Long time bear ready to "flip"

<p>>>>So the question to ask yourself is should you do what everyone does, or listen to your heart? <<<</p>

<p>Is that realtor speak for everyone else doesn't want to buy so they are wrong, but your heart wants to buy so it is right?</p>
 
<p>Thanks for all the great feedback!</p>

<p>ABC- I am married and have a four years old kid. Getting our kid in a better neighborhood and school are the main reasons why my wife is so adamant about moving to Irvine, and of course to save a nhour off my commute each day. Whenever we decided to buy, we will mostly likely put down at least 40% down, thus, we are not in the same situation as many first time buyers. You provided the same argument as my wife in which in the long run a 10-20% price fall is negligible. But besides all of IR's great RE statistic breakdowns, I also just can't ignore all the gloom and doom news about the RE and the financial market nowadays. As bullish as I am with the US economy and local Re market over the next 10-20 years, I do agree with the bears that there will be a decent home value correction and possibly a change of a global financial market melt-down. Although this scenario might serve me well with the current position. But any market downturm will also have an unfavorable effect on our retirement and other short-term investment portfolios, and perhaps affecting the well-being of many people whom I do not wish upon. In short, I understand the risks. But it is not as easy to sit on either side of the RE market as some might believe!</p>

<p>Vicstah- Thanks for the info! I will try to sign up for the promotion listing and look forward for any discount. So far, they are not willing to offer any co-op or incentives that I am aware of, just a 5K closing cost.</p>

<p>RTLGuru- Although the particular development at VoC has a Tustin address, it does belong to the Irvine School District, which is a criterial for my wife. By the way, one concern I have with VoC, even the Grove off Harvard, is that it will not mature as well as some of the other Irvine communities. Anyhow, luck good with your home purchase when you decided to buy!</p>
 
Entry, we too are looking at Ciara. Still on the fence about their pricing (which really hasn't been discounted at all) and especially on the Mello-Roos on VoC Grove Tustin. See my post on this <a href="http://forums.irvinehousingblog.com/discussion/833/">thread</a>. The Sq/ft price is low, but the taxes are high for almost no reason. We are either going to put our cash down on a Plan 3 in the last phase or just wait it out for Orchard Hills or Laguna Crossing. We'll lose equity in our current home as prices erode, but then again we'll have even more savings to offset. Hopefully, prices will adjust evenly, any equity loss will also see reduced asking prices in a new home price. That would be ideal, since we would be paying a lower tax rate due to the lower prices.





I have no idea what the hoopla is about plan 4, I just hate that floorplan. Getting to the kitchen family room, requires going across the dining room and all of sudden there's a tiny little kitchen, huge "breakfast nook" area and the family room. That kitchen is almost useless for me, the amount of counter space and kitchen space is LESS than my home in Irvine that is half the size of Plan 4. The upstairs library seems like a waste and so is the bedroom down that hall. The house doesn't flow well for me. It's very maze like. I guess if you wanted to seclude yourself from members in your household, it's great. They are also re-using this floor plan in one of their communties in SJC.





Then again, I must be different since everybody seems to love the Plan 4, which has always sold out quickly. If they drop their prices by 150K, that'll probably put us in the "game". Until then, we'll wait til the last phase. I wonder how many homes in Phase 4 will fall out of escrow, the ones being built behind the models.






 
<p>I was told that one Plan 4 "changed their mind" today. They'll have another Plan 4 in their next/last Phase. If you count the Models ... then they're have two Plan 4's in the last/final Phase. (well, 3 total if you count the one that recently fell out).</p>
 
LL,


Did they mention any incentives? Plan 4E on Lot 55 (Model home) and another Plan 4E on Lot 6 are in the last phase. For Plan 2's, the current ones are a 2ER on lot 10 and 2A on lot 51 are still for sale, the last phase will have 2 plan 2's, the 2AR (model) on lot 54, and another 2AR on lot 2.





Of course, I like the, unpopular plan 3 because it's functional and cheapest! HA!
 
<p>I'm sorry ... I didn't ask. I was planning on visiting this weekend. The price sheet I got was via fax because I was curious to know the lot sizes and current pricing.</p>

<p> </p>
 
Here's a <a href="http://www.kiso.net/images/ihb/ciara-1.jpg">picture</a> of the lots and models in the current phase 5 and last phase 6.
 
With all of the negative news I've been reading on thehousingbubbleblog and other forums, I would think that the best purchase you could make is a SFR with enough land to grow your own food supply. The impending doom and gloom that I've been reading about makes me think that having your own property will be your best investment when the economy suddenly tanks. Of course you can probably forget about Irvine with all of the association restrictions. Maybe now is the best time to look at real estate in those farming regions that are down 40%
 
<em>"in the long run a 10-20% price fall is negligible."</em>





In the long run, we are all dead, so it does depend on your timeframe. But have you considered that a 20% decline in housing values on a house where you put 40% down means that you lost half of your equity? Plus, the correction may be deeper than 20%.
 
Some news to bolster your trust in economics





<a href="http://biz.yahoo.com/ap/070918/foreclosure_rates.html?.v=4">biz.yahoo.com/ap/070918/foreclosure_rates.html</a>





<strong>U.S. Home Foreclosures Soar in August</strong>





"The number of foreclosure filings reported in the U.S. last month more than doubled versus August 2006 and jumped 36 percent from July, a trend that signals many homeowners are increasingly unable to make timely payments on their mortgages or sell their homes amid a national housing slump."
 
<p><em>"I<em>n the long run a 10-20% price fall is negligible."</em></em></p>

<p>Everyone seems to know how far re prices will fall except for me. How do you know they will fall 10%-20%? During the last So Cal re cycle, (circa 1990-1995), prices fell an average of 30% throughout the LA metro area. My home's value went from $250,000 to $180,000; a decline of 28%. Why won't they fall that much this time? Why not more? 40%? 50%? Or less? 0%? 5%?</p>

<p>Are you ready to make one of the biggest monetary decisions of your life based on the idea that prices will fall 10%-20% and it won't bother you? The 28% drop in my home in 1995 sure bothered me.</p>

<p>Whatever you decide, I hope it works out well for you.</p>
 
<p>awgee, well said. The point is that none of us can predict prices 15 years from now (much less the availability of financing). But in the short run, it is almost assured that pricing will drop (IMO, because of the availability of financing, which artificially spiked demand previously).</p>
 
<p>rlt,</p>

<p>I think everyone here feels about the same. At some point things will correct. How much I don't know.</p>

<p>Foreclosures are hitting record numbers. Even if there isn't a down turn in overall housing prices there will be "deals" out there.</p>

<p>I am dedicated to waiting for 6-12 months after the last set of ARM resets. By then we will know what is happening in the Jumbo loan world. My gut feeling is a lot less people will be quailifying for Jumbo loans. So either housing prices have to adjust or the inventory levels will keep rising until people can save enough to get down to non Jumbo levels.</p>

<p>It was recently posted that 57% of loans are falling out so apply that number to the people walking through the model tours. I took a walk through with no intention of buying.</p>

<p>I think for a savy buyer there will actually be distressed sales in the future. Divorces, deaths, job losses where people actually have equity from when they bought 10,15,20 years ago so they can drastically cut the price just to unload the home. Right now the inventory level is over 12 months and in some area's well over 12 months. So if somoene wants out ASAP they will have to reduce the heck out of their price.</p>

<p>Right now there is very little play in housing prices. The owner bought high and has to sell high hoping just to get out and unload the problem on the next person. They eventually end up in foreclosure. Right now countrywide alone has 12,000 bank owned property. Who will they sell these too?</p>

<p>So why would you wait until now then pull the trigger? Housing prices certainly aren't going up.</p>

<p>What may not seem a big deal to you know in extra mortgage payments may 5, 10 or 15 years from now.</p>

<p> </p>

<p> </p>
 
<p>Good points, tr. I can certainly see how prices could remain too high and then fall, when the situation changes.</p>

<p>As others have pointed out, it would take a flood of properties on the market that can be drastically reduced to drag the others down with them (lots of REOs, sellers facing situations like death and divorce that have a lot of equity and want to sell quickly). Heck, in some cases, it just takes one to throw the comps down. </p>

<p>One example I've heard about recently: the owners needed to sell their house, and they have no mortgage - so they had plenty of wiggle room. They priced their house at least $50-100k below the comps (in fact, it was nearly $300k less than a house on the same street - now the other house was a bit bigger, but there wasn't <em>that</em> much of a difference). The point was that they wanted to get out ASAP, and were willing to do what it took. They ended up agreeing to a price that was about $80k <em>below</em> their asking price to get out of there, but they did it. Smart of them because they got what they wanted - a sale. Not good if you're the other owners in the area, but hey, nobody owes it to them to price their house way too high and just have it sit there, unsold, like the others. You have to do what's in your best interest - particularly in tough times like these.</p>
 
<p>cali,</p>

<p>That is exactly what I am waiting for. When my grandparents passed they left their house to my father and his 3 sisters.</p>

<p>Their were 4 heirs. They looked at the comps and undercut everyone. The discount divided by 4 was pretty easy to swallow.</p>

<p>They sold as is completely furnished, mess in the basement with an 80k discount. There was so much that would have needed to be done they would have had to spend about 20k and a month or two getting it ready to sell. Then ???? on the market</p>

<p>So the trade off was that the buyer had a mess to clean up but if they invested the same time and money they had 60k worth of sweat equity.</p>

<p>I would also bet that they found some stuff they wanted to keep. </p>

<p>In all of So. Cal if you wanted to sell a house you could over price it and then have 3 people out bid each other. There was never a need for a discount. Now there may be one.</p>

<p>I am looking at the over all market condition to help me find the diamond in the rough or the comp buster. I don't need the whole market to go down. I just need one SFR to go down because of the market.</p>
 
<p>trrenter, good strategy of "find the diamond in the rough or the comp buster". Also, maybe NIR can provide some input, just bc one guy had a fire sale, that doesn't immediately translate into a lower price for all the other homes. Those who are willing to wait out just a little bit doesn't get hurt unless there are multiple transactions at a low price. Like everything else, you need to have several data points to establish a trend. That is why multiple forecloses can really hurt the community. </p>

<p> </p>

<p> </p>
 
<a href="http://forums.irvinehousingblog.com/discussion/893/interesting-bit-/#Item_1">http://forums.irvinehousingblog.com/discussion/893/interesting-bit-/#Item_1</a>





Do you still really want to buy???
 
<p>irvine123,</p>

<p>There is definite diamond in the rough to find. You need 3 things: 1. Know what you want, 2. Ready to jump, 3. A super agent who has the connection and who is willing to shop for you. There are always sellers who have a time frame to sell and will sell at market bearing.</p>

<p>Appraisers always analyze the sold price of a comparable home and make adjustments accordingly. Therefore, 1 fire sale may not bring down comps.</p>

<p>Multiple foreclosures bring down comps as subsequent askings are based on current askings. You have to ask questions why multiple foreclosures? Was it a targeted area mortgage frauds (both kinds)? or was it an undesireable neighborhood and/or type of housing?</p>

<p>Most foreclosed/short sales properties that I have seen are eventually vandalized prior to closing, and required tens and hundreds thousand dollars to rehab. Therefore, a very low selling price does not translate to a killer deal.</p>

<p>Undesireable properties are unwanted; therefore, difficult to sell and eventually sold at market bearing...cheap.</p>
 
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