Where are we headed?Irvine home prices?
- Thread starter OCLuvr
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Do they really have bad manners?
Maybe I just haven't had enough interaction with mainlanders. Some of them I interacted with were quite polite Though I'm not sure if there were mainlanders or Japanese or other nationalities. Of course I've seen some weird ones but I've seen weird ones of all ethnicities.
I had a few clients ping me about this article. You have to read between the lines as to what is going on. There are 2 main reasons for the sales volume decrease...1) lack of resale inventory in the lower end of the market (sub $1m in Irvine) and 2) more and more sellers are pricing their homes too high because they see the low level of inventory hoping to catch a sucker buyer which causes a wider bid/ask spread. The article even mentioned my first point as being a cause for the sales volume drop and it did say that prices were up YOY.
I've said it once and I'll keep saying, the leading indicator of where real estate prices might be heading is the level of resale inventory on the market. Less than 3 months of resale inventory = seller's market (prices continue to increase), more than 3 to 6 months of resale inventory = neutral market (flattish prices), and more 6 months of resale inventory = buyer's market (prices will fall). In Irvine, we currently have about 2.75 months of resale inventory...to break it down further the sub $1m market has less than 2 months of resale inventory while the $1m+ market has about 4 months of resale inventory. So watch resale inventory levels (keep seasonality in mind where inventory levels peak in July/August) as your tea leaf of where prices might be heading instead of getting caught up with a click bait headline in an article.
Great explanation. Quoting the latest reports on housing, it shows inventory increasing in all price categories. about 10% YOY increase. Specifically price range of 1M-1.25M is up 29%, 750k-1M up 23%, 1.25-1.5M up 2%. over 1.5M up 6%. This trend of increased inventory seems to be accelerating throughout this year. Overall inventory is up 77% from the beginning of the year. This amount of increase is only second to 2007. Along with significantly decreased demand, I suspect that it may not be a sellers market by the end of this selling season. What are your thoughts on this trend? Although I realize it is difficult to predict the future, it seems reasonable to extrapolate these data points and see that it may no longer be a sellers market soon.
Perhaps list now or be priced lower for a long time?
I do agree with you that the month of inventory have increased from the winter/spring, I think at the low of the market we were around 2 months of inventory and the sub $1m market was below 1.5 months of inventory. You can't look at what inventory levels have done since the beginning of the year because that's what always happens...inventory levels are the lowest around Christmas/New Years Day and then being in rise in mid-Jan and peak in July/Aug, that's been the trend for 6-8 years now. Like I mentioned, more and more sellers saw how low the inventory levels were and that prices increased 4-8% YTD so they thought they could find some sucker buyers....sorry no dice! And those "waste of time" listings will eventually be de-listed after lingering on the market for months and months.
Remember, I'm just speaking about the Irvine market as that is the market that I track very closely. Inventory levels have increased at a slightly higher rate in cities outside of Irvine from what I've seen but the lower end properties sell quickly outside too (sub $700k properties). With the increase in inventory pricing increases have slowed down to about flattish. Unless we go over 4 months of inventory which translates over 1,000+ active listings (we are currently 691 active listings of which 82 are new construction listings), don't expect prices to drop. So closely watch sales and inventory.
I'll start updating my inventory and sales volume schedule starting this month so people can see what the trends are in Irvine.
I agree. Whether there is a flood of inventory coming or not is up for debate. What is not up for debate is that housing is definitely slowing. I think we all see it, it just a matter of how much its slowing that is in question.
Happiness said:
Do they really have bad manners?
Maybe I just haven't had enough interaction with mainlanders. Some of them I interacted with were quite polite Though I'm not sure if there were mainlanders or Japanese or other nationalities. Of course I've seen some weird ones but I've seen weird ones of all ethnicities.
momopi
Well-known member
Generally speaking people's behaviors are governed by religious morality (good/evil), secular ethics (right/wrong/shame) and fear of punishment (legalism, social outcast). These factors do not appeal equally to everyone. Person A might reject Taiwan/Japan's "culture of shame and fear" but accepts religious teachings, while Person B might reject social norms and only comply with the law because he is forced to.
In Singapore and Taiwan, enforcement against things like littering and spitting started many decades ago when the streets were stained with betel nut juice. In Taipei I attended elementary school in late 70s to early 80s, we wore uniforms and KMT armbands to "patrol" on way to school and back as part of disciplinary team (moving from private Catholic school to public school was quite an experience). If we saw any student littering or spitting we were supposed to confront them and record their name tags, then report to our class leader. In reality this was a bad idea if the other boys were much bigger (Jr High-HS) as it would result in a beating and thrown into an open sewer.
In China this was not considered a priority until 2008 Olympics, when suddenly the local government scrambled to fine people for spitting in public. There are NPO's working to improve social etiquette but they have to be mindful of not being considered a threat:
https://www.scmp.com/news/china/art...oodpeckers-beijing-swoop-antisocial-behaviour
Today with advanced technology the CCP is looking to use mass surveillance as the tool for behavioral modification. From facial recognition to "social credit system" technology has enabled the CCP to use big data for this purpose. But this is still going with fear of punishment route. As Confucius said the sense of shame has to be taught.
In Singapore and Taiwan, enforcement against things like littering and spitting started many decades ago when the streets were stained with betel nut juice. In Taipei I attended elementary school in late 70s to early 80s, we wore uniforms and KMT armbands to "patrol" on way to school and back as part of disciplinary team (moving from private Catholic school to public school was quite an experience). If we saw any student littering or spitting we were supposed to confront them and record their name tags, then report to our class leader. In reality this was a bad idea if the other boys were much bigger (Jr High-HS) as it would result in a beating and thrown into an open sewer.
In China this was not considered a priority until 2008 Olympics, when suddenly the local government scrambled to fine people for spitting in public. There are NPO's working to improve social etiquette but they have to be mindful of not being considered a threat:
https://www.scmp.com/news/china/art...oodpeckers-beijing-swoop-antisocial-behaviour
Today with advanced technology the CCP is looking to use mass surveillance as the tool for behavioral modification. From facial recognition to "social credit system" technology has enabled the CCP to use big data for this purpose. But this is still going with fear of punishment route. As Confucius said the sense of shame has to be taught.
OCLuvr
Active member
Now, the world is talking about it.https://www.cnbc.com/2018/07/24/sou...sales-crash-a-warning-sign-to-the-nation.html
usctrojancpa
Well-known member
OCLuvr said:
I had a few clients ping me about this article. You have to read between the lines as to what is going on. There are 2 main reasons for the sales volume decrease...1) lack of resale inventory in the lower end of the market (sub $1m in Irvine) and 2) more and more sellers are pricing their homes too high because they see the low level of inventory hoping to catch a sucker buyer which causes a wider bid/ask spread. The article even mentioned my first point as being a cause for the sales volume drop and it did say that prices were up YOY.
I've said it once and I'll keep saying, the leading indicator of where real estate prices might be heading is the level of resale inventory on the market. Less than 3 months of resale inventory = seller's market (prices continue to increase), more than 3 to 6 months of resale inventory = neutral market (flattish prices), and more 6 months of resale inventory = buyer's market (prices will fall). In Irvine, we currently have about 2.75 months of resale inventory...to break it down further the sub $1m market has less than 2 months of resale inventory while the $1m+ market has about 4 months of resale inventory. So watch resale inventory levels (keep seasonality in mind where inventory levels peak in July/August) as your tea leaf of where prices might be heading instead of getting caught up with a click bait headline in an article.
USCTrojanCPA said:
Great explanation. Quoting the latest reports on housing, it shows inventory increasing in all price categories. about 10% YOY increase. Specifically price range of 1M-1.25M is up 29%, 750k-1M up 23%, 1.25-1.5M up 2%. over 1.5M up 6%. This trend of increased inventory seems to be accelerating throughout this year. Overall inventory is up 77% from the beginning of the year. This amount of increase is only second to 2007. Along with significantly decreased demand, I suspect that it may not be a sellers market by the end of this selling season. What are your thoughts on this trend? Although I realize it is difficult to predict the future, it seems reasonable to extrapolate these data points and see that it may no longer be a sellers market soon.
Perhaps list now or be priced lower for a long time?
usctrojancpa
Well-known member
meccos12 said:
I do agree with you that the month of inventory have increased from the winter/spring, I think at the low of the market we were around 2 months of inventory and the sub $1m market was below 1.5 months of inventory. You can't look at what inventory levels have done since the beginning of the year because that's what always happens...inventory levels are the lowest around Christmas/New Years Day and then being in rise in mid-Jan and peak in July/Aug, that's been the trend for 6-8 years now. Like I mentioned, more and more sellers saw how low the inventory levels were and that prices increased 4-8% YTD so they thought they could find some sucker buyers....sorry no dice! And those "waste of time" listings will eventually be de-listed after lingering on the market for months and months.
Remember, I'm just speaking about the Irvine market as that is the market that I track very closely. Inventory levels have increased at a slightly higher rate in cities outside of Irvine from what I've seen but the lower end properties sell quickly outside too (sub $700k properties). With the increase in inventory pricing increases have slowed down to about flattish. Unless we go over 4 months of inventory which translates over 1,000+ active listings (we are currently 691 active listings of which 82 are new construction listings), don't expect prices to drop. So closely watch sales and inventory.
I'll start updating my inventory and sales volume schedule starting this month so people can see what the trends are in Irvine.
USC?s explanation is on solid ground when it comes to looking at data in the correct context (ie % changes mean anything significant only when applied to a normalized data set )
This is a crash course in real estate he is offering for free , can?t learn this from books or attending a class at UCI . Pay attention to what he says is all I can add to this .
This is a crash course in real estate he is offering for free , can?t learn this from books or attending a class at UCI . Pay attention to what he says is all I can add to this .
Inventory is up 213% YoY from June in the entire Southern California region, and sales are down almost 15%.
A flood of inventory is about to hit the market, as speculators realize "the greater fool" can no longer afford the lower end.
I'm not talking specifically about Irvine lower end, but it will be affected...probably just a lot less. Still, every market cycle has a top, and we've obviously reached it. Especially with the recent news about Chinese becoming net sellers of real estate in the US in Q2
A flood of inventory is about to hit the market, as speculators realize "the greater fool" can no longer afford the lower end.
I'm not talking specifically about Irvine lower end, but it will be affected...probably just a lot less. Still, every market cycle has a top, and we've obviously reached it. Especially with the recent news about Chinese becoming net sellers of real estate in the US in Q2
ThirtySomethingWEquity
Active member
"A flood of inventory". Do you guys remember hearing this too back in 2008/2009? That the banks would release a huge swath of shadow industry? Irvine Renter probably cries himself to sleep every night for not buying around then.
irvinehomeowner
Well-known member
Think we need to be careful with words like "flood"... or anything weather-related when it comes to housing.
I'm still looking for that "tsunami" that was promised 10 years ago.
http://www.doctorhousingbubble.com/notice-of-financial-default-california-develops-a-mortgage-tsunami-patter-reminiscent-of-the-2007-subprime-collapse-alt-a-and-option-arms-unite/
I'm still looking for that "tsunami" that was promised 10 years ago.
http://www.doctorhousingbubble.com/notice-of-financial-default-california-develops-a-mortgage-tsunami-patter-reminiscent-of-the-2007-subprime-collapse-alt-a-and-option-arms-unite/
eyephone said:meccos12 said:eyephone said:I guess I was right?
The person who call me glad something. What?s up now!
Right about what?
The music is slowing down for housing.
I agree. Whether there is a flood of inventory coming or not is up for debate. What is not up for debate is that housing is definitely slowing. I think we all see it, it just a matter of how much its slowing that is in question.
If another hosing downturn occurred, the existing home inventory here in Irvine most likely will also decreased and prevent home prices to drop significantly.
When the home price dropped, homeowner will less likely to list their home for sale unless they really have to. Why sell your house when the price is bad, they will simply wait until the price goes up again. And nothing this this time around to force significant number of homeowner to sell their homes.
When the home price dropped, homeowner will less likely to list their home for sale unless they really have to. Why sell your house when the price is bad, they will simply wait until the price goes up again. And nothing this this time around to force significant number of homeowner to sell their homes.
Been house hunting in south OC for awhile and it really seems like Irvine prices are slowing down / hit a plateau
But prices in Aliso and Laguna continues to go up from what I've seen
Some Aliso home prices have even reached Irvine prices. (dare I say even eclipses)
https://www.redfin.com/CA/Aliso-Viejo/11-Starling-Ln-92656/home/4851560
https://www.redfin.com/CA/Aliso-Viejo/14-Birch-Dr-92656/home/4871021
https://www.redfin.com/CA/Aliso-Viejo/6-Gala-Ct-92656/home/5815845
$510 - $550 per sqft is seriously insane for Aliso
But prices in Aliso and Laguna continues to go up from what I've seen
Some Aliso home prices have even reached Irvine prices. (dare I say even eclipses)
https://www.redfin.com/CA/Aliso-Viejo/11-Starling-Ln-92656/home/4851560
https://www.redfin.com/CA/Aliso-Viejo/14-Birch-Dr-92656/home/4871021
https://www.redfin.com/CA/Aliso-Viejo/6-Gala-Ct-92656/home/5815845
$510 - $550 per sqft is seriously insane for Aliso