Author Topic: Housing Analysis  (Read 304963 times)

Offline sleepy5136

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Re: Housing Analysis
« on: May 26, 2022, 01:17:21 PM »
Inventory is still low by historical standards, but it's rapidly increasing at the moment.  Earlier this year, inventory was down -30% from a year ago, now it's up +9% and growing at an accelerating rate.

And last year inventory was stupid low, we are still hovering around 1 month of inventory with your big increase in inventory (we were down as low as 1 week of inventory at one point) so it's going to take a lot more inventory on the market for prices to come down materially (think over 3 months of inventory).
With what is happening with rates and the talks of a recession, buyer sentiment is key. You are hearing big tech companies slowing or even stopping hiring right now. The RSUs for down payments are shrunk by more than half. Talks of a recession are all over the place. All of this matters because if one is ready to buy a home even with less competition, they are putting a pause on their home search as shown by inventories growing. Rates are higher and may have an impact on the demand, but I would argue the economic uncertainty is more concerning now and is a bigger factor as to the RE slowdown more so than rates.

We always get so fixated on Irvine Irvine Irvine. Not everything is based on Irvine and if anything, whatever happens with other parts of California will happen to Irvine as well. Especially ones that are buying at $700+ per sqft in those dense, no lot, and no driveway type of homes. At some point, your cost basis needs to justify the premium that was paid. Location matters, but if people are bidding homes that don’t deserve that premium in a normal market, it will be impacted regardless of where you’re located.

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