Observations from the front lines of the Irvine housing market?

[Liar Loan]

Stocks could have gone to 0 seems like a hyperbole to me. We're talking about average investors investing in major index funds. There's no evidence of such in the past 4+ decade. Equities has significantly outperformed Irvine RE in any 5 year period in the past 2 + decade.

And this "you at least have a place to live even in case it depreciates" makes even less sense to me. Do people who have not yet bought homes live in the streets? I am a firm believer that one do not need to own a home to be happy in life.

For somebody talking "sophisticated" investing strategies, this is such a wrong statement about stocks and Irvine real estate.  From 2000 to 2005 you would've had a negative stock return (leveraged would have been a blood bath), while Irvine RE doubled or tripled over the same time period.

Kenkoko shouldn't be listened to when it comes to investing.  How's that for a slam dunk?

 

[Kenkoko]

Stocks could have gone to 0 seems like a hyperbole to me. We're talking about average investors investing in major index funds. There's no evidence of such in the past 4+ decade. Equities has significantly outperformed Irvine RE in any 5 year period in the past 2 + decade.

And this "you at least have a place to live even in case it depreciates" makes even less sense to me. Do people who have not yet bought homes live in the streets? I am a firm believer that one do not need to own a home to be happy in life.

For somebody talking "sophisticated" investing strategies, this is such a wrong statement about stocks and Irvine real estate.  From 2000 to 2005 you would've had a negative stock return (leveraged would have been a blood bath), while Irvine RE doubled or tripled over the same time period.

Kenkoko shouldn't be listened to when it comes to investing.  How's that for a slam dunk?

You're right if your time frame is 2000 -2005 . And I did say 2 + decade when I probably should have said past 18-19 years? So I guess you got a internet dunk on me 

I would argue that it's not "sophisticated"

People can mimic this investment strategy by using the Robinhood app today.

Maybe for older folks it is complicated. But certainly not for people who have access to today's tools.

And of course nobody should listen to internet strangers and blindly follow stranger's investment strategy.

I am merely pointing out a common alternative to parking your downpayment in cash or cash like savings.

People should absolutely do their own homework and/or talk to their own professional advisors.

And I think you are barking up the wrong tree Liar Loan. I was poking fun at people trying to get an internet dunk on you.  ;D

 

[irvinehomeowner]

[quote author=irvinehomeowner]
As for Liar Loan, that's a different subject.  He doesn't think Irvine is a good place to make the "largest investment of your life"... which seems contrary to why everyone tends to buy in Irvine in the first place. He always thinks prices in Irvine is dropping every 2 to 3 years... and that everywhere else it's better but who here agrees with that? Where is TalkHB or TalkAlisoVideo or TalkSanCelemente?

IHO, you're making stuff up now to try to smear me.  Unlike you, I actually pay attention to data and respect what it says.  From 2009 - 2012 I was saying the bottom was more or less in and people should be buying like crazy, including in Irvine.  This was across my time on the Lansner Blog, OC Reader, and OC Housing News. 

Larry was the permabear back in 2012 and tried to smear me just like you are doing now.  You are very much like him in letting your personal biases blind you to reality.
[/quote]

Kettle calling the pot black.

Every time you pop in here you talk about Irvine prices dropping. Remember your "pain" prediction? Most Irvine owners are only feeling multiple-over-list price bids for their homes.

When was the last time you had praise for buying in Irvine? No one else here seems to remember that.

 

[irvinebullhousing]

Yup the infamous Irvine crash, tick, tick, tick from LL. Any day now, or is it any month soon, or waitaminute, next year, or maybe a year after that. This has been going on too long. Damnit, uncle Powell, continuing to ruin LL day.

 

[Liar Loan]

When was the last time you had praise for buying in Irvine? No one else here seems to remember that.

The average housing cycle in CA lasts 11 years and the last housing cycle lasted 16 years (1991-2007).  You can't expect me to flip flop every 2-3 years just to make the people on this forum happy.  I was accused of being a perma-bull during the years when I was advising people to buy like crazy, 2009-2012, but you know what?  I stuck by my guns, made a ton of dough, had a ton of fun, and now live in my dreamhouse because I stuck by my convictions.

I'm providing a valuable service on this forum by helping people think critically about their decisions and not letting the emotion of buying in high-priced Irvine overwhelm them.  Most of the posts by others reinforce the hype without asking any questions about the downsides of buying in Irvine.

You can see the level of emotion involved by studying the responses from people like Compressed-Village and zubs who seem to be very affected by my logical and data-driven analysis.  If I can prevent more casualties like them, I've done my job.

 

[Cornflakes]

When was the last time you had praise for buying in Irvine? No one else here seems to remember that.

The average housing cycle in CA lasts 11 years and the last housing cycle lasted 16 years (1991-2007).  You can't expect me to flip flop every 2-3 years just to make the people on this forum happy.  I was accused of being a perma-bull during the years when I was advising people to buy like crazy, 2009-2012, but you know what?  I stuck by my guns, made a ton of dough, had a ton of fun, and now live in my dreamhouse because I stuck by my convictions.

I'm providing a valuable service on this forum by helping people think critically about their decisions and not letting the emotion of buying in high-priced Irvine overwhelm them.  Most of the posts by others reinforce the hype without asking any questions about the downsides of buying in Irvine.

You can see the level of emotion involved by studying the responses from people like Compressed-Village and zubs who seem to be very affected by my logical and data-driven analysis.  If I can prevent more casualties like them, I've done my job.

With that logic everyone will be right 100% of the time. WIth enough time, everything will collapse at some point. Roman empire did, british did, and so on....

Sure at some point Irvine will crash too.

 

[irvinebullhousing]

Common LL you know Irvine pricing only goes up. 


Maybe in your neck of the wood things goes down.


You are preaching to a choir, did not know you are a pastor. Wisdoms.....thanks for your service.

 

[ThirtySomethingWEquity]

Kenkoko shouldn't be listened to when it comes to investing.  How's that for a slam dunk?

Yeah I agree, he tells me I don't understand options, well, why doesn't he explain to me when my 5x leveraged real estate transaction 'expires' and the value goes to 0?  Oh that's right, it doesn't.  Sure I can get crazy leverage from my TDAmeritrade account with options, but I have to be right in both the direction and the timeframe.  Not so with real estate. 

Like I said though,Kenkoko  if you find find me a fund with 4x+ leverage that doesn't involve buying OOM calls that expire in a week LMK and I'll say you're right. 

 

[usctrojancpa]

When was the last time you had praise for buying in Irvine? No one else here seems to remember that.

The average housing cycle in CA lasts 11 years and the last housing cycle lasted 16 years (1991-2007).  You can't expect me to flip flop every 2-3 years just to make the people on this forum happy.  I was accused of being a perma-bull during the years when I was advising people to buy like crazy, 2009-2012, but you know what?  I stuck by my guns, made a ton of dough, had a ton of fun, and now live in my dreamhouse because I stuck by my convictions.

I'm providing a valuable service on this forum by helping people think critically about their decisions and not letting the emotion of buying in high-priced Irvine overwhelm them.  Most of the posts by others reinforce the hype without asking any questions about the downsides of buying in Irvine.

You can see the level of emotion involved by studying the responses from people like Compressed-Village and zubs who seem to be very affected by my logical and data-driven analysis.  If I can prevent more casualties like them, I've done my job.

That's all fine and dandy but you can't predict when we have the gov't and/or the FED stepping in with helicopter money which throws a monkey wrench that average real estate cycle timeline.  The reality is (using data) that Irvine has outperformed all cities except for the beach cities both on the downside and on the upside.  There's no other city in CA that has the backing of a multi-billion dollar corporation like Irvine Company.

 

[Kenkoko]

Kenkoko shouldn't be listened to when it comes to investing.  How's that for a slam dunk?

Yeah I agree, he tells me I don't understand options, well, why doesn't he explain to me when my 5x leveraged real estate transaction 'expires' and the value goes to 0?  Oh that's right, it doesn't.  Sure I can get crazy leverage from my TDAmeritrade account with options, but I have to be right in both the direction and the timeframe.  Not so with real estate. 

Like I said though,Kenkoko  if you find find me a fund with 4x+ leverage that doesn't involve buying OOM calls that expire in a week LMK and I'll say you're right.

I didn't mean any insult if that's what you're getting at. It's just your previous posts made it pretty clear to me that you don't know much about options.

If you are worried about your options expiring and becoming worthless, then don't gamble / speculate with out of the money weekly options.

Even if you insist on buying weekly options, you can still avoid your investment going to 0 by buying deep in the money options. Even if you're wrong about the direction, you won't end up with 0.

You can buy in the money options with longer expiration dates. 3 months, 6 months and yearly options are popular among investors who aren?t active day traders.

Options expiration dates is really never an issue.

You don't have to wait until the option expires to get out of a trade. And most people don't wait until expiration to unwind their option spreads. Even with weekly options, you have plenty of time to unwind an option trade and buy another with later expiration dates (if you want to continue).

You keep asking me to find you an 5x or 4x ETF. I didn?t respond directly to this because through buying options, you don?t even need the underlying stock or ETF to be leveraged.

I gave an example of buying a leveraged ETF + call option as the simplest way to achieve your goal of a 5x leverage. But you don't have to.

You can buy options of a non-leveraged ETF and still mimic a 5x leverage. ( or 3x or 10x whatever you're comfortable with)

Depending on the options expiration date and how deep in the money (or out of the money) you will find different leverage ratios. You can find this info pretty easily and transparently when you open the options chain on your trading platform.

 

[zovall]

If you don't mind south county... your money can get you more in Lake Forest, Aliso Viejo, Laguna Niguel... etc. We looked at those places pretty hard a few years ago but Irvine was closer for us to most of the things we do.

Thoughts on this?https://www.redfin.com/CA/Laguna-Niguel/28491-Breckenridge-Dr-92677/home/4880818

 

[kpatnps]

Yeah I agree, he tells me I don't understand options, well, why doesn't he explain to me when my 5x leveraged real estate transaction 'expires' and the value goes to 0?  Oh that's right, it doesn't.  Sure I can get crazy leverage from my TDAmeritrade account with options, but I have to be right in both the direction and the timeframe.  Not so with real estate. 

Like I said though,Kenkoko  if you find find me a fund with 4x+ leverage that doesn't involve buying OOM calls that expire in a week LMK and I'll say you're right.

Not taking sides in this argument, but I love when options expire and values go to 0.  Those are my favorite actually.

 

[Kenkoko]

If you don't mind south county... your money can get you more in Lake Forest, Aliso Viejo, Laguna Niguel... etc. We looked at those places pretty hard a few years ago but Irvine was closer for us to most of the things we do.

Thoughts on this?https://www.redfin.com/CA/Laguna-Niguel/28491-Breckenridge-Dr-92677/home/4880818

It definitely seems overpriced. We saw this home when it was on the market
https://www.redfin.com/CA/Laguna-Niguel/28672-Abantes-Pl-92677/home/4880889

The agent told us some homes in this area had shifting soil problem. So be on the lookout.

Did you pick this house because you are aiming for the Mandarin immersion program at Marian Bergeson Elementary?

If you're not bound to just Laguna Niguel, I'd recommend going NW to Aliso Viejo near the Soka University area. Homes are newer there and with views. Close to wilderness trails and about same price per sqft.

 

[zovall]

Ah, good to know that about the area. I did not know about the Mandarin immersion program. This home seems to check many boxes for me and I wanted to see what others thought. I like that it has a pool (though it seems this summer may be much different than last summer), 4 bedrooms, open/spacious yard that does not back to other homes or an upslope. It also seems nicely upgraded. It does not have the 3 car wide garage.

 

[irvinehomeowner]

If you don't mind south county... your money can get you more in Lake Forest, Aliso Viejo, Laguna Niguel... etc. We looked at those places pretty hard a few years ago but Irvine was closer for us to most of the things we do.

Thoughts on this?https://www.redfin.com/CA/Laguna-Niguel/28491-Breckenridge-Dr-92677/home/4880818

Well... if you're spending $1.625m, you might as well buy in Irvine.

I agree with Ken, it's a bit high... and... you have to get a 3CWG.

 

[usctrojancpa]

I haven't posted the Irvine data in above 6 months since I've been so swamped with not only trying to get my buyers homes but also listing the most homes I've ever listed in a year.  Attached is the data through Sept 2021 for Irvine which is confirms how strong the market really is.

When I have conversations with my buyers who ask me why there are so few listings on the market I just tell them it's because there is so much demand out there.  It's not a supply problem as there have been almost as many homes listed for sale in Irvine through Sept of this year as there was in all of 2019 or 2020.  In the past 12 months through Sept. 2021 we've had 1,250 more sales (or over 47%) more than 2019.  Another question I get from buyers, is this a bubble and will we prices crash.  My answer to them...it's not going to crash and prices will continue to go higher until there is less demand and more supply of homes on the market.  We currently have less than 1 month of supply of homes on the market because over 90% of listings go into escrow within 7-10 days today with multiple offers. 

The high demand is being driven by several factors including move-up buyers with a ton of equity, first time home buyers, and buyers relocating from LA, the Bay Area, and other higher priced markets due to the work from home flexibility (I've had over a dozen of those buyers in the year myself).  This huge demand has resulted in most all homes getting 5-20+ offers which translated to prices being up about 20% year-over-year as we approach a median price per SF of $600 in Irvine.  Today, we have almost 3x times as many homes in escrow are there are active listings which I have never seen in my 15 years of tracking Irvine real estate.  Until inventory increases significantly, prices will continue to go higher even from today's prices.  Look how much inventory has declined just from June and July, this is why prices keep climbing.

 

[usctrojancpa]

And here are some charts for closed sales, active listings, median prices, and days-on-market (DOM) to show what has been happening in the past 6 months....

 

[aquabliss]

Yikes, that Active Listings chart!  I wonder how far back you have to go to find <300 available listings (if ever). 

 

[Cares]

Nah those charts are fake news. I prefer to go with random OC blogger post about the market crashing.

 

[irvinebullhousing]

Ha ha, I like your thoughts. Good reportings here USC.

That random OC Blogger, claims that I am too emotionally involve in Irvine housing. These charts making me hurts so good. The pains I am feeling never felt better..  . Of course, next year, he'll be back to drop a line or two of the same shits.

You gotta love those trolls though, because without naysayers, it ain't fun.