Housing Prices Trending Higher (renting, condo, mortgage)

[k374]

so what is the opinion here? home prices are going to be increase, flat or go down? I don't see home prices going down in the near term since I think there has to be a trigger. With the economy as strong as it is right now no chance. We need a strong recession, perhaps a collapse of the stock market.

Also, I think interest rates have to rise significantly otherwise investor speculation will prevent home prices from falling too much. Investors need to get out of real estate by chasing higher yields elsewhere and that can only happen if interest rates rise.

[jamsifoes]

Personally I think it will go down more if the Irvine company continues to build apartments and new developments. The traffic on 405 will scare all the buyers away. God I hate Irvine...

[LuvSouthOC]

The most likely scenario is the market will remain flat with slight price drops in the interim.

The second possibility is that there will be a significant drop. This is unlikely since buyers of today either paid cash or were very qualified to buy. These buyers will not sell for a significant loss. Also working against this scenario is the fact that so much money has been printed (then hoarded by the rich and corporations) and that money found its way back to the US via odd routes, e.g, China.

A third possibility, a variant on the first, is that prices fall in the short term, stabilize, and then rise slowly again. This is what the Board of Realtors want everyone to believe and indeed it seems plausible. However, working against this scenario is the fact that many homes are still underwater, there is still some shadow inventory, many homes were pulled off the market and rented instead when it became obvious lately that would not sell at the asking price. Working in favor of this scenario is continued population growth in California, immigration pressures, money printing, almost negative real interest rates, a very modestly improving job market etc.

I vote for variant 1. I think there will be some inflation and home prices must endure a rise of everything else while they stay stagnant in relation to the cost/price of many things (and hopefully wage) increases...for many years.

[the city]

I was surprised to hear the person who said Temecula prices are rising. Here in Santa Maria, I'm surprised to see home prices rise quickly too. We are still the most desirable state to live in for our beauty and outdoor activities. Anywhere near the coast is going to rise faster than inland areas. My parents started off in an inland area and moved closer to the coast. I'm breaking that trend and buying close to the coast from the beginning even though I'm not making as much as my dad and I'm not living in the greatest city.

It seems to me that most young people and college graduates in the last couple years will be looking to buy in more affordable communities or rent in the city they want to live in. The ones who already owned homes before housing prices jumped or people who inherited money/property will be able to relocate to a house in nice coastal cities in CA. I think even if a married couple is making around $150,000 or more that it's not worth to spend $500,000 on a house. Especially if you have kids, all that money you are putting into a house could be put towards your child's college education or money for them to start a business or buy their own home one day.

I feel bad for the Google workers and tech workers, they make all that money, but still not enough to be able to own property in the Bay Area and Silicon Valley.

[CA4Now]

Originally Posted by k374

so what is the opinion here? home prices are going to be increase, flat or go down? I don't see home prices going down in the near term since I think there has to be a trigger. With the economy as strong as it is right now no chance. We need a strong recession, perhaps a collapse of the stock market.

None of that, apparently.

Originally Posted by CA4Now

Housing price cuts point to a shift in Southland market - LA Times

[Electrician4you]

Originally Posted by k374

so what is the opinion here? home prices are going to be increase, flat or go down? I don't see home prices going down in the near term since I think there has to be a trigger. With the economy as strong as it is right now no chance. We need a strong recession, perhaps a collapse of the stock market.

Also, I think interest rates have to rise significantly otherwise investor speculation will prevent home prices from falling too much. Investors need to get out of real estate by chasing higher yields elsewhere and that can only happen if interest rates rise.

IMO they will drop prices for the people that really want to sell. The in the clouds price sellers are gonna sit there not selling. What strong economy are you talking about? Most companies are showing record profits but companies aren't hiring. So that tells me that they are working the hell out of a more streamlined workforce. Yeah people are hiring but not at the quantity needed.
Investors/speculators ( the real big boys) already pulled out. The gains/ROI is so slight now there is no money in it. Few years ago you were looking at 40% return. Now maybe 5%. Craphole houses are going for 500 plus. And need 100k rehabs. By the time you turn it around you're lucky to pull 5-7% out of it. And the risk of the house not selling or possibly selling for less cuts the profit even more. Remember you're looking at moths to rehab. It's not a one week turn around. The margins just aren't there at these prices. In 08-11 yeah but now no way.
Investors will jump back in if prices drop but if the Feds don't back the market again I guarantee you they won't.


There comes a point where affordability and price meet. That's something that happens to everyone and its just at different levels. At that point you hit YOUR affordability ceiling. In order to go last that to buy you go into stretch territory.

I just got done with a meeting with my investment advisor. He fiat out told me not to buy right now and to wait. I already knew it but I wanted affirmation.

[thelopez2]

Too many people look at asking/listing price and not previous sale price to gauge the market. In my condo complex everyone is asking within a $10K-$20K range of each other and none have sold. Someone new listed and it went pending within 1 week. It was listed 20K less the the others.

[Electrician4you]

Originally Posted by thelopez2

Too many people look at asking/listing price and not previous sale price to gauge the market. In my condo complex everyone is asking within a $10K-$20K range of each other and none have sold. Someone new listed and it went pending within 1 week. It was listed 20K less the the others.

And smarty pants here ^^^^ Is right. Asking prices mean zippo. Sale prices is what tells the true value or at least willing to pay price.

[jamsifoes]

Sounds like a bunch of sour grapes here who can't afford to buy now so instead you wish the price will come down. It's not going to come down much from here if it comes down at all. Inflation is going to hit in a few years, wage will rise and house prices will stay afloat. It's all going to be a wash.

[BRinSM]

interest rates are headed back up again, expect sales prices to remain flat or fall very soon.