What is your forecast for the near-term real estate market (through end of 2013)

What do you think will happen in the housing market here locally (Orange County) through the end of


  • Total voters
    44
  • Poll closed .
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irvinerealtor

Well-known member
Just trying to take a pulse on the market from people here at TI.

Looking back at this year, I could not have predicted that market would have changed the way that it has. What are your impressions (and supporting reasons) for what's to come in the coming year.

Thanks,
-IR2
 
I was actually going to post something similar to this because the OC Register has an article talking about how the median price and number of sales have gone up.

I'm torn between increasing mildly and declining midly (which means I should vote "flat")... but based on low inventory, low interest rates and a supposedly improving economy (depending on who you ask), it seems logical that prices will go up slightly (which a rise in median price would indicate... but not necessarily as "median" could just mean the mix of homes that sold is different).

The thing here is how long rates will stay this low... and that could also affect prices (not proportionately as we've seen that dropping rates has not really proportionally raised prices either).

There should be another choice... coin flip or dice roll. :)
 
Mild appreciation in certain Irvine villages like Northwood II, North Park, West Irvine.
Bloated numbers for new homes. El Camino, Walnut, and Oak whatever will be either flat or decline mildly.
 
If the fiscal cliff happened, Europe debt crisis gots deeper,  I would vote "lower".  However, due to low inventory and low interest rate,  it might be "flat"
 
Although mortgage rates are low and re-sale inventory is low, the job market has not really picked up. Wages haven't really risen and with relatively tighter lending standards I am of the opinion that you will not see a large appreciation going forward.

Prices have risen between 10-20% depending on where in the OC you are looking at just from Nov 2011 to Nov 2012. Highly unlikely you will see the same rise between Nov 2012 to Nov 2013.

 
Due to low inventory levels, increasing buyer demand (remember those people who were foreclosed on or did short sales are now back in the game), and low interest rates I think we will see single digit price appreciation next year.  Lending standards will keep a cap on prices going up too high too fast. 
 
Just voted and Wow.  Apparently I am pessimistic.  At what point did "down by 10%" become the "real nutjob" line of thinking?

Seriously?  No one else sees prices coming down  by at least 10% in the next 14 months?  I put it @50/50, and will take the under.
 
daedalus said:
Just voted and Wow.  Apparently I am pessimistic.  At what point did "down by 10%" become the "real nutjob" line of thinking?

Seriously?  No one else sees prices coming down  by at least 10% in the next 14 months?  I put it @50/50, and will take the under.
Curious to hear your reason for your vote.  From what I stand, the current supply/demand dynamics don't point to decline like that in the near term. 
 
As an options trader you know better than anyone the role time plays on things.  I think 14 months is enough time for things to change drastically.  I believe higher interest rates will have a clear and measurable downward impact on prices.  I know we will see higher interest rates at some point in the future.  So what I'm really stating is I believe there is a 50/50 chance that rates go up by enough to bring prices down by at least 10% by the end of next year.  We've only known a willful and powerful treasury, but what if--and put your nutjob Peter Schiff hat on for this--we had a willful but powerless treasury?
 
daedalus said:
As an options trader you know better than anyone the role time plays on things.  I think 14 months is enough time for things to change drastically.  I believe higher interest rates will have a clear and measurable downward impact on prices.  I know we will see higher interest rates at some point in the future.  So what I'm really stating is I believe there is a 50/50 chance that rates go up by enough to bring prices down by at least 10% by the end of next year.  We've only known a willful and powerful treasury, but what if--and put your nutjob Peter Schiff hat on for this--we had a willful but powerless treasury?
I hear what you are saying, but the FED has the pedal to the metal when it comes to printing so I don't see rates moving up meanfully for a long time.  We are going through what Japan is still going through now...the Lost Decades.  We will have low growth and higher unemployer for many years to come along with Europe not being done yet so I think lower rates will be with us for a bit.
 
I agree that's the goal and that it's certainly plausible.  I'm not 100% convince the FED will always be able to do what it has been doing.  Will the tools always work the same in the future?  Japan is not a perfect comparison, but even they will hit the wall at some point.  And I don't think the underpinnings of the US will allow our economy to fake it as long as Japan has.  I'm a mechanical engineer with an MBA in finance, and the term "financal engineering" really scares the crap out of me.  :)
 
daedalus said:
I agree that's the goal and that it's certainly plausible.  I'm not 100% convince the FED will always be able to do what it has been doing.  Will the tools always work the same in the future?  Japan is not a perfect comparison, but even they will hit the wall at some point.  And I don't think the underpinnings of the US will allow our economy to fake it as long as Japan has.  I'm a mechanical engineer with an MBA in finance, and the term "financal engineering" really scares the crap out of me.  :)
As the old saying goes, the market can say irrational longer than you can stay solvent.  Until further notice, don't fight the FED. 
 
I say it will remain flat.

Low inventory levels can drive prices up due to desperate buyers. On the other hand, we also have the looming Euro crisis, the upcoming fiscal cliff, and the job market is just not strong enough to push prices much higher (in fact it should drive prices lower with wages being stagnant, hours being cut etc.). So overall, the levels will be flat with some seasonal variations as usual.
 
For all the bears out there..see attached image showing the Probability of a US recession. It is now at 20%. You can also see previous predicted probabilities and when recessions actually happened. The probabilities are calculated by the St. Louis Fed and can be found on their website
 

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I based my answer (mildly increasing) on my experience in the past 11 months trying to sell my home while also constantly looking at new builds to potentially purchase.

When we started the whole process a year ago, Casero had their plan 2 starting just over $600k and their plan 3 at about $660k. Today their plan 3 is starting at $701k.

I'm also continuing to see other new builds increasing their starting prices on an almost week-to-week basis. The starting price for a plan 2 at Saratoga about a month ago was a couple thousand lower than they were a week ago.

My guess is prices of these new builds will continue rising by on average a couple of thousand a month and the rest of the market will follow the same trend.
 
Do you remember what the Casero Plan 1 was selling for? What did you think of the Casero building quality/finishes when compared to some of the IP homes?


lucky760 said:
I based my answer (mildly increasing) on my experience in the past 11 months trying to sell my home while also constantly looking at new builds to potentially purchase.

When we started the whole process a year ago, Casero had their plan 2 starting just over $600k and their plan 3 at about $660k. Today their plan 3 is starting at $701k.

I'm also continuing to see other new builds increasing their starting prices on an almost week-to-week basis. The starting price for a plan 2 at Saratoga about a month ago was a couple thousand lower than they were a week ago.

My guess is prices of these new builds will continue rising by on average a couple of thousand a month and the rest of the market will follow the same trend.
 
I started looking Nov 2011 ..and seriously since Feb 2012. Entered into 5 bidding wars...and finally bought a new home. Looking back, I would say bottom was during the period Sep 2011 - Jan 2012.  If you look at the stats... that is about when the inventory started dwindling.

irvinehomeowner said:
The poll results are interesting... the majority are in the flat, increase mildly range.

So when did we hit bottom? :)
 
socaltrojan81 said:
Do you remember what the Casero Plan 1 was selling for? What did you think of the Casero building quality/finishes when compared to some of the IP homes?


lucky760 said:
I based my answer (mildly increasing) on my experience in the past 11 months trying to sell my home while also constantly looking at new builds to potentially purchase.

When we started the whole process a year ago, Casero had their plan 2 starting just over $600k and their plan 3 at about $660k. Today their plan 3 is starting at $701k.

I'm also continuing to see other new builds increasing their starting prices on an almost week-to-week basis. The starting price for a plan 2 at Saratoga about a month ago was a couple thousand lower than they were a week ago.

My guess is prices of these new builds will continue rising by on average a couple of thousand a month and the rest of the market will follow the same trend.

When we first started looking at Casero in late 2011 I think plan 1 was maybe about $600k.

I'm no professional, but their build quality seems good, and by all accounts I've heard, Standard Pacific is a very good builder, especially compared to some crap builders like KB Home.
 
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