US new home sales drop for second straight month

[the.irvine]

If there are more home available for rent, then renting 3500+ sqft home would be a lot cheaper than buying. lol

How would builders react to it? Just a got a email from Greatpark about their upcoming Cadence park, with several SFH/Condos, which are definitely going to be more than 1.5M.

 

[irvinehomeowner]

Time to rent!!

 

[Mety]

Thanks USC. So, owners are taking loses on their rentals, but still not selling ?

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.

Investors are parking their cash in properties. It's like a bank. They are not losing money since the market still seems to be rising. People who bought with full cash are not worried about empty properties either because they are still making money as long as the market is going up. Although the rising may come to an end, I don't think that would happen this year.

 

[usctrojancpa]

Thanks USC. So, owners are taking loses on their rentals, but still not selling ?

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.

I wouldn't say that most are losing money as they are buying for cash or putting a lot down via a 1031 exchange or just bought the property years ago with low monthly costs. 

 

[usctrojancpa]

Just to give you guys another data point....in Eastwood alone there are 20 active rental listings on MLS (plus I'm sure there are other ones that aren't on MLS) and Pavilion Park/Beacon Park has 32 active rental listings. 

 

[misme]

If there are more home available for rent, then renting 3500+ sqft home would be a lot cheaper than buying. lol

How would builders react to it? Just a got a email from Greatpark about their upcoming Cadence park, with several SFH/Condos, which are definitely going to be more than 1.5M.

I think it is definitely way cheaper to rent rather than buy an equivalent property in Irvine.
4 BR house, sells for 1 million, rented out for 4,000 a month????

 

[notTHEoc]

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.

Been hearing more buyers agents have been knocking on doors for clients. We had some last week ready to offer well above recent comps for their client. Makes me feel we?re late in this re cycle.

 

[fortune11]

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.

Been hearing more buyers agents have been knocking on doors for clients. We had some last week ready to offer well above recent comps for their client. Makes me feel we?re late in this re cycle.

I think  after 2008 everyone is so hyper focused on not being caught  long ? late in the cycle ? that we may not actually have a cycle (maybe the phrase itself should be banished ) .

There?s  so much liquidity sloshing around even now that buyers are quick to react at the first sign of softening . Those who don?t wait for the next one . But each time it?s a ?higher? low . 

I am in USCTrojan camp on inventory etc . We know there is ton of demand . It is the supply that is the controlling factor here .  And that?s very hard to break right now with lack of loose standards , liar and NINJA loans , etc

 

[usctrojancpa]

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.

Been hearing more buyers agents have been knocking on doors for clients. We had some last week ready to offer well above recent comps for their client. Makes me feel we?re late in this re cycle.

I think  after 2008 everyone is so hyper focused on not being caught  long ? late in the cycle ? that we may not actually have a cycle (maybe the phrase itself should be banished ) .

There?s  so much liquidity sloshing around even now that buyers are quick to react at the first sign of softening . Those who don?t wait for the next one . But each time it?s a ?higher? low . 

I am in USCTrojan camp on inventory etc . We know there is ton of demand . It is the supply that is the controlling factor here .  And that?s very hard to break right now with lack of loose standards , liar and NINJA loans , etc

Totally agree...lenders haven't gotten really stupid yet and opened up the lender flood gates hence why prices typically just grind higher at a modest/moderate pace.