Housing Analysis
- Thread starter eyephone
- Start date
You can?t control everything mainly time. If you get lucky that?s great, but I?ve come to the decision to not put off buying a home or starting a family because you want to time the market.
My nephew has an argument with his parents whenever he saves up enough to buy whatever new video game is coming out that month. They?ll tell him can?t you wait, they always drop in price like a couple months after they come out. His response is always, but then I didn?t have the game for those months.
So you may have to overpaying retrospect if you want a house at the ?wrong? time in the market, but as long as you?re responsible like my nephew who saves up his birthday gifts, allowance, etc. then being able to live in the house and get started with your life is worth more than anything IMO.
We?ve come to grips with this and understand that sure if we were born a couple years later maybe we?d catch a down point in the market. But we are what we are. One thing you can?t control is time. We aren?t getting any younger.
My nephew has an argument with his parents whenever he saves up enough to buy whatever new video game is coming out that month. They?ll tell him can?t you wait, they always drop in price like a couple months after they come out. His response is always, but then I didn?t have the game for those months.
So you may have to overpaying retrospect if you want a house at the ?wrong? time in the market, but as long as you?re responsible like my nephew who saves up his birthday gifts, allowance, etc. then being able to live in the house and get started with your life is worth more than anything IMO.
We?ve come to grips with this and understand that sure if we were born a couple years later maybe we?d catch a down point in the market. But we are what we are. One thing you can?t control is time. We aren?t getting any younger.
irvinehomeowner
Well-known member
@jameskirk:
Exactly. Some people just want to stop worrying about timing and discounts and live their life.
Exactly. Some people just want to stop worrying about timing and discounts and live their life.
irvinehomeowner said:
Sounds like you are hedging now. Only drops greater than 15% is worth talking about? 15% in Irvine can easily be a 200K price drop. How long would it take you to save 200K post tax dollars?
Contrary to what you say, Irvine has not seen YoY price declines in the last 5-8 years. We are seeing the first price declines now. I honestly do not know where you get all this false data. Please post your 5-15% YoY price declines in the past 5-8 years.
https://www.zillow.com/irvine-ca/home-values/
irvinehomeowner
Well-known member
meccos12 said:
Either you misread me or I wasn't clear enough. I'm talking about seasonal drops. I posted about this before where some drops each year can be as much as 5-15%.. it all depends on where you measure it from, which from what I was saying above, is subjective. Maybe I should have used the term "seasonal" instead of YOY.
From your Zillow chart:
Jan 2011 to Apr 2011: 7.7% drop
Aug 2011 to Nov 2011: 6% drop
Jan 2011 to Jan 2012: 9% drop (YOY)
Jan 2011 to Apr 2012: 16.6% drop (more than 15%!)
Aug 2016 to Feb 2017: 9.6% drop
But as I said, these are all vague numbers because you don't know what kind of housing stock sold during these highs and lows.
I find it hard to say that the majority of buyers can save "16%" on any home today vs a home they could have bought a year ago, but that's the story you like to tell.
Maybe you should be a realtor and find all these bargains for people.
irvinehomeowner
Well-known member
moc said:
"He who observes the wind will not sow, and he who regards the clouds will not reap." - Ecclesiastes 11:4
Or basically "You don't always have to wait for perfect conditions."
irvinehomeowner said:
Im sorry, did I misread you writing "YoY"???? Wait a minute... no you clearly wrote YoY. So no, I did not misread you, but you seem to be misleading if anything.
irvinehomeowner said:
LOL really? Maybe? Yeah maybe since these are easily two exchangeable terms huh?
irvinehomeowner said:
If prices have dropped nearly 5% and there has been a 1% reduction in rates, then you can buy 16% more home with the same money today than you could have one year ago. I believe those were my exact words. Do you want me to do the math for you? I know you have a hard time with that.
irvinehomeowner
Well-known member
meccos12 said:
Not really. It depends on the house, the upgrades, the location. ?Nearly 5%? does not apply to all homes thus the math is not that simple.
And yes, at least I admit that I misused YOY. You still have not figured out what paying a fixed 15 year payment on a 10/1 ARM means.
?LOL?
irvinehomeowner
Well-known member
Let's get back to discussing the topic:
So according to your link:
According to Redfin:https://www.redfin.com/city/9361/CA/Irvine/housing-market
So Redfin says 2.9% increase and Zillow says 1.3% drop. But let's use the lower number.
Shouldn't that indicator of decreasing sales volume from March 2018 had a larger effect than a 1.3% drop?
And I'm not asking because I'm trying to prove anyone wrong... I'm asking because I agree with you guys when you said lower volume should result in lower sales prices.
I don't think a lag is a good answer because despite reported lower volume since March 2018, Irvine prices have gone up and down several times (seasonal?).
I'll offer my own theory since no one else has said anything other than lag:
I think in a less stable owners market, sales volume has a larger effect due to panic, inability to pay, etc... but when most of the owners are more financially stable and don't need to sell, the downward price pressure is not as high because they can just "wait". On most of the real estate sites, you'll see that the distressed homes charts are lower than previous years. The Zillow chart shows foreclosed homes in Irvine at less than 2% since 2013. Their Irvine health summary says:
That's less than half the US average, which is already pretty low too.
Combine this financially stable owner base with low rates and always available new home stock seems to skew the math expectation of much lower prices in Irvine.
meccos12 said:
So according to your link:
According to Redfin:https://www.redfin.com/city/9361/CA/Irvine/housing-market
So Redfin says 2.9% increase and Zillow says 1.3% drop. But let's use the lower number.
Shouldn't that indicator of decreasing sales volume from March 2018 had a larger effect than a 1.3% drop?
And I'm not asking because I'm trying to prove anyone wrong... I'm asking because I agree with you guys when you said lower volume should result in lower sales prices.
I don't think a lag is a good answer because despite reported lower volume since March 2018, Irvine prices have gone up and down several times (seasonal?).
I'll offer my own theory since no one else has said anything other than lag:
I think in a less stable owners market, sales volume has a larger effect due to panic, inability to pay, etc... but when most of the owners are more financially stable and don't need to sell, the downward price pressure is not as high because they can just "wait". On most of the real estate sites, you'll see that the distressed homes charts are lower than previous years. The Zillow chart shows foreclosed homes in Irvine at less than 2% since 2013. Their Irvine health summary says:
That's less than half the US average, which is already pretty low too.
Combine this financially stable owner base with low rates and always available new home stock seems to skew the math expectation of much lower prices in Irvine.
irvinehomeowner
Well-known member
Not sure how good this site is but it has lots of chart/data for those interested. It talks about sales volume and seasonality. 
https://journal.firsttuesday.us/home-sales-volume-and-price-peaks/692/
https://journal.firsttuesday.us/home-sales-volume-and-price-peaks/692/
irvinehomeowner
Well-known member
So any other theories on why the decrease in volume hasn't had as large an effect on prices?
According to Case Shiller, price index for LA metro area is up *YOY* for July:
https://us.spindices.com/indices/re...case-shiller-los-angeles-home-price-nsa-index
July 2019: 286.18
July 2018: 282.96
Maybe instead of "slowdown" it's a "not rising as fast".
According to Case Shiller, price index for LA metro area is up *YOY* for July:
https://us.spindices.com/indices/re...case-shiller-los-angeles-home-price-nsa-index
July 2019: 286.18
July 2018: 282.96
Maybe instead of "slowdown" it's a "not rising as fast".
zubs
Well-known member
In 2008 the FEDS balance sheet was 0.8 trillion dollars
Today it is 3.8 trillion dollars
After 11 years, where did the 3 extra trillion dollars go to? ???
Do you think housing is going to drop?
Maybe it's time to buy gold or at least something tangible like a house.
Why is the stock market hitting all time highs? I wonder...
Today it is 3.8 trillion dollars
After 11 years, where did the 3 extra trillion dollars go to? ???
Do you think housing is going to drop?
Maybe it's time to buy gold or at least something tangible like a house.
Why is the stock market hitting all time highs? I wonder...
Liar Loan
Well-known member
irvinehomeowner said:
Real estate rising slower than the already low rate of inflation is not a good sign.
The early 80's downturn was characterized by "flat" prices from 1980-85. The problem is inflation was very high over that time, so the buying power of a dollar in 1980 got whacked by the end of 1985. Anybody that sold, would have been much better off selling in 1980 than in 1985. Conversely, buyers were much better off buying in 1985 than in 1980. Yet if you look at a price chart of that era, you might assume that no price crash occurred.
The same thing applies to this example, albeit in the beginning stages of a downturn.