Observations from the front lines of the Irvine housing market?

[riznick]

Our tenants got lucky then? We included the fridge, washer, & dryer...TBH if I was renting I'd want all those included.  I don't want one extra hassle of dealing with "what to do with the appliances" when moving out. 

The trend has been towards less and less appliances, unfortunately.

They got lucky that they found a match.  Say they already had a washer/dryer/fridge, though...  Then they might not be so lucky as they will need to store them or sell them.  Tenants who buy those appliances are forced to either sell them or find another new place that doesn't have them when they move. 

 

[irvineband]

are there any frontline observations before the spring rolls around? hey

 

[aquabliss]

are there any frontline observations before the spring rolls around? hey

You had me at ?spring rolls?.
Gong Hei Fat Choi!

 

[usctrojancpa]

are there any frontline observations before the spring rolls around? hey

Yes, I'll be posting an update today after I re-list my Columbus Grove condo listing.  Stay tuned...

 

[irvineband]

are there any frontline observations before the spring rolls around? hey

You had me at ?spring rolls?.
Gong Hei Fat Choi!

sorry the ?hey? was a softer way of saying

 

[usctrojancpa]

Sorry for not posting up this data monthly, I?ll try to do it more timely going forward.  The attached spreadsheet has data through Jan. 2019 and I went back and included median price per SF data going back to 2008 (figured it?d filter out some of the noise compared to the average price per SF).  Anyhow, we saw a continued decline in prices (4-5% from Sept to Jan) and sales volume (11% to 31% YOY declines) from September through January but sale volume did spike a bit in October for some reason.  Inventory peaked in late September and than steadily dropped until year-end with an increase of over 100 homes on the market in January.  On average we currently have about 4 months worth of inventory which is a neutral market but the sub $1m market is a very slight seller?s market while the higher end is a buyer?s market with more than 4 months worth of inventory (not including all of the new home shadow inventory which is mostly made up of larger homes).  Many sellers continue to be very stubborn with their asking prices so the ?bid-ask? spread has continued to grow which is a big part of the inventory build up.  The sellers that need to sell (death, relo, divorce, etc) end up cutting prices and become negotiable once their homes sit on the market long enough while the well healed owners refuse to reduce their asking prices materially, if at all.  The number of homes on the market will continue to grow as we get into the Spring selling season and I can see peak inventory this summer being around 1,000 homes. 

On the interest rate front, after the 30-year rates kissing 5% (and ARM rates touching 4%) rates are down back down to around 4% (and 3.25% for a 7-year ARM) with the Fed signaling that they are on pause at the end of January.  I had 6 buyers go on hold with their home searches between September and November of last year because of the high rates and the fear of falling prices.  I?ve had 4 of those buyers re-activate their home search in January and actually helped get 2 of those buyers into escrow.  When I asked them what promoted them to start the home search they said that rates coming down along with decline in prices. A few of the home builders along mentioned that they saw traffic and sales pick up since mid-January. So we?ll see if the lower rates will be a bit of a cushion for real estate in the coming months.  I think we?ll see a 3 handle on the 30-year fixed within the next month or so. 

 

[usctrojancpa]

Here's a few 10-year charts for the visual folks about there for active listings, home sales, median price per SF, and days on market...

 

[lnc]

CoreLogic just reports December national home price increase 4.7 percent from a year ago and increase .10 percent from November. 
https://www.corelogic.com/news/core...-increased-by-4.7-percent-year-over-year.aspx

 

[Loco_local]

Twelve-month home-price growth rate was slowest since August 2012

After peaking in March, December marked the ninth consecutive month of decelerating annual HPI growth in the United States

 

[irvinehomeowner]

@USC:

Since it seems to be the consensus that nationwide housing is slowing more than usual at this time of year, do you observe the same thing for Irvine?

Do you think it will it stay down once spring/summer gets here or as the Closed Sales chart trend shows, it will just pick up again?

 

[meccos12]

@USC:

Since it seems to be the consensus that nationwide housing is slowing more than usual at this time of year, do you observe the same thing for Irvine?

Do you think it will it stay down once spring/summer gets here or as the Closed Sales chart trend shows, it will just pick up again?

Or is it just seasonal?  LOL 

 

[usctrojancpa]

@USC:

Since it seems to be the consensus that nationwide housing is slowing more than usual at this time of year, do you observe the same thing for Irvine?

Do you think it will it stay down once spring/summer gets here or as the Closed Sales chart trend shows, it will just pick up again?

My guess is that prices will be flat to slightly down this year (that's assuming that rates stay flat and the economy doesn't go into recession).  If rates go into the 3s, that'll bring more buyers off the fence and should cushion the market a bit. There are A LOT of stubborn/delusional sellers out there, especially in Irvine. Many of these sellers are foreign owners who own the homes without a mortgage who still think that their properties are special and should be trading above closed comps from early 2018.  I also believe that we will continue to see more properties come to market as we get into Spring and we'll cross the 1,000+ active listing mark sometime this Spring/Summer.  The higher end market ($1.2m+ in Irvine) will be under more pressure than the sub $1m market as builders will be more apt to wheel and deal to sell their "quick move-in" homes.  Remember that the majority of the new homes in Irvine are above are above $1m.  It'll be interesting how Novel Park will sell once they open up later in the Spring.  All that means is that buyers will have more homes to pick from and find reasonable sellers who wants/needs to sell their homes at a reasonable price.  I do see homes that look good and are priced right that go to escrow quickly but that's more the exception than the norm today. 

 

[irvinehomeowner]

@USC:

Since it seems to be the consensus that nationwide housing is slowing more than usual at this time of year, do you observe the same thing for Irvine?

Do you think it will it stay down once spring/summer gets here or as the Closed Sales chart trend shows, it will just pick up again?

Or is it just seasonal?  LOL 

Now you get it. Finally.

 

[meccos12]

@USC:

Since it seems to be the consensus that nationwide housing is slowing more than usual at this time of year, do you observe the same thing for Irvine?

Do you think it will it stay down once spring/summer gets here or as the Closed Sales chart trend shows, it will just pick up again?

Or is it just seasonal?  LOL 

Now you get it. Finally.

LOL.  you are slower than I thought. 

 

[Mety]

@USC:

Since it seems to be the consensus that nationwide housing is slowing more than usual at this time of year, do you observe the same thing for Irvine?

Do you think it will it stay down once spring/summer gets here or as the Closed Sales chart trend shows, it will just pick up again?

Or is it just seasonal?  LOL 

Now you get it. Finally.

LOL.  you are slower than I thought.

Hey mecco12, they think we are the same person now. Should we just merge our names and call it, YellowFever?

 

[meccos12]

@USC:

Since it seems to be the consensus that nationwide housing is slowing more than usual at this time of year, do you observe the same thing for Irvine?

Do you think it will it stay down once spring/summer gets here or as the Closed Sales chart trend shows, it will just pick up again?

Or is it just seasonal?  LOL 

Now you get it. Finally.

LOL.  you are slower than I thought.

Hey mecco12, they think we are the same person now. Should we just merge our names and call it, YellowFever?

They as in IHO? 

 

[newbieinirvine]

I fully agree. I went to Lennar's Cadence Park tour of Marcato, Capella, and Serenade floor plans/homes and they're already chopping $50K-100K off their price list. In fact the Capella homes (3740-4097 SF) price reduction was the most aggressive (up to $150K from list price) AND they had/have 10 homes to show me on the price list (3 of which fell out of escrow last month).

Now, just have to get the secondary sellers to come to terms with the market cycle and cut their prices accordingly! Some of these sellers are delusional.

@USC:

Since it seems to be the consensus that nationwide housing is slowing more than usual at this time of year, do you observe the same thing for Irvine?

Do you think it will it stay down once spring/summer gets here or as the Closed Sales chart trend shows, it will just pick up again?

My guess is that prices will be flat to slightly down this year (that's assuming that rates stay flat and the economy doesn't go into recession).  If rates go into the 3s, that'll bring more buyers off the fence and should cushion the market a bit. There are A LOT of stubborn/delusional sellers out there, especially in Irvine. Many of these sellers are foreign owners who own the homes without a mortgage who still think that their properties are special and should be trading above closed comps from early 2018.  I also believe that we will continue to see more properties come to market as we get into Spring and we'll cross the 1,000+ active listing mark sometime this Spring/Summer.  The higher end market ($1.2m+ in Irvine) will be under more pressure than the sub $1m market as builders will be more apt to wheel and deal to sell their "quick move-in" homes.  Remember that the majority of the new homes in Irvine are above are above $1m.  It'll be interesting how Novel Park will sell once they open up later in the Spring.  All that means is that buyers will have more homes to pick from and find reasonable sellers who wants/needs to sell their homes at a reasonable price.  I do see homes that look good and are priced right that go to escrow quickly but that's more the exception than the norm today.

 

[Mety]

@USC:

Since it seems to be the consensus that nationwide housing is slowing more than usual at this time of year, do you observe the same thing for Irvine?

Do you think it will it stay down once spring/summer gets here or as the Closed Sales chart trend shows, it will just pick up again?

Or is it just seasonal?  LOL 

Now you get it. Finally.

LOL.  you are slower than I thought.

Hey mecco12, they think we are the same person now. Should we just merge our names and call it, YellowFever?

They as in IHO?

Well, IHO's been accusing me as BTB or even his wife for a long time. CV thinks I'm BTB for sure. Now zubs called me and you as BTB reincarnated in New Home Inspection thread. So they must all think we are the same person. I think someone also accused eyephone as you at some point. lol So from their theory, YF=BTB=eyephone=meccos12=Mety. It's kinda fun they think we are the same person. I might as well as act like I'm YF from now on.  > ;D

 

[irvinehomeowner]

Well, IHO's been accusing me as BTB or even his wife for a long time.

Are you eyephone now? Show me where I have been doing what you said for a "long time".

I vaguely recall calling you (or someone else) BTB's wife as a joke because of their ardent support but I think you are stretching this "long time accusation" notion.

 

[meccos12]

@USC:

Since it seems to be the consensus that nationwide housing is slowing more than usual at this time of year, do you observe the same thing for Irvine?

Do you think it will it stay down once spring/summer gets here or as the Closed Sales chart trend shows, it will just pick up again?

Or is it just seasonal?  LOL 

Now you get it. Finally.

LOL.  you are slower than I thought.

Hey mecco12, they think we are the same person now. Should we just merge our names and call it, YellowFever?

They as in IHO?

Well, IHO's been accusing me as BTB or even his wife for a long time. CV thinks I'm BTB for sure. Now zubs called me and you as BTB reincarnated in New Home Inspection thread. So they must all think we are the same person. I think someone also accused eyephone as you at some point. lol So from their theory, YF=BTB=eyephone=meccos12=Mety. It's kinda fun they think we are the same person. I might as well as act like I'm YF from now on.  > ;D

Seems like pretty simple to me.  They (as in IHO, Zubs, CV) argue that housing is strong and there is no slowdown.  They see people (like eye, me, you and few others) claiming it is slowing down.  They attack those people like us.  Everyone finds out the truth that housing is truly slowing down.  They act now to discredit those people that proved them wrong through attacks completely unrelated to topic on hand.  Soon they will change the story and claim they knew housing was slowing and they saw it.