Move Up: Right Time?

NEW -> Contingent Buyer Assistance Program
Mety said:
Compressed-Village said:
fortune11 said:
To OP --

first thing you should do is sell your existing home and lock in those equity gains .  All the gains are on paper unless  crystallized

Once that is done, now you have equity and optionality .  If your buyer is an investor or part time resident , they may let you lease it back for a few months to an year while you decide

Few things

1. dont fall for  that "rates are rising" mantra on this forum .  Rates have already risen from 0% to 2% now in the front end and mortgage rates have not moved by the same proportion  .  reason ? long terms interest rates have fallen because market is not buying this story about high growth and high inflation

2.  Housing is not about to crash in Irvine either .  But you have optionality now having sold your home and here is how I would use it --- wait for a few months to see how the impact of these trade tariffs  , midterm elections etc plays out.  stock market has already priced in the tax cuts , but the consumer impact of SALT limitation is yet to be seen (eyephone has a good point there) .  If  Trump really follows through with tariffs then you will be looking at a serious lowering of interest rates (10y treasury might actualy break below 2%) as market actually begins to price in rate cuts as opposed to further rate hikes - this is very important

3. (if the market does soften) Try to optimize location rather than go for the best price discount.  Homes that would have been hard to access without a bidding war may become more available etc.  So keeping the budget the same, you may be able to get a better , more choice location. 

Hope this helps
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This is the most sounds approach. Fortune11, Bullback, Bones, and IHO has been around the corner a few times and offer great advise. This is why TI is so useful. You get the tap the minds of the ones that seen it all before so you don't have guinea-pig yourself. Of course, make certain that it fit your budget.
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You forgot eyephone and BTB. Oh and Starman.
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Ha ha funny, BTB is good at cherry picking data. And rely completely on FCB to float the his investment. And he could be speculator from all his talk about investing strategies that he discussed, this is the wrong approach. Starman, he is on his own world. Nothing connected.
 
Compressed-Village said:
Ha ha funny, BTB is good at cherry picking data. And rely completely on FCB to float the his investment. And he could be speculator from all his talk about investing strategies that he discussed, this is the wrong approach. Starman, he is on his own world. Nothing connected.
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BTW...the Chinese FCB days are over.  CCP basically stopped all that and all the money has already flew out of PRC and depending on the next few years goes...safe money may be in PRC rather than US.
 
I see the trends in that too. Although, they say that they can always find work around.

Eyephone post about a funny story about Canadian work around for stiff shoes tariffs. Had me laughing for a little while looking at the clip of the flying shoe. So I don't know if it will completely go away, just deep under the radar and not prevalence as it once was.
 
10%, 20%, 25%, 50%. These are all speculating numbers, nothing specific.
Who the heck know what number exactly will be?
The point is "Will the price go up or down from here?"
So far you guys are saying it will either go down or stay flat (for Irvine). No one is saying it will go up. Maybe BTB is saying it will go up.

The price will go up eventually as I've stated many times, but that's like speaking of 2035.
To stick with the OP's question, if right now is the right time to buy a move up home, many are predicting either fall or flat.

 
Refer, to Fortune11 comment on this thread, I would use this approach myself, if I am in the OP shoe.

Up or down is irrelevant to me if life situation force me to act, and that I can financial afford it.

Going against the herd sometimes proven to be lucrative.
 
Irvinecommuter said:
BTW...the Chinese FCB days are over.  CCP basically stopped all that and all the money has already flew out of PRC and depending on the next few years goes...safe money may be in PRC rather than US.
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I keep hearing this on TI, but the buyers of my last property wired over $300k USD over the course of 60 days.  I have the bank statements to confirm it, so I'm sure the PRC can try all they want, but the money is still flowing quite well into the US, and Irvine of course. 
 
Mety said:
10%, 20%, 25%, 50%. These are all speculating numbers, nothing specific.
Who the heck know what number exactly will be?
The point is "Will the price go up or down from here?"
So far you guys are saying it will either go down or stay flat (for Irvine). No one is saying it will go up. Maybe BTB is saying it will go up.

The price will go up eventually as I've stated many times, but that's like speaking of 2035.
To stick with the OP's question, if right now is the right time to buy a move up home, many are predicting either fall or flat.
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We are talking in relative term...what is the most likely outcome.  If anyone can time the market accurately...that person would not be living in Irvine.
 
I'd say sell.  I'm not sure how you are calculating cash flow, but if you are just looking at your mortgage and you are negative $250-$350 that's trouble.  Even if you are including HOA, property tax and insurance, there are other costs to consider that negatively impact cash flow.  Some examples:

Management: How are you going to screen, manage and replace tenant?  A mgmt company charges 8-10% of rent.  If you do it yourself, you'll need to find tenants, set up the right paperwork, make sure to comply with landlord laws, be on call if there is a problem, find replacement tenants, etc.

Vacancy: Unless you offer really attractive rental price or are able to negotiate a long term lease, you are likely to have some vacancy months.  Are you able to be on the hook for a new mortgage plus covering the costs on the rental if you aren't getting any income?  Conservative investors use 10% of rent as a conservative estimate for cost.  This covers vacant months as well as work needed to clean up after a departing tenant and do any needed repairs prior to bringing in a new one.

Repairs & Maintenance: How old is the place?  Unless it's new, prepare for some upkeep and potential major expenses as things such as HVAC, water heater, appliances need replacing.  Estimate 5-20% of monthly rent, depending on the condition of the place.

The other thing to consider is your ability to get financing on a new purchase.  Most banks will require you to demonstrate some rental history to give you credit for the rental income on the property.  If you are new to the game, they aren't going to include it in your income but they will include the costs of that property.  So you may find it difficult to get a mortgage on the new place with all those costs going against you.

So my vote is sell.  Either now or wait is up to you.  To me that would depend on whether or not you find a home that suits your needs.  Be on the lookout and buy if you do.  If not you will wait and the market may move in your favor, but it may not.
 
ChiKid24 said:
I'd say sell.  I'm not sure how you are calculating cash flow, but if you are just looking at your mortgage and you are negative $250-$350 that's trouble.  Even if you are including HOA, property tax and insurance, there are other costs to consider that negatively impact cash flow.  Some examples:

Management: How are you going to screen, manage and replace tenant?  A mgmt company charges 8-10% of rent.  If you do it yourself, you'll need to find tenants, set up the right paperwork, make sure to comply with landlord laws, be on call if there is a problem, find replacement tenants, etc.

Vacancy: Unless you offer really attractive rental price or are able to negotiate a long term lease, you are likely to have some vacancy months.  Are you able to be on the hook for a new mortgage plus covering the costs on the rental if you aren't getting any income?  Conservative investors use 10% of rent as a conservative estimate for cost.  This covers vacant months as well as work needed to clean up after a departing tenant and do any needed repairs prior to bringing in a new one.

Repairs & Maintenance: How old is the place?  Unless it's new, prepare for some upkeep and potential major expenses as things such as HVAC, water heater, appliances need replacing.  Estimate 5-20% of monthly rent, depending on the condition of the place.

The other thing to consider is your ability to get financing on a new purchase.  Most banks will require you to demonstrate some rental history to give you credit for the rental income on the property.  If you are new to the game, they aren't going to include it in your income but they will include the costs of that property.  So you may find it difficult to get a mortgage on the new place with all those costs going against you.

So my vote is sell.  Either now or wait is up to you.  To me that would depend on whether or not you find a home that suits your needs.  Be on the lookout and buy if you do.  If not you will wait and the market may move in your favor, but it may not.
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This is a great post.  Only thing I would add is that the rental market is difficult in Irvine because you have a lot of FCB who are not carrying mortgages and thus can price rent lower than you can.  They bought the property for diversification purposes and have significantly lower carrying costs. 
 
Irvinecommuter said:
Burn That Belly said:
Mety said:
Sell now or get priced out forever!
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Always a great time to move up if your ROI meter is at maximum.
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Not really unless you are willing to rent or wait for the dip.  Otherwise, you would just buy into the market anyways with higher taxes and costs.
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Why not wait? What do you have to loose?

 
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