the.irvine
Active member
www.cnbc.com/2018/02/26/january-new-homes-sales.html
US new home sales drop for second straight month
- Thread starter the.irvine
- Start date
NEW -> Contingent Buyer Assistance Program
Both things affect it. California actually has very low property tax (No. 34)...other states may have lower property values but higher property taxes.
https://taxfoundation.org/how-high-are-property-taxes-your-state/
Texas has property taxes close to 2% even before any potential special local taxes....that SALT deduction limit of $10K comes at you quick
$550k-$650k yes for 2 bedroom tiny condo anything that is 3 bedrooms is over $725k and RMV is a hard sell because it is SOOOO far out there (South and East). The reality is small tiny home for lower $ or apples to apples a little cheaper but a lot farther away from everything else.
Let me give you a few that I've gotten from my clients....
- Our rate is much lower than current rates so we'll sit tight for the time being
- We can afford to keep our existing property so let's keep it as a rental since our rate is so low
- We love the newer homes at X location but it doesn't make sense for us to upgrade due to the cap on the mortgage interest deduction and SALT deduction
- Our kid will be graduation college soon so we'd like to give them the property if they end up getting a job in the area
I really believed that prices really wouldn't be affected that much mainly due to the lack of inventory despite some buyers going on hold due to the tax reform. The market for Irvine homes under $1m is hot (super hot sub $800k). So I was off on my prediction on prices are they are heading higher in the sub $1m market. Builders see this and are increasing prices by 1-1.5% every phase release on the ones that are selling well.
Doesn't matter where they go. Last year this time, there were more sellers than there are today. They figured on moving somewhere last year but the sentiment has changed. USCTrojanCPA made some good points as to why the sentiment has changed.
The big question is what does this do to pricing if we continue in a very low inventory market? This isn't buyer demand exceeds inventory, this is so low inventory that buyers dont even want to come out and look.
Irvinecommuter
New member
The tax bill would have nothing to do with this...nothing at all.
the.irvine
Active member
This could be due to weather too. It would be interesting to see numbers from OC
Irvinecommuter
New member
Liar Loan said:
Both things affect it. California actually has very low property tax (No. 34)...other states may have lower property values but higher property taxes.
https://taxfoundation.org/how-high-are-property-taxes-your-state/
Texas has property taxes close to 2% even before any potential special local taxes....that SALT deduction limit of $10K comes at you quick
I will defer to the real estate agents and mtg business folks who prob have better intel on this but if I had to guess ? it is partly from buyer paralysis ? many probably wanted to wait and see if the new tax bill would create a better entry point . The key item now will be supply - if buyers remain on the sideline and supply starts to go up, you will see more presure on home sales . But if inventory is well managed , then many of the same buyers will be forced back into the market
eddieuclabruin
Member
I got an updated pricing sheet from one of the new builders in RMV a few days ago and there are something like 6 homes still available from the current phase (February move-ins), on top of 2 homes sitting vacant from the earlier phase release (January). In addition, they are offering to pay your HOA dues through the end of the year and just had a large price reduction across all floorplans. These are for homes that are supposed to be on the lower entry point for new builds in OC ($550k - $650k).
irvinehomeowner
Well-known member
Time to selllllllllllll!
Just kidding.
Just kidding.
IrvineBug22
New member
eddieuclabruin said:
$550k-$650k yes for 2 bedroom tiny condo anything that is 3 bedrooms is over $725k and RMV is a hard sell because it is SOOOO far out there (South and East). The reality is small tiny home for lower $ or apples to apples a little cheaper but a lot farther away from everything else.
usctrojancpa
Well-known member
Like I said before....the issue is a lack of inventory.
usctrojancpa
Well-known member
rkp said:
Let me give you a few that I've gotten from my clients....
- Our rate is much lower than current rates so we'll sit tight for the time being
- We can afford to keep our existing property so let's keep it as a rental since our rate is so low
- We love the newer homes at X location but it doesn't make sense for us to upgrade due to the cap on the mortgage interest deduction and SALT deduction
- Our kid will be graduation college soon so we'd like to give them the property if they end up getting a job in the area
usctrojancpa
Well-known member
bones said:
I really believed that prices really wouldn't be affected that much mainly due to the lack of inventory despite some buyers going on hold due to the tax reform. The market for Irvine homes under $1m is hot (super hot sub $800k). So I was off on my prediction on prices are they are heading higher in the sub $1m market. Builders see this and are increasing prices by 1-1.5% every phase release on the ones that are selling well.
bones said:
Doesn't matter where they go. Last year this time, there were more sellers than there are today. They figured on moving somewhere last year but the sentiment has changed. USCTrojanCPA made some good points as to why the sentiment has changed.
The big question is what does this do to pricing if we continue in a very low inventory market? This isn't buyer demand exceeds inventory, this is so low inventory that buyers dont even want to come out and look.
usctrojancpa
Well-known member
I will say....the rental market has softened up a good bit since the Spring of 2017. That is when the number of rental listings was higher than resale listings. This has caused rents to come down a bit as there are a lot of investor buyers in the market (FCBs, 1031 exchange, first time investors, etc). Because numbers never lie...as of right now we have 349 active resale listings on MLS in Irvine while we have 522 active rental listings on MLS in Irvine. I've never see the number of rental listings exceed the number of resale listings until early last year and the gap has been growing. You are seeing a lot of investors buying in the newer communities, sometimes buying multiple properties in the same development.
