4S Builders to Stop Building??

[Sandi Egan]

I hate the recent trend when they put walk-in closet PAST the master bathroom and don’t install a bathroom door. How stupid is that??

[sdcellar]

robyns_song, wantobuy–

Sorry to offer up further detail and then disappear for a few days. Just been too busy since I posted last.

Anyway, the Silhouettes were first offered at starting prices of $780K, $860K, and $880K for the plans 1, 2, and 3 respectively. This was in the beginning of March 2006.

They had the phase 1A release around the first week and here were the actual plans and prices:

2B – $862,990
2B – $865,990
3C – $888,290
1C – $786,140
2B – $880,340
3C – $882,490

I believe exactly 2 of those went into contract (can’t say whether those ulimately closed). This prompted them to reduce the starting prices to $750, $830, and $830 within about 3 weeks.

In July, they lower the price of the 1C above to $711,595. It was in the MLS until two weeks ago, don’t know if it sold, but maybe not, based on what you’re saying.

Same timeframe (July) they listed a plan 3 for $810,965. Not quite as big a drop, but they reduced it to $798,451 at the end of September, $734,451 in the middle of November and it finally closed escrow for $714,451 on December 28.

So from this, you can see that you should offer at most $675 for a plan 1 (and please don’t take this to mean it shouldn’t be or won’t go lower than that). They’ve only built 12 so far and still haven’t sold all of them, so that’ll give you an idea of your negotiating power.

Also, I have an options price list and I know you were interested, but kind of hard to get that to you, but again if you have specifc questions… (and I’ll try to respond more quickly this time!)

[robyns_song]

We like plan 3, The Dreamer (named appropriately). Another $100K+ drop by the end of the year would be nice! I know they have a total of 8 phases and they’re working on building phase 2 right now…do you know when they have to finish? They are going SO slow compared to all other builders…do you know if there’s a reason why they aren’t selling?

[wantobuy]

The sales lady told me that John Liang’s strategy is to take it slow for more long term gain. Not sure if it’s true or not.
Also she told me they kept the deposits from the two plan 1 houses fell out of escrow. Plan 3 and 2 have almost the same price tag. I like Plan 3 too. Around Dec 25 last year, one person who is also a realtor purchased a Plan 2 for $750K (fully upgraded, 5 bedroom + a den (open space) + one sperate library). So if there is another $100K drop by the end of this year, the price tag would be around $650K for plan 2/3.

[gn]

SD Realtor said:

>> I was also curious as this spring it has been really tough negotiating with
>> the builders. Last summer it seemed like they were much more
>> negotiable

I think the builders in 4S have been aggressively lowering prices in the last 12 months. And to be fair, 18% in 12 months is aggressive! They probably think that they’ve done enough to bring in buyers. From the builders’ point of view, keep lowering prices will send the “wrong message”. So, they want to be “firm on prices” and hope that the coming “spring bounce” will help.

Since the lenders are tightening credit standards, sales for this Spring & Summer will probably be weak.

I suspect that the next round of price reductions will come during late summer/early fall. Because, builders won’t want to wait another 6 months until Spring 2008.

[scotia10]

“The sales lady told me that John Liang’s strategy is to take it slow for more long term gain. Not sure if it’s true or not.”

These guys should run for office.

I work for a builder and trust me, “taking it slow” is definitely towards the bottom on a builder/developers list of options. Spin spin spin.

You have to realize you have tremendous bargaining power with builders right now…they are trying to move units off of their books right now to keep the banks happy.

If you don’t want to wait for a deal then at least don’t be too fast to compromise.
jaycee

[no_such_reality]

I meandered through Portola Springs in Irvine last weekend. Hit many of the developments. Looked at the maps, asked about the build outs. Was a bit surprised at how much emphasis was put future phases being “planned” and “future” and dancing around committing to build has their diagrams show.

It wasn’t ‘that’s Phase II’ or ‘we’re expecting to open that section in May’ definitely avoiding build-out commitments.

[ocrenter]

yeah, John Liang Homes really overshoot and they are paying for their arrogance on Silhouettes.

So they started selling a year ago, yet they are just starting phase III. They still have two homes in phase II that came back. I think all together you are looking at 15-17 homes sold in the past year!

Some of the builders that came in later, Such as K.Hovnanian with Evergreen, really got agressive with their pricing and probably sold more homes despite coming on line late last year.

If you look across the street to Garden walk, a cluster of pseudo-SFR/detached condos at 1900-2300 sqft, some of the folks there actually bought in the high $600,000’s/low $700,000’s. And now 3,000 sqft new true SFR homes across the street is going for the same price.

that’s got to hurt!

[drunkle]

anecdotes:

when i worked in construction during the late 90’s as a soils tech/engineer, some of the things i’ve seen and heard can relate. I’d been on regrading jobs where tracts had sat fallow for upwards of 8 years, the original owners having done all the homework and the grading only to quit and eventually sell the lots off.

san elijo was in high gear at the time with grading work. it was projected to be a 10 year project with new schools, shopping malls, etc. at the time, i thought it was ridiculous that they were preselling the homes at 300k+; san elijo is out there in the boonies.

another comment made by senior engineers was that fly by night builders would slap a home together and get out of town, go belly up, change names, whatever to escape the responsibilities of warranty work and liability. like, poor foundations, insufficient soil work, etc. you cant see that stuff and if it goes bad, it wont be for a year and more.

eastlake, preselling with people camping out in line and such for 250k. another boonie housing tract that suffers massive traffic problems… but values going up 50k in months or even weeks.

carmel valley/del mar… those mcmansions off black mt road across from the synygogue… ~800k/pop. tiny little lots, stupid looking houses and for what?

san marcos. clay sewer lines. terrible commute/freeway interchange at both ends.

temecula/murrieta. come on, 1 hour commute each way? or more, the 15 being jammed tight during rush from escondido to mira mar…

poway… that guy lorenzo llamas lives (lived) out there. woo hoo. big lots, boonies, still a tract house. and for a 1 mil+? people are stupid.

carlsbad and la costa, some 350k. boonies. carlsbad village is nice tho as is the beach…

the builders have made massive profits in the past few. they can easily afford to walk away. lay off a bunch of employees, keep your core together and sit it out. not many unions left in town, construction workers take an extended vacation in mexico (even the white ones), wait for the next upturn.

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