Author Topic: Market Top  (Read 14329 times)

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Re: Market Top
« Reply #15 on: August 06, 2018, 11:05:12 AM »
Real estate ETFs YTD performance:

ITB: -12.53% (ishares US home construction)
XHB: -10.26% (SPDR S&P Homebuilder ETF)

[I’m not buying]

When I did my brief glance at price reductions out of state. I did come across new homes with price reductions. I am not talking about expensive homes either. (Is it that bad?)

Offline USCTrojanCPA

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Re: Market Top
« Reply #16 on: August 06, 2018, 11:28:18 AM »
all of you calling the top, please put your money where your mouth is and sell your home.  should be a big profit for you!

Numbers don’t lie. Look at the YTD RE ETF performances.

You are comparing stock market REIT prices with residential real estate prices?  Commercial real estate does not have the emotional factor that residential real estate does.  REITs will always perform poorly in a rising interest rate environment because one of the main reasons why investors buy REITs is for the yield.
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Re: Market Top
« Reply #17 on: August 06, 2018, 11:29:59 AM »
The ETFs: Homebuilders, home improvement, builder suppliers

I guess we can drill down the etf. If you like.

Offline USCTrojanCPA

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Re: Market Top
« Reply #18 on: August 06, 2018, 11:35:35 AM »
The ETFs: Homebuilders, home improvement, builder suppliers

The ETFs: Homebuilders, home improvement, builder suppliers

I guess we can drill down the etf. If you like.

I took a look at the charts...both were basically flat from 2013 to 2016 while home prices surged in 2013 and continued to increase in 2014-2016 at a slower pace.  Again, trying to take stock performance and try to translate it to what Irvine homes prices might do isn't a great indicator.  I also said, keep your eye on inventory levels and # of months of supply of months...that's your tea leaf.  Yes, we have slowed a bit as we were at 2 months of inventory back in the winter/spring and now we are at 2.7 months of inventory today but that is mostly due to the increase in supply in the $1m+ market.
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Offline Compressed-Village

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Re: Market Top
« Reply #19 on: August 06, 2018, 11:39:53 AM »
The reason I predict prices will go up is basic supply and demand.

Contrary to popular belief, demand for housing doesn't matter if it's renters or buyers.

A lesson from 2009 - rents fell
Back in 2009, every pundit predict a surge in rents due to all of the foreclosed homeowners moving into rentals. It never happened.

Why?
  • Oversupply: New construction had overbuilt housing, particularly in less desirable neighborhoods
  • Lack of demand: As millions of Americans lost their jobs, faced paycuts and saw their investments plummet, they bunked up. Recent college grads moved in with their parents, singles that had bought a condo rented a room somewhere, immigrants went back to their home country where cost of living was less.

In 2018, housing demand (rentals + purchases) is very very strong and supply is limited. If fewer households buyer a home but can still afford their own place, demand for rentals will increase - spurring investors to buy the same homes.

There is a lot of demands just can't afford to buy. Prices are high, which forces POTENTIAL BUYERS to rent and see. The Irvine Company play this game well. They know their audiences and read people pockets very well. Another huge apartment complex will soon pop up on Sand Cayon and 5. This too will get fill up very quickly. Builders will build up, more vertical for a bit less price. It too will get gobble up. So to think this is top is premature. The IRVINE market has entered mature cycle, not necessary top.

Offline meccos12

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Re: Market Top
« Reply #20 on: August 06, 2018, 11:49:04 AM »
all of you calling the top, please put your money where your mouth is and sell your home.  should be a big profit for you!

Why would you expect people to sell their home just because they think its at the peak of a cycle?  People still need to live somewhere. 

If we were talking about very liquid investments like stocks, then its a different story.  A home to most of us is not an investment but a place to live your life.  As such it should be treated differently from an investment like stocks. 

However, if was on the fence about selling or planning on selling soon, I would probably sell now.  Or if I was a first time buyer, then I would probably wait.  Just my opinion.


Offline paperboyNC

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Re: Market Top
« Reply #21 on: August 06, 2018, 11:53:27 AM »
all of you calling the top, please put your money where your mouth is and sell your home.  should be a big profit for you!

Why would you expect people to sell their home just because they think its at the peak of a cycle?  People still need to live somewhere. 

If we were talking about very liquid investments like stocks, then its a different story.  A home to most of us is not an investment but a place to live your life.  As such it should be treated differently from an investment like stocks. 

However, if was on the fence about selling or planning on selling soon, I would probably sell now.  Or if I was a first time buyer, then I would probably wait.  Just my opinion.

I know a lot of people that thought 2013 was a bubble and waited to buy. They waited and waited and waited and guess what happened? They got a lot less for their money in 2016, 2017 or 2018 when they finally pulled the trigger.

We are all nervous about the 2006-07 bubble burst repeating. It will not happen.

Just like there will not be a tech bubble burst like 2000-01.

In both cases, the current valuations are grounded compared to completely fictional.

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Offline zubs

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Re: Market Top
« Reply #22 on: August 06, 2018, 11:54:54 AM »
11 years ago when Irvinghousingblog was still alive, the bulls would have defended realestate with much gusto and vitriol.  Today, I see the legacy of the experience learned from that time.  No one is defending the bullish side very much anymore and a more openness to what may happen has taken hold.

Back then bulls were much more adamant about their position to the enjoyment of the rest of us.

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Re: Market Top
« Reply #23 on: August 06, 2018, 12:27:35 PM »
11 years ago when Irvinghousingblog was still alive, the bulls would have defended realestate with much gusto and vitriol.  Today, I see the legacy of the experience learned from that time.  No one is defending the bullish side very much anymore and a more openness to what may happen has taken hold.

Back then bulls were much more adamant about their position to the enjoyment of the rest of us.

Which is honestly a big tell that this is not the top.

2006: EVERYONE told me to buy, buy, buy (housing)
2008: EVERYONE told me to sell, sell, sell (stocks and bonds)
2011: Most were skeptical about buying real estate
2018: Consensus is building that this is the top

The popular belief is usually the wrong one.

Offline Kenkoko

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Re: Market Top
« Reply #24 on: August 06, 2018, 12:28:41 PM »
There is a lot of demands just can't afford to buy. Prices are high, which forces POTENTIAL BUYERS to rent and see. The Irvine Company play this game well. They know their audiences and read people pockets very well. Another huge apartment complex will soon pop up on Sand Cayon and 5. This too will get fill up very quickly. Builders will build up, more vertical for a bit less price. It too will get gobble up. So to think this is top is premature. The IRVINE market has entered mature cycle, not necessary top.

What you described is Irvine having a lot of price downside resistance which most of us will agree with. Irvine is desirable and will remain so going forward.

But what you said did not add an argument to why prices will be continue to go up. These "potential buyers" already could not afford to buy at current price level. How is it that they all of a sudden CAN afford to buy when price continue to go up?

Offline Kenkoko

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Re: Market Top
« Reply #25 on: August 06, 2018, 12:31:50 PM »

Which is honestly a big tell that this is not the top.

2006: EVERYONE told me to buy, buy, buy (housing)
2008: EVERYONE told me to sell, sell, sell (stocks and bonds)
2011: Most were skeptical about buying real estate

Perhaps you should have better people advising you?

Offline Kings

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Re: Market Top
« Reply #26 on: August 06, 2018, 12:32:48 PM »
all of you calling the top, please put your money where your mouth is and sell your home.  should be a big profit for you!

Why would you expect people to sell their home just because they think its at the peak of a cycle?  People still need to live somewhere. 

If we were talking about very liquid investments like stocks, then its a different story.  A home to most of us is not an investment but a place to live your life.  As such it should be treated differently from an investment like stocks. 

However, if was on the fence about selling or planning on selling soon, I would probably sell now.  Or if I was a first time buyer, then I would probably wait.  Just my opinion.

would you sell and rent until your crystal ball says we're at the bottom, or sell and buy again right away?  selling and buying right away is more or less a lateral move in terms of market values

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Re: Market Top
« Reply #27 on: August 06, 2018, 12:33:10 PM »
We could be in a sideways consolidation path (range bound )  for several months here before taking a leg higher

No one is disputing that there are better deals to be had , compared to say last year .

But when you say “correction “ — it means a bear market — I think that’s where people need to Provide more hard data than just anecdotes on FCBs

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Offline USCTrojanCPA

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Re: Market Top
« Reply #28 on: August 06, 2018, 12:46:35 PM »
We could be in a sideways consolidation path (range bound )  for several months here before taking a leg higher

No one is disputing that there are better deals to be had , compared to say last year .

But when you say “correction “ — it means a bear market — I think that’s where people need to Provide more hard data than just anecdotes on FCBs

I'm in your camp, we've run up enough and the market needs time to digest these gains.  I'm thinking we'll be flattish for the rest of this year.
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Re: Market Top
« Reply #29 on: August 06, 2018, 12:53:23 PM »
We could be in a sideways consolidation path (range bound )  for several months here before taking a leg higher

No one is disputing that there are better deals to be had , compared to say last year .

But when you say “correction “ — it means a bear market — I think that’s where people need to Provide more hard data than just anecdotes on FCBs

This is the first time I heard from you that there is a price break.

 

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