San Diego Housing Market News and Analysis
Pardee Homes seems to have a bearish outlook.
User Forum Topic
Submitted by zk on April 14, 2006 - 10:07am
In Carmel Valley, Pardee Homes has just finished building one neighborhood, and they're in the middle of another one. In an area adjacent to these neighborhoods, they were planning to build a neighborhood with homes from about 3,000 to 3,500 square feet on 5,000 square foot lots. They were planning on building that neighborhood in 2008. Now, all of a sudden, they've decided to put 2500-2700 sq. ft. houses on these lots. And they'll be releasing the first phase in early May, 2006. Yes, that's 2 or 3 weeks from now.
If you ask them why they've changed the plan, they'll obviously give you a song and dance. Equally obvious is that they're making the change because they know that houses will be a lot harder to sell in 2008 than they will be this spring/summer.
Why the change to smaller houses? This part I'm not sure about, but I think my guess is probably a good one. The models for the new homes will be the same as the neighborhood they've just finished (that much I do know). Therefore, they won't need to go through the lengthy processes of designing a new floor plan, getting it approved, getting the production of the various components started, opening the pipeline to deliver those components, training the construction workers to build the new models, etc. I don't know exactly what goes into such a change, but it seems intuitively obvious that they'd be hard pressed to start building different models of homes on such short notice. This way, they just pick up where they left off with the last neighborhood and keep everything going as fast as they can.
If anybody out there is familiar with tract home builders and can tell me how unusual it is for them to make such a big change so suddenly, I'd be interested to hear.
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