Housing Analysis

NEW -> Contingent Buyer Assistance Program
How would I have 90s data? All I remember is that a relative bought a house in Lake Forest instead of Irvine in the 90s and their house took longer to recover.

Same story with a few people who bought in Irvine or elsewhere.

I'm not in RE but you seem to have all the charts so you show me that Irvine didn't recover faster like you incorrectly thought in the last drop.

Don't be mad because Irvine is so awesome.
 
irvinehomeowner said:
How would I have 90s data? All I remember is that a relative bought a house in Lake Forest instead of Irvine in the 90s and their house took longer to recover.

Same story with a few people who bought in Irvine or elsewhere.

I'm not in RE but you seem to have all the charts so you show me that Irvine didn't recover faster like you incorrectly thought in the last drop.

Don't be mad because Irvine is so awesome.
Click to expand...
Ok, so USC's investment is a sound one because you remember somebody's house in Lake Forest that didn't do as well? LOL....
 
since we're talking about down 20% in home prices from the peak. Anyone have any stories or experiences with submitting decline-in-value form to OC / LA county?
 
perite123 said:
since we're talking about down 20% in home prices from the peak. Anyone have any stories or experiences with submitting decline-in-value form to OC / LA county?
Click to expand...
I went through it multiple times between 2007-2013 in Orange County. Filing the appeal is easy, but you want to find the strongest comps that you can to prove your point. If you have to go in person, it's a complete PIA because you have to miss work, pay to park, and sit through listening to other people's appeals. The assessor can sometimes be dishonest at the hearing, so you have to be prepared for that and keep your cool.

The better option is to negotiate with them over the phone prior to the hearing. Use some negotiating tactics to lowball your home's value and let them bring you up to what you already know the fair value is. Then the assessor will think they got the "win".

Sometimes, they will actually get the value correct in a declining market and you won't have to do anything. That happened once for me over that five year period.
 
Liar Loan said:
Ok, so USC's investment is a sound one because you remember somebody's house in Lake Forest that didn't do as well? LOL....
Click to expand...

Not really... just commenting on why paying down principal on a property that rebounds quickly could be beneficial in general... I don't know the specifics of USC's property.

But I do remember that the Lake Forest home rebounded slower than similar Irvine homes (I knew which areas they looked to buy new in) and I remember in the 2006 crash where my home rebounded faster than your IE one.

So if we were both paying down principal... guess who made out faster?
 
For the record, I'm still predicting 8% on the peak for mortgages (not yet at peak this cycle). Per Esther George's final parting shot at the Fed, she called them out for not selling the MBS on their book. I feel the Fed will do a fake pivot by not going to the 5.1% they forecast and going where the fed funds futures at 4.9%. People will rejoice, and then they will announce they are selling their MBS securities on book, and the long end will be dragged along for the ride.
 
freedomcm said:
Has the Fed started selling their MBS? Are they just rolling out of their treasury holdings, or selling them outright?
Click to expand...
Still $2T on the books - this is how Powell pushes up the long end of the curve if he sees too many multiple offers in Irvine
 
usctrojancpa said:
But a lot of buyers in Irvine are all cash so no effect there.
Click to expand...
If the cash buyers are from China or foreigners, then yes it will. The higher rates will overall lead to higher USD and weaker purchasing power from the foreigners. Yes, some of them are just corrupt MFers and can bribe their way over here with enough money, but that behavior will come down as the economy slows as a result of the higher rates.
 
usctrojancpa said:
But a lot of buyers in Irvine are all cash so no effect there.
Click to expand...
I've often thought similar. The counter argument might be that financing buyers do participate in Irvine to some degree and higher rates will lower their bids, so FCBs will adjust their offers accordingly. If it's FCB vs FCB bids, then the argument is *if* they're rational buyers, they will adjust their offers to reflect higher cap rates. I doubt that *if* condition always applies though.
 
Last edited:
freedomcm said:
Has the Fed started selling their MBS? Are they just rolling out of their treasury holdings, or selling them outright?
Click to expand...
Nope.

Mortgage-backed securities: -$99 billion from peak.​

1675101334016.png
The balance of MBS dropped by $99 billion since the peak, to $2.64 trillion. Over the past month, the balance dropped by $17 billion, below the cap of $35 billion.

MBS come off the balance sheet largely via pass-through principal payments as mortgages are paid off or are paid down. But these pass-through principal payments have turned into a trickle after mortgage rates spiked, causing refinancings of existing mortgages to collapse and home sales to swoon. These pass-through principal payments, which reduce the MBS balances, are the downward zigs in the chart below.

The Fed stopped buying MBS entirely in mid-September, after having already cut its purchases to near nothing in the prior months. These inflows are the upward zags in the chart, which ended in September.

There have been some mentions by various Fed governors about the possibility of selling MBS outright to get somewhere near the cap of $35 billion a month – which means that the Fed might have to sell between $10-$20 billion a month in MBS. There was no mention of this in the minutes of the December meeting. So we’ll see if we get more discussions of this cropping up.
 
Based on the REAL home price chart, nationwide prices need to fall another 31% (or inflation needs to go up another 46%) to get prices back in line with the historical trend line. Notice we are still above the peak of the 2007 housing bubble.

https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3c189148-a24e-4e01-a0e1-8f88b6fcc44f_939x674.png

And based on the Price-to-Rent chart, nationwide prices need to fall another 35% (or rents needs to go up another 55%) to get prices back in line with the historical trend line. It's interesting how 2006 and 2022 peaked at the same value of 1.7. I wonder if they will bottom out similarly at 1.0?

https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff0878024-9fd9-41d8-aa59-77da68fa4566_939x655.png
 
Last edited:
Don't we agree the prices follow volume? Here' s a snippet of data from a small anonymous berg in socal. Understand that I've watched this little pocket closely (weekly, and for many years daily) for over 20 years. Things really tilted to the far end for several weeks in early 2022, when there was not a single SFR listed for sale. I had never seen that before. Today, things are moving the other way.

There are fewer closed transactions over the last 3 months than I have ever seen before, by far. Ridiculously few, where I had to review my filters to make sure I didn't have something turned on inadvertently. But if I look at 12 months of sales, the data looks almost normal. So looking at time inventory, based on:
past 12 months of sales, we have almost 10 weeks of inventory
past 3 months of sales, we have almost 20 months of inventory

Now, I get that this is a single data point from a small market, but I can tell you that in 20+ years the data has never looked like this. The difference between the 2 speaks to the absolutely violent acceleration that is occurring in sales volume; volume has absolutely crashed. And I think prices are already following, as 2 homes currently listed are at prices well below what I had started to believe we would never see again (basically, for tear-down land value). In early 2022 I'm sure these homes would have sold for 20% more than current list prices.
 
SInce Liar Loan keeps denying his bad predictions, I'll requote them in the very thread he made them,
Liar Loan said:
Prices began falling in January 2019 less than a year after volume started tanking. Nobody predicted a price bottom would be achieved this early in the downturn. Irvine is in for many more years of pain.
Click to expand...
This was in October of 2019... according to LL, Irvine had a PAINfully massive drop of less than 5% by 2020... and then jumped back up to erase that deficit in less than ONE year (sounds seasonal right?).

So 1) If "pain" is a 5% drop... no one should be buying homes EVER because you can expect that % of fluctuation any time and if 2) 1-2 years means "many" more years... someone needs to figure out math or grammar.

Awesome bad call again LL. And don't forget, you tried to shift this definition of "pain" to new Irvine buyers not being able to afford the increased prices that you did not predict. I can find that post too... but I feel sorry for you.
 
Mety said:
Does anyone actually listen to some advice here for buying and not buying home?
Click to expand...
No idea... for some reason, certain people think I have that kind of influence but really? I'm just some random on the Internet who has lived in Irvine for many years... but what I say is just based on my personal experience so take it with a grain of salt. Compare that with certain people who have never lived in Irvine yet profess to be the experts and the all-knowing pinnacles of real estate.

The best lesson I learned in all of this... buy what you want, where you want, when you want... as long as you can afford it. We kept messing up on the "where" at the micro level.
 
This was my personal experience. I almost bought at Great Park, but that legendary environmental hazard sheet YellowFever posted heavily influenced me to reconsider. I didn't buy there but somewhere else in Irvine which turned out better for our family. But I do think GP has great club houses and pools:cool:. Maybe I'll consider buying there if they get rid of that never ending Mello Roos.
 
You must log in or register to reply here.
Back
Top