Have Irvine real estate values peaked?

[AW]

With this scenario, the new house almost the same or downgraded (terms of size and/or location)?

 

[bones]

Similar SF but way better location.

 

[AW]

Wow, good for them, sucks for the bank

 

[paperboyNC]

With this scenario, the new house almost the same or downgraded (terms of size and/or location)?

In my scenario the old home was a 2bdrm attached condo (bought for $450k, short sold for $280k) and the new home was a 3bdrm single family home on a 7,000 sqft lot with some views for $500k. New one is similar to this home (https://www.redfin.com/CA/La-Mesa/7513-El-Paso-St-91942/home/6246590)

 

[Irvinecommuter]

Have a couple friends that sold short and bought another home at the bottom. Benefits:

- Bank ate the loss on the first home, they keep the profit on the 2nd home
- Property tax rates stay low (they go back up on the first home)

By now, the 5-7yr short sale credit ding is almost gone.

Great timing on their part, depending on when the credit ding happened, loans would suck and couldn't get another good house otherwise and waited longer

One bought the new home before they short sold the old home. The other sucked it up with the sucky loan.

I have a lot of experience with short sale and how banks settle them...that's an extremely rare case. 

Also, banks and lending institutions keep two sets of books, one is the credit report...the other is an internal file.  Short sales and foreclosures last a lot longer in the internal file than the credit report.

I actually know someone that did that too: short sold a home after buying another one.  I was pretty surprised they were able to do it too.  Worked out really well for them.  Old house never rebounded to the price they initially paid for it & they were able to get their current house for a good price.  This was up north.

It happens but again extremely rare.  It basically only happens if the servicer of the loan is the owner of the loan.  The vast majority of loans, especially high value loans, were sold via MBS or to Fannie/Freddie.  In those situation, servicers have relatively little leeway to agree to such a big drop in value vs loan owed.  Most owners of the loan rather just take the property in foreclosure and credit bid.  Fannie for example gives almost no leeway to the servicer and does not allow for principal reduction (which is what happens because California is a non-recourse state). 

Again...there are some people who luck out but the vast majority don't get that lucky.

 

[Bullsback]

Different villages will always have ebbs and flows, but affordability is still pretty good and much better than 2005. Unless you have a recession or negative job growth, I doubt you will see any correction more than 5%, if that.
Right now, with 20% down, back of envelope
120k income can qualify you for 700k+ home
150k income can qualify you for 900k+ home
200k income can qualify you for a 1.2m+ home
250k income can qualify you for a 1.4m+ home
300k income can qualify you for a 1.8m+ home
May be tight depending on lifestyle, and you can adjust down 50-100k if you have high MR, but point is, there are plenty of households that can support Irvine home prices. Throw in FCBs or high down payment buyers and you have additional support for current prices.

I have no idea if those qualification levels are right, but I can tell you right now, I'm not comfortable stretching myself to those "qualification" levels.  You'd have to take about 30% off of the home value for income and even then I'd feel like it was a stretch.  Than again, I'm the conservative accountant. 

 

[Bullsback]

Barring anything big happening (China imploding or interest rates skyrocket), my guess is that home prices will be flattish for a few years (~5%+ to 5%-). 

Well that is the thing right, it is always an some unforeseen disaster that ruins wealth and causes the downward spiral. Then all of a sudden the buyers and selllers aren't as financially strong, etc.

Agreed, but waiting for an unforeseen disaster to happen in order to buy is kind of the same reason why a lot of people don't buy at the V-bottom of the stock market (aka the fear of catching the falling knife).  That being said, when the next disaster does come I'll be on the look-out to buy more rental properties.

Plus their own assets are hit by the falling knife and thus their own affordability dropped as well.  Key is don't try to time the bottom or the peak, but if you buy, try to buy something you see some upside in, but way more importantly, buy something you can afford.  If you can afford it, then you are in it for the long (or can be) and thus should be able to deal with the cyclical issues. 

 

[hello]

Different villages will always have ebbs and flows, but affordability is still pretty good and much better than 2005. Unless you have a recession or negative job growth, I doubt you will see any correction more than 5%, if that.
Right now, with 20% down, back of envelope
120k income can qualify you for 700k+ home
150k income can qualify you for 900k+ home
200k income can qualify you for a 1.2m+ home
250k income can qualify you for a 1.4m+ home
300k income can qualify you for a 1.8m+ home
May be tight depending on lifestyle, and you can adjust down 50-100k if you have high MR, but point is, there are plenty of households that can support Irvine home prices. Throw in FCBs or high down payment buyers and you have additional support for current prices.

I have no idea if those qualification levels are right, but I can tell you right now, I'm not comfortable stretching myself to those "qualification" levels.  You'd have to take about 30% off of the home value for income and even then I'd feel like it was a stretch.  Than again, I'm the conservative accountant.

I agree.  Im also on the conservative side.  If you add a 100K to each of those incomes, then it would make sense for me personally.

 

[Goriot]

Foreign buyers at 8-year low (since latest data recording) according to the article from Bloomberg due to Chinese slow down.  No wonder BP and $1mm+ home sales stalled in Irvine. 
http://www.bloomberg.com/news/artic...ng-drops-in-california-as-china-slowdown-seen

 

[acf]

The article goes on to say that median home prices will go up 6.5% this year despite chinese buyers slowing down...

Foreign buyers at 8-year low (since latest data recording) according to the article from Bloomberg due to Chinese slow down.  No wonder BP and $1mm+ home sales stalled in Irvine. 
http://www.bloomberg.com/news/artic...ng-drops-in-california-as-china-slowdown-seen

[/quote

 

[hello]

The article goes on to say that median home prices will go up 6.5% this year despite chinese buyers slowing down...

Foreign buyers at 8-year low (since latest data recording) according to the article from Bloomberg due to Chinese slow down.  No wonder BP and $1mm+ home sales stalled in Irvine. 
http://www.bloomberg.com/news/artic...ng-drops-in-california-as-china-slowdown-seen

[/quote

everyone should buy now.  If you already own a house, buy a second!

 

[eyephone]

The article goes on to say that median home prices will go up 6.5% this year despite chinese buyers slowing down...

Foreign buyers at 8-year low (since latest data recording) according to the article from Bloomberg due to Chinese slow down.  No wonder BP and $1mm+ home sales stalled in Irvine. 
http://www.bloomberg.com/news/artic...ng-drops-in-california-as-china-slowdown-seen

[/quote

everyone should buy now.  If you already own a house, buy a second!

Hello - unless you know something that I don't know, price reductions have hit Irvine.

 

[hello]

The article goes on to say that median home prices will go up 6.5% this year despite chinese buyers slowing down...

Foreign buyers at 8-year low (since latest data recording) according to the article from Bloomberg due to Chinese slow down.  No wonder BP and $1mm+ home sales stalled in Irvine. 
http://www.bloomberg.com/news/artic...ng-drops-in-california-as-china-slowdown-seen

[/quote

everyone should buy now.  If you already own a house, buy a second!

Hello - unless you know something that I don't know, price reductions have hit Irvine.

Sorry I was being sarcastic...  No way in hell I would buy right now unless the deal was too good to pass up.  more price drops ahead...

 

[ps99472]

The article goes on to say that median home prices will go up 6.5% this year despite chinese buyers slowing down...

Foreign buyers at 8-year low (since latest data recording) according to the article from Bloomberg due to Chinese slow down.  No wonder BP and $1mm+ home sales stalled in Irvine. 
http://www.bloomberg.com/news/artic...ng-drops-in-california-as-china-slowdown-seen

[/quote

everyone should buy now.  If you already own a house, buy a second!

Hello - unless you know something that I don't know, price reductions have hit Irvine.

Sorry I was being sarcastic...  No way in hell I would buy right now unless the deal was too good to pass up.  more price drops ahead...

Please quote properly