JJ, my overvaluation is based on economic fundamentals not on comps. It’s based on the trendline for the last 20 yrs. It’s based on the fact that there are absolutely no supporting factors to support the 120%+ price appreciation for the region in the last 6-7 yrs. And last but not least, it is based on the fact that carrying costs for a mortgage are approximately twice as much as renting the equivalent property 😉

Time to pull off the rose colored galsses and realize a few things:

1. most people in these properties couldn’t afford to buy their own homes again at today’s price levels, that says a lot about the situation we’re in.

2. Without the use of exotic lending there are virtually no first time buyers in the market at today’s prices. Exotic lending is rapidly dying.

3. Upgrade buyers are wiped out because of #2. If they can’t sell their own home, they cannot move up…it’s a chain reaction.

4. Loss of Real Estate jobs (30% of OC jobs), increasing interest rates, ARMs resetting with foreclosures starting to skyrocket, tighteing of lending standards (#2), more job loss due to recession caused by sharp contraction in spending (no more HELOC money)…how is all this going to bode for the future of home prices?

These are severely aggravating factors and many people are saying everything will be allright, does that make any sense?

With all these factors how is a $755k asking price sensible as a “good starting point” as you say? Especially when the seller in question here has a HUGE cushion to lower prices? It just demonstrates absolute stupidity and greed and yes that makes them dellusional.