Irvine down 50% from peak?

E

edhne

New member
There was an interesting conversation on pricing S&P index in gold because the dollar is going down in value so much. Looked at that way, the S&P wasn't actually performing as well as it would seem in dollar terms.

If the same were applied to RE prices, priced in other financial instruments/currencies (rather than US dollars), Irvine would be considered to be down significantly more than the nominal US dollar price. People wonder about all the "illogical" and "irrational" FCB are wasting their money using all cash to purchase homes in Irvine at near peak prices or insufficiently corrected prices. "They are clueless." But if they are truly FCB, Irvine could be down as much 50% in their terms.

Now that doesn't address the entire issue of why FCB would want to actually buy in Irvine :)
 
That's a very good point... And it maybe be a significant part of the all cash or the high down payments we see.  But I wonder if the number that is truely "foriegn" is smaller than people think.  My sister has bought 4 properties all cash not in irvine but in the ie... If there were an ie forum maybe they would be claiming that "foreign" cash is buying up all the properties because of her surname.  I'm not sure if I'm hijacking this thread but this is what Ive wondered for a while and i thought this was a good time to chime in... other than the buyer's last name, how can one tell if the buyer is truly foreign?  My coworker just bought a duplex in l.a. to rent to people qualified for section 8... Again he has an Asian last name... paid cash... I myself at a lower price point and with a refi cash out of another property came really close to buying all cash in Aliso.  All these are of course anedoctial...
 
very true...another confusing factor for fcb is that "local" asian buyer isn't really the buyer. have a co worker buying for wealthy foreign inlaws who don't want to go thru literally "forgein" paperwork they don't aren't familiar with so they asked the person to buy in their name instead, all cash.
 
For U.S. homeowners, the family moving in next door could be Canadian. Or Chinese.

    Bloomberg News

U.S. real estate, especially on the high end, is getting support from international buyers. If U.S. buyers find homes attractively priced, global buyers are finding a fire sale once exchange rates are figured in.

According to a report released Wednesday by the National Association of Realtors, foreign clients spent about $41 billion in U.S. housing in the 12 months ended in March 2011. Individuals with visas to stay for more than 6 months purchased an additional $41 billion. Taken together, that?s about 8% of the total U.S. housing market.

Foreign buyers are more likely to buy on the high end of the market. The report notes that the average purchase price paid by an international buyer was $315,000 compared to the overall U.S. average of $218,000. (Read related Journal coverage.)

International buyers are also more likely to pay cash, in part because they face difficulties getting U.S.-based financing. The report said 62% of foreign buyers used all cash. In recent months, about one-third of existing-home sales were all cash.

What is interesting is that more international buyers are going downmarket. The NAR says in the latest year 45% of the international sales were under $200,000. That share is up from 28% in 2007.

?Almost 80% of realtors reported that the value of the dollar had an impact on international sales? the NAR says.

?When the dollar depreciates against the euro it also tends to depreciate against other currencies, so overall the U.S. home buying market has become increasingly attractive to international purchasers, ? the report says.

Prices of new and existing U.S. homes have fallen by about 5% in the year ended in March (the latest data available) according to data from the NAR and Census Bureau. That means a U.S. buyer could enjoy a 5% price cut.

Most foreign buyers got a better bargain when the price is viewed from local currency. A European buyer saw a price drop of 8%. A Chinese house hunter had an 8.6% discount. And a Canadian buyer got a 9.3% price chop.

U.S. real estate is more enticing given that real estate prices have stabilized or even soared in other parts of the world.

According to data from global property consultancy Knight Frank LLP, home prices are soaring in many Asian and emerging nations, to the point where the governments are trying to clamp down in housing inflation.

During 2010, home prices jumped 20.1% in Hong Kong, 16.9% in Latvia, and 16.2% in Israel. (Price changes are in local currencies.)

Prices in the U.S., by Knight Frank?s measure, fell 4.1%, with the drop accelerating in the second half of 2010. Overall global prices rose 2.8% for the year.

How much more will the weak dollar help U.S. real estate?

Over the next year, the impact may be uneven, since analysts are about split whether the dollar will strengthen or weaken against specific currencies.

The consensus view on U.S. home prices, however, is for more declines. Expect foreign buyers to remain important players in the U.S. real estate market.
http://blogs.wsj.com/economics/2011/05/18/foreign-buyers-getting-firesale-prices-on-u-s-housing/

interesting.
 
Yes. Any prospect US home buyers should park their down-payments in a basket of foreign currencies. They will experience two benefits of depreciating Dollar and declining real-estate price.
In a different angle, US home price vs. gold price has dropped by 80% since the peak.
 
A lot of the "foreign" cash buyers may not be actually foreigners but have accounts and businesses in both US ans Asia. Very true for some of the people I know. Even more true that:

1) FCBs buy in Irvine because Irvine is well executed, planned, clean, safe, new, and has good schools, highly attractive to FCBs (especially education).

2) USD is weak against foreign currencies so why not buy up some USD and put it directly into real estate, which is also relatively low.

This is an important one.
3) While economy is suffering globally, you'd be surprised how expensive it is still to purchase a home in some parts of Asia because land is so expensive (dense population). In a lot of cases, you'd need at least 1mil to buy in some of the nicer neighborhoods, which I'm assuming a lot of the power buyers live in. So if they're used to that kind of price range, Irvine (with all other factors combined) is well worth the cash.

Plus, Asians love to play Monopoly and own properties.
 
From a conversation with an agent.......In Asia, you have no land, maybe a balcony if you're lucky because it's all high rises. Vertical living vs horizontal living. So when they come here and see you can get your own house with your own lot that includes both a front and backyard. They're immediately interested. A lot of times, something like that is not even possible in Asia because it doesn't exist, or it would cost way too much. They love the space, to raise kids, have pets, grow lemon trees.
 
ucla bruin said:
From a conversation with an agent.......A lot of buyers just come over to buy houses then they go back. Over there, you have no land, maybe a balcony if you're lucky because it's all high rise. Vertical living vs horizontal living. So when they come here and see you can get your own single family house with your own lot that includes a front and backyard. They're immediate interested. They love the space, to raise kids, have pets, grow lemon trees.
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And not orange tress?  =P
 
ucla bruin said:
So when they come here and see you can get your own house with your own lot that includes both a front and backyard.
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I thought in condos you dont own your "lot" and Irvine is full of condos (most of the new home collection is condo-zoned). But I agree with your point that about horizontal living.

Irrespective of horizontal or vertical living, the important aspect is life style in Asia vs life style in US (Irvine). Factors such as corruption, pollution, communist government, population density etc.,

At the same time, I believe Asia has better education than US till graduation level - though they have more kids per class.
 
Agreed. I was just speaking to SFR. I think those that have seen and lived in both sides of the globe tend to prefer US for the better standard of living. But many still would still move to Asia for the convenience (typically older generations or 1st gen immigrants). Education in Asia before college is at a higher level but the teaching style is also different (cram). College, US wins, generally speaking.

In Asia, high school is where all the pressure is. College is relatively much easier. In US, it's reversed.

I was faced with an opportunity of a major career change and relocating to Asia before I decided to buy a home. I had to consider education for my kids, lifestyle, where I want to be in the next 5-10 years.......etc. Who knows, if I took that, maybe I could return as an FCB :)
 
ucla bruin said:
Agreed. I was just speaking to SFR. I think those that have seen and lived in both sides of the globe tend to prefer US for the better standard of living. But many still would still move to Asia for the convenience (typically older generations or 1st gen immigrants). Education in Asia before college is at a higher level but the teaching style is also different (cram). College, US wins, generally speaking.

In Asia, high school is where all the pressure is. College is relatively much easier. In US, it's reversed.

I was faced with an opportunity of a major career change and relocating to Asia before I decided to buy a home. I had to consider education for my kids, lifestyle, where I want to be in the next 5-10 years.......etc. Who knows, if I took that, maybe I could return as an FCB :)
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Really, I didn't think college was all that hard...grad school was even easier.  I had a lot more homework in HS, but then again I went to a private high school.  But what you describe is the same thing in Poland.  It's brutal for grade school and high school, having to pass a big test to move on to the next grade.  Glad I never went to school over there.  :-X  My goal is to one day be a European FCB (I can be one in Vegas and the IE, just not in Irvine...YET).  ;)
 
ohSNAP.gif
 
bones said:
USCTrojanCPA said:
LAtoOC said:
USCTrojanCPA said:
Really, I didn't think college was all that hard...grad school was even easier. 
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I couldn't let this one pass...was it because you went to USC?
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***BUZZER SOUND***  I went to UCLA for my undergrad degree.  :p
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Geez, you would think by now, everyone knows this.  I know I've read about USC's education at least 10+ times!
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Relax, I never mentioned either school until LAtoOC wanted to poke some fun at me.  If you go back and read what I said, I mentioned that I thought college was easier than high school...no mention of any schools that I went to. 
 
Isn't that the joke?

UCLA was easy... and USC grad school was even easier.

For me, 2nd grade was a doozy. I hated fractions.
 
irvinehomeowner said:
Isn't that the joke?

UCLA was easy... and USC grad school was even easier.

For me, 2nd grade was a doozy. I hated fractions.
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Heh heh.

Some of the programs (MBA....etc) are designed for people that work full time. From what I've heard from friends, they do feel that it is easier than undergrad. Undergrad for me was definitely not easy. Had the best and worst time in my life, no idea how I got through it in 4 years.
 
irvinehomeowner said:
Isn't that the joke?

UCLA was easy... and USC grad school was even easier.

For me, 2nd grade was a doozy. I hated fractions.
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Maybe grad school was easier for me because I really got into it and enjoyed the teaching style (application of concepts via case studies and working in groups) along with most classes being geared for analytical types of people (I fall into that bucket).  In the 2 years of grad school, I missed 2 classes and only because I was sick as can be.  With undergrad, I couldn't stand taking some of the required GE courses and wouldn't do as well in them as the classes that I enjoyed.  Plus with most undergrad classes, it was a lot of memorization and regergitation.  All that being said, Business School is like taking a vacation compared to other graduate programs like law school or medical school. 
 
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