Have Irvine real estate values peaked?

[lnc]

What does the current for sale home inventory and sales number tell us?

Anything under 6 month of inventory indicates upward price trend and over 7 month of supply indicates downward pressure on the prices.

 

[AW]

Or look at the China stock index, it shot up and finally peaked in July, downward trend since, input numbers into model, crunch crunch crunch, hey, regression r squared shows 99%, haha

 

[Irvinecommuter]

Or look at the China stock index, it shot up and finally peaked in July, downward trend since, input numbers into model, crunch crunch crunch, hey, regression r squared shows 99%, haha

Chinese stock market is a made-up market...money can go in but not out for the longest time. 

Regression is not as applicable for high value tangential assets.

 

[AW]

Regarding the outflow of money from the stock market, is that true prior to the crash (and as corrupt as they've been, how difficult would the really rich been able to cash out), I know the government enacted more stringent rules recently to artificially soften the negative impacts.

 

[fishfinder333]

Due to the large portion of FCB in Irvine, I really feel China's economy is a big factor in Irvine's future outlook. Let's say China's economy goes into total meltdown. FCB's are financially leveraged to save their business and other assets in their home country. They start selling assets in the US (multimillion dollar homes in Irvine) and we start to see an outflow of money out of US by FCB's. Irvine inventory shoots up and pricing goes significantly lower.

On the other hand, FCB's can see the writing on the wall and accelerate buying of US assets to protect their fortunes. When China's economy does tank they have protected their wealth and not return to their polluted homeland.

What do you guys think will happen when China's economy takes a turn for the worse?

 

[Irvinecommuter]

Due to the large portion of FCB in Irvine, I really feel China's economy is a big factor in Irvine's future outlook. Let's say China's economy goes into total meltdown. FCB's are financially leveraged to save their business and other assets in their home country. They start selling assets in the US (multimillion dollar homes in Irvine) and we start to see an outflow of money out of US by FCB's. Irvine inventory shoots up and pricing goes significantly lower.

On the other hand, FCB's can see the writing on the wall and accelerate buying of US assets to protect their fortunes. When China's economy does tank they have protected their wealth and not return to their polluted homeland.

What do you guys think will happen when China's economy takes a turn for the worse?

FCBs buy property in US because property ownership is not allowed in China.  It's a way for them to bank their money.  If all else fails, they move to the US and live here.  It's different than other investors, FCBs send their families to live here.

 

[bones]

I would hope no one thinks Irvine is that magical but I guess you never know

You rang?

Call me never

 

[irvinehomeowner]

Due to the large portion of FCB in Irvine, I really feel China's economy is a big factor in Irvine's future outlook. Let's say China's economy goes into total meltdown. FCB's are financially leveraged to save their business and other assets in their home country. They start selling assets in the US (multimillion dollar homes in Irvine) and we start to see an outflow of money out of US by FCB's. Irvine inventory shoots up and pricing goes significantly lower.

On the other hand, FCB's can see the writing on the wall and accelerate buying of US assets to protect their fortunes. When China's economy does tank they have protected their wealth and not return to their polluted homeland.

What do you guys think will happen when China's economy takes a turn for the worse?

FCBs buy property in US because property ownership is not allowed in China.  It's a way for them to bank their money.  If all else fails, they move to the US and live here.  It's different than other investors, FCBs send their families to live here.

I agree with IC here.

For current ownership in the US, whatever happens in China... stays in China. US real estate is the hedge against the Chinese economy. It may affect future ability for them to continue to drive prices up in Irvine, but they aren't the only one interested in buying in Irvine.

#DontForgetMiddleEastAndOtherAsians

 

[paperboyNC]

I expect modest price gains (2-4%/yr) for the next 12 months. If 30yr mortgage rates start to go up (not really related to the FED's short-term rates, FYI), housing prices may level out. As always there will be buyers/homeowners that pay WTF prices or go crazy with upgrades/renos and can't recover their cost when it comes time to sell.

 

[Zenyatta1]

Irvine did not lose Allergan, it was absorbed by Actavis and the Irvine location is still open.

Over long periods of time, RE prices should correlate with incomes.  Coastal markets do better given land scarcity and NIMBY/permitting issues.  OC wage gains are fairly good and appears more balanced than 2005 (mortgage etc). Agree with USC, would add that what would worry me is Irvine lost Allergen and appears Broadcom will move jobs over time (time will tell), CA policies are "challenging" and we appear to be hell bent on using more renewable energy without regard to cost (which I'm not fundamentally against but it's a little disingenuous for me to say given that a 25% rise in energy cost doesn't mean I cut back on energy consumption).

 

[LongIrvine]

You're right, I misspoke, however, they did cut 600 of the 2700 jobs. . . . most companies tend to migrate overtime as leases roll and they "realign" their operations. 

 

[usctrojancpa]

What does the current for sale home inventory and sales number tell us?

Anything under 6 month of inventory indicates upward price trend and over 7 month of supply indicates downward pressure on the prices.

We are hovering around 2.5 to 3.5 months of inventory on the market which is a weak seller's to neutral market. 

 

[lnc]

What does the current for sale home inventory and sales number tell us?

Anything under 6 month of inventory indicates upward price trend and over 7 month of supply indicates downward pressure on the prices.

We are hovering around 2.5 to 3.5 months of inventory on the market which is a weak seller's to neutral market. 

Base on this level of inventory, looks like the housing price still has room to go up before it tapered off. 

 

[hello]

Question is hard to answer unless we specify a specific time frame...I think Irvine prices have peaked for the next 3-5 years but I suspect prices will continue to raise in Irvine for many years to come.

As evidenced, if you hold on to your home long enough even buying at the peak you will come out ahead.

USC, although I value your opinions on most matter, I completely disagree with you here.  Sure in absolute dollars you may have come out slightly ahead.  However if you factor inflation, opportunity costs, etc, etc, etc and look at the real costs then versus now, buying at the peak was one of the worst ideas ever and most who did ended up paying for it. 

 

[jmoney74]

Question is hard to answer unless we specify a specific time frame...I think Irvine prices have peaked for the next 3-5 years but I suspect prices will continue to raise in Irvine for many years to come.

As evidenced, if you hold on to your home long enough even buying at the peak you will come out ahead.

USC, although I value your opinions on most matter, I completely disagree with you here.  Sure in absolute dollars you may have come out slightly ahead.  However if you factor inflation, opportunity costs, etc, etc, etc and look at the real costs then versus now, buying at the peak was one of the worst ideas ever and most who did ended up paying for it.

I think you didn't understand what he was trying to say.  You buy.. hold long term.. it's still a good investment for you.  I think you are alluding to more of timing. 

 

[usctrojancpa]

Question is hard to answer unless we specify a specific time frame...I think Irvine prices have peaked for the next 3-5 years but I suspect prices will continue to raise in Irvine for many years to come.

As evidenced, if you hold on to your home long enough even buying at the peak you will come out ahead.

USC, although I value your opinions on most matter, I completely disagree with you here.  Sure in absolute dollars you may have come out slightly ahead.  However if you factor inflation, opportunity costs, etc, etc, etc and look at the real costs then versus now, buying at the peak was one of the worst ideas ever and most who did ended up paying for it.

I think you didn't understand what he was trying to say.  You buy.. hold long term.. it's still a good investment for you.  I think you are alluding to more of timing. 

Bingo...trying to timing the real estate market is like trying to time the stock market and no one can do it perfectly.  A lot of people think of a home as an investment...the fact of the matter is that it is a commodity (aka a place to live) first and foremost.  I know everyone wants to buy at the lows and sell at the highs, but you still need a place to live.  I don't know about other people, but I got tired of renting fast and wanted my own home where I could do as I please with it.  Depending on timing, your home may not have the highest return but in my opinion it should not be viewed as an investment.  If it does go up in value, that's just the whipped cream and cherry on top of the sundae. 

 

[bones]

Investment or not, this forums' most popular topics and most often asked questions all relate back to some sort of "investment" component for a person's primary residence. Like this thread!

I haven't classified my house as an investment or not an investment but I need to see an exit and I want to make money at that exit.

 

[hello]

Question is hard to answer unless we specify a specific time frame...I think Irvine prices have peaked for the next 3-5 years but I suspect prices will continue to raise in Irvine for many years to come.

As evidenced, if you hold on to your home long enough even buying at the peak you will come out ahead.

USC, although I value your opinions on most matter, I completely disagree with you here.  Sure in absolute dollars you may have come out slightly ahead.  However if you factor inflation, opportunity costs, etc, etc, etc and look at the real costs then versus now, buying at the peak was one of the worst ideas ever and most who did ended up paying for it.

I think you didn't understand what he was trying to say.  You buy.. hold long term.. it's still a good investment for you.  I think you are alluding to more of timing. 

Bingo...trying to timing the real estate market is like trying to time the stock market and no one can do it perfectly.  A lot of people think of a home as an investment...the fact of the matter is that it is a commodity (aka a place to live) first and foremost.  I know everyone wants to buy at the lows and sell at the highs, but you still need a place to live.  I don't know about other people, but I got tired of renting fast and wanted my own home where I could do as I please with it.  Depending on timing, your home may not have the highest return but in my opinion it should not be viewed as an investment.  If it does go up in value, that's just the whipped cream and cherry on top of the sundae.

When you say that one will come out "ahead" regardless of buying at the peak, it suggested to me that you were looking at a house purchase in regards to an investment.  I agree with you that  primary housing is a commodity and not an investment.  Regardless, overpaying for something is still overpaying for something.  I can now assume that you meant someone is "ahead' because they can enjoy being an owner rather than a renter.  I cannot argue that since it is purely an emotional value, however in financial terms, I cannot see how someone could "ahead".

Contrary to USC, Jmoney seems to think it actually was a "good investment".  Buying at the peak and holding was NOT a good investment.  In fact it was a horrible investment.  Also I understand timing the market is difficult to do.  However if one is to suggest that an asset purchase is a good investment, then timing has to be taken into consideration.  I am not saying people should have been able to time the market.  However looking back to the peak price days and now say that buying a house then was a "good investment" does not make any sense. 

 

[notTHEoc]

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[AW]

The problem with that is, I've known people who waited (this is pre boom, before the 2005 peak), and thought the same thing, the price is crazy, got to wait it out, and then only thing available (can't wait anymore) and bought near the peak and lost out on significant gains.

Over the long haul, even if bought at previous peak, for Irvine, it reached that peak again last year, so if bought and sold is breakeven, it's like living at a house you like but paying tax/hoa (less tax writeoff) and presumable quality of life is better than that of renting...