irvinehomeowner
Well-known member
Granted that most of them aren't here anymore and maybe because they don't want to explain why but is that 40% drop still coming?
I must confess that I am a converted bear... but I always thought 40% was extreme, especially for newer SFR products in Irvine (and because someone never provided me data that new SFRs in Irvine during the last bubble dropped as much as other homes). I figured 20% was a more conservative number considering I believed in the intrinsic (and often non-fundamental) values of Irvine real estate.
Yet here we are, about halfway between the cycle (if you consider 05/06 the peak and a historical 7 year cycle length) with record unemployment and much stricter lending guidelines yet we haven't even got to halfway point of 40% drops. In fact, the Irvine Company is selling new homes at about what many homes were priced at during the peak and raising them every phase.
Now again, this may differ depending on the type of product you are looking at (some starter condos have dropped enormously and many ultra-high end homes have taken over 50% hits in value), but let's get real, most of us are not looking at those type of homes. For me personally, we were looking at the 4or5/3 SFR with a 3-car garage. During the peak, newer homes in this category were going for about $850k+. So I do a Redfin search and guess what I find? Yep.. $850k and up... and the lowest price 5br one is $925k.
Sure, they can claim gov interference and bank shenanigans but if I recall correctly, they had said that nothing would be able to prevent these drops... not the fed, not the banks... not even the FCBs. And while there are record levels of foreclosure/distressed/shadow inventory just waiting to wreak havoc on California... how much of that will actually affect Irvine pricing?
C'mon bears... where's the snark?
Disclaimer: While I do think there will continue to be price drops (and hope there will be) and that the bottom is probably sometime after 2012 (when the world ends)... I don't think that it will be as much as I once thought (hoped) it would be. And even if interest rates go up, I don't think that it will exert enough downward pressure to see prices fall to the point of 40% off... especially with Irvine new home building keeping benchmarks high. Realistically, if we are not even at 20% off (in the range I am looking at) near the halfway point, it's a far stretch we'll get to 40% by the bottom... but it would be nice.
I must confess that I am a converted bear... but I always thought 40% was extreme, especially for newer SFR products in Irvine (and because someone never provided me data that new SFRs in Irvine during the last bubble dropped as much as other homes). I figured 20% was a more conservative number considering I believed in the intrinsic (and often non-fundamental) values of Irvine real estate.
Yet here we are, about halfway between the cycle (if you consider 05/06 the peak and a historical 7 year cycle length) with record unemployment and much stricter lending guidelines yet we haven't even got to halfway point of 40% drops. In fact, the Irvine Company is selling new homes at about what many homes were priced at during the peak and raising them every phase.
Now again, this may differ depending on the type of product you are looking at (some starter condos have dropped enormously and many ultra-high end homes have taken over 50% hits in value), but let's get real, most of us are not looking at those type of homes. For me personally, we were looking at the 4or5/3 SFR with a 3-car garage. During the peak, newer homes in this category were going for about $850k+. So I do a Redfin search and guess what I find? Yep.. $850k and up... and the lowest price 5br one is $925k.
Sure, they can claim gov interference and bank shenanigans but if I recall correctly, they had said that nothing would be able to prevent these drops... not the fed, not the banks... not even the FCBs. And while there are record levels of foreclosure/distressed/shadow inventory just waiting to wreak havoc on California... how much of that will actually affect Irvine pricing?
C'mon bears... where's the snark?
Disclaimer: While I do think there will continue to be price drops (and hope there will be) and that the bottom is probably sometime after 2012 (when the world ends)... I don't think that it will be as much as I once thought (hoped) it would be. And even if interest rates go up, I don't think that it will exert enough downward pressure to see prices fall to the point of 40% off... especially with Irvine new home building keeping benchmarks high. Realistically, if we are not even at 20% off (in the range I am looking at) near the halfway point, it's a far stretch we'll get to 40% by the bottom... but it would be nice.