usctrojancpa
Well-known member
Interest rates continue to drift lower and inventory levels remain stubbornly low so if both of those remain in tact then that will cushion any price declines.
Housing Analysis
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The real concern is the Fed turns into the BOJ and the private market for Treasuries goes bye bye as the Fed has to print just to keep the lights on. The securitization ponzi is over.
You've been wrong on oil price hitting $300. You're being wrong on Irvine condos dropping by 50% by June and you WILL be wrong about mortgage rates hitting 10%.
It is now CONFIRMED that we will get into recession this year. Microsoft just announced layoffs of 10k employees. The Fed is going to raise rates 2 more times, Feb (25/50 points) and March (25 points) and that's it.
Just admit you're wrong and move on.
The higher the Fed goes on the Fed funds rate the lower they'll push longer term rates which will translate to lower mortgage rates, that's the reality because the longer term bond rates are mainly priced off of future inflation expectations. I'll post the year end summary in the next few days for Irvine but Dec had 128 sales and we have 234 active listings on MLS as Wednesday even at 5pm which translates to less than 2 months of inventory. If rates continue to bleed lower and inventory levels remain low those things will cushion any material price declines.
Here's another post with 10% mortgage rate and 50% drop on Irvine condos:
One area I've recently become enamored with is Agoura Hills - 30 mins to Malibu/Zuma, very close to Woodland Hills with amazing food options (esp Japanese) and some great restaurant/shopping options - Lure Fish House being something I would like to see in OC given Harbor Grill shut down.
One of the things that will bring move-up sellers to the market is if rates continue to drop, that's my assumption because I have a few clients who are just not mentally ready to go over the 2s to the 5s even though they want/need more space. Rates in the low-to-mid 4s may be a different story.
This is what a lot of the doomsday predictors don't realize. If we're just talking Irvine, the majority of homeowners are locked in all-time low interest rates and also have equity. Even if you bought in early 2022, you have a very good interest rate and maybe your home value has come down but you're probably not underwater.
So unless you absolutely have to sell, why would you? And if you do decide to sell, you can afford to hold out for a good offer.
This is me and my wife currently. We'd personally love to upgrade to a 4-5bd, 3k+ square feet home. But, I'm also locked into a 2.75% 30yr fixed with 50% equity...which is hard to say goodbye to.
You are like about a half a dozen of my move-up clients. I have a 2.375% 30yr fixed rate on my Tustin Ranch home with about $1m in equity so I was pondering selling it but I decided to rent it as I'm almost $2,000 cash flow positive which goes toward my 3.875% 10-year ARM loan payment on my Irvine home. haha
irvinehomeowner
Well-known member
come on USC - you know the Fed is going all out to push up the long end of the yield curve and the debt ceiling standoff along with the potential for a Treasury liquidity event gvien the much smalle rrole the Primary Dealers play these days mean rates aren't moving down in any meaningful way anytime soon, certainly not enough to stimulate demand for payments 2x what they were; there are also 129 SFRs for sale in Irvine, 10x the inventory in my zip code of 40K people.
The real concern is the Fed turns into the BOJ and the private market for Treasuries goes bye bye as the Fed has to print just to keep the lights on. The securitization ponzi is over.
CalBears96
Well-known member
Give it up.
You've been wrong on oil price hitting $300. You're being wrong on Irvine condos dropping by 50% by June and you WILL be wrong about mortgage rates hitting 10%.
It is now CONFIRMED that we will get into recession this year. Microsoft just announced layoffs of 10k employees. The Fed is going to raise rates 2 more times, Feb (25/50 points) and March (25 points) and that's it.
Just admit you're wrong and move on.
irvinehomeowner
Well-known member
Did I miss this post? Or did I forget it? Maybe I thought this was a joke from @OCtoSV.
usctrojancpa
Well-known member
The higher the Fed goes on the Fed funds rate the lower they'll push longer term rates which will translate to lower mortgage rates, that's the reality because the longer term bond rates are mainly priced off of future inflation expectations. I'll post the year end summary in the next few days for Irvine but Dec had 128 sales and we have 234 active listings on MLS as Wednesday even at 5pm which translates to less than 2 months of inventory. If rates continue to bleed lower and inventory levels remain low those things will cushion any material price declines.
CalBears96
Well-known member
Not a joke.
How low can we go? 30 yr fixed at 3.75% with no fees...
Thanks for the answer SGIP. Our last 2 refis were pretty stringent and that was after 2013 (and we are both W2 earners) so just wondering (and you were part of our original purchase and that was not an easy walk either).
www.talkirvine.com
Here's another post with 10% mortgage rate and 50% drop on Irvine condos:
Newer Irvine listings with crazy WTF asking prices from equity sellers
Over $930/sf and backing up to the Toll Road in this market? Uhhh, I don't think so. https://www.redfin.com/CA/Irvine/53-Royal-Pne-92602/home/112723819 Plus that tile flooring downstairs doesn't look good at all. 2 weeks later and looks like a $170k price drop today down to $2.68M...
www.talkirvine.com
I stand by the 10% rates and 50% off peak for Irvine condos. That will be a normal reaction after a few years of tightening which the markets are trying to push against via the 10 yr showing recession signs except unemployment is still at record lows - IMO a function of too much capital still sloshing around. Virtually no one here seems to think much about the asset price discovery process being normalized after decades of ZIRP and int rate represession. Look big picture - places with sparse inventory like Marin show it first but the blast radius will spread.
I look forward to your write up
Hoping for armageddon in Irvine, OCtoSV wanna do SVtoOC
Totally and fortunately my target areas in South OC are already cratering. Some amazing $3-400/sq ft listings in the Indian Wells area too I've been checking out. As long as mainland FCBs need a place to stash cash most Irvine properties will fare better than most South OC properties but the pain will be felt everywhere especially for recent buyers.Hoping for armageddon in Irvine, OCtoSV wanna do SVtoOC
One area I've recently become enamored with is Agoura Hills - 30 mins to Malibu/Zuma, very close to Woodland Hills with amazing food options (esp Japanese) and some great restaurant/shopping options - Lure Fish House being something I would like to see in OC given Harbor Grill shut down.
irvinehomeowner
Well-known member
does the Irvine for sale inventory include all the new units coming online?
Liar Loan
Well-known member
December into mid-January always has the lowest months-of-supply, so it's hard to draw conclusions from that. I think the Spring/Summer numbers will be a lot more revealing once sellers have had a full year to digest that home prices are indeed going down and the YoY numbers start coming in negative.
irvinehomeowner
Well-known member
Another difference here is many if not most owners have financed into record low mortgage rates.
So they aren't staying for the house... but for the rate.
So just like the last drop, where some predicted droves of sellers and foreclosures because of rising rates on ARMs (which didn't become the tsunami as thought because rates dropped instead), the low locked rates are going keep people from selling.
What is going to compel people to sell other than normal life reasons... no real black swan event yet... like we would probably cash out but where would we go? And if we do... it's not a distressed sale... we can wait for a good offer, we don't have to discount.
So they aren't staying for the house... but for the rate.
So just like the last drop, where some predicted droves of sellers and foreclosures because of rising rates on ARMs (which didn't become the tsunami as thought because rates dropped instead), the low locked rates are going keep people from selling.
What is going to compel people to sell other than normal life reasons... no real black swan event yet... like we would probably cash out but where would we go? And if we do... it's not a distressed sale... we can wait for a good offer, we don't have to discount.
usctrojancpa
Well-known member
One of the things that will bring move-up sellers to the market is if rates continue to drop, that's my assumption because I have a few clients who are just not mentally ready to go over the 2s to the 5s even though they want/need more space. Rates in the low-to-mid 4s may be a different story.
potsticker
Active member
This is what a lot of the doomsday predictors don't realize. If we're just talking Irvine, the majority of homeowners are locked in all-time low interest rates and also have equity. Even if you bought in early 2022, you have a very good interest rate and maybe your home value has come down but you're probably not underwater.
So unless you absolutely have to sell, why would you? And if you do decide to sell, you can afford to hold out for a good offer.
This is me and my wife currently. We'd personally love to upgrade to a 4-5bd, 3k+ square feet home. But, I'm also locked into a 2.75% 30yr fixed with 50% equity...which is hard to say goodbye to.
usctrojancpa
Well-known member
You are like about a half a dozen of my move-up clients. I have a 2.375% 30yr fixed rate on my Tustin Ranch home with about $1m in equity so I was pondering selling it but I decided to rent it as I'm almost $2,000 cash flow positive which goes toward my 3.875% 10-year ARM loan payment on my Irvine home. haha
