Author Topic: Escalation Clause  (Read 1721 times)

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Offline kpatnps

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Re: Escalation Clause
« Reply #15 on: April 01, 2021, 02:19:21 PM »

What is happening in the market is just about everywhere....Irvine, the rest of Orange County, most all parts of CA, Vegas, Arizona, Utah, Idaho, Texas, Florida, Nashville, Atlanta, etc.  The only larger market that isn't on fire is NYC. So what is going on is real and not froth.  It reminds me of what happened in late 2012 to the end of 2013 when prices rose about 20%.  At some point, we will calm down and get more to a balanced market but that won't happen until prices go higher and/or interest rates go significantly higher and/or we get significantly more supply.

curious why you think that just because it is happening everywhere it is "real and not froth".  Do overpriced markets only happen in small pockets?

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Re: Escalation Clause
« Reply #16 on: April 01, 2021, 07:43:53 PM »

What is happening in the market is just about everywhere....Irvine, the rest of Orange County, most all parts of CA, Vegas, Arizona, Utah, Idaho, Texas, Florida, Nashville, Atlanta, etc.  The only larger market that isn't on fire is NYC. So what is going on is real and not froth.  It reminds me of what happened in late 2012 to the end of 2013 when prices rose about 20%.  At some point, we will calm down and get more to a balanced market but that won't happen until prices go higher and/or interest rates go significantly higher and/or we get significantly more supply.

curious why you think that just because it is happening everywhere it is "real and not froth".  Do overpriced markets only happen in small pockets?

It is real because it's not just one buyer, pretty much every home that I've made offers on (ranging from $600s to $3m) has 3 to 20+ offers.  So do you think that all those buyers that are making strong offers are doing so based upon market dynamics. It's as simple as economics 101 where demand is outstripping supply by a wide margin so in order for the market to find equilibrium prices have to continue to increase unless the inventory of homes significantly increases.  It's not a supply problem, it's a strong demand problem because sales volumes are at record levels (March 2021 was another record closing month).  Saying a market is overpriced is subjective...you may consider home prices to be overpriced in many areas but the market doesn't agree with you because you are seeing record transaction levels.
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Offline kpatnps

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Re: Escalation Clause
« Reply #17 on: April 03, 2021, 07:42:51 AM »

What is happening in the market is just about everywhere....Irvine, the rest of Orange County, most all parts of CA, Vegas, Arizona, Utah, Idaho, Texas, Florida, Nashville, Atlanta, etc.  The only larger market that isn't on fire is NYC. So what is going on is real and not froth.  It reminds me of what happened in late 2012 to the end of 2013 when prices rose about 20%.  At some point, we will calm down and get more to a balanced market but that won't happen until prices go higher and/or interest rates go significantly higher and/or we get significantly more supply.

curious why you think that just because it is happening everywhere it is "real and not froth".  Do overpriced markets only happen in small pockets?

It is real because it's not just one buyer, pretty much every home that I've made offers on (ranging from $600s to $3m) has 3 to 20+ offers.  So do you think that all those buyers that are making strong offers are doing so based upon market dynamics. It's as simple as economics 101 where demand is outstripping supply by a wide margin so in order for the market to find equilibrium prices have to continue to increase unless the inventory of homes significantly increases.  It's not a supply problem, it's a strong demand problem because sales volumes are at record levels (March 2021 was another record closing month).  Saying a market is overpriced is subjective...you may consider home prices to be overpriced in many areas but the market doesn't agree with you because you are seeing record transaction levels.

No one is arguing with you whether this is or is not a bubble.  Neither me nor the two people I agreed with regarding the state of the market insinuated or implied we are in a bubble.  Yet you hilariously implied we made that argument and argued against it, when all I asked you was to clarify why it was “real and not froth” (your words not mine) simply because “it is happening everywhere”.  Unfortunately that logic fails miserably.   The very nature in which a bubble is formed is because many people continue to buy at overpriced valuations, not just one or a few. 

The “market” may not agree with someone saying a home (or the stocks or gold or crypto or tulips bulb) was overpriced at a certain time, but that doesnt mean the market is right.  Many in mid-2000’s were saying homes were overpriced and the market didnt agree with them either….. until it did.  That, however, is a whole new argument. 

However not to detract, all I wanted to know was your logic in thinking that bubbles cant form because its happening everywhere.

Offline eyephone

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Re: Escalation Clause
« Reply #18 on: April 03, 2021, 03:39:48 PM »

What is happening in the market is just about everywhere....Irvine, the rest of Orange County, most all parts of CA, Vegas, Arizona, Utah, Idaho, Texas, Florida, Nashville, Atlanta, etc.  The only larger market that isn't on fire is NYC. So what is going on is real and not froth.  It reminds me of what happened in late 2012 to the end of 2013 when prices rose about 20%.  At some point, we will calm down and get more to a balanced market but that won't happen until prices go higher and/or interest rates go significantly higher and/or we get significantly more supply.

curious why you think that just because it is happening everywhere it is "real and not froth".  Do overpriced markets only happen in small pockets?

I believe rental prices have drop significantly throughout the US. (For example San Francisco) So this might be a sign. Also, the cdc no eviction order. It is a problem now for landlords and it will become a big mess once lifted.

Offline sleepy5136

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Re: Escalation Clause
« Reply #19 on: April 03, 2021, 06:21:57 PM »

What is happening in the market is just about everywhere....Irvine, the rest of Orange County, most all parts of CA, Vegas, Arizona, Utah, Idaho, Texas, Florida, Nashville, Atlanta, etc.  The only larger market that isn't on fire is NYC. So what is going on is real and not froth.  It reminds me of what happened in late 2012 to the end of 2013 when prices rose about 20%.  At some point, we will calm down and get more to a balanced market but that won't happen until prices go higher and/or interest rates go significantly higher and/or we get significantly more supply.

curious why you think that just because it is happening everywhere it is "real and not froth".  Do overpriced markets only happen in small pockets?

I believe rental prices have drop significantly throughout the US. (For example San Francisco) So this might be a sign. Also, the cdc no eviction order. It is a problem now for landlords and it will become a big mess once lifted.
California is giving handouts to cover missed rent. You have to "qualify" so it might not be as bad as expected. Not sure about states outside of California though.

Offline Dr. CA Real Estate

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Re: Escalation Clause
« Reply #20 on: April 03, 2021, 06:23:58 PM »

What is happening in the market is just about everywhere....Irvine, the rest of Orange County, most all parts of CA, Vegas, Arizona, Utah, Idaho, Texas, Florida, Nashville, Atlanta, etc.  The only larger market that isn't on fire is NYC. So what is going on is real and not froth.  It reminds me of what happened in late 2012 to the end of 2013 when prices rose about 20%.  At some point, we will calm down and get more to a balanced market but that won't happen until prices go higher and/or interest rates go significantly higher and/or we get significantly more supply.

curious why you think that just because it is happening everywhere it is "real and not froth".  Do overpriced markets only happen in small pockets?

I believe rental prices have drop significantly throughout the US. (For example San Francisco) So this might be a sign. Also, the cdc no eviction order. It is a problem now for landlords and it will become a big mess once lifted.

Thats not true unfortunately
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Offline eyephone

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Re: Escalation Clause
« Reply #21 on: April 03, 2021, 06:37:12 PM »

What is happening in the market is just about everywhere....Irvine, the rest of Orange County, most all parts of CA, Vegas, Arizona, Utah, Idaho, Texas, Florida, Nashville, Atlanta, etc.  The only larger market that isn't on fire is NYC. So what is going on is real and not froth.  It reminds me of what happened in late 2012 to the end of 2013 when prices rose about 20%.  At some point, we will calm down and get more to a balanced market but that won't happen until prices go higher and/or interest rates go significantly higher and/or we get significantly more supply.

curious why you think that just because it is happening everywhere it is "real and not froth".  Do overpriced markets only happen in small pockets?

I believe rental prices have drop significantly throughout the US. (For example San Francisco) So this might be a sign. Also, the cdc no eviction order. It is a problem now for landlords and it will become a big mess once lifted.

Thats not true unfortunately
Rental prices have dropped in San Francisco, NYC, parts of LA.

Offline CogNeuroSci

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Re: Escalation Clause
« Reply #22 on: April 03, 2021, 11:06:23 PM »

What is happening in the market is just about everywhere....Irvine, the rest of Orange County, most all parts of CA, Vegas, Arizona, Utah, Idaho, Texas, Florida, Nashville, Atlanta, etc.  The only larger market that isn't on fire is NYC. So what is going on is real and not froth.  It reminds me of what happened in late 2012 to the end of 2013 when prices rose about 20%.  At some point, we will calm down and get more to a balanced market but that won't happen until prices go higher and/or interest rates go significantly higher and/or we get significantly more supply.

curious why you think that just because it is happening everywhere it is "real and not froth".  Do overpriced markets only happen in small pockets?

It is real because it's not just one buyer, pretty much every home that I've made offers on (ranging from $600s to $3m) has 3 to 20+ offers.  So do you think that all those buyers that are making strong offers are doing so based upon market dynamics. It's as simple as economics 101 where demand is outstripping supply by a wide margin so in order for the market to find equilibrium prices have to continue to increase unless the inventory of homes significantly increases.  It's not a supply problem, it's a strong demand problem because sales volumes are at record levels (March 2021 was another record closing month).  Saying a market is overpriced is subjective...you may consider home prices to be overpriced in many areas but the market doesn't agree with you because you are seeing record transaction levels.

No one is arguing with you whether this is or is not a bubble.  Neither me nor the two people I agreed with regarding the state of the market insinuated or implied we are in a bubble.  Yet you hilariously implied we made that argument and argued against it, when all I asked you was to clarify why it was “real and not froth” (your words not mine) simply because “it is happening everywhere”.  Unfortunately that logic fails miserably.   The very nature in which a bubble is formed is because many people continue to buy at overpriced valuations, not just one or a few. 

The “market” may not agree with someone saying a home (or the stocks or gold or crypto or tulips bulb) was overpriced at a certain time, but that doesnt mean the market is right.  Many in mid-2000’s were saying homes were overpriced and the market didnt agree with them either….. until it did.  That, however, is a whole new argument. 

However not to detract, all I wanted to know was your logic in thinking that bubbles cant form because its happening everywhere.

There is a classic debate in evolutionary bio between 2 big name scientists going back and forth from elegant letters to even more elegant letters when eventually everyone in the scientific community, including the 2 scientists, realized they were using slightly different operational definitions of the term "adaptation" and, given adjustments for that, each scientist's position was consistent with the other's.

Whatever "real" or "not real" means to you or whomever, who gives a shit? Martin's post that kpatnps has a problem with actually can run on its own; it's not necessarily a response to anyone that, if so, could be interpreted as misleading or biased or arrogant or misunderstanding the question. It's just a statement that explains the mechanics behind the current widespread situation. Anything deeper (which I don't think is warranted) comes from the complainer (who seems to have misunderstood Martin's premise or motive).
« Last Edit: April 03, 2021, 11:22:56 PM by CogNeuroSci »

Offline zubs

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Re: Escalation Clause
« Reply #23 on: April 04, 2021, 08:41:42 AM »
Once again for new readers, talkirvine is the evolution from IHB which was a bear blog back in 2006.
After 14 years, do you think the participants who laughed at all the buyers in 2006 have morphed into bulls?

It certainly can happen, but we were the original bears.

Offline irvinehomeowner

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Re: Escalation Clause
« Reply #24 on: April 04, 2021, 10:06:25 AM »
Once again for new readers, talkirvine is the evolution from IHB which was a bear blog back in 2006.
After 14 years, do you think the participants who laughed at all the buyers in 2006 have morphed into bulls?

It certainly can happen, but we were the original bears.
Going from bull to bear was an exercise in futility from my own personal experience.

Just buy when you can and don't look back. :)
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Offline zubs

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Re: Escalation Clause
« Reply #25 on: April 04, 2021, 10:40:53 AM »
In 2011 while in the midst of bear ideology and "beariness" I tried to remind myself that it isn't always going to be like this.  I'm surrounding myself with bears, so my mind will tend to fall that way. 

Just watching people on talkirvine start buying again in 2011/2012 helped me buy too.
Otherwise, I was in the bear mindframe.....So I countered my own ideas and hoped for the best.


You can actually go back 10 years and read our posts.  Lots of wrong and right.

Offline zubs

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Re: Escalation Clause
« Reply #26 on: April 04, 2021, 11:16:14 AM »
So in 2018, when some posters here said we were about to take a shit in realestate, I was not so sure....last time we were going to take a shit, the government came in and printed to "save" the economy.

I was certain government would print again, and lo and behold!....Powell brought the interest rates down at the start of 2019...just as predicted.

Offline CogNeuroSci

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Re: Escalation Clause
« Reply #27 on: April 04, 2021, 02:38:17 PM »
I just reviewed some of kpatnps's various other posts. My suspicions were confirmed: dude may suffer a little bit from BDH! LOL.
« Last Edit: April 04, 2021, 03:08:05 PM by CogNeuroSci »

Offline talkirvine

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Re: Escalation Clause
« Reply #28 on: April 04, 2021, 07:25:08 PM »
I just reviewed some of kpatnps's various other posts. My suspicions were confirmed: dude may suffer a little bit from BDH! LOL.
What is BDH?

Offline CogNeuroSci

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Re: Escalation Clause
« Reply #29 on: April 04, 2021, 07:43:52 PM »
I just reviewed some of kpatnps's various other posts. My suspicions were confirmed: dude may suffer a little bit from BDH! LOL.
What is BDH?

Please do a search. I'm afraid to type it.

 

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