Observations from the front lines of the Irvine housing market?

NEW -> Contingent Buyer Assistance Program
For all the talk about FCB buyers would eventually dump their homes and repatriates their dollars during financial crisis in their homeland, it won?t happen. The lock down in China is even more draconian than during the height of COVID lock down initial 2 years ago.

Why is that not happening?

Because, even if we have our owns problems here. It is still the best place to keep their MONEY. And I suspect once the lock down lift, they will flees like bat out hell away to a safer, rules of law, and more free than any where else that they could go to and that is America.

And looks at the demographics where they park their money, Irvine.
 
Compressed-Village said:
For all the talk about FCB buyers would eventually dump their homes and repatriates their dollars during financial crisis in their homeland, it won?t happen. The lock down in China is even more draconian than during the height of COVID lock down initial 2 years ago.

Why is that not happening?

Because, even if we have our owns problems here. It is still the best place to keep their MONEY. And I suspect once the lock down lift, they will flees like bat out hell away to a safer, rules of law, and more free than any where else that they could go to and that is America.

And looks at the demographics where they park their money, Irvine.
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Be careful where you get your news. As someone with first hand knowledge on this (my parents run businesses in China),  the lockdown now is actually not more draconian than the initial lockdown 2 years ago.

The initial lockdown enforcement brought on actual military + armor units + riot police. This time it's just the riot police.

The major change is the public's negative reaction to "clear zero covid". The public was very cooperative 2 years ago.

As to Chinese FCB buying in Irvine, it already slowed after 2019. Peak was 2016.

Some of them did sell. We personally know of a Chinese family who sold all 4 of their Hidden Canyon homes this year.
 
Due to all the lockdowns in China, my customers are trying to shove more business my way.
I guess I'll just have to enjoy all this attention until they open up again.

I feel like mad max when that community was trying to find a way to move their gasoline.


You want to move your gas, you talk to me
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Kenkoko said:
Compressed-Village said:
For all the talk about FCB buyers would eventually dump their homes and repatriates their dollars during financial crisis in their homeland, it won?t happen. The lock down in China is even more draconian than during the height of COVID lock down initial 2 years ago.

Why is that not happening?

Because, even if we have our owns problems here. It is still the best place to keep their MONEY. And I suspect once the lock down lift, they will flees like bat out hell away to a safer, rules of law, and more free than any where else that they could go to and that is America.

And looks at the demographics where they park their money, Irvine.
Click to expand...

Be careful where you get your news. As someone with first hand knowledge on this (my parents run businesses in China),  the lockdown now is actually not more draconian than the initial lockdown 2 years ago.

The initial lockdown enforcement brought on actual military + armor units + riot police. This time it's just the riot police.

The major change is the public's negative reaction to "clear zero covid". The public was very cooperative 2 years ago.

As to Chinese FCB buying in Irvine, it already slowed after 2019. Peak was 2016.

Some of them did sell. We personally know of a Chinese family who sold all 4 of their Hidden Canyon homes this year.
Click to expand...

What did they do with the money from HC.
roll it into ventures in other ventures in the states or re-introduce it back to china?
 
CLB_srA said:
What did they do with the money from HC.
roll it into ventures in other ventures in the states or re-introduce it back to china?
Click to expand...

Both. Going cash is the current popular move. Although consolidation was their biggest goal.

One of the homes was always empty, and the grandparents' home was rarely used. They were rarely here physically.

The grandchild went to college on the east coast & the parents bought a home in Newport Beach.

 
Kenkoko said:
CLB_srA said:
What did they do with the money from HC.
roll it into ventures in other ventures in the states or re-introduce it back to china?
Click to expand...

Both. Going cash is the current popular move. Although consolidation was their biggest goal.

One of the homes was always empty, and the grandparents' home was rarely used. They were rarely here physically.

The grandchild went to college on the east coast & the parents bought a home in Newport Beach.
Click to expand...

Thanks God for less cash competition from one group. But still having tough time with other everyday buyers. I need rate to go to 10%. That should do it. Right?
 
Compressed-Village said:
Thanks God for less cash competition from one group. But still having tough time with other everyday buyers. I need rate to go to 10%. That should do it. Right?
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Agree local residents still has it tough. Rate hikes would probably hurt local buyers more than foreign investors tho.

There are other measures / policy from other states & countries that California can adopt to dis-incentivize foreign investment & help out local resident buyers.

For example, the property tax rate on Maui for Hawaii resident's primary home is only 0.25%. Non-owner occupied rate more than doubles & they jack up the rate to 400% - 500% for short term rentals and time shares.

In many parts of Asia, foreigners simply cannot buy residential real estate. Part of Asia also have steep escalating property tax % based on # of residential properties owned per individuals. The more homes you own, the higher % taxes you pay.

People often refer to California as a super liberal state, but in reality we are symbolically liberal, but operationally conservative.
 
Rick Palacios of John Burns Real Estate Consulting has some interesting observations from our local home builders:

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irvinehomeowner said:
I would hope new home demand would cool off... it's so expensive now they are even taking bids like resale.
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Many are moving to a hybrid model of half bid and half set price...I don't know why though.
 
Cares said:
irvinehomeowner said:
I would hope new home demand would cool off... it's so expensive now they are even taking bids like resale.
Click to expand...

Many are moving to a hybrid model of half bid and half set price...I don't know why though.
Click to expand...

They set a price and then it's a blind best offer. The Oaks at Portola Hills has been doing this since October.
 
Wow... I did not expect a mainstream news source to declare this so quickly.  Market psychology is changing fast.

The Atlantic: The U.S. Housing Market Has Peaked

I count at least three signs that the national housing market is about to experience a significant slowdown.

First, as the Federal Reserve raises interest rates to combat inflation, mortgage rates are soaring.

Second, the number of homes for sale?a.k.a. housing inventory?is finally perking up after plunging to all-time lows during the pandemic.

In the hottest markets, such as California and Colorado, the number of available homes is increasing significantly faster than the national average, according to Altos Research, while the share of new listings going into contract ?immediately? (meaning within days, or even hours) is declining quickly.

Google searches for homes for sale are falling in major cities, including Boston and Los Angeles. Redfin agents in California say that showings and offers are down double digits since last year.
https://www.theatlantic.com/newslet...housing-market-slowing-down-recession/629901/
 
Well as someone said earlier.
It's the brave forecaster who says housing will go up another 10% from here.

It's easy to forecast a down turn when housing has gone up 30% since 2019.
 
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