Gables Crossings

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Submitted by gn on August 31, 2007 - 12:37pm

This is a gated community of custom homes in Del Sur.

Here are 2 houses on the MLS:

http://www.sdlookup.com/MLS-076069184-15...

http://www.sdlookup.com/MLS-076069110-15...

It looks like these investors were late to the party.

I wonder how much it cost to build these homes ? In general (in the absence of a falling market), what is the return on the extra cost used to build custom house (as opposed to buying a tract house) ?

‹ Coronado looks firm good deal ? ›

Hard to say whether they are
Submitted by sdsundevil on August 31, 2007 - 2:14pm.

Hard to say whether they are "late to the party." High-end real estate has a life of it's own. They definitely aren't catering to the masses here.

There are almost 50% more
Submitted by Bugs on August 31, 2007 - 5:45pm.

There are almost 50% more listings above $1,800,000 in that zip than have sold in the last 12 months. Most of them seem to be in gated communities.

Apparently at least one unit in that project has already closed escrow (5,400sf @ $2,195,000) and another is in escrow. Chances are pretty good the buyer in the closed sale is somehow connected to the project - the first couple sales often go to insiders, as it helps establish the sale prices for appraisals of the subsequent units.

the first couple sales often
Submitted by gn on September 1, 2007 - 11:27am.

the first couple sales often go to insiders, as it helps establish the sale prices for appraisals of the subsequent units

Bugs, that's very interesting. Are you saying the following ?

A John Doe bought the house at a specific price primarily to establish a "comp". That is:

1. He likes the house & wants to live there & is compensated (under the table) for paying an artificially inflated price. Or

2. He has no intention of living there & will sell it soon. And that he will be compensated (under the table) for the holding cost & transaction cost ?

 

 

I know of several of these
Submitted by Bugs on September 1, 2007 - 5:49pm.

I know of several of these small gated communities wherein the first couple sales go to friends and family of the developers, and the sale prices posted reflect the "normal" prices they're listing for everything else. In at least a couple cases I've seen the realty agent who is going to farm that project buy the first house. Always at full retail, never a discount involved - at least not on paper.

Now some people might think that these homes are so great that even friends, family and business associates are chompng at the bit to pay full retail price to get them. However, I'm a professional cynic - being skeptical is part of my job description. I don't see why a developer would sell a unit to their own family at the retail price - unless the real sale price is a lot lower than is recorded.

These developers know that most appraisers will rely on those first couple sales and give them the most weight in the appraisals of subsequent units. Enough so that they'll go out of their way to find outside sales that match the inside sales even if they're not as similar. It's the path of least resistance. Otherwise, the appraisers have to explain why the first couple lowball sales AREN'T the most indicative of the value.

That's why the first couple sales in a project are critical to the success of the project.

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