Bingo, there's a reason why I was able to get my Las Ventanas listing into escrow within one week and that's because it was priced right. Besides, it's difficult to pull data on new home sales but if you start adding in how many new homes have been sold in the past year you'll begin to realize that total sales (new and resale) have been flat to increasing. Unless something chaotic happens, we will not get anywhere near a 5%+ price drop.
LOL, price drop. Useless something freakish happens to the global order of things, aka, someone starts pulling triggers in the Crimea, I'll be surprised to not see double digit increases. Again, there is no inventory.
I don't foresee any inventory coming online because everyone that owns the inventory can't see where they'd move to. In many aspects, it's like the job market over last year. It just fundamentally lacks fluidity. You won't get sellers until sellers can see there's a place to go to. Right now there's no place to go.
Price the home at market and it's sold in a week. USC typo'd when he said 'weak' sellers market, it's not weak, it's week. That's actually an incredible sellers strength position that you can sell the biggest purchase people will make in less time than most of them take to decide on the next cell phone.
That's what I meant by the fundamental problem of no starter market in Irvine. There's no place for new buyers to go, there's no move up market of small gain to carry forward, a purchase is quickly outstriped by price increases, but the curve is so steep that your gains on the low end are simply outpaced by the gains on the high end, that you actually fall further behind. You bought a $400K place and gained 15%, the $600K you wanted to move up to gained 20% if not 25%. So you can carry a $100K towards the down, but the house you want went up $120K or $150K and you're actually $50K further away.
so this argues for tepid demand... ? How does this benefit sellers when buyers have limited buying power and a restrictive financing environment? You can argue cash buyers all you want, but loans are still the super-majority.
Meanwhile the builders keep building. More new units and competition this year than last with no end in sight for a long time to come.
Last year at this time, no Pavilion Park. No Orchard Hills. No Baker Ranch. Cypress Village ramping up.
Next year at this time, Area 5B/Northwood Paseo plus tons more in the aforementioned developments. Portola Springs still going. Stonegate still going. Cypress Village still going.
Resale may be discretionary, but builders need to build to survive.
And where is the economy? Where are the employment/income gains?
Seems inflation and precedent are keeping this thing on life support.