Home sales weaken as Chinese investors sour on US real estate!!!

Cornflakes said:
If anything, the previous crisis set the tone among people that it is okay to walk away, there is no shame, it is not even end of life, banks and feds will bend over, and one can always buy home in a period as short as 2-3 years again!
Click to expand...

I'd like to know how clean all the Harp refinancers, short sellers and people who walked away, came out in the end.
 
It isn't that easy anymore in this environment, credit is extremely tight. Bankers are looking for top tier borrowers to get qualify for loans. If you have any kind of major ding in the last 7-10 years such as short sales bankruptcy,  you can stay renting for a long time.

On the other hands this is a great time to be a landlord. Still those landlord are just as picky as well. They do want responsible people on their property. Credit history tell a lot about a person characters and the likelihood of getting pay their rent on time. Major ding will indicate the high probability of repeat behaviors and landlord may choose other suitable applicants. This force them to live in a less desirable area such as I.E., San Bernardino. They may be able to rent, in those area check the FBI crime statistics and see if you can live with that.
 
Compressed-Village said:
It isn't that easy anymore in this environment, credit is extremely tight. Bankers are looking for top tier borrowers to get qualify for loans. If you have any kind of major ding in the last 7-10 years such as short sales bankruptcy,  you can stay renting for a long time.

On the other hands this is a great time to be a landlord. Still those landlord are just as picky as well. They do want responsible people on their property. Credit history tell a lot about a person characters and the likelihood of getting pay their rent on time. Major ding will indicate the high probability of repeat behaviors and landlord may choose other suitable applicants. This force them to live in a less desirable area such as I.E., San Bernardino. They may be able to rent, in those area check the FBI crime statistics and see if you can live with that.
Click to expand...

7-10 years is ABSOLUTELY incorrect(short sale)! 3-4 years is more like it. I think it a very extreme opinion to say, "they will not find a place in OC" and I think it's a bit elitist to say everyone is a criminal in San Bernardino area! There are ton of middle class decent families living and raising their family in those neighborhoods. Let's not be OC snobs here!
 
Cornflakes,
I am a numbers guy and love numbers as the numbers don't lie. The key charts you need to look at are the historical Irvine inventory chart and unemployment rate in Orange County. Real Estate prices in OC and unemployment rate are highly correlated.

Panda said:
unemployment.jpg


Irvine_inventory.jpg
Click to expand...

Cornflakes said:
Things can get really bad really fast. 2001 bust, followed by housing crisis, followed by the oil crisis, then there was brexit. enough number of people feared enough and big money finds a better place to park their $, the downward spiral feeds itself and make things worse than they actually are.

Wall street will always unlimited supply of triggers to evoke the fear among people and sometimes they just have enough mass line up behind them and boom you have economic crisis out of nowhere.

If next housing bust were to occur, it may not be due to subprime lending. It may be due to, say, people lost jobs, not getting raises and choosing to let go of their expensive houses than rob their retirement. If anything, the previous crisis set the tone among people that it is okay to walk away, there is no shame, it is not even end of life, banks and feds will bend over, and one can always buy home in a period as short as 2-3 years again!
Click to expand...
 
RHOC said:
Another interesting article:
http://ochousingnews.com/blog/the-flow-of-chinese-buyers-in-irvine-slows-to-a-trickle/


BTW: Just yesterday my friend was in a new home in Irvine (I have to ask her which community) but the sales agent pulled her and her husband aside in one of the quick move ins and told them he would be willing to take 200K off of the asking price!!! I was SHOCKED!!! :eek:
Click to expand...

Definitely interested to know what community this was in! I would guess Beacon Park or possibly HC due to such a huge discount!
 
Laguna21 said:
RHOC said:
Another interesting article:
http://ochousingnews.com/blog/the-flow-of-chinese-buyers-in-irvine-slows-to-a-trickle/


BTW: Just yesterday my friend was in a new home in Irvine (I have to ask her which community) but the sales agent pulled her and her husband aside in one of the quick move ins and told them he would be willing to take 200K off of the asking price!!! I was SHOCKED!!! :eek:
Click to expand...

Definitely interested to know what community this was in! I would guess Beacon Park or possibly HC due to such a huge discount!
Click to expand...

HC based on the other thread.
 
Well, apparently plenty of buyers are awash in money. The premium lots in HC are selling surprisingly well. Marbella lots with multi-million $$$ lot premium are moving briskly. The same is true for the Capri on a relative level. In fact, it's the standard sized lots without view and little lot premium that are struggling. The buyers who are stretching to getting in to a high-end community like HC are not pulling the trigger like they were last year.
 
"US new home sales race to near 9-year high in July"

"The Commerce Department said on Tuesday new home sales surged 12.4 percent to a seasonally adjusted annual rate of 654,000 units last month, the highest level since October 2007."

http://www.cnbc.com/2016/08/23/new-home-sales-for-july-2016-reported-by-the-commerce-department.html

united-states-new-home-sales.png


It will probably continue to hit new highs since the average home sales used to be over 800,000 units in the late 90's and we weren't in bubble territory then.  If you haven't bought a home yet because you think we're in bubble territory now just wait a few more years and see how much more worse it gets ;D.
 
This chart is well illustrate the current cycles of housing market we are in right now. My subjective opinion is that we are in the very early 4th inning of this game. There is still plenty of room left before this cycle peaks. Of course, financing and get qualify is a major factor. Bank will seeks for the best of the bunch. Let's get your game on.
 
You see that little bottom point at the end of 2011? Bot, that was the time to buy. Let this run go for another decade and I am done, ready to retire.
 
Cornflakes said:
You see that little bottom point at the end of 2011? Bot, that was the time to buy. Let this run go for another decade and I am done, ready to retire.
Click to expand...

Your correct that's when private equity and investors were buying houses left and right.

#buylowsellhigh
 
The chance of seeing another major housing downturn like the great housing bubble of 2008 is really really low.  I would expect the future housing downturn be more like the one in the 80's and 90's. And in both of those downturns, average house price only drop about 10% but the housing prices rebound right back in just a few short years. 


 
I bought a house at THE peak in 1989 and it tweren't no 10% drop......... it was 30% and it took 11 years to finally make a profit a very slim profit.

It was exaggerated by the OC BK (other parts of the country were rebounding).

Bought a resale in Irvine in 1994 (rented out the first one cuz I wasn't gonna sell at a loss and we were planning on moving back there anyway) and houses continued dropping (had been dropping since 1989 peak). Took 4 years to make a tiny profit on that one.




 
Ready2Downsize said:
I bought a house at THE peak in 1989 and it tweren't no 10% drop......... it was 30% and it took 11 years to finally make a profit a very slim profit.

It was exaggerated by the OC BK (other parts of the country were rebounding).

Bought a resale in Irvine in 1994 (rented out the first one cuz I wasn't gonna sell at a loss and we were planning on moving back there anyway) and houses continued dropping (had been dropping since 1989 peak). Took 4 years to make a tiny profit on that one.
Click to expand...

Yeah but the prices were much lower back then so small dollar price movements translated to give % moves.  Also, interest rates were a lot higher back then and the world is awash with cheap money right now.  Not saying a big downturn can happen, but there just aren't any triggers for it at this moment (e.g. higher interest rates, rising unemployment, deflation, etc). 
 
Not saying a big downturn can happen, but there just aren't any triggers for it at this moment (e.g. higher interest rates, rising unemployment, deflation, etc). 
Click to expand...

You have all the right to be bullish on the US right now since its the safest place right now but if you could see what is happening here in China, there is going to be an implosion coming within the next few years and will domino effect the world into the next recession. The chinese gov is fighting it a much as possible right now but everyday people are starting to feel it. The result will be a big wake up call.

Not saying it will happen tomorrow but cracks are already appearing and are evident. As you guys in the US/OC can already tell, the smart money has been going overseas for awhile now and has been ramping up lately. Now with stricter capital outflow restrictions, only time will tell if it fans the flames or puts it out.
 
B2FiNiTY said:
Not saying a big downturn can happen, but there just aren't any triggers for it at this moment (e.g. higher interest rates, rising unemployment, deflation, etc). 
Click to expand...

You have all the right to be bullish on the US right now since its the safest place right now but if you could see what is happening here in China, there is going to be an implosion coming within the next few years and will domino effect the world into the next recession. The chinese gov is fighting it a much as possible right now but everyday people are starting to feel it. The result will be a big wake up call.

Not saying it will happen tomorrow but cracks are already appearing and are evident. As you guys in the US/OC can already tell, the smart money has been going overseas for awhile now and has been ramping up lately. Now with stricter capital outflow restrictions, only time will tell if it fans the flames or puts it out.
Click to expand...

I agree with you, if China implodes that will cause a major global recession.  I don't know what's going on in China other than a few clients telling me that things have been slowing down there.  The one thing that I've learned is that governments can keep kicking the can down the road longer than anyone thinks.  The US is the least dirt shirt in the bunch right now so we are getting a lot of the world's capital following here.
 
USCTrojanCPA said:
The one thing that I've learned is that governments can keep kicking the can down the road longer than anyone thinks.
Click to expand...

This is what everyone underestimated 8 years ago.

Most said that there wasn't a enough govt intervention to prevent a hard crash in Irvine. Sure, there were some properties that took a dive, but I think on average, it was not close to the 40%-50% people were predicting.

The homes we owned in Irvine never dropped 40%, and the one we bought at the height of the "bubble" (05/06), only dropped 5% and is probably at about +20% now (should not have sold that one).

Real estate isn't that easy to time but even if you buy at peak, if you can afford it and hold, the next peak is usually higher than the previous one.
 
You must log in or register to reply here.
Back
Top