Where the market is - Buyer Offers

I bought my Woodburry home in end of 2008. If I remember correctly, Irvine homes dropped another 5% while other area continued to drop 20-30%.  Location should be first major assessment for any buyers.  Sure, not everyone can afford Irvine but it?s the premium worth paying for.
 
USCTrojanCPA said:
Liar Loan said:
irvinehomeowner said:
Liar Loan said:
irvinehomeowner said:
Liar Loan said:
irvinehomeowner said:
I remember when people were against me when I said any time is actually a good time to buy if you can afford it because you can't accurately time the market, now all those people who were waiting for the big slowdown are wishing they listened.

But no one will admit it.

You are talking as if this cycle has already ended.

As I said... I don't make predictions.

I have no idea where we are going, even though rates are rising, inventory is not... and isn't "The Great Slowdown" like 3-4 years late?

Who is wishing they bought a few years ago instead of waiting?

Any time is a good time to buy if you've done the math and can handle the risk.

This is a ridiculous statement.  You started on IHB when people were losing homes in droves due to buying at the wrong time.

Lots of people are bad at math and even worse at assessing risk.  They implicitly trust their realtors and mortgage brokers for advice, but unfortunately, sales people only have one mantra: "Anytime is a great time to buy."

Your statement is just as ridiculous because it counters exactly what I said... do the math and assess the risk. If people are bad at that, then they shouldn't buy.

You just want to be a contrarian because you agree with me but don't want to admit it.

Just because YOUR prediction of pain never happened... don't be mad.

I didn't think it possible, but this statement of yours is even more ridiculous.  Of course, I don't agree with you. 

Your position is the equivalent of cheering people on for making the worst mistake of their lives.  Today's buyers are buying at the worst possible moment.  It's the bottom of the 9th with two outs.  They are going to be similar to the 2006-07 buyers who also did their own math and assessed the risk, and then proceeded to lose their homes.

The only difference this time is home prices are even higher than 2007 on an inflation-adjusted basis.  The price:income ratio is also higher than 2007.  The thing bridging the gap between the highest real home prices of all time and incomes is the proliferation of easy money (ie cheap debt).  This regime works fine until the price of debt goes through the roof and this year it has already risen dramatically, and is projected to keep increasing until inflation is back under some semblance of control.

Do you seriously think real estate will have the same kind of meltdown that it did back in the Great Recession?  You do realize that most all loans have been fully underwritten with no BS ninja loans.  Not only that, but I would tell you that today's buyers are much stronger financially and putting more % down then buyers back in 2003-2007.  There is a severe housing shortage out there and that has been reflected in home prices and record sales volume.  Can home prices dip?  Sure, but we aren't crashing unless some serious shock happens.  I always tell buyers...you should only buy if you are looking to live in the current home for the next 5+ years because I don't know what home prices will do in the short term but I know that they will go over the intermediate and longer term.

I believe prices will revert to the long term mean.  Whether that takes the form of a swift crash ('08), a slow burn (early 90's), or just flat prices until high inflation can devalue the dollar enough (early 80's), the one thing you can count on is long term underperformance in real estate.

By citing ninja loans and todays buyer profile, you are focused on the past.  QE is history.  I'm focused on the future of mortgage lending and what will be possible going forward.  Prices can't go up if affordability doesn't exist.  California has a long history of downturns after affordability gets stretched to the extreme, often with a recession kicking it off.  Is there some reason to believe history won't repeat?

If a downturn does occur, your advice to stay put for at least 5 years is still bad advice.  It took 10+ years for buyers to recover fully from the early 90's and '08 downturns... and that was for those that didn't lose their homes.
 
teddybear said:
Do you end up making money with both places if you sell now? Home prices in Riverside county has finally catch up after 15+ years. You?d made $300-400k if you bought these during the housing bottom in 2009-2011. Good things that you can make payments all these years. Im pretty sure are are tons of unlucky fews who lost their jobs and foreclosed or short sell their house even when they had done the math and thought that they can handle the risk. I bought during both low and peak market and have experienced 50% dropped  in prices as well 100% appreciation. Bottom line, buy in a good area and hopefully one can ride out during the downturn.
I bought a home in Lake Elsinore at the end of 2005, which was the real peak, then bought another one in 2006 in Eastvale, and I still have both houses now. It's like you said, I did the math and could handle the risk, so we're doing just fine. And guess what, I'm buying in Irvine RIGHT NOW.  ;D I guess I'm just great at buying at the peak.  :p Fortunately, I'll be selling both of those homes this summer.

Fortunately, both recovered, even the Lake Elsinore one.

Actually, any home bought during the housing bottom in Eastvale would be making $400-$500k right now.
 
Liar Loan said:
USCTrojanCPA said:
Liar Loan said:
irvinehomeowner said:
Liar Loan said:
irvinehomeowner said:
Liar Loan said:
irvinehomeowner said:
I remember when people were against me when I said any time is actually a good time to buy if you can afford it because you can't accurately time the market, now all those people who were waiting for the big slowdown are wishing they listened.

But no one will admit it.

You are talking as if this cycle has already ended.

As I said... I don't make predictions.

I have no idea where we are going, even though rates are rising, inventory is not... and isn't "The Great Slowdown" like 3-4 years late?

Who is wishing they bought a few years ago instead of waiting?

Any time is a good time to buy if you've done the math and can handle the risk.

This is a ridiculous statement.  You started on IHB when people were losing homes in droves due to buying at the wrong time.

Lots of people are bad at math and even worse at assessing risk.  They implicitly trust their realtors and mortgage brokers for advice, but unfortunately, sales people only have one mantra: "Anytime is a great time to buy."

Your statement is just as ridiculous because it counters exactly what I said... do the math and assess the risk. If people are bad at that, then they shouldn't buy.

You just want to be a contrarian because you agree with me but don't want to admit it.

Just because YOUR prediction of pain never happened... don't be mad.

I didn't think it possible, but this statement of yours is even more ridiculous.  Of course, I don't agree with you. 

Your position is the equivalent of cheering people on for making the worst mistake of their lives.  Today's buyers are buying at the worst possible moment.  It's the bottom of the 9th with two outs.  They are going to be similar to the 2006-07 buyers who also did their own math and assessed the risk, and then proceeded to lose their homes.

The only difference this time is home prices are even higher than 2007 on an inflation-adjusted basis.  The price:income ratio is also higher than 2007.  The thing bridging the gap between the highest real home prices of all time and incomes is the proliferation of easy money (ie cheap debt).  This regime works fine until the price of debt goes through the roof and this year it has already risen dramatically, and is projected to keep increasing until inflation is back under some semblance of control.

Do you seriously think real estate will have the same kind of meltdown that it did back in the Great Recession?  You do realize that most all loans have been fully underwritten with no BS ninja loans.  Not only that, but I would tell you that today's buyers are much stronger financially and putting more % down then buyers back in 2003-2007.  There is a severe housing shortage out there and that has been reflected in home prices and record sales volume.  Can home prices dip?  Sure, but we aren't crashing unless some serious shock happens.  I always tell buyers...you should only buy if you are looking to live in the current home for the next 5+ years because I don't know what home prices will do in the short term but I know that they will go over the intermediate and longer term.

I believe prices will revert to the long term mean.  Whether that takes the form of a swift crash ('08), a slow burn (early 90's), or just flat prices until high inflation can devalue the dollar enough (early 80's), the one thing you can count on is long term underperformance in real estate.

By citing ninja loans and todays buyer profile, you are focused on the past.  QE is history.  I'm focused on the future of mortgage lending and what will be possible going forward.  Prices can't go up if affordability doesn't exist.  California has a long history of downturns after affordability gets stretched to the extreme, often with a recession kicking it off.  Is there some reason to believe history won't repeat?

If a downturn does occur, your advice to stay put for at least 5 years is still bad advice.  It took 10+ years for buyers to recover fully from the early 90's and '08 downturns... and that was for those that didn't lose their homes.

Dude, you lost your @ss off in the first home you bought with 60% drop and you said you did a lot of assesses. What make you think your belief is right this time?
 
BlackKnight said:
Liar Loan said:
USCTrojanCPA said:
Liar Loan said:
irvinehomeowner said:
Liar Loan said:
irvinehomeowner said:
Liar Loan said:
irvinehomeowner said:
I remember when people were against me when I said any time is actually a good time to buy if you can afford it because you can't accurately time the market, now all those people who were waiting for the big slowdown are wishing they listened.

But no one will admit it.

You are talking as if this cycle has already ended.

As I said... I don't make predictions.

I have no idea where we are going, even though rates are rising, inventory is not... and isn't "The Great Slowdown" like 3-4 years late?

Who is wishing they bought a few years ago instead of waiting?

Any time is a good time to buy if you've done the math and can handle the risk.

This is a ridiculous statement.  You started on IHB when people were losing homes in droves due to buying at the wrong time.

Lots of people are bad at math and even worse at assessing risk.  They implicitly trust their realtors and mortgage brokers for advice, but unfortunately, sales people only have one mantra: "Anytime is a great time to buy."

Your statement is just as ridiculous because it counters exactly what I said... do the math and assess the risk. If people are bad at that, then they shouldn't buy.

You just want to be a contrarian because you agree with me but don't want to admit it.

Just because YOUR prediction of pain never happened... don't be mad.

I didn't think it possible, but this statement of yours is even more ridiculous.  Of course, I don't agree with you. 

Your position is the equivalent of cheering people on for making the worst mistake of their lives.  Today's buyers are buying at the worst possible moment.  It's the bottom of the 9th with two outs.  They are going to be similar to the 2006-07 buyers who also did their own math and assessed the risk, and then proceeded to lose their homes.

The only difference this time is home prices are even higher than 2007 on an inflation-adjusted basis.  The price:income ratio is also higher than 2007.  The thing bridging the gap between the highest real home prices of all time and incomes is the proliferation of easy money (ie cheap debt).  This regime works fine until the price of debt goes through the roof and this year it has already risen dramatically, and is projected to keep increasing until inflation is back under some semblance of control.

Do you seriously think real estate will have the same kind of meltdown that it did back in the Great Recession?  You do realize that most all loans have been fully underwritten with no BS ninja loans.  Not only that, but I would tell you that today's buyers are much stronger financially and putting more % down then buyers back in 2003-2007.  There is a severe housing shortage out there and that has been reflected in home prices and record sales volume.  Can home prices dip?  Sure, but we aren't crashing unless some serious shock happens.  I always tell buyers...you should only buy if you are looking to live in the current home for the next 5+ years because I don't know what home prices will do in the short term but I know that they will go over the intermediate and longer term.

I believe prices will revert to the long term mean.  Whether that takes the form of a swift crash ('08), a slow burn (early 90's), or just flat prices until high inflation can devalue the dollar enough (early 80's), the one thing you can count on is long term underperformance in real estate.

By citing ninja loans and todays buyer profile, you are focused on the past.  QE is history.  I'm focused on the future of mortgage lending and what will be possible going forward.  Prices can't go up if affordability doesn't exist.  California has a long history of downturns after affordability gets stretched to the extreme, often with a recession kicking it off.  Is there some reason to believe history won't repeat?

If a downturn does occur, your advice to stay put for at least 5 years is still bad advice.  It took 10+ years for buyers to recover fully from the early 90's and '08 downturns... and that was for those that didn't lose their homes.

Dude, you lost your @ss off in the first home you bought with 60% drop and you said you did a lot of assesses. What make you think your belief is right this time?

Having successfully timed multiple properties (and other asset classes) since then confirms my approach works.  Sometimes one hard lesson in the markets is enough to teach you how things work.
 
why are you so sure the real estate will return to its long term mean?
I would argue, historically, house prices follow the money supply growth over time. As M2 grows, house price goes up.  This is the long term trend. We have a sharp increase in M2 in the last two years, so it is possible the housing price is merely being reset in order to catch up with the jump in M2.  If the price overshoots or M2 starts to shrink, then it is bad time to buy.
 
You have to have housing that is affordable to people who are going to be required to work in jobs that you need filled.

If firemen, policemen, teachers, nurses cannot afford a place to live, they will go elsewhere and there is only so far they will drive for their jobs. They can rent (if they can afford it, take on roommates, live with their parents for a while) but eventually they are likely to want to buy a place of their own, whether that is here or elsewhere. Those kinds of jobs can be had anywhere and anywhere is eventually going be not where housing is so expensive..... jmho.
 
Liar Loan: ? I believe prices will revert to the long term mean.  Whether that takes the form of a swift crash ('08), a slow burn (early 90's), or just flat prices until high inflation can devalue the dollar enough (early 80's), the one thing you can count on is long term underperformance in real estate.?

LOLLLLLL. You just made 3 predictions. Either it will crash, slowly ?burn? or stay flat. Lollllll.

Thank you captain obvious. Not really hard to predict that when homes have been on a bull run the last few years.

It?s like saying Tesla stock is going to ?crash, slow burn, or be stagnant? after it hit it?s crazy peak $1,200 prices. 

For someone to think housing will still go up takes a lot of courage. Saying prices will ?crash, slow burn or stay flat? is the easy prediction in this environment.
 
TestingIrvine said:
Liar Loan: ? I believe prices will revert to the long term mean.  Whether that takes the form of a swift crash ('08), a slow burn (early 90's), or just flat prices until high inflation can devalue the dollar enough (early 80's), the one thing you can count on is long term underperformance in real estate.?

LOLLLLLL. You just made 3 predictions. Either it will crash, slowly ?burn? or stay flat. Lollllll.

Thank you captain obvious. Not really hard to predict that when homes have been on a bull run the last few years.

It?s like saying Tesla stock is going to ?crash, slow burn, or be stagnant? after it hit it?s crazy peak $1,200 prices. 

For someone to think housing will still go up takes a lot of courage. Saying prices will ?crash, slow burn or stay flat? is the easy prediction in this environment.

The FED historically terrible at forecast anything.

FED say they will reduce, just like they said QE is temporary and to this very day could not do it. Easy to forecast, and they wrong every time. Much harder to actually do it. Or do it as a symbolic mean of 1 or 2 cycles then another crisis manifest and force them to do something else. I have no confidence in the FED. If we can remove them I would. Up until 1913 we have no central bank. When the FED arrived, crisis occurs over and over again. I am certain that we are worse off today in term of economic health than we were prior to 1913.

FED-UP. Move them out for the win
 
Liar Loan said:
Compressed-Village said:
If anybody follow idiots advice to time the market, they will only see prices goes higher in a rental apartment. Fools will will be fools.

There's a difference between timing the market and refusing to buy something that is not priced in line with fundamentals.

Fundamental does not matter when an items barely exist that many wants. And that is a home in Irvine.

So I am still waiting for the crash hard from you to come true. If I had listened to you and wait when I needed a place to buy, that advise would have cost me dearly. Thanks
 
Liar Loan said:
BlackKnight said:
Liar Loan said:
USCTrojanCPA said:
Liar Loan said:
irvinehomeowner said:
Liar Loan said:
irvinehomeowner said:
Liar Loan said:
irvinehomeowner said:
I remember when people were against me when I said any time is actually a good time to buy if you can afford it because you can't accurately time the market, now all those people who were waiting for the big slowdown are wishing they listened.

But no one will admit it.

You are talking as if this cycle has already ended.

As I said... I don't make predictions.

I have no idea where we are going, even though rates are rising, inventory is not... and isn't "The Great Slowdown" like 3-4 years late?

Who is wishing they bought a few years ago instead of waiting?

Any time is a good time to buy if you've done the math and can handle the risk.

This is a ridiculous statement.  You started on IHB when people were losing homes in droves due to buying at the wrong time.

Lots of people are bad at math and even worse at assessing risk.  They implicitly trust their realtors and mortgage brokers for advice, but unfortunately, sales people only have one mantra: "Anytime is a great time to buy."

Your statement is just as ridiculous because it counters exactly what I said... do the math and assess the risk. If people are bad at that, then they shouldn't buy.

You just want to be a contrarian because you agree with me but don't want to admit it.

Just because YOUR prediction of pain never happened... don't be mad.

I didn't think it possible, but this statement of yours is even more ridiculous.  Of course, I don't agree with you. 

Your position is the equivalent of cheering people on for making the worst mistake of their lives.  Today's buyers are buying at the worst possible moment.  It's the bottom of the 9th with two outs.  They are going to be similar to the 2006-07 buyers who also did their own math and assessed the risk, and then proceeded to lose their homes.

The only difference this time is home prices are even higher than 2007 on an inflation-adjusted basis.  The price:income ratio is also higher than 2007.  The thing bridging the gap between the highest real home prices of all time and incomes is the proliferation of easy money (ie cheap debt).  This regime works fine until the price of debt goes through the roof and this year it has already risen dramatically, and is projected to keep increasing until inflation is back under some semblance of control.

Do you seriously think real estate will have the same kind of meltdown that it did back in the Great Recession?  You do realize that most all loans have been fully underwritten with no BS ninja loans.  Not only that, but I would tell you that today's buyers are much stronger financially and putting more % down then buyers back in 2003-2007.  There is a severe housing shortage out there and that has been reflected in home prices and record sales volume.  Can home prices dip?  Sure, but we aren't crashing unless some serious shock happens.  I always tell buyers...you should only buy if you are looking to live in the current home for the next 5+ years because I don't know what home prices will do in the short term but I know that they will go over the intermediate and longer term.

I believe prices will revert to the long term mean.  Whether that takes the form of a swift crash ('08), a slow burn (early 90's), or just flat prices until high inflation can devalue the dollar enough (early 80's), the one thing you can count on is long term underperformance in real estate.

By citing ninja loans and todays buyer profile, you are focused on the past.  QE is history.  I'm focused on the future of mortgage lending and what will be possible going forward.  Prices can't go up if affordability doesn't exist.  California has a long history of downturns after affordability gets stretched to the extreme, often with a recession kicking it off.  Is there some reason to believe history won't repeat?

If a downturn does occur, your advice to stay put for at least 5 years is still bad advice.  It took 10+ years for buyers to recover fully from the early 90's and '08 downturns... and that was for those that didn't lose their homes.

Dude, you lost your @ss off in the first home you bought with 60% drop and you said you did a lot of assesses. What make you think your belief is right this time?

Having successfully timed multiple properties (and other asset classes) since then confirms my approach works.  Sometimes one hard lesson in the markets is enough to teach you how things work.
Are you talking about primary residence or investment property? If you are talking about investment property, I think that would make sense. One should definitely do the math/analysis to make sure they can tolerate the risk when buying in this market. But if you're talking about primary residence, as people have mentioned, timing doesn't matter. If you hold onto it, you will be fine. So what if the market crashes 50%? You don't lose money until you sell. A primary residence isn't about maximizing ROI. Big difference that should be understood.
 
sleepy5136 said:
Are you talking about primary residence or investment property? If you are talking about investment property, I think that would make sense. One should definitely do the math/analysis to make sure they can tolerate the risk when buying in this market. But if you're talking about primary residence, as people have mentioned, timing doesn't matter. If you hold onto it, you will be fine. So what if the market crashes 50%? You don't lose money until you sell. A primary residence isn't about maximizing ROI. Big difference that should be understood.

Exactly. You buy a primary residence when you need a home to live in, not trying to time the housing market.
 
sleepy5136 said:
Liar Loan said:
BlackKnight said:
Liar Loan said:
USCTrojanCPA said:
Liar Loan said:
irvinehomeowner said:
Liar Loan said:
irvinehomeowner said:
Liar Loan said:
irvinehomeowner said:
I remember when people were against me when I said any time is actually a good time to buy if you can afford it because you can't accurately time the market, now all those people who were waiting for the big slowdown are wishing they listened.

But no one will admit it.

You are talking as if this cycle has already ended.

As I said... I don't make predictions.

I have no idea where we are going, even though rates are rising, inventory is not... and isn't "The Great Slowdown" like 3-4 years late?

Who is wishing they bought a few years ago instead of waiting?

Any time is a good time to buy if you've done the math and can handle the risk.

This is a ridiculous statement.  You started on IHB when people were losing homes in droves due to buying at the wrong time.

Lots of people are bad at math and even worse at assessing risk.  They implicitly trust their realtors and mortgage brokers for advice, but unfortunately, sales people only have one mantra: "Anytime is a great time to buy."

Your statement is just as ridiculous because it counters exactly what I said... do the math and assess the risk. If people are bad at that, then they shouldn't buy.

You just want to be a contrarian because you agree with me but don't want to admit it.

Just because YOUR prediction of pain never happened... don't be mad.

I didn't think it possible, but this statement of yours is even more ridiculous.  Of course, I don't agree with you. 

Your position is the equivalent of cheering people on for making the worst mistake of their lives.  Today's buyers are buying at the worst possible moment.  It's the bottom of the 9th with two outs.  They are going to be similar to the 2006-07 buyers who also did their own math and assessed the risk, and then proceeded to lose their homes.

The only difference this time is home prices are even higher than 2007 on an inflation-adjusted basis.  The price:income ratio is also higher than 2007.  The thing bridging the gap between the highest real home prices of all time and incomes is the proliferation of easy money (ie cheap debt).  This regime works fine until the price of debt goes through the roof and this year it has already risen dramatically, and is projected to keep increasing until inflation is back under some semblance of control.

Do you seriously think real estate will have the same kind of meltdown that it did back in the Great Recession?  You do realize that most all loans have been fully underwritten with no BS ninja loans.  Not only that, but I would tell you that today's buyers are much stronger financially and putting more % down then buyers back in 2003-2007.  There is a severe housing shortage out there and that has been reflected in home prices and record sales volume.  Can home prices dip?  Sure, but we aren't crashing unless some serious shock happens.  I always tell buyers...you should only buy if you are looking to live in the current home for the next 5+ years because I don't know what home prices will do in the short term but I know that they will go over the intermediate and longer term.

I believe prices will revert to the long term mean.  Whether that takes the form of a swift crash ('08), a slow burn (early 90's), or just flat prices until high inflation can devalue the dollar enough (early 80's), the one thing you can count on is long term underperformance in real estate.

By citing ninja loans and todays buyer profile, you are focused on the past.  QE is history.  I'm focused on the future of mortgage lending and what will be possible going forward.  Prices can't go up if affordability doesn't exist.  California has a long history of downturns after affordability gets stretched to the extreme, often with a recession kicking it off.  Is there some reason to believe history won't repeat?

If a downturn does occur, your advice to stay put for at least 5 years is still bad advice.  It took 10+ years for buyers to recover fully from the early 90's and '08 downturns... and that was for those that didn't lose their homes.

Dude, you lost your @ss off in the first home you bought with 60% drop and you said you did a lot of assesses. What make you think your belief is right this time?

Having successfully timed multiple properties (and other asset classes) since then confirms my approach works.  Sometimes one hard lesson in the markets is enough to teach you how things work.
Are you talking about primary residence or investment property? If you are talking about investment property, I think that would make sense. One should definitely do the math/analysis to make sure they can tolerate the risk when buying in this market. But if you're talking about primary residence, as people have mentioned, timing doesn't matter. If you hold onto it, you will be fine. So what if the market crashes 50%? You don't lose money until you sell. A primary residence isn't about maximizing ROI. Big difference that should be understood.

BINGO...a primary residence is a place to live first (aka a commodity) and an investment a long way behind.  Everyone has different timing and needs so you can't just assume the same advice will work everyone.
 
sleepy5136 said:
Liar Loan said:
BlackKnight said:
Liar Loan said:
USCTrojanCPA said:
Liar Loan said:
irvinehomeowner said:
Liar Loan said:
irvinehomeowner said:
Liar Loan said:
irvinehomeowner said:
I remember when people were against me when I said any time is actually a good time to buy if you can afford it because you can't accurately time the market, now all those people who were waiting for the big slowdown are wishing they listened.

But no one will admit it.

You are talking as if this cycle has already ended.

As I said... I don't make predictions.

I have no idea where we are going, even though rates are rising, inventory is not... and isn't "The Great Slowdown" like 3-4 years late?

Who is wishing they bought a few years ago instead of waiting?

Any time is a good time to buy if you've done the math and can handle the risk.

This is a ridiculous statement.  You started on IHB when people were losing homes in droves due to buying at the wrong time.

Lots of people are bad at math and even worse at assessing risk.  They implicitly trust their realtors and mortgage brokers for advice, but unfortunately, sales people only have one mantra: "Anytime is a great time to buy."

Your statement is just as ridiculous because it counters exactly what I said... do the math and assess the risk. If people are bad at that, then they shouldn't buy.

You just want to be a contrarian because you agree with me but don't want to admit it.

Just because YOUR prediction of pain never happened... don't be mad.

I didn't think it possible, but this statement of yours is even more ridiculous.  Of course, I don't agree with you. 

Your position is the equivalent of cheering people on for making the worst mistake of their lives.  Today's buyers are buying at the worst possible moment.  It's the bottom of the 9th with two outs.  They are going to be similar to the 2006-07 buyers who also did their own math and assessed the risk, and then proceeded to lose their homes.

The only difference this time is home prices are even higher than 2007 on an inflation-adjusted basis.  The price:income ratio is also higher than 2007.  The thing bridging the gap between the highest real home prices of all time and incomes is the proliferation of easy money (ie cheap debt).  This regime works fine until the price of debt goes through the roof and this year it has already risen dramatically, and is projected to keep increasing until inflation is back under some semblance of control.

Do you seriously think real estate will have the same kind of meltdown that it did back in the Great Recession?  You do realize that most all loans have been fully underwritten with no BS ninja loans.  Not only that, but I would tell you that today's buyers are much stronger financially and putting more % down then buyers back in 2003-2007.  There is a severe housing shortage out there and that has been reflected in home prices and record sales volume.  Can home prices dip?  Sure, but we aren't crashing unless some serious shock happens.  I always tell buyers...you should only buy if you are looking to live in the current home for the next 5+ years because I don't know what home prices will do in the short term but I know that they will go over the intermediate and longer term.

I believe prices will revert to the long term mean.  Whether that takes the form of a swift crash ('08), a slow burn (early 90's), or just flat prices until high inflation can devalue the dollar enough (early 80's), the one thing you can count on is long term underperformance in real estate.

By citing ninja loans and todays buyer profile, you are focused on the past.  QE is history.  I'm focused on the future of mortgage lending and what will be possible going forward.  Prices can't go up if affordability doesn't exist.  California has a long history of downturns after affordability gets stretched to the extreme, often with a recession kicking it off.  Is there some reason to believe history won't repeat?

If a downturn does occur, your advice to stay put for at least 5 years is still bad advice.  It took 10+ years for buyers to recover fully from the early 90's and '08 downturns... and that was for those that didn't lose their homes.

Dude, you lost your @ss off in the first home you bought with 60% drop and you said you did a lot of assesses. What make you think your belief is right this time?

Having successfully timed multiple properties (and other asset classes) since then confirms my approach works.  Sometimes one hard lesson in the markets is enough to teach you how things work.
Are you talking about primary residence or investment property? If you are talking about investment property, I think that would make sense. One should definitely do the math/analysis to make sure they can tolerate the risk when buying in this market. But if you're talking about primary residence, as people have mentioned, timing doesn't matter. If you hold onto it, you will be fine. So what if the market crashes 50%? You don't lose money until you sell. A primary residence isn't about maximizing ROI. Big difference that should be understood.

I completely disagree.  Renting is a viable alternative if all you need is a place to live.  Maximizing ROI (or minimizing losses) should be everybody's goal when it comes to housing.  And for most people it is, whether they admit it or not, but they rationalize their bad decision-making by saying "It doesn't matter if I overpaid because I plan to stay put for a long time."  Meanwhile they are paying more principal, more interest, more taxes, more mello, and will have less funds for a future move up.

When I bought in 2006 and the property dropped by 60%, renting was by far the better alternative.  I just didn't see it at the time because I wanted to own something so badly (emotional decision-making).

When I bought my second place in 2010, it made complete sense to purchase because monthly ownership costs were actually cheaper than renting at the time.  Even though there were many fearful voices saying not to buy because prices would keep falling - both online and in real life (hello awgee) - I had run the numbers and made the decision based on fundamentals this time.  Prices didn't take off right away, but it truly didn't matter because I was paying less than it would cost to rent the same place.

Timing matters.  ROI matters.  Just look at all the emotional voices on this thread for proof.
 
Liar Loan = Captain Obvious.
He?s telling everyone to buy low, sell high basically.

Thank you for the public service announcement

What is your point in one or two sentences?  Prices will either crash, fall slowly or stay flat? Lol.
 
Renting doesn?t seem cheaper either. You need about $5000 for SFR in Irvine. You might pay less monthly for mortgage for a similar house.
 
Liar Loan said:
I completely disagree.  Renting is a viable alternative if all you need is a place to live.  Maximizing ROI (or minimizing losses) should be everybody's goal when it comes to housing.  And for most people it is, whether they admit it or not, but they rationalize their bad decision-making by saying "It doesn't matter if I overpaid because I plan to stay put for a long time."  Meanwhile they are paying more principal, more interest, more taxes, more mello, and will have less funds for a future move up.
Depends... you may build more equity in your home than whatever you save renting because if people are bad at math and making rational decision about money like you contend, how well will they invest or save whatever the difference is?

It's not as cut and dried as you posit. Hence the "math and risk assessment" caveat in my original statement.

When I bought in 2006 and the property dropped by 60%, renting was by far the better alternative.  I just didn't see it at the time because I wanted to own something so badly (emotional decision-making).
So what? Non-fundamentals is a reality, People do it all the time, that's life. Just because you hindsighted this and came up short doesn't necessarily mean it would be a bad decision for EVERYONE. Maybe if you bought that property in Irvine instead, it would not have taken so long to recoup.

When I bought my second place in 2010, it made complete sense to purchase because monthly ownership costs were actually cheaper than renting at the time.  Even though there were many fearful voices saying not to buy because prices would keep falling - both online and in real life (hello awgee) - I had run the numbers and made the decision based on fundamentals this time.  Prices didn't take off right away, but it truly didn't matter because I was paying less than it would cost to rent the same place.

Timing matters.  ROI matters.  Just look at all the emotional voices on this thread for proof.
Again, if you are living in it... timing can becomes less of an issue because a home is a personal choice and you want certain things you may not be able to wait for.

If someone wanted to live in a Woodbury hood when it was new and they could choose their floorplan, lot, etc... they had to buy then and not wait it out hoping the same model/lot comes up for resale when prices are lower (which is very hard to time).

Timing matters... but is also very inaccurate because of so many variables.

Have you bought a car recently? Everyone is at MSRP or higher and obviously you should wait until the chip shortage subsides but some people need to buy now. So they do the math, asses their risk and decide.

ROI is time dependent and if you stay long enough, the better. People who bought after the 2013-2017 "peak" (since some of you said 2018+ was the slowdown) have some great ROI right now. Most who bought in Irvine in 05-06 is making at least 50% ROI right now. The Irvine house I sold less than 10 years ago is up over 30%. If you are living in it and can afford it, you don't really worry about ROI until you sell.

Home buying **IS** an emotional process... that's why you are so mad at all these TI people who bought in Irvine and are not feeling the pain you keep predicting.

And I bet you "love" your 3CWG and big lot.
 
Mety said:
Renting doesn?t seem cheaper either. You need about $5000 for SFR in Irvine. You might pay less monthly for mortgage for a similar house.

Rents not only in Irvine but in the surrounding areas are up 20%+ year-over-year.
 
irvinehomeowner said:
Liar Loan said:
I completely disagree.  Renting is a viable alternative if all you need is a place to live.  Maximizing ROI (or minimizing losses) should be everybody's goal when it comes to housing.  And for most people it is, whether they admit it or not, but they rationalize their bad decision-making by saying "It doesn't matter if I overpaid because I plan to stay put for a long time."  Meanwhile they are paying more principal, more interest, more taxes, more mello, and will have less funds for a future move up.
Depends... you may build more equity in your home than whatever you save renting because if people are bad at math and making rational decision about money like you contend, how well will they invest or save whatever the difference is?

It's not as cut and dried as you posit. Hence the "math and risk assessment" caveat in my original statement.

When I bought in 2006 and the property dropped by 60%, renting was by far the better alternative.  I just didn't see it at the time because I wanted to own something so badly (emotional decision-making).
So what? Non-fundamentals is a reality, People do it all the time, that's life. Just because you hindsighted this and came up short doesn't necessarily mean it would be a bad decision for EVERYONE. Maybe if you bought that property in Irvine instead, it would not have taken so long to recoup.

When I bought my second place in 2010, it made complete sense to purchase because monthly ownership costs were actually cheaper than renting at the time.  Even though there were many fearful voices saying not to buy because prices would keep falling - both online and in real life (hello awgee) - I had run the numbers and made the decision based on fundamentals this time.  Prices didn't take off right away, but it truly didn't matter because I was paying less than it would cost to rent the same place.

Timing matters.  ROI matters.  Just look at all the emotional voices on this thread for proof.
Again, if you are living in it... timing can becomes less of an issue because a home is a personal choice and you want certain things you may not be able to wait for.

If someone wanted to live in a Woodbury hood when it was new and they could choose their floorplan, lot, etc... they had to buy then and not wait it out hoping the same model/lot comes up for resale when prices are lower (which is very hard to time).

Timing matters... but is also very inaccurate because of so many variables.

Have you bought a car recently? Everyone is at MSRP or higher and obviously you should wait until the chip shortage subsides but some people need to buy now. So they do the math, asses their risk and decide.

ROI is time dependent and if you stay long enough, the better. People who bought after the 2013-2017 "peak" (since some of you said 2018+ was the slowdown) have some great ROI right now. Most who bought in Irvine in 05-06 is making at least 50% ROI right now. The Irvine house I sold less than 10 years ago is up over 30%. If you are living in it and can afford it, you don't really worry about ROI until you sell.

Home buying **IS** an emotional process... that's why you are so mad at all these TI people who bought in Irvine and are not feeling the pain you keep predicting.

And I bet you "love" your 3CWG and big lot.
Maybe LL should have bought more cars and sell now right? ;)

ROI matters so much to him. Dibs that he didn?t see that coming. Otherwise he would have blasted it on TI by now.
 
sleepy5136 said:
Maybe LL should have bought more cars and sell now right? ;)

ROI matters so much to him. Dibs that he didn?t see that coming. Otherwise he would have blasted it on TI by now.

Yeah, great idea... How many cars fit in your motorcourt?
 
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