What's going into escrow - Irvine and maybe some Tustin too

NEW -> Contingent Buyer Assistance Program
[quote author="ipoplaya" date=1212039050][quote author="tenmagnet" date=1212038659]Best of luck whichever way you and the wife decide to go.

Unfortunately, my situation is different then yours so I approach things differently.

Saving $50K or even $300K over that kind of time frame wouldn't phase me.

I?ve already come to terms with that.

As long as it?s in my range, I?ll do it.



Regarding your offer,

Not to pry, I?m just trying to gauge and fine-tune my own efforts.

Did you offer list on the house over or under?

$935K seems like a very good price.

I totally understand if you don?t want to answer publicly, maybe you could pm me with the details.</blockquote>


We offered over list, but only by $100.00. IR2 never heard back from the listing agent so we have no idea how much it went for. Will likely find out soon. My guess is probably $1-1.025Mish.</blockquote>




Appreciate the feedback.

I would?ve priced my offer in at or slightly above list as well.

Anything under $1M would?ve been a nice deal on that one, imo.

What about 23 Torrey Pine, isn?t that one at or near your range?
 
[quote author="tenmagnet" date=1212043610]Appreciate the feedback.

I would?ve priced my offer in at or slightly above list as well.

Anything under $1M would?ve been a nice deal on that one, imo.

What about 23 Torrey Pine, isn?t that one at or near your range?</blockquote>


Yeah, I checked into Torey a bit but didn't love the floorplan. Small family room, big ole kitchen and nook area. Freaky that the garage is detached... Square footage just isn't in the right places for the IPO family.



And unless I missed it somehow, the park there in NW II doesn't have a tot lot / kids play area. That is pretty much a necessity for my boys...
 
[quote author="irvine123" date=1212043588]IPO, it seems to me that you have already thought through the whole process. I only want to add that your condo price is not going to increase while the single family home prices are either stable or decreasing. So the current fair market value of your condo is probably the best price you can expect for the years to come. Sitting on your proceeds while waiting for the right home at the your acceptable price range seems to me is the most logical choice here. You can analysis this to death, but it will be very hard to "model" the price and timing of your condo sell correctly. I went through the process of buying a home while selling a home just couple years ago. I can tell you it is very stressful. I won't want to do that again.



Good luck!</blockquote>


Thanks for the feedback 123. I'm approaching the financial analysis from a present value of annuity perspective. I will spend $12K over a period of one year to achieve an annuity, in the form of reduced future mortgage payments, for the duration I own my next home.



For you numbers geeks (CK), I am using a 7.5% estimated future mortage rate, a 5% discount rate, and an 18-year holding period. Here's what I came up with:



5% drop in prices over the next year - spend $12K to make $18K

10% drop in prices over the next year - spend $12K to make $35K

15% drop in prices over the next year - spend $12K to make $50K

20% drop in prices over the next year - spend $12K to make $70K
 
IPO,



Thanks for the sharing of the data. You probably already thought about the following, but anyway below are just some of my quick thoughts:



There are many variables in your analysis, which can affect the result quite dramatically.



a) a year from now when you purchase, the 30 year interest rate could just be the same as today which is in the 6 to 6.5% range. If this does happens, your NPV will be reduced due to lower mortgage payments.



b) use a 5% discount rate for the NPV calculation. For the purpose of this calculation, I believe the appropriate discount rate should be the rate of return for your family's overall investment portfolio ( which is your alternative investment for the cash flow). If 5% is what you are getting, then it is fine. I have no idea what the s&P;500 index will produce on average for the next 18 years, but 5% over a period of 18 years sounds relatively conservative to me. If 8% is used in your NPV calculation, your NPV will be lower by a lot.



c) staying in the house for 18 years. Most people in the early 30s don't stay in the same house for 18 years due to many reasons. You might well be the exception, but again "never say never". Your NPV will be lowered if stay there shorter. Then, if you do stay there for 18 years, you might have an opportunity to refinance your 7.5% mortgage rate, which again will lower your NPV.



Any combination of (a), (b) and (c) above will change your result quite a bit. Due to the uncertainty of many variables in an excises like this, often it is more an "art" then science. I tend to look at those analysis as "sanity" check, then strict go-bys. In your case here, personally I will draw the following conclusion based on your analysis: if you believe the type of house you want to buy will drop 20% next year, your cost / benefit is well justified. 10% range, you are probably safe to at least break-even. If it drops no more than 10%, then it all depends.



I can't leave this topic without echoing it might seem to some of you as my theme on this kind of topic: IMO, it is NOT all about numbers when making a rent vs. buy decision on your primary home as long as your can afford buying the house you want. $50K NPV saving (which is uncertain anyway) over a 18 year period doesn't sound like a lot of money to me when buying a $1 million home. A better and sure way to save this kind of money (and more) is to buy inexpensive cars (i.e. toyota vs. lexus, honda vs. accura, etc) in your life time.
 
"A better and sure way to save this kind of money (and more) is to buy inexpensive cars (i.e. toyota vs. lexus, honda vs. accura, etc) in your life time."



Ah, but saving that $50k is what funds that expensive toy Porsche! :D



BTW Ipo, I have another escrow'ed home I'd ask a favor of you to track.



http://www.redfin.com/CA/North-Tustin/12941-Villa-Rose-Dr-92705/home/12404653

MLS#: P622189



Its a home I've toured and was custom-built by a contractor who works on only one or two homes at a time. Check out the dog's home in the back yard.
 
IrvineAllergy, I agree with you! It is more about Priority not about NPVs....There is no quicker ways to see your money disappear then buying new cars. Don't get me wrong, I love cars, and spends more than my fair share!
 
<blockquote>?A better and sure way to save this kind of money (and more) is to buy inexpensive cars (i.e. toyota vs. lexus, honda vs. accura, etc) in your life time.?

Ah, but saving that $50k is what funds that expensive toy Porsche! :D

BTW Ipo, I have another escrow?ed home I?d ask a favor of you to track.

http://www.redfin.com/CA/North-Tustin/12941-Villa-Rose-Dr-92705/home/12404653

MLS#: P622189

Its a home I?ve toured and was custom-built by a contractor who works on only one or two homes at a time. Check out the dog?s home in the back yard. </blockquote>
I love how the fireplace is in the family room, but it isn't the main focal point of the room.
 
absolutely beautiful. and HALF the price of a shady canyon villa (mcmansion), or the same price as a much smaller, turtle ridge mcmansion at short sale.
 
[quote author="Irvine Allergy Dr" date=1212094474]"A better and sure way to save this kind of money (and more) is to buy inexpensive cars (i.e. toyota vs. lexus, honda vs. accura, etc) in your life time."



Ah, but saving that $50k is what funds that expensive toy Porsche! :D



BTW Ipo, I have another escrow'ed home I'd ask a favor of you to track.



http://www.redfin.com/CA/North-Tustin/12941-Villa-Rose-Dr-92705/home/12404653

MLS#: P622189



Its a home I've toured and was custom-built by a contractor who works on only one or two homes at a time. Check out the dog's home in the back yard.</blockquote>


I added it doc.
 
Clear Spring in TR closed at $464/sf, right in line with typical rollbacks in Irvine...



<a href="http://www.ipoplaya.com/iposhiller.pdf">IPO-Shiller</a>
 
[quote author="ABC123" date=1212115533]$1.5 million for a 30-year-old home doesn't sound like a rollback to me.</blockquote>


Tell that to the guy that bought essentially the same TR house during 2006 for $1.8M... You can bet there are a few of them.
 
[quote author="skek" date=1212108037]Doc, I love your taste in houses. That's beautiful (even if it isn't exactly as "Tuscan" as the listing makes it sound). I think Tuscan has replaced "gourmet kitchen" as the most incorrectly and over-used term in MLS listings.</blockquote>
Thank you! My wife helps with the selections. :)



If you think those homes are nice, you should see the $1.6-2M homes I'm also watching. :D
 
Ojeda in Tustin Ranch closed for $1.19M. It's apparently the same plan I tried to buy on Zielian for $935K... Guess my offer was a little low huh?! :)
 
[quote author="Trooper" date=1212149474]Patience Grasshopper.</blockquote>


Trying Troop...



At least the Lakers won tonight. Forgot about housing for a couple of hours.



Now back to surfing rental properties!
 
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