Author Topic: Experts are turning housing bear  (Read 531 times)

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Offline OCLuvr

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Experts are turning housing bear
« on: June 20, 2021, 04:42:40 PM »
Bill McBride, calculatedrisk fame, for the first time since 2013 is not bullish on housing anymore.
Thoughts?

Offline USCTrojanCPA

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Re: Experts are turning housing bear
« Reply #1 on: June 20, 2021, 05:07:55 PM »
Bill McBride, calculatedrisk fame, for the first time since 2013 is not bullish on housing anymore.
Thoughts?

I think the price run-up is in the 7th/8th inning similar to what we saw in 2013 when the 20% increase prices levels out after about 12 months. Don't expect prices to drop, I think prices will probably be flattish once prices level out.
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Offline OCLuvr

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Re: Experts are turning housing bear
« Reply #2 on: June 20, 2021, 05:50:24 PM »
Quoting him
“ The recent price increases make sense from a supply and demand perspective, but prices do seem too high.  And I suppose the frenzy is bothering me.”
Essentially, he is saying as supply will increase in the second half of the year, real estate becomes local and cities where people bought based on speculation, prices will decrease.
So, which cities in SoCal do we believe people bought based on speculation?

Offline USCTrojanCPA

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Re: Experts are turning housing bear
« Reply #3 on: June 20, 2021, 06:29:30 PM »
Quoting him
“ The recent price increases make sense from a supply and demand perspective, but prices do seem too high.  And I suppose the frenzy is bothering me.”
Essentially, he is saying as supply will increase in the second half of the year, real estate becomes local and cities where people bought based on speculation, prices will decrease.
So, which cities in SoCal do we believe people bought based on speculation?

The cities that will be most at risk locally for a price drop when things normalize will be the IE and cities with bad/marginal schools.  Right now, there people are buying garbage properties because there's very little inventory and there's a serious case of FOMO.  Those buyers will have cold slap of reality hit them when the market becomes more neutral. 
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Offline OCLuvr

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Re: Experts are turning housing bear
« Reply #4 on: June 20, 2021, 06:31:34 PM »
Totally agreed

Offline daedalus

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Re: Experts are turning housing bear
« Reply #5 on: June 20, 2021, 07:27:57 PM »
So many factors.  Wage inflation or not, WFH effects, mortgage rates are top 3 I think. 

Offline Compressed-Village

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Re: Experts are turning housing bear
« Reply #6 on: June 20, 2021, 10:04:21 PM »
When was the last time that someone eat all you can eat and say that, it would not affect my weights days after days or months after months. In this case the FED has been on a binge eating diet for several years now. COVID really gave them no choice but double down on the rate binge decrease and balloon the purchase of assets on their balace sheet to right the helms. Damn if they do and damn if they don't, collateral damage will occur and our FED choose to deal with this later. Well, the later is in the near future, maybe a couple of years.

What different that I see is because I am local to Irvine but I travel quite a bit outside of Irvine in the US to know that housing health are very local specific. Drive around Irvine and tell me why are so many homes bought outright without anyone living in them even in this market. More than 56 % of Irvine homes carry no debts and have no mortgage payments. For the entire city of 350 K residence, there are 350 available home for sale.

So lets say 2 years later is now. Rate rocketed to high 4 or low 5, what gonna happen to Irvine real estate?

Nothing! No one sell because the less than 50 % already locked into the low rate and would never give up on their pad.

Nothing is not exactly right, we will have high infation and stagnate. Stagflation, no growth and high inflation. Meanwhile, high properties price will attract high networth individuals. Example HK dual citizenships are fleeing back to US. Do you think they will buy in IE and Santa Ana and call it home?

 

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