When would be next housing Bottom?

[Irvinecommuter]

Irvine has historically outperformed price appreciation over the years and will continue to do use into the future for many of the reasons IHO listed.  I'm not saying that Irvine prices can't drop, but they'll drop less than other cities in Orange County.

So why isn't meccos responding to USC on this? Because I didn't say it?

Meccos is waiting for the ripe time. I think the bashing between liar and meccos keep the forum interesting and showing their hands in the game. Personally, I would buy to live Irvine not for pure CAP and appreciation. That's easy to say because most of us here have bought during the low rides. Now, if I would to wait and buy I would pump the down talk to get price lower.

I've always viewed it as my job to "keep things interesting" here.  However, it doesn't really show my hand in the game.  I'm not interested in buying in Irvine so it's just for the sake of trying to counter some of the pro-Irvine bias that I see posted here all too often.  I'm providing the perspective of a neutral third party.

See..I don't understand how saying that Irvine is more resilient to falling house prices make anyone "Pro-Irvine"

 

[Irvinecommuter]

I don't get the Irvine bashing. 

I don't get why pointing out possible decline on Irvine home prices = Irvine bashing.

But all housing prices can decline...question is how much and how quickly recover.  Irvine falls a lot less than most communities and recovers a lot faster. 

I am not why this needs to be pointed out?

You are basing this opinion on a single data point ~ the last downturn.  There have been previous downturns where this wasn't the case.  Unless you can break down the reasons for why this occurred for the first time in 2008, and why it might happen again in the 2020's, it's not guaranteed that the same behavior will repeat.

For example ~ You can also say the 2001 recession had OC (including Irvine) outperforming the Bay Area.  San Francisco lost about 10% while LA/OC was flattish to slightly up.  Yet if you had predicted that to happen again during the next downturn (2008) the exact opposite occurred.  The Bay Area held up much better than LA/OC during the Great Recession on a relative basis.

So again, you need to break down the reasons why Irvine fared better in 2008 and determine if those same conditions will still apply in 2024.

How far back do we need to go?  2001 recession was uniquely affecting BA because the boom was relating to Silicon Valley and the rise/fall of the dot.com.  Regardless, there is no dispute that both BA and Irvine are highly valuable real estate that are more resilient to dropping prices and rise earlier and faster than other areas. 

 

[fortune11]

I think there is obviously confirmation bias at play here for those who live in Irvine but looking at just the hard data - Irvine s biggest strength is openness to multiple demographics and offering something for everyone.

Yes some people only want the beach , and for many of them living in Huntington Beach or San Clemente Maybe better alternatives but those areas will fall harder in a downturn given lack of jobs and ?narrowcasting ? the audience .

Same goes for Newport Beach . Yes , tonier , but not as ?welcoming? to all . Thereby narrowcasting.

yes , the big $$ homes in pelican hill and coastal CDM always will have The likes of NBA superstars and celebrities who want to live there but More inland Newport will likely suffer a worse decline than Irvine .

 

[Liar Loan]

Although I'm confused because you are saying that "Irvine fared better in 2008" but originally you said it was "revisionist history".

Irvine did fare better than other areas in OC.  What I was saying was revisionist was this idea that it only fell by 10-15%, when the raw numbers dispute that.  It's been repeated so many times that I have seen new/infrequent posters repeat it as if it were fact.  They don't have the analysis skills or data to know any differently, so they take what is consensus here as the truth about Irvine.  The fact is a first time buyer would still have been much better off waiting until 2010-11 to buy than suffering that massive 30% drop in 2008.

See..I don't understand how saying that Irvine is more resilient to falling house prices make anyone "Pro-Irvine"

Saying Irvine is more resilient is fine, but I get the sense that some people believe it is immune to price drops going forward based on the belief that Irvine is that special.

Irvine s biggest strength is openness to multiple demographics and offering something for everyone.

This same argument could be made about Westminster / Garden Grove / etc.  The pricing data doesn't show any particular resilience to price declines in these other areas.  I think demographics are secondary and the flow of capital is primary.  Irvine was more resilient because what was once seen as a boring middle class area was suddenly attractive to wealthy overseas buyers that were willing to pay more and were immune to the 2008 recession due to their protected investments overseas.  That may or may not be the case next time around.

 

[Irvinecommuter]

Irvine s biggest strength is openness to multiple demographics and offering something for everyone.

This same argument could be made about Westminster / Garden Grove / etc.  The pricing data doesn't show any particular resilience to price declines in these other areas.  I think demographics are secondary and the flow of capital is primary.  Irvine was more resilient because what was once seen as a boring middle class area was suddenly attractive to wealthy overseas buyers that were willing to pay more and were immune to the 2008 recession due to their protected investments overseas.  That may or may not be the case next time around.

Sorry...that's just wrong. 

1) TIC was selling Irvine/OC in Asia for years before the downturn. 

2) For example, Irvine is well known outside of the US as a place for Chinse to settle down in.  New homes, safe community, lots of other Chinese people, and great schools.  That is why places like Arcadia and San Marino are popular with Chinese/Asians...also see Walnut, Cerritos, and RH/Diamond Bar.

3)  Chinese FCBs were not buying to "immune" their investment.  They were doing it to get their families out of China and for investment green cards.  A house in Irvine is small potatoes for those coming in 2008/2009. 

4)  Demographics is definitely a thing for foreign buyers/immigrants. 

5)  Irvine also has access to high level white collar jobs...it is very similar to the BA (which is heavy in tech jobs). 

 

[irvinebullhousing]

Organic buyers and new families formation add to the stickiness in pricing. Young, well to do couples also love the newness and master planned neighborhoods.

 

[Liar Loan]

Irvine s biggest strength is openness to multiple demographics and offering something for everyone.

This same argument could be made about Westminster / Garden Grove / etc.  The pricing data doesn't show any particular resilience to price declines in these other areas.  I think demographics are secondary and the flow of capital is primary.  Irvine was more resilient because what was once seen as a boring middle class area was suddenly attractive to wealthy overseas buyers that were willing to pay more and were immune to the 2008 recession due to their protected investments overseas.  That may or may not be the case next time around.

Sorry...that's just wrong. 

1) TIC was selling Irvine/OC in Asia for years before the downturn. 

2) For example, Irvine is well known outside of the US as a place for Chinse to settle down in.  New homes, safe community, lots of other Chinese people, and great schools.  That is why places like Arcadia and San Marino are popular with Chinese/Asians...also see Walnut, Cerritos, and RH/Diamond Bar.

3)  Chinese FCBs were not buying to "immune" their investment.  They were doing it to get their families out of China and for investment green cards.  A house in Irvine is small potatoes for those coming in 2008/2009. 

4)  Demographics is definitely a thing for foreign buyers/immigrants. 

5)  Irvine also has access to high level white collar jobs...it is very similar to the BA (which is heavy in tech jobs).

1) Yeah, so?

2) I agree, but this doesn't take anything away from my point.

3) You misread what I was saying.  What I meant was they were mostly immune to the financial crisis because their assets were based in China.

4) Demographics may be a thing for foreign buyers, but it's not a thing for resilience to housing downturns.  See Garden Grove / Westminster as examples.

5) All of LA/OC has access to white collar jobs.  This doesn't explain resilience to falling prices.  White collar jobs were hit very, very hard in Irvine during the Great Recession.  Tens of thousands of real estate and mortgage jobs were taken out in a very short amount of time.  Many sales people went from making an easy $500-600k per year to $0 in a matter of months.

 

[Liar Loan]

Organic buyers and new families formation add to the stickiness in pricing. Young, well to do couples also love the newness and master planned neighborhoods.

This same paradigm existed in 2008 just as Irvine was losing 30% of its value.

 

[Irvinecommuter]

Irvine s biggest strength is openness to multiple demographics and offering something for everyone.

This same argument could be made about Westminster / Garden Grove / etc.  The pricing data doesn't show any particular resilience to price declines in these other areas.  I think demographics are secondary and the flow of capital is primary.  Irvine was more resilient because what was once seen as a boring middle class area was suddenly attractive to wealthy overseas buyers that were willing to pay more and were immune to the 2008 recession due to their protected investments overseas.  That may or may not be the case next time around.

Sorry...that's just wrong. 

1) TIC was selling Irvine/OC in Asia for years before the downturn. 

2) For example, Irvine is well known outside of the US as a place for Chinse to settle down in.  New homes, safe community, lots of other Chinese people, and great schools.  That is why places like Arcadia and San Marino are popular with Chinese/Asians...also see Walnut, Cerritos, and RH/Diamond Bar.

3)  Chinese FCBs were not buying to "immune" their investment.  They were doing it to get their families out of China and for investment green cards.  A house in Irvine is small potatoes for those coming in 2008/2009. 

4)  Demographics is definitely a thing for foreign buyers/immigrants. 

5)  Irvine also has access to high level white collar jobs...it is very similar to the BA (which is heavy in tech jobs).

1) Yeah, so?

2) I agree, but this doesn't take anything away from my point.

3) You misread what I was saying.  What I meant was they were mostly immune to the financial crisis because their assets were based in China.

4) Demographics may be a thing for foreign buyers, but it's not a thing for resilience to housing downturns.  See Garden Grove / Westminster as examples.

5) All of LA/OC has access to white collar jobs.  This doesn't explain resilience to falling prices.  White collar jobs were hit very, very hard in Irvine during the Great Recession.  Tens of thousands of real estate and mortgage jobs were taken out in a very short amount of time.  Many sales people went from making an easy $500-600k per year to $0 in a matter of months.

1)  It means that appeal of Irvine to foreign buyers is was not "sudden".

2)  It does because you seem to discount the appeal of places like Irvine.  San Marino and Arcadia has been around for awhile...why are they more resilient to price falls than Norwalk or Fontana?  There are master planned communities in the IE...why aren't FCB going there?

3)  Okay but why did those buyers have to come to Irvine?  Why not elsewhere?

4)  Again...it is a plus to note as to why Irvine is more resilient to price falls.  Just like weather, access to jobs, etc...

5)  No...that all of LA has access to good white collar jobs.  Having to drive 2+ hours to get to work does not equate access. 

Again...resilient does not mean immuned...even NYC, Tokyo, London, and Malibu are not immuned to falling housing prices.  Question is how much resilience and why.

Housing is basically supply and demand...the more demand you can build into the product...the higher the price.  Irvine has mass appeal especially to those with money, both domestically and foreign.

 

[meccos12]

What I was saying was revisionist was this idea that it only fell by 10-15%, when the raw numbers dispute that.  It's been repeated so many times that I have seen new/infrequent posters repeat it as if it were fact. 

Who caress about facts and real data!!!  The 10-15% drop in prices was ONLY homes IHO personally saw.  IHO's personal experience is more telling about Irvine housing than real aggregate data!  BTW does anyone know which homes he saw?   

 

[Irvinecommuter]

What I was saying was revisionist was this idea that it only fell by 10-15%, when the raw numbers dispute that.  It's been repeated so many times that I have seen new/infrequent posters repeat it as if it were fact. 

Who caress about facts and real data!!!  The 10-15% drop in prices was ONLY homes IHO personally saw.  IHO's personal experience is more telling about Irvine housing than real aggregate data!  BTW does anyone know which homes he saw?   

I am curious as to why you are so adamant about the Irvine issue...I mean 15% versus 30% is not that important unless you are selling at the low.  More important are 1) the amount of time for prices to recover and 2) what the prices are when they do return. 

 

[meccos12]

What I was saying was revisionist was this idea that it only fell by 10-15%, when the raw numbers dispute that.  It's been repeated so many times that I have seen new/infrequent posters repeat it as if it were fact. 

Who caress about facts and real data!!!  The 10-15% drop in prices was ONLY homes IHO personally saw.  IHO's personal experience is more telling about Irvine housing than real aggregate data!  BTW does anyone know which homes he saw?   

I am curious as to why you are so adamant about the Irvine issue...I mean 15% versus 30% is not that important unless you are selling at the low.  More important are 1) the amount of time for prices to recover and 2) what the prices are when they do return.

I am adamant about persons who post false or deceitful posts.
15% vs 30% is a huge difference that any buyer or selling would care about.  In Irvine that is easily 150-250K.
No one can predict time for recovery and prices so it is pointless to try to predict these.  However it is important to recognize a slowdown in housing as it is occurring right now.  You, like IHO, are focusing on all the wrong things.

 

[ThirtySomethingWEquity]

Looking at aggregate house price groupings by city boundaries is amateur.  This is not how larger real estate companies decide when and if to invest.  There are so many other factors that go into each property that I see little point in discussing if 'Irvine' is more resiliant to prices falling than say, Tustin or or Cypress.

 

[meccos12]

Looking at aggregate house price groupings by city boundaries is amateur.  This is not how larger real estate companies decide when and if to invest.  There are so many other factors that go into each property that I see little point in discussing if 'Irvine' is more resiliant to prices falling than say, Tustin or or Cypress.

You have look at the purpose of what you are doing when looking at pricing.  I agree if you are looking to invest in a particular property, I would not look at aggregate housing prices in a city boundary.  However if one is making claims that a whole city had a certain price movement of 10-15%, then you have no choice but to look at the whole city. 

 

[irvinehomeowner]

Although I'm confused because you are saying that "Irvine fared better in 2008" but originally you said it was "revisionist history".

Irvine did fare better than other areas in OC. What I was saying was revisionist was this idea that it only fell by 10-15%, when the raw numbers dispute that.

This is what you wrote:

It's revisionist history to say that Irvine was safer, and is really a form of cognitive dissonance for those that want to convince themselves that prices can't go down.  If you really want safety, there are other places that will protect your "investment" much better.  Try CDM, NB, LB, etc.  Areas with long time owners and old money will weather the storm best. 

I posted the Trulia data that shows that CDM, NB, LB, etc actually had larger drops using your high/low method and even using a rolling average they still dropped more so I don't think it's revisionist... raw numbers seem to side with Irvine.

It's been repeated so many times that I have seen new/infrequent posters repeat it as if it were fact.  They don't have the analysis skills or data to know any differently, so they take what is consensus here as the truth about Irvine.

Really? I know that in my own posts I state that it was in the specific housing I was looking at. For others, I think they've tempered it with their own experience. I don't feel anyone has said Irvine housing as a whole only dropped 10 or 15%. You and meccos have to start posting links to back up these assertions.

The fact is a first time buyer would still have been much better off waiting until 2010-11 to buy than suffering that massive 30% drop in 2008.

This is just like saying prices only dropped 10-15% as a whole. You can't know this as a fact. There are many people who bought in 2008 and actually better off because they couldn't find the same houses in 2010-11. Cheaper houses aren't always the good ones.

As I've said many times before, the numbers of homes you could buy for a 30% discount was few and far between. Your measurement of drop is extreme, you're taking the highest high and the lowest low, but you are not accounting for how much of that inventory was purchasable by the average buyer. If you have the data that shows the volume of homes you could buy at a 30%, I think it will show a different story. That's why I said that you have to use a reasonable time frame to calculate what a true drop was. Using your method, can I really say Newport Beach homes dropped almost 50%? No, because I know that would be a very small percentage of what actually was bought at a discount.

 

[zubs]

You guys need make the distinction that this is for investment properties only.
Family homes are priceless, so grading a purchase only on its investment quality is appropriate.

While a family home is a big investment, we should only focus on the investment side, because there's no way to price priceless.



In this case, Irvine dropped 30%, and IHO's experience of an only 10-15% drop in his search for a family home should not be considered.

 

[irvinehomeowner]

What I was saying was revisionist was this idea that it only fell by 10-15%, when the raw numbers dispute that.  It's been repeated so many times that I have seen new/infrequent posters repeat it as if it were fact. 

Who caress about facts and real data!!!  The 10-15% drop in prices was ONLY homes IHO personally saw.  IHO's personal experience is more telling about Irvine housing than real aggregate data!  BTW does anyone know which homes he saw?   

What is the point of this post? To tell LiarLoan and yourself that you both were wrong because the "10-15%" only applied to what I was looking at? Thanks for clearing that up.

Again, it takes more than data to properly analyze the behavior of real estate, so despite what you think, personal experience from people who were shopping Irvine during that time frame does have value.

And if you have to know, I probably looked at close to over 700 homes on Redfin, of that, over 100 of those I went to via open house or our realtor Scott Gunther. That's not counting all the new homes we looked at either.

 

[irvinehomeowner]

You guys need make the distinction that this is for investment properties only.
Family homes are priceless, so grading a purchase only on its investment quality is appropriate.

While a family home is a big investment, we should only focus on the investment side, because there's no way to price priceless.



In this case, Irvine dropped 30%, and IHO's experience of an only 10-15% drop in his search for a family home should not be considered.

Even as an investment, I disagree.

On the open market, there were not many homes you could find for 30% off in June of 2012 (the $515k low by Trulia's chart).

This is something that people need to understand... even though the absolute median low was 28% lower than the absolute median high, that's not necessarily the same inventory. If more of the stock was SFRs that sold during the high, and then more of the stock was attached condos during the low... you can't say that you could buy an SFR for 28% off. Even if you use the BR count in Trulia, that's not indicative of type of housing, there are tons of 4br condos/townhomes in Irvine but you can't say those are the same value as an SFR. That's why a I prefer to use a rolling time frame as that smooths out the type of inventory and the extremes. This is where I get my 20% drop number which to me is actually more realistic because I did see a few homes that were 20% off in the type I was looking for.

 

[Irvinecommuter]

What I was saying was revisionist was this idea that it only fell by 10-15%, when the raw numbers dispute that.  It's been repeated so many times that I have seen new/infrequent posters repeat it as if it were fact. 

Who caress about facts and real data!!!  The 10-15% drop in prices was ONLY homes IHO personally saw.  IHO's personal experience is more telling about Irvine housing than real aggregate data!  BTW does anyone know which homes he saw?   

I am curious as to why you are so adamant about the Irvine issue...I mean 15% versus 30% is not that important unless you are selling at the low.  More important are 1) the amount of time for prices to recover and 2) what the prices are when they do return.

I am adamant about persons who post false or deceitful posts.
15% vs 30% is a huge difference that any buyer or selling would care about.  In Irvine that is easily 150-250K.
No one can predict time for recovery and prices so it is pointless to try to predict these.  However it is important to recognize a slowdown in housing as it is occurring right now.  You, like IHO, are focusing on all the wrong things.

No..because very few people buy at the top or the bottom.  If you buy a house in Irvine in 2006 and it dropped 30%, it is not a big deal unless you have to sell ASAP (which is always a bad idea).  But 12 years later, that house is worth a lot more than what you bought for in 2006.  That is not true for many property area around the country. 

So, unless you are a flipper or desperate to sell, the bottom and top are largely irrelevant...question is resilience and stability.

Slowdown begun awhile...I saw reports of a slowdown in the Spring...Irvine still have strength through the fall. 

 

[Irvinecommuter]

You guys need make the distinction that this is for investment properties only.
Family homes are priceless, so grading a purchase only on its investment quality is appropriate.

While a family home is a big investment, we should only focus on the investment side, because there's no way to price priceless.

In this case, Irvine dropped 30%, and IHO's experience of an only 10-15% drop in his search for a family home should not be considered.

Generally, areas that have high prices and good resilience are bad as investments.  You want areas that have big ranges so that you can pick up super cheap and resale fast.  You can't really do that in places like Irvine.