usctrojancpa
Well-known member
I'm seeing that the market has stabilized, especially on the lower end. I'll provide a more detailed write-up in my thread summarizing March results this weekend.
Housing Analysis
- Thread starter eyephone
- Start date
Irvinecommuter
New member
USCTrojanCPA said:
It will be interesting to see what summer brings but I think it will an average year both in sales and pricing.
usctrojancpa
Well-known member
Irvinecommuter said:
I'm predicting a flattish year for 2019 in terms of Irvine prices (could be up a few % or down a few %), the big rate drop in the past few months seems to have stabilized things as has the slow melt up in the stock market. We'll need to see inventory and/or rates spike up a good bit for prices to fall more than a few % this year. Buyers seem to feel more comfy home shopping today but they are still looking to negotiate a decent price.
irvinehomeowner
Well-known member
Mety said:
So Trulia is incorrect?
https://www.trulia.com/real_estate/Irvine-California/market-trends/
From July 18 to Feb 19 it looks like it was a 5% drop, is that right?
Attachments
irvinehomeowner said:
I think Truila, Redfin, Zillow, etc. all those give us a bit of different numbers in general, but if you compare the same time from last year, it is definitely lower. This graph is from March 2018 - March 2019. USCTrojanCPA said he will have his data this weekend so let's compare that as well.
I did mention this before, but another thing to understand in RE market is that the certain percentage of the home price has to go up each year as GDP, our income, and everything else goes up each year together as well. But seeing that the price is lower than the last year is saying either 1) last year was just crazy expensive or 2) the market is unstable. So even if we did have 5% down, it's not just 5% down. It's almost 8-10% down.
The homes in Irvine, from what I'm seeing, are selling better than other cities, but those that sell are priced really well, meaning priced a bit lower than usual. The usual strategy of listing home prices a bit higher than the last comp is not working well so far, meaning those are sitting and sitting and sitting. It is more towards the buyer's market now.
But also, I must say the prices are still pretty high. I don't think it's a result of having a bad economy or anything. It's just starting to find the right balance IMHO.
irvinehomeowner
Well-known member
But even your graph shows prices are going back up. Or is that a dead cat jump?
CNBC article: Luxury home sales see biggest slump in nearly a decade
Sales of homes listed at $2 million and above fell 16% in the first quarter, the sharpest annual decline since 2010, according to Redfin, a real estate brokerage.
This as the supply of those homes rose 14%, marking four straight quarters of annual increases in inventory.
The average price of a "luxury" home, which Redfin defines as the top 5% in each of the 1,000 cities it tracks, fell 1.6% to $1.55 million. Nonluxury homes saw their average price rise 2.7% annually to $300,000.
Demand for high-end homes is waning in large part due to changes in tax law. The amount of state and local taxes that homeowners can deduct was capped at $10,000, and the mortgage interest deduction was reduced from $1 million to $750,000 in mortgage debt.
In Greenwich, Connecticut, home to the chiefs of some of the nation's largest hedge funds, it is all about taxes.
"It can be significant," said Jonathan Miller, CEO of Miller Samuel, a real estate analytics and appraisal firm. "You're looking at 5, 6, 7 million-dollar properties that pay $100-$125,000 a year in taxes, and now you can only write off $10,000. What that does is impact value but it takes a while for buyers and sellers to agree on what that value is."
https://www.cnbc.com/2019/05/01/luxury-home-sales-see-biggest-slump-in-nearly-a-decade.html
My comment: Confirms what I said about SALT tax deduction limitation. As mentioned in the article, ?Demand for high-end homes is waning in large part due to changes in tax law.?
Sales of homes listed at $2 million and above fell 16% in the first quarter, the sharpest annual decline since 2010, according to Redfin, a real estate brokerage.
This as the supply of those homes rose 14%, marking four straight quarters of annual increases in inventory.
The average price of a "luxury" home, which Redfin defines as the top 5% in each of the 1,000 cities it tracks, fell 1.6% to $1.55 million. Nonluxury homes saw their average price rise 2.7% annually to $300,000.
Demand for high-end homes is waning in large part due to changes in tax law. The amount of state and local taxes that homeowners can deduct was capped at $10,000, and the mortgage interest deduction was reduced from $1 million to $750,000 in mortgage debt.
In Greenwich, Connecticut, home to the chiefs of some of the nation's largest hedge funds, it is all about taxes.
"It can be significant," said Jonathan Miller, CEO of Miller Samuel, a real estate analytics and appraisal firm. "You're looking at 5, 6, 7 million-dollar properties that pay $100-$125,000 a year in taxes, and now you can only write off $10,000. What that does is impact value but it takes a while for buyers and sellers to agree on what that value is."
https://www.cnbc.com/2019/05/01/luxury-home-sales-see-biggest-slump-in-nearly-a-decade.html
My comment: Confirms what I said about SALT tax deduction limitation. As mentioned in the article, ?Demand for high-end homes is waning in large part due to changes in tax law.?
woodburyowner
Well-known member
I also wonder if the bloodbath that happened in the equity markets in Q4/2018 had anything to do with the drop in Q1/2019. Let's see how Q2 plays out. I have a feeling there will be a big bump. I see more and more homes in the 1.5-2M range going pending recently.
eyephone said:
I agree. why not share the info with people? Facts are facts.
I started browsing through various forums and blogs 12-13 years ago when I was contemplating buying my first home. Most of the forums and blogs were bullish. TI (in its previous form) was one of the few that actually had some people with bearish views.
Contrarian views are good to have especially when it's backed by facts.
irvinebullhousing
Well-known member
Kenkoko said:
Contrarian views are good
The majority right now, believe that waiting now, is a right thing to do.
irvinehomeowner
Well-known member
Compressed-Village said:
But waiting for what? All the graphs look like Irvine prices are trending back up... are they going to go back down lower than Feb 2019?
zubs
Well-known member
We are due for a recession. Everyone is holding their money and waiting for it. No one knows when it will happen, but everyone thinks it's about to happen. With Capital One offereing 2% money market 360, I think a lot of money is actually out of stocks and in these safe saving accounts. It doesn't pay much, but it pays better than 3 years ago!
irvinebullhousing
Well-known member
zubs said:
Beside CapitalOne money account 2%, which is not too shabby, any other institution that you know of that pays higher for money maket account. Their CD 1yr is 2.75 but I rather stay liquid and not having to lock away for a year. Even though a year time frame is like a blink of an eye, it seem like.
woodburyowner
Well-known member
For short term cash you should look into 1 month tbills. 2.4% and no CA income tax. You can easily sell on the secondary market with a very tight spread. Basically a high-yield savings account.
irvinebullhousing
Well-known member
irvinehomeowner said:
I suppose if those that are waiting, are priced out.
irvinebullhousing
Well-known member
zubs said:
Right On!