When would be next housing Bottom?

NEW -> Contingent Buyer Assistance Program
Soylent Green Is People said:
We had a RE Consulting Group come by the office and give some info from their latest report

2018 expected appreciation 3.6%
2019 expected appreciation 1.5%
2020 expected appreciation -.01%
2021 expected appreciation -3.5%

Wish I had permission to post the entire 50+ page report as there's a great deal to chew on here, but it's a "subscriber only" newsletter.
Click to expand...


Back in 2015, I heard a panel of noted economists predict that the next recession would start sometime during the second half of 2017 to the first half of 2018.  Still waiting...


With all due respect, I don't think anyone is capable of accurately predicting what will happen beyond the next 6-12 months.  If a forecast happens to be correct, I think it's more coincidence than anything else.
 
OCLuvr said:
If OC is just 3%, Irvine would be 0.
Click to expand...

Agree, and that's why I'm agreeing with IHO that it is not worth the wait to buy in Irvine for a slim possibility of some discount.

If one want to wait and find some good deal in the surrounding cities during the slowdown, that's probably a good idea.  But don't expect any significant discount in newer and highly popular neighborhoods in Irvine though.
 
lnc said:
OCLuvr said:
If OC is just 3%, Irvine would be 0.
Click to expand...

Agree, and that's why I'm agreeing with IHO that it is not worth the wait to buy in Irvine for a slim possibility of some discount.

If one want to wait and find some good deal in the surrounding cities during the slowdown, that's probably a good idea.  But don't expect any significant discount in newer and highly popular neighborhoods in Irvine though.
Click to expand...

One of the new developments I follow now has a handful of 'quick move in' homes that are selling for about 20-30k less than they would have been if someone had put a deposit down and selected the options the builder put on them this summer.  I don't think there's going to be anything like the last downturn, but I think I have already saved 20k and could possibly save another 30k by waiting a few more months...
 
It wont "crash" just slow way down. There is not a place in the world that I know of that has this level of stability. THe only thing that can spoil it is the continued flight as it turns more blue. Thats what will tank the entire state.Remember, there is not much land left. Once it is built and if California is not raising a new socialist flag,  long term appreciation is assured.
 
OCAgentGold said:
It wont "crash" just slow way down. There is not a place in the world that I know of that has this level of stability. THe only thing that can spoil it is the continued flight as it turns more blue. Thats what will tank the entire state.Remember, there is not much land left. Once it is built and if California is not raising a new socialist flag,  long term appreciation is assured.
Click to expand...

Huh , Flight ?  Of the raven sitting atop your roof  ?
 
Unless one's job is portable, I don't see any meaningful flight due to the political shift in representation.  Besides, it will take awhile for any policy changes to get people upset enough to move.  That said, if OC becomes like SF relative to social economic problems then all bets are off.
 
I thought 2018 was going to be flat and it?s basically turning out to be that.  We had gains of 3-7% in the first half of the year and since mid year we have basically given up those gains.  I think next year will be flattish (slightly up to slightly down). I?ll be watching inventory levels closely as well as interest rates. The economy and job market remain strong from what I see so it?ll take one of a few things to bring the real estate market down more than a few %....1) rates going materially over 5% on the 30 year fixed loan. 2) tariffs/trade war getting worse. 3) job losses.  4) material increase in resale inventory levels. 5) Fed getting aggressive on increasing interest rates. 6) significant devaluation on the Yuan and the US dollar continuing in strengthen against all other currencies. 
 
Thing is , housing was a LEADING indicator this time , not LAGGING as it usually is  ? which is quite remarkable in and of itself given the otherwise strong jobs market. Some TI posters like eyephone and others got it right early on , to their credit .

Good thing is unlike the excess capacity I see in many other areas of the economy , housing is not one of those sectors yet ? We could bounce around these low levels for a lot while longer without a meaningful correction lower, just like it took the business profit cycle a lot longer to recover from 2009.

In that sense people could be really waiting a long time if they are really trying to ?time ? the bottom . 

As to interest rates , fed will likely hike in December . But for those keeping track of bond markets , notice how the market has begun to price in close to zero hikes for next year . I think the fed is about to ?blink? .

 
OCAgentGold said:
Remember, there is not much land left. Once it is built and if California is not raising a new socialist flag,  long term appreciation is assured.
Click to expand...

How many times have we heard this line!  an oldee, but a goodee!  Weren't there TV commercials saying this in the 03-06 era?

 
meccos12 said:
OCAgentGold said:
long term appreciation is assured.
Click to expand...

You mean inflation?  :o
Click to expand...

Short term you might have high blood pressure or an ulcer. due to the decreasing price

(Also, you might say to yourself maybe I should of waited). I am still seeing the price drops throughout the US.

That?s like saying. If you buy a house it should go up in 50 years. (Come on!) lol

 
I would say that you should not buy a house for investment purposes but you can buy it as a hedge against inflation.  You will always need somewhere to live so buying a house now will help you not have to buy or rent one in the future. 

Question is whether you can make more by investing the funds elsewhere.  I am more conservative so home is first priority and then investment.
 
Irvinecommuter said:
I would say that you should not buy a house for investment purposes but you can buy it as a hedge against inflation.  You will always need somewhere to live so buying a house now will help you not have to buy or rent one in the future. 

Question is whether you can make more by investing the funds elsewhere.  I am more conservative so home is first priority and then investment.
Click to expand...

I agree with this, but it just sucks if your home value goes down. When selling, hopefully it doesn?t overlap with the recession time so the inflation/appreciated value will stay.
 
Mety said:
Irvinecommuter said:
I would say that you should not buy a house for investment purposes but you can buy it as a hedge against inflation.  You will always need somewhere to live so buying a house now will help you not have to buy or rent one in the future. 

Question is whether you can make more by investing the funds elsewhere.  I am more conservative so home is first priority and then investment.
Click to expand...

I agree with this, but it just sucks if your home value goes down. When selling, hopefully it doesn?t overlap with the recession time so the inflation/appreciated value will stay.
Click to expand...

Recipe for recession. Yo
Stock market down, housing down...
 
eyephone said:
Mety said:
Irvinecommuter said:
I would say that you should not buy a house for investment purposes but you can buy it as a hedge against inflation.  You will always need somewhere to live so buying a house now will help you not have to buy or rent one in the future. 

Question is whether you can make more by investing the funds elsewhere.  I am more conservative so home is first priority and then investment.
Click to expand...

I agree with this, but it just sucks if your home value goes down. When selling, hopefully it doesn?t overlap with the recession time so the inflation/appreciated value will stay.
Click to expand...

Recipe for recession. Yo
Stock market down, housing down...
Click to expand...

Yeah...no real good places to park investments if you are going through economic downturn (unless you are a shortseller).  But in a bad economy, more value is placed on things that can be used rather than something abstract. 
 
This year has been a real dog if you are an investor ? literally no place to hide

Stocks ?
Government bonds ?
Corporate bonds ?
Junk bonds ?
Housing ?

Only thing holding up is high yield loan funds - but for  how long , let?s see

The problem is with investment horizons

When you gamble or say bet on a race horse , there is a set start and end point . You may use an analytical framework to use for betting but ultimately it is a discrete event that ends and you lose/win whatever you are supposed to and walk away .


When you invest , you are in a continuous time frame . There is no end point . When your investment goes down, you think maybe I will hold it just a little bit longer and your point of exit keeps shifting and shifting and shifting, leading to constant anguish .  Truly long investment horizons are a luxury only the very few have.

This is why when going into an investment or even when you are about to buy a House ? key to practice and rehearse your reaction function before hand ? will I still be happy if this house were to be marked down by 5-10 percent within an year or two even though I don?t really need to sell it ? If the answer is no , then don?t buy .
 
Add crypto to the list :o

fortune11 said:
This year has been a real dog if you are an investor ? literally no place to hide

Stocks ?
Government bonds ?
Corporate bonds ?
Junk bonds ?
Housing ?

Only thing holding up is high yield loan funds - but for  how long , let?s see

The problem is with investment horizons

When you gamble or say bet on a race horse , there is a set start and end point . You may use an analytical framework to use for betting but ultimately it is a discrete event that ends and you lose/win whatever you are supposed to and walk away .


When you invest , you are in a continuous time frame . There is no end point . When your investment goes down, you think maybe I will hold it just a little bit longer and your point of exit keeps shifting and shifting and shifting, leading to constant anguish .  Truly long investment horizons are a luxury only the very few have.

This is why when going into an investment or even when you are about to buy a House ? key to practice and rehearse your reaction function before hand ? will I still be happy if this house were to be marked down by 5-10 percent within an year or two even though I don?t really need to sell it ? If the answer is no , then don?t buy .
Click to expand...
 
fortune11 said:
This year has been a real dog if you are an investor ? literally no place to hide

Stocks ?
Government bonds ?
Corporate bonds ?
Junk bonds ?
Housing ?
Click to expand...

Housing is very localized, even within Orange County.  Some cities have experienced surprisingly strong appreciation this year.  Based on the comments here, it sounds as if Irvine is not one of them.
 
You must log in or register to reply here.
Back
Top