Market Top

[ThirtySomethingWEquity]

The best you will get is incentives.

Good enough for me.  Landscaping on a detached condo is going to be what, anywhere from 20k to 60k, and upgrades can easily be 50k if you just get a few upgrades (nothing crazy or structural).  I was days away from putting a deposit down on a new development when I decided to wait things out a bit, turns out the next phase went a few thousand lower.  No incentives yet for the yet to be built houses. 

 

[meccos12]

"The SHIFT in the Orange County housing market continues. The Expected Market Time increased to its highest level since January 2011 and just eclipsed the 120 days mark and tilting more towards a buyers market."

-Steve Thomas from Reports on Housing.

 

[meccos12]

Latest housing numbers in OC: (Reports on Housing)

1. Overall expected time on market at 122 days, making it officially a slight buyers market now.  first time since Jan 2011. 
2.  Inventory at 7218 - 53% higher YoY. 
3.  Demand at 2314 - 30% lower YoY.  Lowest since 2007

 

[Mety]

Latest housing numbers in OC: (Reports on Housing)

1. Overall expected time on market at 122 days, making it officially a slight buyers market now.  first time since Jan 2011. 
2.  Inventory at 7218 - 53% higher YoY. 
3.  Demand at 2314 - 30% lower YoY.  Lowest since 2007

Yes, I think we can say it?s a buyer?s market indeed. I?ve heard even the realtors say that. We will see how long it will stay that way.

 

[eyephone]

Latest housing numbers in OC: (Reports on Housing)

1. Overall expected time on market at 122 days, making it officially a slight buyers market now.  first time since Jan 2011. 
2.  Inventory at 7218 - 53% higher YoY. 
3.  Demand at 2314 - 30% lower YoY.  Lowest since 2007

Yes, I think we can say it?s a buyer?s market indeed. I?ve heard even the realtors say that. We will see how long it will stay that way.

Not all real estate agents say that.

 

[meccos12]

I think this chart says a lot.  Look at the rate of increase in inventory as well as how prolonged the elevated inventory is late into the year.  If one extrapolates this data, inventory beginning 2019 will be high.  We could see >10K homes for sale in 2019 at peak inventory levels during summer months.    Last time we saw inventory that high was in 2011 when it peaked at above 11k after which it dropped continuously and furiously to 3500 in 2012.  in 2014 when the market briefly slowed down we saw inventory peak at 8k, however besides that, peak inventory levels have been between high 5000's to low 7000's at best.  2019 will be an interesting year in my opinion. 

 

[Mety]

Latest housing numbers in OC: (Reports on Housing)

1. Overall expected time on market at 122 days, making it officially a slight buyers market now.  first time since Jan 2011. 
2.  Inventory at 7218 - 53% higher YoY. 
3.  Demand at 2314 - 30% lower YoY.  Lowest since 2007

Yes, I think we can say it?s a buyer?s market indeed. I?ve heard even the realtors say that. We will see how long it will stay that way.

Not all real estate agents say that.

True. But one of them also said the market might pick up in Spring 2019 so the point was NOW is the time to buy. lol. I guess some people actually fall for smooth talk like that.

 

[irvinehomeowner]

So all this talk about low volume and high prices not being sustainable doesn't seem to be holding well in Irvine.

Let's talk about this, why, even though with record low volumes in the past 10 years, are Irvine prices still high?

And it looks like volume is rising, but pricing between May and June has gone down a bit.

Maybe Irvine is opposite world?

 

[Kings]

So all this talk about low volume and high prices not being sustainable doesn't seem to be holding well in Irvine.

Let's talk about this, why, even though with record low volumes in the past 10 years, are Irvine prices still high?

And it looks like volume is rising, but pricing between May and June has gone down a bit.

Maybe Irvine is opposite world?

irvine is the upside down

 

[irvinehomeowner]

Seems like no one wants to discuss why prices are still high while volume is low.

Irvine just has so many non-fundamental factors that keep prices higher than other cities.

Reminds me of when everyone kept predicting over 50% price drops in Irvine 10 years ago but we know how that worked out.

I guess everyone is waiting for prices to drop in December?

 

[zubs]

Prices are still floating up in the air because people don't gotta sell like back in 2008.
The hands are stronger this time around.  Inventory is up, but prices have yet to drop.


It's like the stock market where everyone is saying recession!!...but we're still at 26,300 dow.
But back in the beginning of 2018 we were at 26,300 dow...so you could say we've been flat the entire 2018 to now. 


Just like real estate

 

[irvinehomeowner]

So thanks to USC, here is the breakdown of median prices in Irvine from Jan 2018 to now:

Jan-18 850,000
Feb-18 819,500
Mar-18 800,000
Apr-18 855,000
May-18 868,000
Jun-18 890,000
Jul-18 850,000
Aug-18 870,000
Sep-18 849,000
Oct-18 857,500
Nov-18 898,000
Dec-18 849,000
Jan-19 871,500
Feb-19 860,000
Mar-19 847,000
Apr-19 918,000
May-19 845,000
Jun-19 850,846
Jul-19 860,000
Aug-19 880,000
Sep-19 830,000

Notice that the top was actually April this year, not July 2018. And, July 2019 this year was higher than July 2018. Which doesn't make sense with the slowdown in volume.

And, if you look at the "YOY" for Aug 18 to Aug 19, median prices were up. Now, that's cherry picking as you can look at the YOY for any other months and it can be up or down. So as I've mentioned before, let's smooth out the data by taking a rolling average of 6 months.

I used Mar-Sep as that's the latest 6 month data:

Average Mar-Sep 18:  863,667
Average Mar-Sep 19:  863,974
Rise: 0.04%

In the interest of weeding out anomalies, here is the same calculation using median instead of average:

Median Mar-Sep 18: 855,000
Median Mar-Sep 19: 850,846
Drop: 0.49%

Either way, according to USC's data, Irvine prices have moved less than 0.5% up or down using the last 6 months from last year to this year.

So is the data wrong? Is my math wrong (Excel's actually)? I still think that you need more than just data for the story as you can see that depending on the source, the story changes.

Maybe we will see lower drops in December or next year... but why is it taking that long considering how low the volume went?

 

[Mety]

Apr-19 918,000
May-19 845,000
Jun-19 850,846
Jul-19 860,000
Aug-19 880,000
Sep-19 830,000

Almost $100k dropped within 5 months? If that's true, then it seems pretty bad...

 

[Kings]

all of this data for irvine is flawed because there are phases of new homes being sold that may include more condos than mcmansions and vice versa.  it's not an accurate indicator of market strength/weakness because of the nature of new home development. 

for all we know, apr-19 could have had 100 mcmansion sales and 50 condo sales, while sept-19 could have had 50 mcmansion sales and 100 condo sales.

not to mention all of the people on waitlists for months while their new home is built.

 

[eyephone]

all of this data for irvine is flawed because there are phases of new homes being sold that may include more condos than mcmansions and vice versa.  it's not an accurate indicator of market strength/weakness because of the nature of new home development. 

for all we know, apr-19 could have had 100 mcmansion sales and 50 condo sales, while sept-19 could have had 50 mcmansion sales and 100 condo sales.

not to mention all of the people on waitlists for months while their new home is built.

Hmm.....Big waitlist?

 

[Mety]

all of this data for irvine is flawed because there are phases of new homes being sold that may include more condos than mcmansions and vice versa.  it's not an accurate indicator of market strength/weakness because of the nature of new home development. 

for all we know, apr-19 could have had 100 mcmansion sales and 50 condo sales, while sept-19 could have had 50 mcmansion sales and 100 condo sales.

not to mention all of the people on waitlists for months while their new home is built.

Hmm.....Big waitlist?

What Kings is saying is true, but to get rid of such possibilities I think what IHO did kind of makes sense to see in rolling average and median. So it seems like not much is changing, just small ups and downs, Is that why IHO has been calling it #seasonal?  ;D

I don't know, but there definitely are more people on open houses these days.

 

[Kings]

all of this data for irvine is flawed because there are phases of new homes being sold that may include more condos than mcmansions and vice versa.  it's not an accurate indicator of market strength/weakness because of the nature of new home development. 

for all we know, apr-19 could have had 100 mcmansion sales and 50 condo sales, while sept-19 could have had 50 mcmansion sales and 100 condo sales.

not to mention all of the people on waitlists for months while their new home is built.

Hmm.....Big waitlist?

not sure about today, but historically (the data we're looking at) had lots of waitlists for phases.

 

[Kings]

all of this data for irvine is flawed because there are phases of new homes being sold that may include more condos than mcmansions and vice versa.  it's not an accurate indicator of market strength/weakness because of the nature of new home development. 

for all we know, apr-19 could have had 100 mcmansion sales and 50 condo sales, while sept-19 could have had 50 mcmansion sales and 100 condo sales.

not to mention all of the people on waitlists for months while their new home is built.

Hmm.....Big waitlist?

What Kings is saying is true, but to get rid of such possibilities I think what IHO did kind of makes sense to see in rolling average and median. So it seems like not much is changing, just small ups and downs, Is that why IHO has been calling it #seasonal?  ;D

I don't know, but there definitely are more people on open houses these days.

rolling data won't account for altair beginning selling homes in 2018 (?) vs. condo park down the street in 2019

 

[irvinebullhousing]

Prices are still floating up in the air because people don't gotta sell like back in 2008.
The hands are stronger this time around.  Inventory is up, but prices have yet to drop.


It's like the stock market where everyone is saying recession!!...but we're still at 26,300 dow.
But back in the beginning of 2018 we were at 26,300 dow...so you could say we've been flat the entire 2018 to now. 


Just like real estate

So the BIG SAG economy here we come. No Big Bang bust but slow to nil growth is in the card. So this is all we get for 1.5 trillion tax cut for the rich?

 

[irvinehomeowner]

Yes. I agree that data has some degree of flaws.

I don?t even know if USC?s data which I assume is from the CRMLS includes new home sales which for Irvine is a large data point because it has more new homes than most other OC cities.

That?s why you need a combination of data and experience but some people like to discount the experience part which is why predictions just based on data don?t always pan out.

One would think such lows in volume would result in much lower pricing but here we are still within 0.5 (or 5 depending on whose data you use) percentage points of last year.

Slowdown in volume... yes... in prices... questionable.

And as the April high demonstrated, you can?t really trust single points in time due to outliers.