Ellwood by Richmond American at Beacon Park

NEW -> Contingent Buyer Assistance Program
What's different this time is that the ATR/QM rules require creditors qualify all borrowers based on real provable income using the real fully-indexed fully-amortized payment. The rules effectively ban interest-only, negative amortization, teaser payments, and NINJA loans.

So the households buying today have the income and/or wealth to afford the house. The opposite was true from ~2003-2008. This is significant.

I agree that we're pushing the limits of affordability and that this is affecting sales at BP and elsewhere (just not Strada  ;D). We just don't have the downward pressures today that existed in 2008. A serious recession could cause this though.
 
bones said:
Are you sure these aren't lot premium drops due to an inferior lot size/location and/or elevation?  What's the point of a $5k drop?  Seems kinda pointless for everyone involved. The potential buyer will probably wait for more price drops. And if $5k moves the needle for a potential buyer, then they probably aren't in a solid position to buy. The already-signed buyer is now anxious about future pricing.
Click to expand...

I guess I can scan the price sheet that I got on last Sunday.  It doesn't have lot specific info and I didn't bother asking the sale person since she was very uninterested and just handed me that paper, but yes, I agree with you that $5k drop is meaning less on $800k houses.  However, my point was that everyone told me that it would go up $15k to $20k every phase.  Well, it didn't.  As mentioned, I get "price drop" alert for resale homes from redfin a lot more recently. So I'm wondering if the tide is turning in the market.  I'm not saying big time crash 20%, 30% or more.  May be cooling down, leveling or even 10% or so drop in a year or two...
 
hello said:
why is EVERYONE so surprised there are price drops and homes are not selling?  You guys have drank the kool-aid.  Prices are dropping because homes are TOO expensive and inflated.  Have we all forgotten what happened 10 years ago?  Granted I am not saying this is the same situation as before, but 30% price appreciation in the last few years is not normal, healthy nor sustainable.  Incomes do not warrant these prices.  Of course no one can predict the future, but why would anyone be surprised if people didnt (or couldnt) buy and prices started to fall?  This charade may go on another month, another year or five years, but ultimately it wont last.  As to when prices drop, that is a question no one can answer, but we all know it will happen sooner or later...
Click to expand...

Agree. I'm not surprised.  I'm just pointing out the fact that it's not going up $15k every phase and it's not selling like hot cakes as many have written here and told me...
 
hello said:
bones said:
Right. Except jlin just told us one post above yours that the price drop is not a base price drop but a lot premium drop.
Click to expand...

end result is the same... a drop in price.
Click to expand...

Well sure u can look at it that way. But in the end, this could actually be a base price increase with a lower lot premium (in this case due to an inferior lot location facing houses instead of a park).  This happens all the time regardless of the market. At PP, houses in some later phases of sagewood were actually cheaper than earlier phases due to lot premium decreases.  And this happened during a "hot" market.
 
pricedoutJay said:
bones said:
Are you sure these aren't lot premium drops due to an inferior lot size/location and/or elevation?  What's the point of a $5k drop?  Seems kinda pointless for everyone involved. The potential buyer will probably wait for more price drops. And if $5k moves the needle for a potential buyer, then they probably aren't in a solid position to buy. The already-signed buyer is now anxious about future pricing.
Click to expand...

I guess I can scan the price sheet that I got on last Sunday.  It doesn't have lot specific info and I didn't bother asking the sale person since she was very uninterested and just handed me that paper, but yes, I agree with you that $5k drop is meaning less on $800k houses.  However, my point was that everyone told me that it would go up $15k to $20k every phase.  Well, it didn't.  As mentioned, I get "price drop" alert for resale homes from redfin a lot more recently. So I'm wondering if the tide is turning in the market.  I'm not saying big time crash 20%, 30% or more.  May be cooling down, leveling or even 10% or so drop in a year or two...
Click to expand...

Sure in concept I agree. Just pointing out the question in this specific Ellwood case as this is posted in the Ellwood thread.
 
bones said:
pricedoutJay said:
bones said:
Are you sure these aren't lot premium drops due to an inferior lot size/location and/or elevation?  What's the point of a $5k drop?  Seems kinda pointless for everyone involved. The potential buyer will probably wait for more price drops. And if $5k moves the needle for a potential buyer, then they probably aren't in a solid position to buy. The already-signed buyer is now anxious about future pricing.
Click to expand...

I guess I can scan the price sheet that I got on last Sunday.  It doesn't have lot specific info and I didn't bother asking the sale person since she was very uninterested and just handed me that paper, but yes, I agree with you that $5k drop is meaning less on $800k houses.  However, my point was that everyone told me that it would go up $15k to $20k every phase.  Well, it didn't.  As mentioned, I get "price drop" alert for resale homes from redfin a lot more recently. So I'm wondering if the tide is turning in the market.  I'm not saying big time crash 20%, 30% or more.  May be cooling down, leveling or even 10% or so drop in a year or two...
Click to expand...

Sure in concept I agree. Just pointing out the question in this specific Ellwood case as this is posted in the Ellwood thread.
Click to expand...

BTW, we didn't buy Ellwood.  If I buy anything this year or within 1, 2 years, I should not worry about price movement in short term.  I should be prepare for price decrease and plan to be there for 7, 10 years or more.

I would consider buying now opposed to 3 to 5 years later (when/if price drops) to start mortgage pay off process early (I'm getting older so I don't want to wait too late for my retirement) therefore "lock in" monthly payment fixed instead of keeping paying higher rent and enjoy "our home" with my teen kids for a few years before they go on college and beyond...
 
This go round interest rates are a lot lower and rents higher.

Rents are unaffordable and they haven't been dropping, most likely because the difference between renting and owning is not that great.

When rates rise, it will make houses more expensive vs renting and maybe we'll see more homes come on the market for rent pushing down rents.

IMO, the rise of the last few years was due to interest rates being low (so buy vs rent was not a huge difference), higher population in Irvine pushing up demand, investment buyers who intended to rent or resell later and foreign buyers who didn't really seem to care what the prices were for Irvine.

But now, seems to me that the Chinese who prefer new and should be the buyers in Beacon Park have cut back. Maybe it's the possible cemetery, high mello/price or difficulty in getting money here. That leaves investment buyers who have cut back a while ago and the rest of us who have an issue with the payments/mello vs income.

IMO, if we lose the foreign buyers, houses are going to sit. If/when rates rise, that isn't going to help the situation since most of the rest of us have to qualify with incomes that haven't risen a whole lot including mello, etc and most have a house to sell as well. Upper priced homes have softened, imo.

Best case scenario, imo is a flat market which I've said for at least a year. Buy if you want a place to live, not because you think you'll make a profit in the next few years.

If things really don't move, that could lead to a recession and if that happens, home prices could drop just due to more supply coming on the market from resale and new homes competing (as happened in the early 90's). At some point, I would think even if foreign buyers don't pick up homes with lower prices, investors would. Then again the mello in Beacon Park would really add in a significant cost compared to what they were buying a couple years ago.
 
What phase are they in now, 5?  Pretty good as some builders are still sitting on phase 1 to sell.
I just find it odd that they sold the best ones first (no motorcourt and larger lots).
 
And if Irvine drops, the rest of the county is going with it since prices in older areas rose partly because of the diff in rent vs own, but also on the coattails of more desirable areas rising. That will unwind.

But who's to say? Could be just a seasonal slowdown. (Personally I doubt it........ higher priced resales softened well before summer).
 
AW said:
What phase are they in now, 5?  Pretty good as some builders are still sitting on phase 1 to sell.
I just find it odd that they sold the best ones first (no motorcourt and larger lots).
Click to expand...

So the strategy worked this time.
 
But the problem is now moving the future phases.  They can justify higher increases to buyers better if the location/property is better. 
Current strategy is reverse, so expectation of lower future phases?  Interesting
 
Perspective said:
What's different this time is that the ATR/QM rules require creditors qualify all borrowers based on real provable income using the real fully-indexed fully-amortized payment. The rules effectively ban interest-only, negative amortization, teaser payments, and NINJA loans.

So the households buying today have the income and/or wealth to afford the house. The opposite was true from ~2003-2008. This is significant.

I agree that we're pushing the limits of affordability and that this is affecting sales at BP and elsewhere (just not Strada  ;D). We just don't have the downward pressures today that existed in 2008. A serious recession could cause this though.
Click to expand...

I agree.  the recent buyers were much much much stronger than in the mid 2000's.  Therefore we could easily argue that the buyers in the last few years will likely not be distressed sellers in the future.  Assuming that these buyers will not sell, how will this fraction of home owners prevent price declines? 
 
There is always a reason to sell but not always a reason to buy.

If no one sells, then there is no move up market and then who will buy the high end homes? If there isn't a market for high end homes then the lower end can't just keep going up or they would be approach the price of high end homes. (This is why Sheldon can't keep going up since Stafford isn't going up or eventually Sheldon would be priced where Stafford is and then people would just buy those instead).

And furthermore, if we are stuck with "regular folks" with jobs instead of cash buyers we probably HAVE to have resales to keep the whole housing market afloat......... unless we somehow have other buyers who don't need to sell houses buying but that doesn't seem the case because why are sales not booming?
 
These have been selling like hotcakes, from my understanding they are the only properties in BP which can make that claim. Why are people here freaking out about a later phase having a smaller lot premium? Ellwood has no reason to drop the base price on these things, and with the interest in them I would bet on the base price going up. Earlier phases had driveways rather than motorcourts, the premium on that would have to be huge!
 
I was almost to drop in cheque for signing and changed my mind for following reasons.

>Their prices are almost touching $1m, but they don't appeal as $1m homes but look like a typical $800k homes.
>Though square foot is 2000+, architect wasted all space hiding in first floor bedroom(nolan) and main space looks just like any 700-800k homes in irvine.
>motorcades are too narrow and it is difficult to turn car around. Need a valet parking or improve my driving skills to drive out of the garage..  :P (saying it as a joke for courtesy, but its real)
>I was in the deck of other construction home and I see backyards and bedrooms of other homes. also blocked by neighbors roof.
>Their upgrades are expensive than other builders in the same BP
If I ever have to buy this floor plan, I would keep a billboard in my hall way stating "Designed by dumb architect, owned by smart owner". ( if not why should they waste 50% of main floor  for one bed room,. Jesus Christ). Smartest floor plan I have seen was Sedana by TollBroters.

There are couple of other builders little over $1m, and they look like $1m  homes with bigger back yards. Started comparing weltonII but, million dollar tag scarring me out  :o

And the price drop was due to lack of buyers(rush) like in phaseI as most of the ellwood type buyers are gone for them. Priority list 90 includes who bought in phaseI,II,III,... and also some one bought else where and doing their house warming party this weekend.  >:D. Ellwood still claims them as their priority list. ;D

Irvine real estate is really inflated. not worth. I am wondering how many kids from irvine are in top universities right now. If not for admission in better colleges, what is this drive for IUSD for, except to pay melorose? are these schools are that better to pay $7500 melorose each year with out tax benefit?  Houses in chicago and texas also due have sewage lines, side walk, play grounds and better schools.. why MR in irvine????


I PAUSED and better wait for them to drop price more during xmas time or at least free upgrades. Trust me, they dont have buyers as they do in earlier phases. Party was over.

I heard they are looking for ways to create artificial demand with their marketing tactics.

I just watched BoA housing report. Next two years projectile would be less than earlier years and in single digits and flattens down for 3 years after that and takes control by next wave of economy which even warren buffet may not predict. Prepare for -10% to +20% from today.

I might be wrong too...read at your own risk, just my thesis...





 
java123 said:
I was almost to drop in cheque for signing and changed my mind for following reasons.

>Their prices are almost touching $1m, but they don't appeal as $1m homes but look like a typical $800k homes.
>Though square foot is 2000+, architect wasted all space hiding in first floor bedroom(nolan) and main space looks just like any 700-800k homes in irvine.
>motorcades are too narrow and it is difficult to turn car around. Need a valet parking or improve my driving skills to drive out of the garage..  :P (saying it as a joke for courtesy, but its real)
>I was in the deck of other construction home and I see backyards and bedrooms of other homes. also blocked by neighbors roof.
>Their upgrades are expensive than other builders in the same BP
If I ever have to buy this floor plan, I would keep a billboard in my hall way stating "Designed by dumb architect, owned by smart owner". ( if not why should they waste 50% of main floor  for one bed room,. Jesus Christ). Smartest floor plan I have seen was Sedana by TollBroters.

There are couple of other builders little over $1m, and they look like $1m  homes with bigger back yards. Started comparing weltonII but, million dollar tag scarring me out  :o

And the price drop was due to lack of buyers(rush) like in phaseI as most of the ellwood type buyers are gone for them. Priority list 90 includes who bought in phaseI,II,III,... and also some one bought else where and doing their house warming party this weekend.  >:D. Ellwood still claims them as their priority list. ;D

Irvine real estate is really inflated. not worth. I am wondering how many kids from irvine are in top universities right now. If not for admission in better colleges, what is this drive for IUSD for, except to pay melorose? are these schools are that better to pay $7500 melorose each year with out tax benefit?  Houses in chicago and texas also due have sewage lines, side walk, play grounds and better schools.. why MR in irvine????


I PAUSED and better wait for them to drop price more during xmas time or at least free upgrades. Trust me, they dont have buyers as they do in earlier phases. Party was over.

I heard they are looking for ways to create artificial demand with their marketing tactics.

I just watched BoA housing report. Next two years projectile would be less than earlier years and in single digits and flattens down for 3 years after that and takes control by next wave of economy which even warren buffet may not predict. Prepare for -10% to +20% from today.

I might be wrong too...read at your own risk, just my thesis...
Click to expand...

Can't argue about the design issues but Irvine homes have always been worth 20-30% more than what the house appears to be worth. 

Housing prices in Irvine (especially newer homes) don't drop as much as the rest of the country and bounce back faster.  It's not Irvine touting...it's just reality. 

Pet Peeve:  It's Mello Roos...and the quality of IUSD is tangentially related to it.  MRs fund infrastructure improvements/construction in newer community.  It's a way for builders and developers to recoop their initial investment into the area and for communities to get around Prop 13.  IUSD benefits by getting newer schools but the district is successful in large part due to 1) the genetic pool of parents living in the area and 2) the active and consistent involvement of parents to the district (time, money, and accountability).  Believe it or not, IUSD spends less money per student than the average.
http://schoolspending.apps.cironline.org/county/orange/district/irvine-unified/

That's probably in large part because IUSD pays their teachers less than surrounding district, it doesn't have to spend a lot of money on things like security or free lunches, and it does not have spend nearly as much money on upkeep and maintenance. 

The problem with BP is that it came way too late in the game and the prices have already been hiked up by Stonegate, PP, and OH.  The homes in BP are not just 20-30% above perceived value, they're like 40-50%.  On top of that, you have extremely high MR, inferior location, and a lack of supporting infrastructure (in comparison to the other available communities).  People have more choices about where they want to buy new homes in Irvine...thus BP is getting pushed out to the peripherals.

Not that I know any better but I do think it's interesting that you are a predicting a downturn in the economy that "Warren Buffet cannot predict."  Prices will stay flat at worst IMO...people who are already in homes are in relatively stable jobs and/or FCBs.  They have no urgency to sell even if the economy goes back into neutral.  Builders are just going to sit on land for a while...they learned some things during the rescission (like don't build out unless you have demand). 
 
You must log in or register to reply here.
Back
Top