Housing Analysis

[zubs]

I predict the government will do all they can to keep us rich.
Just like last time.

Who are "us?"

TI readers.

everyone is rich relative to the people living in the garbage dumps in India and Philippines.
Someone is always richer stronger weaker poorer than you.

 

[Mety]

I predict the government will do all they can to keep us rich.
Just like last time.

Who are "us?"

TI readers.

everyone is rich relative to the people living in the garbage dumps in India and Philippines.
Someone is always richer stronger weaker poorer than you.

You don't need to look further to compare people to make you look rich. While there are tons of rich people living in India and Philippines with luxuries you can't even imagine, there are many American people who work under the minimum wages and also some who can't even find a job for themselves in this very county of Orange. But from your point, if you own a home in Irvine and are fortunate enough to be stable with your situation to feed your family, then yeah you can consider yourself rich.

So you're saying the government will do all they can to keep us, Americans, rich? I kind of agree. I think Trump will do anything to prevent The Crash or anything like that while he's the president. I don't know what will happen after he's gone though. Things pile up and burst at some point.

 

[irvinehomeowner]

So... prices won't drop until after the election?

Isn't that seasonal?

Can I see the data?

#elevatorbutton

 

[Mety]

So... prices won't drop until after the election?

Isn't that seasonal?

Can I see the data?

#elevatorbutton

Well, is seasonal something that happens based on regular cycles? Then no, what?s happening is not seasonal at all. It is unusual indeed.

 

[eyephone]

1. You already have seen the slowdown.
2. People do not have the incentive to buy a house like before.
3. Even though it was a tax ?cut? but it was a tax/penalty for homeowners.
4. I would also say it was a rotation from housing to stocks .

@eyephone,

Are you saying because of this Trump tax law, the housing will crash soon?

Or are you simply saying it will have some sort of affects and it might actually recover if the tax law is reversed (or if Trump is out) ?

 

[Mety]

1. Yes, there's been a slowdown for sure. But I expected a lot worse. Instead, the RE market is kind of in a normal mode currently. The only thing we can sort of argue is that it hasn't given that 3% annual appreciation from end of 2018 to end of 2019. It's been flat.

2&3. Yes, the housing tax benefit changed. If your tax return was only dependent from the housing property tax, then it's been a bad news. But other factors on this new tax law gave most people better benefits so it sort of evens out.

4. I've heard that from others also. But most of them were NOT homeowners. We'll see.

So you're saying it's still slowing down. You never really said there would be a crash or anything so I guess you've been right so far.

1. You already have seen the slowdown.
2. People do not have the incentive to buy a house like before.
3. Even though it was a tax ?cut? but it was a tax/penalty for homeowners.
4. I would also say it was a rotation from housing to stocks .

@eyephone,

Are you saying because of this Trump tax law, the housing will crash soon?

Or are you simply saying it will have some sort of affects and it might actually recover if the tax law is reversed (or if Trump is out) ?

 

[Liar Loan]

And December is gone.

Zillow and Redfin list a .4% to 1.2% drop from previous year.

What happen to the price lags?

How does one argue with this?  I can remember less than six months ago when you wouldn't even acknowledge that prices were declining in Irvine, because it was unthinkable!  Now you tout the price declines as if they somehow validate your point, that price declines don't follow volume declines.  I hate to break it to you buddy, but prices have declined (as evidenced by your post) and that is not what one would expect with incomes rising 3% per year and interest rates declining by 1.25% since 2018, creating vastly better affordability.

What we've been witnessing since 2013 and Ben Bernanke's taper talk, is that the housing market is completely dependent on Fed intervention to maintain the appearance of good health.  The thing that has changed during this cycle from all previous housing cycles is the Fed's willingness to explicitly project and prop up the stock and housing markets.  They are no longer worried about maintaining the appearance of independence, as they have in the past, and they've gone from vaguely worded Fed-speak under Greenspan, to explicitly telling the market what to expect for the next several meetings.  If you think about it, the changes at the Fed have been radical for such a conservative institution!

So in order to predict the housing market, one needs to predict the Fed's actions, which has never proven possible.  All we do know is they've shown their commitment to propping up asset markets for the foreseeable future.  That means if this quixotically predicted recession ever does arrive, expect record-breaking low rates and a ramped up version of QE to once again support markets.

 

[irvinehomeowner]

And December is gone.

Zillow and Redfin list a .4% to 1.2% drop from previous year.

What happen to the price lags?

How does one argue with this?  I can remember less than six months ago when you wouldn't even acknowledge that prices were declining in Irvine, because it was unthinkable!  Now you tout the price declines as if they somehow validate your point, that price declines don't follow volume declines.  I hate to break it to you buddy, but prices have declined (as evidenced by your post) and that is not what one would expect with incomes rising 3% per year and interest rates declining by 1.25% since 2018, creating vastly better affordability.

What we've been witnessing since 2013 and Ben Bernanke's taper talk, is that the housing market is completely dependent on Fed intervention to maintain the appearance of good health.  The thing that has changed during this cycle from all previous housing cycles is the Fed's willingness to explicitly project and prop up the stock and housing markets.  They are no longer worried about maintaining the appearance of independence, as they have in the past, and they've gone from vaguely worded Fed-speak under Greenspan, to explicitly telling the market what to expect for the next several meetings.  If you think about it, the changes at the Fed have been radical for such a conservative institution!

So in order to predict the housing market, one needs to predict the Fed's actions, which has never proven possible.  All we do know is they've shown their commitment to propping up asset markets for the foreseeable future.  That means if this quixotically predicted recession ever does arrive, expect record-breaking low rates and a ramped up version of QE to once again support markets.

LL is so fancy with his wordsmithing.

As I said a long time ago, anything within the normal seasonal drops of 5% or even 15% I do not consider a slowdown because then we can say there is a slowdown every year.

The point that your are skirting, is that based on the % drop in volume, prices should be much lower (the cited "difference" from previous seasons), and they are not, only 1% off the high in 2018 based on that OCReg post above.

So when is this "Irvine pain" you touted coming? When the Fed says it can?

 

[Liar Loan]

And December is gone.

Zillow and Redfin list a .4% to 1.2% drop from previous year.

What happen to the price lags?

How does one argue with this?  I can remember less than six months ago when you wouldn't even acknowledge that prices were declining in Irvine, because it was unthinkable!  Now you tout the price declines as if they somehow validate your point, that price declines don't follow volume declines.  I hate to break it to you buddy, but prices have declined (as evidenced by your post) and that is not what one would expect with incomes rising 3% per year and interest rates declining by 1.25% since 2018, creating vastly better affordability.

What we've been witnessing since 2013 and Ben Bernanke's taper talk, is that the housing market is completely dependent on Fed intervention to maintain the appearance of good health.  The thing that has changed during this cycle from all previous housing cycles is the Fed's willingness to explicitly project and prop up the stock and housing markets.  They are no longer worried about maintaining the appearance of independence, as they have in the past, and they've gone from vaguely worded Fed-speak under Greenspan, to explicitly telling the market what to expect for the next several meetings.  If you think about it, the changes at the Fed have been radical for such a conservative institution!

So in order to predict the housing market, one needs to predict the Fed's actions, which has never proven possible.  All we do know is they've shown their commitment to propping up asset markets for the foreseeable future.  That means if this quixotically predicted recession ever does arrive, expect record-breaking low rates and a ramped up version of QE to once again support markets.

LL is so fancy with his wordsmithing.

As I said a long time ago, anything within the normal seasonal drops of 5% or even 15% I do not consider a slowdown because then we can say there is a slowdown every year.

The point that your are skirting, is that based on the % drop in volume, prices should be much lower (the cited "difference" from previous seasons), and they are not, only 1% off the high in 2018 based on that OCReg post above.

So when is this "Irvine pain" you touted coming? When the Fed says it can?

Your numbers were annual drops, so why keep bringing up seasonal?

The drop in sales volume did lead to annual price drops, even though you made the argument multiple times that it wasn't happening.  It did happen.

Somebody that bought in November 2018 had a mortgage payment that was $750 higher than somebody purchasing now, and for that privilege they got to eat a nominal price drop of 1%.  Maybe losing $20,000 in combined higher payments and price depreciation doesn't equate to pain in the twisted world of Irvine home owners, but for the average American that is very real pain.

 

[irvinehomeowner]

And December is gone.

Zillow and Redfin list a .4% to 1.2% drop from previous year.

What happen to the price lags?

How does one argue with this?  I can remember less than six months ago when you wouldn't even acknowledge that prices were declining in Irvine, because it was unthinkable!  Now you tout the price declines as if they somehow validate your point, that price declines don't follow volume declines.  I hate to break it to you buddy, but prices have declined (as evidenced by your post) and that is not what one would expect with incomes rising 3% per year and interest rates declining by 1.25% since 2018, creating vastly better affordability.

What we've been witnessing since 2013 and Ben Bernanke's taper talk, is that the housing market is completely dependent on Fed intervention to maintain the appearance of good health.  The thing that has changed during this cycle from all previous housing cycles is the Fed's willingness to explicitly project and prop up the stock and housing markets.  They are no longer worried about maintaining the appearance of independence, as they have in the past, and they've gone from vaguely worded Fed-speak under Greenspan, to explicitly telling the market what to expect for the next several meetings.  If you think about it, the changes at the Fed have been radical for such a conservative institution!

So in order to predict the housing market, one needs to predict the Fed's actions, which has never proven possible.  All we do know is they've shown their commitment to propping up asset markets for the foreseeable future.  That means if this quixotically predicted recession ever does arrive, expect record-breaking low rates and a ramped up version of QE to once again support markets.

LL is so fancy with his wordsmithing.

As I said a long time ago, anything within the normal seasonal drops of 5% or even 15% I do not consider a slowdown because then we can say there is a slowdown every year.

The point that your are skirting, is that based on the % drop in volume, prices should be much lower (the cited "difference" from previous seasons), and they are not, only 1% off the high in 2018 based on that OCReg post above.

So when is this "Irvine pain" you touted coming? When the Fed says it can?

Your numbers were annual drops, so why keep bringing up seasonal?

The drop in sales volume did lead to annual price drops, even though you made the argument multiple times that it wasn't happening.  It did happen.

Somebody that bought in November 2018 had a mortgage payment that was $750 higher than somebody purchasing now, and for that privilege they got to eat a nominal price drop of 1%.  Maybe losing $20,000 in combined higher payments and price depreciation doesn't equate to pain in the twisted world of Irvine home owners, but for the average American that is very real pain.

What was the volume drop percentage? Like 40% or more and that led to a 1% drop?

Stop dancing, you and others thought it would be more than that.

And if you knew the Fed would intervene like last time, why didn?t you mention that earlier?

 

[zubs]

Everyone knows the FED will intervene.  It's been baked into the pie for awhile.
So let's say the economy goes to shit and housing starts falling.

Current FED balance sheet is 4 trillion.  Why do people have a hard time believing the FED won't make it 6 trillion or 8 trillion or 100 trillion?
What would happen if the FED printed the shit out of the USD?  Certainly housing and stocks would go back up and oil would be $150/barrel...and everyone will clamor for $25/hour min wage.

 

[irvinehomeowner]

So if everyone knows the Fed will intervene... why wait?

 

[zubs]

Can someone tell me why we can't keep printing more money if our economy starts to falter?

I distinctly remember 10 years ago thinking i should stick my money into something...it's getting worthless by the minute!


I think Kyle Bass bought tons of nickels because the metal was worth more than 5cents....something odd like that.

 

[eyephone]

So if everyone knows the Fed will intervene... why wait?

I hope you are joking.
So you are telling people to buy a house because the fed might intervene. I think that?s flawed logic.

 

[Mety]

So if everyone knows the Fed will intervene... why wait?

I hope you are joking.
So you are telling people to buy a house because the fed might intervene. I think that?s flawed logic.

Whenever he puts a smiley face, he's joking.

 

[irvinehomeowner]

Only buy a home if you can afford it and you are fairly certain you can stay it in for at least 5-7 years.

Same thing I've been saying since before the "slowdown".

 

[irvinehomeowner]

So if coronavirus causes a real slowdown, who gets credit for predicting it? qwerty?

 

[Mety]

So if coronavirus causes a real slowdown, who gets credit for predicting it? qwerty?

How do you think it might cause a real slowdown in housing? I know I'm not your boss, but would you care to explain?

 

[irvinehomeowner]

Look at everything you own. Where is most of it made?

 

[Mety]

Look at everything you own. Where is most of it made?

So you're saying this virus could collapse China to the level where it wouldn't be able to run those factories all together?