Please take this "expectations" survey…  Results will be posted to the forum soon!
http://www.zoomerang.com/survey.zgi?p=WEB2265RPA6SQQ
Just three basic questions to gauge what people are expecting to do if ready to purchase a house now….
Thanks,
crucialtaunt

crucialtaunt - not sure if your survey can give meaningful indication either way.

I was just pointing out that with downpayment of 20% or more, the cost of ownnership isn’t that out of whack. I am not trying to get an quick answer soon.

I think we’ll just have to wait and see. Spring/summer 2007 should tell us something right?

" I think we’ll just have to wait and see. Spring/summer 2007 should tell us something right?"

That is where I think we all agree. If we get a big increase in inventory and a spike of foreclosures signaling more inventory on the way. We will know real price declines are coming.

Updated! - 2/20/2007, 12:56 pm
There were 53 visits and 37 completes.
The final survey results are in!  There were a big whoppin’  <u>37</u> responses (THANKS!!) so this not a big enough data set to base anything!  But here is goes anyway…  There were three questions on the survey:
1. Please state the approximate range of your liquid net worth in taxable accounts or trusts (i.e. outside of retirement accounts such as IRAs/401(k)/Roth-IRAs, outside of children’s education funds such as 529’s etc., and any qualified medical reimbursement accounts such as HSA etc.).
28% - less than $100,000
36% - $100,000 to $250,000
33% - over $250,000
3% - Other: $3.2 M 1031 trust, savings
2. If you were to purchase a house in the near future, what would be the approximate value of your down payment?
22% - less than $50,000
11% - More than $50,000, but less than $100,000
25% - More than $100,000, but less than $150,000
6% - More than $140,000, but less than $250,000
31% - More than $250,000
6% - Other i.e. (1) "The diff betw price and a $500,000 mortgage" and (2) "dependent upon house, looking for payment"
 3. With your down payment in mind, what is the range of house values that you would consider purchasing?
19% - None, I am a bubble sitter
8% - $450,001 - $550,000
16% - $550,001 - $650,000
11% - $650,001 - $750,000
24% - $750,001 and above
3% - Other: "1mil -> 2mil"

Discuss…

Interesting. Doesn’t look like the profile of a group of poor, bitter renters.

IR - no, it doesn’t.  It looks like a group of people who work hard for their money and want to make the best use of it. 

For now, we have Officially Given Up on moving.  We didn’t want to be slaves to a home, nor give up moderate vacations and occassional meals out, and financial security in the event that one of us lost a job or took a new but better job at lower pay.  We sat down and figured out what we really wanted for and out of a home.  Although we really, really want two more bedrooms and a yard, as DINKs, these are wants, not immediate needs.  Because we like to entertain, we asked what could we do with the current condo to make it easier and/or better to entertain in, as well as making it more to our liking.  Aside from de-cluttering, it came down to new paint, new flooring, and better appliances (I’ve wanted at least two ovens for ages).  So that’s what we’re doing.  We will almost have our ideal home, for about the same price as two years’ worth of increased property taxes.  That math worked for us.

Look for an updated version of the survey above (same thread entry edited) as more people take the survey…

IrvineRenter -

I certainly wouldn’t label you a bitter renter. But I can certainly understand why so many people have become bitter seeing recent home price appreciation, and your housing crash speculation does provide hope to many bitter renters and bubble sitters. I know you mean well and want to educate as many people about the risk of housing crash and I think you have done a great job.

The truth is many experts still disagree and only a few predict a housing crash as bad as yours. Some predict that our economy would suffer greatly if housing does crash which isn’t good for many people.

I am not as articulate and dont have good writing skills so I am not even gonna try to explain soft-landing. But for what it’s worth I’d like to share an article from recent Harvard study so hopefully people can make a better decision.

"Harvard study says there may be bumps along the way, but that the long-term health of the housing market is intact."

http://money.cnn.com/2006/06/13/real_estate/Harvard_study_housing_slow_growth/index.htm

Red:v This article is from June, don’t you think its a little outdated?

wantToLiveInIrvine - No. I think it covers the fundamental why soft-landing scenario is likely and why the future of housing is healthy. Did you spend the time to read it?

I am sure I can find more recent articles about why housing will never crash or why housing bubble is just a myth but I feel this article covers the fundamental and easy to read.

In fact, I think most economists do NOT think housing will crash. Majority think the bottom is either in first or second half of 2007. There are some who even think that the bottom is behind us and housing is currently rising.

From Bloomberg:

Banks That Took Greenspan’s Advice Pay the Price: Caroline Baum

Each side in a debate can find opinions to support their argument, particularly in financial markets where it is all a guess anyway. The real question is whom do you want to believe and why? Are there renters who want to believe prices will crash so they can buy at a better price? Absolutely. Does this color their judgement? You bet. Are their owners who want to believe in Pollyanna notions of continual appreciation? Of course. We all have our biases.

For me the question is one of risk and reward. With prices detached from their fundamentals, is there a chance of a significant price decline? With affordability at an all time low, is there a chance of significant price increases? Are the benefits of ownership worth the risks?

I have answered these questions for myself, and each individual must to the same. In the end we must all accept the consequences of what happens in the housing market, and nobody knows for sure. Personally, I am prepared to rent forever as this is the outcome if I am wrong. Whatever you opinion or actions might be, if you are wrong, are you prepared?

IrvineRenter - This last blog from you is what I’ve been trying to say as well, only you articulate it much better. Housing is such a basic need for everyone and a very personal one too so every decision for buying a home should be personal. The only consolation I have if I am wrong is that I plan on staying put for a while and home price will eventually rise back up, hopefully sooner than later -.

red:
It might interest you to know who is on the "Policy Advisory Board" for the Joint Center for Housing Studies that is quoted in the 6 months old article you referenced above…  here’s the link: http://www.jchs.harvard.edu/people/pabmemberlist.html.

crucialtaunt - Thanks. I guess we really can’t trust no one these days. Sigh…

Survey Numbers updated above… (scroll up ^^^^)

23 responses!  Come on, people!
Zovall, how many registered members do we have?
Time to start shamin’ them.
SCHB

We’ve got 86 registered members on the forums!   And plenty of guests lurking too

Red - I would agree with you that a national housing bubble on a catastrophic scale is probably not going to happen.
But Irvine is very different from the average national market and most of the papers & studies I find regarding the housing bubble are mostly talking about the national market at large. So I wonder how relevant these national studies are really to our situation specifically.
Regards,
Muzie

What Red is doing is human nature.  Even though many of us might claim that we’re nearly open to "alternate views," it is just plain human nature to seek evidence to affirm a decision we’ve made.  Not many people have a legitimate interest in disproving the validity of their judgement.
I’m sure that if I took the plunge and put a deposit down, all the energy I currently spend (hoping prices retreat) would go into the opposite (I hope prices hold firm and my decision was good).  Neither will have an effect on the outcome, though!  :]
BTW, I’m not saying Red is right or wrong…if someone has 20% down and a solid time horizon for staying in the house, they might not be better off waiting.
Crucial, great find on the source of that info.
SCHB

Muzie,

Yes I agree local market and national market are different. But housing bubble seems to be a national phenomena, in fact it is probably a global issue. Europe, Australia, and many parts of Asia have seen housing price doubles or triples just in the last few years, and are facing affordability issue similar to ours.

Now I dont know if we need to start a discussion about global housing and how it relates to us but I think Europe and Australia are ahead of us, i.e. they have had 10% price correction a year or two ago and now price is rising. China also have seen housing price just keep on rising and recently put a restriction on foreign buyers. So we are not alone for sure.

But I actually find this article to be somewhat fitting to our local market and to this thread specifically.

For example it covers how foreign immigrants, graying boomers, changing household composition will keep demand intact for the next 10 years. On the supply side, it touches the risk of foreclosure, and how goverment regulation (land restriction, zoning laws) can limit supply. And at the end the article also mentions "a lot of different areas have their own characteristics and it’s hard to generalize."

Of course as crucialtaunt points out, those Harvard boys may have their own agenda. I can’t comment to this. But from reading the content, to me it presents a strong argument to why housing wont crash and may keep on rising, which I believe what IrvineRenter asked at the beginning of the thread.

SCHB - yes, I have no question that it is human nature. As I mentioned before, I visited this blog is to find info regarding new home in Irvine. I didn’t expect to see discussion about  how housing is about to crash and how bad timing it is to purchase now. So I might have joined the wrong blog and may have overreacted a bit.

On the other hand, I am open-minded enough to sacrifice my deposit if either one of you or the near future market situation itself convince me that a housing crash is imminent.

For what it’s worth, I spotted this on another housing blog today. He didn’t site his source but it looks like Dataquick LA Times charts.

 
     
       
        ORANGECOUNTY SINGLE-FAMILY RESALE HOUSES
       
     
     
       
        PRICE PER SQUARE FOOT MONTHLY CHANGE
       
     
 

            2006                               2005  

JUNE 444                               404  

JULY  433   -2.48%                  412   1.98%

AUG   435   0.46%                   418   1.46%

SEP   435   0.00%                    423   1.20%

OCT   427   -1.84%                  424   0.24%

NOV   419   -1.87%                  430   1.42%

DEC   412   -1.67%                  430   0.00%
Of course, median price/sf is far from a perfect metric since it ignores other quality factors. But you can make a good case that it’s better than the "plain vanilla" median. In any case, the number is on a clear downtrend and we are back at summer 2005 levels. Interesting. I’m very curious about where the JAN number will be.

"Just one month into the first quarter of 2007, already 50,404 foreclosure filings have been reported in the Southwest — more than half the 94,631 filings for the region during the entire first quarter of 2006."

And California takes top honor,

"In the Southwest, California (25,107), Texas (10,296) and Colorado (4,968) continue to rank in the top 5 nationally for foreclosure filings, although Colorado’s rate is trending downward compared to the first quarter of last year, McGee said."

I wonder how Irvine is faring? 

http://www.housingwire.com/2007/02/12/foreclosures-climb-dramatically-in-january/

There was a yellow "foreclosure home for sale sign" (i believe) along Jeffrey between Alton and Barranca this past weekend.

I just don’t see homes appreciating from here. I see MultiFamily Residences doing so (as an investment), but stepping into one of those is a big money endavour.
As a DINK, equity evaporation is a very big deal. But I’m also of the idea if you want a house buy it, just be financially responsible about it (and theirin lies the catch). A house or property is a long term investment and always will be, to think of anything else would be foolhearty. I believe a lot of people in this area have become very spoiled with the giant housing appreciation rates.
 
AND finally, As for cars, well its a labor of love, While nice brite shiney cars are cool, I’m all about performance and I’m FAR past performance that comes with any stock car.  I do have my daily beater because there are so many people who just don’t care about their vehicles as I do.  But I agree with the lot here, I’ve just started buying my cars as of late or financing a meager few dollars (10-8k or less).  Anyways good luck
-bix