Housing Analysis

[The Motor Court Company]

what?s your prediction on the peak to trough for housing price? it cannot be as bad as GFC in 2008 until we start seeing massive layoffs, right?

?Pretty soon, anyone who has bought a home in recent months will be sitting on a loss,? Shepherdson added.

Aren't those the same guys who predicted that prices would be up 10%+ in 2022 earlier this year?

These are the same guys that called the housing bubble in 2005.

He Saw Trouble Coming. Now He Sees It Going.
Nov. 6, 2010

But positive indicators can and do disappoint, so I decided to consult an expert on these matters: Ian Shepherdson, chief United States economist at High Frequency Economics. As a reader of economic tea leaves over the last five turbulent years, Mr. Shepherdson has a darn good record. For instance, unlike the throng of economists who failed to see the housing crisis coming, Mr. Shepherdson warned his clients in fall 2005 that real estate would crash and a recession would ensue.
https://www.nytimes.com/2010/11/07/business/07gret.html

The Five Financial Gurus You Can Still Trust
Jul. 14, 2017

1) Ian Shepherdson Ian Shepherdson anticipated the sharp decline in the U.S. housing market earlier than most. Back in 2005, for instance, he argued that the U.S. housing bubble was starting to hiss badly. He correctly forecast that the housing decline would have wide-ranging ramifications for the economy and the housing market.
https://www.thedailybeast.com/the-five-financial-gurus-you-can-still-trust

 

[Liar Loan]

I think this is basically impossible to predict because it depends so much on how the Fed responds to the tension between high inflation vs. rising unemployment. 

One thing we can all count on is these ivory tower goofballs have gotten it wrong every step of the way and there's no reason to think that will change.  The groupthink at the Fed and in the wider world of Keynesian economists like Yellen and Krugman prevents them from seeing the curveballs the economy is throwing until it is too late.

If you look at nationwide measures of home value, they indicate prices would need to decline by about 1/3 to get in line with historical averages.  Real home prices are above the peak of the 2006 bubble (see 1st chart below).  And price-to-rent is the highest it's ever been, also exceeding the 2006 peak (2nd chart below).

In the 1970's, rapid wage gains and rent increases made up a lot of the difference when home prices got out of whack, so prices never declined by much, if at all.  The question is will that happen again?  Or will wage gains and rents flatline, or even begin to decline (yikes!), as we head into a recession?  If it's the latter scenario, then prices have a long way to fall.

 

[Liar Loan]

78% of community bank executives expect the housing market to crash by 2026

It's not just that prices are high. When adjusted for inflation, home prices have risen to record highs for five months straight. Prices now surpass the peak seen in 2006, just before the market crashed and fueled the global financial crisis.

Homeowners pulled more than $63 billion in equity from their homes in the second quarter, according to analytics firm Black Knight. That's the largest single-quarter sum since mid-2007.
https://www.businessinsider.com/hou...-bank-executives-fear-meltdown-survey-2021-10

 

[usctrojancpa]

78% of community bank executives expect the housing market to crash by 2026

It's not just that prices are high. When adjusted for inflation, home prices have risen to record highs for five months straight. Prices now surpass the peak seen in 2006, just before the market crashed and fueled the global financial crisis.

Homeowners pulled more than $63 billion in equity from their homes in the second quarter, according to analytics firm Black Knight. That's the largest single-quarter sum since mid-2007.
https://www.businessinsider.com/hou...-bank-executives-fear-meltdown-survey-2021-10

And the article also says this...

"Some economists, however, argue that price growth will slowly cool throughout 2022 without a market crash."

That's the camp that I'm in for the Irvine and most of Orange County.  Inventory levels will be the tell on where prices are heading along with interest rates.

 

[Liar Loan]

78% of community bank executives expect the housing market to crash by 2026

It's not just that prices are high. When adjusted for inflation, home prices have risen to record highs for five months straight. Prices now surpass the peak seen in 2006, just before the market crashed and fueled the global financial crisis.

Homeowners pulled more than $63 billion in equity from their homes in the second quarter, according to analytics firm Black Knight. That's the largest single-quarter sum since mid-2007.
https://www.businessinsider.com/hou...-bank-executives-fear-meltdown-survey-2021-10

And the article also says this...

"Some economists, however, argue that price growth will slowly cool throughout 2022 without a market crash."

That's the camp that I'm in for the Irvine and most of Orange County.  Inventory levels will be the tell on where prices are heading along with interest rates.

Does it not worry you one iota that real prices now exceed the greatest real estate bubble in history (up until now)?

 

[usctrojancpa]

78% of community bank executives expect the housing market to crash by 2026

It's not just that prices are high. When adjusted for inflation, home prices have risen to record highs for five months straight. Prices now surpass the peak seen in 2006, just before the market crashed and fueled the global financial crisis.

Homeowners pulled more than $63 billion in equity from their homes in the second quarter, according to analytics firm Black Knight. That's the largest single-quarter sum since mid-2007.
https://www.businessinsider.com/hou...-bank-executives-fear-meltdown-survey-2021-10

And the article also says this...

"Some economists, however, argue that price growth will slowly cool throughout 2022 without a market crash."

That's the camp that I'm in for the Irvine and most of Orange County.  Inventory levels will be the tell on where prices are heading along with interest rates.

Does it not worry you one iota that real prices now exceed the greatest real estate bubble in history (up until now)?

I believe that most markets did run up in price too much, some a lot more than they should have, but I don't see a price collapse in Irvine (other markets, who knows)...more of a slow glide down if anything. 

 

[OCtoSV]

78% of community bank executives expect the housing market to crash by 2026

It's not just that prices are high. When adjusted for inflation, home prices have risen to record highs for five months straight. Prices now surpass the peak seen in 2006, just before the market crashed and fueled the global financial crisis.

Homeowners pulled more than $63 billion in equity from their homes in the second quarter, according to analytics firm Black Knight. That's the largest single-quarter sum since mid-2007.
https://www.businessinsider.com/hou...-bank-executives-fear-meltdown-survey-2021-10

And the article also says this...

"Some economists, however, argue that price growth will slowly cool throughout 2022 without a market crash."

That's the camp that I'm in for the Irvine and most of Orange County.  Inventory levels will be the tell on where prices are heading along with interest rates.

Does it not worry you one iota that real prices now exceed the greatest real estate bubble in history (up until now)?

I believe that most markets did run up in price too much, some a lot more than they should have, but I don't see a price collapse in Irvine (other markets, who knows)...more of a slow glide down if anything.

Either you're being a typical realtor blowing sunshine in a storm or you haven't looked at the last 1 week of Irvine closings - I looked at the first 10 or so and all sold at or below the low "estimated selling price". Irvine is dropping like a rock and anyone buying a marginal property like a condo of any sort will regret it 3 years from now.
https://www.redfin.com/city/9361/CA/Irvine/filter/property-type=house,include=sold-1wk

 

[Danimal]

78% of community bank executives expect the housing market to crash by 2026

It's not just that prices are high. When adjusted for inflation, home prices have risen to record highs for five months straight. Prices now surpass the peak seen in 2006, just before the market crashed and fueled the global financial crisis.

Homeowners pulled more than $63 billion in equity from their homes in the second quarter, according to analytics firm Black Knight. That's the largest single-quarter sum since mid-2007.
https://www.businessinsider.com/hou...-bank-executives-fear-meltdown-survey-2021-10

And the article also says this...

"Some economists, however, argue that price growth will slowly cool throughout 2022 without a market crash."

That's the camp that I'm in for the Irvine and most of Orange County.  Inventory levels will be the tell on where prices are heading along with interest rates.

Does it not worry you one iota that real prices now exceed the greatest real estate bubble in history (up until now)?

I believe that most markets did run up in price too much, some a lot more than they should have, but I don't see a price collapse in Irvine (other markets, who knows)...more of a slow glide down if anything.

Either you're being a typical realtor blowing sunshine in a storm or you haven't looked at the last 1 week of Irvine closings - I looked at the first 10 or so and all sold at or below the low "estimated selling price". Irvine is dropping like a rock and anyone buying a marginal property like a condo of any sort will regret it 3 years from now.
https://www.redfin.com/city/9361/CA/Irvine/filter/property-type=house,include=sold-1wk

Dropping like a rock? I just sold my home couple of days ago above list price. I got 7 offers with just one weekend open house.

I heard of these naysayers 14 years ago when i bought that home. Guess what? Just sold it 3 times the price what i bought it for.  I basically got free rent plus tax deduction for all those years plus free cash.

Like I said, if the home is right and you plan to live for 10+ years, buy it. Short term fluctuations dont matter.  The truth of the matters is that there are so many people wanting to live in Irvine. Hard to see it drops like a rock

 

[zovall]

Either you're being a typical realtor blowing sunshine in a storm or you haven't looked at the last 1 week of Irvine closings - I looked at the first 10 or so and all sold at or below the low "estimated selling price". Irvine is dropping like a rock and anyone buying a marginal property like a condo of any sort will regret it 3 years from now.
https://www.redfin.com/city/9361/CA/Irvine/filter/property-type=house,include=sold-1wk

No doubt the market has turned but dropping like a rock??Would you say the same about the Cupertino market?

 

[OCtoSV]

Either you're being a typical realtor blowing sunshine in a storm or you haven't looked at the last 1 week of Irvine closings - I looked at the first 10 or so and all sold at or below the low "estimated selling price". Irvine is dropping like a rock and anyone buying a marginal property like a condo of any sort will regret it 3 years from now.
https://www.redfin.com/city/9361/CA/Irvine/filter/property-type=house,include=sold-1wk

No doubt the market has turned but dropping like a rock??Would you say the same about the Cupertino market?

For my local market, not far from Cup, that would be a resounding yes with recent closes all showing reductions from the list price. Cupertino tends to be a cash market/FCB and totally starved of inventory so likely not.

 

[usctrojancpa]

78% of community bank executives expect the housing market to crash by 2026

It's not just that prices are high. When adjusted for inflation, home prices have risen to record highs for five months straight. Prices now surpass the peak seen in 2006, just before the market crashed and fueled the global financial crisis.

Homeowners pulled more than $63 billion in equity from their homes in the second quarter, according to analytics firm Black Knight. That's the largest single-quarter sum since mid-2007.
https://www.businessinsider.com/hou...-bank-executives-fear-meltdown-survey-2021-10

And the article also says this...

"Some economists, however, argue that price growth will slowly cool throughout 2022 without a market crash."

That's the camp that I'm in for the Irvine and most of Orange County.  Inventory levels will be the tell on where prices are heading along with interest rates.

Does it not worry you one iota that real prices now exceed the greatest real estate bubble in history (up until now)?

I believe that most markets did run up in price too much, some a lot more than they should have, but I don't see a price collapse in Irvine (other markets, who knows)...more of a slow glide down if anything.

Either you're being a typical realtor blowing sunshine in a storm or you haven't looked at the last 1 week of Irvine closings - I looked at the first 10 or so and all sold at or below the low "estimated selling price". Irvine is dropping like a rock and anyone buying a marginal property like a condo of any sort will regret it 3 years from now.
https://www.redfin.com/city/9361/CA/Irvine/filter/property-type=house,include=sold-1wk

It's not dropping like a rock, it's gliding lower like I mentioned.  We have come off the peak about 8-10% so far but we are still around Feb prices and above prices at the end of the year.  I think we'll end up the year flattish in Irvine for 2022 so that does mean any 5% or so decline in prices. I only follow the Irvine market very closely because that's where most of my business in, I don't know what markets in NorCal are doing or other areas out-of-state.  Real estate is a very localized and pricing can vary widely from one city to the city next door.  I do know that South OC is suffering a lot more than Irvine from what I hear and see. 

I'll give you an example, I cut the price of my 81 Cactus Flower and within less than a week I had 2 offers on it (we just accepted one of them) along with a material pick up in open house traffic last weekend. 

 

[nosuchreality]

78% of community bank executives expect the housing market to crash by 2026

It's not just that prices are high. When adjusted for inflation, home prices have risen to record highs for five months straight. Prices now surpass the peak seen in 2006, just before the market crashed and fueled the global financial crisis.

Homeowners pulled more than $63 billion in equity from their homes in the second quarter, according to analytics firm Black Knight. That's the largest single-quarter sum since mid-2007.
https://www.businessinsider.com/hou...-bank-executives-fear-meltdown-survey-2021-10

And the article also says this...

"Some economists, however, argue that price growth will slowly cool throughout 2022 without a market crash."

That's the camp that I'm in for the Irvine and most of Orange County.  Inventory levels will be the tell on where prices are heading along with interest rates.

Does it not worry you one iota that real prices now exceed the greatest real estate bubble in history (up until now)?

I believe that most markets did run up in price too much, some a lot more than they should have, but I don't see a price collapse in Irvine (other markets, who knows)...more of a slow glide down if anything.

Either you're being a typical realtor blowing sunshine in a storm or you haven't looked at the last 1 week of Irvine closings - I looked at the first 10 or so and all sold at or below the low "estimated selling price". Irvine is dropping like a rock and anyone buying a marginal property like a condo of any sort will regret it 3 years from now.
https://www.redfin.com/city/9361/CA/Irvine/filter/property-type=house,include=sold-1wk

Listed for a week over New Years, listed in Apr, fell out, relisted again, went in a finally closed.  I would suspect either buried flaw or first failure created a crunch for the sellers.

Flipping thru the rest, looks like May was a buster for buyers, lots of April contingent, May relisted.

 

[Liar Loan]

78% of community bank executives expect the housing market to crash by 2026

It's not just that prices are high. When adjusted for inflation, home prices have risen to record highs for five months straight. Prices now surpass the peak seen in 2006, just before the market crashed and fueled the global financial crisis.

Homeowners pulled more than $63 billion in equity from their homes in the second quarter, according to analytics firm Black Knight. That's the largest single-quarter sum since mid-2007.
https://www.businessinsider.com/hou...-bank-executives-fear-meltdown-survey-2021-10

And the article also says this...

"Some economists, however, argue that price growth will slowly cool throughout 2022 without a market crash."

That's the camp that I'm in for the Irvine and most of Orange County.  Inventory levels will be the tell on where prices are heading along with interest rates.

Does it not worry you one iota that real prices now exceed the greatest real estate bubble in history (up until now)?

I believe that most markets did run up in price too much, some a lot more than they should have, but I don't see a price collapse in Irvine (other markets, who knows)...more of a slow glide down if anything.

Either you're being a typical realtor blowing sunshine in a storm or you haven't looked at the last 1 week of Irvine closings - I looked at the first 10 or so and all sold at or below the low "estimated selling price". Irvine is dropping like a rock and anyone buying a marginal property like a condo of any sort will regret it 3 years from now.
https://www.redfin.com/city/9361/CA/Irvine/filter/property-type=house,include=sold-1wk

Dropping like a rock? I just sold my home couple of days ago above list price. I got 7 offers with just one weekend open house.

I heard of these naysayers 14 years ago when i bought that home. Guess what? Just sold it 3 times the price what i bought it for.  I basically got free rent plus tax deduction for all those years plus free cash.

Like I said, if the home is right and you plan to live for 10+ years, buy it. Short term fluctuations dont matter.  The truth of the matters is that there are so many people wanting to live in Irvine. Hard to see it drops like a rock

Maybe it was just luck, but you had the good timing to purchase at the bottom and sell at the top of the cycle.  Somebody buying today is not going to enjoy those same benefits because they are vastly overpaying based on historical valuation measures.  They will be paying double the cost of rent, and lose lots of $$$ to boot - a double whammy.

So many people wanted to live in Irvine in 2007 and very few expected it to drop like a rock, yet it declined by 30%.  The same thing played out during the prior cycle in '91 and prices dropped close to 30% that time as well.

 

[Liar Loan]

Builders Are Stuck With Too Many Houses as US Buyers Pull Back
The industry faces a glut of inventory after years of supply constraints fueled an affordability crisis.

Builders have 9.3 months of supply as of June 30.
https://www.bloomberg.com/news/arti...as-builders-are-stuck-with-too-much-inventory

 

[Liar Loan]

Even the Realtors are predicting PAIN!!!

Realtor.com - The Housing Market Is About To Get Hammered: What Homebuyers, Sellers Should Know

Homebuyers should expect their financial pain to worsen in the coming months.

?The likelihood of a recession with significant job losses is on the table,? says Ratiu. If ?people ? feel less confident buying homes, [that] will generate a downward spiral, which could put housing in a nosedive.?
https://www.realtor.com/news/trends...hammered-what-homebuyers-sellers-should-know/

 

[irvinehomeowner]

"Finally Got It Right Friday" brought to you by Liar Loan.

See other threads for his awesome takes.

 

[Liar Loan]

"Finally Got It Right Friday" brought to you by Liar Loan.

See other threads for his awesome takes.

It pains you.  I can see that.

 

[irvinehomeowner]

"Finally Got It Right Friday" brought to you by Liar Loan.

See other threads for his awesome takes.

It pains you.  I can see that.

Nope... just embarrasses you more because you so need to be right after being so wrong for all these years.

It's... well... pathetic. But you do you.

Any more charts you want to post here?

 

[Liar Loan]

"Finally Got It Right Friday" brought to you by Liar Loan.

See other threads for his awesome takes.

It pains you.  I can see that.

Nope... just embarrasses you more because you so need to be right after being so wrong for all these years.

It's... well... pathetic. But you do you.

Any more charts you want to post here?

I've only tried to help others.  You clearly have more malicious motivations.

 

[irvinehomeowner]

"Finally Got It Right Friday" brought to you by Liar Loan.

See other threads for his awesome takes.

It pains you.  I can see that.

Nope... just embarrasses you more because you so need to be right after being so wrong for all these years.

It's... well... pathetic. But you do you.

Any more charts you want to post here?

I've only tried to help others.  You clearly have more malicious motivations.

Oh really? Never you heard you tell people when to buy... that would be more helpful.

All you've done is cap on Irvine... and Arizona... so who here is the malicious one?

Keep digging that embarrassment hole deeper... it's pure comedy.