San Diego Housing Bubble News and Analysis

price drop down in Maybeck @ 4S ranch

10/2007 price sheet:
Plan 1: $745K
Plan 2: $760K
Plan 3: $770K
Plan 4: $741K

04/2008 price sheet:
Plan 1: $632K + $20K incentive
Plan 2: $668K + $20K incentive
Plan 3: $660K + $20K incentive
Plan 4: $675K + $20K incentive

So maybeck droped around $100K in past 8 months, or > $10K/month

Although the Piennza price didn't drop down, it offers $100K incentive for inventory right now. And it's very likely to drop down its lastest phase 3/9 release price to match Silhouette and Maybeck did. It's a dilemma for fieldstone right now, if it doesn't drop price, then it's impossible to sell its existing new release home. But if it does drop down the price, then a lot of buyers will choose to walk away from phase 3 and phase 9 releases which will finish builing arond August and November seperately. That's pretty interesting senario and we'll see.

Considering the Silhouette plan 2 (3000+ sqf.) effective release price starting from $650k, so for upcoming Chanteclair release, we'll see all the effective release price will no more than $650K. Otherwise it's hard to compete with Silhouette.

That's great news. We have some friends who are moving here, but have held off buying at 4S. I'll let them know about the most recent price drops. We live in RSF, and I've been monitoring it for them--thanks for posting that info.

I'm sure the builders want to get rid of their inventory ASAP, and current residents of 4S who are trying to sell will be glad when they're gone, so they can start trying to set resale pricing higher.

Is that a whiff of panic in the air?

I prequalified with Silhouette 3 weeks ago when their prices were still higher.
I called today to confirm the price drops and $15k incentives.

I first inquired about the price drops, and the lady responded with the numbers posted by the OP. However, she didn't volunteer the information about the $15k incentives. I had to pry it out of her.

I also tried to confirm where I am sitting in the queue of their so-called "priority list" for the upcoming phases, but she said that she could not give me that information. I mentioned that her co-associate had mentioned I was number 25 on the list, but she refused to confirm it or deny it, saying that she wasn't allowed to give me that information.

I'm pretty sure what's going on is they know they are going to have to do at least one if not more cuts on their prices by the time they get to the build-out phases and then sell off the model homes. They are very reluctant (and nervous) to provide enough information so that the rate of price discovery in the new 4S builds becomes transparent to the public.

I have a feeling that the people who bought the earlier phases around Silver Pine road are going to be extremely pissed once the numbers start to really get down. I'm speculating, but I think we'll see Plan A (Explorer) in the 500's by winter. Interestingly, the best lots IMO are the lots in phase 7 and 8, and those will be going for cheapest I think.

roughtrader

Our Piggington's realtors and other 4S potential buyers, do you think this is a good price now given that the Phase 1 sales release had prices in the mid 800s? Or do people really think the price will go down further this year?

There were 6 homes available, one each of each phase. 3/6 had reservations by Saturday morning. By Saturday morning, there was only 1 each of Plan 1,2, or 3. The sales agent stated they did not know if the price would be maintained in the next phase and thought this we rock bottom pricing as they really want to move these homes. They said they had no way of knowing what the price will be at the next phase and that it may go up.

Per the sales agent, the business plan is the finish buiding phases 5-6 by December (total 20 homes this year).

Phase 7 and 8 had some large lots however phase 7 is a bit too close to the school. These will not be released until next year.

It is very tempting to jump in now as we have been waiting for the price drop. As of this week Pienza will not match Silhouette's or Maybeck's prices....we already inquired.

We might have to just take our chances and take the plunge as there are not many lots left which we like....

4spotentialbuyer, let's ask this question:

Given the rather minor variation between the lots in phases 5 and 6 (or with 7 and 8 for that matter), why would the builder lower the prices only to raise them later? Does that make sense? They want to lower the price to move inventory. Once they clear out the phase 5 homes, phases 6-8 are still waiting for them. To me, it doesn't make sense to move the price up again, because that will simply continue to stall the liquidation of the remaining inventory.

My thinking is that they need to unload in a progressive, scheduled manner. They are carrying the costs of holding each unbuilt lot, and the longer they wait it appears the more money they lose. There is nothing special about phase 6 compared to 5 (although each lot appears even MORE cramped), so a higher price on phase 6 will disrupt their ideal release schedule and cost them more dime.

I think they're going to continue to cut, and at the least, hold where they are.

Opinions?

roughtrader

By the way, I forgot to ask, did you get yourself on the priority list so you have first pick of the next phase releases?

roughtrader

One thing I want to remind it's risky to reserve a new home which will finish building 6 months later or more during market downturn. First, you'll potentially face price cut down before you close the home; Second, in the 2nd half of this year, the interest rate could go up, the mortgage calculated right now might now work in the future.

In market downturn, the release price must go down or keep flat, there is no way to go up.

Among 4 builders in 4S, Pienza, Silhouettee and Maybeck all are actively to make releases, and I can see they are going to sell model home by end of 2009. The only odd is Chanteclair, which still has 3 unreleased in total 5 releases. The last phase 2 release was back to June 2007, right now we are in May 2008, we still didn't see phase 3 release yet. Anybody can speculate what Chanteclair wants to do? Hold all the land until the next housing bubble?

Yes, I am on the priority list. Phase 5, the current one with price reductions, was released in October of 2007 and none were sold...they then sold 1-2 lot and the other lots went unsold. They promised those homeowners a Sept finish date so they reduced the prices of these homes in order to start construction on one batch of homes at a time...This is the theory they are providing as to why future phases may go up as these were homes they needed to built together to make their contractual obligations.

They went back to the orginial 1-2 lots and reduced their prices as these homes were are in the same phase.

I don't know how much lower home prices would go and I agree, the later lots look weven more cramp.

"Our Piggington's realtors and other 4S potential buyers, do you think this is a good price now given that the Phase 1 sales release had prices in the mid 800s? Or do people really think the price will go down further this year?"

4Spotentialbuyer I am sure that if you wait long enough, yes prices will continue to fall. Not to anybodys surprise variability in pricing will be determined by demand or lack thereof which will be influenced by the recession, interest rates, unemployment, etc. It really is a matter of whether the pricing stimulates demand in the timeframe that builders need the sales.

I wish I could give you something definitive but I can't. One thing that ALWAYS holds true though... Builders will always be more aggressive then resellers so that bodes well for you for the future phases... If you can hold out then hold out.

SD Realtor

All this talk about the model homes, I don't think you guys are aware that Silhouette sold the models last year to get money. My understanding is that they are leasing the models from the new owner. They sold all three models within a few days of their release and were fully furnished--we tried to prod the sales people a little, but it sounded like they all sold to one person/company...an "investor" haha.

The builder doesn't give a rat's ass about the early buyers being angry. They have 5 more phases to sell and then the builder will be out of there. The builders have the money and deep pockets to lower homes $100k and still make big profit and then run the hell out of SD like nothing happened.

Especialy since John Laing teams up with Countrywide, they probably had to lower the prices because no one can qualify for a loan either.

As for who said that phase 7 and 8 are the best lots are wrong, unless you like having an elementry school right in your backyard and long lines of cars parked in front of your home every morning. Ever see an event at that school after hours? They park everywhere up and down near phase 7 and 8.

I did my homework on this area and the best part of Sillhouette just sold out in that Cul-De-Sac. They have the best lots and are away from the schools and parks enough to not hear the noise, but close enough to walk and enjoy. Problem is they all got in at about 50-100k more than the current listed price.

Better to walk away or will have to short sell in the future.

I'm considering Silhouette/Chanteclair/Pienza, is it normal for builders to refuse potential buyers access to their design centers even if I reserved the house with 20K cheque?
How to make sure incentives are not diluted if the builders jack up the price of the options after contract?

4s Renter

Walked pienza on Sunday - The interior design is terrible, layouts are ok. The builder selects the design - didnt have me leaving warm and fuzzy.

For the price, I would go after maybeck or silo

Pienza is definitely behind the eight ball in regards to price, when compare to the other builders. I personally only like plan 1 of Chanteclair and plan 4 of Pienza. The rest have horrible floor plans. Especially Silhouette plan 2. Who would ever use that room out of the house by the front door. Maybeck is a definite no-no for me, since it's nothing more than a 3000 sq-ft condo to me. Can you imagine if all the houses in that tract have a real family living in there? Assume parents + 2 grown kids. They all have cars. Where would the other cars goes, since there's no drive way? On the street of course. Then, what if one house have a party? I can see the whole street being full of cars, which makes it quite hard to drive through. Also, washing your car would be a pain too w/out a drive way.

Anyone know when and which builder will be building in the northern part of 4S? There's supposed to be more development up there.

4s Renter

I actually like the office on plan 2, as a travelling consultant and for my wife as she works in outside sales. But I wish it was a larger master suite for the guests.

Are HOA/MR fees the same for all the developments? What are they?

4s Renter

Doubtful on them all being equal. Id still try and get the builder to pay some/all of your MR.

asiannautica. I agree about plan 2 for silo. The house is layed out perfectly but that front room is stupid. One major problem with that is it pushes the home back about 20 feet taking away any backyard space..

Plan 1 is gorgeous and plan 3 seems odd with too many rooms downstairs.

Countrywide's rates kind of suck. To get the 15k incentive, I wonder if it's possible to sign on with JLH's lender and refi with another lender before the first mortgage is paid.

Any ideas?

roughtrader

Exactly same thoughts I was having. I also got the rates from them for no closing cost.
That is always an option & they know it. They will work hard when you ask for it.

Can anyone confirm if they are in process of changing the design center? The printed options rates might change according to sales office which sucks if I have sign the contract & find absurd rates later on.

how do you compare 4S ranch vs. Del Sur? which one has an overall higher score?

4s Renter

Del Sur is "Green" built so there are features that make your home more energy efficient (Solar panels on some homes, Tankless water heaters etc). Del sur also have multiple parks with pools in them (all gated) for all residents to use. These two things are reasons that I would love to live in Del Sur.

Del sur is also only on one side of Camino Del Norte, a huge advantage IMO. I hate that about 4S. I wish 4S had an entrance like San Elijo has on the south end. It makes it feel like its own city. But whats done is done.

4S will give you more diversity in home plans/sites/prices. You are also within walking distance to shops/restaraunts/ LA Fitness and closer to a major highway artery. You can also go two different ways to get to the 56/Carmel Valley.

I think both are in for a deep downswing. They have both already seen a drop, but more is on the way.

Im sure I missed some things.

Maybeck in 4S has Tankless water heaters too.

I see Del Sur is clearly more expensive relative to 4S. I'm wondering if that is justified by real thing or just by marketing hype. I know this is something personal, because difference people have different perception and priority. Any input is appreciated.

4s Renter

Thanks for the mention on Maybeck. I guess with any home you can have the same amenities that Del Sur offers wherever you are.

Del Sur offers drought resistant landscaping on 50% of the homes. Another feature at Del Sur "Weather-based satellite irrigation systems". It requires a monthly fee to connect (Like Sirius/XM Subscription) but significant savings.

Im not trying to talk up Del Sur but those are some cool ideas.

I still love the maybeck Designed homes - wish they had bigger yards.

Del Sur homes generally have bigger lots (over 6000sqft).

Del Sur homes generally have bigger lots (over 6000sqft).

Really? That's news to me. Which development in Del Sur have these 6000 sq-ft lot? I've been to all the development in Del Sur and they all have tiny yards, the spacing between the houses are small, and the width of the house is also small.