Author Topic: Global Recession?  (Read 13980 times)

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Offline sleepy5136

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Re: Global Recession?
« Reply #30 on: March 23, 2022, 05:29:20 PM »
What if they HAD a mortgage but paid it off in full and have no new mortgage?
That's a possibility. But what are the odds that all the FCBs with adjustable rate loans are all able to pay off their mortgages? I mean, they got a mortgage for a reason...

Offline Ready2Downsize

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Re: Global Recession?
« Reply #31 on: March 23, 2022, 05:41:12 PM »
What if they HAD a mortgage but paid it off in full and have no new mortgage?
That's a possibility. But what are the odds that all the FCBs with adjustable rate loans are all able to pay off their mortgages? I mean, they got a mortgage for a reason...

Maybe they used the money for something (like a margin loan) and then paid it off.

What are the odds they all have adjustable rate mortgages and weren't smart enough to see rates going up and do something about those mortgages?

I'm buying two houses in AZ for cash (one is supposed to sit in while the other is being built to make sure the market doesn't turn here in California leaving me stuck with a house I don't want. I'm not worried about selling it because it's gone up alot while it's being built). Realtor says do you want to put a mortgage on it after it closes? I can give u the names of some lenders. I say what? I haven't had a mortgage in 15 years. Why would I want a mortgage now? She says well money is so cheap (before rates were going up), lots of cash buyers do that and then pay it off after a while and use it to buy stocks, another house or other "stuff".

Maybe they sold whatever they bought and paid off that mortgage and now own the place free and clear with their profits from whatever they used the money for.

Offline USCTrojanCPA

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Re: Global Recession?
« Reply #32 on: March 23, 2022, 05:44:28 PM »
Housing demand for the most part is really a local event. What exactly is it you see in Irvine to cause you to think it's going to roll over soon?

He hasn't seen anything. He just refuses to admit he's wrong. Simple as that.

But he keeps posting so he must think there is something to back this up.

I like to see opposing views so I don't end up keep drinking kool aid and become too steadfast in my own views. I did that in 2000 and regretted it bigly.

But I have to have something to back those views up to make me see there is something there. Right now, I don't see it at all.

Mortgage rates going up is not enough of an issue for me. We had that in the 70s and housing just went up with rates. We had higher rates in the 80s and housing went up. We just got adjustable rate loans. We had rising rates in the 90s too and again we just got adjustable loans.

There should be SOMETHING that we can put a finger on like rising inventories, increasing days on market, comparable homes selling for lower price per square foot, builders not raising prices or throwing in upgrades on spec homes. SOMETHING. I just don't see anything myself, so Liar Loan, point it out if you have something specific to this area please.

I keep telling everyone, watch inventory levels as the tell of where pricing is going.  Even with these higher rates, inventory levels are still very low (about 1/2 month of inventory in Irvine).  A neutral market is where we have around 3 months of inventory so inventory levels would have to increase 5-6x of where inventory is today for that to happen.  It's all a supply/demand issue but the fact is that demand is still outpacing supply.  I have seen lower open house traffic and less # of offers on my listings but pricing is still strong because the top buyers are strong and motivated.
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Offline USCTrojanCPA

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Re: Global Recession?
« Reply #33 on: March 23, 2022, 05:47:08 PM »
What if they HAD a mortgage but paid it off in full and have no new mortgage?
That's a possibility. But what are the odds that all the FCBs with adjustable rate loans are all able to pay off their mortgages? I mean, they got a mortgage for a reason...

Those buyers bring over big chunks of cash over each month under the limit that China has imposed, I've seen plenty of their bank statements to know the drill.  They'll move all the month over in time and then use them to pay off the asset based loan (usually 50% LTV).  There's basically zero risk of those properties being foreclosed or become a forced sale.
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Offline Ready2Downsize

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Re: Global Recession?
« Reply #34 on: March 23, 2022, 05:57:36 PM »
Housing demand for the most part is really a local event. What exactly is it you see in Irvine to cause you to think it's going to roll over soon?

He hasn't seen anything. He just refuses to admit he's wrong. Simple as that.

But he keeps posting so he must think there is something to back this up.

I like to see opposing views so I don't end up keep drinking kool aid and become too steadfast in my own views. I did that in 2000 and regretted it bigly.

But I have to have something to back those views up to make me see there is something there. Right now, I don't see it at all.

Mortgage rates going up is not enough of an issue for me. We had that in the 70s and housing just went up with rates. We had higher rates in the 80s and housing went up. We just got adjustable rate loans. We had rising rates in the 90s too and again we just got adjustable loans.

There should be SOMETHING that we can put a finger on like rising inventories, increasing days on market, comparable homes selling for lower price per square foot, builders not raising prices or throwing in upgrades on spec homes. SOMETHING. I just don't see anything myself, so Liar Loan, point it out if you have something specific to this area please.

I keep telling everyone, watch inventory levels as the tell of where pricing is going.  Even with these higher rates, inventory levels are still very low (about 1/2 month of inventory in Irvine).  A neutral market is where we have around 3 months of inventory so inventory levels would have to increase 5-6x of where inventory is today for that to happen.  It's all a supply/demand issue but the fact is that demand is still outpacing supply.  I have seen lower open house traffic and less # of offers on my listings but pricing is still strong because the top buyers are strong and motivated.

Irvine would practically have to turn on a dime to do that. IMO, it isn't going to happen because where are the people selling going to go? We'd have to get second homes being sold because if it is primary residences those people must be going somewhere else which means they are buying another property. They could be like me and going out of state but there aren't enough of us to make a tiny dent in Irvine's market.

Offline USCTrojanCPA

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Re: Global Recession?
« Reply #35 on: March 23, 2022, 06:29:57 PM »
Housing demand for the most part is really a local event. What exactly is it you see in Irvine to cause you to think it's going to roll over soon?

He hasn't seen anything. He just refuses to admit he's wrong. Simple as that.

But he keeps posting so he must think there is something to back this up.

I like to see opposing views so I don't end up keep drinking kool aid and become too steadfast in my own views. I did that in 2000 and regretted it bigly.

But I have to have something to back those views up to make me see there is something there. Right now, I don't see it at all.

Mortgage rates going up is not enough of an issue for me. We had that in the 70s and housing just went up with rates. We had higher rates in the 80s and housing went up. We just got adjustable rate loans. We had rising rates in the 90s too and again we just got adjustable loans.

There should be SOMETHING that we can put a finger on like rising inventories, increasing days on market, comparable homes selling for lower price per square foot, builders not raising prices or throwing in upgrades on spec homes. SOMETHING. I just don't see anything myself, so Liar Loan, point it out if you have something specific to this area please.

I keep telling everyone, watch inventory levels as the tell of where pricing is going.  Even with these higher rates, inventory levels are still very low (about 1/2 month of inventory in Irvine).  A neutral market is where we have around 3 months of inventory so inventory levels would have to increase 5-6x of where inventory is today for that to happen.  It's all a supply/demand issue but the fact is that demand is still outpacing supply.  I have seen lower open house traffic and less # of offers on my listings but pricing is still strong because the top buyers are strong and motivated.

Irvine would practically have to turn on a dime to do that. IMO, it isn't going to happen because where are the people selling going to go? We'd have to get second homes being sold because if it is primary residences those people must be going somewhere else which means they are buying another property. They could be like me and going out of state but there aren't enough of us to make a tiny dent in Irvine's market.

Exactly, most of my Irvine sellers are move-up Irvine buyers.  Of all my listings in 2020 through today, I can count the number of buyers relocating out of the area but I've had more move-up buyers who came into Irvine from other cities of the homes (including homes that I've listed for sale). 
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Offline irvinehomeowner

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Re: Global Recession?
« Reply #36 on: March 23, 2022, 06:40:51 PM »
But he keeps posting so he must think there is something to back this up.

He's actually just trolling because he's still hurt from his improper analysis of the 2006 drop in regards to what fared better than Irvine.

He claimed that the beach cities were the safe havens but then when we looked at the numbers, Newport Beach and the like all dropped lower and faster and recovered slower than Irvine.

So he keeps saying Irvine is due for a drop hoping it will come true but mostly because he just likes to poke the Irvine owners because he's jelly.

He thought he had us with this latest "drop/pain/slump" in 2018 but that was nothing compared to what prices are at now (which he did not predict). So all he can say is, "Well... OC performed better".

But despite our disagreements, I highly respect his opinions, he just can't admit when some are wrong... but I get it... most people are like that. I thought back in 2008, prices were going to drop more, but they didn't (at least for 3CWG homes I was looking at). Oh well.
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Offline sleepy5136

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Re: Global Recession?
« Reply #37 on: March 23, 2022, 08:45:53 PM »
What if they HAD a mortgage but paid it off in full and have no new mortgage?
That's a possibility. But what are the odds that all the FCBs with adjustable rate loans are all able to pay off their mortgages? I mean, they got a mortgage for a reason...

Maybe they used the money for something (like a margin loan) and then paid it off.

What are the odds they all have adjustable rate mortgages and weren't smart enough to see rates going up and do something about those mortgages?

I'm buying two houses in AZ for cash (one is supposed to sit in while the other is being built to make sure the market doesn't turn here in California leaving me stuck with a house I don't want. I'm not worried about selling it because it's gone up alot while it's being built). Realtor says do you want to put a mortgage on it after it closes? I can give u the names of some lenders. I say what? I haven't had a mortgage in 15 years. Why would I want a mortgage now? She says well money is so cheap (before rates were going up), lots of cash buyers do that and then pay it off after a while and use it to buy stocks, another house or other "stuff".

Maybe they sold whatever they bought and paid off that mortgage and now own the place free and clear with their profits from whatever they used the money for.
A lot of FCB do not report their income here so they cannot get mortgage rates to their favor. Like USC said, they probably bring in enough each month from their country that is below the limit. Again, I am not saying it will lead it a crash. However, I do think it's a risk. How much risk, I don't know.

You're over here asking for a second point of view but you keep rejecting it. So idk what you want.

Offline USCTrojanCPA

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Re: Global Recession?
« Reply #38 on: March 23, 2022, 08:59:27 PM »
What if they HAD a mortgage but paid it off in full and have no new mortgage?
That's a possibility. But what are the odds that all the FCBs with adjustable rate loans are all able to pay off their mortgages? I mean, they got a mortgage for a reason...

Maybe they used the money for something (like a margin loan) and then paid it off.

What are the odds they all have adjustable rate mortgages and weren't smart enough to see rates going up and do something about those mortgages?

I'm buying two houses in AZ for cash (one is supposed to sit in while the other is being built to make sure the market doesn't turn here in California leaving me stuck with a house I don't want. I'm not worried about selling it because it's gone up alot while it's being built). Realtor says do you want to put a mortgage on it after it closes? I can give u the names of some lenders. I say what? I haven't had a mortgage in 15 years. Why would I want a mortgage now? She says well money is so cheap (before rates were going up), lots of cash buyers do that and then pay it off after a while and use it to buy stocks, another house or other "stuff".

Maybe they sold whatever they bought and paid off that mortgage and now own the place free and clear with their profits from whatever they used the money for.
A lot of FCB do not report their income here so they cannot get mortgage rates to their favor. Like USC said, they probably bring in enough each month from their country that is below the limit. Again, I am not saying it will lead it a crash. However, I do think it's a risk. How much risk, I don't know.

You're over here asking for a second point of view but you keep rejecting it. So idk what you want.

I'm not saying there's no risk but I think the risk fairly minimal.  The big risk in my mind is if most all employers mandate that their workers come back into the office full time...will that lead to an exodus of LA/Bay Area buyers who will look to cash in their gains because they need to move back closer to their offices?
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Offline OCtoSV

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Re: Global Recession?
« Reply #39 on: March 24, 2022, 08:18:11 AM »
Google buses are back on the road and the freeways are packed up here - strong message among the larger companies of get back to the office or roll the dice on your future

Offline paydawg

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Re: Global Recession?
« Reply #40 on: March 24, 2022, 09:30:25 AM »
Google buses are back on the road and the freeways are packed up here - strong message among the larger companies of get back to the office or roll the dice on your future

I doubt 'full time in the office' is in our future.  I work for a large old-school, but very prominent Fortune 500 company that never wanted to adopt WFH, but now they're starting to assess their workforce's preferences and will most likely adopt a hybrid model. 
Thanks in advance for the 'thanks'!!

Offline OCtoSV

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Re: Global Recession?
« Reply #41 on: March 24, 2022, 09:51:16 AM »
hybrid for sure but even hybrid makes it tough to get to the office in the Bay area when you moved to Irvine.

Offline zubs

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Re: Global Recession?
« Reply #42 on: March 24, 2022, 10:02:50 AM »
My large customer keeps pushing back their return to office date.
Last week I went to their office to drop off samples, and there were only 10 cars in the parking lot built for 300.

I ask them when they are going back, and it's always next month!

Offline momopi

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Re: Global Recession?
« Reply #43 on: March 24, 2022, 10:21:12 AM »
I'm not sure how FCB was back in the 80s and 90s in Irvine. But I would think that it's now significantly higher and a bunch of them have adjustable loans. If interest rates hit 6-7%, that will definitely test the limits of these adjustable loan owners and what they will do to keep their house.

Back then there were many Taiwanese buyers in Irvine, with the father returning to TW to work & leaving wife and kids here.  Many did not qualify for a loan in the US, so they took out loans on properties back in TW and used the cash to buy in US.  So even if the property was purchased with cash here, it doesn't mean there isn't a loan elsewhere.

Offline sleepy5136

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Re: Global Recession?
« Reply #44 on: March 24, 2022, 10:29:30 AM »
I'm not sure how FCB was back in the 80s and 90s in Irvine. But I would think that it's now significantly higher and a bunch of them have adjustable loans. If interest rates hit 6-7%, that will definitely test the limits of these adjustable loan owners and what they will do to keep their house.

Back then there were many Taiwanese buyers in Irvine, with the father returning to TW to work & leaving wife and kids here.  Many did not qualify for a loan in the US, so they took out loans on properties back in TW and used the cash to buy in US.  So even if the property was purchased with cash here, it doesn't mean there isn't a loan elsewhere.
Interesting. I know Hong Kong loans do not have a concept of 30 yr fixed interest rate. It's actually adjustable. I would think Taiwan and Mainland China are the same. In which case, that's quite concerning. But who knows? They might just have a boat load of cash and decided to take a loan to leverage.

 

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