Author Topic: Housing Analysis  (Read 82695 times)

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Offline paperboyNC

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Re: Housing Analysis
« Reply #975 on: July 15, 2019, 11:01:18 AM »
On one of those sites I look at, it shows rents were rising.

That jives with less people buying.

If housing is overbuilt / housing demand drops, rents will fall as well. Back in 2009/2010 every single "expert" seemed to be predicting sky-rocketing rents with all of the foreclosures while I predicted falling rents.

What actually happened:
Foreclosures bought up by investors and rented out: increase in supply
Foreclosed young homeowners moved in with mom & dad: reduce in demand
Employed bunked up: reduce in demand
Entire condo towers were turned into apartments: increase in supply
(https://www.hechtsolberg.com/sale-of-vantage-pointe-the-largest-mixed-use-high-rise-condominium-project-in-san-diego-sold-to-equity-residential/)

Offline best_potsticker_in_town

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Re: Housing Analysis
« Reply #976 on: July 16, 2019, 11:14:46 AM »
Anecdotes from the front lines this week working with my buyer client:

- Made a reasonable offer (backed by comps) on a detached condo in CV listed for 21 days at $1m+. Seller balked and wanted higher than market value.
- Made a reasonable offer (backed by comps) on a detached condo in EW listed for 30 days at $900k+. Seller balked and wanted higher than market value.
- Visited Reserve and viewed Verdi, Vivo, Lago - a wide selection of inventory and all around $1.2m. Irvine Pacific is motivated and willing to accept offers.

In summary (not just based off this example), resale supply is low and the sellers have significant equity and are willing to wait the market out for their desired price. If they don't get it, they'll hold on or rent.

For new construction, there is a lot of supply - ranging from quick move-ins to dirt lots. Builders are open to offers and are increasing broker co-ops, but at the same time, slowing the construction timeline. I've seen more than 2 developments with homes that should've been completed in the 1st quarter of the year, but still incomplete and construction stalled so that, "the buyer can select their own flooring." My guess is we will continue seeing builders control inventory by slowing of new phase releases until stagnant inventory has been moved.

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Offline sell4u

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Re: Housing Analysis
« Reply #977 on: July 17, 2019, 06:09:01 AM »
Recent OC reg article on rents.  Rents seem to be moving up fairly swiftly

https://www.ocregister.com/2019/07/12/los-angeles-orange-county-rent-inflation-up-5-8-biggest-hike-since-2008/

Offline irvinehomeowner

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Re: Housing Analysis
« Reply #978 on: August 07, 2019, 08:46:54 AM »
LA Times article (since I can't get through the OCReg paywall):

https://www.latimes.com/business/story/2019-07-26/southern-california-home-prices-barely-budged-in-june

Quote
Southern California home prices rose only 1.2% in June from a year earlier, while sales fell 8.8%, reflecting a broad slowdown in the region’s pricey housing market.

The six-county region’s median price — the point at which half the homes sold for more and half for less — clocked in at $541,250 last month, according to a report Friday from CoreLogic.

Although that price is a record, the modest rise indicates buyers aren’t willing or able to aggressively bid up homes after years of sharp price increases that have sparked renewed concerns over the lack of affordable housing in the Golden State.

So YOY, prices were slightly higher in June than last June. So, yes, slowdown in volume but prices did not go down significantly.

Quote
Here is a breakdown of prices and sales in each county:

In Los Angeles County, the median price rose 0.5% to $618,000 in June and sales fell 12.1%.
In Orange County, the median price slipped 0.3% to $738,000 and sales fell 9.4%.
In Riverside County, the median price climbed 5.3% to $399,000 and sales fell 4%.
In San Bernardino County, the median price rose 1.5% to $340,000 and sales fell 11.4%.
In Ventura County, the median price dropped 5.7% to $580,000 and sales rose 1.6%.
In San Diego County, the median price rose 2.6% to $590,000 and sales fell 7.4%.

Although the market has slowed, many economists say a crash in values is unlikely. The economy may not be strong enough to support steep price increases, they say, but a low rate of home building and continued job growth mean enough people will probably be willing to buy a home at, or at least near, today’s prices.

The California Assn. of Realtors recently revised its 2019 sales forecast, in large part because of falling mortgage rates. It still predicts the smallest annual price appreciation of the current real estate upswing, but the group now forecasts a 4% gain in the statewide median price for a previously owned single-family home. Before, it was predicting a 0.2% decline.

Richard Green, director of the USC Lusk Center for Real Estate, said today’s tight lending standards will provide a barrier against a wave of foreclosures similar to the one last decade that helped crash the market.

So again, back to my original premise, while there may be a slowing in volume, if that doesn't reflect in pricing, what were people waiting for?

There were a few in this thread who claimed that prices would drop enough to wait, as far as I can tell, that didn't happen. So now what? Wait for December? Wait for 2020?
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Offline Mety

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Re: Housing Analysis
« Reply #979 on: August 07, 2019, 11:46:25 AM »
LA Times article (since I can't get through the OCReg paywall):

https://www.latimes.com/business/story/2019-07-26/southern-california-home-prices-barely-budged-in-june

Quote
Southern California home prices rose only 1.2% in June from a year earlier, while sales fell 8.8%, reflecting a broad slowdown in the region’s pricey housing market.

The six-county region’s median price — the point at which half the homes sold for more and half for less — clocked in at $541,250 last month, according to a report Friday from CoreLogic.

Although that price is a record, the modest rise indicates buyers aren’t willing or able to aggressively bid up homes after years of sharp price increases that have sparked renewed concerns over the lack of affordable housing in the Golden State.

So YOY, prices were slightly higher in June than last June. So, yes, slowdown in volume but prices did not go down significantly.

Quote
Here is a breakdown of prices and sales in each county:

In Los Angeles County, the median price rose 0.5% to $618,000 in June and sales fell 12.1%.
In Orange County, the median price slipped 0.3% to $738,000 and sales fell 9.4%.
In Riverside County, the median price climbed 5.3% to $399,000 and sales fell 4%.
In San Bernardino County, the median price rose 1.5% to $340,000 and sales fell 11.4%.
In Ventura County, the median price dropped 5.7% to $580,000 and sales rose 1.6%.
In San Diego County, the median price rose 2.6% to $590,000 and sales fell 7.4%.

Although the market has slowed, many economists say a crash in values is unlikely. The economy may not be strong enough to support steep price increases, they say, but a low rate of home building and continued job growth mean enough people will probably be willing to buy a home at, or at least near, today’s prices.

The California Assn. of Realtors recently revised its 2019 sales forecast, in large part because of falling mortgage rates. It still predicts the smallest annual price appreciation of the current real estate upswing, but the group now forecasts a 4% gain in the statewide median price for a previously owned single-family home. Before, it was predicting a 0.2% decline.

Richard Green, director of the USC Lusk Center for Real Estate, said today’s tight lending standards will provide a barrier against a wave of foreclosures similar to the one last decade that helped crash the market.

So again, back to my original premise, while there may be a slowing in volume, if that doesn't reflect in pricing, what were people waiting for?

There were a few in this thread who claimed that prices would drop enough to wait, as far as I can tell, that didn't happen. So now what? Wait for December? Wait for 2020?

Man, who waited? What a waste of time, huh?

Offline zubs

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Re: Housing Analysis
« Reply #980 on: August 07, 2019, 12:06:03 PM »
Nah...if you waited, you get to pick from 800 homes instead of 500 homes...it's still reason to wait.

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Offline irvinehomeowner

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Re: Housing Analysis
« Reply #981 on: September 10, 2019, 07:37:25 AM »
So I did some data churning from the CAR data and although they don't have median prices for Irvine, for Orange County, using a 6-month average and 1-year average to July, prices are slightly up (if I did this right):

https://car.sharefile.com/share/view/s0c02663a5c54e23a

   2018    2019
Feb   $805,380    $792,500
Mar   $824,450    $809,500
Apr   $818,000    $825,000
May   $838,000    $845,000
Jun   $835,500    $842,000
Jul   $829,000    $839,450
Avg   $825,055    $825,575

   2017-18   2018-19
Aug   $789,000    $838,500
Sep   $799,000    $825,000
Oct   $786,000    $810,000
Nov   $785,000    $795,000
Dec   $785,500    $785,000
Jan   $780,000    $796,500
Feb   $805,380    $792,500
Mar   $824,450    $809,500
Apr   $818,000    $825,000
May   $838,000    $845,000
Jun   $835,500    $842,000
Jul   $829,000    $839,450
Avg   $806,236    $816,954

They don't have Irvine specific numbers (or I couldn't find them) but as a reflection of Orange County, I'm going to assume Irvine is similar or better. Does anyone have Irvine numbers? Trulia changed their site so they don't have a chart with the recent 3-month rolling average anymore (as far as I saw).

Do our resident realtors (or those who have access to MLS data) have Irvine 6-month and 1-year averages comparing this year to last?

And this is despite a notable decrease in sales volume which no one here has really offered any explanation for.

Also, based on the CAR data, the market top wasn't July/Aug 2018 but actually May/June 2019 which is probably due to the drop in rates.

Most of the real estate sites are predicting a downward trend... but is that seasonal? :)
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Offline irvinehomeowner

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Re: Housing Analysis
« Reply #982 on: September 10, 2019, 07:43:27 AM »
August LA Times article:

https://www.latimes.com/business/story/2019-08-28/southern-california-housing-market-perked-up-in-july

Quote
In a reprieve for Southern California’s sluggish housing market, home sales rose in July from a year earlier. It was the first sales increase in 12 months.

The six-county median price — the point at which half the homes sold for more and half for less — climbed 1.9% in July from a year earlier to reach $540,000.

CoreLogic, which released the data Wednesday, attributed the 3.7% sales gain to a variety of factors, including falling mortgage rates, moderating prices and a rise in inventory. Also, there was one more business day last month compared with July 2018. Accounting for the difference would yield a small drop in sales. But over the last year, monthly sales had been falling by an average of 10% each month.

Orange County median price is slightly down though:

Quote
When broken down by county, the market was mixed in July. In Los Angeles County, the median price posted the largest gain since November, while in pricier Orange County the median still fell compared with a year earlier:

In Los Angeles County, the median rose 5% to $635,000, and sales were flat.
In Orange County, the median fell 0.8% to $729,000, and sales dropped 1.7%.
In Riverside County, the median rose 2.9% to $395,000, and sales climbed 8.6% .
In San Bernardino County, the median rose 4.6% to $340,000, and sales climbed 3.3%.
In Ventura County, the median was flat at $595,000, and sales climbed 6.2%.
In San Diego County, the median was flat at $580,000, and sales climbed 10.1%.

Hopefully someone will post what the OCRegister says in their next article.
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Offline jamesKirk

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Re: Housing Analysis
« Reply #983 on: September 10, 2019, 12:56:58 PM »
From a shoppers perspective we have noticed prices dropping slowly. Specifically the more recently build homes in the lower end price range in Irvine.

When we first started looking we noticed very few price drops and when we spoke to seller agents they didn’t think the seller would accept much less than asking, often the house already had an offer or two by the open house day.

A couple months ago we started noticing some price drops. Then more and then our agent would report back and was saying they’d probably go 25-30k under asking since no offers. The new builds also were offering us quite a bit of incentives for quick move in homes. In Portola Springs one condo they were offering 30k plus another 10k if our agent rebated half his commission. It wasn’t the plan we wanted so we passed.

Things definitely feel like they are on our side now. The best homes and deals still draw buyers out so it’s still hard to get the best homes. But overall we feel we are shopping for better quality homes at the same budget we started with. Both resales and new builds.

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Offline eyephone

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Re: Housing Analysis
« Reply #984 on: September 10, 2019, 01:01:17 PM »
From a shoppers perspective we have noticed prices dropping slowly. Specifically the more recently build homes in the lower end price range in Irvine.

When we first started looking we noticed very few price drops and when we spoke to seller agents they didn’t think the seller would accept much less than asking, often the house already had an offer or two by the open house day.

A couple months ago we started noticing some price drops. Then more and then our agent would report back and was saying they’d probably go 25-30k under asking since no offers. The new builds also were offering us quite a bit of incentives for quick move in homes. In Portola Springs one condo they were offering 30k plus another 10k if our agent rebated half his commission. It wasn’t the plan we wanted so we passed.

Things definitely feel like they are on our side now. The best homes and deals still draw buyers out so it’s still hard to get the best homes. But overall we feel we are shopping for better quality homes at the same budget we started with. Both resales and new builds.

This is a testimonial from an actively looking buyer.

 :)

Offline irvinehomeowner

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Re: Housing Analysis
« Reply #985 on: September 10, 2019, 01:28:07 PM »
Although some of you may not trust the CAR, their Housing Market Update seems slightly positive for both volume and prices:

https://www.car.org/marketdata/data/countysalesactivity
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Offline Liar Loan

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Re: Housing Analysis
« Reply #986 on: September 10, 2019, 01:29:23 PM »
IHO - You shouldn't really average a median.  The way the OCR does it is compare the median for the full 6-month period to the median for the same 6-month period one year ago.


According to OCR for the first half of 2019:

SFR's ~ Sales -8.5% ~ Median price -2.4%
Condos ~ Sales -10.5% ~ Median price -0.9%
New Homes ~ Sales -34.4% ~ Median price +5.9%
---------------------------------------------------------
TOTAL ~ Sales -12.5% ~ Median price 0.0% (Flat)

Offline Liar Loan

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Re: Housing Analysis
« Reply #987 on: September 10, 2019, 01:38:49 PM »
Although some of you may not trust the CAR, their Housing Market Update seems slightly positive for both volume and prices:

https://www.car.org/marketdata/data/countysalesactivity

Chart 13 - The last time the market looked like this was late '06/early '07.  Hmm... Remind me again what happened after that?

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Offline Compressed-Village

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Re: Housing Analysis
« Reply #988 on: September 10, 2019, 01:54:54 PM »
Although some of you may not trust the CAR, their Housing Market Update seems slightly positive for both volume and prices:

https://www.car.org/marketdata/data/countysalesactivity

Chart 13 - The last time the market looked like this was late '06/early '07.  Hmm... Remind me again what happened after that?

If you insinuating that the chart is a precursor for the incoming crash of Irvine real estate, then either you smoking some good stuffs or you pushing the fear factors. Either way as an active investor, I like both options. But I am afraid it ain’t gonna come to fruition. Put that pipe down. We are not in a decade era ago. The pots though might be a progressive movements in a positive direction😯 for dudes like you.

Offline irvinehomeowner

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Re: Housing Analysis
« Reply #989 on: September 10, 2019, 01:59:30 PM »
IHO - You shouldn't really average a median.  The way the OCR does it is compare the median for the full 6-month period to the median for the same 6-month period one year ago.


According to OCR for the first half of 2019:

SFR's ~ Sales -8.5% ~ Median price -2.4%
Condos ~ Sales -10.5% ~ Median price -0.9%
New Homes ~ Sales -34.4% ~ Median price +5.9%
---------------------------------------------------------
TOTAL ~ Sales -12.5% ~ Median price 0.0% (Flat)

Not sure why not. All I did was use the median for each month and average them so you can see what the median is for a 6-month period and a 12-month and compare them.

Median as a data point isn't actually entirely reliable either but that's all the data I have to play with.

Still,  just using your numbers, if sales volume is so low, why aren't prices lower?
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