It depends where they are at. If they wanted an old money area, they’re foolish. If they wanted a desirable gentrified area, their window was a few years ago when prices were 50% off peak.

You can see this in the downtown area of Huntington Beach by the pier.

Neighboring properties, one getting foreclosed at $800K while the neighbor trying to sell for $1.6M:
http://www.zillow.com/homedetails/317-7th-St-Huntington-Beach-CA-92648/69246918_zpid/

http://www.zillow.com/homedetails/319-7th-St-Huntington-Beach-CA-92648/69246917_zpid/

And I think I actually toured those when they were rebuilt in 2007, and $1.6M seems low.

Corona del Mar, you see a lot of chasing the market. Things like this, 35%-40% of post peak asking.

http://www.zillow.com/homedetails/612-Iris-Ave-Corona-Del-Mar-CA-92625/25497382_zpid/

Or this, 40% off peak asking. http://www.zillow.com/homedetails/415-Heliotrope-Ave-Corona-Del-Mar-CA-92625/25498210_zpid/

Or this, chasing from $2.995M in 2009 to $1.8M when it sold last year.

Or this one, 20% off of the 2004 price. http://www.zillow.com/homedetails/2616-Ocean-Blvd-Corona-Del-Mar-CA-92625/51673450_zpid/

And make what you will of the 2008 asking of $5.5M only to sell in 2010 for $2.875M

And finally, one last crack pipe hit. Listing for $20M in 2010 but finally selling in 2012 for $9.5M.
And having it listed pretty much the whole time.
http://www.zillow.com/homedetails/210-Hazel-Dr-Corona-Del-Mar-CA-92625/25139714_zpid/

They still made out like bandits though with 6X their 1997 price.