Poll: Irvine Housing Prediction June 2022

[Yousr]

So a 10% increase in 2022 followed by a 7% decline in 2023 is what you consider agreeing with you 

Yes!  If the housing bust only lasts one year, then we'll all be sitting pretty in 2024.  Unfortunately, Orange County has had price declines in about 10 of the past 30 years - 1/3 of the time - because housing busts tend to last about 5-6 years in length. 

If you are saying this time will be different, well, then the burden is on you to explain why.

I think that even in the worst case scenario that this bust lasts for 5-6 years, just  by considering how much the run up in prices have been over the past couple of years it was completely worth it to buy anytime in 2018, 2019, 2020 and the larger part of 2021. The declines in Irvine are single digit historically and even in five years shouldn’t be more than 50%. Now considering the crazy inflation numbers and the obscenely low interest rates in the past. Borrowing a million bucks and holding doesn’t seem such a risky proposition to me specially for a first time buyer

[USCTrojanCPA]

The price decline prediction depends on which time period we are talking about.  Are we talking about where prices were at the beginning of 2022 or at the very peak which happened in April/May?  If we are talking using prices at the beginning of 2022 then I think prices will probably be flat to up to 5% down but if we are talking about from April/May then we may be talking about price declines of from 10% to up to 15% since prices in April/May were up about 10% from the beginning of 2022.

[zubs]

LL knows he's full of shit.
He just trolling u.
why do you react is the real question....why you letting him in?

It's not him that's the problem.

[OCtoSV]

Every time I think prices are high in Irvine, I take a look at parts of the Bay to see real craziness. Many of those buyers are in tech and could be remote and if they could, why would they spend $4.125m ($635k over asking) for this:
https://www.redfin.com/CA/Cupertino/7646-Berland-Ct-95014/home/1418200

Compared to places like Cupertino and Saratoga, Irvine is dirt cheap still. I know the job market is different there but anecdotally I'm aware of several who sold in the Bay and bought in Orange County.

It's because of Monta Vista High... the realtors even mention it in the first sentence.  So they are selling not just the house, but the illusion that the buyer's kid will get into an Ivy...

I make this point all the time - Irvine is a smokin deal if remote works for you. The higher you go the harder that is to pull off, and all the biggies want people back in the office. Saratoga is full of (mostly) Asian/South Asian CEOs and some very nice wineries, and over the hill is Santa Cruz. Cupertino is the original aspirational Asian/South Asian suburb. I did some alumni recruiting for the Viterbi School of Engineering and they held a separate session just for the Cupertino high schools. I would wager that the Bay area’s top high schools in aggregate get more UC/USC admit slots than SoCals best. Maybe Stanford/Ivies too.

I’m down here right now and it is such a refreshing change, even watching the local news. It feels so much more relaxed and less serious.

[Davidlee199]

Don’t expect more people are moving down to Irvine from the Bay Area.  Apple/Google is asking all employees to work at the office min 2 days a week.  Recession is coming, employees prefer to hand out with their managers and make sure their jobs are safe.  2nd tier tech companies are laying off people. As of late June, more than 22,000 workers in the U.S. tech sector have been laid off in mass job cuts so far in 2022,

[OCtoSV]

Don’t expect more people are moving down to Irvine from the Bay Area.  Apple/Google is asking all employees to work at the office min 2 days a week.  Recession is coming, employees prefer to hand out with their managers and make sure their jobs are safe.  2nd tier tech companies are laying off people. As of late June, more than 22,000 workers in the U.S. tech sector have been laid off in mass job cuts so far in 2022,

Intel and NVIDIA both implemented hiring freezes. If remote drove up Irvine prices they will come down as much, if not overshoot. NVIDIA down 48% this year.

[Sidehussle]

The price decline prediction depends on which time period we are talking about.  Are we talking about where prices were at the beginning of 2022 or at the very peak which happened in April/May?  If we are talking using prices at the beginning of 2022 then I think prices will probably be flat to up to 5% down but if we are talking about from April/May then we may be talking about price declines of from 10% to up to 15% since prices in April/May were up about 10% from the beginning of 2022.

Makes most sense to measure year over year declines /increases. What is the Irvine percent change June 2021 vs June 2022?

[ThirtySomethingWEquity]

Don’t expect more people are moving down to Irvine from the Bay Area.  Apple/Google is asking all employees to work at the office min 2 days a week.  Recession is coming, employees prefer to hand out with their managers and make sure their jobs are safe.  2nd tier tech companies are laying off people. As of late June, more than 22,000 workers in the U.S. tech sector have been laid off in mass job cuts so far in 2022,

Intel and NVIDIA both implemented hiring freezes. If remote drove up Irvine prices they will come down as much, if not overshoot. NVIDIA down 48% this year.

A lot of the reported "hiring freezes" aren't freezes, they're reallocation of headcount, they're a "freeze" in some departments and slowing growth in others, etc.  Even Meta is unfreezing at this point, though they are going to be hiring slower.  Still allowing remote from what I've heard. 

G and Amazon both have big offices in Irvine, and Aliso has MSFT which is small but growing.  You can bet that people will want to work out of those offices if prices go back to sanity.  I do think G and Amazon pay less for SoCal compared to the Bay area, but not by much.

However, most people at tech companies are compensated with stock, and what the RSUs giveth, they RSU's taketh away.  So even well paid tech workers coming down to OC are going to have smaller down payments for a good while, which should deflate things some.  I'm in the camp of thinking 10-15% down from peak in the next 18 months.

[USCTrojanCPA]

The price decline prediction depends on which time period we are talking about.  Are we talking about where prices were at the beginning of 2022 or at the very peak which happened in April/May?  If we are talking using prices at the beginning of 2022 then I think prices will probably be flat to up to 5% down but if we are talking about from April/May then we may be talking about price declines of from 10% to up to 15% since prices in April/May were up about 10% from the beginning of 2022.

Makes most sense to measure year over year declines /increases. What is the Irvine percent change June 2021 vs June 2022?

If we compare June 2021 vs June 2022 then prices are up over 20%.  If we look at the peak in pricing which happened in April 2022 then we are down about 3-5% but still up over 5% from the beginning of the year.

[Agent Joe]

It's fun to speculate but the truth is no one knows. I personally believe that Irvine will hold up very well in any kind of market e.g. up, down, sideways, major crash. Think of Irvine as the S&P500 index.

To someone's comment about FCB having to sell because their 5-year ARM is about to skyrocket, he must have forgotten what the "C" stands for in "FCB". IMHO, there would be a very small percentage of foreign landlords needing to sell and that would have little effect on the overall market. In fact, the foreign landlords are one of the reasons that the Irvine market will hold up better because they are just diversifying and parking their "cash" here. They are mostly not leveraging heavily or speculating like some local investors would.

Now my question is...under what conditions would you start buying if you were a long-term investor?

[Liar Loan]

Every time I think prices are high in Irvine, I take a look at parts of the Bay to see real craziness. Many of those buyers are in tech and could be remote and if they could, why would they spend $4.125m ($635k over asking) for this:
https://www.redfin.com/CA/Cupertino/7646-Berland-Ct-95014/home/1418200

Compared to places like Cupertino and Saratoga, Irvine is dirt cheap still. I know the job market is different there but anecdotally I'm aware of several who sold in the Bay and bought in Orange County.

It's because of Monta Vista High... the realtors even mention it in the first sentence.  So they are selling not just the house, but the illusion that the buyer's kid will get into an Ivy...

I make this point all the time - Irvine is a smokin deal if remote works for you. The higher you go the harder that is to pull off, and all the biggies want people back in the office. Saratoga is full of (mostly) Asian/South Asian CEOs and some very nice wineries, and over the hill is Santa Cruz. Cupertino is the original aspirational Asian/South Asian suburb. I did some alumni recruiting for the Viterbi School of Engineering and they held a separate session just for the Cupertino high schools. I would wager that the Bay area’s top high schools in aggregate get more UC/USC admit slots than SoCals best. Maybe Stanford/Ivies too.

I’m down here right now and it is such a refreshing change, even watching the local news. It feels so much more relaxed and less serious.

You probably already know this, but San Francisco prices are already down from 2021:

Home Prices Are Starting to Buckle in Tech-Fueled San Francisco

The median house price in the city dropped 3% from a year earlier to $1.89 million in June, according to a report Thursday by brokerage Compass Inc., after cresting above a record $2 million in the previous three months.

https://www.bloomberg.com/news/articles/2022-07-07/san-francisco-home-prices-start-to-fall-as-headwinds-mount?srnd=premium

The Bay Area Housing Market Is Cooling More Rapidly Than Anywhere Else in the Country

Five of the 10 U.S. housing markets that have cooled fastest this year are in northern California–San Jose, Oakland, San Francisco, Sacramento and Stockton

https://www.redfin.com/news/housing-markets-cooling-fastest-bay-area-2022/

[OCtoSV]

Every time I think prices are high in Irvine, I take a look at parts of the Bay to see real craziness. Many of those buyers are in tech and could be remote and if they could, why would they spend $4.125m ($635k over asking) for this:
https://www.redfin.com/CA/Cupertino/7646-Berland-Ct-95014/home/1418200

Compared to places like Cupertino and Saratoga, Irvine is dirt cheap still. I know the job market is different there but anecdotally I'm aware of several who sold in the Bay and bought in Orange County.

It's because of Monta Vista High... the realtors even mention it in the first sentence.  So they are selling not just the house, but the illusion that the buyer's kid will get into an Ivy...

I make this point all the time - Irvine is a smokin deal if remote works for you. The higher you go the harder that is to pull off, and all the biggies want people back in the office. Saratoga is full of (mostly) Asian/South Asian CEOs and some very nice wineries, and over the hill is Santa Cruz. Cupertino is the original aspirational Asian/South Asian suburb. I did some alumni recruiting for the Viterbi School of Engineering and they held a separate session just for the Cupertino high schools. I would wager that the Bay area’s top high schools in aggregate get more UC/USC admit slots than SoCals best. Maybe Stanford/Ivies too.

I’m down here right now and it is such a refreshing change, even watching the local news. It feels so much more relaxed and less serious.

You probably already know this, but San Francisco prices are already down from 2021:

Home Prices Are Starting to Buckle in Tech-Fueled San Francisco

The median house price in the city dropped 3% from a year earlier to $1.89 million in June, according to a report Thursday by brokerage Compass Inc., after cresting above a record $2 million in the previous three months.

https://www.bloomberg.com/news/articles/2022-07-07/san-francisco-home-prices-start-to-fall-as-headwinds-mount?srnd=premium

The Bay Area Housing Market Is Cooling More Rapidly Than Anywhere Else in the Country

Five of the 10 U.S. housing markets that have cooled fastest this year are in northern California–San Jose, Oakland, San Francisco, Sacramento and Stockton

https://www.redfin.com/news/housing-markets-cooling-fastest-bay-area-2022/

SF is cratering - rents down there 26% as well. Silicon Valley housing market has stalled to some extent though the $4M+ market which is usually mostly cash transactions is still robust. I am firmly convinced that rates are headed to 10% in order to puncture housing specualtion, and I look forward to buying my south OC retirement pad in a few years at 10%+ rates and a steep discount to current pricing.

[USCTrojanCPA]

Every time I think prices are high in Irvine, I take a look at parts of the Bay to see real craziness. Many of those buyers are in tech and could be remote and if they could, why would they spend $4.125m ($635k over asking) for this:
https://www.redfin.com/CA/Cupertino/7646-Berland-Ct-95014/home/1418200

Compared to places like Cupertino and Saratoga, Irvine is dirt cheap still. I know the job market is different there but anecdotally I'm aware of several who sold in the Bay and bought in Orange County.

It's because of Monta Vista High... the realtors even mention it in the first sentence.  So they are selling not just the house, but the illusion that the buyer's kid will get into an Ivy...

I make this point all the time - Irvine is a smokin deal if remote works for you. The higher you go the harder that is to pull off, and all the biggies want people back in the office. Saratoga is full of (mostly) Asian/South Asian CEOs and some very nice wineries, and over the hill is Santa Cruz. Cupertino is the original aspirational Asian/South Asian suburb. I did some alumni recruiting for the Viterbi School of Engineering and they held a separate session just for the Cupertino high schools. I would wager that the Bay area’s top high schools in aggregate get more UC/USC admit slots than SoCals best. Maybe Stanford/Ivies too.

I’m down here right now and it is such a refreshing change, even watching the local news. It feels so much more relaxed and less serious.

You probably already know this, but San Francisco prices are already down from 2021:

Home Prices Are Starting to Buckle in Tech-Fueled San Francisco

The median house price in the city dropped 3% from a year earlier to $1.89 million in June, according to a report Thursday by brokerage Compass Inc., after cresting above a record $2 million in the previous three months.

https://www.bloomberg.com/news/articles/2022-07-07/san-francisco-home-prices-start-to-fall-as-headwinds-mount?srnd=premium

The Bay Area Housing Market Is Cooling More Rapidly Than Anywhere Else in the Country

Five of the 10 U.S. housing markets that have cooled fastest this year are in northern California–San Jose, Oakland, San Francisco, Sacramento and Stockton

https://www.redfin.com/news/housing-markets-cooling-fastest-bay-area-2022/

SF is cratering - rents down there 26% as well. Silicon Valley housing market has stalled to some extent though the $4M+ market which is usually mostly cash transactions is still robust. I am firmly convinced that rates are headed to 10% in order to puncture housing specualtion, and I look forward to buying my south OC retirement pad in a few years at 10%+ rates and a steep discount to current pricing.

You can't have mortgage rates (which are longer term) be 10% if we are in a recession and the yield curve is inverted.  Can the Fed bump the Fed Funds rates to 5%, 6%, or 8%?  Maybe but that's what short term rates are.  To get mortgage interest rates to 10% you'll need inflation to increase materially from today and if we are in recession or going into one that won't happen. Mortgage rates have already begun to roll over a bit as is. Hard to have high mortgage rates when there is demand destruction due to people losing their jobs.

[Liar Loan]

Every time I think prices are high in Irvine, I take a look at parts of the Bay to see real craziness. Many of those buyers are in tech and could be remote and if they could, why would they spend $4.125m ($635k over asking) for this:
https://www.redfin.com/CA/Cupertino/7646-Berland-Ct-95014/home/1418200

Compared to places like Cupertino and Saratoga, Irvine is dirt cheap still. I know the job market is different there but anecdotally I'm aware of several who sold in the Bay and bought in Orange County.

It's because of Monta Vista High... the realtors even mention it in the first sentence.  So they are selling not just the house, but the illusion that the buyer's kid will get into an Ivy...

I make this point all the time - Irvine is a smokin deal if remote works for you. The higher you go the harder that is to pull off, and all the biggies want people back in the office. Saratoga is full of (mostly) Asian/South Asian CEOs and some very nice wineries, and over the hill is Santa Cruz. Cupertino is the original aspirational Asian/South Asian suburb. I did some alumni recruiting for the Viterbi School of Engineering and they held a separate session just for the Cupertino high schools. I would wager that the Bay area’s top high schools in aggregate get more UC/USC admit slots than SoCals best. Maybe Stanford/Ivies too.

I’m down here right now and it is such a refreshing change, even watching the local news. It feels so much more relaxed and less serious.

You probably already know this, but San Francisco prices are already down from 2021:

Home Prices Are Starting to Buckle in Tech-Fueled San Francisco

The median house price in the city dropped 3% from a year earlier to $1.89 million in June, according to a report Thursday by brokerage Compass Inc., after cresting above a record $2 million in the previous three months.

https://www.bloomberg.com/news/articles/2022-07-07/san-francisco-home-prices-start-to-fall-as-headwinds-mount?srnd=premium

The Bay Area Housing Market Is Cooling More Rapidly Than Anywhere Else in the Country

Five of the 10 U.S. housing markets that have cooled fastest this year are in northern California–San Jose, Oakland, San Francisco, Sacramento and Stockton

https://www.redfin.com/news/housing-markets-cooling-fastest-bay-area-2022/

SF is cratering - rents down there 26% as well. Silicon Valley housing market has stalled to some extent though the $4M+ market which is usually mostly cash transactions is still robust. I am firmly convinced that rates are headed to 10% in order to puncture housing specualtion, and I look forward to buying my south OC retirement pad in a few years at 10%+ rates and a steep discount to current pricing.

You can't have mortgage rates (which are longer term) be 10% if we are in a recession and the yield curve is inverted.  Can the Fed bump the Fed Funds rates to 5%, 6%, or 8%?  Maybe but that's what short term rates are.  To get mortgage interest rates to 10% you'll need inflation to increase materially from today and if we are in recession or going into one that won't happen. Mortgage rates have already begun to roll over a bit as is. Hard to have high mortgage rates when there is demand destruction due to people losing their jobs.

Either way housing is screwed.  Rising unemployment is just as bad for home prices as rising rates.

Treasury Curve Inversion Deepens to Level Not Seen Since 2007

https://finance.yahoo.com/news/treasury-curve-inversion-deepens-level-110837331.html

[USCTrojanCPA]

Every time I think prices are high in Irvine, I take a look at parts of the Bay to see real craziness. Many of those buyers are in tech and could be remote and if they could, why would they spend $4.125m ($635k over asking) for this:
https://www.redfin.com/CA/Cupertino/7646-Berland-Ct-95014/home/1418200

Compared to places like Cupertino and Saratoga, Irvine is dirt cheap still. I know the job market is different there but anecdotally I'm aware of several who sold in the Bay and bought in Orange County.

It's because of Monta Vista High... the realtors even mention it in the first sentence.  So they are selling not just the house, but the illusion that the buyer's kid will get into an Ivy...

I make this point all the time - Irvine is a smokin deal if remote works for you. The higher you go the harder that is to pull off, and all the biggies want people back in the office. Saratoga is full of (mostly) Asian/South Asian CEOs and some very nice wineries, and over the hill is Santa Cruz. Cupertino is the original aspirational Asian/South Asian suburb. I did some alumni recruiting for the Viterbi School of Engineering and they held a separate session just for the Cupertino high schools. I would wager that the Bay area’s top high schools in aggregate get more UC/USC admit slots than SoCals best. Maybe Stanford/Ivies too.

I’m down here right now and it is such a refreshing change, even watching the local news. It feels so much more relaxed and less serious.

You probably already know this, but San Francisco prices are already down from 2021:

Home Prices Are Starting to Buckle in Tech-Fueled San Francisco

The median house price in the city dropped 3% from a year earlier to $1.89 million in June, according to a report Thursday by brokerage Compass Inc., after cresting above a record $2 million in the previous three months.

https://www.bloomberg.com/news/articles/2022-07-07/san-francisco-home-prices-start-to-fall-as-headwinds-mount?srnd=premium

The Bay Area Housing Market Is Cooling More Rapidly Than Anywhere Else in the Country

Five of the 10 U.S. housing markets that have cooled fastest this year are in northern California–San Jose, Oakland, San Francisco, Sacramento and Stockton

https://www.redfin.com/news/housing-markets-cooling-fastest-bay-area-2022/

SF is cratering - rents down there 26% as well. Silicon Valley housing market has stalled to some extent though the $4M+ market which is usually mostly cash transactions is still robust. I am firmly convinced that rates are headed to 10% in order to puncture housing specualtion, and I look forward to buying my south OC retirement pad in a few years at 10%+ rates and a steep discount to current pricing.

You can't have mortgage rates (which are longer term) be 10% if we are in a recession and the yield curve is inverted.  Can the Fed bump the Fed Funds rates to 5%, 6%, or 8%?  Maybe but that's what short term rates are.  To get mortgage interest rates to 10% you'll need inflation to increase materially from today and if we are in recession or going into one that won't happen. Mortgage rates have already begun to roll over a bit as is. Hard to have high mortgage rates when there is demand destruction due to people losing their jobs.

Either way housing is screwed.  Rising unemployment is just as bad for home prices as rising rates.

Treasury Curve Inversion Deepens to Level Not Seen Since 2007

https://finance.yahoo.com/news/treasury-curve-inversion-deepens-level-110837331.html

True but it depends which kind of jobs get cut and unfortunately the lower level jobs get cut first.  There are still 2x as many job openings as unemployed people but I'm sure that will shrink in time but the job market is way stronger today than it was back in 2006-2007.