Poll: Irvine Housing Prediction June 2022

Where will Irvine housing prices be in one year?

  • Down over 50%

    Votes: 0 0.0%
  • Down 20%

    Votes: 20 19.0%
  • Down 10%

    Votes: 40 38.1%
  • Down 5%

    Votes: 31 29.5%
  • Flat

    Votes: 37 35.2%
  • Up 5%

    Votes: 15 14.3%
  • Up 10%

    Votes: 5 4.8%
  • Up 20%

    Votes: 0 0.0%
  • Up over 50%

    Votes: 0 0.0%
  • Other (please specify in post)

    Votes: 0 0.0%

  • Total voters
    105
  • Poll closed .
OCtoSV said:
WTTCHMN said:
zovall said:
Every time I think prices are high in Irvine, I take a look at parts of the Bay to see real craziness. Many of those buyers are in tech and could be remote and if they could, why would they spend $4.125m ($635k over asking) for this:https://www.redfin.com/CA/Cupertino/7646-Berland-Ct-95014/home/1418200

Compared to places like Cupertino and Saratoga, Irvine is dirt cheap still. I know the job market is different there but anecdotally I'm aware of several who sold in the Bay and bought in Orange County.


It's because of Monta Vista High... the realtors even mention it in the first sentence.  So they are selling not just the house, but the illusion that the buyer's kid will get into an Ivy...

I make this point all the time - Irvine is a smokin deal if remote works for you. The higher you go the harder that is to pull off, and all the biggies want people back in the office. Saratoga is full of (mostly) Asian/South Asian CEOs and some very nice wineries, and over the hill is Santa Cruz. Cupertino is the original aspirational Asian/South Asian suburb. I did some alumni recruiting for the Viterbi School of Engineering and they held a separate session just for the Cupertino high schools. I would wager that the Bay area?s top high schools in aggregate get more UC/USC admit slots than SoCals best. Maybe Stanford/Ivies too.

I?m down here right now and it is such a refreshing change, even watching the local news. It feels so much more relaxed and less serious.

You probably already know this, but San Francisco prices are already down from 2021:

Home Prices Are Starting to Buckle in Tech-Fueled San Francisco

The median house price in the city dropped 3% from a year earlier to $1.89 million in June, according to a report Thursday by brokerage Compass Inc., after cresting above a record $2 million in the previous three months.
https://www.bloomberg.com/news/arti...start-to-fall-as-headwinds-mount?srnd=premium

The Bay Area Housing Market Is Cooling More Rapidly Than Anywhere Else in the Country

Five of the 10 U.S. housing markets that have cooled fastest this year are in northern California?San Jose, Oakland, San Francisco, Sacramento and Stockton
https://www.redfin.com/news/housing-markets-cooling-fastest-bay-area-2022/
 
Liar Loan said:
OCtoSV said:
WTTCHMN said:
zovall said:
Every time I think prices are high in Irvine, I take a look at parts of the Bay to see real craziness. Many of those buyers are in tech and could be remote and if they could, why would they spend $4.125m ($635k over asking) for this:https://www.redfin.com/CA/Cupertino/7646-Berland-Ct-95014/home/1418200

Compared to places like Cupertino and Saratoga, Irvine is dirt cheap still. I know the job market is different there but anecdotally I'm aware of several who sold in the Bay and bought in Orange County.


It's because of Monta Vista High... the realtors even mention it in the first sentence.  So they are selling not just the house, but the illusion that the buyer's kid will get into an Ivy...

I make this point all the time - Irvine is a smokin deal if remote works for you. The higher you go the harder that is to pull off, and all the biggies want people back in the office. Saratoga is full of (mostly) Asian/South Asian CEOs and some very nice wineries, and over the hill is Santa Cruz. Cupertino is the original aspirational Asian/South Asian suburb. I did some alumni recruiting for the Viterbi School of Engineering and they held a separate session just for the Cupertino high schools. I would wager that the Bay area?s top high schools in aggregate get more UC/USC admit slots than SoCals best. Maybe Stanford/Ivies too.

I?m down here right now and it is such a refreshing change, even watching the local news. It feels so much more relaxed and less serious.

You probably already know this, but San Francisco prices are already down from 2021:

Home Prices Are Starting to Buckle in Tech-Fueled San Francisco

The median house price in the city dropped 3% from a year earlier to $1.89 million in June, according to a report Thursday by brokerage Compass Inc., after cresting above a record $2 million in the previous three months.
https://www.bloomberg.com/news/arti...start-to-fall-as-headwinds-mount?srnd=premium

The Bay Area Housing Market Is Cooling More Rapidly Than Anywhere Else in the Country

Five of the 10 U.S. housing markets that have cooled fastest this year are in northern California?San Jose, Oakland, San Francisco, Sacramento and Stockton
https://www.redfin.com/news/housing-markets-cooling-fastest-bay-area-2022/

SF is cratering - rents down there 26% as well. Silicon Valley housing market has stalled to some extent though the $4M+ market which is usually mostly cash transactions is still robust. I am firmly convinced that rates are headed to 10% in order to puncture housing specualtion, and I look forward to buying my south OC retirement pad in a few years at 10%+ rates and a steep discount to current pricing.
 
OCtoSV said:
Liar Loan said:
OCtoSV said:
WTTCHMN said:
zovall said:
Every time I think prices are high in Irvine, I take a look at parts of the Bay to see real craziness. Many of those buyers are in tech and could be remote and if they could, why would they spend $4.125m ($635k over asking) for this:https://www.redfin.com/CA/Cupertino/7646-Berland-Ct-95014/home/1418200

Compared to places like Cupertino and Saratoga, Irvine is dirt cheap still. I know the job market is different there but anecdotally I'm aware of several who sold in the Bay and bought in Orange County.


It's because of Monta Vista High... the realtors even mention it in the first sentence.  So they are selling not just the house, but the illusion that the buyer's kid will get into an Ivy...

I make this point all the time - Irvine is a smokin deal if remote works for you. The higher you go the harder that is to pull off, and all the biggies want people back in the office. Saratoga is full of (mostly) Asian/South Asian CEOs and some very nice wineries, and over the hill is Santa Cruz. Cupertino is the original aspirational Asian/South Asian suburb. I did some alumni recruiting for the Viterbi School of Engineering and they held a separate session just for the Cupertino high schools. I would wager that the Bay area?s top high schools in aggregate get more UC/USC admit slots than SoCals best. Maybe Stanford/Ivies too.

I?m down here right now and it is such a refreshing change, even watching the local news. It feels so much more relaxed and less serious.

You probably already know this, but San Francisco prices are already down from 2021:

Home Prices Are Starting to Buckle in Tech-Fueled San Francisco

The median house price in the city dropped 3% from a year earlier to $1.89 million in June, according to a report Thursday by brokerage Compass Inc., after cresting above a record $2 million in the previous three months.
https://www.bloomberg.com/news/arti...start-to-fall-as-headwinds-mount?srnd=premium

The Bay Area Housing Market Is Cooling More Rapidly Than Anywhere Else in the Country

Five of the 10 U.S. housing markets that have cooled fastest this year are in northern California?San Jose, Oakland, San Francisco, Sacramento and Stockton
https://www.redfin.com/news/housing-markets-cooling-fastest-bay-area-2022/

SF is cratering - rents down there 26% as well. Silicon Valley housing market has stalled to some extent though the $4M+ market which is usually mostly cash transactions is still robust. I am firmly convinced that rates are headed to 10% in order to puncture housing specualtion, and I look forward to buying my south OC retirement pad in a few years at 10%+ rates and a steep discount to current pricing.

You can't have mortgage rates (which are longer term) be 10% if we are in a recession and the yield curve is inverted.  Can the Fed bump the Fed Funds rates to 5%, 6%, or 8%?  Maybe but that's what short term rates are.  To get mortgage interest rates to 10% you'll need inflation to increase materially from today and if we are in recession or going into one that won't happen. Mortgage rates have already begun to roll over a bit as is. Hard to have high mortgage rates when there is demand destruction due to people losing their jobs.
 
USCTrojanCPA said:
OCtoSV said:
Liar Loan said:
OCtoSV said:
WTTCHMN said:
zovall said:
Every time I think prices are high in Irvine, I take a look at parts of the Bay to see real craziness. Many of those buyers are in tech and could be remote and if they could, why would they spend $4.125m ($635k over asking) for this:https://www.redfin.com/CA/Cupertino/7646-Berland-Ct-95014/home/1418200

Compared to places like Cupertino and Saratoga, Irvine is dirt cheap still. I know the job market is different there but anecdotally I'm aware of several who sold in the Bay and bought in Orange County.


It's because of Monta Vista High... the realtors even mention it in the first sentence.  So they are selling not just the house, but the illusion that the buyer's kid will get into an Ivy...

I make this point all the time - Irvine is a smokin deal if remote works for you. The higher you go the harder that is to pull off, and all the biggies want people back in the office. Saratoga is full of (mostly) Asian/South Asian CEOs and some very nice wineries, and over the hill is Santa Cruz. Cupertino is the original aspirational Asian/South Asian suburb. I did some alumni recruiting for the Viterbi School of Engineering and they held a separate session just for the Cupertino high schools. I would wager that the Bay area?s top high schools in aggregate get more UC/USC admit slots than SoCals best. Maybe Stanford/Ivies too.

I?m down here right now and it is such a refreshing change, even watching the local news. It feels so much more relaxed and less serious.

You probably already know this, but San Francisco prices are already down from 2021:

Home Prices Are Starting to Buckle in Tech-Fueled San Francisco

The median house price in the city dropped 3% from a year earlier to $1.89 million in June, according to a report Thursday by brokerage Compass Inc., after cresting above a record $2 million in the previous three months.
https://www.bloomberg.com/news/arti...start-to-fall-as-headwinds-mount?srnd=premium

The Bay Area Housing Market Is Cooling More Rapidly Than Anywhere Else in the Country

Five of the 10 U.S. housing markets that have cooled fastest this year are in northern California?San Jose, Oakland, San Francisco, Sacramento and Stockton
https://www.redfin.com/news/housing-markets-cooling-fastest-bay-area-2022/

SF is cratering - rents down there 26% as well. Silicon Valley housing market has stalled to some extent though the $4M+ market which is usually mostly cash transactions is still robust. I am firmly convinced that rates are headed to 10% in order to puncture housing specualtion, and I look forward to buying my south OC retirement pad in a few years at 10%+ rates and a steep discount to current pricing.

You can't have mortgage rates (which are longer term) be 10% if we are in a recession and the yield curve is inverted.  Can the Fed bump the Fed Funds rates to 5%, 6%, or 8%?  Maybe but that's what short term rates are.  To get mortgage interest rates to 10% you'll need inflation to increase materially from today and if we are in recession or going into one that won't happen. Mortgage rates have already begun to roll over a bit as is. Hard to have high mortgage rates when there is demand destruction due to people losing their jobs.

Either way housing is screwed.  Rising unemployment is just as bad for home prices as rising rates.

Treasury Curve Inversion Deepens to Level Not Seen Since 2007
https://finance.yahoo.com/news/treasury-curve-inversion-deepens-level-110837331.html
 
Liar Loan said:
USCTrojanCPA said:
OCtoSV said:
Liar Loan said:
OCtoSV said:
WTTCHMN said:
zovall said:
Every time I think prices are high in Irvine, I take a look at parts of the Bay to see real craziness. Many of those buyers are in tech and could be remote and if they could, why would they spend $4.125m ($635k over asking) for this:https://www.redfin.com/CA/Cupertino/7646-Berland-Ct-95014/home/1418200

Compared to places like Cupertino and Saratoga, Irvine is dirt cheap still. I know the job market is different there but anecdotally I'm aware of several who sold in the Bay and bought in Orange County.


It's because of Monta Vista High... the realtors even mention it in the first sentence.  So they are selling not just the house, but the illusion that the buyer's kid will get into an Ivy...

I make this point all the time - Irvine is a smokin deal if remote works for you. The higher you go the harder that is to pull off, and all the biggies want people back in the office. Saratoga is full of (mostly) Asian/South Asian CEOs and some very nice wineries, and over the hill is Santa Cruz. Cupertino is the original aspirational Asian/South Asian suburb. I did some alumni recruiting for the Viterbi School of Engineering and they held a separate session just for the Cupertino high schools. I would wager that the Bay area?s top high schools in aggregate get more UC/USC admit slots than SoCals best. Maybe Stanford/Ivies too.

I?m down here right now and it is such a refreshing change, even watching the local news. It feels so much more relaxed and less serious.

You probably already know this, but San Francisco prices are already down from 2021:

Home Prices Are Starting to Buckle in Tech-Fueled San Francisco

The median house price in the city dropped 3% from a year earlier to $1.89 million in June, according to a report Thursday by brokerage Compass Inc., after cresting above a record $2 million in the previous three months.
https://www.bloomberg.com/news/arti...start-to-fall-as-headwinds-mount?srnd=premium

The Bay Area Housing Market Is Cooling More Rapidly Than Anywhere Else in the Country

Five of the 10 U.S. housing markets that have cooled fastest this year are in northern California?San Jose, Oakland, San Francisco, Sacramento and Stockton
https://www.redfin.com/news/housing-markets-cooling-fastest-bay-area-2022/

SF is cratering - rents down there 26% as well. Silicon Valley housing market has stalled to some extent though the $4M+ market which is usually mostly cash transactions is still robust. I am firmly convinced that rates are headed to 10% in order to puncture housing specualtion, and I look forward to buying my south OC retirement pad in a few years at 10%+ rates and a steep discount to current pricing.

You can't have mortgage rates (which are longer term) be 10% if we are in a recession and the yield curve is inverted.  Can the Fed bump the Fed Funds rates to 5%, 6%, or 8%?  Maybe but that's what short term rates are.  To get mortgage interest rates to 10% you'll need inflation to increase materially from today and if we are in recession or going into one that won't happen. Mortgage rates have already begun to roll over a bit as is. Hard to have high mortgage rates when there is demand destruction due to people losing their jobs.

Either way housing is screwed.  Rising unemployment is just as bad for home prices as rising rates.

Treasury Curve Inversion Deepens to Level Not Seen Since 2007
https://finance.yahoo.com/news/treasury-curve-inversion-deepens-level-110837331.html

True but it depends which kind of jobs get cut and unfortunately the lower level jobs get cut first.  There are still 2x as many job openings as unemployed people but I'm sure that will shrink in time but the job market is way stronger today than it was back in 2006-2007.
 
USCTrojanCPA said:
OCtoSV said:
Liar Loan said:
OCtoSV said:
WTTCHMN said:
zovall said:
Every time I think prices are high in Irvine, I take a look at parts of the Bay to see real craziness. Many of those buyers are in tech and could be remote and if they could, why would they spend $4.125m ($635k over asking) for this:https://www.redfin.com/CA/Cupertino/7646-Berland-Ct-95014/home/1418200

Compared to places like Cupertino and Saratoga, Irvine is dirt cheap still. I know the job market is different there but anecdotally I'm aware of several who sold in the Bay and bought in Orange County.


It's because of Monta Vista High... the realtors even mention it in the first sentence.  So they are selling not just the house, but the illusion that the buyer's kid will get into an Ivy...

I make this point all the time - Irvine is a smokin deal if remote works for you. The higher you go the harder that is to pull off, and all the biggies want people back in the office. Saratoga is full of (mostly) Asian/South Asian CEOs and some very nice wineries, and over the hill is Santa Cruz. Cupertino is the original aspirational Asian/South Asian suburb. I did some alumni recruiting for the Viterbi School of Engineering and they held a separate session just for the Cupertino high schools. I would wager that the Bay area?s top high schools in aggregate get more UC/USC admit slots than SoCals best. Maybe Stanford/Ivies too.

I?m down here right now and it is such a refreshing change, even watching the local news. It feels so much more relaxed and less serious.

You probably already know this, but San Francisco prices are already down from 2021:

Home Prices Are Starting to Buckle in Tech-Fueled San Francisco

The median house price in the city dropped 3% from a year earlier to $1.89 million in June, according to a report Thursday by brokerage Compass Inc., after cresting above a record $2 million in the previous three months.
https://www.bloomberg.com/news/arti...start-to-fall-as-headwinds-mount?srnd=premium

The Bay Area Housing Market Is Cooling More Rapidly Than Anywhere Else in the Country

Five of the 10 U.S. housing markets that have cooled fastest this year are in northern California?San Jose, Oakland, San Francisco, Sacramento and Stockton
https://www.redfin.com/news/housing-markets-cooling-fastest-bay-area-2022/

SF is cratering - rents down there 26% as well. Silicon Valley housing market has stalled to some extent though the $4M+ market which is usually mostly cash transactions is still robust. I am firmly convinced that rates are headed to 10% in order to puncture housing specualtion, and I look forward to buying my south OC retirement pad in a few years at 10%+ rates and a steep discount to current pricing.

You can't have mortgage rates (which are longer term) be 10% if we are in a recession and the yield curve is inverted.  Can the Fed bump the Fed Funds rates to 5%, 6%, or 8%?  Maybe but that's what short term rates are.  To get mortgage interest rates to 10% you'll need inflation to increase materially from today and if we are in recession or going into one that won't happen. Mortgage rates have already begun to roll over a bit as is. Hard to have high mortgage rates when there is demand destruction due to people losing their jobs.
Your conventional thinking logic is flawed as you're not accounting for the impact of MBS QT, which hasn't even started yet (what will the securitization market look like), nor are you considering mortage rates traded at a discount to inflation only 3 times in the last 50 years as so astutely analyzed in Lansners's recent article:
https://www.ocregister.com/2022/06/17/bubble-watch-could-mortgage-rates-hit-10/][url]https://www.ocregister.com/2022/06/17/bubble-watch-could-mortgage-rates-hit-10/[/url]

Our parents faced double digit mort rates in a recession - so will we
 
OCtoSV said:
USCTrojanCPA said:
OCtoSV said:
Liar Loan said:
OCtoSV said:
WTTCHMN said:
zovall said:
Every time I think prices are high in Irvine, I take a look at parts of the Bay to see real craziness. Many of those buyers are in tech and could be remote and if they could, why would they spend $4.125m ($635k over asking) for this:https://www.redfin.com/CA/Cupertino/7646-Berland-Ct-95014/home/1418200

Compared to places like Cupertino and Saratoga, Irvine is dirt cheap still. I know the job market is different there but anecdotally I'm aware of several who sold in the Bay and bought in Orange County.


It's because of Monta Vista High... the realtors even mention it in the first sentence.  So they are selling not just the house, but the illusion that the buyer's kid will get into an Ivy...

I make this point all the time - Irvine is a smokin deal if remote works for you. The higher you go the harder that is to pull off, and all the biggies want people back in the office. Saratoga is full of (mostly) Asian/South Asian CEOs and some very nice wineries, and over the hill is Santa Cruz. Cupertino is the original aspirational Asian/South Asian suburb. I did some alumni recruiting for the Viterbi School of Engineering and they held a separate session just for the Cupertino high schools. I would wager that the Bay area?s top high schools in aggregate get more UC/USC admit slots than SoCals best. Maybe Stanford/Ivies too.

I?m down here right now and it is such a refreshing change, even watching the local news. It feels so much more relaxed and less serious.

You probably already know this, but San Francisco prices are already down from 2021:

Home Prices Are Starting to Buckle in Tech-Fueled San Francisco

The median house price in the city dropped 3% from a year earlier to $1.89 million in June, according to a report Thursday by brokerage Compass Inc., after cresting above a record $2 million in the previous three months.
https://www.bloomberg.com/news/arti...start-to-fall-as-headwinds-mount?srnd=premium

The Bay Area Housing Market Is Cooling More Rapidly Than Anywhere Else in the Country

Five of the 10 U.S. housing markets that have cooled fastest this year are in northern California?San Jose, Oakland, San Francisco, Sacramento and Stockton
https://www.redfin.com/news/housing-markets-cooling-fastest-bay-area-2022/

SF is cratering - rents down there 26% as well. Silicon Valley housing market has stalled to some extent though the $4M+ market which is usually mostly cash transactions is still robust. I am firmly convinced that rates are headed to 10% in order to puncture housing specualtion, and I look forward to buying my south OC retirement pad in a few years at 10%+ rates and a steep discount to current pricing.

You can't have mortgage rates (which are longer term) be 10% if we are in a recession and the yield curve is inverted.  Can the Fed bump the Fed Funds rates to 5%, 6%, or 8%?  Maybe but that's what short term rates are.  To get mortgage interest rates to 10% you'll need inflation to increase materially from today and if we are in recession or going into one that won't happen. Mortgage rates have already begun to roll over a bit as is. Hard to have high mortgage rates when there is demand destruction due to people losing their jobs.
Your conventional thinking logic is flawed as you're not accounting for the impact of MBS QT, which hasn't even started yet (what will the securitization market look like), nor are you considering mortage rates traded at a discount to inflation only 3 times in the last 50 years as so astutely analyzed in Lansners's recent article:
[url=https://www.ocregister.com/2022/06/17/bubble-watch-could-mortgage-rates-hit-10/]https://www.ocregister.com/2022/06/17/bubble-watch-could-mortgage-rates-hit-10/][url=https://www.ocregister.com/2022/06/17/bubble-watch-could-mortgage-rates-hit-10/]https://www.ocregister.com/2022/06/17/bubble-watch-could-mortgage-rates-hit-10/]https://www.ocregister.com/2022/06/17/bubble-watch-could-mortgage-rates-hit-10/][url=https://www.ocregister.com/2022/06/17/bubble-watch-could-mortgage-rates-hit-10/]https://www.ocregister.com/2022/06/17/bubble-watch-could-mortgage-rates-hit-10/]https://www.ocregister.com/2022/06/17/bubble-watch-could-mortgage-rates-hit-10/]https://www.ocregister.com/2022/06/17/bubble-watch-could-mortgage-rates-hit-10/][url]https://www.ocregister.com/2022/06/17/bubble-watch-could-mortgage-rates-hit-10/]https://www.ocregister.com/2022/06/17/bubble-watch-could-mortgage-rates-hit-10/]https://www.ocregister.com/2022/06/17/bubble-watch-could-mortgage-rates-hit-10/]https://www.ocregister.com/2022/06/17/bubble-watch-could-mortgage-rates-hit-10/]https://www.ocregister.com/2022/06/17/bubble-watch-could-mortgage-rates-hit-10/][url]https://www.ocregister.com/2022/06/17/bubble-watch-could-mortgage-rates-hit-10/[/url]

Our parents faced double digit mort rates in a recession - so will we

I experienced that myself but unless oil goes back up, we're not going to 10% interest rates.

Times are different. Inflation that peaked in 1981 came after WWII. Everyone was buying like crazy with household formation increasing and new homes everywhere. Most of my friends had families with 3-4 kids and ONE parent working. They had ONE car. We didn't have credit cards with high balances available. We got lots of dept store cards. I think my sears card had a $300 credit limit. LOL! But as we bought more, moms entered the work force for extra spending money and why not?, credit cards got used more, balance limits went up and spend we did. At the time credit cards payments were tax deductible. Of course, we had to add another car for the second driver and then a bigger house to keep up with the Jones's and the furnishings too.

But now we put off having kids and even then we have maybe 2. Cars last longer (we were LUCKY to get four years out of some of those cars from the 60's/70's). Every four years another two cars and 5-6 mouths to feed and clothe, not 1-4 like now and lots of homeowners are not going to be moving up since they've got low rate mortgages.

The fed may indeed raise rates but inflation is all but done. The fed is going to be scratching their head over their new issue..... DEFLATION.

Just as I suspected... chicken breasts are 99 cents a pound next ad here. Eggs won't be far behind and gas can't get out of it's own way it's dropping so quick.

 
OCtoSV said:
USCTrojanCPA said:
OCtoSV said:
Liar Loan said:
OCtoSV said:
WTTCHMN said:
zovall said:
Every time I think prices are high in Irvine, I take a look at parts of the Bay to see real craziness. Many of those buyers are in tech and could be remote and if they could, why would they spend $4.125m ($635k over asking) for this:https://www.redfin.com/CA/Cupertino/7646-Berland-Ct-95014/home/1418200

Compared to places like Cupertino and Saratoga, Irvine is dirt cheap still. I know the job market is different there but anecdotally I'm aware of several who sold in the Bay and bought in Orange County.


It's because of Monta Vista High... the realtors even mention it in the first sentence.  So they are selling not just the house, but the illusion that the buyer's kid will get into an Ivy...

I make this point all the time - Irvine is a smokin deal if remote works for you. The higher you go the harder that is to pull off, and all the biggies want people back in the office. Saratoga is full of (mostly) Asian/South Asian CEOs and some very nice wineries, and over the hill is Santa Cruz. Cupertino is the original aspirational Asian/South Asian suburb. I did some alumni recruiting for the Viterbi School of Engineering and they held a separate session just for the Cupertino high schools. I would wager that the Bay area?s top high schools in aggregate get more UC/USC admit slots than SoCals best. Maybe Stanford/Ivies too.

I?m down here right now and it is such a refreshing change, even watching the local news. It feels so much more relaxed and less serious.

You probably already know this, but San Francisco prices are already down from 2021:

Home Prices Are Starting to Buckle in Tech-Fueled San Francisco

The median house price in the city dropped 3% from a year earlier to $1.89 million in June, according to a report Thursday by brokerage Compass Inc., after cresting above a record $2 million in the previous three months.
https://www.bloomberg.com/news/arti...start-to-fall-as-headwinds-mount?srnd=premium

The Bay Area Housing Market Is Cooling More Rapidly Than Anywhere Else in the Country

Five of the 10 U.S. housing markets that have cooled fastest this year are in northern California?San Jose, Oakland, San Francisco, Sacramento and Stockton
https://www.redfin.com/news/housing-markets-cooling-fastest-bay-area-2022/

SF is cratering - rents down there 26% as well. Silicon Valley housing market has stalled to some extent though the $4M+ market which is usually mostly cash transactions is still robust. I am firmly convinced that rates are headed to 10% in order to puncture housing specualtion, and I look forward to buying my south OC retirement pad in a few years at 10%+ rates and a steep discount to current pricing.

You can't have mortgage rates (which are longer term) be 10% if we are in a recession and the yield curve is inverted.  Can the Fed bump the Fed Funds rates to 5%, 6%, or 8%?  Maybe but that's what short term rates are.  To get mortgage interest rates to 10% you'll need inflation to increase materially from today and if we are in recession or going into one that won't happen. Mortgage rates have already begun to roll over a bit as is. Hard to have high mortgage rates when there is demand destruction due to people losing their jobs.
Your conventional thinking logic is flawed as you're not accounting for the impact of MBS QT, which hasn't even started yet (what will the securitization market look like), nor are you considering mortage rates traded at a discount to inflation only 3 times in the last 50 years as so astutely analyzed in Lansners's recent article:
[url=https://www.ocregister.com/2022/06/17/bubble-watch-could-mortgage-rates-hit-10/]https://www.ocregister.com/2022/06/17/bubble-watch-could-mortgage-rates-hit-10/][url=https://www.ocregister.com/2022/06/17/bubble-watch-could-mortgage-rates-hit-10/]https://www.ocregister.com/2022/06/17/bubble-watch-could-mortgage-rates-hit-10/]https://www.ocregister.com/2022/06/17/bubble-watch-could-mortgage-rates-hit-10/][url]https://www.ocregister.com/2022/06/17/bubble-watch-could-mortgage-rates-hit-10/]https://www.ocregister.com/2022/06/17/bubble-watch-could-mortgage-rates-hit-10/]https://www.ocregister.com/2022/06/17/bubble-watch-could-mortgage-rates-hit-10/]https://www.ocregister.com/2022/06/17/bubble-watch-could-mortgage-rates-hit-10/][url]https://www.ocregister.com/2022/06/17/bubble-watch-could-mortgage-rates-hit-10/[/url]

Our parents faced double digit mort rates in a recession - so will we

I don't agree with you.  The longer term rates are the ones that anticipate inflation and now we have an inverted yield curve which basically signals that a recession is coming with longer term bond rates down over 1/2% from the peak.  The Fed will have to pivot again once they see that inflation reverses.  Not only has oil started to roll over but so have a lot of other commodities, as have car prices and home prices.  Where's the inflation going to come from if all these commodities are rolling over?  Oh and if we get more layoffs, you'll get declining earnings growth by workers.  I have this funny feeling that the Fed will be back cutting rates sometime in 2023.
 
Remember that cost increase I was going to give my customers at the end of the year?
It's looking like that's not happening. 

I may have to cut prices...the horror.
 
zubs said:
Remember that cost increase I was going to give my customers at the end of the year?
It's looking like that's not happening. 

I may have to cut prices...the horror.

Are they selling a decrease in demand?
 
raw materials is dropping.
Container ships are starting to have more free space....although freight forwarders are still trying to milk it for as long as they can.


I expect demand to go down, but it's supply side that is getting cheaper.
 
Ready2Downsize said:
Hot cpi and what is happening to bond yields? They don't think inflation is going up from here.

Longer term bond rates are basically flat.  As I said, the higher the Fed goes on their rates the lower you may see longer term bond rates as more of a recession will get priced in.
 
USCTrojanCPA said:
Ready2Downsize said:
Hot cpi and what is happening to bond yields? They don't think inflation is going up from here.

Longer term bond rates are basically flat.  As I said, the higher the Fed goes on their rates the lower you may see longer term bond rates as more of a recession will get priced in.
You're completely ignoring the impact of the MBS QT. There will be no runoff with refis dead and no bid. All price signals are beyond distorted courtesy of 15 yrs of QE. All of our asset classes are in the Fed's cross hairs to deflate. I stand by my preciction of 10% on the 30 yr fixed and we'll see it by end of 24/early 25. And we all get to handicap this race right here on TI.
 
OCtoSV said:
USCTrojanCPA said:
Ready2Downsize said:
Hot cpi and what is happening to bond yields? They don't think inflation is going up from here.

Longer term bond rates are basically flat.  As I said, the higher the Fed goes on their rates the lower you may see longer term bond rates as more of a recession will get priced in.
You're completely ignoring the impact of the MBS QT. There will be no runoff with refis dead and no bid. All price signals are beyond distorted courtesy of 15 yrs of QE. All of our asset classes are in the Fed's cross hairs to deflate. I stand by my preciction of 10% on the 30 yr fixed and we'll see it by end of 24/early 25. And we all get to handicap this race right here on TI.

You do realize that once inflation falls and we are in recession and/or something breaks the Fed will pivot and start cutting rates, right?  The Fed is doing QT as we speak and bond rates have come down 1/2% in the past month, why do you think that is?
 
USCTrojanCPA said:
OCtoSV said:
USCTrojanCPA said:
Ready2Downsize said:
Hot cpi and what is happening to bond yields? They don't think inflation is going up from here.

Longer term bond rates are basically flat.  As I said, the higher the Fed goes on their rates the lower you may see longer term bond rates as more of a recession will get priced in.
You're completely ignoring the impact of the MBS QT. There will be no runoff with refis dead and no bid. All price signals are beyond distorted courtesy of 15 yrs of QE. All of our asset classes are in the Fed's cross hairs to deflate. I stand by my preciction of 10% on the 30 yr fixed and we'll see it by end of 24/early 25. And we all get to handicap this race right here on TI.

You do realize that once inflation falls and we are in recession and/or something breaks the Fed will pivot and start cutting rates, right?  The Fed is doing QT as we speak and bond rates have come down 1/2% in the past month, why do you think that is?
They're going right back up this week, but again all these signals are distorted. Do you think Powell is goign to say "ok, the neutral rate is 7% so I can cut now that we're in a recession"? Powell is going to raise rates until that 9.1% print is much much much lower. I don't see how he can maintain a 2% target but it's going to get ugly. Bank on it. Don't fight the Fed is always rule #1. And as Lansner showed the historical premium from Fed Funds to mort rate is ~4%. Grain shortage isn't going away so food inflation will remain elevated, and rents are through the roof, which will keep inflation high
 
OCtoSV said:
USCTrojanCPA said:
OCtoSV said:
USCTrojanCPA said:
Ready2Downsize said:
Hot cpi and what is happening to bond yields? They don't think inflation is going up from here.

Longer term bond rates are basically flat.  As I said, the higher the Fed goes on their rates the lower you may see longer term bond rates as more of a recession will get priced in.
You're completely ignoring the impact of the MBS QT. There will be no runoff with refis dead and no bid. All price signals are beyond distorted courtesy of 15 yrs of QE. All of our asset classes are in the Fed's cross hairs to deflate. I stand by my preciction of 10% on the 30 yr fixed and we'll see it by end of 24/early 25. And we all get to handicap this race right here on TI.

You do realize that once inflation falls and we are in recession and/or something breaks the Fed will pivot and start cutting rates, right?  The Fed is doing QT as we speak and bond rates have come down 1/2% in the past month, why do you think that is?
They're going right back up this week, but again all these signals are distorted. Do you think Powell is goign to say "ok, the neutral rate is 7% so I can cut now that we're in a recession"? Powell is going to raise rates until that 9.1% print is much much much lower. I don't see how he can maintain a 2% target but it's going to get ugly. Bank on it. Don't fight the Fed is always rule #1. And as Lansner showed the historical premium from Fed Funds to mort rate is ~4%. Grain shortage isn't going away so food inflation will remain elevated, and rents are through the roof, which will keep inflation high

The Fed won't raise rates to 9% because inflation will have rolled over by that time.  They'll probably end up somewhere around 4% +/- before they start cutting rates sometime next year.  The bond yield curve will continue to grow as they keep moving up rates because we'll go into a deeper recession the higher they go on the rate increases. Have you see how the 3-year, 5-year, and 10-year break even yield curves have decreased?  These are indication of where the market believes inflation rates will be out into the future.
 
recession is inevitable as this point, the question is how severe and for how long?.

USCTrojanCPA said:
OCtoSV said:
USCTrojanCPA said:
OCtoSV said:
USCTrojanCPA said:
Ready2Downsize said:
Hot cpi and what is happening to bond yields? They don't think inflation is going up from here.

Longer term bond rates are basically flat.  As I said, the higher the Fed goes on their rates the lower you may see longer term bond rates as more of a recession will get priced in.
You're completely ignoring the impact of the MBS QT. There will be no runoff with refis dead and no bid. All price signals are beyond distorted courtesy of 15 yrs of QE. All of our asset classes are in the Fed's cross hairs to deflate. I stand by my preciction of 10% on the 30 yr fixed and we'll see it by end of 24/early 25. And we all get to handicap this race right here on TI.

You do realize that once inflation falls and we are in recession and/or something breaks the Fed will pivot and start cutting rates, right?  The Fed is doing QT as we speak and bond rates have come down 1/2% in the past month, why do you think that is?
They're going right back up this week, but again all these signals are distorted. Do you think Powell is goign to say "ok, the neutral rate is 7% so I can cut now that we're in a recession"? Powell is going to raise rates until that 9.1% print is much much much lower. I don't see how he can maintain a 2% target but it's going to get ugly. Bank on it. Don't fight the Fed is always rule #1. And as Lansner showed the historical premium from Fed Funds to mort rate is ~4%. Grain shortage isn't going away so food inflation will remain elevated, and rents are through the roof, which will keep inflation high

The Fed won't raise rates to 9% because inflation will have rolled over by that time.  They'll probably end up somewhere around 4% +/- before they start cutting rates sometime next year.  The bond yield curve will continue to grow as they keep moving up rates because we'll go into a deeper recession the higher they go on the rate increases. Have you see how the 3-year, 5-year, and 10-year break even yield curves have decreased?  These are indication of where the market believes inflation rates will be out into the future.
 
headline in the WSJ today

Mortgage Rates Rise Again After Recording Sharp Drop
The average rate on a 30-year fixed-rate mortgage increased to 5.51% from 5.30%
 
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