Author Topic: Observations from the front lines of the Irvine housing market…  (Read 118650 times)

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Offline aquabliss

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Re: Observations from the front lines of the Irvine housing market…
« Reply #495 on: April 25, 2019, 10:25:51 AM »

According to Trulia, sale prices for 4 bedroom homes took the biggest hit. Dropping 7.4% yoy (Jan - April)


It's a good thing I have a 5 bedroom house, those are probably immune :)

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Re: Observations from the front lines of the Irvine housing market…
« Reply #496 on: April 25, 2019, 10:29:25 AM »

According to Trulia, sale prices for 4 bedroom homes took the biggest hit. Dropping 7.4% yoy (Jan - April)


It's a good thing I have a 5 bedroom house, those are probably immune :)

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Offline irvinehomeowner

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Re: Observations from the front lines of the Irvine housing market…
« Reply #497 on: April 25, 2019, 10:37:47 AM »

According to Trulia, sale prices for 4 bedroom homes took the biggest hit. Dropping 7.4% yoy (Jan - April)


It's a good thing I have a 5 bedroom house, those are probably immune :)

Only in Irvine... and especially immune if it has a 3CWG (statistically proven by the IHB!).
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Offline irvineband

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Re: Observations from the front lines of the Irvine housing market…
« Reply #498 on: April 27, 2019, 06:40:52 AM »
Great article in Barrons:You Still Might Be Able to Afford a House in San Francisco

Just a little snipit.

“Taking a longer view from before the financial crisis, the biggest housing cost increases between 2000 and 2017 were in Miami, Los Angeles, and San Diego (about 80%) while the smallest increases were in Cleveland, Detroit, Atlanta, and Cincinnati (about 33%). In the middle were Pittsburgh, Denver, and Philadelphia.

These numbers, of course, offer zero information about the change in affordability in each city over these periods, much less the change in relative affordability between cities. That requires comparing changes in average housing costs with changes in average spending power.

The Bureau of Economic Analysis provides estimates of household incomes for every metro area of the U.S. The standard definition of personal income, however, includes the imputed income homeowners “earn” by not having to rent. The biggest source of variation in this “income stream” is the long descent in mortgage interest rates, which is why “rental income of persons” has ballooned from 0.5% of total personal income in 1990 to 1.5% in 2007 to more than 4% since 2014. All this makes the standard income numbers invalid for calculating housing affordability.”

“Going further back to when the data begin in 2001, average employee compensation has increased the most in the Bay Area (65%) and in Seattle (60%), while increasing the least in Detroit (26%), Miami (29%), and Atlanta (32%).”

Offline USCTrojanCPA

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Re: Observations from the front lines of the Irvine housing market…
« Reply #499 on: April 27, 2019, 10:32:31 PM »
March was definitely a very interesting month. Sales came in at 196 homes in the month of March 2019 or 40% higher than February 2019 but still 21% lower than March 2018.  The medium price per SF from a year-over-year basis decreased slightly by 0.4%. These March closings were mostly escrows that opened in January and February when the market seemed to have stabilized due to interest rates coming down starting in mid January. The number of active listings at the end of March increased by 68 homes from the end of February as we are entering the Spring selling season. The increase in sales more than counteracted the increase in inventory which caused the # of months of inventory to decrease to 4.17 months in March versus 5.35 months in February. This would put the Irvine market as a neutral market, but when you look at the inventory in the sub $1m market we are in a weak seller's market while the over $1m is in a buyer's market. Also, Days On Market (DOM) from from 36 days in February to 27 days in March.

I continued to see fairly strong demand in the sub $800k market with multiple offer situations and even slight price increases. One of my clients bought a Woodbury condo for $630k and a recent model match condo closed for $642k (listed at $628k). I've also had a few $1m+ buyers come off the side lines in March too and of all things one of them got outbid by a FCB buyer on a Baker Ranch home.  haha  My listings also tell me that homes that are priced right and are turnkey see attract a lot of buyers, the lower the price point the more buyer traffic I'm getting.  New home builders continue to be flexible on pricing and credits, especially on quicker move-in homes. I believe that the new home shadow inventory is having a significant impact on the higher end of the market. There are still a lot of stubborn/dreamer sellers out there, especially in the higher end of the market, who don't understand that the market has adjusted lower.

From an interest rate perspective, interest rates continued to bleed lower in March with a low point hit near the end of March where the 30-year rate touched 3.75% and the 7-year ARM rate hit 2.75%. Rates have blipped up a bit since then but we are still under 3% on the 30-year fixed and around 3% on the 7-ARM. It's fairly clear now that the these lower rates have stabilized the real estate market in general and that along with the stock market grinding to all-time highs and a good job market with little worry of a recession have given more buyers confidence to get back to looking at buying homes. However, that doesn't mean that buyers aren't both cautious and picky because I know my buyers are.

Overall I think the market feels very balanced which is both good for buyers and sellers.
« Last Edit: April 27, 2019, 10:41:38 PM by USCTrojanCPA »
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Offline USCTrojanCPA

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Re: Observations from the front lines of the Irvine housing market…
« Reply #500 on: April 27, 2019, 10:40:23 PM »
And here are a few 10-year charts to put things into perspective for active listings, home sales, median price per SF, and days on market for all the folks that are more visual. ;)

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Offline irvinehomeowner

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Re: Observations from the front lines of the Irvine housing market…
« Reply #501 on: April 29, 2019, 06:49:33 AM »
The Closed Sales chart is still looking cyclical to me. :)
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Offline USCTrojanCPA

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Re: Observations from the front lines of the Irvine housing market…
« Reply #502 on: April 29, 2019, 07:14:02 AM »
The Closed Sales chart is still looking cyclical to me. :)

Uh oh, I think you might have poked the bear. haha   

Btw, I'm curious....would you guys prefer to see 5 year charts or stay with the 10 year charts going forward?
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Offline irvinehomeowner

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Re: Observations from the front lines of the Irvine housing market…
« Reply #503 on: April 29, 2019, 07:47:39 AM »
10 year is good because it covers the last "real" downturn (although may have to expand out to 11 or 12 years). :)
Once you go 3-car garage... your junk can never go back.
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Offline USCTrojanCPA

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Re: Observations from the front lines of the Irvine housing market…
« Reply #504 on: April 29, 2019, 11:19:34 PM »
10 year is good because it covers the last "real" downturn (although may have to expand out to 11 or 12 years). :)

10 years is as far back as I can capture the data on the graphs and I think it gives a good representation of where things are in comparison during the true buyer's market in 2009-2011.
Martin Mania, CPA
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