Housing Analysis

[Liar Loan]

After 2 years and 30% appreciation later, you may finally be right!!!  You?re so smart!

So after 2 years and 30% appreciation later, and then it drops 5% and LL goes, "See, Irvine dropped 5%!!! HUGE drop"

You guys are already anticipating eating your words.  I love it!!!!

 

[CalBears96]

After 2 years and 30% appreciation later, you may finally be right!!!  You?re so smart!

So after 2 years and 30% appreciation later, and then it drops 5% and LL goes, "See, Irvine dropped 5%!!! HUGE drop"

You guys are already anticipating eating your words.  I love it!!!!

I'm making fun of you, dumbass. Everyone is saying that housing price will flatten out this year and will eventually drop. BUT, it's still UP compared to 2018.

 

[Liar Loan]

Redfin: Surging Mortgage Rates and Home Prices Sideline More Buyers

Mortgage rates are shooting up at the fastest pace in history, sending the typical monthly mortgage payment for a homebuyer up more than $500 since the beginning of this year (LL: Double or triple that for Irvine). As rates quickly approach 5%, we expect their impact on homebuyer demand to change from a motivator?driving a sense of urgency to buy before rates rise further?to a deterrent?causing buyers to step back as the cost of homebuying exceeds their budgets. There are a number of early signs that this shift is beginning to take place.

Fewer people are starting online home searches and applying for mortgages than this time last year, and year-to-date growth in home tours remains far below 2021 levels. An increasing share of sellers are also reducing their prices after putting their homes on the market.

Declines in searches, touring, and mortgage applications are larger in California than elsewhere.
https://www.redfin.com/news/housing-market-update-early-signs-of-a-slowdown/

 

[Ready2Downsize]

After 2 years and 30% appreciation later, you may finally be right!!!  You?re so smart!

So after 2 years and 30% appreciation later, and then it drops 5% and LL goes, "See, Irvine dropped 5%!!! HUGE drop"

You guys are already anticipating eating your words.  I love it!!!!

No one really knows what will happen to any given real estate market. Some markets see stagnant prices for years and others increase or decrease over short term periods, but like stocks, the long term trend is up.

Mortgage rates can go up and prices continue to rise.
https://247wallst.com/special-report/2022/04/03/the-mortgage-rate-in-america-every-year-since-1972/

For years prices went up as interest rates went up along with payments and the home ownership rate was pretty steady.

In fact the market rose for 9 years after rates peaked and the top in housing prices came when rates were half the peak.

But maybe you are right. The sky is falling and I can get that house I told my hubby to buy in the late 70's for 72K after all.

 

[The Motor Court Company]

see the quote in my signature?.can you buy in Qual Hill today with that price? I think IndieDev just missed a zero, so not too bad, right?

 

[usctrojancpa]

Redfin: Surging Mortgage Rates and Home Prices Sideline More Buyers

Mortgage rates are shooting up at the fastest pace in history, sending the typical monthly mortgage payment for a homebuyer up more than $500 since the beginning of this year (LL: Double or triple that for Irvine). As rates quickly approach 5%, we expect their impact on homebuyer demand to change from a motivator?driving a sense of urgency to buy before rates rise further?to a deterrent?causing buyers to step back as the cost of homebuying exceeds their budgets. There are a number of early signs that this shift is beginning to take place.

Fewer people are starting online home searches and applying for mortgages than this time last year, and year-to-date growth in home tours remains far below 2021 levels. An increasing share of sellers are also reducing their prices after putting their homes on the market.

Declines in searches, touring, and mortgage applications are larger in California than elsewhere.
https://www.redfin.com/news/housing-market-update-early-signs-of-a-slowdown/

I'm still getting multiple offers on my Irvine listings so rates need to keep going to up to sideline more buyers.  I have seen less offers on my listings, but it's those marginal buyers who have dropped out that would never really have a chance to buy anyhow. We still only have less than 1 month of inventory.  I'm making 5 offers for one of my Irvine buyers in the hopes of getting at least 1 offer accepted.

 

[Liar Loan]

Redfin: Surging Mortgage Rates and Home Prices Sideline More Buyers

Mortgage rates are shooting up at the fastest pace in history, sending the typical monthly mortgage payment for a homebuyer up more than $500 since the beginning of this year (LL: Double or triple that for Irvine). As rates quickly approach 5%, we expect their impact on homebuyer demand to change from a motivator?driving a sense of urgency to buy before rates rise further?to a deterrent?causing buyers to step back as the cost of homebuying exceeds their budgets. There are a number of early signs that this shift is beginning to take place.

Fewer people are starting online home searches and applying for mortgages than this time last year, and year-to-date growth in home tours remains far below 2021 levels. An increasing share of sellers are also reducing their prices after putting their homes on the market.

Declines in searches, touring, and mortgage applications are larger in California than elsewhere.
https://www.redfin.com/news/housing-market-update-early-signs-of-a-slowdown/

I'm still getting multiple offers on my Irvine listings so rates need to keep going to up to sideline more buyers.  I have seen less offers on my listings, but it's those marginal buyers who have dropped out that would never really have a chance to buy anyhow. We still only have less than 1 month of inventory.  I'm making 5 offers for one of my Irvine buyers in the hopes of getting at least 1 offer accepted.

That's great, but this is the first 'at bat' in the first inning of this downturn.  As you know, real estate cycles take months to shift directions and years to fully play out.

The media is still pumping the record price gains from contracts signed October to December based on 3% rates.  A lot of today's buyers have no clue about the dangerous waters they are wading into.

The emotional outbursts on this thread show just how invested and lacking in judgement today's buyers can be.

 

[usctrojancpa]

Redfin: Surging Mortgage Rates and Home Prices Sideline More Buyers

Mortgage rates are shooting up at the fastest pace in history, sending the typical monthly mortgage payment for a homebuyer up more than $500 since the beginning of this year (LL: Double or triple that for Irvine). As rates quickly approach 5%, we expect their impact on homebuyer demand to change from a motivator?driving a sense of urgency to buy before rates rise further?to a deterrent?causing buyers to step back as the cost of homebuying exceeds their budgets. There are a number of early signs that this shift is beginning to take place.

Fewer people are starting online home searches and applying for mortgages than this time last year, and year-to-date growth in home tours remains far below 2021 levels. An increasing share of sellers are also reducing their prices after putting their homes on the market.

Declines in searches, touring, and mortgage applications are larger in California than elsewhere.
https://www.redfin.com/news/housing-market-update-early-signs-of-a-slowdown/

I'm still getting multiple offers on my Irvine listings so rates need to keep going to up to sideline more buyers.  I have seen less offers on my listings, but it's those marginal buyers who have dropped out that would never really have a chance to buy anyhow. We still only have less than 1 month of inventory.  I'm making 5 offers for one of my Irvine buyers in the hopes of getting at least 1 offer accepted.

That's great, but this is the first 'at bat' in the first inning of this downturn.  As you know, real estate cycles take months to shift directions and years to fully play out.

The media is still pumping the record price gains from contracts signed October to December based on 3% rates.  A lot of today's buyers have no clue about the dangerous waters they are wading into.

The emotional outbursts on this thread show just how invested and lacking in judgement today's buyers can be.

I'm not saying that things haven't slowed down in terms of less offers per listing and less open house traffic but the higher prices and mortgage rates have mainly effected the marginal buyers (who wouldn't have bought anyhow with lower rates because they were already stretching).  Rates will need to go higher to take more buyers out of the market.  There's still no material build in inventory in Irvine and most of Orange County yet.  As you know, I watch inventory levels like a hawk because as inventory levels risk that will be a sign that price appreciation will begin to slow.

 

[AccidentalAnalytics]

MM: You make too much sense for LL to ever comprehend.

 

[AccidentalAnalytics]

That too is limited to $750k basis.  So with that and the SALT limit, it?s not too much more than the standard deduction.  If SALT cap is removed, then it?s game time.

The tax deduction benefit is gone.  The 2017 tax changes limited SALT to 10k and MITD to 750k basis.  Most homeowners now take the standard.

To me the biggest benefits are tax deduction when owning a home and having a stable roof to stay under on my term.

I am getting a new construction home and decided to do a mortgage. We are getting screwed by uncle Sam every year big time.  Sure we can easily pay off our new home but I rather get tax deduction from mortgage than giving it to government for stupid entitlements.  We paid off our current home few years ago and it was a bad move.

I was referring to mortgage interest deduction. I am fully aware of SALT cap at $10k which applies to property taxes. It?ll expire in 2025 hopefully.

 

[Danimal]

That too is limited to $750k basis.  So with that and the SALT limit, it?s not too much more than the standard deduction.  If SALT cap is removed, then it?s game time.

The tax deduction benefit is gone.  The 2017 tax changes limited SALT to 10k and MITD to 750k basis.  Most homeowners now take the standard.

To me the biggest benefits are tax deduction when owning a home and having a stable roof to stay under on my term.

I am getting a new construction home and decided to do a mortgage. We are getting screwed by uncle Sam every year big time.  Sure we can easily pay off our new home but I rather get tax deduction from mortgage than giving it to government for stupid entitlements.  We paid off our current home few years ago and it was a bad move.

I was referring to mortgage interest deduction. I am fully aware of SALT cap at $10k which applies to property taxes. It?ll expire in 2025 hopefully.

That?s exactly how much I plan to borrow. Not a penny more or less. 

My wife is a CPA. She knows the tax system well.

 

[irvinehomeowner]

I chose to become a homeowner too because I see many pros in owning. But I'm not blinded by the cons and the potential opportunity costs.

What? You don't listen to your own mentoring advice?

I hope you realize by now that my "Any time can be a good time to buy" applies to people who have done their research and understand fully the pros and cons.

 

[CalBears96]

I chose to become a homeowner too because I see many pros in owning. But I'm not blinded by the cons and the potential opportunity costs.

What? You don't listen to your own mentoring advice?

I hope you realize by now that my "Any time can be a good time to buy" applies to people who have done their research and understand fully the pros and cons.

My wife must live in a new home, so renting is out of the question.  ;D

Even when we were poor, she would rather buy a new townhouse and a resale SFR. It actually did help because buying new construction gave us an extra 9 months to come up with down payment.  ;D

 

[Ready2Downsize]

We bought a resale once and it never felt like "my house".

New house, you pick everything yourself including the floorplan, lighting, flooring, paint, landscaping, window treatments and you move in with all your neighbors doing the same.

Resale you can change things (except the floorplan) but it might just cost more than a new one in the long run.

New is new. Resale is buying someone's used item. Maybe it's great, maybe you find out things got covered over. U could sue, but it's just not worth it so you fix stuff and replace things.

My resale was "ok" but I wouldn't buy a resale again.

 

[CalBears96]

We bought a resale once and it never felt like "my house".

New house, you pick everything yourself including the floorplan, lighting, flooring, paint, landscaping, window treatments and you move in with all your neighbors doing the same.

Resale you can change things (except the floorplan) but it might just cost more than a new one in the long run.

New is new. Resale is buying someone's used item. Maybe it's great, maybe you find out things got covered over. U could sue, but it's just not worth it so you fix stuff and replace things.

My resale was "ok" but I wouldn't buy a resale again.

That's exactly why my wife would never buy resale. She would never buy used items.

 

[The Motor Court Company]

We are the opposite. We bought and lived in new build before but we are more satisfied with resale now. we will not go back to new build as things like lot size, distance to neighbors, 3 car wide garage and driveway you will never get it in new build unless you do a tear down and rebuild. you can still find open floor plans in some resales so you dont trade off on floor plan either.

 

[CalBears96]

We are the opposite. We bought and lived in new build before but we are more satisfied with resale now. we will not go back to new build as things like lot size, distance to neighbors, 3 car wide garage and driveway you will never get it in new build unless you do a tear down and rebuild. you can still find open floor plans in some resales so you dont trade off on floor plan either.

The 3CWG and driveway are the things that we're going to miss when moving to Bluffs 2, but overall we actually the Bluffs 2 floorplan more than our current home, even though our current home is quite a bit larger. It has many rooms that we don't use. Basically, we never really enter the dining and living room. We use the nook for eating and family room for exercising. And the big bonus room upstairs is never used either. With Bluffs 2, there isn't any wasted space. The loft upstairs is very useful. It's the main reason we decided to decline Bluffs 1 (lack of loft) when we were offered buying opportunity.

 

[The Motor Court Company]

I agree the new floor plans are quite efficient. Our current resale old house which is much bigger than bluffs 2, does not have same L shaped open floor plan as today?s new builds, but essentially it has two big open areas downstairs. One area is the family room + dining/nook + kitchen island combo and the other is great room with open to below(my wife argues there is too much wasted space because of open to below), overlooked by the upstairs loft and window seating. I really appreciate this setup because you can have different activities going on downstairs w/o interfering each other (piano playing in one area, watching TV in the other), but still open enough as today?s new build. I doubt this floor plan is feasible in today?s new build because it is not as efficient.

We are the opposite. We bought and lived in new build before but we are more satisfied with resale now. we will not go back to new build as things like lot size, distance to neighbors, 3 car wide garage and driveway you will never get it in new build unless you do a tear down and rebuild. you can still find open floor plans in some resales so you dont trade off on floor plan either.

The 3CWG and driveway are the things that we're going to miss when moving to Bluffs 2, but overall we actually the Bluffs 2 floorplan more than our current home, even though our current home is quite a bit larger. It has many rooms that we don't use. Basically, we never really enter the dining and living room. We use the nook for eating and family room for exercising. And the big bonus room upstairs is never used either. With Bluffs 2, there isn't any wasted space. The loft upstairs is very useful. It's the main reason we decided to decline Bluffs 1 (lack of loft) when we were offered buying opportunity.

 

[Ready2Downsize]

I agree the new floor plans are quite efficient. Our current resale old house which is much bigger than bluffs 2, does not have same L shaped open floor plan as today?s new builds, but essentially it has two big open areas downstairs. One area is the family room + dining/nook + kitchen island combo and the other is great room with open to below(my wife argues there is too much wasted space because of open to below), overlooked by the upstairs loft and window seating. I really appreciate this setup because you can have different activities going on downstairs w/o interfering each other (piano playing in one area, watching TV in the other), but still open enough as today?s new build. I doubt this floor plan is feasible in today?s new build because it is not as efficient.

We are the opposite. We bought and lived in new build before but we are more satisfied with resale now. we will not go back to new build as things like lot size, distance to neighbors, 3 car wide garage and driveway you will never get it in new build unless you do a tear down and rebuild. you can still find open floor plans in some resales so you dont trade off on floor plan either.

The 3CWG and driveway are the things that we're going to miss when moving to Bluffs 2, but overall we actually the Bluffs 2 floorplan more than our current home, even though our current home is quite a bit larger. It has many rooms that we don't use. Basically, we never really enter the dining and living room. We use the nook for eating and family room for exercising. And the big bonus room upstairs is never used either. With Bluffs 2, there isn't any wasted space. The loft upstairs is very useful. It's the main reason we decided to decline Bluffs 1 (lack of loft) when we were offered buying opportunity.

I agree with the two car garage being a negative of new builds.

The dining room sometimes can be made into an office or gym for not that much money but newer homes are more energy efficient.

One of my big things is to pick the direction of the home and into that goes where the garage sits (to insulate the home from afternoon sun) and where the windows are located. I once had a house with master bedroom upstairs and beautiful windows all facing the afternoon sun (along with the downstairs cathedral ceilings and windows that covered both upstairs and downstairs. So beautiful and light and bright but hot as all get out when the other side was cool. We had a half circle upper window with double pane glass. We had some heat blocking window film put on the windows on that side of the house and the semi circle window cracked...... twice from the sun (others were all fine). After that we just kept that window without the film on it.

Now with my house always facing so that the afternoon sun doesn't hit many windows (and builder added insulation) I have low electric bills and a house that rarely needs the a/c on. Harder to do that with a resale.

 

[Kenkoko]

I chose to become a homeowner too because I see many pros in owning. But I'm not blinded by the cons and the potential opportunity costs.

What? You don't listen to your own mentoring advice?

I hope you realize by now that my "Any time can be a good time to buy" applies to people who have done their research and understand fully the pros and cons.

My mentoring advice is derived partly from my personal experience. I was financially ready to buy in 2009, but waited until 2016. That decision benefited us financially and really forced me to learn how to invest.

I talk about opportunity cost / job lock because it's personal experience too. My wife passed up on a big career move to DC mainly because we'd just bought a new home. She picked out every upgrade and just put down money into building the pool. She was so emotional invested in the house, she just couldn't walk away.

IHO, I hope you know I've always agreed with your caveat. My contention was always that your intended audience is small. (and increasingly smaller since the home price surge)