Blog entry: http://www.irvinehousingblog.com/2007/01/23/sienna-yet-another-quail-hill-flop/

Address: 108 Mosaic, Irvine, CA 92603 (Quail Hill)

Plan: 3500 sq ft - 5/4.5

MLS: S466112 DOM: 51

Sale History: 4/24/2006: $1,725,000

2/17/2004: $1,043,500

Current Price: $1,749,000

The Sienna tract built by Standard Pacific is one of the higher end neighborhoods in the village of Quail Hill.  As you can see from the Sales History, the original owners made a killing thanks to a little bit of luck. 

The new owners listed the home about 6 months after they bought it.  The notes say the seller is relocating.  That’s just gotta suck.  They are facing a loss of about $80,000 (assuming 6% in selling costs) if they get their asking price.  Is this home worth more (even $24,000 more) than it was in April 2006?  I don’t think so. :(

UPDATE #1 - January 23, 2007
This is pretty quick for an update but I just noticed the price on this home has already been lowered twice:
Price Reduced: 01/16/07 — $1,749,000 to $1,729,000

Price Reduced: 01/22/07 — $1,729,000 to $1,693,000
The new asking price will inflict the seller with a loss of over $133,000!  Will the $56k price drop help sell this property?  Time will tell.  New home pricing in the Serra tract in Portola Springs starts at about $1.4mil for similar square footage.
The private remarks state: “Seller is relocating…submit offers. Special financing incentives available on this property through SIRVA Mortgage SELLER EXTREMELY MOTIVATED…SUBMIT ALL OFFERS…MUST SELL BY FEB. 5TH.“
From the info I have, it looks like they put 50% down. If that’s true, all I can is WOW! In this case, the sellers will lose a lot of their own money (as opposed to situations like this or this).

This confirms my counterintuitive theory.  I believe that we will see prices really decline in the affluent areas of South Orange County first, and then the less affluent areas will follow.  Someone who has the ability to put 50% down on a house like this clearly is someone with some means.  Even if that’s not the specific case here, just think about it.  If a "wealthy" person has to relocate, or sell their house for whatever reason, they are not going to be troubled as much by lowering their price to move the house.  Whether they are losing $100k, or taking $100k less in profit, they aren’t going to lose sleep over it. 
Those with less means can’t afford to take a loss, or at least a significant one, so they are going to hold the line on prices until its desperation time.  Similarly, those with less means are going to try to squeeze out every penny that they can if their house has appreciated...those extra dollars mean more to them.  Sadly for them...the writing is already on the wall.  Take less now, or be in even worse condition as time goes by.  A few will get lucky when a greater fool comes along, but most will be going down the toilet with everyone else.

If that seller is using SIRVA relocation services, it’s possible that he/she works for a...  certain large fortune 500 financial company <cough><cough> and is looking to relocate from Orange County to San Antonio TX office to take a better/higher position.  I cannot say this for certain because there must be other companies using SIRVA.  But if my hunch is correct, don’t feel too badly for him because the company is paying (at least in part) seller’s expense, as well as closing costs for new home in TX.  He can prolly buy a new and bigger house in San Antonio for $300,000 cash, eat Rudy’s BBQ every week, and retire early.

Yes, you do see a lot of price reductions of late...but as compared to what?  $20K reduction of a $1.7MM price home is nothing.  With the current market condition and the news recently on New Century and HSBC, you’ll be a fool to even pay $1MM.  There are homes in Irvine 4,200-4,500 sq. ft selling for $1.4MM.  No wonder it is not selling.  Give the people what they want, (lower price that is), and it will sell.

UPDATE #2 - February 20, 2007 
Another quick update.
Price Reduced: 02/07/07 — $1,693,000 to $1,667,000
With 6% in selling costs, the loss will be over $158,000!

Ha Ha!

I think the house is pretty awesome.  I don’t mind picking it up for $833,500.  Anyone here can hook me up for a lowball offer?

I went to see the house today- very beautiful home- if not almost a little large.  The layout is great- but they messed up by carpeting all the bathrooms!!!  YUCK!  There were several people in there when I went to see the house- one lady commented that it was "too open" for her and walked right out.   If there was another negative- perhaps the floors are too dark- if you don’t sweep daily it will be very noticeable.  Also- at that price point, I think that families may want a living room as well as a family room.  There is just a great room.  THe dining room is very oddly shaped- it’s located in the turret of the house.  If you don’t have a circular formal dining room table, then you might have problems!

Looks like they reduced the price-  The selling price is now $1.55 million.
 

If zovall or any other bloggers following Quail Hill knows of any other decent values in Quail Hill or another family-oriented community in the Irvine/Newport Beach area, would you please make suggestions?  I checked on Mosaic and it’s in escrow.  I’m interested in buying in OC.  I live in LA now, and it’s getting harder and harder to raise a family here, with fewer parks, open spaces and good school options.  But prices in OC are just as daunting as they are here.  I’d appreciate so much any suggestions with specific homes selling at attractive values (special situations), or even neighborhoods you recommend.  I know about Quail Hill just because a friend of my mom’s bought there recently.  Thanks so much; I’ve learned a lot already just reading on this blog.

Turtle Rock/Turtle Ridge is a good area if you are trying to find a home in the Irvine/Newport Beach area.