USCTrojanCPA said:
Goriot said:
http://www.latimes.com/business/la-fi-spring-market-20170425-htmlstory.html
It just feels home activities near LA are much hotter then Irvine at the moment due to a lack of new construction homes and scarcity of available land.
Yup, Irvine has that "shadow" new home inventory which is keeping prices somewhat contained. When they are done building new homes in Irvine, we got higher in prices....mark my words. Watch inventory levels, that'll be your tell of where market prices might be heading.
And that is the essence of why prices move -- inventory , inventory, inventory . if you had to distill everything down to one word in investing this would be it .
demand > supply - doesn't matter what asset it is, or what actual price level you are at . we are headed higher . and conversely on the way down.
this is why many smart people who got hung up on metrics like average income , own vs rent , missed some of the best opportunities to own in desirable neighborhoods in a generation during 2009 and then again during 2011.
this is why there is no real ceiling on areas like Manhattan beach or San Francisco. as long as people want to move there and have the means to afford it, prices will head higher. sure some of the same people may wait for a few months to watch if market goes down, but if seller inventory doesn't rise up , the very same people will fold and grudgingly enter the market again.
something has to happen to make inventory go much higher than demand for prices to collapse. stretched mortgages that people cannot afford => distressed inventory . is that happening now ? No . Do FCBs need to sell. ? No. I am not saying this cannot change , but this is where we are now.