Fair value of this Irvine property

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stillConfused_IHB

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I am interested in 12 Pienza (Irvine) and was wondering what fellow bloggers think about its fair value.





<a href="http://www.redfin.com/stingray/do/printable-listing?listing-id=732724&rt=mo_pl" target="_blank"> http://www.redfin.com/stingray/do/printable-listing?listing-id=732724&rt=mo_pl</a>





All inputs appreciated.....
 
This is a difficult question because today's fair market value is well above what it will be in a few years. I would see this property having a resale value near its 2001 sales price when we reach the bottom. That aside, in today's market this property might qualify for a WTF award. Look at this comparable:







Price: $999,000

<a style="text-decoration: none;" href="http://www.redfin.com/stingray/do/buy-how-it-works?listing-id=611376&rt=pl-dsl" linkindex="9" set="yes">


</a>

<a href="http://www.redfin.com/stingray/do/printable-listing?listing-id=611376"> 42 ARBUSTO </a>

<a href="javascript:void(0);/*1181403835415*/"> Irvine, CA 92606</a>






It appears to be an identical floorplan -- or at least they are exactly the same size -- in a nearby neighborhood selling for $250,000 less. The property at 42 Arbusto has been on the market for 72 days, so I would conclude it is overpriced. For either of these properties to find a buyer in todays market, the asking price should be around $900,000 to $925,000. This would put it under $400 per SF which would at least give it a chance.





That being said, I think this will be worth less than $700,000 in 3 to 5 years.
 
<p>instead of buy a used home at anything near 1.2 mil, why not buy a new home of the same size or bigger at nearby Lantana in Columbus Grove for less.</p>
 
<strong>IrvineRenter -</strong>





I have been following this neighborhood for last year or so.... Some how it is frustrating to see all the properties getting gobbled up right in front of my eyes... (I don't know if it is Plaza Vista or neighborhood's proximity to EVERYTHING or it is a Chinese Mecca... BTW, I am not chinese)





Following are ~2500 sq ft homes with 3 car garages and a full-size drive way in that neighborhood.





42 Arbusto (first listed at $1,149,000 in July 2006 - finally went in to contract at $950,000+ (per listing agent))


12 Pienza (first listed at $1,350,000 in July 2006 - relisted at $1,250,000 in May 2007)


21 Cipriani (sold for $1,100,000 six months ago - originally listed for $1,229,000)


8 Santa Rida (sold for $985,000 in a month or so - originally listed for $1,049,000)


10 Pompeii (sold for $1,080,000 in less than a month or so - listed at $1,110,000)





Out of all of the above mentioned properties, 12 Pienza shows the best. End of cul-de-sec in a small street with large 7400 sq ft lot. It has a nice resort like backyard with pebble-tech pool, slide, spa, fire-pit and outdoor grill as well as good landscaping.





We had 42 Arbusto in mind and were going to wait for $900K by December to buy it, but all of a sudden it was sold. Now we have to have something in mind for our next move, right? So, we set our eyes on this property. I know that list price is pretty high, but it is the final sale price that matters... (based on final sale price of 42 Arbusto, this home might fetch $1,050,000, no?)





I don't know whether I can wait for 5 years, because in 10 years, I won't need a bigger home unless daughter chooses UCI and wants to live off campus.


(you may vaguely remember my other thread on this forum - "what to do when you are forced to buy a home?" - so there is a little sense of urgency)


<strong>


detached - </strong>





We will buy new house only if we fail to buy existing house we like. Some how, we do not like new homes as homesites are very small and they try to put in so many sq. ft to make price look attractive. Plus, they have very high taxes and also pain of completion of all things that builder did not do...
 
<p>I agree 100% with detached, you can get a brand new home for $850,00+, instead of a home that is 10 years old with questionable value for 1.2.</p>

<p>I'm also not a big fan of the living room. For 1.2 million, you have to have a TV smaller than 32" to shoehorn it next to the fireplace? Doesn't make sense to me. I see homes in Irvine falling much more if you buy now. Even waiting 6 months, when we are out of the "busy" season, you will see some nice discount.</p>

<p>Side point: total homes in irvine are now at 1233. According to oc-fliptrack, we were at 1209 just 6 days ago. In October, you'll have some good deals.</p>

<p>Let us know how things turn out. Good luck!</p>
 
stillconfused,





Keep in mind that the toxic financing is still available, and some people are still buying. Don't be surprised when many of these houses that "sold" fall out of escrow and come back on the market.





As credit tightens further, the number of qualified buyers will be fewer in number, and these properties simply will not sell at their current prices. You want to buy at the end of a tightening cycle not at the beginning. The foreclosures haven't hit the market yet, and the ARM recasts have only just begun. Credit will be tightening for the next 3 years at least.





Everyone faces various pressures to buy, but I recommend resisting those pressures as long as possible. Ask yourself how you would feel if you bought now, prices dropped $300,000, and you needed to see a 50% increase in prices before your ARM resets or you will lose the house? There is a near zero chance of missing out on the only available buying opportunity this year -- the realtors will peddle that BS, but it is not true.
 
There is a difference between “Market Value” and “Fair Price”. Market value is based on supply and demand. Supply and Demand can be artificially manipulated such is the case right now. Let’s put it this way:



Sale price in 1997 325,000.

Asking price in 2007 1,250,000

That is 14% appreciation year over year. Is there gold buried somewhere on the property? No wonder I can’t afford to buy , “the prices are artificially manipulated”.



A generous 5% appreciation year over year will put the value at: 530,000 at 10% it will be 843000.Willing to pay more? Fill in the blank._________________ .
 
<p>If i have to buy now, then I would use $325-$375/sq ft as a guideline for Irvine depending on the neighborhood, location, condition, etc. These numbers seem reasonable to people i know who are willing to buy right now.</p>

<p>However, i don't have to buy now so i'm gonna wait like IrvineRenter and see that this market will do. </p>
 
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