The recession is coming

[irvinehomeowner]

In 2010, condo prices did drop.  From $650k to $380k for a moment but stabilized at around $475k.  Right now, these condos are going for $550k to $630k.  Go figure.

*These numbers are based on Northpark condos.

Was this across the board or just for a specific condo?

Overall, the Irvine market did not drop the predicted 40% (even some said it would be over 50%). There may have a been a few homes that dropped that low (at the high end and at the low end) but there were also some that dropped only 5-10%.

@dream16: Again, trying to time the market is tough. If you think you will be in whatever you are buying for 5-10 years and can afford it, don't worry too much about future price/interest fluctuations.

 

[eyephone]

Have to adjust timeline a bit. Closed January Sales are for contracts in November/December. The number of homes going under contract does slow during these months, which translates into lower closings in Jan/Feb.

Yes, to the topic headline, I believe there is enough data to show a recession is coming. I learned however some time ago that when you want to go down stream safely, you row a bit from the right and a bit from the left....

http://www.calculatedriskblog.com/2016/01/update-predicting-next-recession.html

Hedge accordingly.

My .02c

SGIP

If a recession does come, do you see newly built IR 2 bedroom condos dropping 20-30% from their current price? Example a attached condo sold for 550k now will be sold for 165k less =  385k?

Did such a drop happen in 2012-2013? Please share thoughts, i have been told by numerous realtors that IR market is insulated from recession due to international interests, cash buyers, safest city, award winning, best schools in USA etc.

Anything can happen. You should of thought of this before you bought your high rise tower. (Joking)

 

[Ready2Downsize]

You have to live somewhere. If you don't own then u rent and MAYBE houses will go down or maybe they won't.

But........... this is what I said back in Nov:

"I think I mentioned once before that every time we have bought a new home it was the peak or the economy took a dive........... every time. (my current house kept going up in price but my hubby was laid off 6 weeks after we bought this place and Greenspan came to the rescue dropping rates leading to the dot com bubble).

So............. on to my next place and if the market has peaked again u can blame me or look at it like it was some kind of leading indicator on when not to buy".


So u can blame me for topping everything out.

One thing I know is recessions are NORMAL. It's necessary to prune back excesses to grow more just like trees. The biz cycle can be delayed but it can't be repealed. Housing doesn't always follow the stock market but somehow stock market sniffs out trouble 6 months or so before it's seen and housing stocks don't look so good.

 

[dream16]

In 2010, condo prices did drop.  From $650k to $380k for a moment but stabilized at around $475k.  Right now, these condos are going for $550k to $630k.  Go figure.

*These numbers are based on Northpark condos.

Was this across the board or just for a specific condo?

Overall, the Irvine market did not drop the predicted 40% (even some said it would be over 50%). There may have a been a few homes that dropped that low (at the high end and at the low end) but there were also some that dropped only 5-10%.

@dream16: Again, trying to time the market is tough. If you think you will be in whatever you are buying for 5-10 years and can afford it, don't worry too much about future price/interest fluctuations.

Thanks Irvinehomeowner, yes i have bought it with 10 years in mind, worst case - everything crashes - i will rent it out and weather the storm

 

[dream16]

Have to adjust timeline a bit. Closed January Sales are for contracts in November/December. The number of homes going under contract does slow during these months, which translates into lower closings in Jan/Feb.

Yes, to the topic headline, I believe there is enough data to show a recession is coming. I learned however some time ago that when you want to go down stream safely, you row a bit from the right and a bit from the left....

http://www.calculatedriskblog.com/2016/01/update-predicting-next-recession.html

Hedge accordingly.

My .02c

SGIP

If a recession does come, do you see newly built IR 2 bedroom condos dropping 20-30% from their current price? Example a attached condo sold for 550k now will be sold for 165k less =  385k?

Did such a drop happen in 2012-2013? Please share thoughts, i have been told by numerous realtors that IR market is insulated from recession due to international interests, cash buyers, safest city, award winning, best schools in USA etc.

Anything can happen. You should of thought of this before you bought your high rise tower. (Joking)

I know...but i was mislead saying IR market is insulated from recessions, either-ways, i hope i haven't bought at the very peak, is there a graph that can clearly show how the IR condo prices have increased from 2012-2015? I don't want to know the horrendous single family home stories as million dollars isn't the market i am playing in at the moment and they might have had way more serious fluctuations in last 3 years

 

[The Motor Court Company]

buy when you can afford + rent parity + plan to stick around for 5+ years

 

[soysen]

There's no recession coming. We have a flight from emerging markets which in turn is causing stocks to flee as well. All of that money will flow into real estate and bonds and gold this year. So if you're thinking housing market will tank, think again. I wish.

 

[Ready2Downsize]

If you already bought what difference does it make?

Houses aren't liquid. You can't just decide to sell today and get your money tomorrow.

You still have to have a place to live. It makes no sense to sell what you just bought hoping to get lower prices. The cost to sell is not cheap.

 

[eyephone]

There's no recession coming. We have a flight from emerging markets which in turn is causing stocks to flee as well. All of that money will flow into real estate and bonds and gold this year. So if you're thinking housing market will tank, think again. I wish.

Uh yeah

 

[panda]

I do agree that money will flow into real estate, bonds, and gold this year. Real Estate corrections will location specific. The bay area housing looks very vulnerable in my opinion especially with the recession in China.

There's no recession coming. We have a flight from emerging markets which in turn is causing stocks to flee as well. All of that money will flow into real estate and bonds and gold this year. So if you're thinking housing market will tank, think again. I wish.

 

[dream16]

If you already bought what difference does it make?

Houses aren't liquid. You can't just decide to sell today and get your money tomorrow.

You still have to have a place to live. It makes no sense to sell what you just bought hoping to get lower prices. The cost to sell is not cheap.

Who said i am selling? I am going through some nervous initial jitters as my 110k down got wiped off my accounts as it's my 1st purchase. Selling is atleast 35k expense, i am not selling it unless i see it swell to 700k in next 5 years, so i can atleast make 100k on it...lol hopes !!! Hopes...is what keeps us alive

 

[nyc to oc]

Have to adjust timeline a bit. Closed January Sales are for contracts in November/December. The number of homes going under contract does slow during these months, which translates into lower closings in Jan/Feb.

Yes, to the topic headline, I believe there is enough data to show a recession is coming. I learned however some time ago that when you want to go down stream safely, you row a bit from the right and a bit from the left....

http://www.calculatedriskblog.com/2016/01/update-predicting-next-recession.html

Hedge accordingly.

My .02c

SGIP

If a recession does come, do you see newly built IR 2 bedroom condos dropping 20-30% from their current price? Example a attached condo sold for 550k now will be sold for 165k less =  385k?

Did such a drop happen in 2012-2013? Please share thoughts, i have been told by numerous realtors that IR market is insulated from recession due to international interests, cash buyers, safest city, award winning, best schools in USA etc.

Anything can happen. You should of thought of this before you bought your high rise tower. (Joking)

I know...but i was mislead saying IR market is insulated from recessions, either-ways, i hope i haven't bought at the very peak, is there a graph that can clearly show how the IR condo prices have increased from 2012-2015? I don't want to know the horrendous single family home stories as million dollars isn't the market i am playing in at the moment and they might have had way more serious fluctuations in last 3 years

One of the resident realtors on TI can correct me if I am wrong, but I think historically, condo prices are more volatile than single family houses in times of boom and bust. Some of that may be due to investors swooping in and out.

 

[eyephone]

If you already bought what difference does it make?

Houses aren't liquid. You can't just decide to sell today and get your money tomorrow.

You still have to have a place to live. It makes no sense to sell what you just bought hoping to get lower prices. The cost to sell is not cheap.

Who said i am selling? I am going through some nervous initial jitters as my 110k down got wiped off my accounts as it's my 1st purchase. Selling is atleast 35k expense, i am not selling it unless i see it swell to 700k in next 5 years, so i can atleast make 100k on it...lol hopes !!! Hopes...is what keeps us alive

Change of heart? Buyers Remorse?

 

[eyephone]

Have to adjust timeline a bit. Closed January Sales are for contracts in November/December. The number of homes going under contract does slow during these months, which translates into lower closings in Jan/Feb.

Yes, to the topic headline, I believe there is enough data to show a recession is coming. I learned however some time ago that when you want to go down stream safely, you row a bit from the right and a bit from the left....

http://www.calculatedriskblog.com/2016/01/update-predicting-next-recession.html

Hedge accordingly.

My .02c

SGIP

If a recession does come, do you see newly built IR 2 bedroom condos dropping 20-30% from their current price? Example a attached condo sold for 550k now will be sold for 165k less =  385k?

Did such a drop happen in 2012-2013? Please share thoughts, i have been told by numerous realtors that IR market is insulated from recession due to international interests, cash buyers, safest city, award winning, best schools in USA etc.

Anything can happen. You should of thought of this before you bought your high rise tower. (Joking)

I know...but i was mislead saying IR market is insulated from recessions, either-ways, i hope i haven't bought at the very peak, is there a graph that can clearly show how the IR condo prices have increased from 2012-2015? I don't want to know the horrendous single family home stories as million dollars isn't the market i am playing in at the moment and they might have had way more serious fluctuations in last 3 years

One of the resident realtors on TI can correct me if I am wrong, but I think historically, condo prices are more volatile than single family houses in times of boom and bust. Some of that may be due to investors swooping in and out.

Just curious have you read feedback about your builder? If not you should have, which I think is a game changer. I'm not going to mention any names.

 

[Ready2Downsize]

Buying a house is always scary.

What's done is done. Thank God interest rates are this low and you can buy a house for those payments and get a tax deduction to boot.

Then again, when they were sky high in 1981 they had nowhere to go but down it was great getting qualified with a huge interest rate loan and then getting a refinanced lower payment.

 

[irvinehomeowner]

@dream16:

If your job situation is stable and as you said, you are looking at 10 years to stay where you are, you'll be okay.

As a first time home buyer, I understand your jitters, you have to put much more in than others (esp in Irvine) but being that it is in Irvine, your "value" is safer than most.

Congrats and try to enjoy your home.

 

[Cornflakes]

I do agree that money will flow into real estate, bonds, and gold this year. Real Estate corrections will location specific. The bay area housing looks very vulnerable in my opinion especially with the recession in China.

There's no recession coming. We have a flight from emerging markets which in turn is causing stocks to flee as well. All of that money will flow into real estate and bonds and gold this year. So if you're thinking housing market will tank, think again. I wish.

Any investment vehicles to short bay are real estate? Or, even better, long Oakland, CA real estate? There is a lot of chatter about Tech migration to Oakland.

 

[Ready2Downsize]

Don't you think people have already moved to Oakland? It's a BART ride to the bay.

 

[Goriot]

Anyone also notice number of homes sold in Irvine has cratered? Looks like affordability is becoming an issue. Now that the chinese can't move their money out as easily we will see who can step in to buy these homes.

Year over year price of a sold house is down 6% and number of sales is now headed towards recessionary levels.  Listing price still hasn't reflect this new situation yet so you won't quite see the headlines but it looks like homes are not selling.

Not to mention the thousands of homes about to be built this year in Eastwood and BP and CV...
http://www.trulia.com/real_estate/Irvine-California/market-trends/

Is  slowing sales due to the low inventory or is inventory increasing significantly and the sales are slowing at the same time?  There is a difference.

Article from OC Register today. 

House hunters have few O.C. choices as year starts
http://www.ocregister.com/articles/year-700543-supply-homes.html

Orange County house hunters face a big challenge as 2016 gets going: a thin selection of homes to choose from.

ReportsOnHousing.com says there were 4,396 existing homes listed for sale in the brokers network as the year started, down 12 percent from a year ago. It?s the second-lowest supply at the start of a year since 2005. In the past decade, supply has averaged 7,298 listings at the beginning of the year.

?There?s definite pent up demand for homes, but just not enough inventory to match. Typically, that is a recipe for appreciation, low supply and high demand, but not in today?s market,? writes ReportsOnHousing?s Steve Thomas.

?Instead, buyers are approaching the housing market much more cautiously. They are very aware that homes have already appreciated considerably since 2012, so they are careful to not overpay,? he wrote.

Supply has improved slightly in the past two weeks to 4,576 listings, Thomas noted. But that?s still 679 less than a year ago.

That means Thomas? estimate of selling time ? comparing supply to new escrows opened in past 30 days ? was just 86 days as of last Thursday vs. 99 days a year ago.

Thin supply may be dimming demand, as measured by new escrows opened ? 1,593 in the 30 days ended Jan. 14, six below a year ago.

 

[dream16]

Have to adjust timeline a bit. Closed January Sales are for contracts in November/December. The number of homes going under contract does slow during these months, which translates into lower closings in Jan/Feb.

Yes, to the topic headline, I believe there is enough data to show a recession is coming. I learned however some time ago that when you want to go down stream safely, you row a bit from the right and a bit from the left....

http://www.calculatedriskblog.com/2016/01/update-predicting-next-recession.html

Hedge accordingly.

My .02c

SGIP

If a recession does come, do you see newly built IR 2 bedroom condos dropping 20-30% from their current price? Example a attached condo sold for 550k now will be sold for 165k less =  385k?

Did such a drop happen in 2012-2013? Please share thoughts, i have been told by numerous realtors that IR market is insulated from recession due to international interests, cash buyers, safest city, award winning, best schools in USA etc.

Anything can happen. You should of thought of this before you bought your high rise tower. (Joking)

I know...but i was mislead saying IR market is insulated from recessions, either-ways, i hope i haven't bought at the very peak, is there a graph that can clearly show how the IR condo prices have increased from 2012-2015? I don't want to know the horrendous single family home stories as million dollars isn't the market i am playing in at the moment and they might have had way more serious fluctuations in last 3 years

One of the resident realtors on TI can correct me if I am wrong, but I think historically, condo prices are more volatile than single family houses in times of boom and bust. Some of that may be due to investors swooping in and out.

Just curious have you read feedback about your builder? If not you should have, which I think is a game changer. I'm not going to mention any names.

Nope, i never checked Kbhomes build quality review, was not in the market to buy a new condo to start with, happen to came across Portola and the 4 story attached condo, fitted my max bill of 550k & called the shots on it. I am not sure who the best builder is in IR or CA or USA? Please share