Villa Rosa open

NEW -> Contingent Buyer Assistance Program
<p>"realistic price today is $300,000"</p>

<p> </p>

<p>What track and size of homes are you refering to that should be $300K?</p>
 
<p>Isn't Rosemoor in Woodbury very similar to Villa Rosa? Saw this pop up yesterday:</p>

<p><a href="http://www.redfin.com/stingray/do/printable-listing?listing-id=1414255">http://www.redfin.com/stingray/do/printable-listing?listing-id=1414255</a></p>

<p>This will be an interesting one to watch compete with the plan 1 and plan 2 at VR.</p>

<p> </p>
 
<i>"What track and size of homes are you refering to that should be $300K?"</i><p>


Prices do not have a should or shouldn't. A realistic price is whatever a buyer and seller agree to. During the auction of a beautiful Deusenburg at Barrett-Jackson today, Mr. Jackson bemoaned that the Deusy was "worth" $1,600,000 while the high bid was $1,000,000. The Deusenburg is "worth" exactly what it sold for today; $1,000,000. There is no should or shouldn't for the price. It doesn't matter if three of the exact same cars sold for $1,600,000 last year. It is worth $1,000,000 today.<p>


In three or four years, the house in question will be selling for $300,000 in income inflation adjusted dollars; give or take a $100,000. It may be worth $1.24 mil today, but not for me.
 
<p>IPO, Rosemoor was also built by Lennar. They opened Villa Rose right after they sold out Rosemoor. Their largest model is about the same as the plan 2 of Villa Rose. They were selling around high 9s in late 2004 / early 2005. </p>

<p>I am waiting for 3000 sq ft homes in Irvine drop to $300K, so I can start buying up every single home come up on the market ( provided that I can get to the house faster than Awgee) </p>
 
awgee was using an inflation adjusted price. It is his way of saying that a $800K house isn't as valuable when your paying $10 per gallon in gas.
 
Half of home price comes from land price. I don't believe inflation reduces the "value" of land?? During hyperinflation, land price tend to keep up with the inflation??



Even if I assume land devalues due to inflation, for a house transacting right now to reduce to 1/4 of its value due to inflation in 3 to 4 years require some "extraordinary circumstances". Then we are not talking about just house bubbles! We are probably going into recession, but I have not seen any analysis or forecast by someone way smarter than me to forecast this kind of inflation. I am curious what kind of assumption you use to reach that conclusion??

<p> </p>
 
Heh, IPO, neither you nor awgee are going to be able to get the $300k homes because real estate investors I know and myself will be bidding $450k for each of the homes that come up.
 
I don't think people here are understanding what an inflation adjusted price is. A 3000 sqft. $900k home in 2004, and priced the same in 2010, would be the same as paying $723k adjusted for inflation, or $241 a square foot, in 2010. The longer people wait, and the longer prices stay flat, the longer and longer it eats away at the value of the home. Seriously, it took 10, yes T E N years, if you bought at the last peak to recover from inflation. Does anyone remember that? I do, it was no fun, and I am not only talking about 91-93, but 94-96, when there was job growth, and prices were still flat. Have you seen the inflation numbers? Have you put gas in your tank, or bought groceries? And, what has your paycheck done? Has it kept up? <a href="http://forums.irvinehousingblog.com/discussion/1506/">Have you seen the jobs numbers</a>? Not as bad as the early 90s, but they are bleeping awful. Not just in lending, RE, or construction, but the rest of the numbers suck, and they suck big time. Have you seen the <a href="http://forums.irvinehousingblog.com/discussion/346/">foreclosure numbers</a>? I will LMAO all the way to the Tan Man's corner office, if you think it is going to get any better. The bleep storm about to hit from the August credit crunch, has only just begun. The January NOD numbers will shatter the 96 monthly record, even with adjusting for housing stock. Don't believe me? Just wait, like a realist does, and you will see.





Warning: here comes the level 10 snarkiness. If you were such the savvy RE investor, why are you not at the foreclosure auction buying properties, for cash, that have the same 160 GRM IR talks about? If you were really serious, I wouldn't have to ask. Wait... allow for me to answer that for you. You either do not have the cash, or you are like the pros at the auction, and you balk at the deals, because you know it will get better when it comes to price. Am I right? I mean, you talk a big game, so if you believe what you say, then why haven't you stepped up to the plate? A real RE investor walks the walk, not just talks the talk, and if you were a real RE investor, then you would be waiting.





So, mock awgee, IR and me (a nutty home and investment property owning, RE investor, with a little bit of cash), all you want. We will sit back and watch this all pan out. You can think we are nutters, but will you have the guts to be humble enough to come back to admit you were wrong? I know nirvinerealtor has, and she has gained my respect because of it. I know I will, because I would love to be proved wrong. So, for all the optimists, like NIR, I hope you can see past the snarkiness, and have an intelligent conversation about it.
 
irvine123 - How much will a gallon of milk cost in 2012? And more importantly, why does a gallon of milk cost more today than it did in 2005?<p>


If a house cost $1,000,000 in 2005 and that same house cost $1,000,000 today, does that house cost the same? If it cost $900,000 today, how much has it decreased in cost, not price, but cost?<p>


How do you measure cost?
 
<p>"Professor Awgee", I will be more than glad to entertain your questions /test before I respond to Graphix later. </p>

<p>a. I fully expected a gal mil cost more in 2012...since I am paying $5.29 for two gals now at Costco I would expect my two gal milk cost $6.43 this time in 2012 with a 5% inflation rate. ( i suspect milk price will continue escalate may be higher than the general inflation rate) </p>

<p>b. Does the house cost the same? </p>

<p>The answers to that question are two folds: </p>

<p>On absolute cash flow standpoint of view, it is the same - which means if I have 2 million in the bank, if I would have bought in 2005, I will be $1 million less; if I have a million in the bank now, but buy this house, still I will have a million less. </p>

<p>From buying power standpoint of view, the million house today is cheaper than 2005, as the price of the house stayed the same, while the buying power of the same million has been been eaten away by the corresponing 2005, 2006, 2007 inflation. Use your milk example, the $1mil today buys you a lot less gal of milk then the $1 million in 2005. </p>

<p> </p>

<p>Anything else professor??</p>
 
the fact remains that a model 2 at Villa Rosa goes for about 350 a square foot, while just down the road on Rising Sun, etc., are 4 (smaller) SFR's that are all selling for about 440 a square foot. Landscaping and shutters can't possible be worth $90 per square foot. So the result, resellers are continuing to be undercut by Lennar and will face a bloodbath when they realize that a year on the market has brought nothing but comical mention on the IHB. And as for Lennar? As horrible as their stock performance has been over the last 2-3 years, it is evident that further reductions are unnecessary (at least in 92620)... which again, really pisses me off...and has me considering "bitting the bullet" and figuring out a way to come up with 25% to get favorable financing.



As for the foregoing commentary, I think that it is not giving enough consideration to the volume and desirability factors. Eg, I could rationalize paying 1m in Woodbury, but not VoC. Eg, my constant return to the "who are these people?" Are they flippers buying now? OR are they extended family groups that may not need to resell in a few years? If I bought now, I'd be set for at least 15 years... If I bought one of those homes on Rising Sun, I'd be selling in a few years to get more room... and probably complaining about transaction costs.
 
<p>Graphix, here are the answers to your your questions, snarkiness or not. </p>

<p>a. I am not a real estate investor or pretend to be one. I have more than one house, all bought brandnew (nothing too big, but in great location). But I don't rent them out, or treat them as investment for now. i might sell when I retire and get old, and can't travel, so I can get some extra cash. I only want to buy the house I love, and want to live in. I love Sandy Canyon, but I can't afford it even at foreclose prices. I have never been to an auction, nor I will ever want to go. So, just to be clear, your snarkiness questions in this regard is just a misunderstanding of what i want. Will I want to move to Sandy Canyon when it sells for $200 / sq ft? you can bet on it. </p>

<p>b. thanks for your education on inflation, but I won't mind your refresher course as you are for sure has more street smarts then me given your experiences. </p>

<p>We just have different views - my view is from buying and staying not from investment point of view; you being an investor, looking at it completely as an investment, and comparing with other inflation protected alternatives. I think this is THE major difference between some of us and the majority folks on this blog including you. For me buying a house is NOT a complete business decision -lowest NPV alternative doesn't always win here. </p>

<p>Coming back to the Awgee's example of $1 million house in four year will be $300K +/- 100K with inflation adjusted price. I am confused. So if you don't mind, help me understand the assumptions behind since you are defending it. </p>

<p>In your example, i just did an quick calculation, you are assuming ~3.5% inflation from 2004 to 2010, and i agree with you math - if 900K house stay at the same price, in 2010 it is only worth $723 of inflation adjusted value ( or I like to call this buying power). But here is my "snarkiness" question: you stil need to come up the $ 900K cash (or down plus bank finance), right? as the cash flow is the same either you buy in 2004 or 2010. </p>

<p>so as a home buyer (NOT investor, as it is obvious it is a bad INVESTMENT to buy a depreciating asset), there is not much difference other than the opportunity cost for the downpayment of 6 years and the rent vs. own monthly cash flow decision (if int is the same, monthly payment is the same you buy in 2004 or 2010 as price is the same) if they were to buy in 2004 vs. 2010 at the same price.</p>

<p>So now we circle back to the same issues IR has been discussing which is rent vs. own, and how much lower the price of housing will go in Irvine.</p>

<p>For buyers want a house to live in, i don't believe inflation plays a big part here. And your inflation adjusted price theory is as mislending as National Association of Reator's recent ads on why this is the great time to buy and create wealth. </p>

<p>If I miss something, or get anything wrong, I will be more than gald to listen and admit. </p>

<p> </p>

<p> </p>

<p> </p>

<p> </p>
 
irvine123,





First, I have to tell you, I have always respected and appreciated your open-mindedness of your contributions to the forums. We may not always agree, but I have come to truly enjoy the discussions we have had and are having, and I hope they will continue. It really is a pleasant change, to see an optimist willing to have an intelligent and meaningful discussion, without the name calling and slander, which is the typical response from the "bulls" or "optimists". The one thing we agree on, is the fact a home should be a place to live, that you can afford comfortably, and not an investment. You may not have made the comment about buying homes as an investment, but it was made, and really there have been some deals out there at the 160 GRM. That would mean, if us nutters are correct, then someone would step up to buy. Well... we are correct, so step up and scoop up the deals that are there and would make a good "investment". And, there will be many more to come, but they are either in denial, or can't back up what they say. Maybe my point wasn't as clear as I would have liked, but there was much more to it than just an inflation adjusted investment perspective. Hopefully, I can clarify what I was truly trying to convey.





Second, I hope you do not think my rant was directed at you specifically, but at some of the "bullish" comments on this thread, and a few other threads as well. I... like you, am getting tired of the same mantras of the bulls and even the bears. I mean, I even tried to create graph's law, anytime the redundancy of the payment comes up, it's like what <a href="http://en.wikipedia.org/wiki/Godwin's_law">Godwin's law</a> is to Nazis on the intarwebs. The thread goes no where, no one can get the math right, everyone gets angry because they are right, and it just kills the thread. I'm over it. But, I am also over us bears being mocked and looked upon as just a bunch of nutters. Two years ago it was worse, and we were looked at as bunch of chicken little freaks, who are just a bunch of bitter renters, that have no idea what we are talking about. It was RE never goes down, you are wasting your money, and you are stupid because of it. I know, I need to be more humble, but they can all go kick rocks, because we were right, RE went down and it is continuing to go down. If you check the <a href="http://forums.irvinehousingblog.com/discussion/346/">foreclosure thread</a> for some of my recent posts, I was actually not pessimistic enough at the beginning of the year. So, I think we and I have earned some respect, and yet we still don't get it. When has any bull/optimist from 2005 or early 2006, ever given us credit for being right? The only one, who has been humble enough, is NIR, and I have even more respect for her now. But, where is Johnson, Nick the fireman, wawaweewah (and all the many other various names he/she used), and EZMoney etc.? Chirp, chirp...





Third, my point was more than inflation, and it was about economics as a whole. My point was about jobs, foreclosures, and inflation. All of which are major factors to the housing market. I posted about the <a href="http://forums.irvinehousingblog.com/discussion/1506/">latest jobs report</a>, and not a single comment. I even corrected the OCR, on fact the that saying a loss of 6600 jobs is erroneous, and the unrevised number is a gain of 4000 jobs. I got an appreciative thank you from Eff, because he knows, that most people like him, don't have the patience to do the research I did. It is as if the bulls/optimists cover their eyes, plug their ears, and scream lalalalalalalala, when they see a thread like that. I don't blame them, because it is ugly. But... for gawd sakes, it is the reality, and the one thing that the bulls/optimists have used to support their beliefs. Now, that it is a negative point, they take "The Secret" approach and ignore it. Can't... acknowledge negative... negative bad... must... see positive things.... positive things good... if I believe the positive... positive it will become. This is BS, and the longer it is ignored, the more it will hurt. The foreclosures from the August credit crunch have just begun. As it gets worse, does anyone really think it will not have a negative impact? Do you really think it isn't going to get worse? Because, January is looking like it will break some records. There is a huge lag time from NOD to REO, and there has been a lot of NODs. Do you really think Shady Canyon will not be impacted? And, WTF is the big deal about Shady? I mean, I can find homes for less money, that have an ocean view, and do not have the nasty mello roos. I just do not get it. It is Irvine, and yes it is nice, but really, no... seriously, there are homes much closer to the ocean that will sell for less, and the overall payment will be a lot less.





Now, I could go over the whole inflation debate, and I could prove my point and you could prove yours, but it will bring up the payment again. I can if you want, but I may have to slap graph's law on myself. I don't want to do that. What I want, is for a discussion on the economic factors of the housing market. Not only have I posted about the jobs, but I have also posted about some great economic papers, and there has been few comments, if any. So, either people think it is over their head, or they do not care, but I would like the discussion, and many, including myself, can learn from it. Frankly, the reason I do not post as much, is that I am not as interested and stimulated as I once was. I love the fun stuff here, as I did start the useless facts thread, but I would like to raise the intellectual bar, and I need to be challenged. So, thank you, for challenging me, and I hope you don't mind the long winded rant. I wish there were more optimists like you, as the discussions would only enhance the forums, and make the forums even better than they already are.
 
<p>graphix - "is that I am not as interested and stimulated as I once was."</p>

<p>c'mon man. you got stimulated in the blog dude. relax...</p>

<p>what are girlfriends for?</p>
 
<p>graph -- I'm an optimist, and I read and digest everything you write out here. I don't ever engage the conversation because I don't feel I have much to add, not that it is over my head --- but well beyond what I can add any value to. But please do keep your great posts coming, believe me they are heard. For instance, I had my checkbook out to buy in late 2006, around the time I discovered IHB. I quickly put that checkbook away and don't plan on pulling it out again until at least January 2009. And if things are still this bad then, I may put it back in my pocket for another year. But information like what you provide helps in that assessment.</p>

<p>Now on to the fun stuff.....I thought about you over the weekend, graph. The Honda guy that I am had an opportunity to take my buddies 2008 550i out on PCH and Newport Coast drive for a hot lap yesterday afternoon, before heading back into Crystal Cove to continue watching football. Dropping the hammer on a 4.8 V8 with 360 horsepower, while heading uphill on a sweeping left on Newport Coast Drive made me realize what you were talking about with the German road feel. What a machine. I probably won't be challenging any more Bimmers to a twisties battle with my Accord V6 again....</p>
 
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