When would be next housing Bottom?

[momopi]

Bear in mind that so few of the "smart guys in the room" saw the 2007-2008 housing turn and an equally small number of folks saw the market bottom in 2010. It's nice to speculate as we are doing now, but by the time someone can firmly plant the flag into the turn or the bottom, opportunity has more than likely passed.
My .02c
SGIP

You could still find some great deals in 2012.  In South Riverside County you could buy older SFR's at 1/3 of today's price in 2012.  For LA County, 1/2 of today's price in 2012.

From 2010 to early 2012 the prices in areas where I invested didn't go up that much.  But by 2013 the jump was significant.  I saw a $240K SFR in 2012 jump to $360K in 2013 in Norwalk, and it wasn't even in the block that's in ABC school district.

 

[Mety]

SoCal is a great place to live for your primary residence, but you are not going to see the 3X appreciation growth you are saw from 1994 - 2006. You want to look at where the population is growing 10+%. New York, LA, and Chicago are developed cities, whereas Atlanta, Houston, and Dallas are emerging cities with a lot upside growth.

For example the population size of LA metro is more than 2 twice the size of metro Atlanta 13.3M vs 5.8M but the population growth in numbers in Atlanta exceeded that of Los Angeles. You have to study and observe where the population is moving.

That's a false comparison.  LA Metro is a mature population with high and ever increasing housing prices.  Atlanta is an up and coming town with relatively low prices as compared to the mature population centers (NYC, Boston, etc.)  or collapse of local economies (i.e. Detroit or Cleveland).  Comparing growth rates of places like NYC and LA with Las Vegas/Arizona and Atlanta would be like comparing the GDP growth of the US with that of BRIC nations.

LA and California are expensive to buy and live in...people are being driven to Las Vegas and Arizona not because they don't like California (mostly) but because they cannot afford to live there.  For a state like California with 8 to 9% growth in major population areas (i.e. Bay Area and Riverside) is actually quite impressive.

I think there will always be the price gap. Where Irvine will never be as expensive as Santa Monica or even close by Newport Beach, the same thing will be as Atlanta or Texas might never be as expensive as OC.  Just my thought. I could be wrong.

 

[meccos12]

Show me the data when there was a sustained 30% downturn for Irvine.

I realize this wasnt directed towards me but....  28% drop, close enough.
https://www.trulia.com/real_estate/Irvine-California/market-trends/

 

[panda]

Mety,
You are correct. Comparing Atlanta and Los Angeles is sort of like comparing India vs USA. Los Angeles is a first tier city whereas Atlanta is an emerging city. In the next 10-20 years, I would place my bets on India Sensex vs S&P500.

If I told that I was investing in an up and coming affluent city in Franklin TN, The Irvine of Nashville, I would get laughed at 6-7 years ago.  There is a major population shift to the south currently taking place.

SoCal is a great place to live for your primary residence, but you are not going to see the 3X appreciation growth you are saw from 1994 - 2006. You want to look at where the population is growing 10+%. New York, LA, and Chicago are developed cities, whereas Atlanta, Houston, and Dallas are emerging cities with a lot upside growth.

For example the population size of LA metro is more than 2 twice the size of metro Atlanta 13.3M vs 5.8M but the population growth in numbers in Atlanta exceeded that of Los Angeles. You have to study and observe where the population is moving.

That's a false comparison.  LA Metro is a mature population with high and ever increasing housing prices.  Atlanta is an up and coming town with relatively low prices as compared to the mature population centers (NYC, Boston, etc.)  or collapse of local economies (i.e. Detroit or Cleveland).  Comparing growth rates of places like NYC and LA with Las Vegas/Arizona and Atlanta would be like comparing the GDP growth of the US with that of BRIC nations.

LA and California are expensive to buy and live in...people are being driven to Las Vegas and Arizona not because they don't like California (mostly) but because they cannot afford to live there.  For a state like California with 8 to 9% growth in major population areas (i.e. Bay Area and Riverside) is actually quite impressive.

I think there will always be the price gap. Where Irvine will never be as expensive as Santa Monica or even close by Newport Beach, the same thing will be as Atlanta or Texas might never be as expensive as OC.  Just my thought. I could be wrong.

 

[panda]

Mety,
You are correct. Comparing Atlanta and Los Angeles is sort of like comparing India vs USA. Los Angeles is a first tier city whereas Atlanta is an emerging city. In the next 10-20 years, I would place my bet going long on India Sensex vs S&P500.

If I told you guys that I was investing in an up and coming affluent city in Franklin TN, The Irvine of Nashville, I would get laughed at 6-7 years ago. There is a major population shift to the south currently taking place.

SoCal is a great place to live for your primary residence, but you are not going to see the 3X appreciation growth you are saw from 1994 - 2006. You want to look at where the population is growing 10+%. New York, LA, and Chicago are developed cities, whereas Atlanta, Houston, and Dallas are emerging cities with a lot upside growth.

For example the population size of LA metro is more than 2 twice the size of metro Atlanta 13.3M vs 5.8M but the population growth in numbers in Atlanta exceeded that of Los Angeles. You have to study and observe where the population is moving.

That's a false comparison.  LA Metro is a mature population with high and ever increasing housing prices.  Atlanta is an up and coming town with relatively low prices as compared to the mature population centers (NYC, Boston, etc.)  or collapse of local economies (i.e. Detroit or Cleveland).  Comparing growth rates of places like NYC and LA with Las Vegas/Arizona and Atlanta would be like comparing the GDP growth of the US with that of BRIC nations.

LA and California are expensive to buy and live in...people are being driven to Las Vegas and Arizona not because they don't like California (mostly) but because they cannot afford to live there.  For a state like California with 8 to 9% growth in major population areas (i.e. Bay Area and Riverside) is actually quite impressive.

I think there will always be the price gap. Where Irvine will never be as expensive as Santa Monica or even close by Newport Beach, the same thing will be as Atlanta or Texas might never be as expensive as OC.  Just my thought. I could be wrong.

[/quote]

 

[usctrojancpa]

Show me the data when there was a sustained 30% downturn for Irvine.

I realize this wasnt directed towards me but....  28% drop, close enough.
https://www.trulia.com/real_estate/Irvine-California/market-trends/

To break it down even further...detached properties/single family homes went down 15-25% while attached condos went down 30-40% in Irvine.

 

[Irvinecommuter]

Mety,
You are correct. Comparing Atlanta and Los Angeles is sort of like comparing India vs USA. Los Angeles is a first tier city whereas Atlanta is an emerging city. In the next 10-20 years, I would place my bets on India Sensex vs S&P500.

If I told that I was investing in an up and coming affluent city in Franklin TN, The Irvine of Nashville, I would get laughed at 6-7 years ago.  There is a major population shift to the south currently taking place.

Investments are different than whether you live.  I would not invest in residential real estate...especially one not near me.  Too much hassle/headache. 

You may place your bet in India Stock market but you wouldn't want to park your nest egg there.  You will want to keep most of it in US stock market and bonds.  If you are putting 90% of your 401K in BRIC markets...you are either an extreme risk taker or doing it wrong.

 

[panda]

Really? SFRs are the easiest real estate investments to manage compared to Retail, Industrial, Multi-family, or Office. I guess the difference of hassle / headache factor would be purchasing a "A" class rental in Irvine vs "C - D" residential in Compton. I can you show my extensive research why I believe India will outperform US Stocks and bonds in the next 10-20 years, but this will be for a different thread at a different time. I am also bullish on Gold/Commodities long term (buy and hold) as we are near bottom of the next commodity cycle boom at the moment. I am not a trader. I am a buy and hold long  term investor.

Irvinecommuter, Near term, it may not be such a bad idea to shift 90% of your 401k into long term treasury bonds.

Mety,
You are correct. Comparing Atlanta and Los Angeles is sort of like comparing India vs USA. Los Angeles is a first tier city whereas Atlanta is an emerging city. In the next 10-20 years, I would place my bets on India Sensex vs S&P500.

If I told that I was investing in an up and coming affluent city in Franklin TN, The Irvine of Nashville, I would get laughed at 6-7 years ago.  There is a major population shift to the south currently taking place.

Investments are different than whether you live.  I would not invest in residential real estate...especially one not near me.  Too much hassle/headache. 

You may place your bet in India Stock market but you wouldn't want to park your nest egg there.  You will want to keep most of it in US stock market and bonds.  If you are putting 90% of your 401K in BRIC markets...you are either an extreme risk taker or doing it wrong.

 

[paperboyNC]

Bear in mind that so few of the "smart guys in the room" saw the 2007-2008 housing turn and an equally small number of folks saw the market bottom in 2010. It's nice to speculate as we are doing now, but by the time someone can firmly plant the flag into the turn or the bottom, opportunity has more than likely passed.


My .02c

SGIP

Everyone that walked and talked told me to buy in 2006. I told them they were crazy - rent was less than half the cost of buying.

I kept checking the math and what do you know, renting was a lot more expensive than buying in 2012 (once interest rates came down) so I bought.

Right now it's still cheaper for me to keep my home than to sell it and rent. With housing prices stabilizing, it may stay that way for a while.

If I could rent my home for half the cost of owning, I'd sell in a heart beat.

 

[meccos12]

Show me the data when there was a sustained 30% downturn for Irvine.

I realize this wasnt directed towards me but....  28% drop, close enough.
https://www.trulia.com/real_estate/Irvine-California/market-trends/

To break it down even further...detached properties/single family homes went down 15-25% while attached condos went down 30-40% in Irvine.

If you would agree that 4 bed homes are likely all detached/single family homes, then it would appear that these dropped even more than median.  Trulia suggest a 31% drop from peak to trough, thus your upper range seems a bit low.
https://www.trulia.com/real_estate/Irvine-California/market-trends/

Furthermore if you break it down by bedrooms, Irvine had a 48% drop in 1 beds, 36% drop in 2 beds , 25% drop in 3 beds, and again 31% drop in 4 beds.  Where are the homes that drop 15%?

 

[irvinehomeowner]

Show me the data when there was a sustained 30% downturn for Irvine.

I realize this wasnt directed towards me but....  28% drop, close enough.
https://www.trulia.com/real_estate/Irvine-California/market-trends/

Where's the rest of my post?

Then show me the same time frame data for cities surrounding Irvine.

Since LL was using a comparative argument, it's important to add context. I haven't looked but I'm sure the data will show that surrounding cities dropped more.

And while peak to trough might be 28%, the reason I said sustained 30% downturn because even during the 2010-12 period, which was supposed to be the bottom, there were some ups and downs that coincided with the normal selling seasons of real estate where prices were higher than 28% off.

This is another characteristic of Irvine real estate that I mentioned before, slower to drop... faster to rise... so discounted housing doesn't stay around for long. Ask anyone who was buying in 2012-2013 and saw Irvine real estate jump. Or maybe like LL says, that's not just in Irvine... but it sure felt like it.

 

[Irvinecommuter]

Really? SFRs are the easiest real estate investments to manage compared to Retail, Industrial, Multi-family, or Office. I guess the difference of hassle / headache factor would be purchasing a "A" class rental in Irvine vs "C - D" residential in Compton. I can you show my extensive research why I believe India will outperform US Stocks and bonds in the next 10-20 years, but this will be for a different thread at a different time. I am also bullish on Gold/Commodities long term (buy and hold) as we are near bottom of the next commodity cycle boom at the moment. I am not a trader. I am a buy and hold long  term investor.

Irvinecommuter, Near term, it may not be such a bad idea to shift 90% of your 401k into long term treasury bonds.

Mety,
You are correct. Comparing Atlanta and Los Angeles is sort of like comparing India vs USA. Los Angeles is a first tier city whereas Atlanta is an emerging city. In the next 10-20 years, I would place my bets on India Sensex vs S&P500.

If I told that I was investing in an up and coming affluent city in Franklin TN, The Irvine of Nashville, I would get laughed at 6-7 years ago.  There is a major population shift to the south currently taking place.

Investments are different than whether you live.  I would not invest in residential real estate...especially one not near me.  Too much hassle/headache. 

You may place your bet in India Stock market but you wouldn't want to park your nest egg there.  You will want to keep most of it in US stock market and bonds.  If you are putting 90% of your 401K in BRIC markets...you are either an extreme risk taker or doing it wrong.

I am opposite of you on the investment strategy.  I think that commodities are a thing of the past. Gold will become less and less valuable as currency becomes virtual and the world globalize.  You put money into a bank...you can withdraw funds from all over the world.  Unless you live in a 3rd world country...it does not really matter. 

Oil will also become irrelevant in the near future because of renewable energy and electric vehicles.  Even the Saudis realize this and are attempting to diversify repeatedly.

As for real estate, I have no need to manage an individual property.  Multi-unit properties have more leeway and value in the longterm than a SFR.  It makes more sense to hire management companies to manage a multi-unit property than a few SFRs.  If the real estate market is doing well, I can just buy into REITs.

BRIC nations have a fundamental reliability issue...people don't trust them or their governments.  Chinese stock market is basically domestic money as is India stock market.  Why would I want to invest in risk on top of risk? 

 

[Irvinecommuter]

Interesting question... I was just looking at latest statistics on Tranio https://tranio.com/ and my bet is 2022

I would only by overseas in a place that I want to go and live in my older days.  Seoul or Taipei for me.

Place I would considering buying a retirement home at:  Portland, Las Vegas, and maybe Arizona.

 

[meccos12]

Show me the data when there was a sustained 30% downturn for Irvine.

I realize this wasnt directed towards me but....  28% drop, close enough.
https://www.trulia.com/real_estate/Irvine-California/market-trends/

Where's the rest of my post?

Then show me the same time frame data for cities surrounding Irvine.

Since LL was using a comparative argument, it's important to add context. I haven't looked but I'm sure the data will show that surrounding cities dropped more.

And while peak to trough might be 28%, the reason I said sustained 30% downturn because even during the 2010-12 period, which was supposed to be the bottom, there were some ups and downs that coincided with the normal selling seasons of real estate where prices were higher than 28% off.

This is another characteristic of Irvine real estate that I mentioned before, slower to drop... faster to rise... so discounted housing doesn't stay around for long. Ask anyone who was buying in 2012-2013 and saw Irvine real estate jump. Or maybe like LL says, that's not just in Irvine... but it sure felt like it.

You asked for date and I gave it to you.  You claimed Irvine only dropped 15%.  We all know that is not true and the data proves it. 
BTW Irvine is not always slower to drop and faster to rise.  True Irvine dropped less than surrounding areas during last downturn, but you forget almost all surrounding cities rose more from 2000 to 2007 compared to Irvine.  All in all, if you take into factor price appreciation and depreciation over the last 2 decades (2000 till now), the level of overall appreciation is about the same for most cities in this area - anywhere between 257% to 274%.   
My point for responding to your post is to highlight what LiarLoan was trying to say.  You have a revisionist history.

 

[irvinehomeowner]

Show me the data when there was a sustained 30% downturn for Irvine.

I realize this wasnt directed towards me but....  28% drop, close enough.
https://www.trulia.com/real_estate/Irvine-California/market-trends/

Where's the rest of my post?

Then show me the same time frame data for cities surrounding Irvine.

Since LL was using a comparative argument, it's important to add context. I haven't looked but I'm sure the data will show that surrounding cities dropped more.

And while peak to trough might be 28%, the reason I said sustained 30% downturn because even during the 2010-12 period, which was supposed to be the bottom, there were some ups and downs that coincided with the normal selling seasons of real estate where prices were higher than 28% off.

This is another characteristic of Irvine real estate that I mentioned before, slower to drop... faster to rise... so discounted housing doesn't stay around for long. Ask anyone who was buying in 2012-2013 and saw Irvine real estate jump. Or maybe like LL says, that's not just in Irvine... but it sure felt like it.

You asked for date and I gave it to you.

No... I asked for a comparison of surrounding cities with Irvine. It was the next sentence in the paragraph which you cut out.

You claimed Irvine only dropped 15%.  We all know that is not true and the data proves it. 

Show me where I claimed *all* of Irvine only dropped 15%. What I *did* say was that the homes *I* was looking for, dropped in that range... some even as little as 10%.

BTW Irvine is not always slower to drop and faster to rise.  True Irvine dropped less than surrounding areas during last downturn, but you forget almost all surrounding cities rose more from 2000 to 2007 compared to Irvine.  All in all, if you take into factor price appreciation and depreciation over the last 2 decades (2000 till now), the level of overall appreciation is about the same for most cities in this area - anywhere between 257% to 274%.   

How does this disprove what I am saying? You're speaking to quantity while I am speaking to speed and timing. Not an apple to oranges comparison.

My point for responding to your post is to highlight what LiarLoan was trying to say.  You have a revisionist history.

How can you claim revisionist history when you weren't even even shopping in Irving during that time nor were you active on IHB? So all you have is numbers to look at, no experience, no personal history, no context on previous conversations... as I've said before, there is more to analysis than just looking at numbers.

I've detailed what I went through, what we bought and what we sold... why would I revise that? It's the truth. What have you shown me otherwise? Unless you were my realtor or my spouse... what do you know about my history?

I don't understand you... about 4 years ago you come to TI asking for opinions and people's advice on buying, upgrades, etc and then somewhere midway through you start distrusting opinions and saying that an anonymous forum isn't really the best place to get advice and that your own opinion doesn't really matter when we ask for it (I hope I'm not misquoting you here). So why are you here?

I even stopped responding to you to keep things copacetic but then you feel the need to chime in whenever LiarLoan throws a dig at me.

Do you think I'm the only one who believes Irvine real estate is more stable? Why did you buy in Irvine if you don't have that same feeling in the back of your mind somewhere? Why aren't you questioning Inc or whoever has the same opinion that I do? Why aren't you calling out anyone else's history?

 

[irvinehomeowner]

Irvine has historically outperformed price appreciation over the years and will continue to do use into the future for many of the reasons IHO listed.  I'm not saying that Irvine prices can't drop, but they'll drop less than other cities in Orange County.

So why isn't meccos responding to USC on this? Because I didn't say it?

 

[Irvinecommuter]

Irvine has historically outperformed price appreciation over the years and will continue to do use into the future for many of the reasons IHO listed.  I'm not saying that Irvine prices can't drop, but they'll drop less than other cities in Orange County.

So why isn't meccos responding to USC on this? Because I didn't say it?

I don't get the Irvine bashing.  I mean it is a desirable place to live...are people running around arguing whether NYC or Tokyo real estate is immuned to price falls?

 

[Mety]

Show me the data when there was a sustained 30% downturn for Irvine.

I realize this wasnt directed towards me but....  28% drop, close enough.
https://www.trulia.com/real_estate/Irvine-California/market-trends/

Where's the rest of my post?

Then show me the same time frame data for cities surrounding Irvine.

Since LL was using a comparative argument, it's important to add context. I haven't looked but I'm sure the data will show that surrounding cities dropped more.

And while peak to trough might be 28%, the reason I said sustained 30% downturn because even during the 2010-12 period, which was supposed to be the bottom, there were some ups and downs that coincided with the normal selling seasons of real estate where prices were higher than 28% off.

This is another characteristic of Irvine real estate that I mentioned before, slower to drop... faster to rise... so discounted housing doesn't stay around for long. Ask anyone who was buying in 2012-2013 and saw Irvine real estate jump. Or maybe like LL says, that's not just in Irvine... but it sure felt like it.

You asked for date and I gave it to you.

No... I asked for a comparison of surrounding cities with Irvine. It was the next sentence in the paragraph which you cut out.

You claimed Irvine only dropped 15%.  We all know that is not true and the data proves it. 

Show me where I claimed *all* of Irvine only dropped 15%. What I *did* say was that the homes *I* was looking for, dropped in that range... some even as little as 10%.

BTW Irvine is not always slower to drop and faster to rise.  True Irvine dropped less than surrounding areas during last downturn, but you forget almost all surrounding cities rose more from 2000 to 2007 compared to Irvine.  All in all, if you take into factor price appreciation and depreciation over the last 2 decades (2000 till now), the level of overall appreciation is about the same for most cities in this area - anywhere between 257% to 274%.   

How does this disprove what I am saying? You're speaking to quantity while I am speaking to speed and timing. Not an apple to oranges comparison.

My point for responding to your post is to highlight what LiarLoan was trying to say.  You have a revisionist history.

How can you claim revisionist history when you weren't even even shopping in Irving during that time nor were you active on IHB? So all you have is numbers to look at, no experience, no personal history, no context on previous conversations... as I've said before, there is more to analysis than just looking at numbers.

I've detailed what I went through, what we bought and what we sold... why would I revise that? It's the truth. What have you shown me otherwise? Unless you were my realtor or my spouse... what do you know about my history?

I don't understand you... about 4 years ago you come to TI asking for opinions and people's advice on buying, upgrades, etc and then somewhere midway through you start distrusting opinions and saying that an anonymous forum isn't really the best place to get advice and that your own opinion doesn't really matter when we ask for it (I hope I'm not misquoting you here). So why are you here?

I even stopped responding to you to keep things copacetic but then you feel the need to chime in whenever LiarLoan throws a dig at me.

Do you think I'm the only one who believes Irvine real estate is more stable? Why did you buy in Irvine if you don't have that same feeling in the back of your mind somewhere? Why aren't you questioning Inc or whoever has the same opinion that I do? Why aren't you calling out anyone else's history?

From a third person perspective, I can't really find a huge disagreement between you guys. It's just a matter of where you guys are focusing on.

Irvine did drop quite significantly after 2008. Approximately about 30%. This 30% is the number of the city as a whole (while other areas dropped more). IHO keeps focusing on HIS range which I assume $1m-$1.5m or SFR with 3CWG which does not represent every home in Irvine even though that is the range the majority of TI members might be looking at (that big middle finger poll graph). meccos12 keeps giving a bigger picture information like nationwide slowdown or Irvine as a whole city not focusing on a certain price range.

I believe meccos12 provided more than enough information to back up his opinion and IHO shared even his personal experiences to give examples.

So in my understanding, you guys are actually talking about the same thing, just focusing on different areas. You guys even agreed that this slowdown won't go down as much as the last crash. 


Bottom line is Irvine did drop about 30% after the last crash although more demanding homes like SFRs dropped less (only about 10% from IHO's experience)  and recovered pretty quick and better than other surrounding OC areas.

 

[irvinebullhousing]

Irvine has historically outperformed price appreciation over the years and will continue to do use into the future for many of the reasons IHO listed.  I'm not saying that Irvine prices can't drop, but they'll drop less than other cities in Orange County.

So why isn't meccos responding to USC on this? Because I didn't say it?

Meccos is waiting for the ripe time. I think the bashing between liar and meccos keep the forum interesting and showing their hands in the game. Personally, I would buy to live Irvine not for pure CAP and appreciation. That's easy to say because most of us here have bought during the low rides. Now, if I would to wait and buy I would pump the down talk to get price lower.

 

[Mety]

Irvine has historically outperformed price appreciation over the years and will continue to do use into the future for many of the reasons IHO listed.  I'm not saying that Irvine prices can't drop, but they'll drop less than other cities in Orange County.

So why isn't meccos responding to USC on this? Because I didn't say it?

Meccos is waiting for the ripe time. I think the bashing between liar and meccos keep the forum interesting and showing their hands in the game. Personally, I would buy to live Irvine not for pure CAP and appreciation. That's easy to say because most of us here have bought during the low rides. Now, if I would to wait and buy I would pump the down talk to get price lower.

I believe meccos12 only provided the current flow and the possible future prediction. So did eyephone also. I don't think they've ever bashed on Irvine except saying Delano is overpriced.