How high will mortgage rates climb in the next 36 months?

usctrojancpa said:
Inventory levels in Irvine (which I track closely) have been flattish in the past 3 months, basically around the level of inventory that we had at the end of 2022. There will not be any material price declines unless inventory increases significantly.
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This actually demonstrates some building pressure as you would think with the rate spread going up by 300+ bps from your 4s assertion inventory would be much lower but there will always be people who need to sell or choose to sell and prices are set at the margin. Once the Chinese money is forced to repatriate the inventory picture will start looking very different. With the current geopolitical instability in the ME and Ukraine Xi might just make a quick move on Taiwan. Nothing I want to see but he’s insane.
 
Non-US Citizen money will, under no circumstance, ever be repatriated. If X or Y or Z were to occur, hunkering down here, rather than back at the homeland, will be the best option. Collapse of IUSD standards? A "San Francisco-ization" of O.C.? Those events might cause people to flee, but anything else? I hardly think so.
 
sgip said:
Non-US Citizen money will, under no circumstance, ever be repatriated. If X or Y or Z were to occur, hunkering down here, rather than back at the homeland, will be the best option. Collapse of IUSD standards? A "San Francisco-ization" of O.C.? Those events might cause people to flee, but anything else? I hardly think so.
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You underestimate the reach of Chinese Security agencies and the power of threats to family back home.
 
Another threat of how powerful our friends in the East. They are crumbling, their demographic is going reverse, youth unemployment is very high.

They have their hands full already, and that will keep them too busy with going after blacked money of the 1% of their citizen. Black money are ghost money that they never appear on the book.

That’s like trying to take back nothing.
 
@OCtoSV I agree that underestimating family threats is a valid possibility. I believe however that much of the foreign cash here came from well connected folks, nearly immune to Police State threats. Also, events move so fast now and Real Estate is fairly illiquid. Taiwan, for example, could be overrun so quickly that there wouldn't be enough time to be threatened to sell.
 
usctrojancpa said:
Yeah rates keep going higher yet prices keep going higher here in Irvine and most parts of Orange County. Why? Because the higher rates goes the lower inventory levels get and prices are mainly driven by inventory levels.
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You're half right. Irvine has not surpassed it's April 2022 peak, but the rest of Orange County has. Once again, Irvine is underperforming other nearby cities like Newport, Laguna, Tustin, and Santa Ana since the Fed got serious about fighting inflation.

Of course, when you look at home prices in REAL terms, Irvine along with the rest of Orange County are going down in value due to the loss of purchasing power (about 6.5% inflation since April 2022). This is similar to how the 1980's bust played out, but of course we are still in early innings.

The first year of a housing bust always tends to be flattish (2007, 1991), giving permabulls eternal hope.

1697648169519.png
 
usctrojancpa said:
Inventory levels in Irvine (which I track closely) have been flattish in the past 3 months, basically around the level of inventory that we had at the end of 2022. There will not be any material price declines unless inventory increases significantly.
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Can you comment on CRE inventory in Irvine? I have been trying to learn about that market but haven't been impressed by what I've seen on Loopnet.
 
Liar Loan said:
You're half right. Irvine has not surpassed it's April 2022 peak, but the rest of Orange County has. Once again, Irvine is underperforming other nearby cities like Newport, Laguna, Tustin, and Santa Ana since the Fed got serious about fighting inflation.

Of course, when you look at home prices in REAL terms, Irvine along with the rest of Orange County are going down in value due to the loss of purchasing power (about 6.5% inflation since April 2022). This is similar to how the 1980's bust played out, but of course we are still in early innings.

The first year of a housing bust always tends to be flattish (2007, 1991), giving permabulls eternal hope.

View attachment 9261
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It seems this being driven by a plurality of low end sales as even USCs recent sales have been condos
 
Liar Loan said:
You're half right. Irvine has not surpassed it's April 2022 peak, but the rest of Orange County has. Once again, Irvine is underperforming other nearby cities like Newport, Laguna, Tustin, and Santa Ana since the Fed got serious about fighting inflation.

Of course, when you look at home prices in REAL terms, Irvine along with the rest of Orange County are going down in value due to the loss of purchasing power (about 6.5% inflation since April 2022). This is similar to how the 1980's bust played out, but of course we are still in early innings.

The first year of a housing bust always tends to be flattish (2007, 1991), giving permabulls eternal hope.

View attachment 9261
Click to expand...

Yes, Irvine has surpassed April 2022 pricing levels and you'll see it when I post up the data through Sept 2022 in the coming few days despite what Redfin graphs show.
 
usctrojancpa said:
Yes, Irvine has surpassed April 2022 pricing levels and you'll see it when I post up the data through Sept 2022 in the coming few days despite what Redfin graphs show.
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As always, I look forward to seeing the data.

My prediction is that your charts won't show any gains in REAL terms, which for Irvine is particularly relevant. A cash buyer in April 2022, has lost money on their purchase even before accounting for tax, insurance, mello roos, HOA, maintenance, and improvements.

And for a financed buyer, they have paid more in interest than they have enjoyed in appreciation, even with the 4% prevailing rate from that time.
 
Feel free to copy and paste the Bloomberg stories for those that don’t have an account/subscription like me :)
 
qwerty said:
Feel free to copy and paste the Bloomberg stories for those that don’t have an account/subscription like me :)
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This is better, you can listen to same article.

omny.fm

This Is What an 8% Mortgage Means For the Housing Market - Odd Lots

Mortgage rates have surged over the last couple of years. But surprisingly to some, actual home prices in the US have been resilient. This has created a historic shock to affordability, with a typical monthly payment on a home purchase soaring. But how long can this go on? Particularly as rates...
omny.fm omny.fm
 
qwerty said:
Feel free to copy and paste the Bloomberg stories for those that don’t have an account/subscription like me :)
Click to expand...
you can cancel all your subscriptions. archive.is allows you to paste the url of the article and see if it's cached in their system. If it is you can read it immediately. If not, it will go through the process to cache it and then present it to you
 
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