Frustration with Irvine inventory!

[quote author="cherry14" date=1243398142]<strong>awgee</strong> - I hope he IS right! I just want him to be right sooner rather than later...



Like I said, I'm no expert and I don't pretend to be. I'm just remarking on what's going on in the trenches right now. Lots of nutty buyers out there, and not a lot of inventory. I definitely do hope it changes in the near future. But I'm not willing to wait years; I'll either have to suck it up and do what it takes to buy in Irvine, or look elsewhere.</blockquote>


Have you considered waiting until the end of this year? Spring / summer is peak selling season. People want to move while their kids are out of school. Take a look this coming fall/winter and see how it compares.
 
You don't NEED to buy, but WANT to buy.



This is true for most of us, I would guess.



The question is, do you mind losing the 20% downpayment you have accumulated (20% of $750k = $150k) when the prices of SFRs in Irvine drop over the next year or two?



Why not email IR2 and have him find you a nice big house to rent for two years?
 
cherry14:



Does the house on today's blog fit your criteria? Seems to be in the same general neigborhood and the same size:



<a href="http://www.irvinehousingblog.com/blog/comments/subdivisions/">http://www.irvinehousingblog.com/blog/comments/subdivisions/</a>



EDIT: I n00bed it up by not making the link clickable... fixed it before 'cakes could get on my case.
 
[quote author="cherry14" date=1243398142]<strong>awgee</strong> - I hope he IS right! I just want him to be right sooner rather than later...



Like I said, I'm no expert and I don't pretend to be. I'm just remarking on what's going on in the trenches right now. Lots of nutty buyers out there, and not a lot of inventory. I definitely do hope it changes in the near future. But I'm not willing to wait years; I'll either have to suck it up and do what it takes to buy in Irvine, or look elsewhere.</blockquote>


Morekaos has an expression: "Don't fight the tape."

And my version: "It is easier to ride a horse in the direction it is going."
 
I've been too busy to update my site, but I have 67 escrows that need to be added from the past 13 or so days... For a couple of months now, 5-6 Irvine properties on average have been going under contract each day.



Of the 650 or so properties indicated in Irvine inventory right now, around 200 of them are already in escrow. That suggests that there is only around 3 months of available inventory on the market in Irvine today.
 
I've never forgotten IrvineRenter's words of wisdom: "Buy when mortgage rates are high and Irvine home prices are low." "You are can always refinance to a lower rate, but you cannot change your purchase price." We are definitely not there yet... 2000+ inventory in Irvine is coming soon! That's why Panda is so patiently waiting for this hyper-inflation to kick in. Because once it does, it is GAME OVER in Irvine.



I'm not sure if Awgee said this one, "Buy when there is blood running in the streets of Irvine. There are little bruises there and there, but I don't see blood in Irvine yet.
 
<a href="http://www.sacbee.com/realestatenews/story/1889277.html">Rising inventory of troubled homes could spur fresh wave of foreclosures</a>



Here is a discussion of the shadow inventory issue in the Sacramento Bee.
 
[quote author="ipoplaya" date=1243404717]I've been too busy to update my site, but I have 67 escrows that need to be added from the past 13 or so days... For a couple of months now, 5-6 Irvine properties on average have been going under contract each day.



Of the 650 or so properties indicated in Irvine inventory right now, around 200 of them are already in escrow. That suggests that there is only around 3 months of available inventory on the market in Irvine today.</blockquote>


This is a remarkable figure. Of course with the drop is values, even as modest as it has been, organic sellers are either precluded from selling (by negative equity) or unwilling to sell (unwilling to accept current prices) their homes. I have spoken with several of the recent closes in QH, all 4 bed homes, and in each instance the seller was convinced that prices would fall further and they were getting out now to monetize remaining equity (At least according to them). It is hard to measure the pent up supply in terms of future sellers currently waiting-out the "downturn", but in the meantime these low inventory numbers have a real dampening impact on price adjustments.



The question I have is, can the penchant for moratoriums and goverment subsidized loans support the market indefinitely, preventing the market from reaching fundamental value. Can a combination of (1) adjusted loan values to reduce debt burden for the most distressed, (2) artificially low mortgage rates (3) expansion of FHA subsized down payment requirement, (4) expansion of conforming mortgage limits, and (5) foreclosure moratoriums create a scenario where price declines halt above fundamental value and ultimately result in a protracted sideways market?



I don't think so.



Why aren't the loan holders forcing servicers to quicken the pace of foreclosures? How is it possible for a borrower to remain in a home for 300 or 600 days without making a payment?!? Doesn't the timing of payments matter? The underlying logic of allowing the home to remain occupied while the loan provides no cashflow is that the home has NO VALUE.
 
<a href="http://www.calculatedriskblog.com/2009/05/dearth-of-move-up-buyers.html">Without moveup buyers, neighborhoods like Irvine are dead. DEAD. DEAD. DEAD. DEAD.</a>
 
[quote author="ipoplaya" date=1243404717]Of the 650 or so properties indicated in Irvine inventory right now, around 200 of them are already in escrow. That suggests that there is only around 3 months of available inventory on the market in Irvine today.</blockquote>


Ipop's observation shouldn't be ignored. Basically the low inventory tells us that prices aren't going to fall much (if any) over the next few months. But you have to remember that it tells us pretty much nothing about what prices are going to do over the next few years. There are countless examples of areas that saw brisk sales and low inventory in 2005/2006 only to see prices cut in half 3 years later.
 
[quote author="Goofy" date=1243397892][quote author="Daedalus" date=1243392969][quote author="cherry14" date=1243386804]I'm ready for my very own house where I can do what I want...paint! Make holes in the walls! Rip out appliances! All that stuff. </blockquote>Funny, I never hear that kind of thing from people who have owned their own homes for a while. Be careful what you wish for.</blockquote>


Well then you'll hear it from me. I like owning my home. Changing the light fixtures, doing landscaping, adding and maintaining a koi pond give me a great source of enjoyment.



I also can't lease a car. It just feels like every mile and every stain on the carpet is going to cost me. It just a mental thing but in order for me to be happy, I need to be the decision maker.



If you want to rent then go ahead, but for many of us owning is the only option.</blockquote>
You're just being goofy. I do own my home. You're jumping to conclusions if you think I don't like being a homeowner. The point is that all too often people are lured to the freedom to do things as homeowners, and overlook the actual doing. Landscaping and a koi pond sound more enjoyable than painting, making (and patching) holes in the walls and ripping out (and replacing) appliances. I have painted, plumbed, carpentered, stuccoed, tilled, mowed, trimmed, wired, roofed, plastered and installed more than my fair share. I enjoy the results, but it's honestly not that much fun.
 
[quote author="bigmoneysalsa" date=1243420063][quote author="ipoplaya" date=1243404717]Of the 650 or so properties indicated in Irvine inventory right now, around 200 of them are already in escrow. That suggests that there is only around 3 months of available inventory on the market in Irvine today.</blockquote>


Ipop's observation shouldn't be ignored. Basically the low inventory tells us that prices aren't going to fall much (if any) over the next few months. But you have to remember that it tells us pretty much nothing about what prices are going to do over the next few years. There are countless examples of areas that saw brisk sales and low inventory in 2005/2006 only to see prices cut in half 3 years later.</blockquote>


It is interesting how low the inventory is yet there are homes on the market for hundreds of days. Ordinarily, if the inventory were very low, prices would go up, but since buyers are not able to raise their bids due to tight lending standards, the higher priced inventory just sits there, and prices stay flat.



Watch over the next several months, and the downpayments will start to decline. There are only so many buyers able to put 35% down. Once they are spent, we will see those putting 30% down get a turn, then 25% down, and so on. The market was not inflated by people with large downpayments, and it cannot be supported by them either.
 
[quote author="Daedalus" date=1243420095][quote author="Goofy" date=1243397892][quote author="Daedalus" date=1243392969][quote author="cherry14" date=1243386804]I'm ready for my very own house where I can do what I want...paint! Make holes in the walls! Rip out appliances! All that stuff. </blockquote>Funny, I never hear that kind of thing from people who have owned their own homes for a while. Be careful what you wish for.</blockquote>


Well then you'll hear it from me. I like owning my home. Changing the light fixtures, doing landscaping, adding and maintaining a koi pond give me a great source of enjoyment.



I also can't lease a car. It just feels like every mile and every stain on the carpet is going to cost me. It just a mental thing but in order for me to be happy, I need to be the decision maker.



If you want to rent then go ahead, but for many of us owning is the only option.</blockquote>
You're just being goofy. I do own my home. You're jumping to conclusions if you think I don't like being a homeowner. The point is that all too often people are lured to the freedom to do things as homeowners, and overlook the actual doing. Landscaping and a koi pond sound more enjoyable than painting, making (and patching) holes in the walls and ripping out (and replacing) appliances. I have painted, plumbed, carpentered, stuccoed, tilled, mowed, trimmed, wired, roofed, plastered and installed more than my fair share. I enjoy the results, but it's honestly not that much fun.</blockquote>
HA! I thought it was going to be a lot more fun that it actually is. If we didn't have to work full time to pay for the house and all these projects, it would be one thing, but we exhaust ourselves nearly every weekend that come Monday morning we are begging for a holiday. You would think the 3 day weekend would resolve this. Nope, we just were more tired today than we would have been had we just gotten up and gone to work in our day jobs yesterday rather than "let's just finish this and that."
 
The thing that I've noticed is that you say, "I'll do X and that will look so much better." But then you do X and then Y and Z suddenly stand out as eyesore, so you have to do those as well and then it is never ending!
 
:cheese: I just wanted to replace a rubber air bypass hose...5 years ago!



How I spent my 3-day weekend:



<img src="http://www.ozop.net/trans_small.jpg" alt="" />



Friction drive plates are on order as of today. I'm just about done digging. Time to start filling this [money] pit.
 
[quote author="IrvineRenter" date=1243420796]



Watch over the next several months, and the downpayments will start to decline. There are only so many buyers able to put 35% down. Once they are spent, we will see those putting 30% down get a turn, then 25% down, and so on. The market was not inflated by people with large downpayments, and it cannot be supported by them either.</blockquote>


Down payments have already been trending down:



<img src="http://www.ipoplaya.com/3moavdown.jpg" alt="" />



This is a graph of the 3-month moving average down payment percentage for Irvine properties. Amazingly, even with the downtrend, prices have flattened out / ticked up...
 
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