There is no housing crash coming in Irvine. And if you are waiting for a crash, you will eventually regret not buying a home when you should have. If things are a bit soft , negotiate harder, or cast a wider net, but don't stay out of the game.
I have said this before several times on this forum (perhaps in other threads) -- inflation is a global phenomenon not local. the world is awash in excess capacity (for nearly everything). employment is low , but are wages really going up much ? not exactly. the big companies are getting bigger and the employee voluntary "quit rate" which I s the real indicator of wage pressures is not really that high except for a few sectors.
Fed is moving a lot faster in terms of raising rates than any other central bank . Why ? because they can afford to. US is performing better than nearly every other developed country out there. But what does that lead to ? Stronger dollar. What does stronger dollar lead to ? You guessed right --> Lower inflation
Now one could say trade war can throw a wrench in all this and in theory this may seem right -- after all if global trade decreases then dollar going up shouldn't really cause a deflation, right. ? But hang on -- what happens to S&P500 that derives nearly half its revenue globally ? Yup, equities take a big hit , P/E multiples come down --- and lo and behold , interest rates go down as investors flee to safety
One thing is clear --- equity market is NOT pricing in impact of trade wars. The day it starts to , we are in for a decent size 5-10% correction in the stock market . Now that doesn't necessarily translate to similar correction in housing , just means home sales volumes might slow down or buyers might get the upper hand for a change.
So next time you hear a supposed expert blathering on CNN / CNBC , know this -- they are throwing out sound bytes and not really making an effort to connect the dots.
