When would be next housing Bottom?

[irvinehomeowner]

I agree with most of that. I do wonder what you mean when you said the Irvine housing market will decline less if the recession hits. Do you mean in comparison to the overall OC market? Have you taken into consideration of Irvine's low homeownership rate? For reference Yorba Lina is high at 82%, Mission Viejo is 74%, and Irvine is really low at 48%.

High homeonership rate helps to soften recession hits.

I'm assuming these percentages where the same 10 years ago and Irvine fared better than both MV and YL. I think it depends on who owns the homes which brings me to your next point:

To me, a big factor that helped Irvine RE soften the last recession hit was having a lot of foreign investors and a big chuck of that is Chinese FCBs. Last US recession, the chinese economy was booming. Not so this time around.

I think too much focus is put on just Chinese FCBs. Irvine has plenty of FCBs that are not just from China... and... there is large domestic demographic that stay put in Irvine generationally.

It's a mix that is almost unique compared to other high value cities like Newport Beach.

 

[Kenkoko]

I'm assuming these percentages where the same 10 years ago and Irvine fared better than both MV and YL. I think it depends on who owns the homes which brings me to your next point:

Your assumption is incorrect. It's not the same 10 years ago. Irvine Homeownership rate was 9-10% higher in 2009. Newport Beach and Yorba Linda has stayed almost exactly the same.

It really does not matter whether Irvine investors are Chinese FCBs or not. Fact is Irvine homeownership rate has steadily declined for decades to now at 48%. Majority of Irvine homes are occupied by renters.

 

[fortune11]

I'm assuming these percentages where the same 10 years ago and Irvine fared better than both MV and YL. I think it depends on who owns the homes which brings me to your next point:

Your assumption is incorrect. It's not the same 10 years ago. Irvine Homeownership rate was 9-10% higher in 2009. Newport Beach and Yorba Linda has stayed almost exactly the same.

It really does not matter whether Irvine investors are Chinese FCBs or not. Fact is Irvine homeownership rate has steadily declined for decades to now at 48%. Majority of Irvine homes are occupied by renters.

Isn?t this because of Irvine just choosing to build more rentals ?

Look at percentages of SFRs that are occupied by renters in Irvine versus those in the other areas and maybe the difference won?t be as stark

 

[irvinehomeowner]

I'm assuming these percentages where the same 10 years ago and Irvine fared better than both MV and YL. I think it depends on who owns the homes which brings me to your next point:

Your assumption is incorrect. It's not the same 10 years ago. Irvine Homeownership rate was 9-10% higher in 2009. Newport Beach and Yorba Linda has stayed almost exactly the same.

Not sure why you mention Newport Beach when you originally brought up Mission Viejo. 9-10% decline is nominal to me. And that still doesn't go around the fact that Irvine still did better than MV and YL at a 58% ownership rate 10 years ago (where are you getting these numbers?).

It really does not matter whether Irvine investors are Chinese FCBs or not. Fact is Irvine homeownership rate has steadily declined for decades to now at 48%. Majority of Irvine homes are occupied by renters.

So if it doesn't really matter, why did you point Chinese FCBs out as a talking point?

I disagree with you about owner-occupied percentage vs rentals. As I said, it's the stability of the owner you have to worry about. If half of the rentals are owned by people who are just as stable as the owner occupieds in other cities... why would that be a concern?

 

[fortune11]

Fresh data on Housing starts:

Northeast: -28.3% Y/Y
Midwest: -28.0% Y/Y
South: -4.1% Y/Y
West: -19.5% Y/Y

 

[irvinebullhousing]

Fresh data on Housing starts:

Northeast: -28.3% Y/Y
Midwest: -28.0% Y/Y
South: -4.1% Y/Y
West: -19.5% Y/Y

This is a dramatic drop in Housing Starts data in the big picture. Irvine does not follows. We continue to see housings and lands develop on THE RANCH. Remarkable and resilience in the big picture for Irvine.

 

[eyephone]

Fresh data on Housing starts:

Northeast: -28.3% Y/Y
Midwest: -28.0% Y/Y
South: -4.1% Y/Y
West: -19.5% Y/Y

Yup. Let?s say I am still seeing price reductions across select cities that I chose to look at in the region you mentioned.

 

[Kenkoko]

I'm assuming these percentages where the same 10 years ago and Irvine fared better than both MV and YL. I think it depends on who owns the homes which brings me to your next point:

Your assumption is incorrect. It's not the same 10 years ago. Irvine Homeownership rate was 9-10% higher in 2009. Newport Beach and Yorba Linda has stayed almost exactly the same.

Not sure why you mention Newport Beach when you originally brought up Mission Viejo. 9-10% decline is nominal to me. And that still doesn't go around the fact that Irvine still did better than MV and YL at a 58% ownership rate 10 years ago (where are you getting these numbers?).

It really does not matter whether Irvine investors are Chinese FCBs or not. Fact is Irvine homeownership rate has steadily declined for decades to now at 48%. Majority of Irvine homes are occupied by renters.

So if it doesn't really matter, why did you point Chinese FCBs out as a talking point?

I disagree with you about owner-occupied percentage vs rentals. As I said, it's the stability of the owner you have to worry about. If half of the rentals are owned by people who are just as stable as the owner occupieds in other cities... why would that be a concern?

https://datausa.io/profile/geo/yorba-linda-ca/#housing

Here is the Yorba Linda stats link. You can easily change cities in the menu to compare. You mentioned Newport Beach first in your response, naturally I followed up on it.

How is it a talking point? Chinese FCB to me is a big factor to Irvine price stability, you disagree. I only said Chinese FCB did not matter in the context of homeonwership % (renter % vs owner %) I did not think it matter whether the investor is a Chinese FCB or a Persian FCB. Bottom line, it's an investor not a homeowner. Investor will more likely sell when the market tanks more than a homeowner.

Irvine is a young city with resident median age of 34. Irvine medium household income is below 100k. I brought up this point earlier in the thread. Irvine does not have the median household income to propel RE much further than current price level. FCBs helped prop up Irvine price to current level.

I have the same outlook on Irvine RE as Panda. We are likely to trend down so people still on the sidelines should wait as long as possible. We are already 10 years into this recovery/expansion. Now is not the time to jump in. Plenty of signs of a slowdown / recession coming.

 

[irvinehomeowner]

How is it a talking point? Chinese FCB to me is a big factor to Irvine price stability, you disagree. I only said Chinese FCB did not matter in the context of homeonwership % (renter % vs owner %) I did not think it matter whether the investor is a Chinese FCB or a Persian FCB. Bottom line, it's an investor not a homeowner. Investor will more likely sell when the market tanks more than a homeowner.

Why is that? If rents are still good, ie cashflow positive, why would an investor sell?

Irvine is a young city with resident median age of 34. Irvine medium household income is below 100k. I brought up this point earlier in the thread. Irvine does not have the median household income to propel RE much further than current price level. FCBs helped prop up Irvine price to current level.

This has been said many times but you cannot rely on any census for Irvine's medium household income. Additionally the money that supports Irvine pricing isn't based on traditional income. You even said it yourself in the same paragraph... FCBs. There are also seniors, students, etc whose "income" will not be reflected properly.

I have the same outlook on Irvine RE as Panda. We are likely to trend down so people still on the sidelines should wait as long as possible. We are already 10 years into this recovery/expansion. Now is not the time to jump in. Plenty of signs of a slowdown / recession coming.

Panda has always been a downer when it comes to Irvine real estate. On the other hand, he thinks Johns Creek will never go bad.

Some people can't wait... but it sound like you think Irvine real estate is going to drop even more from here? How much more 10%? 20%? Not even Panda has made that type of prediction.

 

[Irvinecommuter]

How is it a talking point? Chinese FCB to me is a big factor to Irvine price stability, you disagree. I only said Chinese FCB did not matter in the context of homeonwership % (renter % vs owner %) I did not think it matter whether the investor is a Chinese FCB or a Persian FCB. Bottom line, it's an investor not a homeowner. Investor will more likely sell when the market tanks more than a homeowner.

Disagree...I don't know about Persian FCB but Chinese FCBs don't care about a 10-20% drop because they were not in the market for gains.  They just wanted to solidify their RMB in US real estate.  They are not looking for return. 

If prices fall 10-20%, they're more likely to just hold on it.

 

[irvinebullhousing]

How is it a talking point? Chinese FCB to me is a big factor to Irvine price stability, you disagree. I only said Chinese FCB did not matter in the context of homeonwership % (renter % vs owner %) I did not think it matter whether the investor is a Chinese FCB or a Persian FCB. Bottom line, it's an investor not a homeowner. Investor will more likely sell when the market tanks more than a homeowner.

Disagree...I don't know about Persian FCB but Chinese FCBs don't care about a 10-20% drop because they were not in the market for gains.  They just wanted to solidify their RMB in US real estate.  They are not looking for return. 

If prices fall 10-20%, they're more likely to just hold on it.

Right, Chinese especially foreign FCB, purchased and moved money to Irvine real estate for keeping their money out of China. Those homes have been sitting empty for 5 years now, those that I tracked. And occasionally comes for visit and off they go again.  Makes little difference to them in the next few years if market goes up or down.

 

[lnc]

Fresh data on Housing starts:

Northeast: -28.3% Y/Y
Midwest: -28.0% Y/Y
South: -4.1% Y/Y
West: -19.5% Y/Y

All I see is tightening of inventory and upward pressure on home prices. 

 

[irvinebullhousing]

How is it a talking point? Chinese FCB to me is a big factor to Irvine price stability, you disagree. I only said Chinese FCB did not matter in the context of homeonwership % (renter % vs owner %) I did not think it matter whether the investor is a Chinese FCB or a Persian FCB. Bottom line, it's an investor not a homeowner. Investor will more likely sell when the market tanks more than a homeowner.

Why is that? If rents are still good, ie cashflow positive, why would an investor sell?

Irvine is a young city with resident median age of 34. Irvine medium household income is below 100k. I brought up this point earlier in the thread. Irvine does not have the median household income to propel RE much further than current price level. FCBs helped prop up Irvine price to current level.

This has been said many times but you cannot rely on any census for Irvine's medium household income. Additionally the money that supports Irvine pricing isn't based on traditional income. You even said it yourself in the same paragraph... FCBs. There are also seniors, students, etc whose "income" will not be reflected properly.

I have the same outlook on Irvine RE as Panda. We are likely to trend down so people still on the sidelines should wait as long as possible. We are already 10 years into this recovery/expansion. Now is not the time to jump in. Plenty of signs of a slowdown / recession coming.

Panda has always been a downer when it comes to Irvine real estate. On the other hand, he thinks Johns Creek will never go bad.

Some people can't wait... but it sound like you think Irvine real estate is going to drop even more from here? How much more 10%? 20%? Not even Panda has made that type of prediction.

Why is that? If rents are still good, ie cashflow positive, why would an investor sell?

Vacancy rate is extremely low. Less than 3%. I would not sell any of my rentals. You literally have a dozen of good applicants to choose from. And these are top tier renters. A-class. High credit profiles with high income. Most renters that want to rent in Irvine are responsible individuals that I have come across.

 

[Kenkoko]

How is it a talking point? Chinese FCB to me is a big factor to Irvine price stability, you disagree. I only said Chinese FCB did not matter in the context of homeonwership % (renter % vs owner %) I did not think it matter whether the investor is a Chinese FCB or a Persian FCB. Bottom line, it's an investor not a homeowner. Investor will more likely sell when the market tanks more than a homeowner.

Disagree...I don't know about Persian FCB but Chinese FCBs don't care about a 10-20% drop because they were not in the market for gains.  They just wanted to solidify their RMB in US real estate.  They are not looking for return. 

If prices fall 10-20%, they're more likely to just hold on it.

Here's something I've been saying that keeps flying over people's head when they talk about Chinese FCBs. The major driver for a lot of these Chinese FCBs is not US economy or the Irvine RE prices. It's the Chinese economy.  I agree with you that even if Irvine prices fall 10-20%, they are more likely to just hold on to their Irvine RE. Heck even if a 30% drop happens in Irvine, majority would not sell. But that's only IF the Chinese economy stays stable. I know this because my own parents are in this camp and a lot of people in their circle are like this as well. A lot of them bought Irvine RE with "cash" but that cash came from leveraging their financial holdings in China. ( Taiwan in my parent's case)

If the Chinese economy tanks another 30% (like it did from 2015-2018), a lot of them will have to sell US holdings to cover their leveraged positions in China.

P.s. Irvinecommuter did you know that Yang's parents have a residence in Irvine? My mom read it in a recent Chinese newspaper article. They live in Taiwan now but does split time between US and Taiwan.

 

[Kenkoko]

Panda has always been a downer when it comes to Irvine real estate. On the other hand, he thinks Johns Creek will never go bad.

Some people can't wait... but it sound like you think Irvine real estate is going to drop even more from here? How much more 10%? 20%? Not even Panda has made that type of prediction.

Panda said he thinks a slow decline of 10-15% in the next 4 years is possible. I am in agreement with that. I see much more downside potential going forward than upside potential. Now is not the time to get in.

 

[irvinehomeowner]

@kenkoko:

Again, you're focusing on Chinese economy.

I am still of the position that's it's not just Chinese FCBs who own quite a bit of real estate in Irvine.

It's like a diversified stock portfolio, if part of it tanks, the rest keeps it afloat.

 

[irvinehomeowner]

Panda has always been a downer when it comes to Irvine real estate. On the other hand, he thinks Johns Creek will never go bad.

Some people can't wait... but it sound like you think Irvine real estate is going to drop even more from here? How much more 10%? 20%? Not even Panda has made that type of prediction.

Panda said he thinks a slow decline of 10-15% in the next 4 years is possible. I am in agreement with that. I see much more downside potential going forward than upside potential. Now is not the time to get in.

We will see. Ask him about his Dow prediction.

And that's not 20%.

 

[irvinehomeowner]

How is it a talking point? Chinese FCB to me is a big factor to Irvine price stability, you disagree. I only said Chinese FCB did not matter in the context of homeonwership % (renter % vs owner %) I did not think it matter whether the investor is a Chinese FCB or a Persian FCB. Bottom line, it's an investor not a homeowner. Investor will more likely sell when the market tanks more than a homeowner.

Why is that? If rents are still good, ie cashflow positive, why would an investor sell?

Irvine is a young city with resident median age of 34. Irvine medium household income is below 100k. I brought up this point earlier in the thread. Irvine does not have the median household income to propel RE much further than current price level. FCBs helped prop up Irvine price to current level.

This has been said many times but you cannot rely on any census for Irvine's medium household income. Additionally the money that supports Irvine pricing isn't based on traditional income. You even said it yourself in the same paragraph... FCBs. There are also seniors, students, etc whose "income" will not be reflected properly.

I have the same outlook on Irvine RE as Panda. We are likely to trend down so people still on the sidelines should wait as long as possible. We are already 10 years into this recovery/expansion. Now is not the time to jump in. Plenty of signs of a slowdown / recession coming.

Panda has always been a downer when it comes to Irvine real estate. On the other hand, he thinks Johns Creek will never go bad.

Some people can't wait... but it sound like you think Irvine real estate is going to drop even more from here? How much more 10%? 20%? Not even Panda has made that type of prediction.

Why is that? If rents are still good, ie cashflow positive, why would an investor sell?

Vacancy rate is extremely low. Less than 3%. I would not sell any of my rentals. You literally have a dozen of good applicants to choose from. And these are top tier renters. A-class. High credit profiles with high income. Most renters that want to rent in Irvine are responsible individuals that I have come across.

Plus, if the economy is down and less people are buying and more people are renting... who's your daddy?

 

[Irvinecommuter]

How is it a talking point? Chinese FCB to me is a big factor to Irvine price stability, you disagree. I only said Chinese FCB did not matter in the context of homeonwership % (renter % vs owner %) I did not think it matter whether the investor is a Chinese FCB or a Persian FCB. Bottom line, it's an investor not a homeowner. Investor will more likely sell when the market tanks more than a homeowner.

Disagree...I don't know about Persian FCB but Chinese FCBs don't care about a 10-20% drop because they were not in the market for gains.  They just wanted to solidify their RMB in US real estate.  They are not looking for return. 

If prices fall 10-20%, they're more likely to just hold on it.

Here's something I've been saying that keeps flying over people's head when they talk about Chinese FCBs. The major driver for a lot of these Chinese FCBs is not US economy or the Irvine RE prices. It's the Chinese economy.  I agree with you that even if Irvine prices fall 10-20%, they are more likely to just hold on to their Irvine RE. Heck even if a 30% drop happens in Irvine, majority would not sell. But that's only IF the Chinese economy stays stable. I know this because my own parents are in this camp and a lot of people in their circle are like this as well. A lot of them bought Irvine RE with "cash" but that cash came from leveraging their financial holdings in China. ( Taiwan in my parent's case)

If the Chinese economy tanks another 30% (like it did from 2015-2018), a lot of them will have to sell US holdings to cover their leveraged positions in China.

P.s. Irvinecommuter did you know that Yang's parents have a residence in Irvine? My mom read it in a recent Chinese newspaper article. They live in Taiwan now but does split time between US and Taiwan.

If Chinese economy tanks, you will see a mass exodus from China.  They wouldn't sell their assets in the US...it is their asset firewall.  That's why they already sent their families here.

I know that his dad went to Cal.  Irvine seems logical.

 

[Mety]

How is it a talking point? Chinese FCB to me is a big factor to Irvine price stability, you disagree. I only said Chinese FCB did not matter in the context of homeonwership % (renter % vs owner %) I did not think it matter whether the investor is a Chinese FCB or a Persian FCB. Bottom line, it's an investor not a homeowner. Investor will more likely sell when the market tanks more than a homeowner.

Disagree...I don't know about Persian FCB but Chinese FCBs don't care about a 10-20% drop because they were not in the market for gains.  They just wanted to solidify their RMB in US real estate.  They are not looking for return. 

If prices fall 10-20%, they're more likely to just hold on it.

Here's something I've been saying that keeps flying over people's head when they talk about Chinese FCBs. The major driver for a lot of these Chinese FCBs is not US economy or the Irvine RE prices. It's the Chinese economy.  I agree with you that even if Irvine prices fall 10-20%, they are more likely to just hold on to their Irvine RE. Heck even if a 30% drop happens in Irvine, majority would not sell. But that's only IF the Chinese economy stays stable. I know this because my own parents are in this camp and a lot of people in their circle are like this as well. A lot of them bought Irvine RE with "cash" but that cash came from leveraging their financial holdings in China. ( Taiwan in my parent's case)

If the Chinese economy tanks another 30% (like it did from 2015-2018), a lot of them will have to sell US holdings to cover their leveraged positions in China.

P.s. Irvinecommuter did you know that Yang's parents have a residence in Irvine? My mom read it in a recent Chinese newspaper article. They live in Taiwan now but does split time between US and Taiwan.

If Chinese economy tanks, you will see a mass exodus from China.  They wouldn't sell their assets in the US...it is their asset firewall.  That's why they already sent their families here.

I know that his dad went to Cal.  Irvine seems logical.

I don?t know, but if I was a wealthy Chinese who owns properties in Irvine and some hard time comes in China, I would sell Irvine properties to have more stable life in China, not the other way. If some massacres or something as bad happen, then I would flee to America, but if it?s just some economic problem, I would sell assets here to support my life in home country. For families and kids, I think they send them here to learn and eventually would have them come back. Isn?t that why they go back after college?