Patientrenter asked me about Coronado in another thread and I decided to move my response here as I know there are few other people who are interested in Coronado (eagle eye – are you still out there?)
Prices have come down here in the under 2M market (I don’t watch over that price so I don’t know what is happening in in the over 2M).
There is a huge supply of homes here in the 1.4m to 1.8m range. A large portion of those homes are spec homes. There are a couple of local builders who buy an old home on two lots, tear down the house and build two tall and skinny houses. There are a mess of these homes available right now and they aren’t selling very fast. I see some price reductions in the future! Prices on these homes were in the 1.75m range. Now I’m seeing them in the 1.4m – 1.5m range and the builders are advertising that the price includes design choices. I would not be at all surprised to see some of these houses close around 1.2m this fall as these builders start getting pinched (only 1 house sold in this range in both May and April but there are 28 listings -yikes!)
These builders aren’t like homeowners, they HAVE to sell and they are going to be forced to discount in order to move their inventory.
There are also a big number of new condos for sale at the north end of Orange. The prices are really high (1.5m and up). Why would anybody buy a condo that has a view of an alley for that price when they can buy a house? Apparently, they have a few in escrow but they are a little late to the party (they just had a “ribbon cutting” party about a week ago). I predict hard times ahead for the developer.
Quite a few months ago I had a conversation with someone about a friend of theirs who developed a condo building here at the end of the last cycle. The guy ended up going bankrupt and managed to convince the bank to let him live in one of the condos while the bank was repossessing the building.
It happened last time, it is going to happen again.
