drop? That's a $56,000 loss in one year based on Irvine's existing SFR median price.
We are still in the early innings though. The "big" drops will probably begin next year once the rest of OC starts declining like Irvine. There's still a long ways to go before this bottoms out.
You talking bullsh--....my same model matched just closed a month ago with a gain of $50K compared to a year ago on the same model sold. So there you have it. You can't take an average of 4.6% for a neighborhood....You clearly don't know what you talking about. The hood that I am in, seeing an increase on average of 3%. There.....
So you just proved one of my points. Home prices aren't just data points. There are many factors, including non-fundamentals ones, that can affect pricing that the median/mean/average don't reflect or predict. Many were skeptical of my FCB Theory... seems like your are a believer.
As I said, "housing analysis" isn't just statistics. Why can't we use averages of medians over time to smooth out the outliers so you can see the trends? Look at the numbers I posted, notice something about those medians? Looks a bit seasonal doesn't it?
And using a median from peak to trough and YOY is flawed. Another poster pointed this out to you before on your usage of "median" to determine actual house to house price comparison doesn't really work. I've said this many times before but it's not the same housing stock unless these numbers are broken down into more micro categories. Just like your 28% drop number from peak to trough during the last crash. A reason the median was so low was during that one month, could be more lower priced housing like condos were sold... and conversely, during the peak, higher priced housing like large SFRs sold (which is usually the case, in a rising market, higher end homes sell from move-up buyers cashing in on equity and during a down market, lower end homes sell to first time buyers jumping in and people looking for bargains).
That's why I prefer to use a rolling month average to smooth out this housing stock factor so you get a more realistic picture of what actual price drops were. This also takes into account that home buying isn't an instant transaction (as you said), it takes months from searching to offers to escrow to closing. I did this before but if you use a 3 or 6 month average around your peak/trough points from the last crash, the number is closer to 20% for Irvine which is closer to what I saw in the housing stock I was looking at.
Yes. Someone else keeps saying this too. But according to you guys, sales volume have been down since March 2018. How long does equilibrium take? And since 2018, prices hit a new high in May/June 2019, how did that happen if volumes were at record lows this past year?
And you want to keep using that whopping 4.6% drop. Isn't that within a seasonal delta? I've posted that YOY prices in the last 5-8 years have experienced drops of 5-15% so isn't anything in that range considered business as usual?
Drops beyond that... to me, is worth talking about. Some have predicted that *prices* will drop over 15%. You said "big"... is that what you mean?
And what factors are you citing that would do this? There are no more ninja loans, everyone is well qualified who bought not just in Irvine but most of SoCal. What events are going to lead to "big" drops in Irvine home prices? 2020 Election? Chinese mass exodus from Irvine real estate? Rising mortgage rates? Earthquake? Lagging price to volume inflection point?
But I'll backtrack here a bit. From what I remember before, real estate usually cycles in 7-9 year time spans and it looks like we are due, so any predictions for future drops are more likely to come true... it's just what is the quantity and length of time.
And again, if you can afford it, buying when you find the right home despite what the timing is, isn't exactly a "don't do it" situation. If you can stay, usually it will cycle within your favor if you are worried about "investment" value.
irvinehomeowner
Well-known member
So I did some data churning from the CAR data and although they don't have median prices for Irvine, for Orange County, using a 6-month average and 1-year average to July, prices are slightly up (if I did this right):
https://car.sharefile.com/share/view/s0c02663a5c54e23a
2018 2019
Feb $805,380 $792,500
Mar $824,450 $809,500
Apr $818,000 $825,000
May $838,000 $845,000
Jun $835,500 $842,000
Jul $829,000 $839,450
Avg $825,055 $825,575
2017-18 2018-19
Aug $789,000 $838,500
Sep $799,000 $825,000
Oct $786,000 $810,000
Nov $785,000 $795,000
Dec $785,500 $785,000
Jan $780,000 $796,500
Feb $805,380 $792,500
Mar $824,450 $809,500
Apr $818,000 $825,000
May $838,000 $845,000
Jun $835,500 $842,000
Jul $829,000 $839,450
Avg $806,236 $816,954
They don't have Irvine specific numbers (or I couldn't find them) but as a reflection of Orange County, I'm going to assume Irvine is similar or better. Does anyone have Irvine numbers? Trulia changed their site so they don't have a chart with the recent 3-month rolling average anymore (as far as I saw).
Do our resident realtors (or those who have access to MLS data) have Irvine 6-month and 1-year averages comparing this year to last?
And this is despite a notable decrease in sales volume which no one here has really offered any explanation for.
Also, based on the CAR data, the market top wasn't July/Aug 2018 but actually May/June 2019 which is probably due to the drop in rates.
Most of the real estate sites are predicting a downward trend... but is that seasonal?
https://car.sharefile.com/share/view/s0c02663a5c54e23a
2018 2019
Feb $805,380 $792,500
Mar $824,450 $809,500
Apr $818,000 $825,000
May $838,000 $845,000
Jun $835,500 $842,000
Jul $829,000 $839,450
Avg $825,055 $825,575
2017-18 2018-19
Aug $789,000 $838,500
Sep $799,000 $825,000
Oct $786,000 $810,000
Nov $785,000 $795,000
Dec $785,500 $785,000
Jan $780,000 $796,500
Feb $805,380 $792,500
Mar $824,450 $809,500
Apr $818,000 $825,000
May $838,000 $845,000
Jun $835,500 $842,000
Jul $829,000 $839,450
Avg $806,236 $816,954
They don't have Irvine specific numbers (or I couldn't find them) but as a reflection of Orange County, I'm going to assume Irvine is similar or better. Does anyone have Irvine numbers? Trulia changed their site so they don't have a chart with the recent 3-month rolling average anymore (as far as I saw).
Do our resident realtors (or those who have access to MLS data) have Irvine 6-month and 1-year averages comparing this year to last?
And this is despite a notable decrease in sales volume which no one here has really offered any explanation for.
Also, based on the CAR data, the market top wasn't July/Aug 2018 but actually May/June 2019 which is probably due to the drop in rates.
Most of the real estate sites are predicting a downward trend... but is that seasonal?
irvinehomeowner
Well-known member
August LA Times article:
https://www.latimes.com/business/st...n-california-housing-market-perked-up-in-july
Orange County median price is slightly down though:
Hopefully someone will post what the OCRegister says in their next article.
https://www.latimes.com/business/st...n-california-housing-market-perked-up-in-july
Orange County median price is slightly down though:
Hopefully someone will post what the OCRegister says in their next article.
From a shoppers perspective we have noticed prices dropping slowly. Specifically the more recently build homes in the lower end price range in Irvine.
When we first started looking we noticed very few price drops and when we spoke to seller agents they didn?t think the seller would accept much less than asking, often the house already had an offer or two by the open house day.
A couple months ago we started noticing some price drops. Then more and then our agent would report back and was saying they?d probably go 25-30k under asking since no offers. The new builds also were offering us quite a bit of incentives for quick move in homes. In Portola Springs one condo they were offering 30k plus another 10k if our agent rebated half his commission. It wasn?t the plan we wanted so we passed.
Things definitely feel like they are on our side now. The best homes and deals still draw buyers out so it?s still hard to get the best homes. But overall we feel we are shopping for better quality homes at the same budget we started with. Both resales and new builds.
When we first started looking we noticed very few price drops and when we spoke to seller agents they didn?t think the seller would accept much less than asking, often the house already had an offer or two by the open house day.
A couple months ago we started noticing some price drops. Then more and then our agent would report back and was saying they?d probably go 25-30k under asking since no offers. The new builds also were offering us quite a bit of incentives for quick move in homes. In Portola Springs one condo they were offering 30k plus another 10k if our agent rebated half his commission. It wasn?t the plan we wanted so we passed.
Things definitely feel like they are on our side now. The best homes and deals still draw buyers out so it?s still hard to get the best homes. But overall we feel we are shopping for better quality homes at the same budget we started with. Both resales and new builds.
irvinehomeowner
Well-known member
Although some of you may not trust the CAR, their Housing Market Update seems slightly positive for both volume and prices:
https://www.car.org/marketdata/data/countysalesactivity
https://www.car.org/marketdata/data/countysalesactivity
Liar Loan
Well-known member
IHO - You shouldn't really average a median. The way the OCR does it is compare the median for the full 6-month period to the median for the same 6-month period one year ago.
According to OCR for the first half of 2019:
SFR's ~ Sales -8.5% ~ Median price -2.4%
Condos ~ Sales -10.5% ~ Median price -0.9%
New Homes ~ Sales -34.4% ~ Median price +5.9%
---------------------------------------------------------
TOTAL ~ Sales -12.5% ~ Median price 0.0% (Flat)
According to OCR for the first half of 2019:
SFR's ~ Sales -8.5% ~ Median price -2.4%
Condos ~ Sales -10.5% ~ Median price -0.9%
New Homes ~ Sales -34.4% ~ Median price +5.9%
---------------------------------------------------------
TOTAL ~ Sales -12.5% ~ Median price 0.0% (Flat)
irvinebullhousing
Well-known member
Liar Loan said:
If you insinuating that the chart is a precursor for the incoming crash of Irvine real estate, then either you smoking some good stuffs or you pushing the fear factors. Either way as an active investor, I like both options. But I am afraid it ain?t gonna come to fruition. Put that pipe down. We are not in a decade era ago. The pots though might be a progressive movements in a positive direction
for dudes like you.
irvinehomeowner
Well-known member
Liar Loan said:
Not sure why not. All I did was use the median for each month and average them so you can see what the median is for a 6-month period and a 12-month and compare them.
Median as a data point isn't actually entirely reliable either but that's all the data I have to play with.
Still, just using your numbers, if sales volume is so low, why aren't prices lower?
Liar Loan
Well-known member
Compressed-Village said:Liar Loan said:
If you insinuating that the chart is a precursor for the incoming crash of Irvine real estate, then either you smoking some good stuffs or you pushing the fear factors. Either way as an active investor, I like both options. But I am afraid it ain?t gonna come to fruition. Put that pipe down. We are not in a decade era ago. The pots though might be a progressive movements in a positive direction
The California Association of Realtors (CAR) shows that existing SFR home prices for Orange County increased by 1.3%, but DECREASED by -4.6% in Irvine. I would be very worried if I were you. I'd also give serious thought to selling your investments.
Those that believe Irvine is invincible and will always perform better than the rest of Orange County are about to receive a rude wake up call.
irvinehomeowner
Well-known member
Liar Loan said:
No one believes Irvine is invincible but I posted data last year that showed Irvine fared better than even your coastal cities during the last crash.
So jelly.
Liar Loan
Well-known member
irvinehomeowner said:Liar Loan said:
No one believes Irvine is invincible but I posted data last year that showed Irvine fared better than even your coastal cities during the last crash.
So jelly.
During the last crash, Irvine got bailed out by Chinese buyers. During this crash, Chinese buyers are drying up. So the case could be made that Irvine has more excesses built into the market than coastal cities, which accounts for the faster and sharper drop in prices you are experiencing.
Liar Loan
Well-known member
irvinehomeowner said:
Once you average a series of six or twelve medians, they cease to be medians. You have to pick one or the other, mean or median, because even the lowliest statistics professor at UCI would advise against taking the mean of a series of medians to derive anything meaningful about the data. The mean, median, and mode are all meant to be summary statistics that capture the "center" of the data. They are alternatives to one another, not designed to be layered on top of one another.
Sales volume is a leading indicator of the market. Once sales start to decline, it takes awhile for prices to find a new equilibrium, especially since real estate transactions take a long time to close, and the market then needs time to absorb that new information.
irvinebullhousing
Well-known member
Interesting. So how much longer before we start to see a big drop? You sounds like you know the timing, so fill me in.
Liar Loan
Well-known member
Compressed-Village said:
You don't consider 4.6% of your home's value to be a big drop? That's a $56,000 loss in one year based on Irvine's existing SFR median price.
We are still in the early innings though. The "big" drops will probably begin next year once the rest of OC starts declining like Irvine. There's still a long ways to go before this bottoms out.
irvinebullhousing
Well-known member
Liar Loan said:
You talking bullsh--....my same model matched just closed a month ago with a gain of $50K compared to a year ago on the same model sold. So there you have it. You can't take an average of 4.6% for a neighborhood....You clearly don't know what you talking about. The hood that I am in, seeing an increase on average of 3%. There.....
irvinebullhousing
Well-known member
I got you qouted on this, we will revisit this thread next year, again, like the year before that, and the year, year before that.
That's what they keeps sayin....So at let's see if its your turn now to be right.
That's what they keeps sayin....So at let's see if its your turn now to be right.
irvinehomeowner
Well-known member
Liar Loan said:
So you just proved one of my points. Home prices aren't just data points. There are many factors, including non-fundamentals ones, that can affect pricing that the median/mean/average don't reflect or predict. Many were skeptical of my FCB Theory... seems like your are a believer.
Liar Loan said:
As I said, "housing analysis" isn't just statistics. Why can't we use averages of medians over time to smooth out the outliers so you can see the trends? Look at the numbers I posted, notice something about those medians? Looks a bit seasonal doesn't it?
And using a median from peak to trough and YOY is flawed. Another poster pointed this out to you before on your usage of "median" to determine actual house to house price comparison doesn't really work. I've said this many times before but it's not the same housing stock unless these numbers are broken down into more micro categories. Just like your 28% drop number from peak to trough during the last crash. A reason the median was so low was during that one month, could be more lower priced housing like condos were sold... and conversely, during the peak, higher priced housing like large SFRs sold (which is usually the case, in a rising market, higher end homes sell from move-up buyers cashing in on equity and during a down market, lower end homes sell to first time buyers jumping in and people looking for bargains).
That's why I prefer to use a rolling month average to smooth out this housing stock factor so you get a more realistic picture of what actual price drops were. This also takes into account that home buying isn't an instant transaction (as you said), it takes months from searching to offers to escrow to closing. I did this before but if you use a 3 or 6 month average around your peak/trough points from the last crash, the number is closer to 20% for Irvine which is closer to what I saw in the housing stock I was looking at.
Yes. Someone else keeps saying this too. But according to you guys, sales volume have been down since March 2018. How long does equilibrium take? And since 2018, prices hit a new high in May/June 2019, how did that happen if volumes were at record lows this past year?
And you want to keep using that whopping 4.6% drop. Isn't that within a seasonal delta? I've posted that YOY prices in the last 5-8 years have experienced drops of 5-15% so isn't anything in that range considered business as usual?
Drops beyond that... to me, is worth talking about. Some have predicted that *prices* will drop over 15%. You said "big"... is that what you mean?
And what factors are you citing that would do this? There are no more ninja loans, everyone is well qualified who bought not just in Irvine but most of SoCal. What events are going to lead to "big" drops in Irvine home prices? 2020 Election? Chinese mass exodus from Irvine real estate? Rising mortgage rates? Earthquake? Lagging price to volume inflection point?
But I'll backtrack here a bit. From what I remember before, real estate usually cycles in 7-9 year time spans and it looks like we are due, so any predictions for future drops are more likely to come true... it's just what is the quantity and length of time.
And again, if you can afford it, buying when you find the right home despite what the timing is, isn't exactly a "don't do it" situation. If you can stay, usually it will cycle within your favor if you are worried about "investment" value.
OC_relocation
Member
We moved to Irvine in 2010 during the time of housing crisis. We were new in the country so had no idea about real estate, i wish someone had told us. We had the opportunity to buy SFH in Stonegate for around 500ish, LR for around 800s, PP for around 600K and condos for 300ish. We missed the boat.
We decided to buy in 2012/13 time frame, looked aggressively in Irvine and around OC. We couldn't compete with cash buyers, finally in 2014 we bought a condo.
Irvine in 2010/11 was very different from what we have now, there was no CV, Stonegate was partially built, PS was half built, no signs of GP/Altair/OH(new)/EW.
Now you have many options. There is simple supply demand equation, in next slow down, Irvine will be impacted for sure. How much it will be impacted depends on how desperate people are, and job market.
One of my friends just bought a house at Altair, where builder offered them 200K discount.
I am not an expert in RE by any means, but i would not rush to buy now.
We decided to buy in 2012/13 time frame, looked aggressively in Irvine and around OC. We couldn't compete with cash buyers, finally in 2014 we bought a condo.
Irvine in 2010/11 was very different from what we have now, there was no CV, Stonegate was partially built, PS was half built, no signs of GP/Altair/OH(new)/EW.
Now you have many options. There is simple supply demand equation, in next slow down, Irvine will be impacted for sure. How much it will be impacted depends on how desperate people are, and job market.
One of my friends just bought a house at Altair, where builder offered them 200K discount.
I am not an expert in RE by any means, but i would not rush to buy now.