Market Top

[eyephone]

What stage do you think we are in?

healthy

Considering the real estate market the past five years has been:
- A strong, strong seller's market (under $1million)
- Overheated
- Suffering from lack of supply


The market is now:
- A moderate seller's market (under $1million)
- Prices are flattish (only growing at the rate of inflation)
- Supply is increasing

These are all good things and a sign that the real estate market is becoming healthy. It has not been healthy for the past 5 years.

What are your thoughts regarding Redfin CEO?s statement.

 

[usctrojancpa]

I'll add that, that in a market where prices are only going up 3% per year, a lot of seller's are going to be frustrated.

Imagine you bought the following brand-new home:
$1.1million list price for 2,800sqft detached condo
$150,000 design center upgrades and closing costs
$30,000 landscaping
$10,000 window covering, interior finishes

Total
$1,290,000

When you go to sell, the realtor asks for 1% commission plus 2.5% buyer commission. Just to break even you have to ask:
$1.34m

You were promised you'd make money on real estate, so you list at $1.395m

You'd have this listing:https://www.redfin.com/CA/Irvine/116-Follyhatch-92618/home/143915050

For their 1% commission, your realtor takes two photos and calls it a day. Inventory appears to be spiking and sitting and price reductions are in your future.

Does it mean that prices are falling? No - it just means that some buyers overpaid for their homes.

Unreal, a $1.4m listing and the agent takes 2 cell phone pictures.  haha  The seller bought the home for just under $1.2m in 2016 so even if they get list they'll make less than $100k. 

 

[bones]

Man this is a tough crowd.  Can?t have community photos. Can?t list without comprehensive photos. The house has been listed for 30 hours. Maybe they?re getting the place cleaned/ready. Everyone has different selling strategies.  And sure, maybe this house will sit and sit but give it a chance!

 

[kbinteriordesign]

I'll add that, that in a market where prices are only going up 3% per year, a lot of seller's are going to be frustrated.

Imagine you bought the following brand-new home:
$1.1million list price for 2,800sqft detached condo
$150,000 design center upgrades and closing costs
$30,000 landscaping
$10,000 window covering, interior finishes

Total
$1,290,000

When you go to sell, the realtor asks for 1% commission plus 2.5% buyer commission. Just to break even you have to ask:
$1.34m

You were promised you'd make money on real estate, so you list at $1.395m

You'd have this listing:https://www.redfin.com/CA/Irvine/116-Follyhatch-92618/home/143915050

For their 1% commission, your realtor takes two photos and calls it a day. Inventory appears to be spiking and sitting and price reductions are in your future.

Does it mean that prices are falling? No - it just means that some buyers overpaid for their homes.

Is that the floor plan where the front door opens into the dining/kitchen area? Residence 3 at Cantata by Lennar is designed that way and I don't like it. The exterior elevation of this property looks similar to the Cantata Plan 3.

https://www.lennar.com/new-homes/california/orange-county/irvine/great-park-neighborhoods/cantata-at-cadence-park/residence-3

 

[meccos12]

Mety:

Pick a stage that you think we are in for RE.
1 (mania)
2 (peak)
3 (bust)

None of the above. It is different this time.

I think we are at 2.
But it is different this time. We can't say it will turn out just like 2008.
What stage do you think we are at, eyephone?

Mety: I believe we are at stage 2.

I think many people are feeling the same.
But the real question is would that stage 2 last quite a bit of long time?
Or would it bust soon?

I don?t think many people on TI feel the same. (The nothing has happened attitude)

100% agree

 

[usctrojancpa]

Man this is a tough crowd.  Can?t have community photos. Can?t list without comprehensive photos. The house has been listed for 30 hours. Maybe they?re getting the place cleaned/ready. Everyone has different selling strategies.  And sure, maybe this house will sit and sit but give it a chance!

It's like ThunderDome here....mercy is for the weak.  haha

 

[paperboyNC]

What are your thoughts regarding Redfin CEO?s statement.

Redfin just grew over 33% year-over-year but still lost millions.

If redfin's brokerage business is suddenly flat (same as last year) rather than seeing continued massive growth, it would be devasting to their business plan.

It only reinforces my prediction of flattish prices with growth limited to inflation.

 

[meccos12]

What are your thoughts regarding Redfin CEO?s statement.

Redfin just grew over 33% year-over-year but still lost millions.

If redfin's brokerage business is suddenly flat (same as last year) rather than seeing continued massive growth, it would be devasting to their business plan.

It only reinforces my prediction of flattish prices with growth limited to inflation.

Explain why Redfin's growth reinforces your price predictions?  I personally cannot see how an online brokerage's growth can be correlated to future prices.  Inventory, demand, interest rates, taxes, etc are all factors I could see someone use to argue future prices, but Redfin's growth?  I just dont see how it correlates. 

 

[paperboyNC]

What are your thoughts regarding Redfin CEO?s statement.

Redfin just grew over 33% year-over-year but still lost millions.

If redfin's brokerage business is suddenly flat (same as last year) rather than seeing continued massive growth, it would be devasting to their business plan.

It only reinforces my prediction of flattish prices with growth limited to inflation.

Explain why Redfin's growth reinforces your price predictions?  I personally cannot see how an online brokerage's growth can be correlated to future prices.  Inventory, demand, interest rates, taxes, etc are all factors I could see someone use to argue future prices, but Redfin's growth?  I just dont see how it correlates.

I was asked about it. Redfin's CEO's bearish comments. I am just saying it doesn't reflect an impending housing pricing crash, just a slow return to a neutral market without significant short term price appreciation.

 

[irvinebullhousing]

What are your thoughts regarding Redfin CEO?s statement.

Redfin just grew over 33% year-over-year but still lost millions.

If redfin's brokerage business is suddenly flat (same as last year) rather than seeing continued massive growth, it would be devasting to their business plan.

It only reinforces my prediction of flattish prices with growth limited to inflation.

Explain why Redfin's growth reinforces your price predictions?  I personally cannot see how an online brokerage's growth can be correlated to future prices.  Inventory, demand, interest rates, taxes, etc are all factors I could see someone use to argue future prices, but Redfin's growth?  I just dont see how it correlates.

I was asked about it. Redfin's CEO is bearish. I am just saying it doesn't reflect an impending housing pricing crash, just a slow return to a neutral market without significant short term price appreciation.

Redfin also have a business model of making an offer on your house. There is a big reason for CEO to comes out and state such a slow down to compound the low ball offer from Redfin. There it is.

 

[usctrojancpa]

I'll throw some more data for everyone to chew on....there were 264 closed sales in July vs. 253 closed sales in June in Irvine and both months had 21 business days in the month (per MLS).  Plus inventory levels are still under 700 actively listed homes (690 to be exact...per MLS).  There may be a more significant increase in inventory in other cities in and outside of Irvine. 

 

[lnc]

USCT, can you keep us updated with the Irvine?s monthly sales and inventory level.  I think those numbers are the most crucial data we need to look for.

Back in the housing bubble days around 2008, IIRC, Irvine?s inventory level was in the 800s range but home sales number was only around 80-100 per month.  Right now the monthly sale number and inventory level still looks very healthy but just want to see if these numbers start to turn.

 

[eyephone]

Irvine is not on an island. So you have to consider other cities.

USCT, can you keep us updated with the Irvine?s monthly sales and inventory level.  I think those numbers are the most crucial data we need to look for.

Back in the housing bubble days around 2008, IIRC, Irvine?s inventory level was in the 800s range but home sales number was only around 80-100 per month.  Right now the monthly sale number and inventory level still looks very healthy but just want to see if these numbers start to turn.

 

[eyephone]

Housing is dropping, and it's demand not supply-driven.

 

[irvinebullhousing]

Housing is dropping, and it's demand not supply-driven.

Eyephone, when was your last purchase (year of purchased) of a property? Including primary residence and/or rental investment.

 

[usctrojancpa]

Housing is dropping, and it's demand not supply-driven.

But total sales increased in July vs June and inventory has stayed between 680-700 for the past month and a half.  Irvine isn't immune if other cities' prices drop but it'll drop less than those cities, as had happened in the downturn 10 years ago.

 

[usctrojancpa]

USCT, can you keep us updated with the Irvine?s monthly sales and inventory level.  I think those numbers are the most crucial data we need to look for.

Back in the housing bubble days around 2008, IIRC, Irvine?s inventory level was in the 800s range but home sales number was only around 80-100 per month.  Right now the monthly sale number and inventory level still looks very healthy but just want to see if these numbers start to turn.

I'll revive the thread with the excel sheet that tracks the sales and inventory volume.

 

[lnc]

Housing is dropping, and it's demand not supply-driven.

Of course it?s not but the best way to gauge demand is the sales number.  And that?s why I?m interested in the Irvine?s monthly sales figure to get an sense of housing demands.

 

[meccos12]

Housing is dropping, and it's demand not supply-driven.

But total sales increased in July vs June and inventory has stayed between 680-700 for the past month and a half.  Irvine isn't immune if other cities' prices drop but it'll drop less than those cities, as had happened in the downturn 10 years ago.

Are closed sales from July pending sales from April and May?  If so what were pending sales in July versus April and May? 

The open houses I went to in May and June were packed.  The open houses Ive been to so far in July and August have been pretty dead. 

 

[irvinebullhousing]

Housing is dropping, and it's demand not supply-driven.

But total sales increased in July vs June and inventory has stayed between 680-700 for the past month and a half.  Irvine isn't immune if other cities' prices drop but it'll drop less than those cities, as had happened in the downturn 10 years ago.

Are closed sales from July pending sales from May and June?  If so what were pending sales in July versus May and June? 

The open houses I went to in May and June were packed.  The open houses Ive been to so far in July and August have been pretty dead.

You should go to usccpa open house. It?s all about the treats. And it?s always packed