Don't count on home prices dropping in OC and LA (Los Angeles: rent, credit)

[LuvSouthOC]

Originally Posted by NewbieHere

I know houses are still sold very quickly. My neighbor's house was sold less than 2 weeks. My sister's neighbor house was sold less than a week. I hope it continues.

I notice that homes priced under 850 in my wider general area, go pretty fast.

[NewbieHere]

Originally Posted by LuvSouthOC

I notice that homes priced under 850 in my wider general area, go pretty fast.

My neighbor's home was sold for $1.6M, but it was scooped up by a Chinese couple. But they rarely live here.
My sister's neighbor house was sold $535K, older home in the 50s.

[LuvSouthOC]

Originally Posted by NewbieHere

My neighbor's home was sold for $1.6M, but it was scooped up by a Chinese couple. But they rarely live here.
My sister's neighbor house was sold $535K, older home in the 50s.

I just had a house sell very close to me and I awaiting to see what the final closing price was and who the buyers will be. I am very curious to see if it's a Chinese buyer, but I strongly suspect it is not. They don't seem to buy homes with pools because their intention is to rent (almost exclusively to Chinese people). If my hunch about pool homes is correct, we are fairly safe all around here because...pools abound. .

[NewbieHere]

Originally Posted by LuvSouthOC

I just had a house sell very close to me and I awaiting to see what the final closing price was and who the buyers will be. I am very curious to see if it's a Chinese buyer, but I strongly suspect it is not. They don't seem to buy homes with pools because their intention is to rent (almost exclusively to Chinese people). If my hunch about pool homes is correct, we are fairly safe all around here because...pools abound. .

They like Irvine and Newport Beach, I'm told. I don't know why Laguna Niguel and a Laguna Beach are not their targets.

[LuvSouthOC]

Originally Posted by NewbieHere

They like Irvine and Newport Beach, I'm told. I don't know why Laguna Niguel and a Laguna Beach are not their targets.

Well a house just three doors down was purchased by a Chinese investor three years ago so I am not so sure. Thank goodness they sold it.

They tend to prefer the that so very highly overrated area...Irvine.

[NewbieHere]

Originally Posted by LuvSouthOC

Well a house just three doors down was purchased by a Chinese investor three years ago so I am not so sure. Thank goodness they sold it.

They tend to prefer the that so very highly overrated area...Irvine.

Two houses near $2m were put on the market recently, also owned by Chinese. There must be some reasons why they are moving, even in Irvine.

[k374]

Zillow is forecasing a 3% drop in values for much of OC.

Example - Irvine, forecast through May 2018 is -2.8%

https://www.zillow.com/irvine-ca/home-values/

I think we are at a cusp of something, either they are going to introduce more of the exotic loan products to keep this going or the whole thing is going to soften up. I have an Uncle who works in Real Estate and he told me he just did a property where the buyer did 108% LTV.. just like the old days!

I joked that the extra 8% was to pay the mortgage I think this is the definition of a Ponzi scheme. A lot of stuff is happening now in the mortgage market to keep volume going, it's NOT only foreign capital driving this thing!

Welcome to 2005

One thing I've learned from the last crash is to never listen to any economist - they pretend to know everything but they are usually all wrong.

From the article:

At 6 percent a year, the median home price could reach almost $700,000 in Southern California by 2023, $500,000 in Riverside County, $800,000 in Los Angeles County and nearly $1 million in Orange County.

These people are total fools if they think this is going to happen. We are totally overdue for a recession and when people lose their jobs do you think appreciation will continue like this? Morons. Yeah, just take the current situation and extend it like nothing ever is going to happen to the economy. Yes, the good times will last into infinity... why? because according to history recessions and big crashes have never happened right? Ridiculous! These economists just annoy the crap out of me, they are such idiots and their stupid opinions are devoid of any value. 2023 is so far ahead in the future and we have so many uncertainties from today until then.

[saibot]

Over the weekend I was driving through Foothill Ranch and passed a young man on the street corner holding (and dancing with) a sign advertising new homes up Glenn Ranch Road..."from the low $1 millions." Just shaking my head. $1 million+ for a three-bedroom house in hot, wildfire-prone Foothill Ranch.

[expatCA]

Originally Posted by k374

At 6 percent a year, the median home price could reach almost $700,000 in Southern California by 2023, $500,000 in Riverside County, $800,000 in Los Angeles County and nearly $1 million in Orange County.

These people are total fools if they think this is going to happen. We are totally overdue for a recession and when people lose their jobs do you think appreciation will continue like this? Morons. Yeah, just take the current situation and extend it like nothing ever is going to happen to the economy. Yes, the good times will last into infinity... why? because according to history recessions and big crashes have never happened right? Ridiculous! These economists just annoy the crap out of me, they are such idiots and their stupid opinions are devoid of any value. 2023 is so far ahead in the future and we have so many uncertainties from today until then.

That is what they said in 2000. Wait prices are way above what they were then even after the recession.

Prices will have a minimal drop if any at all. This is part of a normal run up and stabilization. It will take a very bad outside event to cause any significant price drop to occur.

If a major recession hit, while prices "could" drop, the ones hoping for it, would still likely not be able to buy. As long as there are people with the money to buy or good credit the prices will not drop. The idiots that bought in the last run up are not buying today and could not buy if a recession hit.

[ihatedcu]

Originally Posted by expatCA

That is what they said in 2000. Wait prices are way above what they were then even after the recession.

Prices will have a minimal drop if any at all. This is part of a normal run up and stabilization. It will take a very bad outside event to cause any significant price drop to occur.

If a major recession hit, while prices "could" drop, the ones hoping for it, would still likely not be able to buy. As long as there are people with the money to buy or good credit the prices will not drop. The idiots that bought in the last run up are not buying today and could not buy if a recession hit.

We'll see what happens when there's no cheap money. When cheap money ends and recession hits, your theory will go out the window. We had 10 years of down real estate cycle in the 90s.