Move Up: Right Time?

[Mety]

To OP --

first thing you should do is sell your existing home and lock in those equity gains .  All the gains are on paper unless  crystallized

Once that is done, now you have equity and optionality .  If your buyer is an investor or part time resident , they may let you lease it back for a few months to an year while you decide

Few things

1. dont fall for  that "rates are rising" mantra on this forum .  Rates have already risen from 0% to 2% now in the front end and mortgage rates have not moved by the same proportion  .  reason ? long terms interest rates have fallen because market is not buying this story about high growth and high inflation

2.  Housing is not about to crash in Irvine either .  But you have optionality now having sold your home and here is how I would use it --- wait for a few months to see how the impact of these trade tariffs  , midterm elections etc plays out.  stock market has already priced in the tax cuts , but the consumer impact of SALT limitation is yet to be seen (eyephone has a good point there) .  If  Trump really follows through with tariffs then you will be looking at a serious lowering of interest rates (10y treasury might actualy break below 2%) as market actually begins to price in rate cuts as opposed to further rate hikes - this is very important

3. (if the market does soften) Try to optimize location rather than go for the best price discount.  Homes that would have been hard to access without a bidding war may become more available etc.  So keeping the budget the same, you may be able to get a better , more choice location. 

Hope this helps

This is the most sounds approach. Fortune11, Bullback, Bones, and IHO has been around the corner a few times and offer great advise. This is why TI is so useful. You get the tap the minds of the ones that seen it all before so you don't have guinea-pig yourself. Of course, make certain that it fit your budget.

You forgot eyephone and BTB. Oh and Starman.

 

[Mety]

No one can guarantee a 25% price drop within the next 4-5 months (OP's timeframe). The only scenario that is worth waiting for is when prices AND rates dropped. This happened in the 08-12 time frame which NO ONE predicted (in regards to rates).

People have a short memory, but when rates were falling, even the those in the mortgage industry were surprised how low they went. While I don't think rates will rise sharply... I also don't know if rates will get as low as they did in 2012 and again in 2016 (so lucky we refi'd that year).

I'm no BTB, but a quick glance at the charts looks like when rates went up in 2013, so did prices (which is opposite of the "prices will fall as rates rise" theory) and it looks like it's happening again in 2018.

So I'm not sure how "waiting" is advantageous as no one knows what is going to happen.

Yeah, no one knows what is going to happen. Only God knows.
And try to quote the entire message, I don't think I ever said "wait" to anyone in terms of buying or selling.

Fundamentally different market, risk management, and economy from before the crash.  There is very little to indicate that RE prices will fall in areas like Irvine...stays flat but not fall.

Any specific city in your mind other than Irvine that will have such a strong value?

 

[Irvinecommuter]

No one can guarantee a 25% price drop within the next 4-5 months (OP's timeframe). The only scenario that is worth waiting for is when prices AND rates dropped. This happened in the 08-12 time frame which NO ONE predicted (in regards to rates).

People have a short memory, but when rates were falling, even the those in the mortgage industry were surprised how low they went. While I don't think rates will rise sharply... I also don't know if rates will get as low as they did in 2012 and again in 2016 (so lucky we refi'd that year).

I'm no BTB, but a quick glance at the charts looks like when rates went up in 2013, so did prices (which is opposite of the "prices will fall as rates rise" theory) and it looks like it's happening again in 2018.

So I'm not sure how "waiting" is advantageous as no one knows what is going to happen.

Yeah, no one knows what is going to happen. Only God knows.
And try to quote the entire message, I don't think I ever said "wait" to anyone in terms of buying or selling.

Fundamentally different market, risk management, and economy from before the crash.  There is very little to indicate that RE prices will fall in areas like Irvine...stays flat but not fall.

Any specific city in your mind other than Irvine that will have such a strong value?

Standard fare...places with good and diverse employment, international appeal, and attractive points.  SF/Bay Area, NYC, Seattle, etc.  RE Markets are so regional though.  Irvine can weather a recession but IE and SB County probably not.

Avoid bust and boom places like Las Vegas.  It's fine if you buy the place to live there...just don't expect the value to hold up as well.

 

[iacrenter]

No one can guarantee a 25% price drop within the next 4-5 months (OP's timeframe). The only scenario that is worth waiting for is when prices AND rates dropped. This happened in the 08-12 time frame which NO ONE predicted (in regards to rates).

People have a short memory, but when rates were falling, even the those in the mortgage industry were surprised how low they went. While I don't think rates will rise sharply... I also don't know if rates will get as low as they did in 2012 and again in 2016 (so lucky we refi'd that year).

I'm no BTB, but a quick glance at the charts looks like when rates went up in 2013, so did prices (which is opposite of the "prices will fall as rates rise" theory) and it looks like it's happening again in 2018.

So I'm not sure how "waiting" is advantageous as no one knows what is going to happen.

Yeah, no one knows what is going to happen. Only God knows.
And try to quote the entire message, I don't think I ever said "wait" to anyone in terms of buying or selling.

Fundamentally different market, risk management, and economy from before the crash.  There is very little to indicate that RE prices will fall in areas like Irvine...stays flat but not fall.

Any specific city in your mind other than Irvine that will have such a strong value?

Johns Creek, GA 
http://www.talkirvine.com/index.php/topic,13843.0.html

 

[Irvinecommuter]

No one can guarantee a 25% price drop within the next 4-5 months (OP's timeframe). The only scenario that is worth waiting for is when prices AND rates dropped. This happened in the 08-12 time frame which NO ONE predicted (in regards to rates).

People have a short memory, but when rates were falling, even the those in the mortgage industry were surprised how low they went. While I don't think rates will rise sharply... I also don't know if rates will get as low as they did in 2012 and again in 2016 (so lucky we refi'd that year).

I'm no BTB, but a quick glance at the charts looks like when rates went up in 2013, so did prices (which is opposite of the "prices will fall as rates rise" theory) and it looks like it's happening again in 2018.

So I'm not sure how "waiting" is advantageous as no one knows what is going to happen.

Yeah, no one knows what is going to happen. Only God knows.
And try to quote the entire message, I don't think I ever said "wait" to anyone in terms of buying or selling.

Fundamentally different market, risk management, and economy from before the crash.  There is very little to indicate that RE prices will fall in areas like Irvine...stays flat but not fall.

Any specific city in your mind other than Irvine that will have such a strong value?

Johns Creek, GA 
http://www.talkirvine.com/index.php/topic,13843.0.html

That will actually be an interesting market.  I am not quite sure whether that area has diversified economic/job wise.  AT&T is the big employer in that area.

I assume John's Creek will be fine...it's a very affluent area, with what I assume is a lot of "old" money.

 

[Mety]

No one can guarantee a 25% price drop within the next 4-5 months (OP's timeframe). The only scenario that is worth waiting for is when prices AND rates dropped. This happened in the 08-12 time frame which NO ONE predicted (in regards to rates).

People have a short memory, but when rates were falling, even the those in the mortgage industry were surprised how low they went. While I don't think rates will rise sharply... I also don't know if rates will get as low as they did in 2012 and again in 2016 (so lucky we refi'd that year).

I'm no BTB, but a quick glance at the charts looks like when rates went up in 2013, so did prices (which is opposite of the "prices will fall as rates rise" theory) and it looks like it's happening again in 2018.

So I'm not sure how "waiting" is advantageous as no one knows what is going to happen.

Yeah, no one knows what is going to happen. Only God knows.
And try to quote the entire message, I don't think I ever said "wait" to anyone in terms of buying or selling.

Fundamentally different market, risk management, and economy from before the crash.  There is very little to indicate that RE prices will fall in areas like Irvine...stays flat but not fall.

Any specific city in your mind other than Irvine that will have such a strong value?

Standard fare...places with good and diverse employment, international appeal, and attractive points.  SF/Bay Area, NYC, Seattle, etc.  RE Markets are so regional though.  Irvine can weather a recession but IE and SB County probably not.

Avoid bust and boom places like Las Vegas.  It's fine if you buy the place to live there...just don't expect the value to hold up as well.

What makes you so sure these cities including Irvine will stand firm even at a recession? Any historical proof?

 

[Mety]

No one can guarantee a 25% price drop within the next 4-5 months (OP's timeframe). The only scenario that is worth waiting for is when prices AND rates dropped. This happened in the 08-12 time frame which NO ONE predicted (in regards to rates).

People have a short memory, but when rates were falling, even the those in the mortgage industry were surprised how low they went. While I don't think rates will rise sharply... I also don't know if rates will get as low as they did in 2012 and again in 2016 (so lucky we refi'd that year).

I'm no BTB, but a quick glance at the charts looks like when rates went up in 2013, so did prices (which is opposite of the "prices will fall as rates rise" theory) and it looks like it's happening again in 2018.

So I'm not sure how "waiting" is advantageous as no one knows what is going to happen.

Yeah, no one knows what is going to happen. Only God knows.
And try to quote the entire message, I don't think I ever said "wait" to anyone in terms of buying or selling.

Fundamentally different market, risk management, and economy from before the crash.  There is very little to indicate that RE prices will fall in areas like Irvine...stays flat but not fall.

Any specific city in your mind other than Irvine that will have such a strong value?

Johns Creek, GA 
http://www.talkirvine.com/index.php/topic,13843.0.html

That will actually be an interesting market.  I am not quite sure whether that area has diversified economic/job wise.  AT&T is the big employer in that area.

I assume John's Creek will be fine...it's a very affluent area, with what I assume is a lot of "old" money.

Man, I wish John Creek was at Irvine.

 

[irvinehomeowner]

No one can guarantee a 25% price drop within the next 4-5 months (OP's timeframe). The only scenario that is worth waiting for is when prices AND rates dropped. This happened in the 08-12 time frame which NO ONE predicted (in regards to rates).

People have a short memory, but when rates were falling, even the those in the mortgage industry were surprised how low they went. While I don't think rates will rise sharply... I also don't know if rates will get as low as they did in 2012 and again in 2016 (so lucky we refi'd that year).

I'm no BTB, but a quick glance at the charts looks like when rates went up in 2013, so did prices (which is opposite of the "prices will fall as rates rise" theory) and it looks like it's happening again in 2018.

So I'm not sure how "waiting" is advantageous as no one knows what is going to happen.

Yeah, no one knows what is going to happen. Only God knows.
And try to quote the entire message, I don't think I ever said "wait" to anyone in terms of buying or selling.

To clarify, my reference to your post was only your scenario of prices dropping 25%.

The "waiting" reference was to eyephone's advice.

 

[Irvinecommuter]

What makes you so sure these cities including Irvine will stand firm even at a recession? Any historical proof?

it's pretty straightforward economics.  People with higher paying steady jobs have less debt and more access to funds during a time of crisis.  Recession also generally hits lower end workers hardest and they were already barely making enough to get buy.  Areas with mature employment markets are much less dependent on one or two dominant employers and more likely to appeal to new employers.  International appeals mean more likilihood of foreign buyers.
https://www.ocregister.com/2017/08/06/orange-countys-housing-bubble-10-years-later/

 

[Mety]

No one can guarantee a 25% price drop within the next 4-5 months (OP's timeframe). The only scenario that is worth waiting for is when prices AND rates dropped. This happened in the 08-12 time frame which NO ONE predicted (in regards to rates).

People have a short memory, but when rates were falling, even the those in the mortgage industry were surprised how low they went. While I don't think rates will rise sharply... I also don't know if rates will get as low as they did in 2012 and again in 2016 (so lucky we refi'd that year).

I'm no BTB, but a quick glance at the charts looks like when rates went up in 2013, so did prices (which is opposite of the "prices will fall as rates rise" theory) and it looks like it's happening again in 2018.

So I'm not sure how "waiting" is advantageous as no one knows what is going to happen.

Yeah, no one knows what is going to happen. Only God knows.
And try to quote the entire message, I don't think I ever said "wait" to anyone in terms of buying or selling.

To clarify, my reference to your post was only your scenario of prices dropping 25%.

The "waiting" reference was to eyephone's advice.

The 25% dropping scenario is just an assumption/example and hardly would happen in couple months. That would take years "if" that ever happens.

Many strongly believe Irvine is a special place that will not be shaken. I wanna know what makes those beliefs even when there are so many of you bought your homes at  much lower prices when there was a dip.

 

[eyephone]

Why not wait? Just going from the recent indicators. It doesn?t look good.

 

[Mety]

What makes you so sure these cities including Irvine will stand firm even at a recession? Any historical proof?

it's pretty straightforward economics.  People with higher paying steady jobs have less debt and more access to funds during a time of crisis.  Recession also generally hits lower end workers hardest and they were already barely making enough to get buy.  Areas with mature employment markets are much less dependent on one or two dominant employers and more likely to appeal to new employers.  International appeals mean more likilihood of foreign buyers.
https://www.ocregister.com/2017/08/06/orange-countys-housing-bubble-10-years-later/

Sure, the high paying steady jobs would make a city stronger, but what happened in 2008?
How come Irvine homes had falling prices until like 2012?

 

[Irvinecommuter]

No one can guarantee a 25% price drop within the next 4-5 months (OP's timeframe). The only scenario that is worth waiting for is when prices AND rates dropped. This happened in the 08-12 time frame which NO ONE predicted (in regards to rates).

People have a short memory, but when rates were falling, even the those in the mortgage industry were surprised how low they went. While I don't think rates will rise sharply... I also don't know if rates will get as low as they did in 2012 and again in 2016 (so lucky we refi'd that year).

I'm no BTB, but a quick glance at the charts looks like when rates went up in 2013, so did prices (which is opposite of the "prices will fall as rates rise" theory) and it looks like it's happening again in 2018.

So I'm not sure how "waiting" is advantageous as no one knows what is going to happen.

Yeah, no one knows what is going to happen. Only God knows.
And try to quote the entire message, I don't think I ever said "wait" to anyone in terms of buying or selling.

To clarify, my reference to your post was only your scenario of prices dropping 25%.

The "waiting" reference was to eyephone's advice.

The 25% dropping scenario is just an assumption/example and hardly would happen in couple months. That would take years "if" that ever happens.

Many strongly believe Irvine is a special place that will not be shaken. I wanna know what makes those beliefs even when there are so many of you bought your homes at  much lower prices when there was a dip.

Again fundamentally different economies.  Irvine dropped somewhere around 20% during the recession compared to like 50% elsewhere. 

Also, if a 25% drop is coming...it will come suddenly not over a matter of years.

 

[eyephone]

Without seeing the model Goldman Sachs is using. I?ll take them for their word.

 

[Irvinecommuter]

What makes you so sure these cities including Irvine will stand firm even at a recession? Any historical proof?

it's pretty straightforward economics.  People with higher paying steady jobs have less debt and more access to funds during a time of crisis.  Recession also generally hits lower end workers hardest and they were already barely making enough to get buy.  Areas with mature employment markets are much less dependent on one or two dominant employers and more likely to appeal to new employers.  International appeals mean more likilihood of foreign buyers.
https://www.ocregister.com/2017/08/06/orange-countys-housing-bubble-10-years-later/

Sure, the high paying steady jobs would make a city stronger, but what happened in 2008?
How come Irvine homes had falling prices until like 2012?

The entire world economy came close to crashing?  Again, you need to look at relative drops.  Irvine drop about 20% while other major areas places dropped 50% or more. 
https://www.trulia.com/real_estate/Irvine-California/market-trends/

 

[Irvinecommuter]

Man, I wish John Creek was at Irvine.

Like I always say to Panda...John Creek looks great but then you are still in Georgia.

 

[Mety]

No one can guarantee a 25% price drop within the next 4-5 months (OP's timeframe). The only scenario that is worth waiting for is when prices AND rates dropped. This happened in the 08-12 time frame which NO ONE predicted (in regards to rates).

People have a short memory, but when rates were falling, even the those in the mortgage industry were surprised how low they went. While I don't think rates will rise sharply... I also don't know if rates will get as low as they did in 2012 and again in 2016 (so lucky we refi'd that year).

I'm no BTB, but a quick glance at the charts looks like when rates went up in 2013, so did prices (which is opposite of the "prices will fall as rates rise" theory) and it looks like it's happening again in 2018.

So I'm not sure how "waiting" is advantageous as no one knows what is going to happen.

Yeah, no one knows what is going to happen. Only God knows.
And try to quote the entire message, I don't think I ever said "wait" to anyone in terms of buying or selling.

To clarify, my reference to your post was only your scenario of prices dropping 25%.

The "waiting" reference was to eyephone's advice.

The 25% dropping scenario is just an assumption/example and hardly would happen in couple months. That would take years "if" that ever happens.

Many strongly believe Irvine is a special place that will not be shaken. I wanna know what makes those beliefs even when there are so many of you bought your homes at  much lower prices when there was a dip.

Again fundamentally different economies.  Irvine dropped somewhere around 20% during the recession compared to like 50% elsewhere. 

Also, if a 25% drop is coming...it will come suddenly not over a matter of years.

Really? Why suddenly and not gradually?

 

[irvinehomeowner]

The 25% dropping scenario is just an assumption/example and hardly would happen in couple months. That would take years "if" that ever happens.

The OP's scenario specifically said 4-5 months.

Many strongly believe Irvine is a special place that will not be shaken. I wanna know what makes those beliefs even when there are so many of you bought your homes at  much lower prices when there was a dip.

So back when the apocalypse was being predicted, many said Irvine homes would drop more than 50%... even for SFRs. Overall, I think that number is closer to 20% and for many of the prime areas in Irvine, maybe only 10%.

I don't think many here bought at "much lower prices when there was a dip"... it's just been a big run-up.

Which is why I'm concerned, because current prices are above the bubble prices of 05/06, I'm not sure what the inflation calc is but back when people were going to pay $1m for a 3CG new home, with a driveway, on a proper lot... they were getting ripped for spending that much.... now you are going to pay $1.4m and you don't even get close to that type of home?

 

[Irvinecommuter]

Really? Why suddenly and not gradually?

Because a dramatic fall like that would be caused by national/global economic issues.  Those are sudden and have immediate effects.

Irvine/OC is a highly desirable place to live in the long run so you will always have buyers and investors willing to buy...that's why Irvine has bounced back so quickly. 

Bust and Boom cities like Vegas are first to break down and last to recover. 

 

[irvinehomeowner]

This is anecdotal but the old timers know that I bought a house during the peak of the last bubble... we sold it a few years later at only a 5% discount... and only a few years after, it was not only back up to peak pricing, but past it.

Currently, I think it's worth 30-35% over peak pricing. This is year 13 since the last peak, history has shown real estate to be cyclical so a downturn should be on the way... but 25%? That's a lot without some type of financial crash to go along with it.