Housing cracks: Median OC price drops to 690k (sale, renter)

[Electrician4you]

Originally Posted by max210

Exactly what was said last time. This time it's different.

Oh by the way

https://finance.yahoo.com/news/house...175705459.html
House flippers triggered the US housing market crash, not poor subprime borrowers

But this time it's different.

So where is your proof of borrowers defaulting en masse? Rates aren't going up, and rents are high. Everybody has been sitting here waiting for the other shoe to drop for about 6 years now. Sure the market will move back a bit maybe the prices will drop.
Even if you start getting a default from borrowers (and it really makes no difference who the borrower is) the banks are going to withold inventory, big hedge funds are gonna step in and buy and turn to rental. Because people are going to
1. Want to shelter their money in safe(re) investments
2. Everybody needs a place to sleep.

Throwing out a article means zippo. Surecprices are astronomical. But there is a difference. You simply do not have the same type of loans that were available. Ok for example we own multiple properties. I bought a house. I put 20 % down. im sure as hell not gonna walk away. The previous housexwe bought list about 1/3 of its value in the first two/three years of ownership. So what? I still needed a roof over my head. And even when I lost my job I still found some work. Sure it was crap bs work but I didn't car. It brought in some money. That's all I cared about.

Many people want this economy to crash simply for one reason. So they can get their piece of the pie on the cheap and say see I told you do. Right now the only people not working are the ones who are lazy.

[CaliRestoration]

I don't see massive price drops like 2008 because the loans since then have been strictly underwritten (not sure about the past couple years but I can't imagine the no-income loans of 2005).

In certain parts of OC, you had 50% all cash offers in 2011, 2012. How do I know? I was one of them, and I was competing against all the other all cash guys who swooped in on the homes being short sold, and foreclosed.

Even if my home in OC lost 20% of value today, I would still be 40% up from the price we paid in 2012. Why would I suddenly sell and put it on the market? It's 100% paid off and I've still made lots of money. Apply this logic to all the other people who have 50% or more equity positions with their primary home. None of these people would be in negative equity positions even with a massive 20% drop.

The 2008 crash isn't going to happen again in any time frame that helps people sitting on the fence. There are far too many people alive right now who remember what happened 10 years ago and it's still fresh in their memories. Flat lined prices yes, but if you're waiting for a real estate crash where prices drop 20%, you better hope North Korea fires a lot of missiles and hits. That's the only way you get 20% off now. Anything that would cause a 20% drop now would have to be catastrophic and you wouldn't want to live in OC if that happened anyway.

[expatCA]

Originally Posted by max210

Exactly what was said last time. This time it's different.

Oh by the way

https://finance.yahoo.com/news/house...175705459.html
House flippers triggered the US housing market crash, not poor subprime borrowers

But this time it's different.

They blame it on "House flippers" and then speak of rich. middle class and poor having multiple mortgages. It wasn't flippers, but people who bought and sold and bought again.

I knew a few, but they were not house flippers like on HGTV.

One friend would put money down when a new tract started and by the time it finished he could sell it and make money and do it again. Not fixer uppers, etc like we have today. Just bad decisions by people who had good credit scores, but poor income for the higher priced home they bought and then could not sell.

In a new neighborhood across from the one I lived in, about 60% of the homes went vacant during the crash due to the buyers having no income to support them as they bought with no income requirements. One lived in another house 50 miles away and bought the new one as he thought the prices would rise and .......... they didn't.

Rich and middle class and poor were not house flippers, but investors who should not have bought.

If credit had been checked like today, with income verification and a large down payment, house prices would not have climbed like they did.

[BB_210]

I agree that the article in OP is not proof of the crash. I also can't show you proof of a crash/correction that hasn't happened yet. I'm saying is that it was the same thing that was being said before the great recession, this time it's different, there are no indicators of a problem.

It seems to me like our economy is over valued, I also can't point to something that would trigger a correction. It also seems like although the economy has been growing it is still fragile (why are interest rates still so low?). I already own a home and a rental purchased a few years ago; I can't say I wish a recession on the whole US because I want an extra room and a bigger backyard. Personally I think whatever triggers a correction will be from outside of the US, such as China taking a dump.

[Electrician4you]

Originally Posted by max210

I agree that the article in OP is not proof of the crash. I also can't show you proof of a crash/correction that hasn't happened yet. I'm saying is that it was the same thing that was being said before the great recession, this time it's different, there are no indicators of a problem.

It seems to me like our economy is over valued, I also can't point to something that would trigger a correction. It also seems like although the economy has been growing it is still fragile (why are interest rates still so low?). I already own a home and a rental purchased a few years ago; I can't say I wish a recession on the whole US because I want an extra room and a bigger backyard. Personally I think whatever triggers a correction will be from outside of the US, such as China taking a dump.

But last time there WERE indicators. Those indicators were ignored or simply dismissed. I bought with 20% down and I had to jump through a whole lot of hoops to get the loan. I mean yeah I got it because I had the finances and credit, but it wasn't a gimme.
In the "bubble" everyone brings up I think if I fogged a mirror I qualified. Dude I knew things were wonky when a buddy who made about 49k a year qualified for a no money down loan for 360,000. I knew another guy who bought and sold every house about six month intervals. Literally went from 300,000 dollars to about 840,000 house.

[Teckeeee]

As I go on my daily walk around the neighborhood In Costa Mesa/South Coast Metro area there are around 15 homes for sale close to the median price most are selling pretty quick a few have issues, neighbors that don't maintain their lawn/property those are still on the market, but I don't see anyone slashing prices, a few reductions listed. I wish we would see a nice drop I might buy because rent is $2000 for a 1 bdr. in Irvine and I have a hard time swallowing that, heck even old 1 bdr. in Costa Mesa with wall unit AC are $1800 a month, ridiculous!

[Electrician4you]

Originally Posted by TracerOW

I just tried to buy an 8 plex in Belmont Shores for 2.6 M with 1 M down. Best offer was 2.8M all cash 30 day close. The market is definitely not tanking.

You're not kidding. I just got a call on my way home from work from a guy offering me 500k for one of my rentals. All cash no contingencies at all. He just wants to walk it. It's up for rent that's why he called. Not to mention the few rent to win offers i got from people in the last few weeks

[Electrician4you]

Originally Posted by TracerOW

What to you mean by rent to win?

Rent to own. Sorry fat fingers small phone

[NewbieHere]

My neighbor's home sold in less than a week.

[Teckeeee]

Originally Posted by NewbieHere

My neighbor's home sold in less than a week.

Need more data points.......what city.....what price?