Newer Irvine listings with crazy WTF asking prices from equity sellers

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USCTrojanCPA said:
aquabliss said:
Only $696/sq ft for a Laguna Altura motorcourt home:https://www.redfin.com/CA/Irvine/55-Lupari-92618/home/112504340

Merry Christmas indeed.
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You beat me to the post.  I saw this one pop up on my new Irvine listings tracker on MLS and knew it had to go in this thread.  So only one picture and asking for $1.45m?  Maybe the realtor could have planned better by having pictures taken ahead of time and posted them with the new list?  Just an idea.  And not sure why you'd want to be listing a home this week right before xmas, why not wait till after new years (that's what I advised to two sellers)?  And doing open houses on new years eve and new years day?  Uh yeah, that was a great idea....NOT!
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don't MLS pic always get a bit delay cuz they're an ancient ass system? so some realtors setup one pic first and the aggregate sites don't update till the next data pull.

either way I agree. wtf is the point listing it during christmas week? who the hell is going to come and see this $696 sq/ft home during this time. love it though, nothing comparable at all to this 1.4 mil beast. maybe its just a stubborn seller and the realtor just have to do things their way and list accordingly.

damn I should have bought in laguna altruna back in 2011/2012. would have made out like a bandit.

kid was a baby then and didn't really think/care about school. also the location didn't seem right with me but apparently everyone is okay with it? i'm still not okay with it even if you dangle the cash in my face. I guess to each their own.
 
USCTrojanCPA said:
This one kind of made me laugh when I saw the sales history...
https://www.redfin.com/CA/Irvine/402-Rockefeller-92612/unit-314/home/40102478

So basically the seller bought the property for $820k last year after it was listed for $869 for 6 months.  What is this guy smoking thinking that he'll get $228k more than what he bought it for last year (about a 25% yoy increase)?  Last similar comp closed for a little over $400/sf not $500/sf.  haha
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don't you get it? its meticulously upgraded!
 
capboba said:
USCTrojanCPA said:
aquabliss said:
Only $696/sq ft for a Laguna Altura motorcourt home:https://www.redfin.com/CA/Irvine/55-Lupari-92618/home/112504340

Merry Christmas indeed.
Click to expand...

You beat me to the post.  I saw this one pop up on my new Irvine listings tracker on MLS and knew it had to go in this thread.  So only one picture and asking for $1.45m?  Maybe the realtor could have planned better by having pictures taken ahead of time and posted them with the new list?  Just an idea.  And not sure why you'd want to be listing a home this week right before xmas, why not wait till after new years (that's what I advised to two sellers)?  And doing open houses on new years eve and new years day?  Uh yeah, that was a great idea....NOT!
Click to expand...

don't MLS pic always get a bit delay cuz they're an ancient ass system? so some realtors setup one pic first and the aggregate sites don't update till the next data pull.

either way I agree. wtf is the point listing it during christmas week? who the hell is going to come and see this $696 sq/ft home during this time. love it though, nothing comparable at all to this 1.4 mil beast. maybe its just a stubborn seller and the realtor just have to do things their way and list accordingly.

damn I should have bought in laguna altruna back in 2011/2012. would have made out like a bandit.

kid was a baby then and didn't really think/care about school. also the location didn't seem right with me but apparently everyone is okay with it? i'm still not okay with it even if you dangle the cash in my face. I guess to each their own.
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Doesn't take too long to have pictures come over to sites like Redfin after posting them up in MLS...maybe an hour or so.  Looks like agent added an open house on New Years Day at 12pm to 5pm.  I can see timing isn't his strong point.  Anyhow, $1.45m for a detached condo with no driveway?  Makes the house that I bought seem like a bargain.
 
BangBros said:
best_potsticker_in_town said:
Am I missing something...a 2bd Acacia (CV) for $699k??
https://www.redfin.com/CA/Irvine/142-Rose-Arch-92620/home/112719705

I get that there are some upgrades, but how do you justify that when a unit a few doors down sold for $600k?https://www.redfin.com/CA/Irvine/138-Rose-Arch-92620/home/112719917
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housing prices are based on what buyers are willing to throw down emotionally.  There is nothing more to it then that.  And sellers try to capitalize on it as much as they can.  Forget about recent sales comps.  Sellers believe their homes are worth $100k more simply because they think they can get that much only to finally capitulate after 6 months later that their ego was wrong and nobody would pay that much.  This is the game of residential real estate.

The way I tend to play this game is simple:

1) look for homes that have been on the market for 90+ days.
2) low ball them 10-15% less than what they're asking
3) as long as the house continues to sit on the market, they're losing money and you're still sitting happy.
4) every month, tempt them by increasing your offer another $2,000 to show some continued interest.
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If you really want to pour salt on the wound and have some fun with the seller on those grossly overpriced homes, make each subsequent offer slightly lower.  haha
 
BangBros said:
On a $700,000 home, @ 3.25% back in October 2016, payments would have been $2,437 for PI.  With 4.25% now, PI will be $2,755.  An increase of $318.  That is a big impact and sellers need to drop a $700k home to $618k to make it equally affordable.

I wonder if seller's have capitulated enough to understand that.
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I would wish the same with the new home builders too....all are increasing prices with each new phase, but they are able to sell successfully looks like. With the rate increase, We are now forced to look at a smaller new home or a condo. The rate increase has been bummer...
 
BangBros said:
On a $700,000 home, @ 3.25% back in October 2016, payments would have been $2,437 for PI.  With 4.25% now, PI will be $2,755.  An increase of $318.  That is a big impact and sellers need to drop a $700k home to $618k to make it equally affordable.

I wonder if seller's have capitulated enough to understand that.
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Like I said before, 1% change in rates is about 10% change in affordability.  In the example you used, its almost 12% bump in the monthly payments.  Trust me, this does not go unnoticed by buyers.  However sellers set the price so price drops will be coming when these homes sit on the market because buyers decide they cant afford it or its not worth it.  I expect the higher end homes to be first and most affected as you will have significant amounts of people trade down to buyer smaller homes at the same price but also because rate increases are most sensitive with larger mortgages.

Price changes, especially downward, takes time.  Prices can rise within weeks, but drops usually takes much longer as sellers wont capitulate until their home sits for months and they start to get a bit desperate.  I expect builders to drop prices first as they are less emotional. 

If rates continue to rise and if new tax laws come into place, then watch out.
 
On higher priced homes, might be a bit more complicated,  agree in theory and it will have price impact,  however higher priced homes tend to have lower ltv levels if any mortgage at all.
 
We can all assume and guess all day.  Please upload long term historical correlation data between rates and home price trends.  It's not that simple.  Not much correlation between higher rate trends and lower home prices in the past because higher rate is due to inflation and wage inflation or stronger economy.

If you have any historical correlation charts between these two variables,  please upload it.  Google.
 
Supply and demand is the biggest determination of prices.

If rates go up and people still want to buy homes, builders will toss in various incentives (or offer to chip in on financing). Buyers who want to buy will buy smaller places, put less into upgrading, move to a lower priced city or lower priced neighborhood etc but they will still buy. Eventually of course supply can overtake demand which would pressure prices. As long as there are FCB or those with lots of cash to buy rates aren't going to make that much of a difference.

If there was a direct correlation in rates/prices we would have seen more sales as rates came down but instead rates and prices came down for years and it can and has in the past gone in the opposite direction with rates/prices going up together.

To get prices to drop especially the low end, you'd have to have a buyer's market (demand less than supply).

I don't need a graph to prove the above to me. I've been around long enough and through enough cycles to know it's true and I know those cycles can last a whole lot longer than anyone thinks they will.
 
It's not as simple as slightly higher rates will bring down real estate prices based upon the % change in the monthly payment.  As R2D mentioned, it has a lot more to do with supply and demand.  Right now (I know it's seasonally low), we have less than 2 months of resale inventory in Irvine (we sold around 240 homes in Dec and have a little more than 300 active listings).  There are a lot of variables that go into whether prices will go down...supply/demand, economic strength (increasing wages/employment), interest rates, desirability, strength of the buyer pool, etc.  Interest rates are where they were about 2 years ago.  Some of you guys make it seem like we are already at 5%+.  The 3.25% was only available for a short time and only a few people got that rate, the rate that most of my buyers got earlier in 2016 ranged from 3.375% to 3.625%.  I believe that rates are around 4.00% to 4.125% currently and we never went up past 4.50% like where we were a few years ago.  I think the impact on higher rates will be felt more on lower demand cities where buyers have to stretch like Santa Ana, Anaheim, etc.  Also, the other thing I've began seeing this is a lot of investors in the market this year including 1031 exchange buyers. 

The market is definitely split in two...the sub $800k-$900k market and the $1.5m+ market.  The former is doing well with lot of buyers in a seller's market while the latter is soft and in a buyer's market.  If you removed all the $1.5m listings in Irvine, you'd have about 1-1.5 months inventory for the remaining homes.  As I mentioned, if we didn't have shadow new home inventory Irvine home priced for the sub $1m homes would have increased more than they already did.  Watch inventory levels to see where prices might be going.
 
Not quite true on buyers always preferring buying new homes.  That agent is making an incorrect assumption and her listing isn't selling because it's overpriced.  A lot of my buyers prefer resale homes for various and use the new homes as their plan B if they can't a good resale home in a specific time.  Some of the reasons are 1) even though new home base prices are similar to resale prices once you add in upgrades and landscaping resale homes are cheaper,  2) numerous resale homes have lower Mello Roos and/or HOA than similar new homes, 3) buyers can lock in their interest rate right when they get into escrow on a resale home, 4) there are no waiting lists for resale homes, etc.  It may be true that FCB buyers prefer new homes but many of them also buy resale homes.  What the sales pace of new homes under $1m as well as low resale inventory indicates that there is strong buyer demand for homes in that price range. 
 
But if you didn't have FCBs here, imo prices wouldn't have gone up as much as they have and we can thank the Irvine Company for actively marketing to Chinese buyers.

So two edged sword...... if we didn't have so many new homes prices would be higher but if we didn't have so many FCBs, prices would not be as high as they are now.

If suddenly the FCBs were prevented from buying, the market would turn into a buyers market even in the lower end imo and rates would indeed play a bigger role in the health of housing here.
 
Chinese do prefer new but they WILL buy resale if they are looking at value and are more comfortable buying here.

Resale offers:
About the same price per sq foot as new with landscaping and upgrades (assuming the buyer likes what is installed).
Bigger lots
Lower and maybe expiring mello.
Lower HOA
The ability to negotiate strong arm an individual seller, especially useful for higher end homes that tend to not have multiple buyers who can qualify.
 
Why is lowballing a seller seen as strong arming? Isn't the seller trying to strong arm any buyer into paying their full asking price? It's a one on one negotiation. The seller can also just laugh in the buyers face if they receive a low ball offer.
 
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