irvinebullhousing
Well-known member
OCtoSV said:
San Jose housing??KABOOMM
Poll: Irvine Housing Prediction June 2022
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San Jose housing??KABOOMM
Around 25% from peak to trough with desirable SFR homes declining 15-20% and attached condos declining 30-35%.
2. Ongoing War. Gas is lower but still up significantly
3. China COVID. Lockdowns there can impact supply chain.
I recalled with the new builds, the builders were asking during the peak were around $400/sq.ft. And after the crash, most of them were reduced to around $350-$360/sq.ft. Lambert Ranch was the lowest new build base on price per sq.ft. and was asking about $340 per sq.ft.
The price for existing home were all over the place. The inventory of existing home were so low after the crash, almost just like now, many still asking in the high $300/sq.ft range. A few foreclosure at auction did fetch below $300/sq.ft and some short sales were at low $300s/sq.ft., but these are not easily accessible to most buyers.
1. Rents won't go up if we are in recession, rents drop slightly or worst case stay flattish
2. The ongoing war is more of a problem for Europe and as we go into recession the demand for oil/gas drops
3. This is true but the line of container ships waiting outside of the LA/LB port is down over 80% from this time last year so that tells me demand is down because it's not like the port got more efficient
There is another China angle I didn't even include in my thesis but that I am uniquely informed on due to exposure to high end datacenter equipment manufacturing: taking mfg out of China means potentially doubling costs. China has no peer in high end/high volume PCBA mfg, and they do it cheaper than anyone else. An endless supply of migrant labor that will always work the overtime and a relentless focus on improvement is cultural and trying to replicate that in MX or MY or VN or wherever will be a Sisyphean quest. Meanwhile we will see all consumer prices rise for virtually everything we buy or service we use as a result.
So if I say this, certain people think I'm biased... but this is what I've been saying for years.
Those over 50% drops in Irvine that were predicted never happened. Even 40% is more an exception than the the rule.
My townhouse I bought in 2009 for ~450k sold for $650k in 2007. Now, I got it on a short sale and it was trashed at the time, so definitely not typical, but still at least one example of a pretty drastic crash.
Thanks. This is good info. Is it from reliable source?
I am no statistician but from the numbers it appears that inflation or mortgage rates do no necessarily have consistent positive or negative impact on home prices. I did find two noteworthy peak-to-peak drop and recovery cycles from 1991-1998 and 2006-2018.
No doubt producing PCBA in not China will be more expensive for the reasons you mentioned. The rub is that letting one country control such an essential precursor supply for so many finished goods makes supply chain partners almost exclusively reliant that country. When it works people in developed countries get new phones annually for cheap and Foxconn keeps it's anti-suicide nets up, but when China decides to shut down sections of it's economy, the supply chain suffers and final products get delayed. We're seeing the effects of that now.
Same logic for expanding production of semi conductors outside of Taiwan in case god forbid there's a problem in Taiwan.
It seems like the benefit of diversifying the electronics manufacturing to countries outside of China (and Taiwan) may be less about pricing and more about making the supply chain more resilient against the whims of a single country.
In Irvine? Still 30% drop... not 50%+.
Not many SFRs dropped more than 20%, esp 3CWGs.
With that said, we have a tight labor market. Unemployment rate is 3.6% I believe? So unless there is a mass layoff that occurs, we will probably run into stagflation and that's where inflation will not "cool" off. Rents will continue to stay high or elevated. Also, we are in a world of globalization. If one part of the world falls, we are not immune to it. Just like how gas prices are going up here and we are complaining about $6 per gallon when Europe is probably $10+ per gallon. If gas prices remain elevated, it means inflation will not cool as everything requires gas to deliver goods to the stores. Price pressures will remain. Consumers are still spending but not at the rate as it use to. Probably has something to do with low unemployment rate. What are you going to do if groceries are up 10-15%? Not eat? Costco can't even tell me when chicken thighs will be on a scheduled basis. They're saying there will continue to be a shortage for the next 6 months. And let's not even get started about China zero covid policy and how much of an impact that can have to the entire world. Ask Elon Musk and he can tell you how that has impacted his business.
I can definitely be wrong about this, but I really don't see any event where inflation will slow down near term unless massive layoffs happen. Especially with China's covid policy and the war going on. Though once we start seeing layoffs happen and unemployment ticking up I think things will go down and the Fed will then act accordingly to lower rates. But that isn't showing in the data yet.
San Jose housing??KABOOMM
Liar Loan
Well-known member
Home prices always fall in Spring.... Must be seasonal.
The SoCal housing market is cooling. Here?s how far prices have fallen
The SoCal housing market is cooling. Here?s how far prices have fallen
- In Los Angeles County, the median sales price was $860,000. That?s 8.9% higher than in June 2021 but unchanged compared with May.
- In Orange County, the median sales price was $1.025 million. That?s 13.9% higher than in June 2021 but 2.8% lower than in May.
- In Riverside County, the median sales price was $594,500. That?s 16.6% higher than in June 2021 but 0.7% lower than in May.
- In San Bernardino County, the median sales price was $517,750. That?s 16.9% higher than in June 2021 but 1% lower than in May.
- In San Diego County, the median sales price was $825,000. That?s 10.1% higher than in June 2021 but 2.9% lower than in May.
irvinebullhousing
Well-known member
We will get back to boring. The hot run is over and now, housing will be a place to live, a home. I don't mind it getting boring. FWIW, it was one hell of a run. The shinny pool and all those cool upgrades in a house are still things nice to have, at the end of the day, we all need a roof over our heads.
usctrojancpa
Well-known member
huuur said:
Around 25% from peak to trough with desirable SFR homes declining 15-20% and attached condos declining 30-35%.
sleepy5136
Well-known member
1. Rents.USCTrojanCPA said:
2. Ongoing War. Gas is lower but still up significantly
3. China COVID. Lockdowns there can impact supply chain.
huuur said:
I recalled with the new builds, the builders were asking during the peak were around $400/sq.ft. And after the crash, most of them were reduced to around $350-$360/sq.ft. Lambert Ranch was the lowest new build base on price per sq.ft. and was asking about $340 per sq.ft.
The price for existing home were all over the place. The inventory of existing home were so low after the crash, almost just like now, many still asking in the high $300/sq.ft range. A few foreclosure at auction did fetch below $300/sq.ft and some short sales were at low $300s/sq.ft., but these are not easily accessible to most buyers.
usctrojancpa
Well-known member
sleepy5136 said:
1. Rents won't go up if we are in recession, rents drop slightly or worst case stay flattish
2. The ongoing war is more of a problem for Europe and as we go into recession the demand for oil/gas drops
3. This is true but the line of container ships waiting outside of the LA/LB port is down over 80% from this time last year so that tells me demand is down because it's not like the port got more efficient
sleepy5136 said:
There is another China angle I didn't even include in my thesis but that I am uniquely informed on due to exposure to high end datacenter equipment manufacturing: taking mfg out of China means potentially doubling costs. China has no peer in high end/high volume PCBA mfg, and they do it cheaper than anyone else. An endless supply of migrant labor that will always work the overtime and a relentless focus on improvement is cultural and trying to replicate that in MX or MY or VN or wherever will be a Sisyphean quest. Meanwhile we will see all consumer prices rise for virtually everything we buy or service we use as a result.
irvinehomeowner
Well-known member
USCTrojanCPA said:
So if I say this, certain people think I'm biased... but this is what I've been saying for years.
Those over 50% drops in Irvine that were predicted never happened. Even 40% is more an exception than the the rule.
ThirtySomethingWEquity
Active member
irvinehomeowner said:
My townhouse I bought in 2009 for ~450k sold for $650k in 2007. Now, I got it on a short sale and it was trashed at the time, so definitely not typical, but still at least one example of a pretty drastic crash.
Cornflakes
Active member
huuur said:
Thanks. This is good info. Is it from reliable source?
I am no statistician but from the numbers it appears that inflation or mortgage rates do no necessarily have consistent positive or negative impact on home prices. I did find two noteworthy peak-to-peak drop and recovery cycles from 1991-1998 and 2006-2018.
The Motor Court Company
Well-known member
we are heading into a recession despite the change in its definition. it could get deeper post mid terms and bond holders are expecting Fed to pivot and start cutting rates and re-start QE. There is a good chance we end up in a stagflation while 5% CPI becomes the new norm and target. Regardless, the bubble or the boom and bust cycle are just keeping getting bigger over time?.the next bubble could be created by negative Fed fund rate?thats one lever the Fed has not pulled yet.
someguy
Active member
OCtoSV said:
No doubt producing PCBA in not China will be more expensive for the reasons you mentioned. The rub is that letting one country control such an essential precursor supply for so many finished goods makes supply chain partners almost exclusively reliant that country. When it works people in developed countries get new phones annually for cheap and Foxconn keeps it's anti-suicide nets up, but when China decides to shut down sections of it's economy, the supply chain suffers and final products get delayed. We're seeing the effects of that now.
Same logic for expanding production of semi conductors outside of Taiwan in case god forbid there's a problem in Taiwan.
It seems like the benefit of diversifying the electronics manufacturing to countries outside of China (and Taiwan) may be less about pricing and more about making the supply chain more resilient against the whims of a single country.
irvinehomeowner
Well-known member
ThirtySomethingWEquity said:
In Irvine? Still 30% drop... not 50%+.
Not many SFRs dropped more than 20%, esp 3CWGs.
sleepy5136
Well-known member
Recession definition is 2 consecutive quarters of negative GDP. We are probably in one right now and I wouldn't be shocked.USCTrojanCPA said:
With that said, we have a tight labor market. Unemployment rate is 3.6% I believe? So unless there is a mass layoff that occurs, we will probably run into stagflation and that's where inflation will not "cool" off. Rents will continue to stay high or elevated. Also, we are in a world of globalization. If one part of the world falls, we are not immune to it. Just like how gas prices are going up here and we are complaining about $6 per gallon when Europe is probably $10+ per gallon. If gas prices remain elevated, it means inflation will not cool as everything requires gas to deliver goods to the stores. Price pressures will remain. Consumers are still spending but not at the rate as it use to. Probably has something to do with low unemployment rate. What are you going to do if groceries are up 10-15%? Not eat? Costco can't even tell me when chicken thighs will be on a scheduled basis. They're saying there will continue to be a shortage for the next 6 months. And let's not even get started about China zero covid policy and how much of an impact that can have to the entire world. Ask Elon Musk and he can tell you how that has impacted his business.
I can definitely be wrong about this, but I really don't see any event where inflation will slow down near term unless massive layoffs happen. Especially with China's covid policy and the war going on. Though once we start seeing layoffs happen and unemployment ticking up I think things will go down and the Fed will then act accordingly to lower rates. But that isn't showing in the data yet.
This is posted in another forum by a seasoned investor so in general, I trust this data, but I didn't verify it myself.
His perspective is that this time might be more similar to the 70~80s, the inflation lasted for a few years, and the mortgage rate is high, but the home price keeps increasing despite of high mortgage rate.
His perspective is that this time might be more similar to the 70~80s, the inflation lasted for a few years, and the mortgage rate is high, but the home price keeps increasing despite of high mortgage rate.
Cornflakes said:
The Motor Court Company
Well-known member
do you mind to share that forum? you can PM me the link.
huuur said: