Author Topic: When would be next housing Bottom?  (Read 7696 times)

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Offline Mety

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Re: When would be next housing Bottom?
« Reply #225 on: December 06, 2018, 10:27:08 AM »
Kenkoko:  I was going break down your post but I don't think it would be beneficial. 

Fundamentally, you need to understand that the development that Irvine experienced since 2000 is almost all new homes.  That affects pricing in that new homes are usually 10 to 15% lower than re-sales for a number of reasons.  Irvine has exceeded all median price points for the "Asian" housing markets we have identified other than Arcadia.  That is significant.  Once Irvine "sells out" and becomes a mature market, all you will have left is re-sale and there will be significantly more competition and increased prices. 

The other question is why Chinese/FCB came to Irvine instead of going to traditional Asian pockets...money clearly wasn't the concern so why come to Irvine?  This is where I differ with you on why FCB bought in Irvine....while you think they did to keep their money safe, I believe that they did so that they can bring their families here.  Contrary to your assertion, Stonegate, OH, PP, and BP are all filled with families and not just nuclear families, grandparents as well.  Pass by any of the parks at like 10 am. and you will see a ton of elderly Chinese people talking and doing taichi.  FCB bought houses here because China was beginning to crackdown on certain business practices and Chinese business people were trying to get their family to the US.  They bought the houses not for investment purposes, but to get green cards.  They also put a ton of money down on investment zones for EB-5 purposes. 

As for going forward, I expect a rescission of the US and global markets (can't run bull forever) but I don't expect a huge hit on Irvine housing market.  When the economies recovery, Irvine will be a top destination for Asian buyers looking to for a place to settle down.

Buying houses in the U.S. gets you green card? I'm asking out of curiosity, not starting an argument.
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Offline Kenkoko

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Re: When would be next housing Bottom?
« Reply #226 on: December 06, 2018, 10:30:06 AM »

Buying houses in the U.S. gets you green card? I'm asking out of curiosity, not starting an argument.

Short answer is yes. You have to meet the purchase amount criteria and follow the proper procedures.

Offline Mety

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Re: When would be next housing Bottom?
« Reply #227 on: December 06, 2018, 10:35:50 AM »

Buying houses in the U.S. gets you green card? I'm asking out of curiosity, not starting an argument.

Short answer is yes. You have to meet the purchase amount criteria and follow the proper procedures.

I just asked in Google also, and it said, "No, it's a false rumor." haha
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Offline Kenkoko

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Re: When would be next housing Bottom?
« Reply #228 on: December 06, 2018, 11:34:41 AM »
Fundamentally, you need to understand that the development that Irvine experienced since 2000 is almost all new homes.  That affects pricing in that new homes are usually 10 to 15% lower than re-sales for a number of reasons.  Irvine has exceeded all median price points for the "Asian" housing markets we have identified other than Arcadia.  That is significant.  Once Irvine "sells out" and becomes a mature market, all you will have left is re-sale and there will be significantly more competition and increased prices.

I agree with that. Prices will pop when Irvine gets built out. I see that you only mentioned Arcadia and left out San Marino to illustrate your point. (it’s one of the 8 cities I posted)

The other question is why Chinese/FCB came to Irvine instead of going to traditional Asian pockets...money clearly wasn't the concern so why come to Irvine?

When I looked at the numbers for Irvine and other traditional Asian pockets, I was really surprised of how little price separation there is and how almost every Asian cities have Irvine like downward price resilience. I mean San Gabriel Alhambra Rowland Heights are shitty areas to live in IMO. I think the more interesting question is why didn’t more Chinese/FCB choose Irvine over those shitty areas?

This is where I differ with you on why FCB bought in Irvine....while you think they did to keep their money safe, I believe that they did so that they can bring their families here.  Contrary to your assertion, Stonegate, OH, PP, and BP are all filled with families and not just nuclear families, grandparents as well.  Pass by any of the parks at like 10 am. and you will see a ton of elderly Chinese people talking and doing taichi.  FCB bought houses here because China was beginning to crackdown on certain business practices and Chinese business people were trying to get their family to the US.  They bought the houses not for investment purposes, but to get green cards.  They also put a ton of money down on investment zones for EB-5 purposes.

I can go to the park as you suggested but how am I supposed to see people who are not here?
Before you start putting words in my mouth, go back and read what I said. I never said newer villages are only filled with Chinese nuclear FCBs. I said you see more % of Chinese FCBs in newer villages which I still contest is true.
Let me bring the discussion back to something more relevant. Economy is getting bad in China, there are more and more Chinese investors putting their previously empty homes on the rental market to capture some return. This is especially evident in newer villages like Eastwood and GP neighborhoods. The oversupply of rental homes available is driving rent significantly down. You have Chinese realtors listing 1 million-dollar homes for rent for about $3000 a month now. My parents are Irvine landlords, and this is pissing them off.


As for going forward, I expect a rescission of the US and global markets (can't run bull forever) but I don't expect a huge hit on Irvine housing market.  When the economies recovery, Irvine will be a top destination for Asian buyers looking to for a place to settle down.

The fascinating thing on this forum is that anyone who isn’t bullish on Irvine all the time and on all fronts gets called out. People like CV will jump out and give a snide comment like not buying Irvine home now is putting life on hold. You called out people for “bashing Irvine” for merely pointing out that there may be price declines.

I’ve always believed in the long-term future of Irvine. But I do see a US slowdown + China meltdown looming. I think that will create a good short term buying opportunity. If you have a housing NEED, then please pay this no mind. Fulfill your need. If you just WANT to buy a better/bigger house, then waiting for a better entry point is the smart thing to do.


Offline Seeding

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Re: When would be next housing Bottom?
« Reply #229 on: December 06, 2018, 12:43:14 PM »
Buying a house doesn't get you a green car, since it's not the same as EB5 investments. EB5 money must be investments in businesses so jobs can be created.

If buying a house can get you a green card, I could have done it in the early 90's, instead of exhausting all legal means over the past 27 years just to get mine.

Offline Kenkoko

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Re: When would be next housing Bottom?
« Reply #230 on: December 06, 2018, 12:51:54 PM »
Buying a house doesn't get you a green car, since it's not the same as EB5 investments. EB5 money must be investments in businesses so jobs can be created.

If buying a house can get you a green card, I could have done it in the early 90's, instead of exhausting all legal means over the past 27 years just to get mine.

Not directly. A common practice is go through the EB5 route. Borrow (cash out) part of your investment and use it to buy a home. Go to a EB5 seminar in any of the traditional Asain immigrant city. They will explain to you in details and the steps to accomplish it.

Offline Irvinecommuter

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Re: When would be next housing Bottom?
« Reply #231 on: December 06, 2018, 01:10:29 PM »
This is why having a disscussion with you is difficult. You brought up Neihu and YangMing Shan first. YOU called them the ultra posh areas of Taipei.  I was merely following the premises you set.  >:(

You can just do a quick google search. Numerous travel blog/sites called Xinyi the most posh area of Taipei.

Downtown LA is is not very accurate description either. Even Wikipedia called Xinyi the Manhattan of Taiwan. And YangMing Shan is a freaking National Park. Sure there are some nice mansions but not a good comparison to Irvine or Anywhere we talked about.


Just about anyone from Taiwan knows YangMing Shan and Neihu...they are the ultra posh areas of Taipei. 

THere are no real equivalents in Taiwan to Irvine...that's important.  Yangmingshan is the closest thing with single family American style homes.

Offline Irvinecommuter

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Re: When would be next housing Bottom?
« Reply #232 on: December 06, 2018, 01:14:47 PM »
Buying a house doesn't get you a green car, since it's not the same as EB5 investments. EB5 money must be investments in businesses so jobs can be created.

If buying a house can get you a green card, I could have done it in the early 90's, instead of exhausting all legal means over the past 27 years just to get mine.

It depends on how you characterize the purchase and how it is purchased.  It can be used as collateral for a commercial loan that then translate into a EB-5 investment. 

https://behringcompanies.zendesk.com/hc/en-us/articles/115002357113-5-Things-EB-5-Investors-Can-Do-Preparing-for-Their-Source-of-Funds-Report

https://www.nytimes.com/2015/05/17/realestate/want-a-green-card-invest-in-real-estate.html

Offline Kenkoko

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Re: When would be next housing Bottom?
« Reply #233 on: December 06, 2018, 01:27:19 PM »
This is why having a disscussion with you is difficult. You brought up Neihu and YangMing Shan first. YOU called them the ultra posh areas of Taipei.  I was merely following the premises you set.  >:(

You can just do a quick google search. Numerous travel blog/sites called Xinyi the most posh area of Taipei.

Downtown LA is is not very accurate description either. Even Wikipedia called Xinyi the Manhattan of Taiwan. And YangMing Shan is a freaking National Park. Sure there are some nice mansions but not a good comparison to Irvine or Anywhere we talked about.


Just about anyone from Taiwan knows YangMing Shan and Neihu...they are the ultra posh areas of Taipei. 

THere are no real equivalents in Taiwan to Irvine...that's important.  Yangmingshan is the closest thing with single family American style homes.

Do you even read what you post? YOU are the one that started the Taiwan to Irvine comparison.
And No. Yangmingshan is not the closest thing with single family American style home. You are confusing Beitou with Yangming Shan.
I repeat, Yangming Shan is a freaking National Park.

Offline Irvinecommuter

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Re: When would be next housing Bottom?
« Reply #234 on: December 06, 2018, 01:27:30 PM »

I agree with that. Prices will pop when Irvine gets built out. I see that you only mentioned Arcadia and left out San Marino to illustrate your point. (it’s one of the 8 cities I posted)


I don't know which 8 we are talking about San Marino is really a bad comp in that it is very small and is a significantly different price point.  It would be the ultimate example of re-sale positively affecting pricing.


Quote

When I looked at the numbers for Irvine and other traditional Asian pockets, I was really surprised of how little price separation there is and how almost every Asian cities have Irvine like downward price resilience. I mean San Gabriel Alhambra Rowland Heights are shitty areas to live in IMO. I think the more interesting question is why didn’t more Chinese/FCB choose Irvine over those shitty areas?


$640K (DB) and $708K (Walnut) is not significantly different than $840K (Irvine).  And again..you are comparing largely new home sales versus resales.



Quote

I can go to the park as you suggested but how am I supposed to see people who are not here?
Before you start putting words in my mouth, go back and read what I said. I never said newer villages are only filled with Chinese nuclear FCBs. I said you see more % of Chinese FCBs in newer villages which I still contest is true.

Let me bring the discussion back to something more relevant. Economy is getting bad in China, there are more and more Chinese investors putting their previously empty homes on the rental market to capture some return. This is especially evident in newer villages like Eastwood and GP neighborhoods. The oversupply of rental homes available is driving rent significantly down. You have Chinese realtors listing 1 million-dollar homes for rent for about $3000 a month now. My parents are Irvine landlords, and this is pissing them off.


Again...you fundamentally misunderstand why Chinese buy homes in US.  It is not generally for investment purpose...it's basically their backup plan.  We have two rentals near us, both were Chinese FCB.  One was buying it for his daughter that thought about going to school and the other was to potentially have their parents move to the US.  Neither things happened and there has been renters since.  They put the house on the market to rent because why not.   

Most people who can be FCBs have assets elsewhere...they buy in Irvine to have a backup plan for their families in case things go south in PRC.  They're not worried about a crash in China because they already moved a ton of money out of China and are basically plan their escape if they run into economic or political problems.

Quote

The fascinating thing on this forum is that anyone who isn’t bullish on Irvine all the time and on all fronts gets called out. People like CV will jump out and give a snide comment like not buying Irvine home now is putting life on hold. You called out people for “bashing Irvine” for merely pointing out that there may be price declines.

I’ve always believed in the long-term future of Irvine. But I do see a US slowdown + China meltdown looming. I think that will create a good short term buying opportunity. If you have a housing NEED, then please pay this no mind. Fulfill your need. If you just WANT to buy a better/bigger house, then waiting for a better entry point is the smart thing to do.

I didn't call anyone for bashing Irvine.  On the contrary...I have been called blind for "singing the praises" of Irvine.  Go back to anyone posts where anyone said that Irvine would not suffer price declines? 

I think the Irvine market will just stay flat...most people here have decent jobs and have a lot of equity and low interest rates.  At worst, they just stay put for 5 years.  Again...this assume a regular rescission. 

Offline Irvinecommuter

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Re: When would be next housing Bottom?
« Reply #235 on: December 06, 2018, 01:36:45 PM »
This is why having a disscussion with you is difficult. You brought up Neihu and YangMing Shan first. YOU called them the ultra posh areas of Taipei.  I was merely following the premises you set.  >:(

You can just do a quick google search. Numerous travel blog/sites called Xinyi the most posh area of Taipei.

Downtown LA is is not very accurate description either. Even Wikipedia called Xinyi the Manhattan of Taiwan. And YangMing Shan is a freaking National Park. Sure there are some nice mansions but not a good comparison to Irvine or Anywhere we talked about.


Just about anyone from Taiwan knows YangMing Shan and Neihu...they are the ultra posh areas of Taipei. 

THere are no real equivalents in Taiwan to Irvine...that's important.  Yangmingshan is the closest thing with single family American style homes.

Do you even read what you post? YOU are the one that started the Taiwan to Irvine comparison.
And No. Yangmingshan is not the closest thing with single family American style home. You are confusing Beitou with Yangming Shan.
I repeat, Yangming Shan is a freaking National Park.

Do you read what I wrote? 

Quote
There are plenty of places in Taiwan that are relatively clean but Taiwan in general is still not Irvine clean.  Not to mention Taipei housing prices are pretty ridiculous as compared to relative income.  Additionally, most of the "houses" are condos rather than SFRs or Townhouses...unless you live in YangMinShan or Neihu. 

Not a single mention of Irvine in that post. 

These are the properties in Yangminshan

https://www.rentaltw.com/property-10749

https://www.wsj.com/articles/SB10001424052970204349404578099781248583090

https://www.sothebysrealty.com/eng/sales/twn

Yangminshan was where the US diplomats and American soldiers used to live...so there are a lot of American style housing on there.

Other areas with American style homes:  Shilin (which is way outside of Taipei) and Neihu (which is where a lot of expats and returning Taiwanese live).

https://www.lenihansothebysrealty.com/sales/taipei-city-tw-twn/single-family-home-type/townhouse-type

Xinyi is super urban area.  It is definitely expensive but no SFRs or townhomes there.

Offline Mety

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Re: When would be next housing Bottom?
« Reply #236 on: December 06, 2018, 01:40:10 PM »
Hey guys, no disrespect, but you guys can text each other about Taiwanese cities. Let's stay with Irvine and maybe OC areas in this thread. There were some interesting insight from you guys about FCBs.

Do you really think FCBs will have that much impact on RE market? They certainly did in the past by buying many properties, but I'm talking about from now on going forward. If they sell en masse in a future, do you think that will cause the price drop significantly? OR if they do not sell, do you think that will keep the market going up each year?

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Offline Irvinecommuter

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Re: When would be next housing Bottom?
« Reply #237 on: December 06, 2018, 01:50:14 PM »
Hey guys, no disrespect, but you guys can text each other about Taiwanese cities. Let's stay with Irvine and maybe OC areas in this thread. There were some interesting insight from you guys about FCBs.

Do you really think FCBs will have that much impact on RE market? They certainly did in the past by buying many properties, but I'm talking about from now on going forward. If they sell en masse in a future, do you think that will cause the price drop significantly? OR if they do not sell, do you think that will keep the market going up each year?

Works for me.

I think if FCBs all mass sell...yes it would have a significant effect on RE prices.  Look at what happened in the 1990s when Japanese buyers starting  selling commercial property en mass..

https://www.nytimes.com/1995/06/09/business/japanese-are-in-rush-to-sell-their-real-estate-in-the-us.html

I would also say that if FCBs are sell en mass...there are whole lot of other problems to deal with. 

I don't expected prices in Irvine (or much elsewhere) to go up in the next 3-7 years...I think it will stay relative flat (3-5% growth max) and low volume.
« Last Edit: December 06, 2018, 01:55:48 PM by Irvinecommuter »

Offline Kenkoko

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Re: When would be next housing Bottom?
« Reply #238 on: December 06, 2018, 04:12:54 PM »

Again...you fundamentally misunderstand why Chinese buy homes in US.  It is not generally for investment purpose...it's basically their backup plan. 

Do you have any empirical evidence to back up your claim? if not, it's your anecdote vs my anecdote.

Most people who can be FCBs have assets elsewhere...they buy in Irvine to have a backup plan for their families in case things go south in PRC.  They're not worried about a crash in China because they already moved a ton of money out of China and are basically plan their escape if they run into economic or political problems.

I agree with part of that.  Their assets in Irvine are just a backup plan. But I disagree with you that they are not worried about a crash in China. Most of these Chinese FCBs who bought Irvine homes still do business in China. These Irvine homes are just rainy day cash that they stashed away safely. When shit hits the fan in China, the actual escape places they would move to are places like Singapore where they can still speak Chinese and live a much similar life style than Irvine. Even Australia is more likely as an escape spot than USA just because of the proximity. Irvine homes to them are like cash sitting in a safety deposit box. They would not have any mental attachments preventing them to sell when they need that cash.

I didn't call anyone for bashing Irvine. 

I don't get the Irvine bashing. 

I don't get why pointing out possible decline on Irvine home prices = Irvine bashing.

Offline Kenkoko

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Re: When would be next housing Bottom?
« Reply #239 on: December 06, 2018, 04:25:32 PM »
Hey guys, no disrespect, but you guys can text each other about Taiwanese cities. Let's stay with Irvine and maybe OC areas in this thread. There were some interesting insight from you guys about FCBs.

Do you really think FCBs will have that much impact on RE market? They certainly did in the past by buying many properties, but I'm talking about from now on going forward. If they sell en masse in a future, do you think that will cause the price drop significantly? OR if they do not sell, do you think that will keep the market going up each year?

I apologize. Taiwan is where I grew up and still has a lot of emotional attachment to. Just got all worked up when I felt my hometown was being misrepresented, especially by someone claiming to be from there.

I think if we just have a China meltdown, you would barely notice it. We have enough demand from non Chinese FCBs to absorb Chinese FCBs dumping.
If we have a US slowdown that is timed perfectly with China meltdown, you could see a sizable short term down. A lot homes bought by these Chinese FCBs over a decade could hit the market in a very short period of time. That'd be a good buying opportunity.
« Last Edit: December 06, 2018, 04:33:53 PM by Kenkoko »

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