Newer Irvine listings with crazy WTF asking prices from equity sellers

I wonder how the appraisals are working out?  Still see quite a few buyer conventional financing like 87 Long Meadow above.. Do they miraculously hit the asking/offer price?  Or if they come up short what then?  If I was buying, and the discrepancy is too great.. red flag?  Going 50% down seems really risky for me, especially on smaller floorplans.
 
ps9 said:
I wonder how the appraisals are working out?  Still see quite a few buyer conventional financing like 87 Long Meadow above.. Do they miraculously hit the asking/offer price?  Or if they come up short what then?  If I was buying, and the discrepancy is too great.. red flag?  Going 50% down seems really risky for me, especially on smaller floorplans.
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I definitely think their bigger downpayments cover the difference. 
 
shadax said:
It would be wise to sell and take profit soon
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Only problem is... where are you gonna live in the mean time?  Unless you have another designated home you could stay already or want to buy again in this bubble..

wait wait wait!! You can sell and buy in Johns Creek!!! Stupid me
 
I am going to sell at WTF price and take the profit. then move in with my parents who live in a much bigger house by themselves and also in the Unicorn land. I will use the profit to buy a couple of houses at Johns Creek to help out our Korean friend at TI.

H        O        M        E        R said:
shadax said:
It would be wise to sell and take profit soon
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Only problem is... where are you gonna live in the mean time?  Unless you have another designated home you could stay already or want to buy again in this bubble..

wait wait wait!! You can sell and buy in Johns Creek!!! Stupid me
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BunkMoreland said:
This is ridiculous. The impact is that if you buy a home right now, you have to LOVE IT... that is, you need to be prepared to live there at least 10 years because it is very possible/likely that buyers today could be under water in 6 years when they want to upgrade.
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Not really.  I bought back in 2005 and only had a 5 year plan.  Here we are 7 years later and my property is worth more than what I paid.  Back then, there were a TON of stated income loans, piggy-back loans, little down payment, etc. causing a huge run up in prices.  Then the short sales happened and put a huge amount of downward pressure on prices.  Now days, with everyone putting 30%+ down payments or paying cash for properties, we are in a completely different situation.  I cannot see prices falling off a cliff if there are no foreclosures or short sales...
 
woodburyowner said:
BunkMoreland said:
This is ridiculous. The impact is that if you buy a home right now, you have to LOVE IT... that is, you need to be prepared to live there at least 10 years because it is very possible/likely that buyers today could be under water in 6 years when they want to upgrade.
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Not really.  I bought back in 2005 and only had a 5 year plan.  Here we are 7 years later and my property is worth more than what I paid.  Back then, there were a TON of stated income loans, piggy-back loans, little down payment, etc. causing a huge run up in prices.  Then the short sales happened and put a huge amount of downward pressure on prices.  Now days, with everyone putting 30%+ down payments or paying cash for properties, we are in a completely different situation.  I cannot see prices falling off a cliff if there are no foreclosures or short sales...
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Your home is worth more now because you rode out the downturn. That is exactly my point ... if you buy high now, be prepared to have to live through the dip that is bound to come. I see pricing falling when interest rates rise, which is bound to happen.
 
BunkMoreland said:
woodburyowner said:
BunkMoreland said:
This is ridiculous. The impact is that if you buy a home right now, you have to LOVE IT... that is, you need to be prepared to live there at least 10 years because it is very possible/likely that buyers today could be under water in 6 years when they want to upgrade.
Click to expand...

Not really.  I bought back in 2005 and only had a 5 year plan.  Here we are 7 years later and my property is worth more than what I paid.  Back then, there were a TON of stated income loans, piggy-back loans, little down payment, etc. causing a huge run up in prices.  Then the short sales happened and put a huge amount of downward pressure on prices.  Now days, with everyone putting 30%+ down payments or paying cash for properties, we are in a completely different situation.  I cannot see prices falling off a cliff if there are no foreclosures or short sales...
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Your home is worth more now because you rode out the downturn. That is exactly my point ... if you buy high now, be prepared to have to live through the dip that is bound to come. I see pricing falling when interest rates rise, which is bound to happen.
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My guess is that the dip might 10-15% off the new peak (which we still haven't hit yet) so if a buyer buys right now, he still should be in good shape.  Sure interest rates will rise, but it won't have THAT much of an impact here in Irvine.  It will be a very slow rise with many other factors probably contributing more to the housing prices.

You also originally stated that "it is very possible/likely that buyers today could be under water in 6 years".  I don't see this happening because of the large number of people with massive down payments and all cash buyers.  The market will not tank like it did in 09/10 due to reasons I already mentioned and as a result, very few people will be underwater.
 
woodbury owner - bunkmorelands point has some merit to it, for example, if you tried selling in year 5 or 6 after ownership, you probably would have lost money on your purchase if you tried to sell it. in year 7 it just so happened that prices have gone up 20% to put you back in the money.
 
Higher interest rates won't bring prices down by themselves, higher supply and/or lower demand will bring prices down.  Higher rates will decrease buyer demand on the margin in Irvine since so many buyers buy with all cash or large downpayments.  Supply will be the key of where prices go. 
 
USCTrojanCPA said:
Higher interest rates won't bring prices down by themselves, higher supply and/or lower demand will bring prices down.  Higher rates will decrease buyer demand on the margin in Irvine since so many buyers buy with all cash or large downpayments.  Supply will be the key of where prices go.
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As interest rates rise, you'll see fewer cash buyers as folks will look for other investment vehicles. Obviously its a myriad of factors.
 
It will take more than rising interest rates for prices to fall significantly... I've talked about this before, but here's a chart to show you that it's not just interest rates that affect prices:

2010_09_12_mortage_rates_vs_real_home_prices.png


Got it from this forum on Redfin:
http://forums.redfin.com/t5/Orange-County/Report-Are-we-approaching-a-NEW-Housing-Bubble/td-p/409381
 
ps9 said:
cowlemon said:
This one went pending yesterday.

http://www.redfin.com/CA/Irvine/63-Regal-92620/home/7210750?utm_medium=email&utm_campaign=listings_update&utm_source=myredfin&utm_content=address
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closed at $930,000 CASH with a Redfin agent...I'm quitting my job and gonna go help people buy in Woodbury
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ps9 said:
cowlemon said:
This one went pending yesterday.

http://www.redfin.com/CA/Irvine/63-Regal-92620/home/7210750?utm_medium=email&utm_campaign=listings_update&utm_source=myredfin&utm_content=address
Click to expand...

closed at $930,000 CASH with a Redfin agent...I'm quitting my job and gonna go help people buy in Woodbury
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ps9 said:
cowlemon said:
This one went pending yesterday.

http://www.redfin.com/CA/Irvine/63-Regal-92620/home/7210750?utm_medium=email&utm_campaign=listings_update&utm_source=myredfin&utm_content=address
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closed at $930,000 CASH with a Redfin agent...I'm quitting my job and gonna go help people buy in Woodbury
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I had to do a double take, almost $100k over list.  Getting close to $500/SF.
 
USCTrojanCPA said:
ps9 said:
closed at $930,000 CASH with a Redfin agent...I'm quitting my job and gonna go help people buy in Woodbury
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I had to do a double take, almost $100k over list.  Getting close to $500/SF.
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Me too!  I wonder how the counter offers went.. must have been a crazy few days with the negotiations.  I bet there are a lot of neighbors doing some serious thinking this weekend after seeing this closing price!
 
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