How low can we go? 30 yr fixed at 3.75% with no fees...

[OCtoSV]

Everybody still believes in the 'Fed put' because it was in effect for so long.  The Fed was able to lower rates at the first sign of trouble for the past dozen+ years because the economy was in a sustained deflationary environment.  Those days are gone now.  Inflation is at 40 year highs and becoming more entrenched by the day.  The Fed no longer has the luxury of lowering rates at the first sign of pain.  They have to fight inflation for as long as it persists because politically they will get killed if they don't.

CalBruin96 needs to read the Journal and watch some Bloomberg Surveillance, where this morning Ken Rogoff was trying to make the clearly flustered anchor understand the Fed has no choice but to raise rates to 4% for sure and likely up to 5%. Then there was a great piece in the WSJ describing the difference in runoff strategy and magnitude compared to 2017 when is started at $10B/mo, whereas now it starts at $95B/mo, $30B of that MBS. In other words they won't be able to just count on runoff, becuase since no one will be refi'ing the MBS maturities will stretch out so they will need to be sold on the open market.

I am more convinced than ever that current buyers will be underwater for a loong time due to mortgage rates that very few see coming. I'm riding out my 15yr 1.99% - thx Jerome!

 

[irvinebullhousing]

Everybody still believes in the 'Fed put' because it was in effect for so long.  The Fed was able to lower rates at the first sign of trouble for the past dozen+ years because the economy was in a sustained deflationary environment.  Those days are gone now.  Inflation is at 40 year highs and becoming more entrenched by the day.  The Fed no longer has the luxury of lowering rates at the first sign of pain.  They have to fight inflation for as long as it persists because politically they will get killed if they don't.

CalBruin96 needs to read the Journal and watch some Bloomberg Surveillance, where this morning Ken Rogoff was trying to make the clearly flustered anchor understand the Fed has no choice but to raise rates to 4% for sure and likely up to 5%. Then there was a great piece in the WSJ describing the difference in runoff strategy and magnitude compared to 2017 when is started at $10B/mo, whereas now it starts at $95B/mo, $30B of that MBS. In other words they won't be able to just count on runoff, becuase since no one will be refi'ing the MBS maturities will stretch out so they will need to be sold on the open market.

I am more convinced than ever that current buyers will be underwater for a loong time due to mortgage rates that very few see coming. I'm riding out my 15yr 1.99% - thx Jerome!

CalBear switching from a shitty area, sorry, if I offend anyone, to a better area. And the trade off happen when both properties risen rapidly. He did himself well.

You might see it correct in San Jose sooner from the much higher appreciation to date compare to Irvine. So I say NorCal might see it earlier.

 

[OCtoSV]

Everybody still believes in the 'Fed put' because it was in effect for so long.  The Fed was able to lower rates at the first sign of trouble for the past dozen+ years because the economy was in a sustained deflationary environment.  Those days are gone now.  Inflation is at 40 year highs and becoming more entrenched by the day.  The Fed no longer has the luxury of lowering rates at the first sign of pain.  They have to fight inflation for as long as it persists because politically they will get killed if they don't.

CalBruin96 needs to read the Journal and watch some Bloomberg Surveillance, where this morning Ken Rogoff was trying to make the clearly flustered anchor understand the Fed has no choice but to raise rates to 4% for sure and likely up to 5%. Then there was a great piece in the WSJ describing the difference in runoff strategy and magnitude compared to 2017 when is started at $10B/mo, whereas now it starts at $95B/mo, $30B of that MBS. In other words they won't be able to just count on runoff, becuase since no one will be refi'ing the MBS maturities will stretch out so they will need to be sold on the open market.

I am more convinced than ever that current buyers will be underwater for a loong time due to mortgage rates that very few see coming. I'm riding out my 15yr 1.99% - thx Jerome!

CalBear switching from a shitty area, sorry, if I offend anyone, to a better area. And the trade off happen when both properties risen rapidly. He did himself well.

You might see it correct in San Jose sooner from the much higher appreciation to date compare to Irvine. So I say NorCal might see it earlier.

great example. I would make the same choice to escape Eastvale for OC as well and not worry about how long the house is underwater as it's not an investment.

Bay area may see that cooling faster due to the eye watering run up however there are some structural constraints here, such as no Irvine or Ladera or Rancho Mission Viejo - recently built communities with gobs of potential inventory. There are some larger newer developments in the East Bay but nowhere near the scale of any of the aforementioned developments and every City Council aside from San Jose is ardently slow growth.

 

[sleepy5136]

Everybody still believes in the 'Fed put' because it was in effect for so long.  The Fed was able to lower rates at the first sign of trouble for the past dozen+ years because the economy was in a sustained deflationary environment.  Those days are gone now.  Inflation is at 40 year highs and becoming more entrenched by the day.  The Fed no longer has the luxury of lowering rates at the first sign of pain.  They have to fight inflation for as long as it persists because politically they will get killed if they don't.

CalBruin96 needs to read the Journal and watch some Bloomberg Surveillance, where this morning Ken Rogoff was trying to make the clearly flustered anchor understand the Fed has no choice but to raise rates to 4% for sure and likely up to 5%. Then there was a great piece in the WSJ describing the difference in runoff strategy and magnitude compared to 2017 when is started at $10B/mo, whereas now it starts at $95B/mo, $30B of that MBS. In other words they won't be able to just count on runoff, becuase since no one will be refi'ing the MBS maturities will stretch out so they will need to be sold on the open market.

I am more convinced than ever that current buyers will be underwater for a loong time due to mortgage rates that very few see coming. I'm riding out my 15yr 1.99% - thx Jerome!

CalBear switching from a shitty area, sorry, if I offend anyone, to a better area. And the trade off happen when both properties risen rapidly. He did himself well.

You might see it correct in San Jose sooner from the much higher appreciation to date compare to Irvine. So I say NorCal might see it earlier.

great example. I would make the same choice to escape Eastvale for OC as well and not worry about how long the house is underwater as it's not an investment.

Bay area may see that cooling faster due to the eye watering run up however there are some structural constraints here, such as no Irvine or Ladera or Rancho Mission Viejo - recently built communities with gobs of potential inventory. There are some larger newer developments in the East Bay but nowhere near the scale of any of the aforementioned developments and every City Council aside from San Jose is ardently slow growth.

Underwater on property isn?t that big of a deal if it?s a primary residence. I?d be more concerned about unemployment. If you are unemployed, it won?t matter whether you are underwater or not. You will need to figure out how to pay your mortgage or be forced to sell the home and rent. Or pray that gov will throw in forbearance again.

 

[CalBears96]

Underwater on property isn?t that big of a deal if it?s a primary residence. I?d be more concerned about unemployment. If you are unemployed, it won?t matter whether you are underwater or not. You will need to figure out how to pay your mortgage or be forced to sell the home and rent. Or pray that gov will throw in forbearance again.

Which is why, as IHO stated before, you do all the math. You always have to assess the risk of buying. At any point. How long can you sustain the mortgage if you get laid off, for example?

For me, if I sold both my current home and rental, I could pay off the new home, but why would I do that when I could get 2.875% loan? So even if I got laid off, I could go years without having to worry.

It's different for other people, of course. So they have to assess the risk.

 

[Liar Loan]

Underwater on property isn?t that big of a deal if it?s a primary residence. I?d be more concerned about unemployment. If you are unemployed, it won?t matter whether you are underwater or not. You will need to figure out how to pay your mortgage or be forced to sell the home and rent. Or pray that gov will throw in forbearance again.

Which is why, as IHO stated before, you do all the math. You always have to assess the risk of buying. At any point. How long can you sustain the mortgage if you get laid off, for example?

For me, if I sold both my current home and rental, I could pay off the new home, but why would I do that when I could get 2.875% loan? So even if I got laid off, I could go years without having to worry.

It's different for other people, of course. So they have to assess the risk.

Job losses and housing downturns tend to go hand-in-hand.  You may find the math has changed when you can't easily sell into a declining market.  Of course, as a buyer in '05 you know that.

 

[usctrojancpa]

Underwater on property isn?t that big of a deal if it?s a primary residence. I?d be more concerned about unemployment. If you are unemployed, it won?t matter whether you are underwater or not. You will need to figure out how to pay your mortgage or be forced to sell the home and rent. Or pray that gov will throw in forbearance again.

Which is why, as IHO stated before, you do all the math. You always have to assess the risk of buying. At any point. How long can you sustain the mortgage if you get laid off, for example?

For me, if I sold both my current home and rental, I could pay off the new home, but why would I do that when I could get 2.875% loan? So even if I got laid off, I could go years without having to worry.

It's different for other people, of course. So they have to assess the risk.

Job losses and housing downturns tend to go hand-in-hand.  You may find the math has changed when you can't easily sell into a declining market.  Of course, as a buyer in '05 you know that.

Agree about the jobs and housing downturn hence why I don't see the market falling apart in the near term since there are 1.9 open jobs per unemployed person.  So just like a lack of inventory in housing, there is a lack of employees for open jobs.  Until both turn, you won't see much downside in real estate prices.

 

[CalBears96]

LL, why do you always post useless shit? Why do you keep mentioning "you can't easily sell into a declining market" when NOBODY is talking about selling your primary residence when it's under water?

What everyone is saying, you do the math to assess the risk of buying a home to LIVE IN. If you're able to pay the mortgage even if you're laid off for several months, then you buy. If you cannot, then maybe it's not a good idea to buy. Why would anyone want to sell their primary residence when it goes under water?

 

[morekaos]

Tell that to all the fools who lost their asses in the 2007-2009 market? ;D ;D >

 

[irvinebullhousing]

Tell that to all the fools who lost their asses in the 2007-2009 market? ;D ;D >

I know some of these fools. As a matter of facts, two of them were my old neighbors. Leverage loans and zero down.

And no income docs. Then my hair cut guy, owns 3 homes.

That was the story of 07-09. These are real, I am not making it up. Today buyers, better show the MONEY.

 

[Danimal]

Tell that to all the fools who lost their asses in the 2007-2009 market? ;D ;D >

I bought my Woodbury home as a primary home in 2009.  Its fair marker value has tripled.  Such a foolish investment  8)

 

[sleepy5136]

Tell that to all the fools who lost their asses in the 2007-2009 market? ;D ;D >

apples vs oranges. no income checks and zero down where as right now if my bank statement is missing the ending page, they will ask for the bank statement with ALL pages.

 

[Liar Loan]

There are thousands of homes lost in Irvine alone, as documented on the predecessor blog to this forum.

 

[irvinehomeowner]

There are thousands of homes lost in Irvine alone, as documented on the predecessor blog to this forum.

Where is the data?

Show us the numbers of ?lost? homes in Irvine and then show us the numbers for other OC cities. It?s already been proven there was more ?pain? outside of Irvine.

Did you ask morekaos for backup? He usually avoids these type of threads because his knowledge of Irvine real estate is about as expansive as his understanding of health science.

 

[morekaos]

There are thousands of homes lost in Irvine alone, as documented on the predecessor blog to this forum.

Where is the data?

Show us the numbers of ?lost? homes in Irvine and then show us the numbers for other OC cities. It?s already been proven there was more ?pain? outside of Irvine.

Did you ask morekaos for backup? He usually avoids these type of threads because his knowledge of Irvine real estate is about as expansive as his understanding of health science.

LL hardly needs my help....I unloaded my Irvine place back in 2007 somewhere near that top and rented in Naples till we bought our home in 2011 at the last bottom.  While renting I was shorting Countrywide, Citibank, Washington Mutual and made a fortune riding New Century to its demise.  Used that chunk as my down for our water house.  Just refied it with a cash out 30 year fixed in February, just checked that loan and it is over 5.5% APR today.  LL knows the trends.  We are in one now.

 

[irvinebullhousing]

There are thousands of homes lost in Irvine alone, as documented on the predecessor blog to this forum.

Where is the data?

Show us the numbers of ?lost? homes in Irvine and then show us the numbers for other OC cities. It?s already been proven there was more ?pain? outside of Irvine.

Did you ask morekaos for backup? He usually avoids these type of threads because his knowledge of Irvine real estate is about as expansive as his understanding of health science.

LL hardly needs my help....I unloaded my Irvine place back in 2007 somewhere near that top and rented in Naples till we bought our home in 2011 at the last bottom.  While renting I was shorting Countrywide, Citibank, Washington Mutual and made a fortune riding New Century to its demise.  Used that chunk as my down for our water house.  Just refied it with a cash out 30 year fixed in February, just checked that loan and it is over 5.5% APR today.  LL knows the trends.  We are in one now.

The trend is your friend. Funny that you said that, because the last crash outside of Irvine was even much more severe. Look at Riverside, Chino, Rancho Cuca. of the % of peak and bottom. And compare that to Irvine. I believe in cycles, sure. You gotta have this works to clear out dead wood. Garbage Grove and those areas were similar. The problem with LL is doesn't even talk about real estate as whole but only focus on Irvine, which were a very well to do city by comparison. His Garbage Grove hood will be severly under water when compare to Irvine with this cycle. We are critical of Irvine crazy listing as well as LL, that's why there is a thread of WTF price for Irvine. But elsewhere beyond Irvine you have crap shack for over a million dollar box, and not even liveable. Compare that to Irvine then we can talk. Otherwise his hatred for Irvine is not justify. And to say that his attempts was to save people from making mistakes. I know that people that buy today, are the one that trade up to a better town, better school and better climate, while made good money sold their home elsewhere.

 

[Liar Loan]

There are thousands of homes lost in Irvine alone, as documented on the predecessor blog to this forum.

Where is the data?

Show us the numbers of ?lost? homes in Irvine and then show us the numbers for other OC cities. It?s already been proven there was more ?pain? outside of Irvine.

Did you ask morekaos for backup? He usually avoids these type of threads because his knowledge of Irvine real estate is about as expansive as his understanding of health science.

LL hardly needs my help....I unloaded my Irvine place back in 2007 somewhere near that top and rented in Naples till we bought our home in 2011 at the last bottom.  While renting I was shorting Countrywide, Citibank, Washington Mutual and made a fortune riding New Century to its demise.  Used that chunk as my down for our water house.  Just refied it with a cash out 30 year fixed in February, just checked that loan and it is over 5.5% APR today.  LL knows the trends.  We are in one now.

The trend is your friend. Funny that you said that, because the last crash outside of Irvine was even much more severe. Look at Riverside, Chino, Rancho Cuca. of the % of peak and bottom. And compare that to Irvine. I believe in cycles, sure. You gotta have this works to clear out dead wood. Garbage Grove and those areas were similar. The problem with LL is doesn't even talk about real estate as whole but only focus on Irvine, which were a very well to do city by comparison. His Garbage Grove hood will be severly under water when compare to Irvine with this cycle. We are critical of Irvine crazy listing as well as LL, that's why there is a thread of WTF price for Irvine. But elsewhere beyond Irvine you have crap shack for over a million dollar box, and not even liveable. Compare that to Irvine then we can talk. Otherwise his hatred for Irvine is not justify. And to say that his attempts was to save people from making mistakes. I know that people that buy today, are the one that trade up to a better town, better school and better climate, while made good money sold their home elsewhere.

Parts of your comment are correct and other parts are not. 

I expect this to be a nationwide housing downturn, not just Irvine specific like the 2018 downturn.  In preparation for an overdue recession, I sold my inland rentals after they had more than doubled in price.  The conservative thing to do for someone that didn't care about economic cycles would have been to hold them, since they did throw off massive cashflow.  But since I'm more of a market timer and trend-follower, selling made the most sense.  I'll let someone else deal with the stress of a downturn, including higher vacancy, higher job losses, and higher property taxes thanks to bankrupt city governments.  You can make bundles on inland markets when the cycle is going up, but the downside risk is much greater when the music stops.  Crashes tend to be worse and last for longer than OC.

As I've said before, if people want to buy as a place to live that's fine by me.  I'm only providing information about the growing risks to the real estate market, and that information should not bother these people.  CalBears and IHO seem incredibly insecure about their home prices, which belies the fact that a home is more than just a place to live in their minds, despite the lip service they pay to "buy anytime if you can afford it".  If they really felt that way, then they too would be cheering for a downturn so they could pick up more of that precious, sweet Irvine master-planned goodness near the bottom.

I'm in line with your view that real estate on sale is a good thing.  I bought as much as I could during the first half of this past cycle, and I hope to buy even more during the next cycle if the Fed actually has the guts to let things correct.

 

[morekaos]

There is the big question of "is this a Volker style Fed?" of just a  Gen Z limp Fed that has little tolerance for any pain.  Much like the Obama years where Government intervention in the mortgage market only prolonged the inevitable pain (Manuel the gardener was going to lose that house no matter how many time you re-negotiated the mortgage.)  Corrections need to naturally correct..like trying to slow a mudslide...best to just let it run its course then clean it up.

 

[irvinehomeowner]

CalBears and IHO seem incredibly insecure about their home prices, which belies the fact that a home is more than just a place to live in their minds, despite the lip service they pay to "buy anytime if you can afford it".

More lies.

Where am I insecure about my home price? I'm not actively shopping anymore so it doesn't really matter.

It's you that are insecure about Irvine home prices... because you have been so wrong about them.

Hilarious.

If they really felt that way, then they too would be cheering for a downturn so they could pick up more of that precious, sweet Irvine master-planned goodness near the bottom.

You're such a contradiction. You brag about the pain homeowners go through when prices drop but are concerned about the pain first time homebuyers have trying to buy when prices are high.

Which one are you cheering for?

Maybe you should start using purple font too so we know to ignore the blathering contained therein.

 

[The Motor Court Company]

I think IHO may actually want the price to fall so he can get a 3CWG single story house in Turtle Rock

CalBears and IHO seem incredibly insecure about their home prices, which belies the fact that a home is more than just a place to live in their minds, despite the lip service they pay to "buy anytime if you can afford it".

More lies.

Where am I insecure about my home price? I'm not actively shopping anymore so it doesn't really matter.

It's you that are insecure about Irvine home prices... because you have been so wrong about them.

Hilarious.

If they really felt that way, then they too would be cheering for a downturn so they could pick up more of that precious, sweet Irvine master-planned goodness near the bottom.

You're such a contradiction. You brag about the pain homeowners go through when prices drop but are concerned about the pain first time homebuyers have trying to buy when prices are high.

Which one are you cheering for?

Maybe you should start using purple font too so we know to ignore the blathering contained therein.